Interim / Quarterly Report • Sep 6, 2018
Interim / Quarterly Report
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Biocartis Group NV Generaal de Wittelaan 11 B 2800 Mechelen – Belgium
| 1. | Message from the CEO4 | |
|---|---|---|
| 2. | Responsibility statement4 | |
| 3. | Principal risks related to the business activities5 | |
| 4. | Business review of the first half of 2018 5 | |
| 5. | Condensed consolidated interim financial statements for the period ended 30 June 2018 12 | |
| 6. | Notes to the condensed consolidated interim financial statements 17 | |
| 7. | Review report of the auditor 31 | |
| 8. | Disclaimer and additional information 33 | |
| 9. | Glossary 35 |
Dear Shareholder, Dear Stakeholder,
I am pleased to present to you our financial report for the first six months of 2018.
Our European direct and RoW1 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™ 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™. 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!
Herman Verrelst CEO Biocartis
The undersigned hereby declare that to the best of their knowledge: a) the condensed consolidated financial statements for the six-month's period ended 30 June 2018, which have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union, give a true and fair view of the net equity, financial position and results of the Company and the companies included in the consolidation, and b) give a true and fair view of the main events and the impact thereof on the condensed consolidated financial statements c) as well as a description of the main risks and uncertainties with respect to the remaining months of the fiscal year, and the main transactions with related parties and the impact thereof on the condensed consolidated financial statements.
Herman Verrelst Christian Reinaudo
CEO Chairman
1 RoW = Rest of the World. RoW is defined as the world excluding Europe, US, China and Japan.
The principal risks related to Biocartis' business activities are outlined in Biocartis' 2017 Annual Report, p. 18-23, available on the Biocartis website. In summary, the principal risks and uncertainties faced by Biocartis relate to strategic and commercial risks, operational risks, regulatory risks and financial risks. The principal risks have not materially changed from the ones outlined in the 2017 Annual Report.
Installed base – The Idylla™ installed base increased with 149 instruments in H1 2018 driven by higher than expected growth in Europe and strong placements in the US, the latter contributing to approximately 1/3 of overall growth. End of June 2018, the total installed base amounted to 796 Idylla™ instruments.
Commercial cartridge volume: H1 2018 commercial volume increased to approximately 58k cartridges, which is more than a doubling of the H1 2017 volume (approximately 27k cartridges). Europe followed by RoW contributed most to the growth in commercial cartridge volume.
2 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. 3 Key Opinion Leaders.
Installed base + 149 instruments to a total of 796
instruments and + 58,000cartridges
New R&D center in the USand strong instrument placements, including at some of the top 10 US oncology hospitals
Idylla™ review study: out of the nearly 2,500 Idylla™ tests,
98.1% generated a valid result Product revenues y-o-y +68% to EUR 8.6m, predominantly driven by cartridge revenues that more than doubled. Collaboration revenues increased y-o-y close to five times to EUR 3.7m
Second CDx Amgen
Strong progress in the validation of the 2 nd cartridge manufacturing line
strategy: joint venture announcement with Wondfo Additional market authorizations in Argentina, Brazil, Canada, Malaysia, Mexico, Singapore and Uruguay
Review external performance studies – On 27 June 2018, Biocartis announced the publication of a study in the Journal of Clinical Pathology6 that reviewed 18 Idylla™ performance studies7 , showing a strong performance of Idylla™ compared to reference methods commonly used in clinical practice today to determine biomarker status (BRAF, NRAS, KRAS and EGFR mutations) that drive frequently occurring cancers (i.e. melanoma, colorectal, lung, thyroid and pancreatic cancer8 ). Results showed that out of the nearly 2,500 Idylla™ tests, 98.1% of the tests generated a valid result. The study also showed an excellent concordance rate of 94.8% between Idylla™ and the reference methods. The data generated by the studies demonstrated as such the high accuracy of the Idylla™ platform to test for actionable BRAF, NRAS, KRAS and EGFR mutations in different cancers, underlining the cost-effectiveness of Idylla™ testing compared to other molecular methods.
4 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. 5 Polymerase Chain Reaction.
6 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).
7 The Medline and Google Scholar databases were searched to retrieve studies addressing the Idylla™ 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™ cartridges used and the non-Idylla™ reference method. Special care was also taken to record discordant cases, focusing on the underlying reasons of disagreements between Idylla™ and non-Idylla™ methods.
8 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™ test cartridges used: Idylla™ BRAF Mutation Test (CE-IVD), Idylla™ NRAS-BRAF-EGFRS492R Mutation Assay (RUO or Research Use Only), Idylla™ NRAS-BRAF Mutation Test (CE-IVD), Idylla™ KRAS Mutation Test (CE-IVD), Idylla™ NRAS Mutation Test (CE-IVD), Idylla™ EGFR Mutation Assay (RUO).
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 (MSI13) that are included in the Idylla™ 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 study14 used the prototype Idylla™ MSI Assay in finalized design and shows superior performance of the MSI assay compared to reference methods. The second study15 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™ MSI Assay (RUO) on 17 July 2018, early than initially planned.
Lung cancer menu On 28 May 2018, Biocartis announced the publication of a study16 in the Journal of Clinical Pathology demonstrating that the Idylla™ EGFR Mutation Test (CE-IVD) was able to rescue 80% of the EGFR samples whose assessment was unsuccessful with Next Generation Sequencing (NGS). The study concluded that the Idylla™ EGFR Mutation Test is a viable alternative to NGS for rapid treatment decisions17 in patients with acute deterioration, in particular when testing is performed on a less than optimal tumor tissue sample, which frequently yields insufficient amounts of DNA for proper NGS analysis. There was a 100% concordance with NGS for the valid results, where Idylla™ confirmed the EGFR mutational status. For a large portion (20/25 or 80%) of the cases whose NGS assessment was invalid, Idylla™ was able to process the sample and adequately produced a result.
