On April 29, 2020 Epigenomics AG (FSE: ECX, OTCQX: EPGNY, the "Company") reported financial results (according to IFRS) for the fiscal year 2019 (Press release, Epigenomics, APR 29, 2020, View Source [SID1234556714]). In addition, the Company announces preliminary unaudited financial results for the first quarter of 2020.
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At the end of November 2019, a microsimulation model developed by scientists at Harvard Medical School was published in the journal Cancer Medicine. The results show that patient adherence and screening intervals are decisive factors in a successful colorectal cancer (CRC) screening strategy. When these factors are incorporated into the evaluation of various CRC screening measures, blood tests can play a significant role in reducing the incidence and mortality of colorectal cancer.
On February 28, 2020, the Centers for Medicare and Medicaid Services (CMS) opened the National Coverage Determination (NCD) review of Epi proColon, a further significant milestone for Epigenomics AG on its way to U.S. reimbursement by CMS. With the NCD opening, CMS is required by legal statute to publish a decision on the reimbursement of Epi proColon within a maximum period of nine months, i.e. no later than November 28, 2020. A positive reimbursement decision would be a major breakthrough for the marketing of the blood test in the U.S. market.
To finance its ongoing operations, Epigenomics successfully completed a capital increase by way of a private placement on March 31, 2020. The new shares were fully subscribed by institutional investors from Germany and the U.S.A. The gross proceeds of the capital increase amount to approximately EUR 4.0 million and, together with cost reduction measures initiated in connection with the Covid-19 pandemic, will ensure that the Company will have sufficient liquid funds well into Q1 2021.
The US-American National Comprehensive Cancer Network (NCCN) announced on April 23, 2020 that it has included Epi proColon in its updated 2020 NCCN CRC guidelines. Inclusion in the guidelines underscores the potential of Epi proColon to significantly increase screening rates and thereby reach the over 30 million Americans who are at risk for colorectal cancer but do not participate in screening.
Greg Hamilton, CEO of Epigenomics AG: "We have made tremendous progress in the last six months towards Medicare reimbursement, the key prerequisite for full commercialization of Epi proColon. In November, a pivotal microsimulation model was published demonstrating the effectiveness of Epi proColon and in February, CMS initiated its national coverage determination process for the test. In addition, the NCCN CRC screening guidelines were updated to include Epi proColon in a manner consistent with our FDA indications for use as an option for patients who refuse other screening modalities. We believe this positive momentum will culminate in a positive coverage decision later this year."
Financial results 2019
Total revenue decreased to EUR 1.1 million (2018: EUR 1.5 million), mainly due to the decrease in licensing revenue from China. Product revenue increased to EUR 1.0 million from EUR 0.8 million in 2018.
Selling, general and administrative costs increased from EUR 8.7 million (2018) to EUR 8.9 million, mainly due to greater expenses for sales and marketing. Research and development costs rose from EUR 6.4 million (2018) to EUR 7.3 million, largely because of external costs that arose in connection with carrying out the post-approval study for Epi proColon and the HCC cross-section study in the U.S.A.
The decline in EBITDA (before share-based payment expenses) to EUR -13.3 million (2018: EUR -11.4 million) was mainly caused by temporary cost increases in connection with the clinical studies and non-cash expenses.
The net loss for the year increased to approximately EUR -17.0 million (2018: EUR -12.7 million) and was impacted by a one-off non-cash expense of EUR 2.5 million; the loss per share decreased slightly to EUR -0.46 (2018: EUR -0.47).
Cash consumption rose to EUR -13.5 million in fiscal year 2019 (2018: EUR -9.6 million) due to higher operating cash outflows. Furthermore, the prior-year figure was buoyed by a stronger effect from working capital that no longer applied in the reporting period.
Preliminary financial results Q1 2020
Based on preliminary unaudited figures, Epigenomics AG generated revenues of EUR 0.2 million in the first quarter of 2020 (Q1 2019: EUR 0.3 million).
EBITDA (before share-based payment expenses) improved slightly from EUR -3.0 million (Q1 2019) to EUR -2.6 million.
The net loss for the period also improved slightly from EUR -3.0 million (Q1 2019) to EUR -2.9 million.
Cash consumption decreased by EUR 1.0 million to EUR -3.3 million (Q1 2019: EUR -4.3 million).
Outlook 2020
Revenue
The Company expects revenue for the fiscal year 2020 within the range of EUR 1.0 million to EUR 2.0 million.
EBITDA / Cash consumption
Epigenomics’ EBITDA (before share-based payment expenses) is expected to range from EUR -10.5 million to EUR -12.5 million. Based on the Company’s business plan 2020, cash burn is expected to be in line with EBITDA guidance (before share-based payment expenses).
Further Information
The Annual Report 2019 is available on the Epigenomics website:
View Source." target="_blank" title="View Source." rel="nofollow">View Source The Interim Statement for the first quarter 2020 will be published on May 7, 2020 on the Company’s website.
Conference call for analysts and investors
Epigenomics AG will host a conference call for analysts and investors today at 3.00 pm (CET) / 9.00 am (EDT). The webcast can be accessed on the Company’s website: View Source