– PMA application for Epi proColon® accepted and priority review status – Non-inferiority of Epi proColon® to FIT for sensitivity shown in comparison study – Significant cost savings implemented; EUR 5.0 million raised at the beginning of 2013
21.03.2013 | 130321_Press_release_results_FY_2012
Berlin, Germany and U.S.A. – Epigenomics AG (Frankfurt Prime Standard: ECX), the German-American cancer molecular diagnostics company, today announced its results for the financial year ended 31 December 2012 and provided an outlook for 2013.
Dr. Thomas Taapken, Chief Financial Officer and acting Chief Executive Officer of Epigenomics commented: “By the close of 2012 we had completed a very busy year in which we made significant progress on our regulatory pathway for Epi proColon® in the U.S. and in the development of our commercialization plans for this blood-based colorectal cancer screening assay. By submitting our Premarket Approval (PMA) application to the FDA, including encouraging data from the recent comparison study, we achieved our primary objective for the year. The next most significant milestone for us is to be able to start commercialization of our product in the most relevant market of the world – the United States of America – and to ultimately transform Epigenomics into a commercially driven molecular diagnostics company with growing revenue derived from product sales.”
2012 Financial Results
- 2012 revenue amounted to EUR 1.0 million (2011: EUR 1.4 million) generated from product sales of Epi proColon® kits, royalty payments, licensing income and partnering activities; the decrease compared to 2011 is primarily due to one-off licensing payments received in 2011 with no comparable effects in 2012. Product sales prior to a potential approval of Epi proColon® in the US continued on a low level, though moderately increasing, over the year.
- Other income increased to EUR 1.0 million (2011: EUR 0.5 million) primarily driven by the reversal of provisions related to the restructuring of the Company in 2011.
- Net loss improved by 22% to EUR 12.2 million (2011: EUR 15.6 million). The decline in total revenue and an increase of R&D costs due to the execution of the comparison study were overcompensated by the absence of extraordinary effects (i.e. restructuring and goodwill amortization) in 2012 (2011: EUR 5.5 million).
- Epigenomics implemented significant cost savings in 2012. Consequently, cash consumption was reduced to EUR 10.9 million (2011: EUR 12.2 million) but contained high cash outflows directly attributable to the study mentioned above (EUR 2.3 million) and payments related to restructuring measures taken (in total EUR 1.4 million).
- Cash and cash equivalents at year-end 2012 amounted to EUR 2.7 million (2011: EUR 14.0 million). The Company raised gross proceeds of EUR 5.0 million in an equity issue at the beginning of 2013.
Outlook for 2013
- Prior to securing approval of Epi proColon® as an IVD product in the U.S. market, Epigenomics remains cautious and does not expect revenues to significantly differ from 2012 levels.
- EBIT and net loss for 2013 are expected to be significantly lower than in 2012 due to the full effect of the 2011 restructuring and significantly reduced R&D expenses. Net loss for 2013 expected in the range of EUR 6.5 to 7.5 million.
- In line with reduced net loss, cash consumption 2013 is expected to be in the range of EUR 6.5 to 7.5 million.
- Current financial resources expected to support the Company’s operations until the end of 2013. Epigenomics will continue to diligently explore all strategic options, including the possibility to raise capital.
Operational Highlights in 2012 and 2013 YTD
Non-inferiority of Epi proColon® against FIT demonstrated: Epigenomics performed a head-to-head comparative study with the goal to demonstrate non-inferiority of Epi proColon® to fecal immunochemical testing (FIT) for the
detection of CRC. This clinical trial started in Q2 2012, after having agreed on the study protocol with the FDA, and was successfully completed before year-end. In summary, Epi proColon® met the critically important endpoint of
non-inferiority with respect to sensitivity compared to FIT. The sensitivity – or cancer detection rate – amounted to 71%. The FIT comparator used in the study showed a sensitivity of 67% and detected less cancer cases than Epi
proColon®. The difference in specificity – or the rate of correctly assessed non-cancer cases –was determined at 81% for Epi proColon® and at 98% for FIT and is in line with previous studies performed with Epi proColon® and
published data for FIT. The difference in specificity was anticipated and in our opinion is less vital, since patients will undergo a colonoscopy – the currently recommended screening procedure in the U.S. – as a result of a positive
PMA application for Epi proColon® completed: Epigenomics initiated the process of gaining U.S. regulatory approval for its blood-based CRC test early in the year. Four data modules of the PMA for Epi proColon® were submitted to the FDA in the course of the year. Through the submission of the fourth module by the end of 2012, the Company formally completed its PMA application, which has been filed with the FDA in early 2013 and will be subject to priority review by the authorities.