9 B Jacobs, B Claes, P Laurent-Puig, JP Bachet, S Tejpar, G Maertens, E Sablon, "Analytical and clinical validation of the Idylla™ ctKRAS and ctNRAS-BRAF Liquid biopsy tests", first presented at the 2018 AACR Annual Meeting in Chicago, US, 14-18 April 2018.
10 These tests were developed under the collaboration with Merck KGaA, Darmstadt, Germany.
11 The Idylla™ ctKRAS Mutation Test and the Idylla™ 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.
12 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
13 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.
14 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™ MSI Assay prototype", ASCO Annual Meeting of the American Society of Clinical Oncology, 1-5 June 2018, Chicago, IL (US).
15 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.
16 De Luca et al, University of Naples Federico II, "The Idylla™ 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,
17 To be taken by a multidisciplinary team.
New board composition – Following the annual shareholders' meeting (AGM) held on Friday 11 May 2018, five new independent board members were appointed and three board members whose mandate expired at the closing of the AGM, were re-appointed. The new board composition allows for a transition towards a board of directors consisting predominantly of independent directors and consists of: CRBA Management BVBA (represented by Christian Reinaudo), chairman of the board, Ann-Christine Sundell, Scientia II LLC (represented by Harry Glorikian), CLSCO BVBA (represented by Leo Steenbergen), Luc Gijsens BVBA (represented by Luc Gijsens), Peter Piot18, Hilde Windels BVBA (represented by Hilde Windels19), Roald Borré20 and Herman Verrelst (CEO of Biocartis).
US R&D center - On 1 March 2018, Biocartis announced to have established an R&D center in the US as the result of a transfer of R&D staff members and Idylla™ related assay development assets and tests of Janssen Diagnostics (a division of Janssen Pharmaceuticals, Inc.). With the establishment of this US R&D center, Biocartis supports the execution of its strategy to accelerate test menu expansion on the Idylla™ platform through predominantly CDx collaborations and assay content partnerships.
Cartridge manufacturing – Strong progress was made during H1 2018 in the validation of Biocartis' second cartridge manufacturing line that should provide for an additional annual cartridge capacity of over 1 million Idylla™ cartridges. The aim is to start commercial cartridge production on this line by year-end.
18 Independent director.
19 Non-executive director.
20 Non-executive director.
Horizon 2020. It can be used to part-finance up to 50% of further investments in infectious diseases diagnostics solutions.
Additional details – See 'H1 2018 financial results' below for more details on the H1 2018 financials.
Collaboration revenues increased y-o-y close to five times to EUR 3.7m
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 revenues y-o-y +68% to EUR 8.6m, predominantly driven by cartridge revenues that more than doubled.
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.
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™ 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™ 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.
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™ systems placed with customers under (reagent) rental agreements and Idylla™ 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.
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | Notes | 30 June 2018 | 30 June 2017 |
| Revenue | |||
| Collaboration revenue | 6.4 | 3,535 | 716 |
| Product sales revenue Service revenue |
6.4 6.4 |
8,555 251 |
5,092 104 |
| Other operating income | 12,341 | 5,912 | |
| Grants and other income | 6.5 | 400 | 1,066 |
| Total operating income | 12,741 | 6,978 | |
| Operating expenses | |||
| Cost of sales | 6.6 | -6,890 | -3,278 |
| Research and development expenses | 6.7 | -16,029 | -19,320 |
| Marketing and distribution expenses | 6.8 | -7,152 | -5,308 |
| General and administrative expenses | 6.9 | -3,809 | -2,781 |
| -33,880 | -30,687 | ||
| Operating loss for the period | -21,139 | -23,709 | |
| Financial income | 0 | -2 | |
| Financial expense | -650 | -714 | |
| Foreign exchange gains/(losses), net | -41 | -13 | |
| Financial result, net | -691 | -729 | |
| Loss for the year before taxes from continuing | |||
| operations | -21,830 | -24,438 | |
| Income taxes | 70 | 456 | |
| Loss for the year after taxes from continuing | |||
| operations | -21,760 | -23,982 | |
| Gain (loss) for the year after taxes from | |||
| discontinued operations | 0 | 0 | |
| Loss for the year | -21,760 | -23,982 | |
| Attributable to owners of the Company | -21,760 | -23,982 | |
| Attributable to non-controlling interest | |||
| Earnings per share | |||
| Basic and diluted loss per share from continuing | |||
| operations | 6.11 | -0.42 | -0.54 |
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | Notes | 30 June 2018 | 30 June 2017 |
| Loss for the year | -21,760 | -23,982 | |
| Other comprehensive income (loss), not to be reclassified to profit or loss |
-2 | ||
| Actuarial gain (loss) on defined benefit plan | -80 | 0 | |
| Tax impact actuarial gain (loss) | 27 | 0 | |
| Other comprehensive gain (loss) for the year, that may be reclassified to profit and loss |
0 | 0 | |
| Total comprehensive loss for the year | 0 -21,813 |
-23,984 | |
| Attributable to owners of the Company Attributable to non-controlling interest |
-21,813 0 |
-23,984 0 |
| As of | |||
|---|---|---|---|
| In EUR 000 | Notes | 30 June 2018 | 31 Dec 2017 |
| Assets | |||
| Non-current assets | |||
