MDxHealth fourth quarter total revenues increase 48% to €0.9M

MDxHealth SA (NYSE Euronext: MDXH), a leading molecular diagnostic company that develops and commercializes epigenetic tests to support cancer treatment, today announced results for Q4 and full year 2011.

Highlights

MDxHealth made substantial progress in 2011 through implementing its new business strategy.

In Q4 2011, the company established a CLIA (Clinical Laboratory Improvement Amendments) registered laboratory for the commercialization of its diagnostic assays.

The company's California facility received its clinical laboratory license and CLIA certificate of registration in less than 5 months after the leasing of the lab facility.

In 2011, R&D activities and resources were directed to clinical validation of the ConfirmMDx™ test for Prostate Cancer test, accelerated development of additional cancer tests in the company's pipeline and development of pharmaco diagnostic tests.

MDxHealth was awarded the Frost & Sullivan European award for technology leadership in oncology molecular diagnostics for 2011.

"The growth in revenues from our pharmaco diagnostic business in Q4 2011 of nearly 50% versus Q4 2010 represents continued validation and acceptance of our epigenetic technology and tests within the pharmaceutical industry," said Dr. Jan Groen, Chief Executive Officer of MDxHealth. "Additionally, we made important strides in the development and validation of our ConfirmMDx for Prostate Cancer test and significantly advanced preparations for product launch in the coming months."

Key Figures (EUR thousands, except number of shares and per share data):

Revenues

Total revenues for Q4 2011 increased by 48% to €0.9 million from €0.6 million during the same period in 2010. The revenue increase was attributable to the company's pharmaco-diagnostic business. Total revenues for the full year ended December 31, 2011, increased by 6% to €2.7 million, compared to total revenues of €2.5 million for the prior year.

MDxHealth reported a net loss of €1.3 million, or €0.07 a share, for Q4 2011 compared to a net loss of €1.8 million, or €0.13 a share, in the same period of 2010. For Q4 2011, net loss was reduced by 29% (a reduction of 50% on an earnings per share basis) compared to the same period in 2010. MDxHealth's net loss for the year ended December 31, 2011, was €6.9 million, or €0.37 a share, compared to €8.3 million, or €0.63 a share, for the prior year. The net loss was reduced in 2011 due primarily to a reduction of operating expenses.

Operating Expenses

Operating expenses for Q4 2011 were €2.2 million, essentially the same as in Q4 2010. Operating expenses for the year ended December 31, 2011 decreased by 10% to €9.5 million from €10.5 million for the prior year. Operating expenses for Q4 2011 were higher than in each of the preceding three quarters of 2011 primarily due to costs related to the establishment of the company's CLIA laboratory in Irvine, California, and the multicenter clinical trials to validate the ConfirmMDx™ for Prostate Cancer. For the full year, operating expenses decreased mainly as a result of the restructuring of the company implemented in 2010.

Cash Position

MDxHealth ended the year with cash and cash equivalents of €11.1 million, compared to €10.6 million on December 31, 2010. The company raised net proceeds of €7.3 million in a private placement in April 2011. Excluding the proceeds of the 2011 private placement, MDxHealth had a net cash burn of €6.8 million in 2011 compared to a net cash burn of €7.4 million in 2010. This 9% reduction in the cash consumed by the company was the result of cost cuts initiated in 2010 and realized in 2011.

Outlook

The company is building the sales and marketing infrastructure necessary to support the expected launch of its ConfirmMDx for Prostate Cancer test in the US during H1 2012. The company will continue to focus also on the development and validation of its PredictMDx™ for Brain Cancer (Glioblastoma) test directed at the MGMT epigenetic biomarker, which is being used in Merck Serono's Phase III clinical trial for their drug candidate cilengitide. The test may help identify glioblastoma (brain) cancer patients who could benefit from cilengitide treatment.

Revenues in 2012 are expected to grow over those of 2011, with the majority of revenues coming from the PharmacoMDx business and the ConfirmMDx for Prostate Cancer test. However, with the expected product launch in H1, prostate test revenues are not expected to have a material impact on the company's results until the latter part of 2012. Operating expenses are expected to increase primarily from the expansion of the sales and marketing efforts in the U.S. Accordingly, 2012 net loss and cash burn is expected to increase compared to 2011, while R&D expenses are expected to be stable.

Other Announcements

MDxHealth has appointed Mr. Francis Ota as Vice President of Finance, who will be based at the company's U.S. headquarters in Irvine, CA. Mr. Ota brings valuable industry experience to MDxHealth, having served as a senior finance executive with a number of leading healthcare companies in the U.S. He recently served as CFO of Captek Holdings, a specialty nutraceuticals company. Prior to that, he was senior director of finance at Focus Diagnostics, Inc. a CLIA service laboratory acquired by Quest Diagnostics in 2006. Mr. Ota also held senior finance roles with Medtronic and Hewlett Packard. Mr. Ota earned a Master in Business Administration (MBA) from the Haas School of Business, University of California, Berkeley, and a Bachelor of Science in Finance and & International Business from Leeds School of Business, University of Colorado, Boulder.

"Francis brings to MDxHealth more than 25 years of finance and operating experience within the healthcare industry and with his knowledge of reimbursement and systems to support our sales efforts, he will play a key role in our commercialization efforts," said MDxHealth CEO Dr. Jan Groen. "The company is now predominantly focused on the commercialization of our first epigenetic test for prostate cancer in the U.S. Implementation of a corporate financial structure optimized to support the highly complex healthcare payment systems within the U.S. healthcare industry is extremely important."

Mr. Philip Devine, co-founder and Chief Financial Officer (CFO) of MDxHealth since 2003, will cease his position as CFO of the company as of March 31, 2012 in order to pursue other interests. His responsibilities will be assumed by Mr. Ota with the support of Jean-Michaël Scelso, Director of Finance, who has been with MDxHealth since 2006 and is based at the company's Belgian headquarters in Liège. Mr. Devine will continue to be involved with MDxHealth as an advisor after he steps down as CFO. Dr. Groen said: "we are extremely grateful for the many contributions, in both financial and operational aspects of our business, that Philip has made to MDxHealth since its formation in 2003, and we thank Philip for his outstanding service to the company and the Board."