Earnings Release • Mar 16, 2016
Earnings Release
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Biocartis will host a webcast presentation today at 14:00 CET to discuss the 2015 results, 2016 guidance and update on its menu of Idylla™ tests. The live webcast may be accessed on the Biocartis website or by clicking here. To participate in the questions and answers session, please dial 5-10 minutes prior to the start time the number +44 (0)20 3427 1914 (standard international), followed by the confirmation code 1026764. The webcast and conference call will be conducted in English. A replay of the webcast will be available on the Biocartis website shortly after.
Mechelen, Belgium, 17 March 2016 - Biocartis Group NV (the 'Company' or 'Biocartis'), an innovative molecular diagnostics company (Euronext Brussels: BCART), today announced its operational highlights and financial results for 2015, prepared in accordance with IFRS as adopted by the European Union. Furthermore, the Company today provides its guidance for 2016 and an update on its menu of Idylla™ tests.
Following launch in September 2014, 2015 was the first full commercialisation year of Biocartis' molecular diagnostics platform Idylla™ that is being sold via direct representations in key European countries and via distribution partners in geographies accepting CE-mark.
During 2015, Biocartis further advanced the development of new tests for its Idylla™ platform with a focus on
addressing clinical unmet needs in oncology and infectious diseases, being respectively the fastest growing and largest segment of the worldwide molecular diagnostics market. Biocartis aims to launch a minimum of four Idylla™ tests per year.
Biocartis' initial focus within oncology is to develop a core menu consisting of four solid biopsy and four liquid biopsy tests for melanoma, colon and lung cancer. The majority of this core menu is expected to be on the market by the end of 2016:
Biocartis' focus within infectious diseases is on offering highly sensitive syndromic panel tests for, amongst others, respiratory diseases:
To ensure a rapid expansion of the test menu, Biocartis has an active partnership strategy to develop tests in collaboration with external strategic partners. Biocartis signed the following collaborations in 2015:
Microbiome (a spin-off of the VU University Medical Center Amsterdam, the Netherlands); aimed at developing a test for the rapid detection of bloodstream infections, such as sepsis.
1 Histiocytosis is a general name for a group of disorders or "syndromes" that involve an abnormal increase in the number of immune cells that are called histiocytes. Source: https://www.nlm.nih.gov/medlineplus/ency/article/000068.htm, December 2015.
2 The test is compatible with both dry NPS swabs as well as with a viral transport medium.
3 Source: World Health Organization, Fact sheet N°401.
From a financial point of view, 2015 was a year marked by successfully securing funding, as well as initiating the transition process from revenues driven by R&D activities, towards revenues driven by partnerships and commercial product sales:
The operational focus in 2015 was on further strengthening the organisation to support and enable the envisaged test menu expansion and related commercial roll-out of the Idylla™ platform:
4 Biocartis signed a partnership agreement with ETPL (Exploit Technologies Pte. Ltd.), the commercialisation arm of the Agency for Science, Technology and Research (A*STAR, based in Singapore).
5 Excluding the U.S., China and Japan.
6 Added to the collaboration in December 2015.
2015, to provide the company with the expertise needed for the execution of its strategy.
Employee base: Biocartis' employee base included 270 FTEs as per 31 December 2015, compared to 189 FTEs as per 31 December 2014.
"2015 was a year of great success for Biocartis. I am extremely proud to say that we delivered on the promises that were made during the time of our IPO. Furthermore, I am also pleased to say that we realised a promising initial market adoption of Idylla™. Besides this being a key value driver for our company, it also has a positive impact on society, as Idylla™ offers accurate and fast diagnostic information - where and when clinicians and patients meet.
Backed-up by a solid cash position and a strengthened organisation with dedicated employees, we are confident to continue to deliver on our promises in 2016, both operationally and commercially. In a rapidly changing healthcare landscape, where molecular information is increasingly used to detect and stage disease earlier and more accurately, our Idylla™ technology in combination with our Idylla™ oncology tests are increasingly showing their complementary use in diagnostics, as a companion to new, promising treatments such as immuno-oncology. As such, in 2016 we will aim to have our core menu for oncology on the market and by doing so, expect further leverage of our Idylla™ technology."
