DIAXONHIT - Group 2015 annual results
Further progress of commercial activity
Initial sales of proprietary products
- 4% increase in sales of in vitro specialty diagnostic products
- Further reduction of operating expenses by 13% compared to 2014
- Negative impact of €3.3 million on cost of goods sold linked to a strengthened dollar, compensated by currency exchange gains of €2.0 million.
- Initial sales of BJI InoPlex for prosthetic infections and AlloMap for heart transplant monitoring
- Plan to increase profitability through commercialization of new products
- Implementation of new cost cutting plan
PARIS, April 4, 2016 (GLOBE NEWSWIRE) -- The Management Board of Diaxonhit (Alternext: ALEHT, FR0004054427), the leading French provider of specialty in vitro diagnostic solutions for transplantation, infectious diseases and cancer, met on March 22, 2016 to close the consolidated financial accounts for the year ending on December 31, 2015. These accounts were verified by the Supervisory Board1.
|Consolidated in € M||2015||2014|
|Sales of in vitro diagnostic products||28.9||27.9|
|Cost of goods sold||(21.1)||(17.4)|
|Research and Development expenses (*)||(4.0)||(5.6)|
|Marketing and Sales expenses (*)||(8.6)||(9.1)|
|General and Administrative expenses||(4.6)||(4.9)|
|Financial income (loss)||1.7||(5.6)|
|Cash and cash equivalents at December 31||11.7||14.1|
|(*) Includes amortization of intangible assets derived from Purchase Price Allocation for a total of €1.4 million|
DIAXONHIT 2015 sales of diagnostic products increased by 4% compared to 2014, despite a global diagnostics market down 2% in France. This performance offsets the 80% decline of R & D revenues following the end of the Allergan collaboration in December 2014.
Operating expenses continued to decline by 13% compared to 2014. However, the sharp rise of the dollar that occurred in 2015 resulted in a € 3.3 million increase in the cost of goods sold, and consequently a decline in operating income. However, this decline was offset in large part by foreign exchange gains of € 2.0 million from US dollar forward contracts, limiting the decline in net income to € 0.4 million. Excluding foreign exchange effects, operating profit would have improved by 12% compared to 2014.
The Group cash position stands at € 11.7 million at December 31, 2015.
2015 Annual results
In-vitro diagnostic products sales growth
2014 sales of in-vitro diagnostic products reached € 28.9 million, up 4% compared to 2014. This increase partially offsets lower R&D fees in connection with the Allergan collaboration that ended in December 2014 and resulted in an 80% drop in R&D revenues at € 0.6 million, corresponding to milestone payments related to DIAXONHIT's therapeutic assets.
Thus, DIAXONHIT's consolidated income at December 31, 2015 totaled € 29.5 million, and annual revenues stood at € 30.2 million compared to € 31.7 million in 2014.
Reduction of operating expenses and rising US dollar
The cost of goods sold was affected by the US dollar rising by about 20% against the euro between 2014 and 2015, with an increase of 21% to € 21.1 million. The corresponding € 3.7 million increase is linked to the rising dollar for € 3.3 million and to the increase in turnover for € 0.4 million.
However, per the plan implemented by the Company, operating expenses were reduced by 13% compared to 2014.
- R&D Expenses fell by 30% to € 4.0 million as a result of the end of the Allergan collaboration and the end of the development program for BJI InoPlex that has just reached commercialization.
- Keeping our focus on commercial activities, marketing and sales expenses remained stable, the overall reduction of 6% to € 8.6 million primarily reflecting an adjustment in accruals for retirement.
- General and administrative expenses continued to decrease by 8% to € 4.6 million, following the implementation of synergies resulting from the acquisition of InGen BioSciences (IBS), which reached 100% of targets set for this acquisition.
Thus, despite a continued reduction of operating expenses, operating income was impacted by the decline of the euro and reached € -8.0 million, down compared to 2014. At constant exchange rates, it would have decreased by € 3.3 million to € -4.7 million, an improvement of 12% compared to 2014.
