- Epigenomics reaches 99.5% adherence for Epi proColon® in the ADMIT Trial
- BioChain starts to commercialize Epi proColon® in China
- Epigenomics receives EUR 2.8 million grant from European Commission to support development of Epi proLung®
- Solid financial position; liquidity at the end of period EUR 6.4 million; Up to EUR 5 million rights issue underway
Berlin (Germany) and Germantown, MD (U.S.A.) – Epigenomics AG (Frankfurt Prime Standard: ECX, OTCQX: EPGNY), the German-American cancer molecular diagnostics company today announced its financial results for the first quarter of 2015 ending March 31.
“Our activities in the first quarter 2015 very much focused on completion of the ADMIT trial (ADherence to Minimally Invasive Testing – NCT02251782) requested by the U.S. Food and Drug Administration (FDA) as part of our pre-market approval (PMA) application for Epi proColon®. With an adherence rate of nearly 100% to colorectal cancer (CRC) screening using Epi proColon® we remain convinced that the study results will support our PMA application and plan to submit the data to the FDA over the next few weeks,” said Dr. Thomas Taapken, CEO/CFO of Epigenomics AG. “We are now also starting to shift research and development resources from Epi proColon® towards future product opportunities, most notably the development of a blood-based lung cancer test.”
Q1 2015 Financial Results
Q1 2015 revenue slightly decreased to EUR 367 thousand (Q1 2014: EUR 407 thousand); thereof, product revenue decreased by 21% year-on-year (from EUR 215 thousand to EUR 169 thousand), however, initial product orders for the Chinese market have been received for the following quarters and will lead to higher revenue in the second half of the year.
Q1 2015 operating costs increased to EUR 3.7 million from EUR 2.5 million in Q1 2014. This increase was completely in line with the Company’s forecast and primarily attributable to higher R&D costs of EUR 2.2 million (Q1 2014: EUR 1.3 million) due to conducting the ADMIT trial and an increase in provisions relating to the phantom stock programs. SG&A costs increased to EUR 1.3 million (Q1 2014: EUR 1.0 million) mainly attributable to an increase in provisions relating to the phantom stock programs and legal and consulting expenses with regard to the Company’s targeted U.S. market entry.
In line with the increase in operating costs, EBIT for Q1 2015 amounted to EUR -3.2 million (Q1 2014: EUR -2.0 million) and net loss for the period to EUR 3.2 million (Q1 2014: EUR 2.2 million). Due to the increased number of shares outstanding at the end of Q1 2015, net loss per share increased only slightly to EUR 0.20 (Q1 2014: EUR 0.17).
Cash outflow from operating activities was EUR 2.2 million in Q1 2015 – an increase of EUR 0.7 million compared to Q1 2014 (EUR 1.5 million) which was mainly attributable to the ADMIT trial and to building up product inventory for expected product demand in the months to come. Cash inflow from financing activities amounted to EUR 1.0 million (Q1 2014: EUR 1.9 million) due to the conversion of two convertible notes by their holders.
Liquid assets amounted to EUR 6.4 million at the reporting date (Dec 31, 2014: EUR 7.5 million).
Summary of Operational Highlights
Epigenomics reaches 99.5% adherence for Epi proColon® in the ADMIT trial (after period-end): Results from the ADMIT trial, published last week (for detailed results reference is made to the press release dated May 8, 2015), demonstrated a 99.5% rate of adherence to CRC screening using Epi proColon®, while the fecal immunochemical test (FIT) showed an adherence rate of 88.1%. Seeing adherence with Epi proColon® approaching 100% clearly confirms the Company’s assumption that blood-based CRC screening has the potential to significantly lower the barrier for patients that have been historically non-compliant to participate in CRC screening programs.
Marketing start of Epi proColon® in China: Since the approval of Epi proColon® in China, Epigenomics has been assisting its partner BioChain in their efforts to work with the provincial governments to secure adequate pricing and reimbursement decisions to support the market adoption and to secure the commercial success of its innovative blood-based test for early detection of CRC in China. Epigenomics has received initial product orders post approval for delivery and expects a ramp-up in sales during the second half of the year.
Strengthening manufacturing capabilities: To secure the commercialization progress of its main product Epi proColon®, the Company has established a second source for product manufacturing, which mitigates potential supply chain risks. In addition, the Company is evaluating further steps to shorten manufacturing lead times and reduce costs. Also, the company is building product inventory in preparation of the launch of Epi proColon® in the US and China.
European Commission grants EUR 2.8 million to Epigenomics for development of blood-based Epi proLung® test (after period-end): Epigenomics is eligible to receive an EU grant under the industrial leadership of the Horizon 2020 program. The grant with a total fund volume of up to EUR 2.8 million is intended to fund the clinical research to validate Epigenomics’ proprietary lung cancer biomarker SHOX2 with the goal to develop a CE-marked product for the detection of lung cancer in blood plasma under the new in-vitro diagnostic directive.
Epigenomics announced Capital Increase of up to EUR 5 million (after period-end): To strengthen the Company’s liquidity, to finance certain market introductory measures for Epi proColon® in the U.S., to strengthen its manufacturing capabilities as well as to build product inventory, Epigenomics has announced a rights issue of up to EUR 5 million. The subscription period will start on May 13, 2015, and will end on May 27, 2015.
The Company confirms its prognosis for fiscal 2015 as outlined in the Group Management Report of the 2014 Annual Report. However, if the announced rights issue is successful, this could have a positive impact on the Company’s financial position in the remainder of 2015 and on the cash reach projections. All business projections for 2015 are still based on the approval of Epi proColon® as an IVD product in the U.S. market around mid-year and the generation of first revenues from Q3 2015 on.
The full Q1 2015 Financial Report can be obtained from Epigenomics’ website at:
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Epigenomics (www.epigenomics.com) is a molecular diagnostics company developing and commercializing innovative 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, has received approval by the Chinese Food and Drug Administration for China and is under regulatory review by the U.S. Food and Drug Administration (FDA). Additionally, the Company markets its tissue assay for use in lung cancer diagnosis, Epi proLung®, in Europe. The Company’s technology and products have been validated through multiple partnerships with leading global diagnostic companies and testing laboratories. Epigenomics is an international company with operations in Europe and the U.S.A.
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