The tables below show an overview of the key figures and a breakdown of operating income for 2015. A consolidated income statement, balance sheet, cash flow statement and statement of changes in equity of Biocartis Group NV is presented in the paragraph 'Financial information' at the end of this press release.
| Key figures (EUR 1,000) | 2015 | 2014 | % Change |
|---|---|---|---|
| Total operating income | 14,951 | 10,367 | 44% |
| Cost of goods sold | -2,642 | -4,251 | -38% |
| Research and development expenses | -36,554 | -25,014 | 46% |
| Marketing and distribution expenses | -8,747 | -3,095 | 183% |
| General and administrative expenses | -6,662 | -7,180 | -7% |
| Operating expenses | -54,606 | -39,540 | 38% |
| Operational result | -39,655 | -29,173 | 36% |
| Net financial result | -790 | -961 | -18% |
| Income tax | 648 | 947 | -32% |
| Result from discontinued operations | - | 19,472 | -100% |
| Net result | -39,797 | -9,715 | 310% |
| Cash flow from operating activities | -23,357 | -35,884 | -35% |
| Cash flow from investing activities | -9,414 | 5,052 | -286% |
| Cash flow from financing activities | 125,943 | 12,727 | 890% |
| Net cash flow | 93,173 | -18,105 | -615% |
| Cash and cash equivalents1 | 104,088 | 10,919 | 853% |
| Financial debt | 10,814 | 13,585 | -20% |
1 Including EUR 1.5m of restricted cash (as a guarantee for bank and lease financing)
| Breakdown operating income (EUR 1,000) | 2015 | 2014 | % Change |
|---|---|---|---|
| Collaboration revenue | 9,686 | 3,174 | 205% |
| Product sales revenue | 3,593 | 5,260 | -32% |
| Service revenue | 54 | 44 | 22% |
|---|---|---|---|
| Total revenue | 13,334 | 8,478 | 57% |
| Grants and other income | 1,617 | 1,889 | -14% |
| Total operating income | 14,951 | 10,367 | 44% |
Biocartis' total operating income increased from EUR 10.4m in 2014 to EUR 15.0m in 2015, an increase of 44%. This increase was primarily attributable to a EUR 6.5m increase in collaboration revenues bringing the total to EUR 9.7m in 2015. Collaboration revenues consisted of revenue recognition from upfront payments that Biocartis received under its license and development agreements with Janssen Pharmaceutica in the amount of EUR 5m, a total of EUR 4m of milestone payments that Biocartis received from Janssen Pharmaceutica in relation to the further commercialisation of the Idylla™ platform, as well as EUR 0.7m of revenues from R&D services.
Total product sales revenues in 2015 amounted to EUR 3.6m, representing a decrease of EUR 1.7m compared to 2014. This is the result of a one-off direct sale of 80 Idylla™ instruments towards Janssen Pharmaceutica in 2014 and lower product sales from R&D activities that were only partially off-set by higher commercial product sales. Idylla™ instrument sales consequently decreased from EUR 3.7m in 2014 to EUR 2.3m in 2015. Other operating income in 2015 amounted to EUR 1.6m and consisted of grants that Biocartis received from the IWT (Institute for Innovation by Science and Technology in Flanders), mainly for R&D in the field of sepsis and liquid biopsy technologies.
Total operating expenses in 2015 increased from EUR 39.5m in 2014 to EUR 54.6m in 2015, primarily driven by higher expenses in R&D as well as in marketing and distribution.
