MagForce Publishes Financial Results and Operative Highlights for 2012
MagForce Publishes Financial Results and Operative Highlights for 2012
BERLIN -- (Marketwired) -- 06/27/13 -- MagForce AG / MagForce Publishes Financial Results and Operative Highlights for 2012. Ad hoc announcement according to Section 15 WpHG. Processed and transmitted by Thomson Reuters ONE.
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* Strategic realignment and operative restructuring completed
* Successful capital increase totaling EUR33.5 million (after period-end)
* Dr. Ben J. Lipps appointed Chairman of the Management Board as of September 2013 (after period-end)
* Focus on expanding strategic partnerships as well as on establishing and commercializing the NanoTherm(R) therapy
* Post-marketing study approval from the Federal Institute for Drugs and Medical Devices and the Federal Office for Radiation Protection (after period-end)
MagForce AG (Frankfurt, Xetra: MF6), a leading medical device company in the area of nanotechnology with a focus on oncology, published today its financial results and operative highlights for the fiscal year ending on December 31, 2012.
Christian von Volkmann, CFO and co-CEO of MagForce comments: "For MagForce, 2012 was characterized by the Company's important strategic realignment and operational restructuring. We concentrated all of our activities and finances on both expanding our strategic partnerships as well as on establishing the NanoTherm(R) therapy in the oncology field and its corresponding post-marketing study. The most important milestone for MagForce was the capital increase announced in December 2012 and successfully completed in March 2013, amounting to EUR33.5 million against cash and noncash contributions. Despite the difficult market environment, the transaction attracted renowned international investors. This capital increase allows us to lay a solid foundation for the implementation of our strategy and helps to put our Company on the path to success. We are also extremely pleased that Dr. Ben J. Lipps, former Chairman of the Management Board at Fresenius Medical Care AG, will be joining the Management Board of MagForce as Chairman beginning in September 2013 to support us as we move forward. Both the overwhelming response of investors to the capital increase and the fact that we have added Dr. Lipps to our management team only reassured us that our strategic realignment and operational restructuring were the right decisions."
The highlight of the Company's development in the 2012 reporting period was the completion of the strategic realignment and operational restructuring of MagForce AG. Ultimately, MagForce focused on establishing the NanoTherm(R) therapy on the oncological market and on commercializing it for value creation in the short-term. MagForce therefore concentrated on the primary steps needed for successful marketing. As a result, we built up a network with leading neurosurgeons and neuro-oncologists and developed a clinical trial plan for a three-armed, randomized study on glioblastoma patients to underscore the benefits of the NanoTherm(R) therapy and facilitate its acceptance among specialists. In 2012, the study was submitted to the Ethics Commission, the Federal Institute for Drugs and Medical Devices and the Federal Office for Radiation Protection and was approved in the first half of 2013.
In accordance with the new strategy, the core segments of the Company, including Clinical Development, Business Development, Medical Affairs and Legal & IP, were consolidated to the Munich site. In addition to the Software Development and Finance departments, the production of nanoparticles and NanoActivators(TM) remained at the Company's headquarters in Berlin. At the same time, early-stage research activities were substantially reduced and can be outsourced as needed. As a result, the Company expects seven-digit annual savings (in euros) in these areas.
In the short to medium term, MagForce will use the majority of its finances for the post-marketing study of glioblastoma, which will greatly contribute to the Company's strategic expansion. MagForce will also focus on establishing the NanoTherm(R) therapy on the market with its distribution partners, including DELRUS and TekGrup, its development partners, such as the Mayo Clinic for gastro-intestinal tumors and the Department of Urology at Duesseldorf University for prostate cancer, as well as the production of nanoparticles.
Result of operations, net assets and financial position
Before starting the post-marketing study and in accordance with expectations, MagForce did not generate any revenues with the NanoTherm(R) therapy in 2012 (previous year: EUR41 thousand). As a result of restructuring measures, operating expenses were reduced to EUR5,846 thousand (previous year: EUR7,022 thousand), mainly due to lower personnel costs. As a result, the Company also generated a lower net loss for the year with EUR5,717 thousand (previous year: EUR8,586 thousand). This means that MagForce's performance in 2012, also with regard to costs, was as forecasted in its report from the previous year.
The net loss was partially offset by cash inflows from capital increases amounting to EUR5,455 thousand in the reporting year. In 2012, the Company's share capital was successively increased from EUR4,127 thousand to EUR5,316 thousand by issuing new shares against cash contributions. As of the reporting date, other liabilities increased by a total of EUR16,081 thousand from the takeover of loan receivables from Nanostart AG and Venture Tech GmbH by Avalon Capital One GmbH.
Cash flow from operating activities amounted to EUR-5,473 thousand (previous year: EUR-4,537). Cash flow from investing activities totaled EUR-40 thousand (previous year: EUR-1,258 thousand) while the cash flow from financing activities amounted to EUR6,187 thousand (previous year: EUR4,816 thousand). As of the reporting date, December 31, 2012, the Company's cash and cash equivalents amounted to EUR689 thousand (previous year: EUR14 thousand).
Owing to the net loss, MagForce's balance sheet was indebted as of December 31, 2012. However, the Company announced a capital increase against cash and noncash contributions in December 2012 and successfully generated EUR33.5 million from its implementation in March 2013. This underscores the trust and confidence that international investors have in MagForce technology and the MagForce team. The Company now has adequate capital for achieving its next milestones. The Company's liquidity totaled EUR17.6 million following the capital increase.
Due to the early phase of commercialization for its innovative therapy, the Company cannot be sure whether increasing revenues can be realized in 2013. The Company expects to generate an increasing net loss from operating activities as compared to 2012 as part of its roll-out plan. This will mainly be due to the start of the clinical post-marketing study and preparations for market entry in additional countries. This corresponds to the objectives of the series of measures passed in 2012, the related restructuring of the Company and the focus on strategically important value drivers.
The Company expects an increased negative cash flow from operating activities in the fiscal year 2013, which is largely due to th e reduction of liabilities and financing of measures in connection with establishing the NanoTherm(R) therapy. Cash flow from financing activities will be clearly positive due to the capital increase from March 2013, despite the repayment of all loan liabilities amounting to EUR15.9 million.
About MagForce AG
MagForce AG is a leading medical device company in the field of nanomedicine in oncology. The Company's proprietary, NanoTherm(R) therapy, enables the targeted treatment of solid tumors through the intratumoral generation of heat via activation of superparamagnetic nanoparticles. NanoTherm(R), NanoPlan(R), and NanoActivator(TM) are components of the therapy and have received EU-wide regulatory approval as medical devices for the treatment of brain tumors. MagForce, NanoTherm(R), NanoPlan(R), and NanoActivator(TM) are trademarks of MagForce AG in selected countries. For more information, please visit www.magforce.com.
This release may contain forward-looking statements and information which may be identified by formulations using terms such as "expects", "aims", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or "will". Such forward-looking statements are based on our current expectations and certain assumptions, which may be subject to a variety of risks and uncertainties. The results actually achieved by MagForce AG may substantially differ from these forward-looking statements. MagForce AG assumes no obligation to update these forward-looking statements or to correct them in case of developments, which differ from those, anticipated.
MagForce_Press Release_June 27, 2013:
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