| Intangible assets | 9,842 | 10,267 | |
| Property plant and equipment | 29,519 | 26,199 | |
| Participating interests | 6.12 | 5,052 | 5,052 |
| Other long term receivables | 11 | 11 | |
| Deferred tax assets | 6,736 | 6,572 | |
| 51,160 | 48,102 | ||
| Current assets | |||
| Inventory | 10,588 | 9,060 | |
| Trade receivables | 6,977 | 6,892 | |
| Other receivables | 3,683 | 2,856 | |
| Other current assets | 1,714 | 1,517 | |
| Cash and cash equivalents* | 91,269 114,231 |
112,765 133,090 |
|
| Total assets | 165,391 | 181,191 | |
| Equity and liabilities | |||
| Capital and reserves | |||
| Legal share capital | 513 | 511 | |
| Historical share capital adjustment | -221,232 | -221,232 | |
| Share premium | 632,477 | 630,670 | |
| Share based payment reserve | 2,877 | 2.381 | |
| Accumulated deficit | -301,851 | -280,046 | |
| Other comprehensive income | -124 | -45 | |
| Total equity attributable to owners of the | |||
| Company | 112,660 | 132,239 | |
| Non-current liabilities | |||
| Provisions | 67 | 16 | |
| Financial debt | 6.13 | 31,842 | 31,359 |
| Deferred income | 6.14 | 6 | 10 |
| Accrued charges | 2,053 | 1,767 | |
| 33,968 | 33,152 | ||
| Current liabilities | |||
| Financial debt | 6.13 | 6,302 | 4,029 |
| Trade payables | 6,454 | 5,555 | |
| Deferred income | 6.14 | 2,048 | 2,777 |
| Other current liabilities | 3,958 | 3,439 | |
| 18,763 | 15,800 | ||
| Total equity and liabilities | 165,391 | 181,191 | |
*Cash and cash equivalents for 30 June 2018 include EUR 1.2 million restricted cash related to KBC Lease financing
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | Notes | 30 June 2018 | 30 June 2017 |
| Operating activities | |||
| Loss for the period | -21,760 | -23,982 | |
| Adjustments for | |||
| Depreciation and amortization | 2,144 | 2,428 | |
| Tax income in profit and loss | -71 | -421 | |
| Financial result, net | 691 | 635 | |
| Net movement in retirement benefit obligation Share based payment expense |
51 496 |
-21 151 |
|
| Other | -110 | 0 | |
| Changes in working capital Net movement in inventories |
-1,528 | -94 | |
| Net movement in trade and other receivables | |||
| and other current assets | -1,109 | -542 | |
| Net movement in trade payables & other | |||
| current liabilities | 1,705 | -27 | |
| Net movement in deferred income | 6.14 | -733 | -133 |
| Interest & other financial expenses paid | -60 | -52 | |
| -20,284 | -22,058 | ||
| Taxes paid Cash flow used in operating activities |
-51 -20,335 |
-114 -22,172 |
|
| Investing activities | |||
| Interest received | 0 | -2 | |
| Purchases of property, plant & equipment Purchases of intangible assets |
-2,273 -28 |
-1,461 -68 |
|
| Cash flow from / (used in) investing activities | -2,301 | -1,531 | |
| Financing activities | |||
| Proceeds from borrowings | 0 | 0 | |
| Proceeds from the lease financing of property, plant and equipment |
0 | 0 | |
| Net proceeds from the issue of common shares, net of transaction costs |
1,809 | 0 | |
| Repayment of borrowings | 6.13 | -543 | -470 |
| Bank charges | -15 | -9 | |
| Cash flow from financing activities | 1,251 | -479 | |
| Net increase / (decrease) in cash and cash equivalents1 |
-21,385 | -24,182 | |
| Cash and cash equivalents at the beginning of the period |
112,765 | 83,246 | |
| Effects of exchange rate changes on the balance of cash held in foreign currencies |
-110 | -22 | |
| Cash and cash equivalents at the end of the period2 |
91,269 | 59,042 |
1 Excludes effects of exchange rate changes on the balance of cash held in foreign currencies
2 Including EUR 1.2 million restricted cash related to KBC Lease financing
| In EUR 000 | Notes | Legal share capital |
Historical share capital adjustment |
Share premium |
Share based payment reserve |
Gains and losses on defined benefit plans |
Accumulated deficit |
Total equity attributable to the owners of the Company |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2017 | 446 | -221,232 | 554,065 | 1,716 | -19 | -238,088 | 96,889 | 96,889 | |
| Loss for the period | -23,982 | -23,982 | -23,982 | ||||||
| Other comprehensive income | -1 | -1 | -1 | ||||||
| Total comprehensive income |
-23,984 | -23,984 | -23,983 | ||||||
| Share-based payment expense Actuarial gain/loss on defined |
151 | -0 | 150 | 150 | |||||
| benefit plan | -33 | -0 | -34 | -34 | |||||
| Consolidation translation difference | - | - | - | ||||||
| Balance as at 30 June 2017 | 446 | -221,232 | 554,065 | 1,867 | -52 | -262,073 | 73,021 | 73,021 | |
| Balance as at 1 January 2018 | 511 | -221,232 | 630,670 | 2,381 | -45 | -280,046 | 132,240 | 132,240 | |
| Loss for the period | -21,760 | -21,760 | -21,760 | ||||||
| Other comprehensive income | -0 | -0 | -0 | ||||||
| Total comprehensive income |
- | - | -21,760 | -21,760 | -21,760 | ||||
| Share-based payment expense | 496 | 496 | 496 | ||||||
| Share issue - exercise of stock options on 5 April 2018 |
2 | 1,807 | 1,809 | 1,809 | |||||
| Actuarial gain/loss on defined | |||||||||
| benefit plan | -80 | -80 | -80 | ||||||
| Consolidation translation difference | -45 | -45 | -45 | ||||||
| Balance as at 30 June 2017 | 513 | -221,232 | 632,477 | 2,877 | -125 | -301,851 | 112,660 | 112,660 |
Biocartis Group NV, a company incorporated in Belgium with registered address at Generaal de Wittelaan 11 B, 2800 Mechelen, Belgium (the 'Company') and its subsidiaries (together, the 'Group') commercialize an innovative and proprietary molecular diagnostics ('MDx') platform that offers accurate, highly-reliable molecular information from virtually any biological sample, enabling fast and effective diagnostics treatment selection and treatment progress monitoring.
