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MDxHealth Reports 2013 First-Half Results

MDxHealth Reports 2013 First-Half Results 
Over 80% Increase in ConfirmMDx(TM) for Prostate Cancer Test Volume
From Q1 to Q2 2013 
IRVINE, CA, and LIEGE, BELGIUM -- (Marketwired) -- 08/22/13 -- 
MDxHealth SA (EURONEXT BRUSSELS: MDXH), a leading molecular
diagnostic company that develops and commercializes epigenetic tests
to support the diagnosis and treatment of cancer patients, today
announced its 2013 first half results.  
Business Highlights
 In the first half of 2013, MDxHealth continued
to deliver on its commercialization plan for ConfirmMDx for Prostate
Cancer in the U.S. That plan includes increasing the penetration of
the test at an expanding number of urology practices, while advancing
the clinical and economic impact studies necessary to secure
reimbursement in line with the test's health economic benefits.
During the first half of 2013, test volumes ramped up significantly,
with 67 million lives added to the total number of patients who can
obtain reimbursement for the test. More than 90 different third-party
insurance payers have reimbursed the ConfirmMDx test.  
Data supporting the ConfirmMDx test were published in peer-reviewed
journals and presented at major scientific conferences. The data
demonstrated that the biomarkers in the ConfirmMDx test outperform
prostate specific antigen testing (PSA) and other traditional risk
factors in prostate cancer detection, representing a powerful new
tool for urologists assessing the need for a repeat prostate biopsy.
Addtionally, investigators from the University of California at San
Francisco and Thomas Jefferson University published a health economic
study in the journal American Health & Drug Benefits
(2013;6(1):15-24), which demonstrated that health insurance plans
establishing coverage for the ConfirmMDx for Prostate Cancer test
would realize approximately $600 in cost savings per patient managed,
generating significant economic benefits within the first year.  
MDxHealth reported commercial and total revenues of EUR 3.0 million
in the first half of 2013, a 51% increase versus the same period in
2012. Commercial revenues grew by 108% over the first half of 2012.
There were no grant or subsidy revenues during the first half of
2013. The company's cash position was significantly improved through
an EUR 18 million private placement which closed on June 25, 2013.  
On June 7th MDxHealth partner Exact Sciences (NASDAQ: EXAS) submitted
the final module of the premarket approval (PMA) application for
Cologuard(TM), the company's molecular stool-based colorectal cancer
screening test to the U.S. Food and Drug Administration. Pending FDA
approval Exact Sciences is now preparing for the commercial launch of
their test. MDxHealth expects to receive milestone payments and
royalties from the sale of the Cologuard test.  
"Adoption of our ConfirmMDx for Prostate Cancer test in the U.S.
continues to accelerate. Year to date we have tested more than 42,000
prostate biopsies from over 3,500 patients. This represents a
sequential increase of 82% in volume in Q2 over Q1 2013," said Dr.
Jan Groen, CEO of MDxHealth. "We continue to build our
commercialization structure in the U.S. to support this growth
through the remainder of 2013 and beyond. Together with our partners,
we now have more than 70 sales representatives in the U.S. promoting
our ConfirmMDx test for Prostate Cancer test, and the penetration
rates are being aided further by the growing number of payers that
have recognized the clinical and economic value of the test and are
reimbursing its use."  
Commenting on the financial results, Dr. Groen continued: "We are
pleased with the significant growth in commercial revenue thus far in
2013, derived from both diagnostic test and services sales. At this
point more than 90 insurance companies have recognized the clinical
utility and economic value and are reimbursing the ConfirmMDx for
Prostate Cancer test. Our managed care efforts are focused on
increasing coverage through contracts with third-party payors and
networks. Reimbursement codes at these insurers and other third-party
payors allow MDxHealth to secure appropriate payment, increase the
percentage of revenue recognized, and expedite collections, while
providing economic benefit to payers and the entire healthcare
system."  
