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Globe Newswire 6-Sep-2018 1:01 AM
PRESS RELEASE: REGULATED INFORMATION
Thursday, 6 September 2018, 07:00 CEST
BIOCARTIS ANNOUNCES H1 2018 RESULTS
Mechelen, Belgium, 6 September 2018 - Biocartis Group NV (the 'Company' or 'Biocartis'), an innovative molecular diagnostics company (Euronext Brussels: BCART), today announces its business highlights and financial results for the first half of 2018, prepared in accordance with the IAS 34 Interim Financial Reporting as adopted by the European Union. Furthermore, the Company provides it updated outlook for the full year 2018.
Key messages H1 2018 results
Updated 2018 guidance
Biocartis will host a conference call with live webcast presentation today at 14:00 CEST / 13:00 BST (UK) / 08:00 EDT (US) to discuss the H1 2018 results. Click here to access the live webcast.
To participate in the questions and answers session, please dial 5-10 minutes prior to the start time the number +44 (0)330 336 9125 (standard international), followed by the confirmation code 3161692.
The conference call and webcast will be conducted in English. A replay of the webcast will be available on the Biocartis investors' website shortly thereafter.
Commenting on the H1 2018 results, Herman Verrelst, Chief Executive Officer Biocartis, said: "Our European direct and RoW[2] markets showed good momentum in H1 2018, Europe even exceeding our expectations. Furthermore, I am pleased that in H1 2018 we could significantly strengthen our commercial presence in the US by attracting amongst others top tier customers who fueled a strong US installed base growth. This demonstrates the attractiveness of the Idylla(TM) platform for the US market, paving the way for further market adoption. All of this allowed us to grow our installed base to close to 800 instruments and to realize a doubling of cartridge volumes year-over-year. In addition to that, the expansion of existing and addition of new test menu collaborations in H1 2018 will allow us to further build on this momentum, as such collaborations have shown to be an accelerator in the market adoption of Idylla(TM). It is in this context that we have further redirected internal resources in H1 2018 to facilitate such partnerships. Finally, driven by strong demand from customers, we accelerated the development of our unique MSI test and managed to successfully launch this product in July 2018, an important kick-starter for the second half of this year!"
Commercial highlights
Partnership menu highlights
Menu highlights
o ctRAS testing at AACR - On 15 March 2018, Biocartis announced that a study abstract[10] on the analytical and clinical validation of its liquid biopsy Idylla(TM) ctKRAS and ctNRAS-BRAF Mutation Tests[11] was selected for oral presentation at the renowned AACR (American Association for Cancer Research) Annual Meeting in Chicago, IL (US). Results demonstrated that the Idylla(TM) ctKRAS and ctNRAS-BRAF Mutation Tests[12] provide a sensitive, reliable and fast solution for liquid biopsy RAS-BRAF ctDNA (circulating tumor DNA) testing, and that RAS-BRAF mutation status can be adequately determined using blood plasma from metastatic colorectal cancer (mCRC) patients with liver metastases. RAS-BRAF mutation analysis is mandatory by all major international guidelines[13] for mCRC patients.
o MSI testing at ASCO - On 17 May 2018, Biocartis announced that two studies conducted in cooperation with the Flemish Institute for Biotechnology (VIB) regarding the performance of its exclusively licensed novel set of biomarkers for microsatellite instability (MSI[14]) that are included in the Idylla(TM) MSI Assay (the 'MSI Biomarkers'), were selected for publication at the ASCO (American Society of Clinical Oncology) Annual Meeting, which took place between 1-5 June 2018 in Chicago, IL (US). The first study[15] used the prototype Idylla(TM) MSI Assay in finalized design and shows superior performance of the MSI assay compared to reference methods. The second study[16] underlined the potential of Biocartis' MSI Biomarkers to be used as a companion diagnostic to predict immunotherapy outcome in MSI-High endometrial and colorectal tumors. Biocartis launched its Idylla(TM) MSI Assay (RUO) on 17 July 2018, early than initially planned.
Organizational and operational highlights
Financial highlights
Post-period events
Menu news flow H2 2018
o MSI testing - Driven by strong demand from existing and new customers, Biocartis has accelerated the RUO launch of the Idylla(TM) MSI Test as well as aims to bring forward its CE-marking;
o Lung cancer - Introduction of a liquid biopsy version of the Idylla(TM) EGFR Mutation Test is now set for H1 2019. Furthermore, Biocartis will no longer seek CE-marking of the existing solid biopsy Idylla(TM) BRAF Mutation Test for lung cancer, but intends to add such BRAF mutations in a larger lung cancer panel covering multiple genes with predictive markers for lung cancer; and
o Breast cancer - Launch of the Idylla(TM) ctESR1 (RUO) Assay, a liquid biopsy test aimed at monitoring of metastatic breast cancer patients for resistance to hormone therapy, which is developed in collaboration with LifeArc[30], is now set for 2019. This will allow the market introduction of that test to benefit from marketing synergies of a more orchestrated launch of the initial breast cancer test menu that is under development.