Pre-marketing activities in the U.S.: Although reimbursement levels are still to be determined, a major accomplishment in 2012 has been the inclusion of Septin9 testing with its own defined code into the Current Procedural Terminology (CPT) coding document issued by the American Medical Association, which is the basis for reimbursement of laboratory tests by payers in the United States and will be first applied in 2013. Epigenomics is also undertaking steps to increase awareness of the test among KOLs and medical experts setting screening
U.S. partnering activities expanded: In June 2012, the Company signed another LDT agreement with Companion Dx Reference Lab, a strong partner serving the Texan cancer-testing market. Encouragingly, Epigenomics is seeing a
growing market acceptance for its test in North America with more than 45,000 Septin9 tests performed in 2012 by its license partners compared to 26,000 tests in 2011.
Increasing acceptance from European healthcare bodies: After a far-reaching restructuring of commercialization activities in Europe, Epigenomics is starting to see increasing acceptance from players in the healthcare systems to adopt the patient-friendly blood test for the early detection of CRC. As a measure of initial success Swiss Life, one of France’s largest private health insurance companies, has decided to recommend and reimburse up to 50% of the costs of the Septin9 test. This decision clearly confirms Epigenomics’ approach in Europe and the Company will continue on this path.
Organizational changes reducing cost base: At the Company’s Annual General Meeting (AGM) in May 2012, the shareholders voted with vast majority in favor of a reduction of the Supervisory Board from six to three members.
They elected Heino von Prondzynski as new member and confirmed the former members Ann Clare Kessler, Ph. D., and Prof. Dr. Günther Reiter for a further term until the AGM in 2015. In the initial meeting the newly elected
Supervisory Board subsequently elected Heino von Prondzynski as its new Chairman and Ann Clare Kessler as Vice-Chairwoman. Epigenomics’ former CEO Geert Nygaard agreed with the Supervisory Board of the Company to
retire from the Executive Board and to leave the Company effective September 30, 2012. Simultaneously, the Supervisory Board appointed the Company’s CFO, Dr. Thomas Taapken, to serve as acting CEO in addition to his
responsibilities as CFO, effective October 1, 2012. Epigenomics’ Executive Board was therefore reduced to one person, marking a significant step in reducing the Company’s cost basis.
Successful capital increase: On January 25, 2013, after the reporting period, Epigenomics announced a capital increase from authorized capital for 3,149,430 new ordinary bearer shares, generating gross proceeds of EUR 5.0
million. 2,811,707 of these shares were taken up by existing shareholders at a subscription price of EUR 1.58 per share and the remaining 337,723 shares were sold at the same price in a private placement to institutional investors, which was significantly oversubscribed.
Conference call for press and analysts The Annual Report 2012, which was released today, can be obtained from Epigenomics’ website at: http://www.epigenomics.com/en/news-investors/investors/financial-reports.html.
Epigenomics will host an annual press conference in Frankfurt Main, Germany in German language at 9.30 am CET today. The Company will also be hosting a conference call on the same day at 3.00 pm CET today. The presentation can be followed as a slide show on the website. Details of both events will be available on Epigenomics’ website at http://www.epigenomics.com/en/news-investors.html.
Contact Epigenomics AG
For US press inquiries:
9700 Great Seneca Highway Rockville, Maryland 20850
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 partnerships with leading diagnostic companies and testing laboratories. 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 of America. The analytical and clinical performance characteristics of any product based on this technology which may be sold at some future time in the U.S.A. have not been established.