Successful continuation of the Group's mutation in specialty in-vitro diagnostics with strong reduction of losses
- Strong 41% improvement in operating result and 29% in net result compared to June 30, 2013
- 7% growth of sales of specialty diagnostics, which more than offsets the planned end of the Allergan collaboration
- Strengthened financial position with € 14.7 million in cash for funding of continued growth and R&D
Paris, France - September 18, 2014 - DIAXONHIT (Alternext: ALEHT, FR0004054427), a French leader in specialty in-vitro diagnostics, announced today its financial results for the first half of 2014.
| € M | H1 2014 | H1 2013 | Variation |
| Sales of IVD products | 14.5 | 13.6 | +7% |
| Other revenues | 1.7 | 2.3 | |
| TOTAL REVENUES | 16.2 | 15.9 | +1.8% |
| COGS | (9.0) | (8.6) | |
| R&D expenses | (2.8) | (3.6) | |
| Marketing and sales expenses (1) | (4.2) | (3.7) | |
| G&A expenses | (2.1) | (3.2) | |
| OPERATING RESULT | (1.9) | (3.2) | +41% |
| %revenues | -11.6% | -20.0% | |
| NET RESULT | (1.9) | (2.7) | +29% |
| %revenues | -12.0% | -17.1% | |
| Cash and cash equivalents at June 30 | 14.7 | 5.9 | +8.8 M€ |
| (1) Includes amortization of intangible assets derived from Purchase Price Allocation | |||
DIAXONHIT first-half sales of diagnostic products increased by 7% compared to the first semester of 2013, leading to a 1.8% increase of total consolidated revenues at € 16.2 million, more than offsetting the planned end of the collaboration with Allergan.
Operating profitability improved notably with an operating result of € -1.9 million, a 41% increase compared to first half of 2013. Net result also increased by 29% to € -1.9 million. This encouraging performance reflects the acceleration of the Group's mutation.
In a stable diagnostics market within Europe, the first half performance also highlights the strength of DIAXONHIT positioning in specialty in-vitro diagnostics, which led to further sales increase.
With € 14.7 million in cash and cash equivalents following the successful issuance of convertible bonds with warrants to US investors, DIAXONHIT can clearly maintain its investments in marketing and R&D in order to further strengthen its position in specialty in-vitro diagnostics.
Half-year results: further reduction of losses
Revenues: sales growth offsets the end of the Allergan collaboration
Half-year sales of in-vitro diagnostic products made by InGen, DIAXONHIT's marketing affiliate, reached € 14.5 million, up 7% compared to the first half of 2013. This increase more than offsets lower revenues in research and development in relation with the end of the Allergan collaboration which R&D fees are halved for the year 2014, before the end of the program planned for the month of December.
Thus, despite lower R&D revenues, DIAXONHIT's half-year consolidated revenues at June 30, 2014 totaled € 16.2 million, up 1.8% compared to consolidated revenues of € 15.9 million at June 30, 2013.
Strong improvement of operating result
Operating result totaled € -1.9 million, up 41% compared to the first half of 2013 (€ -3.2 million). This significant improvement of almost € 1.3 million reflects both the impact of synergies following the acquisition of InGen BioSciences ("IBS") and the rationalization of expenses, as part of the acquisition and preparing for the end of the R&D collaboration with Allergan programmed for 2014.
The consolidation of DIAXONHIT's and IBS's scientific teams in a single site, and the discontinuation of certain activities reduced R&D spending from € 3.6 million to € 2.8 million.
In a context of mutation with increased focus on commercial activities, sales and marketing expenses increased by 14.6% over the period to € 4.2 million. This growth is mainly due to the reorganization and strengthening of marketing activities undertaken to launch AlloMap and to prepare for the launch of BJI InoPlex.
General and administrative expenses decreased to € 2.1 million against € 3.2 million in the first half of 2013. This reduction is mainly due to the implementation of the synergies resulting from the acquisition of IBS.
Marketing and sales assets derived from IBS purchase price allocation are being amortized over 10 years, for a total of € 643 K at June 30, 2014, and are included in marketing and sales expenses. The remaining goodwill related to the acquisition of IBS is also being amortized over 10 years. It is deducted from the operating result and stands at € 154 K at June 30, 2014.