With respect to net result, this deterioration was offset in large part by foreign exchange gains of € 2.0 million derived from US dollar forward contracts entered into by the Company to reduce the effects of currency fluctuations. However, the favorable effect of these currency contracts which term is limited to 18 months, should subside in 2016. Given an exceptional result of € 134 K related to a supplemental Research Tax Credit receivable for prior years, net income amounted to € -5.9 million, down € 0.4 million compared to 2014.
To note, marketing and sales assets derived from IBS purchase price allocation (PPA) are being amortized over 10 years, for a total of € 1,286 K at December 31, 2014. They are included in marketing and sales expenses. Similarly, with the start of BJI InoPlex's commercialization, an R&D PPA asset also derived from the acquisition of IBS, is now being amortized over 10 years, for € 68 K at December 31, 2015 that is included in R&D expenses. The remaining goodwill related to the acquisition of IBS is also being amortized over 10 years. It is deducted from the operating result and stands at € 308 K at December 31, 2015. Excluding amortization of goodwill, the net loss would have been € 5.6 million and € 4.2 million also excluding amortization of commercial and R&D PPA assets.
Strengthened financial position
On January 1, 2015, DIAXONHIT had € 14.1 million in cash and cash equivalents. After financings which offset interest payments as well as reimbursement of bonds, loans and capital leases, an operating cash consumption of € 2.4 million against € 3.4 million in 2014, the Group's cash and cash equivalents stand at € 11.7 million at December 31, 2015.
- Launch and reimbursement of BJI Inoplex
The launch of BJI Inoplex, DIAXONHIT's proprietary test for the diagnosis of bone and joint prosthetic infections, began in S1 2015. During the second semester, a couple of Luminex instruments dedicated to performing the test were installed in two bone and joint infections Reference Centers, generating the first sales of the product in France.
In late August 2015, a new repository of innovative tests (RIHN) was set up by the French Ministry of Health to support innovative medical biology by financing the reimbursement of selected new tests. The innovative nature of BJI InoPlex was recognized, and the test was included in the quite exclusive RIHN list of about 250 tests.
Final reimbursement of the test by the French health insurance system, following its inclusion in the official nomenclature of medical biology acts (French CPT codes), should take place within three years following the submission of a plan for implementation of a registry study to assess the medical and economic utility of BJI InoPlex. This plan is currently being finalized and should soon be submitted with the support of the French Society for Microbiology. During these three years, BJI InoPlex will benefit from the RIHN reimbursement.
Outside of France, marketing agreements have been signed with four distributors covering 15 European countries, which led to initial orders at the end of 2015. The distributors are also setting up medical-marketing studies in Spain, Italy and Benelux to familiarize prescribers with BJI InoPlex.
On February 10, 2016, a first scientific paper was published in the Journal of Clinical Microbiology, confirming BJI InoPlex's performance in the medical and clinical environment of care for patients complaining of pain related to bone and joint prostheses. This publication will help support the marketing effort undertaken by the Company for promoting the test.
- AlloMap test commercialization
Since the beginning of 2016, a centralized laboratory, set up in the Strasburg University Hospitals (HUS), became operational in order to support European commercialization of AlloMap, the only blood test that provides a non-invasive solution for monitoring heart transplants to clinicians and patients, which is licensed to DIAXONHIT on an exclusive basis for Europe.
Future reimbursement of the test in France is based on achieving a medico-economic study (PRME), which goal is to assess the benefits of Allomap compared with the current method of monitoring heart transplant patients using biopsies. This study, conducted by an independent group of biologists and heart surgeons under the lead of the Hospices Civils de Lyon (HCL), has been approved and is funded by the Ministry of Health. The cost of AlloMap is fully covered. HCL and HUS are currently finalizing the administrative documentation required to enable shipment of blood samples to be tested to the central laboratory in Strasburg. The study is expected to start in the second quarter 2016.
In the export market, in Spain and Italy, regional "Innovation" budgets can finance AlloMap testing, and thus generated the first sales.
