Earnings Release • Nov 16, 2018
Earnings Release
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Gentian Diagnostics AS is a medical diagnostics company listed on Merkur Market, Oslo Stock Exchange with the ticker "GENT-ME".
Gentian is headquartered in Moss, Norway, with a representative office in China and distribution subsidiaries in Sweden and USA.
Gentian designs, develops and markets in vitro diagnostic reagents (IVD) based on its proprietary NanosenseTM technology. The goal is to offer efficient and accurate reagents within the areas of kidney disease, cardiac disease, inflammation and veterinary medicine. The NanosenseTM technology will enable users to move assays from low volume immunology platforms to fully automated, high throughput instruments with shorter turnaround times, better workflow and improved cost efficiency. The subsidiary PreTect AS develops and manufactures molecular diagnostic tests to detect oncogenic activity in cervical samples. The products PreTect SEE and PreTect HPV Proofer contribute to earlier detection of cervical cancers.
Comparative numbers for Gentian 2017 in ()
Total operating revenue ended at MNOK 18.4 (MNOK 8.0) for 3Q18, and MNOK 40.6 (MNOK 24.6) year to date.
Sales revenue in 3Q18 ended at MNOK 10.4 (MNOK 6.7), a 55 % increase compared to 3Q17. Sales revenue year to date ended at MNOK 28.8 (MNOK 20.1), a 43% increase compared to the same period last year.
Geographic split:
| MNOK | 3Q18 | 3Q17 | 1Q-3Q18 | 1Q-3Q17 |
|---|---|---|---|---|
| US | 0.3 | 0.4 | 1.3 | 1.0 |
| Europe | 6.0 | 3.5 | 19.6 | 12.3 |
| Asia | 4.1 | 2.7 | 7.9 | 6.8 |
| Total | 10.4 | 6.7 | 28.8 | 20.1 |
Other operating revenue, including a one-off royalty licence fee, ended at MNOK 8.0 (MNOK 1.2) for 3Q18. SkatteFUNN funding ended at MNOK 1.4 (MNOK 0.7) for 3Q18.
COGS ended at MNOK 2.6 (MNOK 1.5) in 3Q18, which represents 25 % (23 %) of sales revenue. Total COGS year to date ended at MNOK 6.45 (MNOK 3.8), which represents 22 % (19 %) of sales revenue.
Total operating expenses before capitalization of R&D expenses ended at MNOK 16.8 (MNOK 11.3) in 3Q18, and MNOK 41.5 (MNOK 33.6) year to date.
Operating costs include total salary and social expenses of MNOK 9.9 (MNOK 7.5) and other expenses of MNOK 6.9 (MNOK 3.7) for 3Q18. Total salary and social expenses YTD ended at MNOK 24.0 (MNOK 20.7) and other expenses ended at MNOK 17.5 (MNOK 12.9). The increase is according to the planned acceleration of activities.
Total operating expenses after capitalization of R&D expenses ended at MNOK 15.5 (MNOK 10.8) in 3Q18, and MNOK 38.4 (MNOK 29.1) year to date.
R&D expenses amounted to 32 % (35 %) of total operating expenses before capitalization for 3Q18, and 34 % (35 %) year to date.
Operating profit before depreciation and amortization (EBITDA) ended at MNOK 0.2 (MNOK -4.3) for 3Q18, and MNOK -4.3 (MNOK - 8.2) year to date.
Net financial income ended at MNOK 0.2 (MNOK 0.1) for 3Q18, and MNOK 0.5 (MNOK 0.6) year to date.
Net profit ended at MNOK -0.6 (MNOK -5.0) for 3Q18, and MNOK -6.8 (MNOK -9.9) year to date.
Cash and cash equivalents as of 30.09.2018 were MNOK 194.8 (MNOK 148.9). The cash is placed in both savings accounts and current accounts.
Accounts receivables as of 30.09.2018 were MNOK 13.8 (MNOK 5.8). The increase in accounts receivables is mainly due to the finalization of the royalty agreement of MNOK 6.1 in late September, with reception of funds in October.
Inventory as of 30.09.2018 were MNOK 13.3 (MNOK 11.9). The increase in inventory is due to more products, increased demand and building of security inventory.
Cash flow from operating activities ended at MNOK -16.9 (MNOK -17.8) year to date and MNOK -5.2 (MNOK -6.0) for 3Q18.
Cash flow from investment activities ended at MNOK -3.9 (MNOK -5.3) year to date and MNOK -1.3 (MNOK -1.0) for 3Q18. Included in investment activities are capitalization of R&D expenses, which in 3Q18 amounted to MNOK 1.2 (MNOK 0.5). This gives a total capitalization of MNOK 3.1 (MNOK 4.5) year to date.
Cash flow from financial activities ended at MNOK 68.8 (MNOK 96.1) year to date and MNOK 0.0 (MNOK 0.0) for 3Q18.
Sales in 3Q18 showed an increase of 55 % compared to 3Q17, ending the quarter with a sales revenue of MNOK 10.4. The increase is driven by record sales of Cystatin C with high volumes to Asian customers as some shipments were postponed from 2Q18 to 3Q18. Sales of fCAL Turbo showed a moderate decline compared to 2Q18 which is due to seasonally low sales of this product in Europe in 3Q.
