Berlin, Germany, and U.S.A., – Epigenomics AG (Frankfurt Prime Standard: ECX, OTC: EPGNY), the German-American cancer molecular diagnostics company, today announced its financial results for the third quarter and the nine months ending September 30, 2013.
- 9M 2013 revenue increased by 43% to EUR 961 thousand
- 9M 2013 operating costs decreased by 40% to EUR 6.6 million
- 9M 2013 EBIT improved by 45% to EUR -5.2 million
- Strategic partnerships with Polymedco for the U.S. and BioChain for China (after period-end)
- Successful financing of EUR 5,2 million closed (thereof EUR 4,7 million after period-end)
- Supervisory Board re-appoints Thomas Taapken as CEO/CFO until end of 2015
“In the past weeks we have achieved significant progress as evidenced by two strategically important collaborations we entered into with Polymedco and BioChain and by securing a EUR 5.2 million financing for the future development of our Company. We are especially proud that both of our new partners, BioChain and Polymedco, have expressed their commitment and trust in Epigenomics by becoming strategic investors”, said Thomas Taapken, CEO/CFO of Epigenomics AG. “Investor confidence in Epigenomics finally seems to be returning; our share price has tripled since the beginning of this year. We are committed to live up to these high expectations to the benefit of our shareholders and partners and remain confident to receive the FDA approval for Epi proColon® in the foreseeable future.”
Nine Months 2013 Financial Results
- 9M 2013 revenue increased by 43% to EUR 961 thousand (9M 2012: EUR 672 thousand), mainly driven by product revenue of EUR 438 thousand (+52%) and R&D service fees of EUR 342 thousand (+242%).
- 9M 2013 operating costs decreased to EUR 6.6 million, down 40% from EUR 11.0 million in 9M 2012. This was primarily attributable to the clinical trial (i.e. FIT study), which was completed at the end of 2012 and had significantly affected the 2012 costs. Furthermore, the decrease mirrors the Company’s headcount reduction from 45 employees at the end of Q3 2012 to 34 at the reporting date.
- As a consequence, EBIT for the 9M 2013 improved by 45% to EUR -5.2 million (9M 2012: EUR -9.4 million) and net loss by 44% to EUR 5.2 million (9M 2012: EUR 9.4 million). Net loss per share was significantly reduced to EUR 0.16 for Q3 2013 (Q3 2012: EUR 0.42) and to EUR 0.45 for the nine-month period (9M 2012: EUR 1.07).
- Net cash flow in 9M 2013 added up to EUR -0.3 million (9M 2012: EUR -6.9 million). A major impact on liquidity resulted from the successful capital raise in Q1 2013 and the convertible bond issuance in Q3 2013leading to a net cash inflow of EUR 4.9 million for the Company.
- Cash outflow from operating activities was EUR 5.2 million in 9M 2013 – a significant decrease of EUR 2.3 million compared to 9M 2012 (EUR 7.5 million).
- Liquid assets at the end of the period amounted to EUR 2.6 million (December 31, 2012: EUR 2.7 million), which does not yet reflect the recently concluded financings after the end of the reporting period.
- PMA Registration on Track, Panel Meeting Awaited: Throughout the third quarter of 2013, Epigenomics completed all required activities in connection with the premarket approval (PMA) submission of Epi proColon®. The review of the PMA submission by the U.S. Food and Drug Administration (FDA) and resulting activities from this review have dominated the activities of the Company for most of the year. As a next step towards the approval decision, the FDA will convene an advisory board panel meeting, comprising independent medical experts to discuss the PMA application. As in the past, once a panel meeting date has been set, the FDA will publicly announce it and Epigenomics will immediately inform its shareholders.
• Joint Commercialization Agreement with Polymedco for Epi proColon® in North America: On October 2, 2013, after period-end, Epigenomics announced a joint commercialization agreement for Epi proColon® in North America with Polymedco, Inc., the leading U.S. company in the field of selling CRC screening products with more than 1,500 established customers in the sector and a CRC-dedicated sales force. Both parties will work jointly on the marketing, launch and development strategies and with key payers to obtain favorable reimbursement coverage for Epi proColon®. Epigenomics will retain the responsibility to manufacture the product and to support it from the medical and regulatory point of view, including activities necessary to achieve inclusion in major cancer screening guidelines post approval. The significant know-how and established position of Polymedco in the CRC screening space will ensure a successful market introduction of Epi proColon® and accelerate the commercial roll-out once the test has received FDA approval.