In Germany, several tests were performed for patients covered by private insurance. For a comprehensive coverage of AlloMap by the German health insurance system, discussions are underway with the authorities to assess the feasibility of a straight coverage on the basis of existing data, or coverage after a medico-economic utility study co-funded by the German Ministry of Health.
In parallel, CareDx, DIAXONHIT's US partner and developer of AlloMap, has been successfully pursuing the commercial development of the test in the United States. CareDx estimates that its annual turnover is expected to reach 28 to 30 M € in 2015, 80% of the tests being now reimbursed.
- New product ranges
In parallel with the marketing of its own products, DIAXONHIT is currently accelerating the distribution of new products and new ranges in order to restore the margins of its commercial operations. Early 2016, it started marketing a new generation of HLA tests under NGS (Next Generation Sequencing). Furthermore, the Group aims at strengthening its range of molecular tests in the fast growing field of infectious diseases.
- Final validation study of DX15, proprietary test in thyroid cancer
This clinical study, unique in Europe, allows for the first time a full characterization of the population of European patients diagnosed with a thyroid nodule as well as corresponding clinicians care practices.
To date, observations confirm both the potential and value of DX15. Moreover, given the variety of observed European practices, it was decided to extend patient recruitment until April 2016. Despite this change, DX15 CE mark is still expected for 2017, with market launch in 2018.
- Development of a companion diagnostic for a therapeutic vaccine against AIDS
Mid-2015, InnaVirVax announced encouraging results of its phase 2a clinical study. VAC-3S immunotherapy was well tolerated and immune response consistent with expectations. In addition, administration of VAC-3S resulted in favorable immunovirological effects, and, in correlation with the immune response, a decrease of proviral DNA was observed. InnaVirVax indicated that, if this positive trend was confirmed in future studies, it could enable VAC-3S to contain HIV viral load while interrupting antiretroviral treatments. If VAC-3S were to confirm its potential, the market for the tests that DIAXONHIT currently develops would grow significantly.
Consequently, development of the VAC-3S companion test was accelerated to allow testing of the first clinical samples during the third quarter of 2016. The test prototype is currently being finalized on schedule.
"DIAXONHIT is now a fully integrated group positioned in specialty diagnostics, the most dynamic sector of the in vitro diagnostics market. While innovating through the development of new tests, and advancing our sales of third-party and proprietary products, such as BJI InoPlex, our main objective remains the achievement of break-even. Faced with a negative dollar impact on our business but with a solid cash position of 11.7 million euros, we are implementing a strong response with the deployment of a new commercial offer and implementation of a new plan of reduction of our operating costs, these two pathways contributing to achieving financial break-even. " concludes Loïc Maurel, President of the Management Board of DIAXONHIT.
- All financial statements were audited by the auditors and their report will be issued after review of the 2015 management report.
Upcoming financial events
Shareholders Annual General Meeting : June 16, 2016
Diaxonhit (Alternext, FR0004054427, ALEHT) is a French fully integrated leader in in vitro diagnostics, involved from research to commercialization of specialty diagnostic products in the fields of transplantation, infectious diseases and cancer. It is the leader for commercialization in France of HLA tests. With many partnerships and a strong presence in hospitals, Diaxonhit has an extensive commercialization network and a portfolio of proprietary products including Tetanus Quick Stick® and BJI Inoplex® in the field of infectious diseases. Each year, the Group invests in R&D more than 15% of its sales to develop new, innovative and proprietary diagnostic tests. Diaxonhit has more than 85 employees based in Paris and the Paris region. The Group is part of the Alternext BPI Innovation, PEA-PME 150 and Next Biotech indices.