Reduction of net loss
Despite increased financial expenses related to strong currency exchange fluctuations during the first semester, and extraordinary expenses related to the reorganization undertaken as part of the end of the Allergan collaboration, the net loss stands at € 1.9 million, an improvement of 29% compared to June 30, 2013. Excluding amortization of goodwill, the net loss would have been € 1.8 million, and € 1.1 million when further excluding amortization of marketing and sales assets derived from IBS purchase price allocation.
Strengthened financial position
On January 1, 2014, DIAXONHIT had € 5.7 million in cash and cash equivalents. After several financings for a total of € 2.6 million, an operating cash consumption of € 3.0 million against € 4.3 million in the first half of 2013, which included an increase in net working capital of € 2 million against € 2.9 million on June 30, 2013, investments for a total of € 0.6 million, and the successful issuance of convertible bonds with warrants to US investors for € 10 million, the Group's cash and cash equivalents stands at € 14.7 million at June 30, 2014.
Operations: continued refocus on specialty in-vitro diagnostics
First European commercialization of the AlloMap test
CareDx, DIAXONHIT's US partner, successfully tested the first blood sample from a German patient with AlloMap in a commercial setting. A centralized laboratory is being set up in the E.U. for the commercialization of AlloMap. DIAXONHIT also initiated the necessary process to obtain reimbursement of the test. AlloMap is the only blood test that provides clinicians and patients with a non-invasive solution for monitoring heart transplants.
Development of a companion diagnostics of a therapeutic vaccine against AIDS
DIAXONHIT received a € 1.7 million financial support from Bpifrance, as part of a project to develop an innovative therapeutic vaccine (VAC-3S) to treat patients with AIDS, and to develop diagnostic tests for the personalized care of these patients. DIAXONHIT was selected for its competence in developing diagnostic tests in the field of infectious diseases and for its recognized expertise in proteomics.
Perspectives
The financial performance of the semester demonstrates the relevance of DIAXONHIT's positioning on specialty in-vitro diagnostics, with sales growth despite an environment that is expected to remain tight for the diagnostics market in Europe. These performances enable the Group to successfully maintain its R&D effort.
DIAXONHIT managed to offset the programmed shutdown of therapeutic activities with Allergan and focus on specialty in-vitro diagnostics in three areas: transplantation, cancer and infectious diseases. In terms of R&D, with its expertise in proteomics and genomics, with its patented GWSA technology and patented antigens, the Group is now fully dedicated to the development of its two proprietary products, BJI InoPlex, a first proteomic blood test to detect joint prostheses infections (CE mark expected by the end of the year), and DX15, a molecular test to identify the benign or malignant status of indeterminate thyroid cysts (validation study starting in the coming weeks). The Group is also developing companion diagnostics in cancer, in partnership with Erytech, and AIDS.
Loïc Maurel, President of DIAXONHIT's Management Board, concluded on the outcome of the first semester: "In the first half of 2014, the combined effects of regrouping our R&D teams post-acquisition and reallocating our resources on the most promising projects helped further reduce DIAXONHIT's operating and net losses. This performance is a milestone and encourages us to strengthen our position in specialty in-vitro diagnostics. Despite an environment that currently remains unfavorable to growth in the diagnostics sector at large, DIAXONHIT has remained a growing business in H1. Sales increased while we continued to invest to support the commercial launch of AlloMap, to finalize BJI InoPlex development for launch in 2015, and to start the validation study of DX15 in thyroid cancer before the end of the year. These achievements are reinforced and supported following the recent success of our issuance of convertible bonds with warrants, and makes us feel confident in the future of DIAXONHIT. "
Upcoming financial press releases
2014 revenues: January 2015
2014 annual results: March 2015
About DIAXONHIT
Diaxonhit (NYSE Alternext, FR0004054427, ALEHT) is a French fully integrated leader in the in vitro diagnostic field, involved from research to commercialization of specialty diagnostic products. With many partnerships and a strong presence in hospitals, Diaxonhit has an extensive commercialization network. Through its affiliate, InGen, it commercializes and services, mostly under exclusivity agreements, in-vitro diagnostic kits and advanced equipment. It operates mainly in the fields of transplantation, infectious diseases and autoimmunity, product quality control and rapid tests, including Tetanus Quick Stick ®, a proprietary product. InGen is the leading supplier in France of HLA tests manufactured by Thermo-Fisher/One Lambda, of which it is the largest distributor worldwide. The group also owns a diversified portfolio of products in development, including both innovative molecular and non-molecular diagnostics, covering three main specialty areas: transplantation, immuno-infection and cancer. Diaxonhit headquarters are located in Paris and its affiliate in the Paris region. The Group is listed on NYSE Alternext in Paris and is part of the NYSE Alternext OSEO innovation index.
