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Diaxonhit reports 2013 results

PRESS RELEASE

Diaxonhit reports 2013 results

2013 successful transformation into
a specialty in vitro diagnostics company

2013 successful transformation into a specialty in vitro diagnostics company

  • Strong and dynamic commercial activity;
  • 5 new distribution agreements signed;
  • Successful integration of InGen BioSciences (" IBS ");
  • Reorganization of R& D with focus on in vitro diagnostic

FY 2013: encouraging financial results

  • 11% increase in sales of in vitro diagnostic products;
  • Non-recurring items related to IBS integration;
  • Operating income declined slightly to €6.8 million, but improved 16% excluding amortization related to IBS acquisition;
  • Net income of -€6.0 million dropped slightly, but improved 23% excluding amortizations related to IBS acquisition;

Outlook 2014, a focused and well aligned group

  • Commercial launch of AlloMap;
  • CE Marking of BJI InoPlex, last step before commercialization;
  • Initiation of DX15 validation study;
  • New distribution and licensing agreements.

PARIS, April 1, 2014 (GLOBE NEWSWIRE) -- The Management Board of Diaxonhit (NYSE Alternext: ALEHT), the leading French provider of specialty in vitro diagnostic solutions, met on March 25, 2014 to close the consolidated financial accounts for the year ending on December 31, 2013. These accounts were verified by the Supervisory Board1.

Commenting on these results, Loïc Maurel, MD, President of the Management Board of Diaxonhit, said: "First of all, I would like to highlight the 11% growth in sales and 16% improvement in operating profit excluding amortization related to the acquisition of InGen BioSciences. This performance demonstrates the successful integration of this company during the first year after its acquisition. By becoming a pure player in diagnostics, we are now well aligned to achieve the goals we have set, to reach financial breakeven and to become a specialty in vitro diagnostics leader in Europe."

2013 ACCOUNTS: THE YEAR OF INGEN BIOSCIENCES INTEGRATION

In €M 2013

consolidated
2012 (1)

consolidated
2012 (2)

pro forma
Consolidated revenues 31,2 5,4 28,6
Cost of goods sold (16,2) (0,4) (14,2)
R&D expenses (7,3) (7,0) (8,0)
Marketing and sales expenses (3) (7,9) (0,9) (7,7)
G&A expenses (6,5) (3,5) (6,1)
Operating result (6,8) (6,5) (7,3)
Net result (6,0) (5,8) (6,2)
Amortization of goodwill (0,3) (0,1) (0,3)
Amortization of IBS purchase price allocation (1,3) 0 (1,3)
Net result excluding amortizations related to IBS acquisition (4,4) (5,7) (4,6)
Consolidated cash and cash equivalent at Dec. 31 5,7 9,8

(1) including InGen BioSciences accounts consolidated from December 14, 2012 on

(2) Pro forma: financial statements restated to reflect the acquisition of IBS as if it had occurred on January 1, 2012

(3) including amortization of revalued intangible assets related to IBS purchase price allocation for €1,340K in 2013

In vitro diagnostic products sales growth: 11 %

Consolidated revenues as at December 31, 2013 amounted to €31.2 million against €5.4 million in 2012. On a pro forma basis this represents a 9% increase, reflecting strong in vitro diagnostic products sales which totaled €26.3 million, up 11% compared to 2012 (€23.8 million). As previously announced, this growth reflects Diaxonhit's strength in transplantation with a 15% increase in sales of HLA tests, and the development of the quality control market in which sales increased by over 14% compared to 2012.

In a globally stable in vitro diagnostic market, this performance confirms both the choice of specialty diagnostics, and the level of innovation provided by new products.

Operating result improving by 16 % excluding amortization related to the acquisition of IBS

IBS consolidation into Diaxonhit's perimeter significantly changed the structure of the Group's operating expenses.