For more information, please visit: www.diaxonhit.com
Symbol : ALEHT - ISIN Code: FR0004054427 - Reuters : ALEHT.PA - Bloomberg : ALEHT:FP
This press release contains elements that are not historical facts including, without limitation, certain statements about future expectations and other forward-looking statements. Such statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated. In addition, Diaxonhit, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only. Finally, this press release may be drafted in the French and English languages. If both versions are interpreted differently, the French language version shall prevail.
|CONSOLIDATED INCOME STATEMENT|
(in thousands of euros, except per share data)
|12 months ended|
December 31, 2015
|12 months ended|
December 31, 2014
|Sales of in vitro diagnostic products||28,901||27,890|
|Research and Development revenues||562||2,726|
|Research & Development grants||317||428|
|Cost of goods sold||(21,124)||(17,419)|
|Research and Development expenses||(3,965)||(5,642)|
|Marketing and Sales expenses||(8,583)||(9,099)|
|including amortization of intangible assets derived from the PPA||(1,286)||(1,286)|
|General and Administrative expenses||(4,555)||(4,935)|
|Total operating expenses||(17,103)||(19,676)|
|Currency exchange gain (loss) - net||2,050||(423)|
|Financial income (loss)||1,734||(671)|
|Extraordinary income (loss)||134||(103)|
|Income (loss) before tax and amortization of goodwill||(6,167)||(6,154)|
|Tax benefit (expenses)||600||980|
|Amortization of goodwill||(308)||(308)|
|Net result, Group||(5,879)||(5,487)|
|Net result, minority||4||4|
|Weighted average number of shares outstanding||71,014,649||61,993,653|
|Net result per share||(0.08)||(0.09)|
|Net result per share (diluted)||(0.08)||(0.09)|
|CONSOLIDATED BALANCE SHEET|
(in thousands of euros)
|ASSETS||December 31, 2015||December 31, 2014|
|Intangible assets, net||10,527||11,998|
|Property and equipment, net||1,211||1,190|
|Other long term assets||211||274|
|Deferred tax assets, long-term||74||74|
|Deferred expenses, long-term||139||289|
|Total long-term assets||14,304||16,274|
|Trade accounts receivable (net)||4,248||4,755|
|Other receivables, short-term||3,362||3,242|
|Deferred tax assets, short-term||56||85|
|Deferred expenses, short-term||6||8|
|Cash and cash equivalents||4,586||2,981|
|Total short-term assets||21,409||24,223|
|LIABILITIES||December 31, 2014||December 31, 2014|
|Additional paid-in capital||112,895||109,930|
|Accumulated deficit and other||(106,754)||(100,898)|
|Accrual for risks||1,278||1,482|
|Long-term debt less current portion||567||902|
|Long-term capital lease obligations less current portion||397||278|
|Long-term portion of deferred income||-||-|
|Total long-term liabilities||964||1,179|
|Current portion of long-term debt||334||494|
|Current portion of capital lease obligations||299||198|
|Social and tax liabilities||2,463||3,151|
|Other current liabilities||62||26|
|Deferred revenues, short-term||159||277|
|Total short-term liabilities||10,161||9,888|
|CONSOLIDATED CASH FLOW STATEMENT|
(in thousands of euros)
|Less revenues and charges with no impact on cash or|
|Depreciation and amortization net of reversals||2,321||2,990|
|Capital gains or losses||(9)||(64)|
|Change in working capital requirements :||780||(808)|
|Research tax credit receivable||439||97|
|Net cash used in operations||(2,444)||(3,385)|
|Purchase of property, equipment and intangibles||(155)||(658)|
|Sale of property, equipment and intangibles||45||378|
|Sale (purchase) of other financial assets||63||25|
|Net cash used in investing activities||(47)||(255)|
|Issuance of shares (net of fees)||3,074||5,551|
|Convertible bond issued||-||10,044|
|Convertible bond reimbursed||(1,935)||(3,114)|
|Redeemable advances received||-||100|
|Redeemable advances repaid||(90)||(70)|
|Reimbursement of loans||(495)||(514)|
|Reimbursement of capital leases||(250)||(217)|
|Financial expenses paid||(266)||-|
|Dividends paid to minority shareholders||(4)||(3)|
|Net cash provided by (used in) financing activities||28||11,770|
|Net increase (decrease) in cash and cash equivalents||(2,465)||8,130|
|Effects of currency exchange rate on cash||25||302|
|Cash and cash equivalents, beginning of period||14,126||5,694|
|Cash and cash equivalents, end of period||11,686||14,126|
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