For more information, please visit: http://www.diaxonhit.com
Symbol: ALEHT - ISIN Code: FR0004054427 - Reuters: ALEHT.PA - Bloomberg: ALEHT:FP
Disclaimer
This press release contains elements that are not historical facts including, without limitation, certain statements about future expectations and other forward-looking statements. Such statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated.
In addition, Diaxonhit, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only.
Finally, this press release may be drafted in the French and English languages. If both versions are interpreted differently, the French language version shall prevail.
Contacts
DIAXONHIT
Hervé Duchesne de Lamotte, CFO, +33 (0)1 53 94 52 49, herve.delamotte@diaxonhit.com
NewCap
Julien Perez, Investors Relations & Financial Communication, +33 (0)1 44 71 98 52, jperez@newcap.fr
Annie-Florence Loyer, Media Relations, +33 (0)1 44 71 98 50, afloyer@newcap.fr
| DIAXONHIT S.A. | |||
| CONSOLIDATED INCOME STATEMENT (in thousands of euros, except per share data) | |||
| 6 months June 30, 2014 (1) | 6 months June 30, 2013 (1) | 12 months December 31, 2013 | |
| Sales of in vitro diagnostic products | 15 537 | 13 580 | 26 326 |
| Research and Development revenues | 1 429 | 2 008 | 4 174 |
| Other products | 27 | 130 | 248 |
| Research & Development grants | 186 | 182 | 468 |
| Total revenues | 16 179 | 15 900 | 31 216 |
| Cost of goods sold | (8 990) | (8 618) | (16 217) |
| Research and Development expenses | (2 803) | (3 608) | (7 346) |
| Marketing and Sales expenses | (4 188) | (3 656) | (7 932) |
| Including amortization of intangibles assets derived from PPA | (643) | (697) | (1 340) |
| General and Administrative expenses | (2 077) | (3 193) | (6 495) |
| Total operating expenses | (9 068) | (10 457) | (21 774) |
| Loss from operations | (1 879) | (3 175) | (6 775) |
| Interest expense | (53) | (72) | (74) |
| Interest income | 41 | 41 | 114 |
| Currency exchange gain (loss) - net | (259) | (87) | (124) |
| Financial income (loss) | (271) | (117) | (85) |
| Extraordinary expense | (229) | (65) | (262) |
| Extraordinary income | 105 | 71 | 241 |
| Extraordinary income (loss) | (124) | 6 | (21) |
| Income (loss) before tax | (2 274) | (3 286) | (6 881) |
| Tax benefit | 488 | 656 | 1 137 |
| Depreciation of goodwill | (154) | (96) | (250) |
| Net income (loss) | (1 940) | (2 726) | (5 994) |
| Weighted average number of shares outstanding | 60 139 691 | 55 942 675 | 56 922 318 |
| Net loss per share | (0,03) | (0,05) | (0,11) |
| Net loss per share (diluted) | (0,03) | (0,05) | (0,11) |
(1) Unaudited
DIAXONHIT S.A. | ||
| CONSOLIDATED BALANCE SHEET (in thousands of euros) | ||
| ASSETS | June 30, 2014 (1) | December 31, 2013 |
| Goodwill, net | 2 603 | 2 757 |
| Intangible assets, net | 12 698 | 13 382 |
| Property and equipment, net | 1 315 | 1 048 |
| Other long term assets | 863 | 280 |
| Total long-term assets | 17 479 | 17 467 |
| Accounts and grants receivable | 5 430 | 5 797 |
| Other short term assets | 5 618 | 4 457 |
| Cash and cash equivalents | 14 662 | 5 693 |
| Total short-term assets | 25 709 | 15 947 |
| TOTAL ASSETS | 43 189 | 33 414 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Share capital | 981 | 934 |
| Additional paid-in capital | 106 905 | 104 531 |
| Acquisition premium | 9 795 | 9 795 |