Year to date, sales revenue ended at 28.8 MNOK, which is 43 % up from the same period in 2017.
Significant development milestones have been achieved with the ultrasensitive cardiovascular marker G-1001 and the Fecal Pancreatic Elastase assay.
On October 1,2018, Gentian announced the publication of favourable results from a clinical study conducted by the universities Karolinska, Uppsala and Umea in Sweden. Calprotectin from Gentian was compared with other biomarkers for the discrimination between patients with sepsis and trauma and for the predictive ability regarding 30 days mortality.
The company expects total sales in Q4 on a similar level as for Q3. Sales of fCal turbo is expected to improve while sales of other products will remain at similar levels as Q3 with normal quarterly variations.
Within R&D we have achieved significant developments for G-1001 that reduce the risk of the project. However, to ensure that we have the most optimal design for high volume production, we have decided to do additional technology assessment and to postpone the progression into the next development phase by approximately 6 months.
Several studies on calprotectin as sepsis biomarker will be finalized by the end of this year. Respective publications in scientific journals related to emergency and intensive care are planned for 2019. In addition, we have been able to establish contacts with additional key opinion leaders in the field of sepsis, with whom we will engage on additional clinical studies in 2019.
Gentian also expect that its distributor for fCAL turbo will obtain FDA clearance towards the end of the first half of 2019.
There are no events to report after the balance sheet date.
| SHAREHOLDER INFORMATION | ||
|---|---|---|
| 20 largest shareholders in Gentian Diagnostics AS as of 30.09.2018 according to | ||
| VPS: | ||
| SHAREHOLDER | NUMBER OF SHARES | % |
| HOLTA LIFE SCIENCES AS | 2 014 702 | 13,1 % |
| VATNE EQUITY AS | 1 599 814 | 10,4 % |
| SAFRINO AS | 1 300 000 | 8,4 % |
| SALIX AS | 1 218 630 | 7,9 % |
| NORRON SICAV - TARGET | 762 151 | 5,0 % |
| STOREBRAND VEKST VERDIPAPIRFOND | 569 717 | 3,7 % |
| SILVERCOIN INDUSTRIES AS | 567 593 | 3,7 % |
| VINGULMORK PREDICTOR AS | 535 710 | 3,5 % |
| PORTIA AS | 425 000 | 2,8 % |
| STATOIL PENSJON | 391 631 | 2,5 % |
| VERDIPAPIRFONDET DNB SMB | 384 249 | 2,5 % |
| SUNDREHAGEN BÅRD HENRIK | 307 010 | 2,0 % |
| CRESSIDA AS | 235 000 | 1,5 % |
| NORDA ASA | 220 668 | 1,4 % |
| OM HOLDING AS | 209 000 | 1,4 % |
| MARSTAL AS | 202 000 | 1,3 % |
| STRAWBERRY CAPITAL AS | 200 300 | 1,3 % |
| SPAR KAPITAL INVESTOR AS | 192 291 | 1,2 % |
| MUTUS AS | 187 210 | 1,2 % |
| 1,1 % | ||
| VIOLA AS | 174 990 | |
| OTHER SHAREHOLDERS TOTAL NUMBER OF SHARES |
3 698 255 15 395 921 |
24,0 % 100 % |
| 2018 | 2018 | 2017 | 2017 | |
|---|---|---|---|---|
| (figures in NOK thousands) | Q3 | 01.01-30.09 | Q3 | 01.01-30.09 |
| Operating Revenue | ||||
| Sales revenue | 10 410 | 28 849 | 6 666 | 20 051 |
| Royalties | 6 196 | 6 196 | - | 96 |
| Other operating revenue | 372 | 1 700 | 608 | 1 999 |
| SkatteFUNN - tax deduction | 1 429 | 3 851 | 687 | 2 451 |
| Total Operating Revenue | 18 407 | 40 596 | 7 961 | 24 597 |
| Operating Expenses/Costs | ||||
| Cost of goods sold | -2 636 | -6 466 | -1 510 | -3 761 |
| Operating costs | -16 774 | -41 507 | -11 278 | -33 555 |
| Capitalization | 1 206 | 3 066 | 493 | 4 501 |
| Total Operating Expenses/Costs | -18 204 | -44 907 | -12 295 | -32 815 |
| EBITDA | 203 | -4 311 | -4 334 | -8 219 |
| Depreciation | -964 | -2 915 | -748 | -2 239 |
| EBIT | -761 | -7 226 | -5 081 | -10 458 |
| Financial income/expense | 170 | 456 | 106 | 566 |
| Net Profit | -591 | -6 770 | -4 975 | -9 892 |
| Statement of Financial Position Gentian Group | |||
|---|---|---|---|
| 2018 | 2017 | 2017 | |
| (figures in NOK thousands) | 30.09 | 31.12 | 30.09 |
| Assets | |||
| Non-Current Assets | |||
| Property, plants and equipment | 4 925 | 5 097 | 4 777 |
| Capitalized development costs | 17 876 | 16 357 | 15 701 |
| Other intangible assets | 13 277 | 13 641 | 13 762 |