R&D expenses increased from EUR 25.0m in 2014 to EUR 36.6m in 2015 (increase of EUR 11.6m) as the consequence of an expansion of the R&D team with 38 FTE, increased R&D activities for test and platform development and additional required support from service providers. Marketing and distribution expenses increased from EUR 3.1m in 2014 to EUR 8.7m in 2015 (increase of EUR 5.6m) as the result of an expansion of the marketing & distribution team with 12 FTE, additional external sales force support and increased marketing activities to support the global roll-out of the Idylla™ platform. G&A expenses decreased from EUR 7.2m in 2014 to EUR 6.7m in 2015. This decrease is the combined result of exceptional expenses that Biocartis incurred in 2014 for its group restructuring and a costs increase because of the expansion of G&A staff with 10 FTE in 2015. Cost of goods sold decreased, predominantly as the result of lower product sales from R&D activities and a decrease in manufacturing costs for instrumentation and cartridges.
The operational result in 2015 amounted to a loss of EUR 39.7m compared to a loss of EUR 29.2m in 2014. Net financial result improved from EUR -1.0m in 2014 to EUR -0.8m in 2015.
The above has resulted in a net result from continued operations in 2015 of EUR 39.8m, compared to a loss of EUR 29.2m in 2014. In this respect it is important to note that in 2014, Biocartis realised a one-off gain from discontinued operations of EUR 19.5m.
In 2015, property, plant & equipment increased with EUR 5.1m from EUR 9.2m in 2014 to EUR 14.2m as the result of EUR 9.2m of additions, predominantly capex for manufacturing equipment, and depreciation of EUR 4.2m.
Per 31 December 2015, a financial participation of EUR 5.1m was included on the balance sheet, as the result of the acquisition of a participation in MyCartis NV on 15 January 2015, following the exercise by Debiopharm Diagnostics SA of a put option in December 2014. Biocartis currently holds a 9.53% participation in MyCartis NV.
Inventory increased from EUR 3.6m per 31 December 2014, to EUR 5.8m end of 2015, caused by higher inventory levels in view of the further commercialization of the Idylla™ platform. Trade receivables have decreased significantly with EUR 9.9m to EUR 5.9m per 31 December 2015, because of the collection of receivables of approx. EUR 12.0m from Janssen Pharmaceutica. Trade payables increased from EUR 4.3m per 31 December 2014, to EUR 13.9m per 31 December 2015, mainly driven by prepayment invoices for operating and capital commitments in relation to manufacturing expansion. Deferred income has decreased to EUR 5.2m per 31 December 2015, from EUR 9.6m per 31 December 2014, because of recognised upfront payments from Janssen Pharmaceutica in relation to the strategic licensing, development and commercialization collaborations.
Total financial debt decreased from EUR 13.6m as of 31 December 2014, to EUR 10.8m per 31 December 2015. This has primarily been the result of the full repayment of the Senter Novem loan of EUR 4.1m, repayments on existing lease facilities of EUR 1.1m and a new financing facility of EUR 5.0m that was obtained from a financial institution end of 2015 under which EUR 1.8m was drawn per 31 December 2015.
Driven by the second tranche of the series F financing round of EUR 21.5m in January 2015 and the gross proceeds of EUR 115.0m of the IPO in April 2015, the cash position of the Group increased with EUR 93.2m from EUR 10.9m per 31 December 2014 to EUR 104.1m per 31 December 2015.
The cash flow from operating activities improved in 2015 to EUR -23.4m compared to EUR -35.9m in 2014, as the result of positive changes in working capital, a higher loss for 2015 as well as an exceptional gain in 2014 on the disposal of MyCartis NV of EUR -26.6m.
The cash flow from investing activities in 2015 amounted to EUR -9.4m compared to EUR 5.1m in 2014, as the result of higher investments in property, plant & equipment, as well as a one-off gain in 2014 of EUR 7.5m as the result of a divestment into MyCartis NV.
The cash flow from financing activities amounted in 2015 to EUR 125.9m, compared to EUR 12.7m in 2014, driven predominantly by the proceeds of the second tranche of the series F financing round and the IPO as well as net payments of borrowings.