Key limited audited financials, as of June 30, 2013
 Amounts as at
and for the six months ended 


 
-----------------------------------------------------------------
-----------
Euro thousands                                  June 30, 2013  June 30, 2012
----------------------------------------------------------------------------
Commercial Revenues*                                    3,033          1,456
----------------------------------------------------------------------------
Total Revenues                                          3,033          2,014
----------------------------------------------------------------------------
EBITDA (Loss)                                         (5,754)        (4,049)
----------------------------------------------------------------------------
EBIT Operating Income (Loss)                          (5,953)        (4,260)
----------------------------------------------------------------------------
Net Profit (Loss)                                     (5,971)        (4,259)
----------------------------------------------------------------------------
Cash and cash equivalents                              24,677          6,551
----------------------------------------------------------------------------

 
*Commercial revenue is defined as revenue without government grants
and or subsidies, and includes CLIA laboratory diagnostic testing
revenue, services to pharmaceutical partners and royalty/licensing
income.  
Revenues
 Commercial revenue in H1 2013 amounted to EUR 3.0
million compared to EUR 1.5 million in H1 2012, representing an
increase of 108%. No revenues were derived from government grants as
the company continued to focus on growing its commercial revenue
sources.  
Test volumes for ConfirmMDx for Prostate Cancer continued to
increase, with more than 4,500 tests sold to date since launch. A
steady increase in reimbursement from private third-party payers was
recorded during the period, with more than 90 insurers now paying for
the test. This is expected to increase further through the agreements
with Multiplan and Three Rivers, which plans have combined access to
67 million covered lives. 
Operating Expenses
 Operating expenses for 1H 2013 were EUR 7.6
million, increasing 24% compared to EUR 6.1 in 1H 2012. As previously
noted, this increase was attributable to the build-up of the U.S.
operations in support of ConfirmMDx for Prostate Cancer test
commercialization, as well as R&D investment in our pipeline of new
diagnostic tests. 
Non-operational and one-time restructuring costs, not expected to
continue in future periods, amounted to EUR 302K for the
period. 
Results
 As expected, 1H 2013 loss increased over the same
period in 2012 due to costs associated with growing commercial
infrastructure to support U.S. sales and marketing and new product
R&D investment. The company's operating loss (EBIT) increased by
39.7%, and the net loss increased by 40.2% in H1 2013.  
Cash Position
 MDxHealth ended the first half of 2013 with cash and
cash equivalents of EUR 24.7 million compared to EUR 6.6 million on
June 30, 2012. The increase in cash was supported in part by the EUR
18 million gross private placement closed on June 25, 2013. 
Outlook 
 Based on the growth in
 the first two quarters of 2013 we
anticipate continued growth in test volumes, our customer base and
payer reimbursement in coming quarters. 
The central histopathology review of the company's second multicenter
validation study for ConfirmMDx for Prostate Cancer has completed.
The study involved five major cancer centers in the U.S. with Prof.
Dr. Alan Partin from Johns Hopkins University serving as principle
investigator. Testing included 3,687 archived prostate biopsy cores
from 350 men in a blinded fashion. In the coming weeks the database
will be unlocked and data will be analyzed and submitted for an oral
presentation at a major urology conference and publication in a
leading urology journal.  
The development of MDxHealth's second prostate cancer product
(InformMDx) is on target. This test will provide prognostic
assessment to distinguish between aggressive and non-aggressive
prostate cancer. In Q1 2014 the company will start validation studies
for the test. 
The reimbursement climate in the U.S. is still evolving. Along with
our peers in the industry, MDxHealth is closely monitoring the
Centers for Medicare and Medicaid Services' (CMS) changes to the
Medicare Clinical Laboratory Fee Schedule. These fee schedule
changes, coupled with the changing reimbursement landscape, pose
challenges for all diagnostic companies. While we believe the lack of
clarity is a temporary situation, we have elected to take a
conservative view and will likely adjust our per test revenue
projections downward to reflect the uncertainties. Once payment
histories under the new codes are well established, we will
reevaluate our revenue recognition policy to determine if upward
revision is appropriate. 
The Company's revenue recognition policy at this time is primarily
based on cash collections. Because reported revenues generally
exclude uncollected outstanding billable cases, the impact of current
test sales on reported revenues may be delayed by one or more
calendar quarters. However, as billing and reimbursement trends are
established with each payer, the Company is transitioning to an
accrual-based revenue recognition policy. Additionally, MDxHealth has
held claims to Medicare and will pursue payment once Medicare has
reviewed and approved the company's medical dossier and finalizes
reimbursement for the test, expected in 2013. Once Medicare
reimbursement is obtained, the company expects a one time,
retrospective billing payment for cases dating back to 2012,
representing a significant, one off, increase in revenue. We
anticipate a continued increase in private third-party reimbursement
as new payers are included. Currently, 70% of all MDxHealth
ConfirmMDx cases are non-Medicare. 
