DGAP-News: Epigenomics AG / Key word(s): Final Results/Forecast
Epigenomics AG Reports Results for the Financial Year Ended December 31,
2015 and Provides Outlook for 2016
18.03.2016 / 06:00
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Press release
Epigenomics AG Reports Results for the Financial Year Ended December 31,
2015 and Provides Outlook for 2016
- Product revenue growth of 88% year-on-year driven by successful start
of commercialization of Epi proColon(R) in China
- FDA review for approval of Epi proColon(R) expected to be completed
soon
- Outlook 2016: Strong revenue growth upon launch in the U.S.A.
Berlin (Germany) and Germantown, MD (U.S.A.), March 18, 2016 - Epigenomics
AG (Frankfurt Prime Standard: ECX, OTCQX: EPGNY), the German-American
cancer molecular diagnostics company, today announced financial results for
the fiscal year ending December 31, 2015 and provided an outlook for the
year 2016.
Dr. Thomas Taapken, CEO/CFO of Epigenomics, commented: "The most important
achievement of our work in 2015 is the progress we made with the Pre-Market
Approval (PMA) application for our lead product Epi proColon(R). We are now
in advanced talks with the FDA on the outstanding topics, with the main
topics being resolved. We are very confident that the approval process of
Epi proColon(R) can be completed in the near future."
"In 2015 we also saw remarkable progress with our Epi proColon(R) test in
China. The inclusion of Septin9-based tests as the method of choice in the
Chinese Guideline on Screening, Endoscopic Diagnostics and Treatment of
Early CRC was a major milestone for us. Together with our partner BioChain
we further strengthened our marketing activities around Epi proColon(R) and
were able to accelerate commercial success. Product revenues increased
significantly, though, still on a moderate level, and we are optimistic
that Septin9 testing will make the difference in colorectal cancer
screening in the important Chinese market."
2015 Financial Results
- In 2015, Epigenomics' total revenue increased by 38% to EUR 2.1 million
(2014: EUR 1.5 million), exceeding the previous year's figure and
thereby meeting the Company's revised guidance. For the first time, the
biggest share of revenue (EUR 1.6 million; 2014: EUR 0.8 million)
derived from product sales, which grew 88% year-over-year, following
the approval of Epi proColon(R) in China. Consequently, revenue in
Asia amounted to EUR 1.0 million. In Europe, revenue amounted to EUR
0.9 million as product sales and R&D income were in line with the
Company's expectations.
- Total operating costs increased to EUR 12.2 million (2014: EUR 10.5
million). Research and development costs increased by EUR 1.1 million
to EUR 5.8 million (2014: EUR 4.7 million) driven by both the ongoing
FDA approval process and in particular the conduct of the ADMIT trial
and the development activities for a blood-based lung cancer assay.
Selling, general and administrative costs were up EUR 0.2 million to
EUR 5.1 million (2014: EUR 4.9 million) attributable primarily to
increased expenses for legal advice and auditing.
- Operating loss (EBIT) in 2015 increased to EUR -9.3 million (2014: EUR
-8.4 million), but compares favorably with the Company's financial
prognosis of EUR -10.0 and EUR -11.0 million. Net loss of EUR -9.0
million (2014: EUR -8.9 million) also remained below our 2015 guidance
range (EUR -10.0 million to EUR -11.0 million). Due to an increase in
the average number of shares outstanding as compared to 2014, the loss
per share in 2015 fell to EUR -0.52 (2014: EUR -0.65).
- Cash consumption in 2015 amounted to EUR 8.0 million (2014: EUR 8.1
million) and was significantly below of the prognosis range of EUR 9.5
to 10.5 million as we recorded EUR 1.4 million in proceeds from grants
and subsidies which were not predictable at the beginning of the year.
Due to net cash inflows from financing activities in the amount of EUR
9.0 million in 2015 (2014: EUR 7.6 million), net cash flow amounted to
EUR 1.1 million (2014: EUR -0.5 million).
- The Company's liquidity at year-end 2015 was EUR 8.6 million (Dec 31,
2014: EUR 7.5 million). After year-end, three further convertible notes
were converted by their holders and the Company received a further cash
inflow from financing amounting to EUR 1.6 million. The seven
outstanding convertible notes have the potential to increase the
liquidity by an additional amount of EUR 3.6 million upon their
conversion in 2016.