| Financial assets Total Non-Current Assets |
347 36 425 |
1 949 37 043 |
1 944 36 184 |
| Current Assets | |||
| Inventory | 13 254 | 11 092 | 11 883 |
| Accounts receivables | 13 797 | 6 809 | 5 813 |
| Other receivables | 9 892 | 5 283 | 7 624 |
| Cash and cash equivalents | 194 487 | 145 003 | 146 961 |
| Total Currents Assets | 231 430 | 168 187 | 172 280 |
| Total Assets | 267 855 | 205 230 | 208 464 |
| Equity and Liabilities | |||
| Equity | |||
| Net profit (Loss) | 6 770 | 15 170 | 9 892 |
| Other equity | -264 943 | -211 645 | -211 600 |
| Equity | -258 173 | -196 475 | -201 708 |
| Non-Current Liabilities | |||
| Interest-bearing loans and dept | -737 | -466 | - |
| Total Non-Current Liabilities | -737 | -466 | - |
| Current liabilities | |||
| Accounts payable | -4 006 | -3 549 | -3 361 |
| Public dept | -1 249 | -1 694 | -1 000 |
| Accrued expenses | -3 691 | -3 046 | -2 396 |
| Total Current Liabilities | -8 946 | -8 288 | -6 756 |
| -267 855 | -205 230 | -208 464 |
| Cash Flow Statement | ||||
|---|---|---|---|---|
| (figures in NOK thousands) | 2018 Q3 |
2018 01.01-30.09 |
2017 Q3 |
2017 01.01-30.09 |
| Cash Flow from Operating Activities | ||||
| Net profit (loss) | 409 | -6 770 | -4 975 | -9 892 |
| Depreciation | 964 | 2 915 | 748 | 2 239 |
| Change Inventory | -681 | -2 161 | -832 | -4 336 |
| Change Accounts Receivables | -5 489 | -6 988 | -1 063 | -2 957 |
| Change Accounts Payables | 710 | 457 | 177 | -159 |
| Change in other short-term receivables/ liabilities | -1 149 | -4 409 | -90 | -2 732 |
| Net Cash Flow from Operating Activities | -5 236 | -16 956 | -6 036 | -17 837 |
| Cash Flows from Investment Activities | ||||
| Acquisition of Property, plant and equipment | -89 | -820 | -529 | -783 |
| Investment in intangible assets | -1 206 | -3 066 | -493 | -4 501 |
| Other changes in financial items | - | - | - | - |
| Net Cash Flow from Investment Activities | -1 296 | -3 887 | -1 022 | -5 284 |
| Cash Flow from Financial Activities | ||||
| New debt | - | 379 | - | - |
| Downpayment of loans | -39 | -109 | - | - |
| Cash flows from share issues | - | 68 519 | - | 96 069 |
| Dividend payment | - | - | - | - |
| Net Cash Flow from Financial Activities | -39 | 68 790 | - | 96 069 |
| Net Change in Cash and Cash Equivalents | -6 571 | 47 947 | -7 058 | 72 948 |
| Cash flow from last period | 201 409 | 146 951 | 155 991 | 75 958 |
| Currency adjustment | -3 | -64 194 835 |
-29 148 905 |
-1 148 905 |
| Net Cash and Cash Equivalents | 194 835 |
| Statement of Changes in Equity | |||||
|---|---|---|---|---|---|
| (figures in NOK thousands) | |||||
| Share | Share | Other paid-in | Retained | Total | |
| capital | premium | capital | earnings | equity | |
| Equity at 01.01.2017 | 1 114 | 128 359 | 1 467 | -15 399 | 115 541 |
| Net result for the year | -15 170 | -15 170 | |||
| Other comprehensive income | 35 | 35 | |||
| Proceeds from share issue | 286 | 99 714 | 100 000 | ||
| Cost of share issue | -3 931 | -3 931 | |||
| Other changes in equity | |||||
| Equity at 31.12.2017 | 1 400 | 224 143 | 1 467 | -30 534 | 196 475 |
| Equity at 01.01.2018 | 1 400 | 224 143 | 1 467 | -30 534 | 196 475 |
| Net result for the year | -6 770 | -6 770 | |||
| Other comprehensive income | |||||
| Proceeds from share issue | 140 | 69 841 | 69 981 | ||
| Cost of share issue | -1 462 | -1 462 | |||
| Other changes in equity | -52 | -52 | |||
| Equity at 30.09.2018 | 1 540 | 292 522 | 1 467 | -37 356 | 258 173 |
| 3. Quarter Statement of Changes in Equity is not audited | |||||
| NOTES | |||||
| Accounting Principles |
| Other comprehensive income | |||
|---|---|---|---|
The interim report for Q3 2018 has been prepared in accordance with IAS 34 Interim Reporting. The accounting policies applied in the interim report corresponds to what was used in preparing the annual financial statements for 2017.
The Company uses currency rates given by DNB ASA.
There are currently three projects where the Gentian Group is capitalizing R&D expenses.
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