The Company is using its CE-IVD marked Idylla™ platform to develop and market a broad set of high value clinical assays with a focus on oncology.
The Group's mission is to become a global, fully integrated provider of novel molecular diagnostics solutions with industry-leading, high clinical value tests. The Company has established subsidiaries in Mechelen (Belgium), Lausanne (Switzerland) and New Jersey (US). The Group has so far been funded by a combination of private and public equity, upfront licensing fees and contract R&D income from collaborations. Several grants have been awarded to the Group to support its R&D activities.
The consolidated financial statements have been authorized for issue on 30 August 2018 by the board of directors of the Company (the 'board of directors').
The principal accounting policies for preparing these consolidated financial statements are explained below.
These condensed consolidated interim financial statements for the six months ended 30 June 2018 have been prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the EU. The statements should be read in conjunction with the annual financial statements for the year ended 31 December 2017, which have been prepared in accordance with IFRS as adopted by the EU.
The accounting policies adapted in the preparation of the condensed interim financial statements are consistent with those applied in the preparation of the financial statements for the year ended 31 December 2017. New standards or interpretations applicable from 1 January 2018 do not have an impact on the condensed consolidated interim financial statements.
All amounts are presented in thousands of Euro, unless otherwise indicated, rounded to the nearest EUR 000.
These condensed interim financial statements have been subject to a review by the Company's external auditor Deloitte Bedrijfsrevisoren BV CVBA.
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2018:
The above application of new standards did not have a significant impact on the financial position and the results of the Group.
In the application of the Company's accounting policies, which are described above, the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revized if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The following areas are areas where key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
The interim results for the six months ended 30 June 2018 show a negative result, and the balance sheet includes a loss carried forward. The Board of Directors has examined the statements and accounting standards. Taking into account the solid cash position and the credit facilities that the Company has at its disposal, the Board of Directors is of the opinion that it can submit the interim financial statements on a going concern basis.
The Group's revenues are summarized in the table below:
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 | |
| Collaboration revenue | |||
| R&D services | 2,626 | 45 | |
| License fees | 75 | 671 | |
| Milestones | 833 | 0 | |
| 3,535 | 716 | ||
| Product related revenue | |||
| Idylla™ System Sales revenue | 1,130 | 1,272 | |
| Idylla™ System Rental revenue | 822 | 549 | |
| Cartridge Sales | 6,603 | 3,270 | |
| 8,555 | 5,091 | ||
| Service revenue | |||
| Service revenue | 251 | 105 | |
| 251 | 105 | ||
| Total | 12,341 | 5,912 |
Revenues from collaboration agreements may include license fees, milestone payments and/or income from R&D services.
Unless up-front fees are paid in exchange for products delivered or services performed and, therefore, substantial risks and rewards have been transferred to the buyer in a separate transaction, such fees are not recognized as revenue up front but rather deferred as unearned revenue (even if they are non-refundable) and recognized pro rata over the expected performance period under each respective arrangement.
The Group makes its best estimate of the period over which it expects to fulfil its performance obligations, which may include technology transfer assistance, research and development activities, clinical, medical and regulatory activities, manufacturing and commercialization activities.
License fees include technology access fees to the Idylla platform technology. A distinction is made between right to use and right to access fees. Right to use fees are fees paid to use the IP as it exists when the license is granted, which means that the revenue recognition will happen at a point in time. Right to access fees are fees paid to access IP throughout a certain license period, which means that the revenue recognition will happen over time.
For the period, the group recognized EUR 0.1m of license fees.
A contingent consideration received by the Group upon the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity's performance or on the occurrence of a specific outcome resulting from the entity's performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity.
A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with the Group's performance required to achieve the milestone or the increase in value to the collaboration
resulting from the Group's performance, related solely to the Group's past performance, and is reasonable relative to all of the other deliverables and payments within the overall collaboration arrangement.
In certain situations, the Group may receive contingent payments after the end of its period of continued involvement. In such circumstances, the Group would recognize 100% of the contingent revenues when the contingency is achieved and collection is reasonably assured.
For the period, the group recognized EUR 0.8m of milestone payments.
Cost reimbursements resulting from collaboration agreements, or a similar type of compensation received for costs incurred under R&D collaborations are recorded as R&D services as the related costs are incurred and upon agreement by the parties involved. The corresponding expenses are generally recorded under research and development expenses. Revenues from R&D Services are in general recognized over the duration of the collaboration agreement, if relevant subject to when the required services are provided or costs are incurred.
For the period, the group recognized EUR 2.6m of income from R&D services.
Product sales relate to Idylla™ system sales (Idylla™ Instruments and Idylla™ Consoles) and cartridge sales to customers and collaboration partners. The total product sales can be categorized in commercial sales and research & development revenue.
| For the 6 months ended | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 |
| Commercial revenue | 7,950 | 5,024 |
| Research & Development revenue | 605 | 66 |
| Total | 8,555 | 5,091 |
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 | |
| Country of domicile | 338 | 262 | |
| Belgium | 338 | 262 | |
| Total all foreign countries, of which | 12,003 | 5,650 | |
| United states of America | 4,999 | 1,298 | |
| Spain | 1,338 | 857 | |
| Rest of the world | 5,666 | 3,495 | |
| Total | 12,341 | 5,912 | |
Revenues in the above table are assigned according to the location of the Group or parent company of the customer. The Group hasn't recognized revenues from one customer representing at least 10% of the total revenues.