Upon acquisition of IBS on December 14, 2012, Diaxonhit recorded a goodwill of € 16.9 million in its accounts. During fiscal 2013, the purchase price at the date of acquisition was reallocated among several assets ("PPA"), marketing and sales assets for € 12.9 million and R&D assets for € 979 K. Accordingly, goodwill was reduced to € 3.1 million.

Marketing and sales assets are amortized over 10 years. Accordingly, an amortization expense of € 1.3 million was added to marketing and sales expenses at December 31, 2013. R&D assets will also be amortized over 10 years when the developed products will be marketed. The remaining goodwill is also being amortized over 10 years, which led to a € 0.3 million amortization expenses deducted from operating profit at December 31, 2013.

In this context:

  • The cost of goods sold amounted to €16.2 million, corresponding to in vitro diagnostic product sales;
  • Research and development expenses remained under control, with a reduction to €7.3 million from €8.0 million in 2012 pro forma;
  • Marketing and sales expenses amounted to € 7.9 million, including amortization of intangible assets for € 1.3 million. These expenses increased compared to 2012 pro forma, reflecting the increase in commercial activity;
  • General and administrative expenses increased slightly compared to 2012 pro forma. They include non-recurring costs related to the integration of IBS and the purchase of the AlloMap license.

Total operating income declined slightly to -€6.8 million. However, excluding amortization related to the IBS acquisition, it improved by 16%.

Taking into account amortization of the remaining goodwill related to the IBS acquisition and the research tax credit for an amount of €1.1 million, net income amounted to -€6.0 million, a limited decline compared to 2012. However, excluding amortization related to the IBS acquisition, it improved by 23%.

Financial situation

The Group's balance sheet is characterized by €19.6 million in equity, a financial debt of €1.9 million and a cash position at € 5.7 million.

During fiscal 2013, changes in the Group's cash position included the following:

  • Funding received for a net total of €1.8 million, mainly from capital increases related to PACEO and TEPA financings;
  • Consumption of cash by operations for a total of € 4.9 million;
  • A slight increase in working capital requirements, mainly due to the increase in commercial business during the year.

The Group has cash and access to sufficient funding to continue its development beyond the next twelve months.

A WELL ALIGNED SPECIALTY IN VITRO DIAGNOSTIC GROUP

The termination of therapeutic activities resulting from the end of the Allergan collaboration positions Diaxonhit as a specialty diagnostics pure player in three areas: transplantation, cancer and infectious diseases.

R&D activities focused on development of diagnostic tests

The Group has now fully dedicated its R&D activities for the development of diagnostic tests, leveraging its expertise in genomics, with its patented GWSA technology, and proteomics.

Today, two proprietary products are in development:

  • BJI InoPlex, the first proteomic test able to detect joint prostheses infections with a simple blood sample. As already announced, its validation study should be completed in H2 2014 with CE marking anticipated at the end of the year and followed by commercialization;
  • DX15, a molecular test to identify whether a thyroid nodule is benign or malignant. An efficient test signature was recently identified to meet a high medical need in thyroid cancer; in France, more than 7,000 unnecessary thyroid ablations are performed each year, despite the nodule being benign. This signature will be confirmed by a validation study, with CE marking and market launch expected in 2016.

A three-pronged commercial strategy: launch of proprietary products, development of distribution, and licensing-in

The main pillar of Diaxonhit's strategy is to remain innovative through the development of proprietary products with the aim to accelerate revenue growth, and improving gross margin and profitability.

Our goal is to expand our distribution business by signing new contracts such as the agreements with Tosoh and Samsung announced in recent months.

With our reference position in the field of transplantation with over 70% market share in France, the Group acquired an exclusive license for commercialization in Europe of AlloMap, a molecular test for monitoring rejection in heart transplant patients, which is scheduled for launch in 2014.

