IRVINE, Calif. and HERSTAL, Belgium, Feb. 28, 2019 /PRNewswire/ -- MDxHealth SA (Euronext: MDXH.BR), today announced its business update and financial results for the year ended December 31, 2018 and provided its strategic outlook for 2019.
Total test volume up 18%, with over 39,000 patients tested.
Total revenue of $28.4 million, equaling the prior year's total (normalized) revenue.
EBITDA of $-29.1 million compared to a normalized EBITDA of $-22.4 million in 2017.
Cash collections on products and services up 15%.
$44 million in gross proceeds raised via a private placement of new shares.
Year-end cash and cash equivalents of $26.2 million.
Michael McGarrity, newly appointed CEO, commented, "I am excited to join MDxHealth and lead the Company forward. Based on the clinical validity and value proposition advanced by the Company to date, I am confident that we have a solid foundation for accelerated operational and commercial execution.
I am eager to apply my past experience in leading a disruptive clinical diagnostics business beyond initial adoption into standard of care, bringing tangible value to patients, clinicians and providers. Our path forward will require focus and execution, and I am confident the operating expense reduction put in place in Q4 2018 will support this focus without compromising execution.
Only a few days in, I am working closely with the management team to fully integrate into the business and look forward to sharing my assessment and forward vision over the next few months. We will plan to hold an investor call after Q1 Results Release and I look forward to working together to build value for all of our stakeholders including patients, clinicians and shareholders."
MDxHealth has undertaken the following key initiatives to drive operating performance from top line to and through the business.
Realignment of US sales territories based on contracted payor coverage, targeting increased overall cash collections and revenue.
Operating expense will focus on activities that support growth of ConfirmMDx and SelectMDx.
The operating expense reductions and cash preservation initiatives include:
Postponement of commercial roll-out of AssureMDx for Bladder Cancer until after expected completion of the US validation and health economic studies to support reimbursement (expected late 2019).
Delay of planned investments in two new products for prostate cancer, InformMDx and MonitorMDx.
TEST VOLUME SUMMARY
US + EU
The Company saw progress in overall test volume growth with over 39,000 patients tested with SelectMDx and ConfirmMDx worldwide in 2018, up 18% from nearly 33,000 in 2017.
Total US test volume of 20,300 in 2018 compared to 21,400 in 2017.
Total test volume growth in Q4 of 11% to 4,796 from 4,329 in Q3 2018.
63% of all ConfirmMDx tests performed in the US fall under existing contracts. Expanded reimbursement coverage attributable to:
Assignment of the unique PCT code combined with the newly-issued positive final Local Coverage Determination (LCD) by Medicare (Palmetto GBA).
18 new US payor contracts, including Kaiser Permanente Southern California which serves 4.4 million members, bringing the total contracted payors to 80.
Six new US positive coverage commercial medical policies issued; bringing the total to 36 positive commercial policies to date, including 13 of the 36 Blue Cross Blue Shield Association®-licensee payors, which collectively provide health insurance in the United States to more than 106 million people.
Inclusion in the European Urology Association (EAU) clinical guidelines.
Completion of multicenter clinical validation supporting use of ConfirmMDx in African American men at risk of aggressive cancer missed by prostate biopsy. Data published in the journalUrology.
Data published in the journal The Prostate on the performance of ConfirmMDx biomarkers in blood samples to help guide personalized treatment of castration-resistant prostate cancer (CRPC) patients. Data published in the Journal of Clinical Oncology also showed the potential of ConfirmMDx biomarkers in urine samples from patients with an initial negative biopsy. These two clinical applications extend the potential of ConfirmMDx to the liquid biopsy market space.
Total test volume growth of 61% globally to over 18,800 in 2018 vs 11,700 in 2017.
EU test volume growth of more than 65% to over 5,100 patients tested compared to 3,100 in 2017.
12 additional US payor contracts signed including Government Services Administration (GSA) making SelectMDx available to federal, state and local government buyers; total contracted payors 26 since product launch mid-2016.
Inclusion in the European Urology Association (EAU) clinical guidelines.
Reimbursement obtained in The Netherlands.
Eight new EU distribution agreements signed bringing the total to 19, making the test available to 1.2 million men in 50 European countries.
The New York State Department of Health reviewed and approved SelectMDx, further validating the quality and reliability of SelectMDx test results.
US and EU health economic studies showing that routine use of SelectMDx in clinical practice would result in better outcomes for patients and combined savings of nearly $1 billion dollars for health care providers.
