ConfirmMDx Full Year Revenue and Case Volume Continue Excellent Growth Trends
IRVINE, CA, and HERSTAL, BELGIUM – 8:00 AM, February 26, 2015 – MDxHealth SA (Euronext: MDXH.BR), today announced results for the fourth quarter and the fiscal year ended December 31, 2014.
ConfirmMDx for Prostate Cancer
ConfirmMDx revenue increased 152% from $3.7 million to $9.4 million in 2014
ConfirmMDx revenue for Q4 doubled to $2.4 million compared to $1.2 million in the same period last year
Total full year revenue increased to $11.7 million in 2014 versus $7.6 million in 2013
Recorded a 76% increase in annual ConfirmMDx case volume, with 12,300 patients tested in 2014 compared to nearly 7,000 patients tested in 2013
In Q4, ConfirmMDx case volume increased 46% to more than 3,300 tests, compared to approximately 2,300 tests in Q4 2013
Published ConfirmMDx clinical utility study in the journal of in American Health and Drug Benefits
Published ConfirmMDx DOCUMENT validation study in the Journal of Urology
Signed marketing agreements, with Long Island Pathology, Inc., American Pathology Partners, and Miraca Life Sciences (MLS) to co-promote ConfirmMDx
Signed exclusive distribution agreement with Teva Pharmaceutical Ltd. for Israel
Signed reimbursement agreements with PPO providers Prime Health Services, Inc., Galaxy Health Network Ancillary Care Services (ACS), and Consilium, LLC
Palmetto GBA issued a Medicare coverage determination (LCD) for ConfirmMDx
Other Business Activities
Raised $15 million in new equity funding via a private placement in November
MDxHealth and HistoGeneX N.V. awarded $1.8 million (€1.3 million) from the Flemish Institute for the Promotion of Innovation by Science and Technology (IWT)
MDxHealth Licensee Exact Sciences received FDA approval and Medicare coverage for its Cologuard® colon cancer screening assay and started commercialization in Q4
Events after the Reporting Period
MDxHealth received the 2014 Euronext Best BEL Small Company Performer Award
MDxHealth licensed epigenetic technology to Oncgnostics GmbH for cervical cancer test
Commenting on the excellent progress, Dr. Jan Groen, Chief Executive Officer of MDxHealth, said “In 2014, we experienced sharp growth in ConfirmMDx test volume and revenue driven by continued adoption by the U.S. urology community and positive reimbursement from payors, based on recognition of the substantial positive data supporting the assay’s clinical value and utility. This growth led to a narrowing of our reported loss versus 2013.” Dr. Groen added “The recent Medicare coverage decision for ConfirmMDx will have a significant positive impact on our business in 2015.”
Dr. Groen continued: “We have also continued to make enhancements to our ConfirmMDx for Prostate Cancer test. Based on recent clinical and scientific studies, we developed a risk score for ConfirmMDx methylation-positive men. We believe this score will improve the risk stratification of biopsy-negative men who may be harboring undetected, aggressive prostate cancer, further augmenting the clinical value provided by ConfirmMDx.”
Key Figures for the full year (thousands of U.S. dollars, except number of shares and per share data):
|As of or for the year ended December 31*||4th Quarter 2014||Full Year 2014||4th Quarter 2013||Full Year 2013|
|Total operating expenses||7,077||27,013||5,875||23,625|
|Operating profit (EBIT)||-3,705||-15,342||-4,299||-16,071|
|Net Income (Loss)||-3,019||-15,256||-4,387||-16,175|
|Earnings per share, basic ($)||-0.08||-0.40||-0.13||-0.47|
|Number of outstanding shares||37,676,303||34,251,303|
|Cash and cash equivalents||18,897||24,683|
Revenue and Income
Total company revenues for the full year ended December 31, 2014, increased by 54% to $11.7 million, compared to total revenues of $7.6 million for the prior year. Revenue from ConfirmMDx for Prostate Cancer represented 70% of total Q4 revenues compared to 76% in the same quarter last year. Total revenues for Q4 2014 were $3.4 million compared to $1.6 million during the same period in 2013. The increase in Q4 2014 revenues compared to the prior period was due to increased sales of ConfirmMDx and royalty and milestone payments from Exact Sciences. For the full year, ConfirmMDx for Prostate Cancer accounted for 80% of the company’s revenue, compared to only 50% in 2013.
At the end of 2014, MDxHealth received the Local Coverage Determination (LCD) for Medicare reimbursement of ConfirmMDx for Prostate Cancer through Palmetto GBA. The LCD not only sets the reimbursement rate for Medicare patients, but also establishes reimbursement for Medicare Advantage patients covered by private commercial payors. By virtue of the Center for Medicare and Medicaid Services policies, payors contracted to offer Medicare Advantage programs are obliged to honor the LCD and price established. MDxHealth will also pursue direct contracts with these payors to cover ConfirmMDx testing for their non-Medicare patient population under the age of 65 years old. The Medicare coverage decision did not impact 2014 cash collections, given the timing of the approval. However, the company expects the Medicare coverage decision for the ConfirmMDx for Prostate Cancer to improve cash collections going forward. As noted in previous press releases, the growing adoption of the test by new prescribing urologists across the U.S. will continue to result in a growing number of new payors, thus also increasing the group of non-contracted, third party payors. This could lead to continued delays in collections and revenue recognition among those payors.