Biocartis continuously monitors market developments and feedback from key opinion leaders, its Scientific Advisory Board and customers to optimize its Idylla™ menu of tests. Especially recent developments in the field of oncology have resulted in several menu optimisations as summarised below.
7 MSI or Microsatellite Instability is the condition of genetic hyper mutability that results from impaired DNA mismatch repair (MMR). MSI is a known prognostic factor in colorectal cancer and can also be found in a range of other cancer types.
Development of Idylla™ NGS Prep Panels that will function as a gateway to link the Idylla™ platform to nextgeneration sequencing (NGS), a rising technology which allows detailed information analysis across multiple genes. The first Idylla™ NGS Prep Panel is expected to be launched in 2017.
Additional background on the summarised menu update will be provided during today's webcast presentation at 14:00CET.
The Biocartis management team will host a conference call and webcast, during which the 2015 results, 2016 outlook and test menu update will be presented, followed by a Q&A session. This event will be held today, 17 March 2016 at 14:00 CET. The conference call will be webcast live and may be accessed on www.biocartis.com or by clicking here. If you would like to participate in the Q&A, please dial +44 (0)20 3427 1914 (standard international) with confirmation code 1026764. Shortly after the call, a replay of the webcast and presentation will be available on www.biocartis.com.
Renate Degrave (Corporate Communications & Investor Relations) +32 15 632 600 | [email protected]
Biocartis (Euronext Brussels: BCART) is an innovative molecular diagnostics (MDx) company providing next generation diagnostic solutions aimed at improving clinical practice for the benefit of patients, clinicians, payers and industry. Biocartis' proprietary MDx Idylla™ platform is a fully automated sample-to-result, real-time PCR (Polymerase Chain Reaction) system that offers accurate, highly reliable molecular information from virtually any biological sample in virtually any setting. Idylla™ addresses the growing demand for personalized medicine by allowing fast and effective treatment selection and treatment progress monitoring.
Biocartis launched the Idylla™ platform in September 2014. Biocartis is developing and marketing a rapidly expanding test menu addressing key unmet clinical needs in oncology and infectious diseases. These areas represent respectively the fastest growing and largest segments of the MDx market worldwide. More information: www.biocartis.com.
Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company or, as appropriate, the Company directors' 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 Company operates. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward-looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and
8 Kochanek KD, Xu J, Murphy SL, Miniño AM, Kung HC. 2011. Deaths: final data for 2009. Natl. Vital Stat. Rep. 60(3):1–116.
should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.
The consolidated financial statements have been prepared in accordance with IFRS, as adopted by the EU. The financial information included in this press release is an extract from the full IFRS consolidated financial statements, which will be published on 12 April 2016. The statutory auditor, Deloitte Bedrijfsrevisoren/Reviseurs d'Entreprises, represented by Gert Vanhees, has substantially completed the audit procedures on the IFRS consolidated statements as of and for the year ended 31 December 2015, and has confirmed that the consolidated balance sheet, the consolidated statements of comprehensive income, cash flow and changes in shareholders' equity, included in this press release, are consistent in all material aspects with the consolidated accounts from which they have been derived.
