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Curetis Reports Financial Results for the First Six Months of 2016
Key business and commercial milestones and goals met / Global presence further strengthened with subsidiaries in the U.S., UK, France and the Netherlands
Operational and Business Highlights 2016 to Date
In April 2016, Curetis successfully completed the CE performance evaluation study and subsequently launched its Unyvero BCU Blood Culture Application Cartridge during ECCMID 2016 in Amsterdam. The CE-marked BCU Application is designed for diagnosing infections spreading through the blood stream in positively flagged blood cultures. The comprehensive panel covers 87 of the most relevant pathogens, including Gram negative and Gram positive bacteria, and 16 related resistance markers. Interim data from a prospective multicenter evaluation showed 98% concordance with conventional microbiology and Unyvero results were on average available 24 hours earlier than results obtained by routine diagnostic methods.
The U.S. FDA trial for the Unyvero LRT Application in lower respiratory tract infections is almost completed. Prospective and retrospective sample enrolment has been successfully concluded on schedule in the first half of 2016. In less than a year, a total number of more than 2,250 samples including approximately 1,700 prospective and over 550 retrospective patient samples, have been enrolled at nine clinical trial sites across the U.S., including, amongst others, Mayo Clinic, Northwestern University, Johns Hopkins Hospital, UCLA and Columbia University Medical Center.
Curetis has continued its commercial expansion in both the United States and Europe. In the U.S., the Company has appointed Christopher M. Bernard as President and Chief Executive Officer of the newly-formed North American subsidiary Curetis USA, Inc.. Christopher Bernard is a seasoned executive with significant expertise in sales, marketing and commercialization of in-vitro diagnostic platforms. Prior to Curetis, he has worked in several executive management roles at Epic Sciences, Metabolon, Inc., Abaxis, Inc. and Cytyc Corporation (Hologic, Inc.). At Curetis, he will be responsible for the development of the new subsidiary and will lead the marketing and sales initiatives of Curetis in the U.S..
In Europe, the Company has hired Willem Haagmans as Head of Sales EMEA. He brings a strong track record and extensive leadership experience with both large and small-to-medium sized molecular diagnostics companies. Prior to joining Curetis, he worked as General Manager Benelux at Beckman Coulter. Previously, he held international management positions at Roche, Nimblegen, and Vela Diagnostics.
In addition, the Company has hired key commercial staff in the UK, France and Benelux that is currently on boarded. This new staff will significantly strengthen Curetis' direct commercial footprint and position the Company to accelerate new Unyvero installations in these key markets.
Curetis has also established wholly owned sales subsidiaries in the UK in May and in the Netherlands for the Benelux area in June and is in the process of setting up an additional subsidiary in France.
In June 2016, the Company signed an exclusive, three-year distribution agreement with Axon Lab AG for Curetis' Unyvero products in Central and Eastern European countries, including Austria, the Czech Republic, Slovakia, Slovenia and Croatia.
The Company is in the final stage of completing the development of a second-generation Unyvero ITI Application Cartridge and is progressing the development of its IAI Intra-Abdominal Infection Cartridge. In addition, the partnered Sepsis Host Response program is progressing according to plan.
Curetis has continued to expand the installed base of Unyvero Analyzers to 113 as of June 30, 2016 (vs. 70 instruments as of June 30, 2015).
During the Annual Shareholder Meeting held on June 16, 2016, Dr. Prabhavathi Fernandes, CEO of Cempra Pharmaceuticals Inc., Chapel Hill, NC, USA, has been elected as a member of the Curetis N.V. Supervisory Board. Dr. Prabhavathi Fernandes has profound knowledge in infectious diseases and antibiotics as well as experience in successfully founding, building and leading several biotech companies and taking one public on Nasdaq, raising more than half a billion U.S. dollars. Moreover, Dr. Holger Reithinger and Dr. Rudy Dekeyser were re-elected for another one-year term, respectively. In addition, the proposed resignation of Dr. Frank Muehlenbeck, the creation of a new Stock Option Program for the Company and associated changes to the Supervisory Board remuneration policy as well as changes to the Management Board's Remuneration Policy and Stock Option grants were also approved by the shareholders.
