OncoMethylome Sciences S.A. Announces 2009 Financial Results
Published: Mar 11, 2010
Liège (Belgium) - March 11, 2010, 7:00 AM CET - OncoMethylome Sciences SA publishes its financial results for the period ended December 31, 2009. 2009 operational highlights: Starting at the end of 2009, OncoMethylome focused its R&D efforts on four core areas: colorectal cancer screening, bladder cancer detection, prostate cancer detection, and pharmacogenomics. In parallel, the company has initiated cost reductions which are expected to reduce current operating costs by approximately 25%, with the full impact expected in 2011. 1. Pharmacogenomics: In addition to the company's well-known and proprietary MGMT biomarker, which can predict patient response to standard brain cancer therapy, the company is developing a portfolio of novel biomarkers for predicting patient response to major cancer drugs or vaccines. OncoMethylome has collaborations with several large pharmaceutical companies for the development of companion diagnostic tests to assist in identifying patients most likely to respond to new or existing oncology therapies. These collaborations include: ? Merck KGaA (Cilengitide) ? Roche (Avastin) ? Schering Plough (Temodar) ? GlaxoSmithKline Biologicals (immunotherapeutics) 2. Colorectal cancer: OncoMethylome improved the blood-based colorectal cancer screening test and published results from further studies in September 2009. The company is in the process of validating its blood-based test on samples from screening trials involving persons who underwent a colonoscopy. The test is being developed to serve as a patient-friendly and non-invasive screening method for detecting colorectal cancer among adults over age 50. 3. Bladder cancer: The company is validating its urine-based assay for the detection of bladder cancer and for the monitoring of its recurrence and published excellent results from its studies throughout 2009. The company has also initiated a program to identify biomarkers that will help to identify aggressive bladder tumors and optimize therapy selection. 4. Prostate cancer: The company has developed a tissue-based test (already being sold in North America via LabCorp) and has a urine-based test in development. In November 2009 Veridex LLC announced that, as part of the general restructuring of its group, it was discontinuing the development of the prostate cancer products it had licensed from OncoMethylome. Veridex and OncoMethylome are now working together to find new partners for the test. In addition to the above R&D programs, OncoMethylome has cervical cancer biomarkers that could be used to triage women following positive-HPV or suspicious Pap test results and the company is working to partner this application to bring it to market. OncoMethylome has numerous other biomarkers which could be used for other cancer applications, including lung cancer detection and prediction of lung cancer recurrence. 2009 financial highlights The net loss increased in 2009 due to extra spending on clinical trials and to one-time costs of EUR 2.3 million for a restructuring plan implemented at the end of 2009. Revenues Total revenues in 2009 decreased to EUR 2.5 million due to the absence in 2009 of one-time commercial up-front or milestone fees that were present in the revenues of 2008. The grant-related revenue decreased slightly in 2009 due to the end of certain subsidized projects in 2008. Costs and Profitability Total operating costs increased by EUR 3 million primarily due to (i) one-time costs of EUR 2.3 million related to the restructuring of activities and the focus program announced in November 2009 which includes costs related to the reduction in headcount, the accelerated amortization and depreciation of non-essential tangible and intangible assets, and a re-organization of internal R&D activities, and (ii) extra costs in 2009 for the expansion of clinical trials for the colorectal cancer screening test. The combination of an increase in operating costs of EUR 3 million, (including the one-time restructuring costs of EUR 2.3 million), the reduction of interest income of EUR 0.7 million (due primarily to lower interest rates) and the reduction of revenues of EUR 0.5 million led to a larger loss in 2009. Cash Position OncoMethylome's cash and cash equivalents amounted to EUR 18 million at December 31, 2009. The larger operating loss in 2009 led to an increased use of cash for operations. Outlook for 2010 • Revenues are expected to remain stable and are expected to include revenues from (i) the 3 tests already being sold in North America, (ii) new commercial deals, (iii) personalized medicine collaborations, and (iv) grants. • Operating expenses are expected to decrease significantly in 2010 with the implementation of several cost-cutting initiatives. • Overall, the company expects to reduce its cash burn in 2010 compared to 2009. "In 2009, OncoMethylome focused its R&D on product areas which have the highest likelihood of creating value going forward. This focusing will allow us to dedicate more resources and attention to a core set of products, thus optimizing their development and clinical validation, while significantly reducing operating costs going forward. The OncoMethylome technology continues to be an excellent technology for cancer applications as demonstrated by our strong scientific publications in 2009", commented Philip Devine, interim CEO and CFO of OncoMethylome Sciences. Other News Dr. Bob Pinedo has resigned from his position as a Board Director effective as of the last Board meeting held on March 10, 2010. The Board thanks Dr. Pinedo for his contributions over the last years. The net assets to share capital ratio of the non-consolidated and non-IFRS statutory accounts of the Company has decreased to less than 50%, thus a general shareholders meeting will be convened in accordance with applicable legal provisions of Art. 633 of Belgian company law. Financial statements To download the consolidated audited financial statements of 2009, click here: ONCO 2009 Financial Statement Information for shareholders The 2009 Annual Report will be available for downloading in the investors section of www.oncomethylome.com website towards the end of April 2010. Comments of the Auditor The financial information included in this press release is derived from the audited consolidated financial statements under IFRS as adopted by the European Union. The statutory auditors, BDO Bedrijfsrevisoren - Réviseurs d'Entreprises CVBA, represented by Bert Kegels, have confirmed that their audit procedures, which have been substantially completed, have not revealed any material adjustments which would have to be made to the accounting data included in this press release as of and for the year ended December 31, 2009. On this basis they intend to issue an unqualified report including the following explanatory paragraph : "Although the company has incurred considerable losses which affect the financial position of the company, the financial statements are prepared in going concern. This assumption is only justified to the extent that the company further can rely on the financial support of the shareholders or other financial sources. Without prejudice to the above unqualified opinion, we draw your attention to the annual report in which the Board of Directors, according to Belgian legal requirements, justifies the application of the valuation rules in going concern. No adjustments were made with respect to valuation or classification of balance sheet items that would be required in case the company discontinues its activities." OncoMethylome Reporting Calendar May 6, 2010 - First business update May 28, 2010 - Annual general shareholders' meeting August 26, 2010 - Half-year 2010 results November 4, 2010 - Second business update March 11, 2011 - Full-year 2010 results About OncoMethylome Sciences OncoMethylome Sciences (Euronext Brussels: ONCOB; Euronext Amsterdam: ONCOA) is a molecular diagnostics company developing gene methylation tests to assist physicians in effectively detecting and treating cancer. Specifically, the company's tests are designed to help the physician (i) accurately detect cancer in early stages of cancer development, (ii) predict a patient's response to drug therapy, and (iii) predict the likelihood of cancer recurrence. The company collaborates with leading international molecular oncology research centers, such as The Johns Hopkins University, and has a number of commercial and collaborative partnerships with LabCorp, Schering-Plough Corp., GlaxoSmithKline Biologicals, Millipore Corporation's BioScience Division, Merck KGaA and Qiagen. OncoMethylome's products are based on methylation technology invented by Johns Hopkins University (USA). Established in January 2003, OncoMethylome has offices in Europe and in Durham, NC (USA).