| Years ended 31 December, | |||
|---|---|---|---|
| In €000 | 2015 | 2014 | |
| Revenue | |||
| Collaboration revenue | 9,686 | 3,174 | |
| Product sales revenue | 3,593 | 5,260 | |
| Service revenue | 54 | 44 | |
| 13,334 | 8,478 | ||
| Other operating income | |||
| Grants and other income | 1,617 | 1,889 | |
| Total operating income | 14,951 | 10,367 | |
| Operating expenses | |||
| Cost of goods sold | -2,642 | -4,251 | |
| Research and development expenses | -36,554 | -25,014 | |
| Marketing and distribution expenses | -8,747 | -3,095 | |
| General and administrative expenses | -6,662 | -7,180 | |
| -54,606 | -39,540 | ||
| Operating loss for the period | -39,655 | -29,173 | |
| Financial income | 107 | 60 | |
| Financial expense | -819 | -933 | |
| Foreign exchange gains/(losses), net | -78 | -88 | |
| Financial result, net | -790 | -961 | |
| Loss for the year before taxes from continuing | |||
| operations | -40,445 | -30,134 | |
| Income taxes | 648 | 947 | |
| Loss for the year after taxes from continuing operations |
|||
| -39,797 | -29,187 | ||
| Gain (loss) for the year after taxes from discontinued operations |
0 | 19,472 | |
| Loss for the year | -39,797 | -9,715 | |
| attributable to owners of the Company | -39,797 | -9,118 | |
| attributable to non-controlling interest | -598 | ||
| Earnings per share | |||
| basic and diluted loss per share from continuing and discontinued operations |
-1.07 | -0.36 | |
| basic and diluted loss per share from continuing operations |
-1.07 | -1.14 |
| As of 31 December, | |||||
|---|---|---|---|---|---|
| In €000 | 2015 | 2014 | |||
| Assets | |||||
| Non-current assets | |||||
| Intangible assets | 8,987 | 9,652 | |||
| Property plant and equipment | 14,245 | 9,154 | |||
| Participating interests | 5,052 | 0 | |||
| Other long term receivables | 11 | 117 | |||
| Deferred tax assets | 1,986 | 947 | |||
| 30,281 | 19,870 | ||||
| Current assets | |||||
| Inventory | 5,837 | 3,583 | |||
| Trade receivables | 5,852 | 15,793 | |||
| Other receivables | 1,063 | 148 | |||
| Other current assets | 1,258 | 2,700 | |||
| Cash and cash equivalents | 104,087 | 10,919 | |||
| 118,097 | 33,142 | ||||
| Total assets | 148,378 | 53,012 | |||
| Equity and liabilities | |||||
| Capital and reserves | |||||
| Legal share capital | 405 | 222,268 | |||
| Historical share capital adjustment | -221,232 | -221,232 | |||
| Share premium | 522,708 | 166,592 | |||
| Share based payment reserve | 1,345 | 1,166 | |||
| Accumulated deficit | -188,310 | -148,513 | |||
| Total equity attributable to owners of the Company |
114,916 | 20,280 | |||
| Non-current liabilities | |||||
| Financial debt | 2,662 | 8,528 | |||
| Deferred income | 1,342 | 4,534 | |||
| Accrued charges | 1,580 | 1,955 | |||
| 5,585 | 15,017 | ||||
| Current liabilities | |||||
| Financial debt | 8,152 | 5,057 | |||
| Trade payables | 13,927 | 4,265 | |||
| Deferred income | 3,812 | 5,100 | |||
| Other current liabilities | 1,986 | 3,293 | |||
| 27,877 | 17,714 | ||||
| Total equity and liabilities | 148,378 | 53,012 |
| Years ended 31 December, | ||
|---|---|---|
| in €000 | 2015 | 2014 |
| operating activities | ||
| Loss for the period | -39,797 | -9,715 |
| Adjustments for | ||
| Depreciation and amortization | 5,021 | 4,437 |
| Depreciation and amortization included in discontinued operations | 0 | 81 |
| Impairments | 73 | 37 |
| Tax income in profit and loss | -1,039 | -947 |
| Financial result, net | 688 | 897 |
| Net movement in retirement benefit obligation | 0 | 108 |
| Gain on disposal MyCartis NV | 0 | -26,624 |
| Share based payment expense | 179 | 143 |
| Changes in working capital | ||
| Net movement in inventories | -2,254 | -2,524 |
| Net movement in trade and other receivables and other current assets | 10,574 | -2,736 |