Additionally, Curetis has established a Medical Advisory Board with experts from the US (Robin Patel, MD, Mayo Clinic), Belgium (Jean-Louis Vincent, MD, Erasme University Hospital), Switzerland (Reno Frei, MD, University Hospital Basel, as well as Laurent Poirel, MD, University of Fribourg), and Germany (Mathias Pletz, MD, Jena University Hospital). The advisors bring strong expertise in intensive care, clinical microbiology, sepsis, prosthetic joint infections, and antibiotic resistance.
Financial Highlights, First Half-Year 2016
Revenues: EUR 655 thousand (vs. EUR 742 thousand in the first half-year of 2015).
Expenses: EUR 7.5 million (vs. EUR 6.4 million in the first half-year of 2015).
Gross loss: EUR 9 thousand (vs. a gross profit of EUR 77 thousand in the first half-year of 2015).
Net loss: EUR 6.7 million (vs. EUR 12.4 million in the first half-year ended June, 30 2015).
Cash and cash equivalents: EUR 39.7 million as of June 30, 2016 (vs. EUR 46.1 million as of December 31, 2015).
Net cash burn in the first half-year 2016 was EUR 6.4 million.
For the U.S. FDA trial with the Unyvero LRT Application in lower respiratory tract infections, Curetis targets completion of the contrived specimen study, molecular composite comparator testing for all samples and ancillary preclinical work packages in the second half of 2016, with top line data expected to be available after un-blinding.
The submission of Curetis' (de novo) 510(k) data package to the U.S. FDA is anticipated by year-end 2016 with the goal of achieving FDA clearance for Unyvero and starting commercialization in the first half of 2017.
The Company has begun preparing to enter U.S. FDA trials for its next U.S. product. To that end, Curetis has already submitted a so-called pre-submission package to the U.S. FDA in which the Company has outlined the intended use claims and a proposed study design for a U.S. version of its Unyvero ITI Cartridge. Depending on the FDA's feedback later this year, the Company will determine appropriate next steps and timelines for a U.S. FDA trial for its second U.S. product. Further details will be announced later this year.
The Company and its partner BCB are progressing the regulatory trials for product clearance in China with important data and preclinical parts of the trial expected to be run in H2-2016 under the auspices of the Beijing Institute of Medical Device Testing of the Beijing Center for Medical Device Quality Supervision and Testing of the Chinese State Food and Drug Administration (CFDA). BCB has expressed its goal to obtain CFDA clearance in 2017 and to begin commercialization in mainland China thereafter. Commercial efforts in Hong Kong and Taiwan, which are not subject to first obtaining CFDA approval, have already begun with a first commercial installation at a major hospital in Hong Kong successfully completed in July.
Curetis' partner Acumen has recently submitted a filing to the regulatory authorities in Singapore with the goal of achieving regulatory clearance for the Unyvero HPN (Hospitalized Pneumonia) Application which is equivalent to the current EU P55 Pneumonia cartridge. Acumen has also started preparing respective filing documents for the Unyvero BCU Blood Culture Application and plans to apply for the ITI Application once the second-generation has been CE-IVD marked in Europe. Regulatory approval for the Unyvero Platform and Products is expected not before 2017.
The Japanese Patent Office has decided to grant a key patent for the Unyvero Platform combining PCR amplification and array-based detection in the Unyvero Cartridges. The patent will become effective with the issuance of an official note by the Japanese patent office.
The European launch of the second-generation Unyvero ITI Application Cartridge is expected in Q3-2016. Completion of development of the IAI Intra-Abdominal Infection Cartridge is planned by year-end 2016. Moreover, the partnered Sepsis Host Response program is anticipated to be completed not before the end of 2017.
Together with its Medical Advisory Board, the Company is in the process of defining and prioritizing multiple additional new infectious disease indication areas of high unmet medical need for further Unyvero Cartridge developments and will update its product pipeline shortly.
With the commercial teams in all European direct selling markets now in place and getting up to speed, the Company believes that there are several dozen well-qualified Unyvero placement opportunities for H2-2016. Therefore, the Company reiterates its guidance of an expected global installed base of 150 to 200 Unyvero Analyzers by year-end 2016.