OUTLOOK 2014

2014 should be a dynamic year for the Group with the following objectives:

  • Sales growth, particularly in quality control;
  • Market launch of AlloMap;
  • End of BJI InoPlex clinical validation study, CE marking and market launch;
  • Initiation of DX15 validation study in thyroid cancer;
  • Signature of new distribution agreements.
  1. All financial statements were audited by the auditors and their report will be issued after review of the 2012 management report.

2014 Financial Calendar

Meeting with institutional investors and analysts: March 26, 2014
Shareholders Annual General Meeting: June 19, 2014
H1 2014 revenues: July 2014
H1 2014 accounts: September 2014

About Diaxonhit

Diaxonhit (NYSE Alternext, FR0004054427, ALEHT) is a French fully integrated leader in the in vitro diagnostic field, involved from research to commercialization of specialty diagnostic products.

With many partnerships and a strong presence in hospitals, Diaxonhit has an extensive commercialization network. Through its affiliate, InGen, it commercializes and services, mostly under exclusivity agreements, in vitro diagnostic kits and advanced equipment. It operates mainly in the fields of transplantation, infectious diseases and autoimmunity, product quality control and rapid tests, including Tetanus Quick Stick ®, a proprietary product. InGen is the leading supplier in France of HLA tests manufactured by Thermo-Fisher/One Lambda, of which it is the largest distributor worldwide.

The group also owns a diversified portfolio of products in development, including both innovative molecular and non-molecular diagnostics, covering three main specialty areas: transplantation, immuno-infection and cancer.

Diaxonhit headquarters are located in Paris and its affiliate in the Paris region. The Group is listed on NYSE Alternext in Paris and is part of the NYSE Alternext OSEO innovation index.

For more information, please visit: http://www.diaxonhit.com

Disclaimer

This press release contains elements that are not historical facts including, without limitation, certain statements about future expectations and other forward-looking statements. Such statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated.

In addition, Diaxonhit, its shareholders, and its affiliates, directors, officers, advisors and employees have not verified the accuracy of, and make no representations or warranties in relation to, statistical data or predictions contained in this press release that were taken or derived from third party sources or industry publications, and such statistical data and predictions are used in this press release for information purposes only.

Finally, this press release may be drafted in the French and English languages. In an event of differences between the texts, the French language version shall prevail.

CONTACTS

DIAXONHIT

Hervé Duchesne de Lamotte

CFO

+33 1 53 94 52 49

herve.delamotte@diaxonhit.com

ACTIFIN

Financial Communication

+ 33 1 56 88 11 11

Investors Relations

Alexandre Commerot, acommerot@actifin.fr

Press Relations

Jennifer Jullia, jjullia@actifin.fr

DIAXONHIT S.A.
CONSOLIDATED INCOME STATEMENT
(in thousands of euros, except per share data)
12 months