| For the 6 months ended | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 |
| R&D project support (VLAIO) | 376 | 966 |
| Production Training support (VLAIO) | 24 | 0 |
| Other project grants (EU) | 0 | 62 |
| Other income | 0 | 38 |
| Total | 400 | 1,066 |
The cost of goods sold in relation to the product sales is as follows:
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 | |
| Staff costs | -2,257 | -747 | |
| Material, lab consumables & small equipment | -3,056 | -1,773 | |
| Depreciation and amortization | -634 | -387 | |
| Royalty expense | -491 | -336 | |
| Logistics | -185 | 0 | |
| Rent | -98 | -35 | |
| Maintenance | -170 | 0 | |
| Total | -6,890 | -3,278 |
| For the 6 months ended | |||
|---|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 | |
| Staff costs | -9,216 | -9,895 | |
| Subcontracting | -704 | -922 | |
| Laboratory expenses | -855 | -1,005 | |
| Platform and cartridge prototype costs | -653 | -2,578 | |
| Consultancy | -1,279 | -1,020 | |
| Quality and regulatory | -9 | -38 | |
| Intellectual property | -306 | -294 | |
| Facilities, office & other | -1,685 | -1,650 | |
| ICT | -459 | -568 | |
| Travel, training & conferences | -251 | -301 | |
| Depreciation and amortization | -1,342 | -1,892 | |
| Capitalized systems for internal use | 730 | 845 | |
| Total | -16,029 | -19,320 |
Subcontracting includes expenses in relation to services provided by research and development providers such as services related to the development of assay cartridges, platform instrumentation design of manufacturing equipment and engineering services.
Platform and cartridge prototype costs relate to the development of platform prototypes not taken into inventory for sale or into fixed assets for internal use. These include both the raw materials and (sub) assembly costs.
Capitalized systems for internal use are Idylla™ Consoles and Idylla™ Instruments used for amongst other assay development and quality purposes.
| For the 6 months ended | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 |
| Staff costs | -4,438 | -3,046 |
| Subcontracting | -43 | -44 |
| Sales and promotional expenses | -158 | -239 |
| Business development | -317 | -147 |
| Consultancy | -35 | -96 |
| Facilities, office & other | -554 | -438 |
| Travel, training & conferences | -1,080 | -1,124 |
| Depreciation and amortization | -401 | -174 |
| Provision for doubtful debtors | -124 | 0 |
| Total | -7,152 | -5,308 |
Sales and promotional expenses relate to costs of external market research, advertisement, and promotional activities related to the Group's products.
| For the 6 months ended | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 |
| Staff costs | -2,150 | -1,545 |
| External advice | -515 | -311 |
| Facilities, office & other | -545 | -430 |
| Human resources | -393 | -392 |
| Travel, training & conferences | -211 | -109 |
| Depreciation and amortization expenses | 6 | 6 |
| Total | -3,809 | -2,781 |
External advice expenses include fees, service and consulting expenses related to legal, human resources, investor relations, accounting, audit and tax services.
| For the 6 months ended | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 30 June 2017 |
| Staff costs | -18,061 | -15,233 |
| Average number of full time equivalents | 366 | 313 |
The Company has stock option plans that may be settled in common shares of the Company and which are considered anti-dilutive given that the Group's operations were loss making over the reporting period. As such, the basic and diluted earnings per share are equal. The basis for the basic and diluted earnings per share is the net loss for the year attributable to the owners of the Company.
| For the 6 months ended | ||
|---|---|---|
| 30 June 2018 | 30 June 2017 | |
| Profit/loss for the period attributable to the owners of the Company (in EUR 000) |
-21,760 | -23,982 |
| Weighted average number of ordinary shares for basic loss per share (in number of shares) |
51,208,729 | 44,648,105 |
| Basic loss per share (EUR) | -0,42 | -0,54 |
In 2015, the Group acquired a financial participation of 13.5% in MyCartis NV through a contribution in kind for an amount of EUR 5.1m by Debiopharm Diagnostics SA. The participation is not accounted for under the equity method, as the Group has no significant influence over MyCartis NV. The stake in MyCartis NV has decreased to 7.10% per 30 June 2018 because the Company did not participate in any subsequent capital increases in MyCartis NV since acquisition of its financial participation. No impairment has been made per 30 June 2018.
| As of | |||
|---|---|---|---|
| In EUR 000 | 30 June 2018 | 31 Dec 2017 | |
| Initial recognition amount | 5,052 | 5,052 | |
| Total | 5,052 | 5,052 |
The financial debt can be analyzed as follows:
| As of | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 31 Dec 2017 |
| PMV & FPIM Lease company Bank |
16,902 14,696 244 |
16,331 14,723 305 |
| Total non current | 31,842 | 31,359 |
| PMV & FPIM Lease company Bank |
0 6,181 121 |
0 3,909 120 |
| Total current | 6,302 | 4,029 |
In 2013, Biocartis NV refinanced about 50% of its Idylla™ semi-automated cartridge manufacturing line in Mechelen (Belgium) via a sale and lease back operation. The lease had an initial term of 5 years at a 3.35% interest rate and included a purchase option of EUR 0.2m. In 2015, the term was extended until 1 June 2021 to align with the new 2015 lease as described below. The purchase option was also reduced to EUR 0.1m. As a security, a debt service reserve account is to be maintained, starting at EUR 2.5m, decreasing over time according to the following milestones: fundraising 2013, CE approval, FDA approval. The current debt service reserve account amounts to EUR 1.2m.
In 2015, Biocartis NV obtained two new financing facilities for the modifications to the current cartridge production line in Mechelen. The first new facility entails an investment credit for an amount of EUR 0.6m, provided by a bank. This facility has a payment term of 5 years and an interest rate of 1.93%. The second one entails a leasing facility for EUR 4.4m, provided by a lease company. The interest applicable for this leasing facility equals 1.77% and the leasing includes a purchase option of 1% of the financed amount. The duration of the leasing agreement is 54 months.