Over 10 peer-reviewed scientific papers and abstracts published, including a clinical utility study in the journal Urology Practice.
Existing license agreement with LabCorp expanded to include rights to patents owned and controlled by MDxHealth relating to the MGMT biomarker for use in oncology, including a brain cancer test. The MGMT biomarker test is a companion diagnostic test for Glioblastoma, a rare form of brain cancer included in the NCCN guidelines and which has its own unique CPT reimbursement code.
Under the terms of the agreement, MDxHealth will receive a double-digit royalty payment per test. This test is predominantly used for pharmaceutical service testing.
Exclusive worldwide licensing agreement with Royal Philips NV for the use of the rights to manufacture and market prognostic biomarker PDE47, enabling the finalization of development of InformMDx® for Prostate Cancer, a tissue-based molecular test to stratify patients with a low or indeterminate Gleason score to predict the risk of disease progression. The Company anticipates that InformMDx will provide actionable information to help clinicians guide post-biopsy treatment decisions at the time of diagnosis, as well as post-surgical treatment decisions following prostatectomy. In the US alone, over 150,000 patients per year could benefit from the InformMDx test.
POST PERIOD EVENTS
MDxHealth signs exclusive partnership agreement with LifeLabs to make SelectMDx® available in Canada.
Positive data for SelectMDx and ConfirmMDx for Prostate Cancer presented at the American Society of Clinical Oncology Genitourinary Cancers Symposium (ASCO GU), California, February 14-16 2019:
Annual cost savings of nearly $500 million when SelectMDx is used prior to multi-parametric magnetic resonance imaging (mpMRI) for the identification of US patients at high risk of aggressive prostate cancer.
SelectMDx outperforms the Prostate Health Index (Phi) blood test for the detection of high-grade prostate cancer prior to prostate tissue biopsy.
Retrospective validation of SelectMDx in German patients confirms robust clinical performance.
Clinical utility study demonstrates that ConfirmMDx had a significant positive impact on repeat prostate biopsy decision-making.
Data showing SelectMDx for Prostate Cancer urine test outperforms the Prostate Health Index (phi) blood test presented at the 29th Annual International Prostate Cancer Update (IPCU) meeting in Beaver Creek, Co, January 24-27, 2019. Having a SelectMDx urine test available in the physician's office is a major advantage over a blood test as the latter requires a patient to visit an external lab for blood collection.
Company appoints Michael K. McGarrity as CEO of MDxHealth in February 19, 2019.
Dr. Jan Groen continues as an Advisor to the Board of Directors.
Mr. Kurt Schmidt, MDxHealth's Executive Vice President of Finance, is serving as the Company's interim CFO. With over 20 years of senior level financial experience, over 12 of which are the molecular diagnostics industry, Mr. Schmidt has been with the Company for more than two years.
The Board of Directors has initiated a search for new independent Directors with relevant U.S. industry experience.
KEY FINANCIAL FIGURES
Key unaudited consolidated figures for the financial year ended December 31, 2018 (thousands of US dollars, except per share data):
as a %
Operating profit/(loss) (EBIT)
Earnings per share, basic ($)
Revenue and Income Total normalized revenue for the year ended December 31, 2018 was little changed at $28.4 million, compared to $28.4 million a year earlier. Including the one-time sale of the Company's patents to Exact Sciences in 2017, total revenue was $28.4 million compared with $40.5 million. ConfirmMDx remained the lead product and accounted for 87% of total product and services revenue. The reduction of ConfirmMDx's contribution to 87% in 2018 from 91% in 2017 also reflects continued strong growth of SelectMDx, both in the US and in Europe. Test volumes for SelectMDx grew by more than 61%, and accounted for 48% of global volumes. The lower price point of SelectMDx compared to ConfirmMDx and the early stage of payor adoption however limited revenue for SelectMDx to approximately $2.4 million, an increase of 30% year-on-year.
Revenue recognized on the sales of ConfirmMDx and SelectMDx represented 48% of total gross billings, a slight decrease compared to 2017, with a marginal improvement in the revenue recognition rate for ConfirmMDx being offset by the lower rate applicable to the fast-growing test volumes of SelectMDx.
The gross profit margin on products and services decreased from 64% in 2017 to 58% as a result of SelectMDx increasing as a percent of total volume and greater overhead being attributed to COGS, partially offset by continued efficiency improvements in the laboratory.
