MDxHealth made substantial progress in 2011 through implementing its new business strategy.
In Q4 2011, the company established a CLIA (Clinical Laboratory Improvement Amendments) registered laboratory for the commercialization of its diagnostic assays.
The company’s California facility received its clinical laboratory license and CLIA certificate of registration in less than 5 months after the leasing of the lab facility.
In 2011, R&D activities and resources were directed to clinical validation of the ConfirmMDx™ test for Prostate Cancer test, accelerated development of additional cancer tests in the company’s pipeline and development of pharmaco diagnostic tests.
MDxHealth was awarded the Frost & Sullivan European award for technology leadership in oncology molecular diagnostics for 2011.
“The growth in revenues from our pharmaco diagnostic business in Q4 2011 of nearly 50% versus Q4 2010 represents continued validation and acceptance of our epigenetic technology and tests within the pharmaceutical industry,” said Dr. Jan Groen, Chief Executive Officer of MDxHealth. “Additionally, we made important strides in the development and validation of our ConfirmMDx for Prostate Cancer test and significantly advanced preparations for product launch in the coming months.”
Key Figures (EUR thousands, except number of shares and per share data):
As at or for the year ended December 31 2011 2010
Total revenues 2687 2536
Total operating expenses 9518 10532
Operating profit (EBIT) -7097 -8366
Net loss -6947 -8253
Earnings per share, basic (€) -0.37 -0.63
Number of outstanding shares 18622327 13185614
Cash and cash equivalents 11123 10593
Total revenues for Q4 2011 increased by 48% to €0.9 million from €0.6 million during the same period in 2010. The revenue increase was attributable to the company’s pharmaco-diagnostic business. Total revenues for the full year ended December 31, 2011, increased by 6% to €2.7 million, compared to total revenues of €2.5 million for the prior year.
MDxHealth reported a net loss of €1.3 million, or €0.07 a share, for Q4 2011 compared to a net loss of €1.8 million, or €0.13 a share, in the same period of 2010. For Q4 2011, net loss was reduced by 29% (a reduction of 50% on an earnings per share basis) compared to the same period in 2010. MDxHealth's net loss for the year ended December 31, 2011, was €6.9 million, or €0.37 a share, compared to €8.3 million, or €0.63 a share, for the prior year. The net loss was reduced in 2011 due primarily to a reduction of operating expenses.
Operating expenses for Q4 2011 were €2.2 million, essentially the same as in Q4 2010. Operating expenses for the year ended December 31, 2011 decreased by 10% to €9.5 million from €10.5 million for the prior year. Operating expenses for Q4 2011 were higher than in each of the preceding three quarters of 2011 primarily due to costs related to the establishment of the company's CLIA laboratory in Irvine, California, and the multicenter clinical trials to validate the ConfirmMDx™ for Prostate Cancer. For the full year, operating expenses decreased mainly as a result of the restructuring of the company implemented in 2010.
MDxHealth ended the year with cash and cash equivalents of €11.1 million, compared to €10.6 million on December 31, 2010. The company raised net proceeds of €7.3 million in a private placement in April 2011. Excluding the proceeds of the 2011 private placement, MDxHealth had a net cash burn of €6.8 million in 2011 compared to a net cash burn of €7.4 million in 2010. This 9% reduction in the cash consumed by the company was the result of cost cuts initiated in 2010 and realized in 2011.
The company is building the sales and marketing infrastructure necessary to support the expected launch of its ConfirmMDx for Prostate Cancer test in the US during H1 2012. The company will continue to focus also on the development and validation of its PredictMDx™ for Brain Cancer (Glioblastoma) test directed at the MGMT epigenetic biomarker, which is being used in Merck Serono’s Phase III clinical trial for their drug candidate cilengitide. The test may help identify glioblastoma (brain) cancer patients who could benefit from cilengitide treatment.
