EANS-News: Epigenomics AG Announces Q3 Financial Results and Operational
Highlights
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Company Information/9-month report/molecular diagnostic
Subtitle: Main focus for Q4: to successfully file PMA with the FDA in the US and
simultaneous re-launch in Europe with dramatically improved Epi proColon® 2.0 CE
test
Berlin, Germany, and Seattle, WA, U.S.A., November 9, 2011 (euro adhoc) -
Epigenomics AG (Frankfurt Prime Standard: ECX), the cancer molecular diagnostic
company, today announced financial results for the third quarter and nine months
ending September 30, 2011.
After the announcement of a strategic restructuring in the second quarter of the
year, Epigenomics has been working to complete the clinical development of Epi
proColon® 2.0 and has been preparing for the planned submission of its PreMarket
Approval (PMA) regulatory filing with the U.S. Food and Drug Administration
(FDA).
Geert Nygaard, Chief Executive Officer of Epigenomics said: "Our third quarter
performance has been set against a backdrop of turbulent financial markets and
operational challenges with respect to the restructuring and reverse stock
split. However, within the Company, we have made significant progress with the
launch of our second generation product Epi proColon® CE in Europe and we are
very pleased with the positive clinical results we have generated from our
validation studies for this new product. We look forward to sharing the top-line
results from our U.S. pivotal study later this year followed by our subsequent
PMA filing with the FDA. Ultimately, we hope to be in a position to have the
first FDA approved blood screen for colorectal cancer on the U.S. market."
Key Financials Q3 2011 and 9M 2011
| |Q3 2010 (unaudited)|Q3 2011 (unaudited)|9M 2010 (unaudited)|9M 2011
(unaudited)|
Revenue |EUR 000|363 |257 |1,336 |1,242
|
EBIT |EUR 000|-3,010 |-5,032 |-8,443 |-10,748
|
Net Loss |EUR 000|-2,974 |-4,816 |-8,358 |-10,717
|
| |Sept 30, 2011(unaudited)|Dec 31, 2010(audited)|
Liquid Assets |EUR 000|17,386 |26,369 |
Employees | |77 |82
Financial Highlights
* Revenue for the nine months decreased to EUR 1.2 million (9M 2010: EUR 1.3
million) and was generated from product sales as well as from collaborations and
licensing agreements
* Operating costs of EUR 12.2 million (9M 2010: EUR 10.2 million) were impacted
by the one-time restructuring costs of EUR 2.8 million
* R&D costs significantly decreased by approx. 21% to EUR 4.1 million (9M 2010:
EUR 5.2 million)
* SG&A costs increased significantly by nearly 16% to EUR 4.7 million (9M 2010
EUR 4.1 million) due to the increased market preparatory expenditure for the US
market launch
* Operating loss (EBIT) increased to EUR10.7 million (9M 2010 loss EUR 8.3
million) driven mostly by the one-off restructuring costs
* Net loss for the period was EUR 10.7 million (9M 2010: EUR 8.4 million)
* A 5:1 reverse split of the share capital was implemented during Q3 which was
approved at the Annual General Shareholders´ Meeting in June 2011. With the
reverse split, the company now has 8,818,417 shares outstanding (H1 2010:
44,092,085 shares)
* Short-term liquidity as at September 30, 2011 was EUR 17.4 million, a decrease
of EUR 9.0 million from EUR 26.4 million reported at the year-end 2010.
Q3 2011 Overview
Despite the challenging market environment and impact of the Company's
restructuring, the Company has made significant progress with respect to the
launch of its improved second generation Epi proColon® test into specific
European countries based on very positive data generated in a case-controlled
clinical validation study in September. The new test accurately identified 95%
of the cancer cases (i.e. 95% sensitivity) at a specificity with respect to
colorectal cancer of 85%. Most importantly, for stages I and II cancers, for
which therapeutic interventions have the greatest likelihood of treatment
success, the combined sensitivity was 91%. These results demonstrate a very
significant improvement over the performance of the Company's first generation
product. The successfully completed validation study performed in Europe enabled
the start of the second validation study in the U.S. in September 2011 which is
required for PMA submission to the FDA. This pivotal U.S study is being
conducted at three external laboratories which will test blood samples from a
study cohort of approximately 8,000 subjects and is expected to be completed
before the year-end.
The Company recently presented the results of the first clinical validation
study at the United European Gastroenterology Week meeting in Stockholm in
October 2011 and announced the upcoming launch of its second generation product
in Europe. To meet European market requirements, the alternative interpretative
algorithm will be used with Epi proColon® 2.0 CE in Europe. This algorithm is
optimized for specificity for cancer and has resulted in the test identifying
more than 80% of the colorectal cancer cases while minimizing the number of
false positive test results to 1%.
Earlier in the period, Epigenomics announced the results of surveys in the U.S.
and Europe showing that the vast majority of patients would prefer blood tests
over conventional methods for colorectal cancer screening.
During the third quarter, Epigenomics also readjusted its commercial strategy in
the European markets, targeting payers and large institutional customers deeply
entrenched in the healthcare system, including distributors of selected European
countries. The launch of Epi proColon® 2.0 as a CE-marked product in Europe is a
means to re-enter the market with a significantly stronger value proposition to
clinicians and patients.