In 2016, Biocartis NV obtained a lease financing facility for the development of a second cartridge production line in Mechelen, for EUR 15m, provided by a lease company, the amount is fully withdrawn per 30 June 2018. The interest applicable for this leasing facility equals approx. 1.87% and the leasing includes a purchase option of 1% of the financed amount.
In 2016, Biocartis NV and the Company also obtained a subordinated loan of EUR 15m provided by a consortium of PMV (Participatie Maatschappij Vlaanderen) and the Belgian 'Federal Holding and Investment Company' (FPIM). Both PMV and FPIM granted a loan of EUR 7.5m each, bearing an interest rate of 7% and with a maturity date at 30 September 2021 (except in case of extension of the loan upon the Company's request or voluntary or mandatory early repayment). The interest on the loans is capitalized during the first three years of the agreement and accrued in the consolidated balance sheet at the year-end. The agreement contains a set of business covenants, which require obtaining the lenders' approval for certain major transactions outside the ordinary course of business.
End of Q3 2017, Biocartis reached agreement with KBC and BNP Paribas Fortis to replace the Company's EUR 25m committed multiple purpose credit facility (partially guaranteed by the Flemish Government) with a new committed multiple purpose credit facility of EUR 27.5m (not covered by a government guarantee). The new committed multiple purpose credit facility consists of a EUR 18.5m rollover credit line and a EUR 9m working capital credit line, and has lower overall financing costs compared to the previous facility. No drawdowns were made under this facility as per 30 June 2018.
On 1 March 2018, Biocartis announced to have obtained a EUR 24m debt financing facility from the European Investment Bank. The financing facility is supported by InnovFin – EU Finance for Innovators' Infectious Diseases Finance Facility, with the financial backing of the European Union under its research and innovation programme Horizon 2020. It can be used to part-finance up to 50% of further investments in infectious diseases diagnostics solutions. No drawdowns were made under this facility as per 30 June 2018.
In addition, the Group also has access to a bank guarantee line of EUR 0.5m of which EUR 0.5m has been taken up for rental guarantees as per 30 June 2018, and an credit line with a bank of EUR 0.6m for currency hedging, of which EUR 0m has been taken up as per 30 June 2018.
| As of | ||
|---|---|---|
| In EUR 000 | 30 June 2018 | 31 Dec 2017 |
| Grants | 1,141 | 1,213 |
| Partner income | 913 | 1,575 |
| Total | 2,054 | 2,787 |
| current | 2,048 | 2,777 |
| non current | 6 | 10 |
Deferred partner income includes upfront payments from collaboration partners in relation to the strategic licensing, development and commercialization collaborations.
| Deferred partner income |
|
|---|---|
| As per 31 December 2016 | 1,837 |
| Invoiced | 1,145 |
| Recognized in profit or loss | -1,772 |
| As per 31 December 2017 | 1,575 |
| Invoiced | 444 |
| Recognized in profit or loss | -1,105 |
| As per 30 June 2018 | 913 |
6.15.1. Fair value
The fair value of the financial assets has been determined on the basis of the following methods and assumptions:
The fair value of the participation in MyCartis is not significantly different than its carrying value on 31 December 2017 and is based upon the valuation used in the latest capital increase in MyCartis in July 2017. The fair value measurement is classified as level 2.
The fair value of the financial liabilities has been determined on the basis of the following methods and assumptions:
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
The Group has no financial instruments carried at fair value in the consolidated balance sheet on 30 June 2018 and 31 December 2017.
| Carrying value | Fair value | |||
|---|---|---|---|---|
| In EUR 000 | 30 June 2018 | 31 Dec 2017 | 30 June 2018 | 31 Dec 2017 |
| Available for sale financial assets | ||||
| Participating interest | 5,052 | 5,052 | 5,052 | 5,052 |
| Total available for sale financial assets | 5,052 | 5,052 | 5,052 | 5,052 |
| Loans and receivables measured at amortized cost | ||||
| Trade and other receivables (current) | 10,660 | 9,748 | 10,660 | 9,748 |
| Other long term receivables | 11 | 11 | 11 | 11 |
| Other current assets | 1,714 | 1,517 | 1,714 | 1,517 |
| Total loans and other receivables | 12,385 | 11,276 | 12,385 | 11,276 |
| Cash & cash equivalents | ||||
| Cash & cash equivalents* | 91,269 | 112,765 | 91,269 | 112,765 |
| Total cash & cash equivalents | 91,269 | 112,765 | 91,269 | 112,765 |
| Financial liabilities measured at amortized cost | ||||
| Loans & Borrowings | 38,145 | 35,388 | 27,993 | 34,675 |
| Trade payables | 6,454 | 5,555 | 6,454 | 5,555 |
| Other liabilities and accrued charges | 6,012 | 5,206 | 6,012 | 5,206 |
| Total financial liabilities measured at amortized cost | 50,610 | 46,149 | 40,458 | 45,436 |
* For 30 June 2018: including EUR 1.2m restricted cash related to KBC Lease financing.
The Group has no new contingencies compared to 31 December 2017.
As per 30 June 2018, the Group has EUR 3.3m capital commitments mainly related to investments in the second cartridge production line. This production line is located in Mechelen (Belgium) for which the Group is engaged in several contractual arrangements with specified suppliers.
As per 30 June 2018, the Group has operating commitments towards different suppliers for Idylla™ systems and cartridge parts for a total amount of EUR 5.2m. It is expected that the majority of the commitments will be fulfilled in 2018.