- Broad Strategic Collaboration with BioChain in China: On October 27, 2013, after the end of the reporting period, Epigenomics signed another strategically important agreement with BioChain, a leading clinical diagnostics company in cancer and genetic diagnostics in China and the U.S.A. BioChain acquired an exclusive license to develop and commercialize Septin9 in vitro diagnostic (IVD) tests for CRC screening in the large Chinese market, where more than 290 million people are CRC screening eligible. BioChain will initiate a major clinical trial to validate the Septin9 assay with the goal to gain market approval for the blood-based test by the Chinese Food and Drug Administration (CFDA). In October, BioChain has placed an order for 5,000 Epi proColon® tests for this clinical study, which is expected to start immediately.
- Successful Financing of EUR 5,2 Million though Private Placement, Convertible Bond Issuance and Strategic Investment of BioChain: Over the last weeks, Epigenomics has raised a gross amount of EUR 5,2 million to finance its current operations and to build and strengthen the distribution capacities for Epi proColon®. In the context of the aforementioned agreement, BioChain and its owners invested approximately EUR 1 million into Epigenomics. In addition, at the end of October, the Company successfully raised EUR 3.3 million in a private placement to institutional investors in Europe and the U.S. Among others, the owners of its strategic partner Polymedco participated in the financing. Earlier in August, Epigenomics had entered into an agreement with Yorkville, securing a convertible bond financing for up to EUR 5 million. The agreement allows management to access funds with great flexibility to improve the Company’s financial position. The first two tranches of EUR 0.5 million each were issued in August and after the end of the reporting period.
- Supervisory Board Re-appoints Dr. Thomas Taapken: In Q3 2013, the Supervisory Board of the Company unanimously re-appointed Dr. Thomas Taapken as CEO/CFO of Epigenomics until the end of 2015.
- First Berlin Increases Price Target: Based on the recent operational and financing successes, research analysts of First Berlin Equity Research have increased the price target for Epigenomics shares to EUR 8.20 per share.
- The most significant milestone for Epigenomics over the next months will be the approval decision for Epi proColon® by the FDA. The transformation of Epigenomics into a commercially driven molecular diagnostics company with growing revenue from product sales remains the goal for the medium and long term.
- With regard to the financial prognosis for the current business year, there are no significant changes compared to the statements in Epigenomics’ consolidated management report for 2012. Based on the nine-month results, Epigenomics expects to see a noticeable increase of its full year revenue compared to the previous year, driven by higher product sales and R&D income. In line with previous guidance, EBIT and net loss are expected to be in a range between EUR -6.5 million and EUR -7.5 million, significantly improved over 2012 through the successful reduction of costs. The expected net loss per share will likely be in the range of EUR 0.54 to EUR 0.64 (2012: EUR 1.38). Cash consumption for 2013 is expected to be approximately EUR 7 million (2012: EUR 10.9 million).
- Following the successful financing of Epigenomics during the recent weeks, current financial resources are expected to fund the Company’s operations well into 2014. However, Epigenomics will continue to evaluate all financing options available to secure its business operations beyond this term.
Conference call for press and analysts
The full 2013 Third Quarter and Nine Month Financial Report can be obtained from Epigenomics’ website at:
Epigenomics’ management will host a conference call with web presentation at 3pm CET/9am ET today, Wednesday, November 6th, 2013. The conference call will be held in English.
The dial-in numbers for the conference call are:
Dial-in number (within Germany): +49 30 232 531 490
Dial-in number (within the UK): +44 203 367 9216
Dial-in number (within the U.S.): +1 408 916 9838
Participants are kindly requested to dial in 10 minutes prior to the start of the call.
The presentation accompanying the conference call and dial-in details for the web presentation will be available on Epigenomics’ website: http://www.epigenomics.com/en/news-investors.html
Both an audio replay of the conference call and a transcript of the conference call will be provided on Epigenomics’ website subsequently: http://www.epigenomics.com/en/news-investors.html
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Contact Epigenomics AG
Antje Zeise, Manager IR | PR
Kleine Praesidentenstrasse 1
Tel +49 (0) 30 24345 386
For US press inquiries:
9700 Great Seneca Highway Rockville
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 and China. 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.
Epigenomics legal disclaimer
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.