Company News: Curetis Announces Financial Results for the First Six Months of 2018
– Successful U.S. launch of Unyvero System and LRT Application Cartridge, with strong pipeline of sales opportunities
– Unyvero UTI Application Cartridge launched as CE-IVD product,
BCU and HPN Application Cartridges approved in Singapore
– Commercial reach expanded to Latin America and Northern Africa
Curetis N.V. (the “Company” and, together with its subsidiaries, “Curetis“), a developer of next-level molecular diagnostic solutions, today reported its financial results for the first six months ended June 30, 2018, and provided a business update for 2018 year-to-date and its outlook for the future.
Operational and Business Highlights 2018 Year-to-Date
Successful U.S. Launch of Unyvero System and LRT Cartridge
- Following the U.S.-FDA clearance in April 2018, Curetis launched the Unyvero System and the Unyvero LRT Application Cartridge for lower respiratory tract infections in the U.S. market at the ASM Microbe 2018 Congress in Atlanta, GA, USA on June 7, 2018.
- Since the launch, the U.S. commercial team has initially qualified more than 125 accounts as potential first buyers of Unyvero out of a total of about 1,000 hospitals considered by Curetis to be initial targets for Unyvero LRT. Of those qualified accounts, more than 50 have been thoroughly vetted and many are expected to be converted to commercial accounts over the next several quarters with approximately ten accounts constituting near-term opportunities currently at the contract negotiation stage. These initial ten accounts on average are expected to have LRT cartridge volumes of 700 to 800 annually once they become commercial customers. The estimated LRT cartridge volume potentials for the more than 50 accounts in advanced stages of qualification range from around 250 to over 1,600 p.a.
- In all EMEA direct markets, combined revenues from cartridges and instruments grew by more than 257% comparing the first half 2018 with the first half of 2017. Total revenue was up by 36% compared to the first half of 2017.
- In August 2018, Curetis expanded its geographic presence into the Northern African and Latin American markets signing exclusive distribution partnerships with Future Horizon Scientific for Egypt, with Quimica Valaner S.A. for Mexico and with Biko S.A. for Uruguay. Each of the three new distribution partners intends to commercialize all five Unyvero Application Cartridges that are currently CE-IVD-marked, namely HPN, ITI, BCU, IAI and UTI. These partners in total have committed to purchasing a minimum of 45 instrument systems at Curetis’ typical distributor transfer prices over the respective three-year contractual terms. In addition, they have committed to minimum purchases of several thousand Unyvero application cartridges over the terms of the agreements.
- With these additional distribution partnerships in place, Curetis to-date has 16 distribution partners covering 29 countries and believes to have a strong pipeline of further potential distribution partners covering additional markets that may lead to further near-term distribution agreements.
- Upon completion of a pharmaceutical partner’s phase III clinical trial, Curetis in Q1-2018 exercised an option to buy back multiple Unyvero Systems deployed in this clinical trial and has concurrently taken a stronger focus on higher priority accounts and conversion efficiency throughout H1-2018, which has led to a re-deployment of Unyvero Analyzers resulting in a temporary decrease in the installed base of Unyvero Analyzers to 162 Analyzers as of the end of the first half-year 2018, down by a net of 13 Analyzers compared to 175 Analyzers at year-end 2017. The Company expects to offset this decrease through future U.S. sales and the entry into additional distribution partnerships and has also identified a significant number of EMEA direct market opportunities for new Unyvero placements. Overall, the Company’s more selective placement of Unyvero Systems has resulted in improved working capital management in H1-2018.
Product Launches and Regulatory Approvals
- In April 2018, Curetis launched the CE-IVD marked Unyvero Urinary Tract Infection (UTI) Application Cartridge at ECCMID 2018. The UTI panel covers 103 diagnostic targets, including 88 pathogens and 15 resistance markers. Unyvero UTI primarily targets urinary tract infections in patients with complicated and severe UTIs.
- In April 2018, the Unyvero HPN and BCU Application Cartridges were approved by the Singapore Health Sciences Authority (HSA) and fully registered as Class C IVD medical devices with the Singapore Medical Device Register. The approval allows Curetis’ Singaporean distribution partner Acumen Research Laboratories Ltd. to initiate a more comprehensive roll-out in Singapore.
- In January 2018, Curetis and MGI (a BGI Group Company, Shenzhen, China) signed R&D collaboration and supply agreements focused on the Unyvero Lysator technology and instruments. Under the agreement, MGI can utilize Curetis’ Lysator technology to develop and commercialize a universal automated solution for next generation sequencing (NGS)-based molecular microbiology that can process any sample type commonly obtained from patients for microbiological analysis. With the feasibility phase completed and with all pre-defined performance criteria met, the collaboration has entered the development phase for a first integrated product. Results from the collaboration are expected to be presented at the ICG-13 Conference in Shenzhen, China, on October 24-28, 2018.