Following the formation of Curetis USA, Inc. in San Diego, CA, and the start of recruitment of a core team of senior U.S. marketing and sales leadership, the Company is planning direct commercialization of all Unyvero products in the U.S. hospital market.
Further Curetis subsidiaries are to be incorporated in France and Switzerland in Q3-2016.
"We are very satisfied that we could meet our key corporate milestones in the first six months of 2016," said Oliver Schacht, Chief Executive Officer of Curetis. "As our product and commercial development is progressing well, we are convinced that we can continue to deliver on the anticipated milestones communicated during our IPO. The market launch of our BCU Cartridge and the expected roll-out of our second-generation ITI and the new IAI Application Cartridges provide opportunities for further commercial upside. With our EMEA team fully built out by mid-year, we are now looking forward to accelerating our commercial momentum in the second half of 2016."
Financial Development and Guidance
For the six months ended June 30, 2016, revenues were EUR 655 thousand, as compared to revenues of EUR 742 thousand in the same period 2015. While revenues in the first half of 2015 included EUR 297 thousand Unyvero Systems sales to a pharma partner, revenues in the same period in 2016 did not include any such system sales to pharma. In general, revenues are expected to remain volatile from quarter-to-quarter, as early-stage instrument sales to distribution partners are unevenly spread throughout the year.
Expenses in the first six months of 2016 amounted to EUR 7.5 million (vs. EUR 6.4 million in the first half-year 2015). The increase is in line with the operational and organizational growth and driven by higher R&D expenses, increased marketing, sales and distribution costs as well as G&A costs.
Gross loss for the first six months of 2016 totaled EUR 9 thousand, compared with a gross profit of EUR 77 thousand for the same period in 2015. The relatively low gross margin is mainly due to IFRS accounting requiring idle capacity of manufacturing line and facility to be allocated to cartridge output.
Net loss for the first six months of 2016 was EUR 6.7 million compared with a net loss of EUR 12.4 million in the same period in 2015.
As of June 30, 2016, the Company had a strong cash position of EUR 39.7 million cash on hand and a net cash burn of EUR 6.4 million for all operating, investment and financing activities combined. The company expects a cash position of 31 to 32 million at the end of 2016.
Earnings Conference Call and Webcast
Curetis will host a public earnings conference call and webcast today, August 19, 2016, at 03:00pm CET / 09:00am EST to discuss the financial results of the first six months 2016, highlight the most important events and provide an outlook for the second half 2016 and beyond.
The conference call will be supplemented by a presentation which can be accessed during the call at http://www.curetis.com/en/investors/financial-reports-and-conferences/financial-reports.html (participants' passcode curetis0816).The live webcast and a replay will be available at http://curetis120416-live.audio-webcast.com
To access the call, please dial the following numbers using the passcode 93120684#
D: +49 69 222229043
NL: +31 1071 372 73
UK: +44 20 30092452
US: +1 855 4027766
For further international dial-in numbers, please open the following link: http://events.arkadin.com/ev/docs/International%20Access%20Numbers_%20UKFELBRI1_SU7.pdf
The first half-year financial report 2016 will be available as of today, August 19, 2016, at http://www.curetis.com/en/investors/financial-reports-and-conferences/financial-reports.html
CAUTION - Investigational device. Limited by Federal (or United States) law to investigational use. The information contained in this communication does not constitute nor imply an offer to sell or transfer any product, and no product based on the Curetis Unyvero technology is currently available for sale in the United States of America or Canada. The analytical and clinical performance characteristics of any Curetis Unyvero product which may be sold at some future point in time in the U.S. have not yet been established.
This document constitutes neither an offer to buy nor to subscribe securities and neither this document nor any part of it should form the basis of any investment decision in Curetis.
The information contained in this press release has been carefully prepared. However, Curetis bears and assumes no liability of whatever kind for the correctness and completeness of the information provided herein. Curetis does not assume an obligation of whatever kind to update or correct information contained in this press release whether as a result of new information, future events or for other reasons.
This press release includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will", or "should", and include statements Curetis makes concerning the intended results of its strategy. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. Curetis' actual results may differ materially from those predicted by the forward-looking statements. Curetis undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by law.
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