| Accumulated deficit | (98 603) | (96 663) |
| Other | 924 | 968 |
| Shareholders' equity | 20 002 | 19 565 |
| Other equity | 11 125 | 999 |
| Provisions for risks | 673 | 800 |
| Long-term debt less current portion | 1 141 | 1 399 |
| Long-term capital lease obligations less current portion | 432 | 124 |
| Long-term portion of deferred income | 166 | - |
| Total long-term liabilities | 1 740 | 1 523 |
| Current portion of long-term debt | 509 | 510 |
| Current portion of capital lease obligations | 211 | 138 |
| Accounts payable | 5 298 | 5 480 |
| Accrued liabilities | 2 640 | 3 339 |
| Deferred income short-term | 990 | 1 060 |
| Total short-term liabilities | 9 650 | 10 526 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 43 189 | 33 414 |
(1) Unaudited
| DIAXONHIT S.A. | ||||||
| CONSOLIDATED CASH FLOW STATEMENT | ||||||
| (in thousands of euros) | 6 months ending June 30, 2014 (1) | 6 months ending June 30, 2013 (1) | Year ending Dec 31, 2013 | |||
| OPERATIONS | ||||||
| Net loss | (1 940) | (2 726) | (5 994) | |||
| Less : | ||||||
| Depreciation and amortization of property & equipment | 366 | 344 | 634 | |||
| Depreciation of intangible assets | 695 | 738 | 1 481 | |||
| Amortization of goodwill | 154 | 96 | 250 | |||
| Net book value of impaired assets | (34) | 64 | 39 | |||
| Retirement liability accrual and other | (127) | 62 | 231 | |||
| Deferred tax | (87) | - | - | |||
| Other | (3) | 16 | (4) | |||
| Increase (decrease) in cash from: | (2 043) | (2 908) | (1 537) | |||
| Inventory | 60 | 520 | 341 | |||
| Accounts receivable | 367 | (1 526) | (1 689) | |||
| Research tax credit receivable | (389) | (656) | 2 | |||
| Prepaid expenses and other assets | (825) | (249) | 674 | |||
| Other assets, long term | (472) | - | - | |||
| Accounts payable and accrued expenses | (181) | (751) | (391) | |||
| Accrued compensation | (698) | (79) | 48 | |||
| Current portion of long-term debt | 17 | (18) | (18) | |||
| Deferred income, short term | 140 | (52) | (164) | |||
| Deferred income, long term | - | - | (126) | |||
| Grants - deferred income, short term | (227) | (52) | (214) | |||
| Grants - deferred income, long term | 166 | (46) | - | |||
| Net cash used in operations | (3 019) | (4 314) | (4 901) | |||
| INVESTING ACTIVITIES | ||||||
| Purchase of property and equipment | (899) | (630) | (574) | |||
| Payment of patent and acquisition of other intangibles | 291 | - | 168 | |||
| Other financial assets | (14) | - | 193 | |||
| Net cash used in investing activities | (621) | (630) | (213) | |||
| FINANCING ACTIVITIES | ||||||
| Issuance of shares (net of fees) | 2 420 | 1 307 | 1 602 | |||
| Convertible debenture bond | 10 044 | - | - | |||
| Loan - redeemable advances | 65 | - | 156 | |||
| Reimbursement of loans | (258) | (186) | (401) | |||
| Reimbursement of leasing | 382 | (107) | (230) | |||
| own share | (12) | - | - | |||
| Net cash provided by (used in) financing activities | 12 642 | 1 015 | 1 127 | |||
| Net increase (decrease) in cash and cash equivalents | 9 002 | (3 929) | (3 987) | |||
| Effects of currency exchange rate on cash | (34) | 35 | (121) | |||
| Cash and cash equivalents, beginning of period | 5 694 | 9 802 | 9 802 | |||
| Cash and cash equivalents, end of period | 14 662 | 5 908 | 5 694 | |||
(1) Unaudited
