Key Figures (in EUR thousand)
- Revenue: 466 in Q3 2007, down by 61% (Q3 2006: 1,203)
- EBIT: -3,229 in Q3 2007, improved by 15% (Q3 2006: -3,790)
- Net loss: -3,139 in Q3 2007, improved by 16% (Q3 2006: -3,740)
- Liquid assets: 13,024 as of 30/09/2007 (31/12/2006: 17,341)
Highlights of the Third Quarter 2007
- Strategic in-vitro diagnostics partnership with Abbott Molecular
signed
- Continued successful execution of revised strategy
- Medical Advisory Board for colorectal cancer screening development
program established
- Numerous new candidate biomarkers within prostate cancer screening
program identified
- All development programs on track and in line with expectations
- Key patents for early cancer detection technology granted
- Biomarker R&D partnership with pharmaceutical partner expanded
- All key financials for first nine months 2007 within expectations:
Operating costs reduced, EBIT improved
Berlin, Germany and Seattle, WA, USA, October 31 2007 - Epigenomics
AG (Frankfurt, Prime Standard: ECX), a cancer molecular diagnostics
company developing tests based on DNA methylation, today reported
financial results for the third quarter of 2007, which ended
September 30, 2007.
Geert Nygaard, CEO of Epigenomics AG, commented: "The third quarter
has seen Epigenomics delivering on one of its major promises for the
year 2007: The conclusion of a first non-exclusive IVD collaboration
and licensing agreement with Abbott Molecular. This agreement is an
important step towards the commercialization of our key value driver,
the blood-based early colon cancer detection test based on our
proprietary biomarker Septin 9. With an anticipated launch date of a
test kit in Europe in 2009, followed by regulatory filing for U.S.
approval in 2010, we now see a clear path towards commercialization
of our leading product as well as a validation of its clinical
utility and commercial attractiveness. During the past three months,
we have also delivered successfully on our other goals: to execute
our realigned strategy, to advance IVD partnering discussions and
negotiations, to keep our financial discipline and to progress on all
of our development projects in the pipeline."
Third Quarter 2007 - Financial Review
Overall, key financials for the reporting period were in line with
expectations.
Revenue in Q3 2007 decreased to EUR 466 thousand from EUR 1,203
thousand in the comparable period of 2006 due to omission of revenue
recognition from the collaboration with Roche Diagnostics in previous
year's comparison period. The Clinical Solutions business contributed
EUR 185 thousand to overall Q3 2007 revenue (Q3 2006: EUR 162
thousand) with the remainder of EUR 281 thousand coming from
licensing deals (Q3 2006: EUR 30 thousand). Overall revenue in 9M
2007 decreased to EUR 1.8 million from EUR 2.3 million over the same
period of 2006.
R&D costs increased from EUR 2.2 million in the third quarter of 2006
to EUR 2.4 million in Q3 2007. At the same time, the cost of sales
dropped from EUR 1.3 million in Q3 2006 to EUR 0.2 million in the
same period of 2007 due to lower revenue from partnered R&D programs.
Thus, overall costs for R&D operating activities in Q3 2007 dropped
by 26% compared to Q3 2006.
In Q3 2007, EBIT amounted to EUR -3.2 million, improved by almost 15%
against Q3 2006 EBIT of EUR -3.8 million. The full effect of the
restructuring process begun in fall of 2006 has become visible after
the first quarter of 2007. The overall operating cost base in 9M 2007
at EUR 12.9 million was significantly below 9M 2006 operating costs
of EUR 15.7 million, i.e. year-on-year savings of around EUR 2.8
million for the fist nine months of 2007 were achieved.
Net loss for Q3 2007 improved by 16% from Q3 2006 (EUR 3.7 million)
to EUR 3.1 million in the reporting period. The difference is almost
completely accounted for by the reduction of the operating cost
base.
Epigenomics's balance sheet total decreased from EUR 30.1 million as
of December 31, 2006, to a total of EUR 25.6 million as of September
30, 2007. Key driver was again the net consumption of liquidity by
operations partly compensated by the successful PIPE financing
transaction and partnering deals as mitigating factors.
Epigenomics's cash flow and financial position in 9M 2007 were mainly
affected by the continued net cash consumption by operations.
Overall, the financial position has developed according to
expectations with liquid assets amounting to EUR 13.0 million as of
September 30, 2007, compared to EUR 17.3 million as of December 31,
2006.
Total net cash flow (currency-adjusted) for 9M 2007 was negative at
EUR -3.0 million. Cash outflow from operating activities in 9M 2007
amounted to EUR 8.7 million. Cash inflow from investing activities
amounted to EUR 1.1 million, primarily driven by the sale of
marketable securities. Cash flow from financing activities was
positive at EUR 4.6 million, mainly due to the issue of new shares.
Third Quarter 2007 - Operational review and highlights
The third quarter of 2007 was characterized by the continued
execution on the revised strategy of focusing on the development of
the colorectal cancer screening program and nonexclusive partnering
deals. Following an intense process of identifying a suitable IVD
partner as the first nonexclusive licensee for the colorectal cancer
blood test, Epigenomics won Abbott Molecular Inc. in the third
quarter 2007. Abbott obtained worldwide non-exclusive rights to the
proprietary Septin 9 methylation biomarker for blood-based colorectal
cancer testing. Both partners anticipate launching a CE-marked test
on Abbott's automated m2000 instrument platform in Europe in 2009
followed by regulatory filing for U.S. approval in 2010.