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in the notes. The remuneration of key management and a list of the subsidiaries are disclosed below. There were no other transactions with related parties.
27 Horizon mutated samples.
21 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)>.
22 Formalin fixed, paraffin embedded.
23 Including IHC and Promega MSI analysis system 1.2. 24 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. 25 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).
26 Using the Ion AmpliSeq 50-gene Cancer Hotspot Panel v2 (Thermo Fisher Scientific).
28 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.
Report on the review of the consolidated interim financial information for the six-month period ended 30 June 2018
The original text of this report is in Dutch
In the context of our appointment as the company's statutory auditor, we report to you on the consolidated interim financial information. This consolidated interim financial information comprises the condensed consolidated balance sheet as at 30 June 2018, the condensed consolidated income statement, the condensed consolidated statement of other comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the period of six months then ended, as well as selective notes.
We have reviewed the consolidated interim financial information of Biocartis Group NV ("the company") and its subsidiaries (jointly "the group"), prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting" as adopted by the European Union.
The condensed consolidated balance sheet shows total assets of 165 391 (000) EUR and the condensed consolidated income statement shows a consolidated loss (group share) for the period then ended of 21 760 (000) EUR.
The board of directors of the company is responsible for the preparation and fair presentation of the consolidated interim financial information in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
We conducted our review of the consolidated interim financial information in accordance with International Standard on Review Engagements (ISRE) 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial information.
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information of Biocartis Group NV has not been prepared, in all material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.
Zaventem, 5 September 2018
The statutory auditor DELOITTE Bedrijfsrevisoren / Réviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Gert Vanhees
Biocartis Group NV is a limited liability company organized under the laws of Belgium and has its registered office at Generaal de Wittelaan 11 B, 2800 Mechelen, Belgium. Throughout this report, the term 'Biocartis NV' refers to the nonconsolidated Belgian subsidiary company and references to 'the Group' or 'Biocartis' include Biocartis Group NV together with its subsidiaries.
Biocartis and Idylla™ are registered trademarks in Europe, the United States and other countries. Biocartis trademark and logo and Idylla™ trademark and logo are used trademarks belonging to Biocartis. This report is not for distribution, directly or indirectly, in any jurisdiction where to do so would be unlawful. Any persons reading this report 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 report 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.
As defined by Belgian law, Biocartis has to publish its financial report in the English and Dutch language. In case of difference in interpretation, the English version prevails. An electronic version of the half-yearfinancial report 2018 is available on the Biocartis website. Other information on the Biocartis website or on other websites is not a part of this half-year report.
Biocartis Investor Relations Renate Degrave Generaal de Wittelaan 11 B3 2800 Mechelen, Belgium +32 15 632 600 [email protected]
Biocartis is listed on Euronext Brussels since 27 April 2015 under the symbol BCART. Biocartis' ISIN code is BE0974281132.
The financial year starts on 1 January and ends on 31 December.
Deloitte Bedrijfsrevisoren B.V. o.v.v.e. CVBA, represented by: Gert Vanhees Gateway Building Luchthaven Nationaal 1J 1930 Zaventem Belgium
Certain statements, beliefs and opinions in this report 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 report 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 report, 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 report 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 report or the actual occurrence of the forecasted developments. You should not place undue reliance on forwardlooking statements, which speak only as of the date of this report.
| Assay | In the field of diagnostics, an assay is a process or method aimed at determining the presence or amount (quantitative assay) of a certain substance in a sample. |
|---|---|
| Biopsy (solid/liquid) | The Idylla™ platform is capable of processing both solid biopsies (FFPE tissue which is the standard tissue type for solid tumor diagnostics, and fresh (frozen) tissue samples) and liquid biopsies. These are easier to obtain sample types such as blood plasma or urine. Liquid biopsy based assays will facilitate monitoring of treatments and disease progression, and possible earlier disease detection. |
| Serine/threonine-protein kinase B raf (BRAF) |
BRAF is a protein that, in humans, is encoded by the BRAF gene. The BRAF protein is involved in sending signals within cells and in cell growth. Certain inherited BRAF mutations cause birth defects. Alternatively, other acquired mutations in adults may cause cancer. |
| CE-mark | The CE-mark is a mandatory conformance mark on many products placed on the market in the European Union. With the CE-marking on a product, the manufacturer ensures that the product is in conformity with the essential requirements of the applicable European Union directives. The letters "CE" stand for 'Conformité Européenne' ('European Conformity'). |
| ctDNA | This is circulating tumor DNA. |
| Companion Diagnostics (CDx) | CDx is a bio-analytical method designed to assess: (i) whether or not a patient will respond favorably to a specific medical treatment; (ii) what the optimal dose is for a patient; and (iii) whether the patient can expect certain side effects from a medical treatment. Any prescription of a drug with a CDx is based on the outcome of the CDx. CDx tests are also used in the drug development process. |
| CLIA | The Clinical Laboratory Improvement Amendments of 1988 (CLIA) regulations include federal standards applicable to all U.S. facilities or sites that test human specimens for health assessment or to diagnose, prevent, or treat disease (source: https://wwwn.cdc.gov/clia/). |
| Deoxyribonucleic acid (DNA) | DNA is a nucleic acid molecule that contains the genetic instructions used in the development and functioning of living organisms. |
| Epidermal growth factor receptor (EGFR) |
EGFR is a protein found on the surface of certain cells which can cause them to divide. It is found in abnormally high levels on the surface of many types of cancer cells. |