Summary of Operational Highlights in 2015
- Epi proColon(R) with successful results in ADMIT trial in the U.S.A.:
In May 2015, the Company successfully completed the ADMIT trial
(ADherence to Minimally Invasive Testing), which was requested by the
FDA as part of the approval process for Epi proColon(R). In this trial,
adherence to the blood-based test approached nearly 100%, outperforming
Fecal Immunochemical Testing (FIT) by 11.4%, which clearly confirms the
Company's assumption that blood-based CRC screening has the potential
to significantly lower the barriers for patients who have been
historically noncompliant to participate in CRC screening programs.
- Approaching FDA approval decision: In November 2015, Epigenomics
received a formal response letter, in which the agency requested
additional data demonstrating that the blood-based Epi proColon(R) test
will increase compliance to CRC screening in the intended use
population. Following discussions with the agency, Epigenomics appealed
the FDA's decision on additional data requirements as the Company
strongly believed that an approval for the intended use of Epi
proColon(R) is warranted based on the data already submitted. The
agency notified in January 2016 that the already submitted and
available data for Epi proColon(R) would allow the agency to come to a
final determination on its safety and effectiveness. Epigenomics
expects the final stages of the review process will be completed in the
near future. Upon approval, Epi proColon(R) will be the first and only
FDA-approved blood-based test for the early detection of colorectal
cancer.
- Preparing for product launch: Together with its strategic
commercialization partner Polymedco, Epigenomics is taking preparatory
measures for launching Epi proColon(R) in the U.S. market. This
includes, for example, the necessary technical validation of selected
major laboratories. To secure the commercialization progress, the
Company also significantly strengthened its manufacturing capabilities
and is evaluating further steps to shorten manufacturing lead times and
reduce production costs while building product inventory in preparation
of the product launch.
- Further progress with commercialization of blood-based Septin9 testing
in China: In July 2015, new "Guidelines on Screening, Endoscopic
Diagnosis and Treatment of Early Colorectal Cancer" were published in
China stating that Septin9-based tests, such as Epi proColon(R), one of
the methods of choice for early CRC screening. Epigenomics believes
this to be an important step that will help BioChain in their ongoing
efforts to establish Septin9-based tests in routine healthcare
screening programs and increase market adoption while at the same time
securing adequate pricing and reimbursement decisions for the
commercial success of this innovative blood-based test in China.
- Epi proLung(R): Next generation blood-based lung cancer test with
impressive performance data in first clinical evaluation study: During
2015, Epigenomics further developed its next generation innovative in
vitro molecular diagnostic (IVD) assay for blood-based lung cancer
diagnosis. Starting from its existing product Epi proLung(R) which
detects the lung cancer biomarker SHOX2 in bronchial fluid, the Company
aims to develop an easy-to-use blood-based alternative to existing
testing methods leveraging its huge expertise in the emerging field of
liquid biopsies and its strong platform in DNA methylation. The
development is partly financed by a grant of up to EUR 2.8 million from
the European Commission within the framework of the Horizon 2020
program awarded to Epigenomics in April 2015.
- In November 2015, Epigenomics announced preliminary performance data of
a first clinical evaluation study of this new blood-based Epi
proLung(R) test. Data displayed high sensitivity in detecting lung
cancer and superior performance compared to protein biomarkers allowing
to use it as a confirmatory test for positively tested patients in a
low dose spiral computed tomography (LDCT) screening and alternatively
as an early detection test to guide patients into additional
imaging-based diagnostic procedures, such as LDCT or others.
- Solid financial position: In May 2015, the Company successfully
completed a capital increase by way of a pre-emptive rights issue,
which was significantly over-subscribed. All of the 976,562 new
registered shares offered were taken up by existing shareholders of the
Company. The proceeds were used to strengthen the Company's liquidity,
to finance certain market introductory measures for Epi proColon(R) in
the U.S.A., to strengthen its manufacturing capabilities as well as to
build product inventory.
