New process for US approval of The NGAL Test™ initiated after rejection
In May 2016, BioPorto received notification that the FDA had rejected the company’s application for approval of The NGAL Test™ as the submitted clinical data in FDA's view did not adequately support the requested claims, especially for mild cases of acute kidney injury.
Immediately after the rejection, BioPorto initiated a dialogue with the FDA regarding the circumstances that led to the rejection of the original application, as FDA approval is of great importance to the commercialization of BioPorto’s The NGAL Test™ for clinical routine use in the US. In July 2016, the dialogue led to the decision to prepare for a new submission of The NGAL Test™ - expectedly with new clinical data that is expected to lead to final approval within 18-24 months. The new application process is expected to result in costs of DKK 3 million in 2016, while the final cost for the entire process can not yet be determined.
In the second quarter, The European Patent Office (EPO) ruled that BioPorto’s NGAL forms patent was upheld as valid in opposition pro-ceedings. After the second quarter, the EPO ruled that BioPorto's NGAL exclusion patent was invalid in opposition proceedings and this decision will be appealed by BioPorto. The company estimates that its entire portfolio of patents provides a sufficient coverage of the NGAL area regardless of the outcome of this case.
Revenue and profit/loss
In the second quarter, BioPorto’s revenue totaled DKK 4.7 million against DKK 5.8 million in the second quarter of 2015.
Despite an increase in sales of The NGAL Test™ in the second quar-ter from DKK 0.6 million to DKK 1.0 million, the total turnover decreased due to lower sales of antibodies after a very strong first quarter in 2016. This was partly due to a change in income recognition from a research collaboration on antibodies that in 2015 was recognized as a one-time payment and in 2016 is recognized on an ongoing basis. The change means that revenue in the first half of 2016 is DKK 0.5 million lower compared to the same period of 2015.
BioPortos operating profit (EBIT) was DKK -13.2 million in the first half of 2016 against DKK -8.5 million in the same period last year. Capacity costs increased due to the establishment and operation of the new US subsidiary and hiring a COO and CFO beginning this year. In the first half of 2016, EBIT was also impacted by non-cash expenses of DKK 1.2 million in connection with the expensing of warrants to executive and senior management.
Guidance for 2016
BioPorto adjusts its expectations for a turnover in 2016 from around DKK 23-26 million to DKK 23-25, representing a growth of 13-23%.
As a result of costs estimated at DKK 3 million associated with the reapplication with the FDA, expectations for EBIT for the full year 2016 is adjusted from a loss of around DKK 16-18 million, to a loss of around DKK 19-21 million. Profit after tax is adjusted from a loss of DKK 14.5-16.5 million to a loss of DKK 17-19 million.
Peter M. Eriksen, CEO comments:
"In the second quarter, we have had to revise our strategy for NGAL in the US and I am very pleased with the support we have received from US clinical leaders and the continued demand for NGAL tests from hospitals and clinics. NGAL is still a very important biomarker which can improve the detection of acute kidney injuries. We are disappointed that the The NGAL TestTM was not approved but have a better understanding of what is needed to be succesful this time around. We have initiated work for the new submission and our US organization will be instrumental in ensuring important input for the new process. "
Investor meeting
In connection with the release of the interim report, BioPorto hosts an investor meeting on August 4, 2016 at 3 pm at the company address Tuborg Havnevej 15, 2900 Hellerup. Please sign up at investor@bioporto.com.
For further information, please contact:
Peter Mørch Eriksen, CEO
Christina Thomsen, Investor Relations Manager
Tel: +45 4529 0000
E-mail: investor@bioporto.com
See the full report in the attached pdf