- Going forward, Curetis aims to expand existing collaborations and enter into further value-adding R&D and commercial partnerships around the Unyvero Platform with well-known diagnostic industry players.
- To expand the label claim of its recently U.S.-FDA cleared Unyvero LRT Application Cartridge for lower respiratory tract infections, Curetis plans to file for the clearance of bronchoalveolar lavage (BAL) as a second sample type. To this end, Curetis will have a pre-submission meeting with the U.S.-FDA at the end of September 2018 to discuss submission requirements and details for a Unyvero LRT Application Cartridge optimized for BAL samples and including a further diagnostic target as compared to the LRT Application Cartridge currently marketed in the U.S.
- To rapidly expand its Unyvero Application Cartridge portfolio in the U.S., Curetis has started an FDA trial for its next U.S. Product, the Unyvero IJI Application Cartridge for severe invasive joint infections, a variant of its Unyvero ITI Cartridge specifically designed and developed for the U.S. market. The collection of retrospective samples to augment the prospective arm of the trial is ongoing and Curetis aims to finalize the U.S. clinical trial for Unyvero IJI in 2019.
- Working towards a China market clearance by the Chinese Food and Drug Administration (CFDA), analytical testing of the Unyvero HPN Application Cartridge by Curetis’ partner in China, Beijing Clear Biotech (BCB), was initiated in Q4-2017 under the auspices of the Beijing Institute of Medical Device Testing and finalized in Q2-2018 with Unyvero HPN meeting all performance requirements for the entire panel. Analytical testing is a key requirement and precondition for BCB to initiate the prospective CFDA clinical trial later in 2018. Based on recently published new guidance by the Chinese State Council, Curetis together with BCB is currently exploring how the substantial clinical data available from the CE-IVD and U.S.-FDA studies could help accelerate the CFDA approval process.
- All other R&D programs and product development projects remain on track and in line with previous guidance. In particular, Curetis has advanced the development of its new analyzer module, Unyvero A30 RQ, and expects CE-IVD-marking of the instrument as well as a first A30 RQ Application Cartridge in late 2019.
- Curetis’ subsidiary Ares Genetics received a funding commitment for its project “The Digital Microbe” with a total project volume of EUR 1.6 million by the Austrian Research Promotion Agency (FFG).
- Further, Ares Genetics has been selected as a winner of the “GoSiliconValley” competition of the Austrian Economic Chambers (WKO). The award includes an incubator stay in Silicon Valley, CA, USA, which is aimed at facilitating U.S. market entry and access to U.S. venture and growth capital. In addition, Ares Genetics won the PerMediCon Award 2018 as runner-up.
- In July 2018, Ares Genetics launched the ARES & CO (Antibiotic REsistance Solutions by COoperative R&D) pharma partnering program. The program is supported and largely funded by the Vienna Business Agency and aims to establish an alliance for antibiotic stewardship with pharmaceutical companies and contract research organizations. The goal of the program is to counteract antibiotic resistance and to foster antibiotic stewardship by applying advanced data-driven solutions to antimicrobial drug development and life cycle management of existing antimicrobial drugs.
- All R&D Programs related to the further development, expansion and antibiotic resistance marker mining of ARESdb and the further development of the ARES Technology Platform utilizing Artificial Intelligence approaches are on track.
- Going forward, ARES aims to expand existing and enter into further value-adding R&D and commercial partnerships with well-known industry players around ARESdb and the ARES Technology Platform.
Scientific Advisory Board
- In April 2018, Curetis established a dedicated U.S. Scientific Advisory Board (SAB), expanding its scientific network and clinical expertise to support U.S. adoption of the recently FDA-cleared Unyvero System and LRT Cartridge. Five renowned U.S. infectious disease experts have been appointed to the SAB. The newly formed U.S. Scientific Advisory Board complements the Curetis Medical Advisory Board, which has been renamed the EU Scientific Advisory Board.
Annual General Meeting (AGM) and Supervisory Board
- All items on the agenda of the AGM held in Amsterdam on June 21, 2018, were approved by shareholders. Oliver Schacht, Ph.D. and Dr. Achim Plum have been re-appointed as Managing Directors. Furthermore, Dr. Rudy Dekeyser and Dr. Werner Schaefer have been re-elected to the Supervisory Board. Further, the shareholders approved three authorized capital to increase the Company’s share capital (two authorizations of up to 10% and one of up to 50%) providing the management with strategic flexibility in further commercially growing the Company.