| Emergency Use Authorization (EUA) |
This is an authorisation given by the FDA Commissioner pursuant to section 564 of the US Federal Food, Drug, and Cosmetic Act, as amended (the 'FD&C Act'), which allows unapproved medical products or unapproved uses of approved medical products to be used in the United States in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by chemical, biological, radiological or nuclear threat agents when there are no adequate, approved, and available alternatives. |
| Formalin fixed, paraffin embedded (FFPE) |
FFPE tissues are samples, typically from suspected tumors, that are fixed or mixed with formalin to preserve the structural integrity of the sample. The sample is then embedded into a type of paraffin wax so that it can be sliced into very fine slices, 5-10 microns thick. Treating samples in this manner enables the samples to be stained with dyes to analyse abnormalities in tissue that is suspected of cancer. |
| US Food and Drug Administration (FDA) |
The FDA is a federal agency of the United States Department of Health and Human Services responsible for protecting and promoting public health through the regulation and supervision of, among other things, medical devices. |
| Immunoassay | Immunoassays are assays that measure biomarkers through antigen-antibody interaction technologies. In most cases such assays are used to measure biomarkers of the immune system itself, e.g. HCV or HIV antibodies produced by the bodies, which are detected by means of HCV or HIV antigens. |
|---|---|
| Influenza | Also known as 'the flu' is a highly contagious respiratory tract infection caused by the family of influenza viruses. |
| In vitro diagnostics or In vitro diagnosis (IVD) |
IVD is a diagnostic test outside of a living body in contrast to "in vivo", in which tests are conducted in a living body (for example an X-ray or CT-scan). |
| Kirsten rat sarcoma-2 virus oncogene (KRAS) |
KRAS is a protein that, in humans, is encoded by the KRAS gene. Like other members of the Ras family, the KRAS protein is a GTPase (a large family of hydrolase enzymes that can bind and hydrolyse guanosine triphosphate), and is an early player in many signal transduction pathways. The protein product of the normal KRAS gene performs an essential function in normal tissue signalling, and the mutation of a KRAS gene is associated with the development of many cancers. |
| MDSAP (Medical Device Single Audit Program) |
The MDSAP allows medical device manufacturers can be audited once for compliance with the standard and regulatory requirements of up to five different medical device markets: Australia, Brazil, Canada, Japan and the United States. The program's main mission is to "…jointly leverage regulatory resources to manage an efficient, effective, and sustainable single audit program focused on the oversight of medical device manufacturers." |
| Metastatic Colorectal Cancer (mCRC) |
Colorectal Cancer (CRC) is the second most common cancer worldwide, with an estimated incidence of more than 1.36 million new cases annually. According to the International Agency for Research on Cancer, an estimated 694,000 deaths from CRC occur worldwide every year, accounting for 8.5% of all cancer deaths and making it the fourth most common cause of death from cancer. |
| Molecular diagnostics (MDx) | MDx is a form of diagnostic testing used to detect specific sequences in DNA or RNA that may or may not be associated with disease. Clinical applications of MDx include infectious disease testing, oncology, pharmacogenomics and genetic disease screening. |
| Micro satellite instability (MSI) | MSI is a genetic hyper-mutability condition resulting from MMR that is functioning abnormally. |
| Multiplexing | The simultaneous detection of more than one analyte or biomarker from a single sample. |
| Neuroblastoma RAS viral (v-ras) oncogene (NRAS) |
NRAS is a protein that is encoded, in humans, by the NRAS gene. Like other members of the Ras family, the NRAS protein is a GTPase (a large family of hydrolase enzymes that can bind and hydrolyse guanosine triphosphate), and is an early player in many signal transduction pathways. The protein product of the normal NRAS gene performs an essential function in normal tissue signaling, and the mutation of a NRAS gene is associated with the development of many cancers. |
| Next-Generation Sequencing (NGS) |
Sequencing is the process of determining the precise order of nucleotides within a DNA molecule. It includes any method or technology that is used to determine the order of the four bases—adenine, guanine, cytosine, and thymine—in a strand of DNA. The high demand for low-cost sequencing has driven the development of high-throughput sequencing technologies that parallelize the sequencing process, producing thousands or millions of sequences concurrently. High-throughput sequencing technologies are intended to lower the cost of DNA sequencing beyond what is possible with standard dye-terminator methods. |
Polymerase chain reaction (PCR) The specific and exponential amplification of DNA sequences by consecutive thermal cycling steps.
36
| Real-time PCR is a form of PCR whereby the amplified sequences are made visible by means of fluorescent labelling in real time, i.e., as they become synthesized. Real-time PCR can be used to estimate the quantity of target DNA sequences in a multiplexed way. PCR and real-time PCR can also be used to detect and quantify RNA sequences after a DNA copy has been made from the RNA sequence by means of a reverse transcriptase enzyme. |
|
|---|---|
| Protein | Polypeptide chain built from the 20 natural amino acids. Proteins are synthesized from a messenger RNA copy of a gene and can have many functions in the cytoskeleton of the cell, enzymatic, messenger functions in cells and blood such as immune cytokines, DNA binding proteins that regulate expression, etc. |
| Respiratory Syncytial Virus (RSV) RSV is a major cause of lower respiratory tract infection that is a frequent infection in children. | |
| Research Use Only (RUO) | This is a category of non-approved (i.e. no CE-marking and FDA approval) medical device products that can solely be used for research purposes. Many producers introduce their products first as RUO and/or IUO products, prior to obtaining 510(k) clearance or PMA approval. |
| Ribonucleic acid (RNA) | RNA, like DNA, is a nucleic acid molecule. RNAs have a variety of different functions in living cells. They can have a scaffolding role in the build-up of complexes (ribosomes, SNRPs), provide sequence recognition (translation, RNA spicing), have catalytic function (ribozymes), act as messengers for protein synthesis (mRNAs), regulate gene expression (miRNAs) or make up the genome of certain viruses. |
| Sepsis | Severe overall inflammatory response of the body to an infection. |
Biocartis Group NV Generaal de Wittelaan 11 B 2800 Mechelen – Belgium
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