Key figures for H1 2018
The tables below show an overview of the key figures and a breakdown of operating income for H1 2018. Consolidated financial statements including notes are included in Biocartis' financial report for H1 2018 that can be downloaded from the Company's website here.
Key figures (EUR 1,000) | H1 2018 | H1 2017 | % Change |
Total operating income | 12,741 | 6,978 | 83% |
Cost of sales | -6,890 | -3,278 | 110% |
Research and development expenses | -16,029 | -19,320 | -17% |
Marketing and distribution expenses | -7,152 | -5,308 | 35% |
General and administrative expenses | -3,809 | -2,781 | 37% |
Operating expenses | -33,880 | -30,687 | 10% |
Operational result | -21,139 | -23,709 | -11% |
Net financial result | -691 | -729 | -5% |
Income tax | 70 | 456 | -85% |
Net result | -21,760 | -23,982 | -9% |
Cash flow from operating activities | -20,335 | -22,172 | -8% |
Cash flow from investing activities | -2,301 | -1,531 | 50% |
Cash flow from financing activities | 1,251 | -479 | -361% |
Net cash flow1 | -21,385 | -24,182 | -12% |
Cash and cash equivalents2 | 91,269 | 59,042 | 55% |
Financial debt | 38,145 | 35,388 | 8% |
1 Excludes effects of exchange rate changes on the balance of cash held in foreign currencies
2 Including EUR 1.2m of restricted cash (as a guarantee for KBC lease financing)
Operating income (EUR 1,000) | H1 2018 | H1 2017 | % Change |
Collaboration revenue | 3,535 | 716 | 394% |
Idylla(TM) System sales | 1,952 | 1,821 | +7% |
Idylla(TM) Cartridge sales | 6,603 | 3,270 | 102% |
Product sales revenue | 8,555 | 5,092 | 68% |
Service revenue | 251 | 104 | 141% |
Total revenue | 12,341 | 5,912 | 109% |
Grants and other income | 400 | 1,066 | -62% |
Total operating income | 12,741 | 6,978 | 83% |
Product sales revenue (EUR 1,000) | H1 2018 | H1 2017 | % Change |
Commercial revenue | 7,950 | 5,024 | 58% |
Research & Development revenue | 605 | 66 | 811% |
Total product sales revenue | 8,555 | 5,091 | 68% |
Income statement
Collaboration revenues in H1 2018 increased year-over-year with close to five times to EUR 3.6m driven by a strong growth in R&D services and milestone revenues as the consequence of new partnerships closed in H2 2017 and H1 2018. R&D services, consisting of invoiced services to pharma and content partners, increased from EUR 45k in H1 2017 to EUR 2.6m in H1 2018. Milestone revenues amounted EUR 0.8m in H1 2018 (versus no milestone revenues in H1 2017) and consisted of realized assay development milestones. Product sales revenues increased year-over-year with 68% to EUR 8.6m driven by a doubling of cartridge sales from EUR 3.3m in H1 2017 to EUR 6.6m in H1 2018. Instrument revenues amounted to EUR 2.0m in H1 2018, a year-over-year increase of 7% as the consequence of the increase in installed base in H1 2018 and of an increased revenue contribution from instruments placed at clients under leasing contracts in previous periods. Year-over-year, commercial product revenues increased with approx. 58% and R&D product revenues with about 8 times, the latter as the consequence of the increased number of content partnerships. Grants and other income amounted to EUR 0.4m in H1 2018 which resulted in a total operating income of EUR 12.7m versus EUR 7.0m in H1 2017, a year-over-year increase of 83%.
Total operating expenses (including cost of sales) amounted to EUR 33.9m in H1 2018 versus EUR 30.7m in H1 2017, an increase of 10% as the consequence of higher cost of sales. Cost of sales increased year-over-year with 110% to EUR 6.9m in H1 2018 driven by higher cartridge as well as instrument volumes. Operating expenses excluding cost of sales amounted 27.0m in H1 2018, a year-over-year decrease of 2% as higher expenses for marketing and distribution and G&A were offset by a decrease in R&D expenses. Expenses for R&D amounted to EUR 16.0m in H1 2018, a year-over-year decrease of 17% that was predominantly driven by lower platform and cartridge prototype costs, allocated depreciation expenses and staffing costs. Expenses for marketing and distribution increased year-over-year with 35% and amounted to EUR 7.2m. This increase was mainly driven by higher staffing costs as the consequence of an expansion of Biocartis' sales team, of which most for the US market. G&A expenses increased year-over-year with 37% to EUR 3.8m as the consequence of higher staffing costs (including non-cash share based payment expenses), external advice and facility costs.