Revenues in 2012 are expected to grow over those of 2011, with the majority of revenues coming from the PharmacoMDx business and the ConfirmMDx for Prostate Cancer test. However, with the expected product launch in H1, prostate test revenues are not expected to have a material impact on the company’s results until the latter part of 2012. Operating expenses are expected to increase primarily from the expansion of the sales and marketing efforts in the U.S. Accordingly, 2012 net loss and cash burn is expected to increase compared to 2011, while R&D expenses are expected to be stable.
MDxHealth has appointed Mr. Francis Ota as Vice President of Finance, who will be based at the company’s U.S. headquarters in Irvine, CA. Mr. Ota brings valuable industry experience to MDxHealth, having served as a senior finance executive with a number of leading healthcare companies in the U.S. He recently served as CFO of Captek Holdings, a specialty nutraceuticals company. Prior to that, he was senior director of finance at Focus Diagnostics, Inc. a CLIA service laboratory acquired by Quest Diagnostics in 2006. Mr. Ota also held senior finance roles with Medtronic and Hewlett Packard. Mr. Ota earned a Master in Business Administration (MBA) from the Haas School of Business, University of California, Berkeley, and a Bachelor of Science in Finance and & International Business from Leeds School of Business, University of Colorado, Boulder.
"Francis brings to MDxHealth more than 25 years of finance and operating experience within the healthcare industry and with his knowledge of reimbursement and systems to support our sales efforts, he will play a key role in our commercialization efforts,” said MDxHealth CEO Dr. Jan Groen. “The company is now predominantly focused on the commercialization of our first epigenetic test for prostate cancer in the U.S. Implementation of a corporate financial structure optimized to support the highly complex healthcare payment systems within the U.S. healthcare industry is extremely important.”
Mr. Philip Devine, co-founder and Chief Financial Officer (CFO) of MDxHealth since 2003, will cease his position as CFO of the company as of March 31, 2012 in order to pursue other interests. His responsibilities will be assumed by Mr. Ota with the support of Jean-Michaël Scelso, Director of Finance, who has been with MDxHealth since 2006 and is based at the company’s Belgian headquarters in Liège. Mr. Devine will continue to be involved with MDxHealth as an advisor after he steps down as CFO. Dr. Groen said: "we are extremely grateful for the many contributions, in both financial and operational aspects of our business, that Philip has made to MDxHealth since its formation in 2003, and we thank Philip for his outstanding service to the company and the Board.”
Financial Statements and Auditors’ Opinion
The 2011 consolidated IFRS financial statements of the company have been audited by the company’s auditors, BDO Réviseurs d’Entreprises. The auditors have issued an unqualified audit opinion.
The condensed Consolidated Statement of Comprehensive Income, Statement of Financial Position, Cash Flow Statement, and Statement of Changes in Shareholders’ Equity can be found on the company’s web-site at mdxhealth.com . The full Annual Report is expected to be made available to the public via the company’s web-site during April 2012.
MDxHealth (mdxhealth.com) is a leading molecular diagnostics company that develops and commercializes epigenetic tests to support cancer treatment. The company’s tests are based on proprietary gene methylation (epigenetics) technology and assist physicians with the diagnosis of cancer, prognosis of recurrence risk, and prediction of response to a specific therapy.
MDxHealth SA Coordinates: Address: Tour 5 GIGA - Av. de l'Hôpital 11 - 4000 Liège; VAT BE 0479.292.440 RPM Liège, Belgium.
For more information:
Mike Sinclair, Halsin Partners
T: +44 20 7318 2955 / C: +44 7968 022075 - E: msinclair[.]halsin.com
This press release contains forward-looking statements and estimates with respect to the anticipated future performance of MDxHealth and the market in which it operates. Such statements and estimates are based on assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable but may not prove to be correct. Actual events are difficult to predict, may depend upon factors that are beyond the company’s control, and may turn out to be materially different. MDxHealth expressly disclaims any obligation to update any such forward-looking statements in this release to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required by law or regulation.