Dec. 31, 2013
12 months

Dec. 31, 2012 *
12 months

Dec. 31, 2012 **
(pro forma)
Sales of in vitro diagnostic products 26,326 691 23,781
Research and Development revenues 4,174 4,375 4,375
Other products 248 16 16
Research & Development grants 468 305 449
Total revenues 31,216 5,387 28,621
Cost of goods sold (16,217) (449) (14,195)
Research and Development expenses (7,346) (6,983) (7,978)
Marketing and Sales expenses *** (7,932) (898) (7,658)
General and Administrative expenses (6,495) (3,531) (6,113)
Total operating expenses (21,774) (11,412) (21,749)
Loss from operations (6,775) (6,474) (7,323)
Interest expense (74) (48) (23)
Interest income 114 64 102
Currency exchange gain (loss) - net (124) (184)
Financial income (loss) (85) (168) 79
Extraordinary expenses (262) -
Extraordinary income 241 - 179
Extraordinary income (loss) (21) - 179
Income (loss) before tax and amortization of goodwill (6,881) (6,643) (7,065)
Tax benefit (expenses) 1,137 943 1,139
Amortization of goodwill (250) (71) (308)
Net income (loss) (5,994) (5,770) (6,235)
Weighted average number of shares outstanding 56,922,318 35,941,997
Net loss per share (0.11) (0.16)
Net loss per share (diluted) (0.11) (0.16)
(*) consolidated accounts including IBS since its acquisition on 14/12/2012
(**) non-audited accounts including IBS as if it had been acquired on 01/01/2012
(***) including amortization of intangible assets derived from the PPA : (1,340) (1,286)
DIAXONHIT S.A.
CONSOLIDATED BALANCE SHEET
(in thousands of euros)
ASSETS December 31, 2013 December 31, 2012
Goodwill, net 2,757 16,850
Intangible assets, net 13,382 599
Property and equipment, net 1,048 1,223
Other long term assets 280 440
Total long-term assets 17,467 19,112
Inventory 1,480 1,821
Accounts receivable 5,797 4,108
Grants receivable - -
Other short term assets 2,978 3,651
Marketable securities 2,546 3,143
Cash and cash equivalents 3,147 6,659
Total short-term assets 15,947 19,382
TOTAL ASSETS 33,414 38,494
LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 2013 December 31, 2012
Share capital 934 886
Additional paid-in capital 104,531 102,590
Acquisition premium 9,795 9,795
Accumulated deficit (96,663) (90,670)
Other 968 1,057
Shareholders' equity 19,565 23,658
Other equity 999 843
Accruals for risks 800 569
Long-term debt less current portion 1,399 1,867
Long-term capital lease obligations less current portion 124 131
Long-term portion of deferred income - 126
Total long-term liabilities 1,709 2,125
Current portion of long-term debt 510 444
Current portion of capital lease obligations 138 237
Accounts payable 5,480 5,870
Accrued liabilities (Tax and Compensation) 3,339 3,291
Other short-term debt - 18
Deferred income short-term 1,060 1,438
Total short-term liabilities 10,342 11,299
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 33,414 38,494

DIAXONHIT S.A.
CONSOLIDATED CASH FLOW STATEMENT

(in thousands of euros)
Year ending
Dec 31, 2012
Year ending

Dec 31, 2011
OPERATIONS
Net loss (5,994) (5,770)
Less:
Depreciation and amortization of property & equipment 634 268
Depreciation of intangible assets 1,481 16
Amortization of goodwill 250 71
Net book value of impaired assets 39 8
Net change in accruals for risks 231 (296)
Other (4) 37
Increase (decrease) in cash from:
Inventory 341 (132)
Accounts receivable (1,689) 673
Research tax credit receivable 2 423
Prepaid expenses and other assets 674 (776)
Accounts payable and accrued expenses (391) 1,832
Accrued liabilities (Tax and Compensation) 48 (654)
Deferred income, short term (164) (146)
Deferred income, long term (126) -
Grants - deferred income, short term (214) -
Change in working capital (1,537) 1,221
Net cash used in operations (4,901) (4,447)
INVESTING ACTIVITIES
Purchase of property and equipment (574) (87)
Sale of property and equipment 168 -
Acquisition of shares in subsidiaries (net of cash acquired) - (5,659)
Other financial assets 193 -
Net cash used in investing activities (213) (5,746)
FINANCING ACTIVITIES
Issuance of shares (net of fees) 1,602 5,943
Loan - redeemable advances 156 646
Reimbursement of bank loans (401) -
Reimbursement of lease obligations (230) (27)
Grants - deferred income, short term - 475
Grants - deferred income, long term - 86
Net cash provided by (used in) financing activities 1,127 7,123
Net increase (decrease) in cash and cash equivalents (3,987) (3,070)
Effects of currency exchange rate on cash (121) (52)
Cash and cash equivalents, beginning of period 9,802 12,925
Cash and cash equivalents, end of period 5,694 9,802

Press release http://hugin.info/159969/R/1773292/604276.pdf

HUG#1773292

Source:Diaxonhit