The strategy review preceding the implemented restructuring also highlighted the
increased importance of the U.S. market in the Company's plans. Licensee, Quest
Diagnostics, Inc., has been the first to demonstrate the commercial opportunity
of colorectal cancer blood tests in the U.S. and has demonstrated very
encouraging volume growth since it started promoting its laboratory-developed
Septin9 test, under the brand name ColoVantage in Q1 2011.
R&D efforts are being focused on existing and near-term product opportunities,
with longer term projects being put on hold for the time being.
The restructuring measures that are being implemented up to the year end and
into 2012 include:
* reduction of the employee number from 84 at the end of H1 2011 to a target
size of 45 by the end of Q1 2012;
* implementation of a new commercialization approach in Europe, mainly targeting
key accounts for Epi proColon® 2.0 CE and Epi proLung® aimed at institutions
such as healthcare providers, health insurers and other large institutional
customers;
* scale down direct marketing and sales efforts in the European self-payer
segment;
* discontinuation of all early-stage and technology research activities;
* relocation of the US headquarters to the U.S. East Coast (2012 onwards).
The corporate restructuring mostly impacted the Q3 financial results but it will
also impact Q4 results, albeit to a lesser extent. Going forward, Epigenomics
expects to benefit from annual savings on a comparable operational cost
structure of approximately EUR 3.5-4.0 million.
The main focus of the organization has remained on the development of the second
generation blood-based Epi proColon® test with the goal to file a PMA with the
FDA by the end of the year and the recent launch in Europe as a CE-marked IVD
product. Epigenomics continues to work alongside its partners including Abbott
Molecular, Qiagen and Sysmex to assist them in the commercialization of their
own Septin9-based colorectal cancer tests.
Outlook
The most important milestone remains the filing of the PMA for the Epi proColon®
2.0 test with the FDA in the United States. In order to be successful, the
Company needs first to complete the ongoing prospective clinical validation
study and compile all necessary supplemental material.
The demonstrated success that Epigenomics' partner Quest Diagnostics has
experienced in just over six months with its own version of the Septin9 test,
ColoVantageTM, underlines the management's view that the U.S. market should be
the primary focus.
In Europe, where sales initially have been slower, the management believes that
the re-entry into the market with a new strategy and a significantly improved
second generation product will lead to a more sustainable revenue stream going
forward.
Finally, on the financial side, the management expects revenues for the full
year 2011 to be in the same range as in 2010. The combination of Epi proColon®
2.0 CE IVD kit sales in Europe, growing royalty income from partners' worldwide
sales of Septin9-based tests, and income from prospective additional licensing
fees from partners are expected to be the key drivers of revenue growth going
forward. With respect to costs, it is expected that the restructuring will
continue to have a residual impact in the fourth quarter and in 2012 until the
restructuring and relocation of the US operations to the East Coast are
completed.
-Ends-
Contact Epigenomics AG
Antje Zeise | CIRO
Manager IR/PR
Epigenomics AG
Tel +49 (0) 30 24345 386
pr@epigenomics.comwww.epigenomics.com
Media inquiries can also be directed at:
Dr. Robert Mayer
Account Manager
Tel +49 (0)89 5238 8030
robert.mayer@collegehill.com
Further Information
The full 9-Months Financial Report 2011 can be obtained from Epigenomics'
website at:
http://www.epigenomics.com/en/news-investors/investors/financial-reports.html
About Epigenomics
Epigenomics (www.epigenomics.com) is a molecular diagnostics company developing
and commercializing a pipeline of proprietary products for cancer. The Company's
products enable doctors to diagnose cancer earlier and more accurately, leading
to improved outcomes for patients. Epigenomics' lead product, Epi proColon®, is
a blood-based test for the early detection of colorectal cancer, which is
currently marketed in Europe and is in development for the U.S.A. The Company's
technology and products have been validated through multiple partnerships with
leading global diagnostic companies including Abbott, QIAGEN, Sysmex, and Quest
Diagnostics. Epigenomics is an international company with operations in Europe
and the U.S.A.
Epigenomics legal disclaimers
This communication expressly or implicitly contains certain forward-looking
statements concerning Epigenomics AG and its business. Such statements involve
certain known and unknown risks, uncertainties and other factors which could
cause the actual results, financial condition, performance or achievements of
Epigenomics AG to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Epigenomics AG is providing this communication as of this date and does not
undertake to update any forward-looking statements contained herein as a result
of new information, future events or otherwise.
The information contained in this communication does not constitute nor imply an
offer to sell or transfer any product, and no product based on this technology
is currently available for sale by Epigenomics in the United States or Canada.
The analytical and clinical performance characteristics of any Epigenomics
product based on this technology which may be sold at some future time in the
U.S. have not been established.
Further inquiry note:
Antje Zeise | CIRO
Manager IR/PR
Epigenomics AG
Tel: +49 30 24345 386
antje.zeise@epigenomics.com
end of announcement euro adhoc
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company: Epigenomics AG
Kleine Präsidentenstraße 1
D-10178 Berlin
phone: +49 30 24345-0
FAX: +49 30 24345-555
mail: ir@epigenomics.com
WWW: http://www.epigenomics.com
sector: Biotechnology
ISIN: DE000A1K0516
indexes: Prime All Share, Technology All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
Hamburg, Stuttgart, Düsseldorf, München
language: English