Outlook for 2016
- The Companys's business projections for 2016 are based on the
successful introduction of Epi proColon(R) in the U.S. market. However,
it is difficult at this pre-FDA approval stage to provide the capital
markets with a reliable prognosis on our earnings situation. In our
planning, we assumed that Epi proColon(R) will generate initial revenue
in the U.S. market during Q2 2016, even if initially only on a moderate
level. Given the increased initial resources necessary to facilitate a
successful market introduction, the earnings situation may not benefit
in the short-term, but should improve over time.
- Based on the aforementioned assumptions and associated uncertainties,
our revenue estimate for 2016 is expected in the range of EUR 3 to 7
million with the bulk of this in the second half of the year. This
growth in revenue versus the 2015 number will almost entirely be driven
by the expected product sales in the U.S.A. For China, we expect
BioChain to be selling more units of the domestically manufactured
Septin9 product, shifting our revenue from kit sales to a royalty
stream in 2016. As they still depend on the development of the ongoing
reimbursement discussions with the Chinese authorities, this is another
difficult-to-predict effect.
- Efforts to develop the U.S. market for the lead product will initially
weigh down operating results. Reflecting these product launch costs, we
expect EBIT for 2016 to be lower than in 2015, in the range of EUR -9.0
to -11.0 million. Any delay in the approval decision might result in a
reduction of our revenue estimate on the one side, which would then be
compensated in its impact on the expected loss by lower additional
costs on the other.
- Based on our business plans for 2016, we expect an increase in cash
consumption compared to 2015 to a range between EUR 8.5 and 9.5
million. For 2017 and the years to come, cash utilization for operating
and investing activities is expected to decrease along with the
revenues ramping up.
- Starting from EUR 8.6 million in liquid assets at the beginning of 2016
plus a remaining inflow potential from convertible notes of EUR 5.2
million, current financial resources are sufficient at the projected
cash consumption to support the Company's operations beyond 2016.
Epigenomics is convinced that a positive FDA decision will open up
further financing options on the capital markets and is determined to
exercise such options in the Company's best interests. The Company will
also continue to diligently explore all further available strategic
options.
Further Information
The Full Year Report 2015 can be obtained from Epigenomics' website at:
www.epigenomics.com/en/news-investors/investors/financial-reports/2015.html
Annual press conference / Conference call for analysts and investors
Epigenomics will host its Annual Press Conference in Frankfurt Main,
Germany at 11:00 am CET, today.
The Company will also host an investor conference call at 3.00 pm CET / 10
am EST, today. The presentation can be followed as a slide show on the
website.
The dial-in numbers for the conference call are:
Dial-in number (within Germany): +49 30 232531366
Dial-in number (within the UK): +44 203 3679216
Dial-in number (within the U.S.A.): +1 408 9169838
Participants are kindly requested to dial in 10 minutes prior to the start
of the call.
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.
Details of both events will be available on Epigenomics' website at
http://www.epigenomics.com/en/news-investors.html
- Ends -
About Epigenomics
Epigenomics is a molecular diagnostics company focused on blood-based
detection of cancers using its proprietary DNA methylation biomarker
technology. The Company develops and commercializes diagnostic products
across multiple cancer indications with high medical need. Epigenomics'
lead product, Epi proColon(R), is a blood-based screening test for the
early detection of colorectal cancer. Epi proColon(R) is currently marketed
in Europe and China. For more information, visit www.epigenomics.com.
Contact Epigenomics AG
Peter Vogt, Investor & Public Relations
Epigenomics AG
Geneststraße 5
10829 Berlin
Phone +49 (0) 30 24345 386
ir@epigenomics.com
www.epigenomics.com
For U.S. press inquiries:
Epigenomics, Inc.
20271 Goldenrod Lane, Suite 2027
Germantown, Maryland 20876
pr@epigenomics.com
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.A. have not been established.
---------------------------------------------------------------------------
18.03.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------------
Language: English
Company: Epigenomics AG
Geneststraße 5
10829 Berlin
Germany
Phone: +49 30 24345-0
Fax: +49 30 24345-555
E-mail: ir@epigenomics.com
Internet: www.epigenomics.com
ISIN: DE000A11QW50
WKN: A11QW5
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart
End of News DGAP News Service
---------------------------------------------------------------------------
446713 18.03.2016
DGAP-News: Epigenomics AG Reports Results for the Financial Year Ended December 31, 2015 and Provides Outlook for 2016
| Source: EQS Group AG