The above resulted in an operational result for H1 2018 equal to EUR -21.1m compared to EUR -23.7m in H1 2017, an improvement of 11%. Following a net financial result for the period of EUR -0.7m, the net result for H1 2018 equaled to EUR -21.8m compared to EUR -24.0m in H1 2017.
Balance sheet
Property, plant and equipment increased in H1 2018 to EUR 29.5m as per end of June 2018 from 26.2m at the end of 2017 (increase of EUR 3.3m) driven by capital expenditures in H1 2018 of EUR 5.1m (predominantly related to investments for cartridge manufacturing expansion and capitalized Idylla(TM) systems) and a depreciation charge of around EUR 1.8m. Inventory increased in H1 2018 to EUR 10.6m (versus EUR 9.1m per end 2017), predominantly driven by an increase in finished products of both cartridges and Idylla(TM) instrumentation. Trade and other receivables increased in H1 2018 with EUR 0.9m due to predominantly higher VAT receivables. On the other side of the balance sheet, trade payables increased in H1 2018 with EUR 0.9m and deferred income decreased with EUR 0.7m.
The Company's cash and cash equivalents end of H1 2018 amounted to EUR 91.3m compared to EUR 112.8m end of 2017. Total financial debt end of H1 2018 amounted to EUR 38.1m, representing an increase of approx.
EUR 2.8m compared to end of 2017. This was the result of an increase in lease financing in the context of the ongoing cartridge manufacturing expansion, as well as the addition of capitalized interest to the Company's subordinated loan.
Cash flow statement
The cash flow from operating activities in H1 2018 amounted to EUR -20.3m compared to EUR -22.2m in H1 2017 (an improvement of 8%), primarily driven by an improved result for the period which was partially offset by higher investments in working capital. The cash flow from investing activities in H1 2018 amounted to EUR -2.3m (compared to EUR -1.5m in H1 2017) and is mainly related to capitalized Idylla(TM) systems placed with customers under (reagent) rental agreements and Idylla(TM) systems used for internal needs. The EUR 3.2m investments for cartridge manufacturing expansion in H1 2018 are excluded from the cash flow from investing activities since these invoices were directly financed through our leasing partner. The cash flow from financing activities in H1 2018 amounted to EUR 1.3m (compared to EUR -0.5m in H1 2017) and predominantly relates to proceeds from warrants exercises that are partially offset by repayments of borrowings. Because of the aforementioned, the net cash flow of H1 2018 amounted to EUR -21.4m compared to EUR -24.2m in H1 2017, representing an improvement of 12% year-over-year.
Financial calendar 2018
Webcast and presentation
Biocartis will host a conference call with live webcast, during which the H1 2018 results will be presented, followed by a Q&A session. This event will be held today, 6 September 2018 at 14:00 CEST / 13:00 BST (UK) / 08:00 EDT (USA). Access the webcast by clicking here. If you would like to participate in the Q&A, please dial +44 (0)330 336 9125 (standard international), followed by the confirmation code 3161692. A replay of the webcast will be available on the Biocartis investors' website shortly after.
Auditor Statement
The condensed consolidated financial statements for the six-month's period ended 30 June 2018 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all the information required for the full annual financial statements and should therefore be read in conjunction with the financial statements for the year ended 31 December 2017. The condensed consolidated financial statements are presented in thousands of Euros (unless stated otherwise). The condensed consolidated financial statements have been approved for issue by the Board of Directors on 30 August 2018. The statutory auditor, Deloitte Bedrijfsrevisoren/Reviseurs d'Entreprises, represented by Gert Vanhees, has performed a review, which did not reveal any significant adjustments to the condensed consolidated financial statements. The interim financial report 2018 and the review opinion of the auditor are available on www.biocartis.com.