Operating expenses for 2018 of $48.8 million increased by $6.3 million compared to 2017, mainly as a result of a full year of the increased sales force in the US and the European commercial operations including commercial and laboratory staff. Total headcount stood at 186 at the end of 2018 compared to 232 a year earlier, the decrease reflects the optimization of the US organization in December 2018.
Cash Position Cash and cash equivalents stood at $26.2 million at December 31, 2018, compared to $16.8 million at December 31, 2017. The net proceeds from new financing of $42.4 million were offset by an operational cash burn of $28.4 million, $2.4 million of unfavorable foreign exchange translation effects, and investments in tangible and intangible assets of $1.4 million. Cash collections from ConfirmMDx and SelectMDx only amounted to $26.5 million, 15% more than a year earlier.
The Company remains confident in the potential of its two complementary commercial stage products to provide urologists with a clear clinical pathway to accurately identify high-grade prostate cancer whilst minimizing the use of invasive procedures. We believe this clinical pathway, with SelectMDx guiding cancer detection in a pre-biopsy setting and ConfirmMDx in a post-biopsy setting, will continue driving momentum and increase market share on all fronts. In the longer term, SelectMDx will continue to drive growth in the US and international markets.
The Company is positive about the outlook for the current year and believes it can achieve a higher volume of genomic testing for both ConfirmMDx and SelectMDx.
Growth in 2019 and beyond will benefit from:
Completion of the dossier for SelectMDx to file for Medicare coverage.
Increasing private payor adoption and securing favorable reimbursement rates for ConfirmMDx and SelectMDx in the US, which should improve cash collections.
Enhanced visibility and clinical utility of the Company's product portfolio through publication of peer-review articles, including:
a prospective clinical study combining SelectMDx with mpMRI.
a EU and US clinical validation study for SelectMDx.
a health economic study comparing SelectMDx with mpMRI.
An Evaluation of ConfirmMDx and multiparametric MRI in patients with prior negative prostate biopsy.
2019 Reporting Calendar
April 24 : Q1 interim business update and management conference call.
April 29: Online publication of annual report 2018.
May 29: Annual General Meeting.
August 29: Publication of H1 2019 results.
October 22: Q3 business update.
About MDxHealth MDxHealth is a multinational healthcare company that provides actionable molecular diagnostic information to personalize the diagnosis and treatment of cancer. The Company's tests are based on proprietary genetic, epigenetic (methylation) and other molecular technologies and assist physicians with the diagnosis of urologic cancers, prognosis of recurrence risk, and prediction of response to a specific therapy. The Company's European headquarters are in Herstal, Belgium, with laboratory operations in Nijmegen, The Netherlands, and US headquarters and laboratory operations based in Irvine, California. For more information, visit mdxhealth.com and follow us on social media at: twitter.com/mdxhealth, facebook.com/mdxhealth and linkedin.com/company/mdxhealth.
Financial Statements and Auditor Review
The Company's statutory auditor, BDO Bedrijfsrevisoren CBVA, has confirmed that its audit procedures with respect to the Company's consolidated financial statements, prepared in accordance with the International Financial Reporting Standards as adopted in the European Union, have been partially completed, that the procedures completed to date have not revealed any material adjustments that would have to be made to the accounting information derived from the Company's consolidated financial information that is included in this press release.
The condensed Consolidated Statement of Comprehensive Income may be found on the Company's website at www.mdxhealth.com. The full Annual Report is expected to be made available to the public via the Company's website in April 2019.
This press release contains forward-looking statements and estimates with respect to the anticipated future performance of MDxHealth and the market in which it operates. Such statements and estimates are based on assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable but may not prove to be correct. Actual events are difficult to predict, may depend upon factors that are beyond the company's control, and may turn out to be materially different. MDxHealth expressly disclaims any obligation to update any such forward-looking statements in this release to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required by law or regulation. This press release does not constitute an offer or invitation for the sale or purchase of securities or assets of MDxHealth in any jurisdiction. No securities of MDxHealth may be offered or sold within the United States without registration under the U.S. Securities Act of 1933, as amended, or in compliance with an exemption therefrom, and in accordance with any applicable U.S. securities laws.
NOTE: The MDxHealth logo, MDxHealth, ConfirmMDx, SelectMDx, AssureMDx, PredictMDx and UrNCollect are trademarks or registered trademarks of MDxHealth SA. All other trademarks and service marks are the property of their respective owners. The foregoing information on Kaiser Permanente and the General Service Administration contract awards is not intended to serve as an endorsement of MDxHealth or ConfirmMDx by Kaiser Permanente or the US Government.