MdxHealth (TM) : MDxHealth Reports 2013 First-Half Results
Over 80% Increase in ConfirmMDx^TM for Prostate Cancer Test Volume From Q1 to
IRVINE, CA, and LIEGE, BELGIUM, August 22, 2013 - MDxHealth SA (NYSE Euronext:
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.
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 €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 €18 million private placement which
closed on June 25, 2013.
On June 7^th 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 appropriatepayment, 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.
Commercial revenue in H1 2013 amounted to €3.0 million compared to €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 for 1H 2013 were €7.6 million, increasing 24% compared to
€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
Non-operational and one-time restructuring costs, not expected to continue in
future periods, amounted to €302K for the period.
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.
MDxHealth ended the first half of 2013 with cash and cash equivalents of €24.7
million compared to €6.6 million on June 30, 2012.The increase in cash was
supported in part by the €18 million gross private placement closed on June
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
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.
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 basisin circumstances where the financial risk for changesin
utilization of medical services appears limited based on actuarial
assumptions. PPOs andthird party administrators (TPA's) contract withhealth
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
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
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 Réviseurs d'Entreprises Soc. Civ.
Represented by Bert Kegels
Complete Financial Statements:
To download the 2013 interim report, go to:
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
For more information:
Dr. Jan Groen, CEO Mike Sinclair Matt Clawson
MDxHealth Halsin Partners Allen & Caron, Inc
US: +1 949 812 6979 UK: +44 20 7318 2955 US: +1 949 474 4300
BE: +32 4 364 20 70 Cell: +44 7968 022075
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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
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disclaims any obligation to update any such forward-looking statements in this
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change in events, conditions or circumstances on which any such statement is
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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.
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