Pre-Sub application for The NGAL TestTM to the FDA marks official start of new process
After four months of preparation, BioPorto submitted the pre-submission to obtain FDA feedback on the proposed clinical trial protocol and the application for regulatory approval of The NGAL TestTM for clinical use (IVD) in the USA in the beginning of October 2016. BioPorto has been in close dialogue with the FDA to discuss and fully understand the issues with the first application and remains confident that these issues are addressed in the new pre-submission. In this process, BioPorto has involved world-leading specialists and consultants. Given the timeframe of a pre-submission with the FDA and allowing for any changes to the protocol, enrollment of patients is expected to commence in second quarter of 2017. BioPorto maintains the expectation that an approval can be obtained by mid-2018.
Workload associated with FDA process in USA leads to temporary slow down in revenue growth for all segments other than The NGAL TestTM
The uptake of the NGAL TestTM in South Korea (clinical use) and in USA (research use only) are progressing as planned and by the end of 2016, around 15 RUO users in the USA are expected to have the test running. Following a strong first quarter performance, sales have been stagnant in the other segments compared to 2015, as resources have been allocated to the pre-submission application for The NGAL TestTM.
The collaboration with Siemens is progressing according to plan, however, the launch will take place in 2017 due to ongoing shelf life testing. Also, a significant OEM order has been postponed to 2017. As both sales and EBIT has fallen short of expectations, management has initiated a restructuring activity, which has led to a head count reduction in the Danish organization of 20% and will reduce cost by DKK 4 million when fully implemented.
NGAL Forms patent upheld and and progress in NGAL Cutoff patent application
In the third quarter, The European Patent Office (EPO) confirmed that they had not received an appeal from the opponent regarding BioPorto’s NGAL Forms patent. This means that the patent remains valid. BioPorto has appealed EPO’s decision on the Exclusion patent, which was ruled invalid earlier this year. The NGAL Cutoff patent application has been amended according to the response from the EPO and BioPorto expects an approval to issue the patent within months.
Options on future financing being evaluated
BioPorto has initiated a process of evaluating options for raising additional capital for financing the company’s increased activities related to the FDA process. The Board's intention is to implement a directed share issue before year-end.
Revenue and profit/loss
In the third quarter 2016, BioPorto’s revenue totaled DKK 4.6 million against DKK 4.7 million in the third quarter of 2015. Revenue in the first nine months of 2016 was DKK 14.4 million against DKK 14.6 in the same period in 2015, corresponding to a 1% decline. Revenues have not developed as projected except for The NGAL TestTM as management and resources were reallocated to focus on the FDA process.
Revenue from the NGAL product portfolio in the first nine months of 2016 was DKK 4.7 million against DKK 4.5 million in 2015. Of this, revenues of The NGAL Test™ amounted to DKK 2.3 million compared to DKK 1.9 million the year before. Sales of MBL kits, antibodies and other products and licenses have declined moderately from DKK 10.1 in the period January to September 2015 to DKK 9.8 in the same period 2016.
This brought BioPorto’s operating result before interest and tax (EBIT) to DKK -20.3 million in the first nine months of 2016 compared to DKK -10.6 million in the previous year. Capacity costs in the first nine months of 2016 amount to DKK 30.9 million compared to DKK 21.5 million last year. Costs are higher predominantly due to the establishment of the US subsidiary, costs related to the FDA resubmission process, and the hiring of a COO and CFO. Furthermore, in the first nine months of 2016, EBIT was also impacted by non-liquidity affecting costs of DKK 1.6 million in expensing of a warrant program to management and key employees.
Guidance for 2016
As a consequence of the turnover and restructuring costs, BioPorto’s expectations for turnover in 2016 is adjusted to DKK 21.5 million corresponding to a growth of 5% (previously DKK 23-25). Correspondingly, expectations for EBIT for the full year 2016 is adjusted to a loss of DKK 23.5 million and profit after tax at DKK -21.5 million (previously a loss of DKK 19-21 and loss after tax of DKK 17-19 respectively).
Peter M. Eriksen, CEO comments: "I am very pleased that our new application process for The NGAL TestTM with the FDA is proceeding according to plan with the ground work laid in Q3 2016 resulting in a new Pre-Sub in the beginning of October 2016. We are receiving very strong support for The NGAL TestTM from leading kidney specialists in the USA who recognize the urgent need for the test. We are confident that once FDA approval is achieved, we will experience a rapid uptake of sales in the USA. Having said that, our daily business has been impacted by this workload and we are not performing as planned. Accordingly, we have decided to implement some changes and reorganize, especially within our sales department, to ensure that our costs are in line with our revenues. With our new COO in front, we are working on initiatives that should get sales back on track for next year and continue to trend positively over the future years.”
Investor meeting
In connection with the release of the interim report, BioPorto hosts an investor meeting on November 3, 2016 at 3 pm. Note that this meeting is held at Danske Bank, Åboulevarden 69, 8000 Aarhus C. Please sign up at investor@bioporto.com.
For further information, please contact:
Peter Mørch Eriksen, CEO
Christina Thomsen, Investor Relations Manager
Tel: +45 4529 0000
E-mail: investor@bioporto.com
See the full report in the attached pdf
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