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More information:
Renate Degrave
Manager Corporate Communications & Investor Relations
e-mail rdegrave@biocartis.com
tel +32 15 631 729
mobile +32 471 53 60 64
About Biocartis
Biocartis (Euronext Brussels: BCART) is an innovative molecular diagnostics (MDx) company providing next generation diagnostic solutions aimed at improving clinical practice for the benefit of patients, clinicians, payers and industry. Biocartis' proprietary MDx Idylla(TM) platform is a fully automated sample-to-result, real-time PCR (Polymerase Chain Reaction) system that offers accurate, highly reliable molecular information from virtually any biological sample in virtually any setting. Biocartis launched the Idylla(TM) platform in September 2014. Biocartis is developing and marketing a rapidly expanding test menu addressing key unmet clinical needs in oncology and infectious diseases. These areas represent respectively the fastest growing and largest segments of the MDx market worldwide. Today, Biocartis offers fifteen oncology tests and two infectious disease tests in Europe. More information: www.biocartis.com. Press Photo Library available here. Follow us on Twitter: @Biocartis_.
Biocartis and Idylla(TM) are registered trademarks in Europe, the United States and other countries. Biocartis trademark and logo and Idylla(TM) trademark and logo are used trademarks belonging to Biocartis. This press release is not for distribution, directly or indirectly, in any jurisdiction where to do so would be unlawful. Any persons reading this press release should inform themselves of and observe any such restrictions. Biocartis takes no responsibility for any violation of any such restrictions by any person. Please refer to the product labeling for applicable intended uses for each individual Biocartis product. This press release does not constitute an offer or invitation for the sale or purchase of securities in any jurisdiction. No securities of Biocartis may be offered or sold in the United States of America absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended.
Forward-looking statements
Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company's or, as appropriate, the Company directors' or managements' current expectations and projections concerning future events such as the Company's results of operations, financial condition, liquidity, performance, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward-looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. As a result, the Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based, except if specifically required to do so by law or regulation. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.
[1] RUO = Research Use Only, not for use in diagnostic procedures.
[2] RoW = Rest of the World. RoW is defined as the world excluding Europe, US, China and Japan.
[3]Source: US NEWS Top 10 hospital ranking, https://www.usnews.com/info/blogs/press-room/articles/2017-08-08/us-news-announces-2017-18-best-hospitals, last consulted on 9 August 2018.
[4] Key Opinion Leaders.
[5] Trial Assigning Individualized Options for Treatment (Rx), or TAILORx. Source: Genomic Health website, last consulted on 3 August 2018, http://newsroom.genomichealth.com/releasedetail.cfm?ReleaseID=1069104.
[6] Polymerase Chain Reaction.
[7] The review study was performed by Dr. Arnaud Uguen (MD, PhD, Department of Pathology of the Brest University Hospital, Brest, France) and Dr. Giancarlo Troncone (MD, PhD, Professor of Anatomic Pathology, University of Naples Federico II, Naples, Italy).
[8] The Medline and Google Scholar databases were searched to retrieve studies addressing the Idylla(TM) system performance in comparison to other diagnostic methods. Only original papers were taken into account, excluding congress abstracts. Data analyzed included the number and types of samples, the specific Idylla(TM) cartridges used and the non-Idylla(TM) reference method. Special care was also taken to record discordant cases, focusing on the underlying reasons of disagreements between Idylla(TM) and non-Idylla(TM) methods.
[9] Overall, five studies were dedicated to colorectal cancer, four to lung cancer, four to melanoma, one to thyroid cancer, one to pancreatic cancer and three to different tumors including the aforementioned types as well as a few examples of other tumors. The studies included the following Idylla(TM) test cartridges used: Idylla(TM) BRAF Mutation Test (CE-IVD), Idylla(TM) NRAS-BRAF-EGFRS492R Mutation Assay (RUO or Research Use Only), Idylla(TM) NRAS-BRAF Mutation Test (CE-IVD), Idylla(TM) KRAS Mutation Test (CE-IVD), Idylla(TM) NRAS Mutation Test (CE-IVD), Idylla(TM) EGFR Mutation Assay (RUO).
[10] B Jacobs, B Claes, P Laurent-Puig, JP Bachet, S Tejpar, G Maertens, E Sablon, "Analytical and clinical validation of the Idylla(TM) ctKRAS and ctNRAS-BRAF Liquid biopsy tests", first presented at the 2018 AACR Annual Meeting in Chicago, US, 14-18 April 2018.
[11] These tests were developed under the collaboration with Merck KGaA, Darmstadt, Germany.
[12] The Idylla(TM) ctKRAS Mutation Test and the Idylla(TM) ctNRAS-BRAF Mutation Test are CE-marked IVD's in Europe and not for sale in the US. Please check availability with the local Biocartis sales representative.
