Trinity Biotech Announces Quarter 3 Financial Results and Temporary Suspension of Meritas Troponin Trials
DUBLIN, Ireland, Oct. 23, 2014 (GLOBE NEWSWIRE) -- Trinity Biotech plc (Nasdaq:TRIB), a leading developer and manufacturer of diagnostic products for the point-of-care and clinical laboratory markets, today announced results for the quarter ended September 30, 2014. In addition, it announced that it was temporarily suspending its FDA trials for its Meritas Troponin test.
Quarter 3 Results
Total revenues for Q3, 2014 were $27.2m which compares to $24.1m in Q3, 2013, an increase of 12.6%.
Point-of-Care revenues for Q3, 2014 increased by 2.8% when compared to Q3, 2013. This increase was attributable to growth in HIV revenues in the USA.
Clinical Laboratory revenues increased from $18.8m to $21.7m, which represents an increase of 15.4% compared to Q3, 2013. This increase was primarily attributable to continued growth in the Premier business plus the impact of acquisitions.
Revenues for Q3, 2014 were as follows:
| 2013 | 2014 | ||
| Quarter 3 | Quarter 3 | Increase | |
| US$'000 | US$'000 | % | |
| Point-of-Care | 5,315 | 5,463 | 2.8% |
| Clinical Laboratory | 18,806 | 21,698 | 15.4% |
| Total | 24,121 | 27,161 | 12.6% |
Gross profit for Q3, 2014 amounted to $13.0m representing a gross margin of 47.9%, which is lower than the 49.7% achieved in Q3, 2013. This decrease is mainly due to the impact of lower margins on the higher level of Premier instrument sales coupled with a lower level of higher margin Lyme revenues. It was also impacted by final closure costs in relation to the blood bank screening manufacturing facilities in the United Kingdom. These costs included building restitution, disposal of hazardous waste and transport costs for production equipment and inventories.
Research and Development expenses have increased to $1.1m from $0.9m when compared to the equivalent quarter last year. Meanwhile, Selling, General and Administrative (SG&A) expenses have increased from $5.9m to $7.0m over the same period. This is partly due to the impact of the Immco acquisition which was made during Q3 last year plus additional sales and marketing costs associated with the national roll-out of our new test for Sjögren’s syndrome in addition to Meritas related sales and marketing expenses.
Operating profit has decreased from $4.8m to $4.6m for the quarter. However, if UK related closure costs and Meritas sales and marketing expenses are excluded, operating profit would have increased from $4.8m in Q3, 2013 to $5.0m this quarter.
Similar to Q2, 2014 financial income was broadly offset by financial expenses resulting in a negligible net expense for the quarter. This compares to net financial income of approximately $0.2m earned in Q3, 2013. This is due to lower funds being placed on deposit following the utilisation of funds for acquisitions and lower prevailing deposit interest rates.
Profit before tax was $4.6m compared to $5.0m in the equivalent period last year. The tax charge for Q3, 2014 was $0.3m which represents an effective tax rate of 6.0% compared to 10.2% in Q3, 2013.
Profit after tax for the period was $4.4m which, after excluding the impact of UK and Meritas costs, equates to approximately $4.8m – an increase of 7% compared to Q3, 2013. Earnings per ADR were 19 cents for the quarter.
The abovementioned comparative numbers are before the impact of the once-off charges and related tax credits recognised in Q3, 2013.
Earnings before interest, tax, depreciation, amortisation and share option expense for the quarter was $6.2m.
Other Recent Developments
Cardiac Update
Today Trinity Biotech is announcing that it is temporarily suspending enrolment into its Troponin clinical trials. The reason for this temporary suspension is that in the past number of days, the company became aware of increased scatter (higher CV’s) in whole blood data. Immediately, an investigation was initiated to determine the cause. The failure has now been positively identified as being attributable to a format change in a chemical raw material which is purchased from a third party supplier. This change caused instability in the product’s performance, which only became apparent over a period of time.
The offending version of the chemical was first introduced into manufacturing during the week of July 14, 2014. All clinical trial sites which have received batches of product manufactured since that date have been instructed to discontinue their use. Any clinical data generated using the impacted batches has now been identified and will be excluded from the clinical trial. Trial sites which did not receive the problem batches continue to recruit patients, although these sites will run out of product shortly.
Meanwhile, having identified the source of the problem, we have now manufactured a pilot batch of product using the original format of the chemical. This pilot batch demonstrates performance characteristics identical to product batches previously made and successfully used in our CE marking trials and in the independent USA study presented at AACC last July. The supplier has now committed to supplying new batches of the chemical in its original format. This material will be received in four weeks time, upon which, new batches of the Meritas Troponin product will be manufactured. The production cycle for the new batches will then take eight weeks to complete.
Enrolment to the trials will then recommence in mid-February, 2015. The clinical trials will be conducted at multiple US hospital sites during the months of February, March, April and May. Data compilation and cardiologist adjudication will be completed during the months of June and July and it is anticipated that a final submission will be made in August, 2015. We confidently believe that the product will receive FDA clearance thereafter.
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