Based on 2014 reported cases and historical average reimbursement amounts, the total estimated value of tests performed in 2014 was $19.1 million. Of this amount $9.4 million was recognized as revenue, leaving uncollected outstanding unrecognized revenues of $9.7 million, consisting of $7.9 million from Medicare and $1.2 million from private payors. This uncollected amount has been excluded from the Company’s 2014 revenues. While collection efforts continue on these outstanding amounts, the timing and amount of actual collections is uncertain. MDxHealth’s revenue recognition policy evaluates the certainty of payment on a payor-by-payor basis, currently resulting in a mixture of accrual based revenue recognition and cash based collections depending on our evaluation of certainty of payment. MDxHealth believes this revenue recognition policy is appropriate at this time. However, the recent Medicare coverage of ConfirmMDx should help to secure more managed care contracts. The Company expects to transition more payors to an accrual accounting basis resulting in increased revenue recognition in 2015.
In Q4 2014, the Company reported a net loss of $3.0 million, or ($0.08) a share, compared to a net loss of $4.4 million, or ($0.13) a share, in the same period of 2013. The Company’s net loss for the year ended December 31, 2014, was $15.3 million, or ($0.40) a share, compared to $16.2 million loss, or ($0.47) a share, for the prior year. This loss is attributed to the continued investment in commercialization efforts in the U.S. and the delay in recognizing revenues from ConfirmMDx sales.
Operating expenses for Q4 2014 were $7.1 million, an increase of $1.2 million compared to $5.9 million in Q4 2013. This increase is attributable to the clinical utility study and other associated costs to meet the requirements of Medicare. Operating expenses for the year ended December 31, 2014 increased by $3.4 million to $27.0 million from $23.6 million for the prior year. The year-over-year increase is due to the continuing build-up of U.S. operations to support the commercialization of the ConfirmMDx for Prostate Cancer test.
The Company ended 2014 with cash and cash equivalents of $18.9 million, compared to $24.7 million on December 31, 2013. The Company raised net proceeds of $14.7 million in a private placement in November 2014. Collections from ConfirmMDx reimbursements were $4.5 million in 2014 vs. $2.4 million in 2013. Collections, which are an important variable in net cash burn, are improving, and will be an important factor in strengthening the Company’s cash position moving forward. More specifically, the Medicare LCD and its expected positive impact on private third party payor reimbursement decisions will enhance the company’s collections going forward. Excluding the proceeds of the 2014 private placement, the Company had a net cash burn of $20.5 million in 2014 compared to a net cash burn of $15.3 million in 2013. This 25% increase in cash used by the Company is a result of expanding operating activities supporting the commercialization of the ConfirmMDx for Prostate Cancer test, an increase in accounts receivables and the start of the PASCUAL clinical utility trial.
For fiscal year 2015, the Company expects continuing growth in ConfirmMDx test volume and revenue driven by the recent positive Medicare coverage decision (LCD) by Palmetto GBA for the ConfirmMDx for Prostate Cancer test. Anticipated growth in reported case volume and revenue will be supported by the Company’s continued focus on obtaining payor contracts, recognition in Clinical Guidelines and increasing reimbursement for the ConfirmMDx test. However, based on seasonality, some quarter-to-quarter fluctuation in reported case volume and revenue is expected. With increasing volume, gross margin on ConfirmMDx revenue for 2015 is anticipated to improve.
The Company is providing the following guidance for 2015:
ConfirmMDx for Prostate Cancer test volume: 15,000 to 17,000
Revenue: $16 million to $20 million
Completion of the PASCUAL clinical utility trial
Scientific publication on ConfirmMDx risk score profile
Publication of the ConfirmMDx for Bladder Cancer validation study results
This guidance also reflects the Company’s plans for continued expansion of its sales and marketing, managed care and billing personnel to drive and manage growth, as well as investment in product development, automation to reduce the cost of tests performed, and facilities.
2015 Reporting Calendar
2014 FY results: February 26, 2015
Q1 results: May 5, 2015
H1 results: August 20, 2015
Q3 results: November 3, 2015
Financial Statements and Auditors’ Opinion
The Company’s 2014 consolidated IFRS financial statements have been audited by its 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 may be found on the Company’s website at www.mdxhealth.com. The full Annual Report is expected to be made available to the public via the Company’s website during April 2015.
MDxHealth is a multinational healthcare company that provides actionable epigenetic information to personalize the diagnosis and treatment of cancer. The company’s tests are based on proprietary gene methylation (epigenetic) technology and assist physicians with the diagnosis of cancer, prognosis of recurrence risk, and prediction of response to a specific therapy. For more information visit mdxhealth.com and follow us on Twitter at: twitter.com/mdxhealth.
For more information:
|Dr Jan Groen, CEO||Mike Sinclair (media)|
|US : +1 949 812 6979||UK: +44 20 7318 2955|
|BE: +32 4 364 20 70||Cell: +44 7968 022075|
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. This press release does not constitute an offer or invitation for the sale or purchase of securities or assets of MDxHealth in any jurisdiction. No securities of MDxHealth may be offered or sold within the United States without registration under the U.S. Securities Act of 1933, as amended, or in compliance with an exemption therefrom, and in accordance with any applicable U.S. securities laws.
NOTE: The MDxHealth logo, MDxHealth, ConfirmMDx and PredictMDx are trademarks or registered trademarks of MDxHealth SA. All other trademarks and service marks are the property of their respective owners.