[13] http://www.amp.org/committees/clinical_practice/CRCOpenComment.cfm; ESMO (ESMO consensus guidelines for the management of patients with metastatic colorectal cancer. Annals of Oncology 0: 1-37, 2016); NCCN (NCCN Clinical Practice Guidelines in Oncology - Colon Cancer - Version 2.2016); ASCO (Allegra C.J. et al. Extended RAS gene mutation testing in metastatic Colorectal Carcinoma to predict response to antiepidermal growth factor receptor monoclonal antibody therapy: American Society of Clinical Oncology Provisional Clinical Opinion Update 2015. Journal of Clinical Oncology 2016; 34(2):179-85) and CAP/AMP/ASCO
[14] Microsatellite instability or MSI is the result of inactivation of the body's so-called DNA mismatch repair (MMR) system. Consequently, errors that normally spontaneously occur during DNA replication are no longer corrected, contributing to tumor growth and evolution. Current MSI testing methods rely on manual, lengthy and complex procedures involving amongst others obtaining and testing of a second reference sample.
[15] B. De Craene et al., "Detection of microsatellite instability (MSI) in colorectal cancer samples with a novel set of highly sensitive markers by means of the Idylla(TM) MSI Assay prototype", ASCO Annual Meeting of the American Society of Clinical Oncology, 1-5 June 2018, Chicago, IL (US).
[16]H. Zhao et al., "A novel set of 7 homopolymer indels for detection of MSI is associated with tumor mutation burden and total indel load in endometrial and colorectal cancers", ASCO Annual Meeting of the American Society of Clinical Oncology, 1-5 June 2018, Chicago, US. The methodology used for detection of the seven biomarkers, TMB (tumor mutation burden,) and indel load, was whole-exome sequencing.
[17]De Luca et al, University of Naples Federico II, "The Idylla(TM) Assay and Next Generation Sequencing: an integrated EGFR mutational testing algorithm", Journal of Clinical Pathology, to consult online on http://jcp.bmj.com/content/jclinpath/early/2018/05/24/jclinpath-2018-205197.full.pdf?ijkey=V8eBoaMDpKZ7t9N&keytype=ref,
[18] To be taken by a multidisciplinary team.
[19] Independent director.
[20] Non-executive director.
[21] Non-executive director.
[22] Maertens G. et al. Annals of Oncology (2017) 28 (suppl_5): v22-v42; De Craene B. et al. Annals of Oncology (2017) 28 (suppl_5): v209-v268; De Craene et al. J Clin Oncol 36, 2018 (suppl; abstr e15639)>.
[23] Formalin fixed, paraffin embedded.
[24] Including IHC and Promega MSI analysis system 1.2.
[25] ESMO (ESMO consensus guidelines for the management of patients with metastatic colorectal cancer. Annals of Oncology 0: 1-37, 2016); NCCN (NCCN Clinical Practice Guidelines in Oncology - Colon Cancer - Version 2.2016); ASCO (Allegra C.J. et al. Extended RAS gene mutation testing in metastatic Colorectal Carcinoma to predict response to antiepidermal growth factor receptor monoclonal antibody therapy: American Society of Clinical Oncology Provisional Clinical Opinion Update 2015. Journal of Clinical Oncology 2016; 34(2):179-85) and CAP/AMP/ASCO.
[26] M. Rabie Al-Turkmani et al., "Rapid Somatic Mutation Testing in Colorectal Cancer Using a Fully Automated System and Single-Use Cartridge: A Comparison with Next-Generation Sequencing", first presented at 70th AACC Annual Scientific Meeting in Chicago, IL (US).
[27] Using the Ion AmpliSeq 50-gene Cancer Hotspot Panel v2 (Thermo Fisher Scientific).
[28] Horizon mutated samples.
[29] ESMO (ESMO consensus guidelines for the management of patients with metastatic colorectal cancer. Annals of Oncology 0: 1-37, 2016); NCCN (NCCN Clinical Practice Guidelines in Oncology - Colon Cancer - Version 2.2016); ASCO (Allegra C.J. et al. Extended RAS gene mutation testing in metastatic Colorectal Carcinoma to predict response to antiepidermal growth factor receptor monoclonal antibody therapy: American Society of Clinical Oncology Provisional Clinical Opinion Update 2015. Journal of Clinical Oncology 2016; 34(2):179-85) and CAP/AMP/ASCO.
[30]LifeArc is an independent UK based life science medical research charity and aims to move promising medical research forward into patient treatments and diagnostics and has been involved in helping deliver a number of therapies including Keytruda® (pembrolizumab, marketed by MSD) which is an important immunotherapy treatment for various cancers.