Total operating costs in the second half are expected to increase in
a carefully controlled manner in line with ramping up of the
commercialization activities associated with the ConfirmMDx for
Prostate Cancer test.  
Post-closing events
 MDxHealth signed a partnership agreement with
Bostwick Laboratories, a full-service laboratory specializing in
anatomic and clinical pathology, with a focus on uropathology,
providing MDxHealth with access to one of the largest urology
networks in the U.S.  
In addition and as noted above, agreements were signed with MultiPlan
and Three Rivers Provider Network (TRPN) to provide expanded access
for the ConfirmMDx for Prostate Cancer test. These preferred provider
organizations (PPO's) contract with healthcare providers typically on
a discounted fee-for service basis in circumstances where the
financial risk for changes in utilization of medical services appears
limited based on actuarial assumptions. PPOs and third party
administrators (TPA's) contract with health maintenance organizations
(HMO's), self funded employers, and other payers to provide expanded
choice, and services for patients, at discounted rates, with seamless
claims processing and claims optimization efficiencies.  
The New York State Department of Health (NYSDOH) also certified and
granted approval for the ConfirmMDx for Prostate Cancer test,
completing MDxHealth's list of state licensures, opening access to
one of the largest markets in the U.S.  
In the PharmacoMDx business area, MDxHealth established a service
collaboration with HistoGeneX to provide pharmaceutical companies and
oncologists with integrated molecular diagnostic testing services.
HistoGeneX's laboratory in Belgium will also perform MGMT service
testing on behalf of MDxHealth's current and future clients. 
In early July, MDxHealth signed a marketing partnership was signed
with Summit Pharmaceuticals International Corporation (SPI), a
subsidiary of Sumitomo Corporation, to gain access to the Japanese
market with MDxHealth's PharmacoMDx services, including Next
Generation sequencing (NGS) and epigenetic technologies and assays.  
Statutory Auditor's Limited Review Report
 We have reviewed the
accompanying interim consolidated statement of financial position of
MDxHealth SA as of 30 June 2013 and the related interim consolidated
statements of comprehensive income, cash flows and changes in equity
for the six-month period then ended, as well as the explanatory
notes. The Board of Directors is responsible for the preparation and
presentation of this consolidated interim financial information in
accordance with IAS 34 "Interim Financial Reporting", as adopted by
the European Union. Our responsibility is to express a conclusion on
this consolidated interim financial information based on our review. 
We conducted our review in accordance with International Standard on
Review Engagements 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity". A review of
interim financial information consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion. 
Based on our review, nothing has come to our attention that causes us
to believe that the accompanying consolidated interim financial
information is not prepared, in all material respects, in accordance
with IAS 34 "Interim Financial Reporting", as adopted by the European
Union. 
Zaventem, August 22, 2013 
BDO Bedrijfsrevisoren Burg. Ven. CBVA / BDO Reviseurs d'Entreprises
Soc. Civ. SCRL
 Statutory auditor
 Represented by Bert Kegels 
Complete Financial Statements:
 To download the 2013 interim report,
go to: http://www.mdxhealth.com/investors/financials 
About MDxHealth
 MDxHealth is a molecular diagnostics company that
develops and commercializes advanced epigenetic tests for cancer
assessment and the personalized treatment of patients. By applying
patented DNA methylation platform and biomarkers, MDxHealth helps to
address a large and growing unmet medical need for better cancer
diagnosis and treatment information. For more information visit
www.mdxhealth.com. 
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. Su
ch 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. Past performance should not be
relied upon as a predictor of future performance. 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 and PredictMDx are
trademarks or registered trademarks of MDxHealth SA. All other
trademarks and service marks are the property of their respective
owners. 
To access the PDF version, please click here:
http://hugin.info/137314/R/1724309/574747.pdf 
For more information: 
Dr. Jan Groen
CEO 
MDxHealth
US: +1 949 812 6979
BE: +32 4 364 20 70 
info@mdxhealth.com  
Mike Sinclair 
Halsin Partners
UK: +44 20 7318 2955 
Cell: +44 7968 022075 
msinclair@halsin.com 
Matt Clawson
Allen & Caron, Inc
US: +1 949 474 4300
matt@allencaron.com 
 
 
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