In addition to the collaboration with Abbott, Epigenomics has several
ongoing IVD partnering discussions and negotiations for its
colorectal cancer screening test and progress during the third
quarter of 2007 has been fully in line with expectations.
In order to support a fast clinical development and commercialization
of its lead product, Epigenomics has recently formed a Medical
Advisory Board for Colorectal Screening. Within its prostate cancer
program, Epigenomics has identified dozens of novel candidate
biomarkers which may help to better distinguish between prostate
cancer and benign prostate conditions, a shortfall of current
prostate cancer tests. In addition, data showing the feasibility of
Epigenomics' urine-based prostate cancer test were presented at major
cancer conferences in Q3 2007.
Other operational key events since beginning of Q3 2007 included the
granting of key patents for the company's technology for the
sensitive detection of methylated DNA, HeavyMethyl®. Together with
further key patents already issued, the granted patents complete the
patent protection of the entire workflows for Epigenomics' diagnostic
tests on body fluids and tissue in a wide range of market regions
including the U.S. and Europe. Further, Epigenomics could expand the
biomarker R&D collaboration with one of its pharmaceutical partners.
Outlook
After concluding a first non-exclusive collaboration and licensing
agreement with Abbott Molecular Inc., Epigenomics is presently in
discussions and negotiations with several further potential IVD
partners. The discussions cover all of the company's current cancer
screening programs and the management expects to close at least one
additional IVD deal for its proprietary colorectal cancer biomarker
Septin 9 in 2008. For early market introduction of the Septin 9
biomarker as a centralized testing service in the US in 2008,
Epigenomics further expects to partner with a US reference laboratory
in due course.
Management expects full year revenue to be somewhat below 2006
revenue. However, EBIT for full year 2007 is expected to be somewhat
better than EBIT for 2006. Given the deal structure of the
collaboration and licensing agreement with Abbott, Epigenomics
anticipates approximately EUR 12 million to EUR 13 million cash
consumption by operating activities in 2007.
Further Information
The full 9-Month Report 2007 can be obtained from Epigenomics'
website at:
http://www.epigenomics.com/en/investor_relations/Financial_Information/
About Epigenomics AG
Epigenomics is a molecular diagnostics company with a focus on the
development of novel products for cancer. Using DNA methylation
biomarkers, Epigenomics' tests can potentially diagnose cancer at an
early stage and help guide physicians to select an appropriate
therapy. Epigenomics' defined business strategy covers two
complementary core business areas:
The company develops diagnostic screening tests for the early
detection of cancer. Based on body fluid samples (e.g. blood and
urine), these tests are aimed at finding cancer at an early stage
before symptoms occur. Epigenomics' product pipeline contains a
validated biomarker panel for the early detection of colorectal
cancer in blood plasma, and further proprietary DNA methylation
biomarkers at various stages of development for prostate and lung
cancer detection in body fluids. Epigenomics aims at giving patients
and doctors early access to these biomarkers through reference
laboratory testing services. For development and global
commercialization as in vitro diagnostic test kits, Epigenomics
pursues a non-exclusive partnering strategy with diagnostics industry
players. As a first strategic partner, Abbott Molecular licensed the
worldwide non-exclusive rights to Epigenomics' proprietary Septin 9
biomarker for colorectal cancer.
As a second core business area, Epigenomics develops specialty
diagnostics for individuals at high risk for cancer and cancer
patients. These tests include surveillance applications of our
colorectal cancer biomarkers and a tissue-based prognostic cancer
molecular classification test for prostate cancer patients. Our
tissue-based prostate cancer application is developed in strategic
partnerships with Qiagen (pre-analytics) and Affymetrix (diagnostic
device platform). The biomarkers for cancer specialty diagnostic
applications will be made available through testing services in
centralized reference laboratories. Epigenomics retains the
flexibility to decide on further commercialization as in vitro
diagnostic test kits in Europe.
Pharma, diagnostics and biotech partners can access Epigenomics'
portfolio of proprietary DNA methylation technologies and biomarkers
protected by more than 190 patent families (granted patents and
patent applications) through Biomarker Services, IVD Development
Collaborations, and Licensing. The company is headquartered in
Berlin, Germany, and has a wholly owned subsidiary in Seattle, WA,
USA. For more information, please visit Epigenomics' website at
www.epigenomics.com.
###
Epigenomics' Disclaimer
This communication expressly or implicitly contains certain
forward-looking statements concerning Epigenomics AG and its
business. Such statements involve certain known and unknown risks,
uncertainties and other factors which could cause the actual results,
financial condition, performance or achievements of Epigenomics AG to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Epigenomics AG is providing this communication as of this date and
does not undertake to update any forward-looking statements contained
herein as a result of new information, future events or otherwise.
Contact:
Epigenomics AG
Dr. Achim Plum
VP Corporate Communications
+49 (0) 30-24345-368
achim.plum@epigenomics.com