- Holger Reithinger, General Partner at venture capital company Forbion Capital Partners, resigned from Curetis’ Supervisory Board effective April 30, 2018. After Dr. Reithinger’s resignation, the Supervisory Board now consists of six members.
Financial Highlights H1-2018, Financing
- Revenues: EUR 807k (growing by about 36% compared to EUR 595k in the first half-year 2017). EMEA direct sales have grown 257% year over year.
- Expenses: EUR 12,443k total cost of sales, distribution costs, administrative expenses and research & development expenses (vs. EUR 9,907k in the first half-year 2017). The increase is in line with the operational and organizational growth and driven by higher distribution costs, higher research & development expenses as well as G&A costs.
- Operating loss: EUR -11,365k (vs. EUR -9,262k in the first half-year 2017).
- Net loss of the period: EUR -11,561k (vs. EUR -9,662k in the half-year 2017).
- Cash and cash equivalents: EUR 11,646k as of June 30, 2018 (vs. EUR 16,311k as of December 31, 2017).
- Net cash burn in the first half-year 2018 was EUR -4,912k. In April 2018, Curetis raised EUR 4.1 million in a private equity placement and issued 854,166 new shares and secured access to an additional USD 10 million equity facility offered by Global Corporate Finance (GCF) in New York allowing the Company solely at its request to raise additional capital over a period of up to 36 months subject to certain pre-agreed floor pricing. Cash outflow from operations and investments totaled EUR 11,692k in H1-2018.
- Curetis in H1-2018 has continued to assess all tactical and strategic financing options in the debt and equity capital markets globally and aims to raise additional growth capital as either equity or debt in 2018 to secure appropriate funding and cash for its continued operations for at least the next 12 months and to ensure it has the financial resources to continue as a going concern.
Going forward, Curetis expects to:
- Convert U.S. and EMEA pipeline of commercial opportunities for Unyvero into near-term deal closures and revenue contribution.
- Expand its global Unyvero distribution network and commercial reach through further partnerships with suitably positioned distributors.
- Continue to work with BCB to finalize the CFDA study and regulatory submission for Unyvero HPN to gain market access in China.
- Execute on and expand the partnership with MGI / BGI to develop and commercialize solutions for NGS-based Molecular Microbiology.
- Execute on all R&D programs including a Unyvero LRT Cartridge label claim extension for BAL, IJI clinical studies in the U.S., Unyvero A30 RQ development expected for CE-IVD launch in late 2019, and further development of ARESdb and the ARES Technology Platform.
- Enter into further value-adding R&D and commercial partnerships with well-known industry players around ARESdb and the ARES Technology Platform as well as the Unyvero Platform.
- Continue to assess all tactical and strategic financing options in the debt and equity capital markets globally to raise additional growth capital as either equity or debt in 2018 in order to fund continued operations for at least the next 12 months.
“We achieved a key corporate milestone in the first half of 2018 with the FDA clearance and commercial launch of the Unyvero System and Unyvero LRT Application Cartridge in the U.S.,” said Oliver Schacht, Chief Executive Officer of Curetis. “As the largest molecular diagnostics market in the world, the U.S. is crucial not only for Curetis, but for all diagnostics companies, and our U.S. launch has been a major value inflection point for Curetis. To broaden our U.S. product offering, we are currently conducting an FDA trial for our second U.S. product, Unyvero IJI for invasive joint infections, and are seeking U.S. FDA input on the most efficient regulatory approach to extend the label claim for the Unyvero LRT Application Cartridge to BAL samples. In addition, we have significantly broadened our global commercial reach by closing exclusive distribution partnerships for Mexico, Uruguay and Egypt, and have significantly advanced in our efforts to gain market access in China.”
Conference Call and Webcast
Curetis will host a public conference call and webcast on August 14, 2018, at 12:30 pm CEST / 06:30 am EDT to present the H1-2018 financial results, highlight the most important events and provide an outlook for the second half of 2018 and beyond.
The conference call will be supplemented by a presentation, which can be accessed during the call at:
For participating in the earnings conference call, please access the presentation at https://webcasts.eqs.com/curetis20180814
To access the call, please dial the following numbers using the passcode 93120684#:
NL: +31 107137273
BE: +32 11500307
DE: +49 6922 222 9043
UK: +44 2030 092 452
US: +1 855 4027766
China: +86 4006815483
Hong Kong: +852 30773565
Further country-specific dial-in numbers can be found at: http://events.arkadin.com/ev/docs/International Access Numbers_ UKFELBRI1_SU7.pdf
The full H1-2018 Report will be available as of 14 August 2018, at: http://www.curetis.com/en/investors/financial-reports-and-conferences/financial-reports.html
The live webcast and a replay will be available at: https://webcasts.eqs.com/curetis20180814