| Net movement in trade payables & other current liabilities | 7,981 | 1,860 |
| Net movement in deferred income | -4,479 | -746 |
| Interests paid | -304 | -155 |
| Cash flow from operating activities | -23,357 | -35,884 |
| Investing activities | ||
| Interest received | 106 | 60 |
| Purchases of property, plant & equipment | -9,241 | -1,927 |
| Purchases of intangible assets | -371 | -840 |
| Proceeds from sale and lease back of property, plant and equipment | 18 | 0 |
| Proceeds from the sale of fixed assets | 74 | 0 |
| Disposal shares in other companies | 0 | 245 |
| Acquisition of a subsidiary | 0 | 7,514 |
| Cash flow from investing activities | ||
| -9,414 | 5,052 | |
| Financing activities | ||
| Proceeds from borrowings | 1,817 | 0 |
| Proceeds from issue of preference shares F | 21,513 | 21,244 |
| Disposal of Mycartis NV to capital owners of the parent | 0 | -5,138 |
| Proceeds from the issue of common shares, net of transaction costs | 107,688 | 0 |
| Repayment of borrowings | -5,057 | -3,378 |
| Bank charges | -18 | -1 |
| Cash flow from financing activities | 125,943 | 12,727 |
| Net increase / (decrease) in cash and cash equivalents | 93,173 | -18,105 |
| Cash and cash equivalents at the beginning of the period | 10,919 | 29,047 |
| Effects of exchange rate changes on the balance of cash held in foreign currencies |
-4 | -23 |
| Cash and cash equivalents at the end of the period | 104,088 | 10,919 |
| Supplementary cash flow disclosures | ||
| new finance leases | 1,216 | 0 |
| in $\epsilon$ 000 | 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 |
Non- controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance as at 31 December 2013 | 926 | 175,946 | 1,023 | $-309$ | $-145,631$ | 31,955 | 31,955 | ||
| Loss for the period Non-controlling interest of 20% in Mycartis NV Capital increase by incorporation of share premium Disposal of interest in Mycartis NV through capital |
30.488 | $-30.488$ | $-9,118$ 6,057 |
$-9.118$ 6,057 |
$-598$ 1,443 |
$-9.716$ 7,500 |
|||
| decrease Issue of preference shares Cost related to capital increase Share-based payment expense Change in reporting entity |
$-30.488$ 110 221,232 |
$-221,232$ | 21.403 $-269$ |
143 | 309 | 178 | $-30,000$ 21.513 $-269$ 143 |
$-845$ | $-30,845$ 21,513 $-269$ 143 $\sim$ |
| Balance as at 31 December 2014 | 222,268 | $-221,232$ | 166,592 | 1,166 | $-148,513$ | 20,280 | 20,280 | ||
| Loss for the period Share issue - tranche 2 of round F on 15 January 2015 |
$-39,797$ | $-39,797$ | $-39,797$ | ||||||
| Share issue - contribution in kind of the participation in | 20,488 | 1,025 | 21,513 | 21,513 | |||||
| Mycartis on 15 January 2015 Capital increase by incorporation of share premium on |
4,812 | 241 | 5,052 | 5.052 | |||||
| 15 January 2015 Capital decrease by conversion into share premium on |
8 | -8 | |||||||
| 13 April 2015 | $-247.272$ | 247,272 | |||||||
| Share issue - Initial Public Offering on 28 April 2015 Share issue - exercise of over-allotment warrant on 19 |
87 | 99.913 | 100.000 | 100,000 | |||||
| May 2015 Cost related to Initial Public Offering Share issue - exercise of stock options on 3 June 2015 |
13 | 14,987 $-8,124$ |
15,000 $-8,124$ |
15,000 $-8.124$ |
|||||
| $\mathbf 0$ | 171 | 171 | 171 | ||||||
| Share issue - exercise of stock options on 6 October 2015 Share issue - exercise of stock options on 23 December |
0 | 313 | 313 | 313 | |||||
| 2015 | 0 | 295 | 295 | 295 | |||||
| Costs related to capital increase | 33 | 33 | 33 | ||||||
| Share-based payment expense | 179 | 179 | 179 | ||||||
| Balance as at 31 December 2015 | 405 | $-221.232$ | 522,708 | 1.345 | $-188,310$ | 114,916 | 114,916 |
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