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MDxHealth H1 Revenues Up 87 Percent

NEW YORK (GenomeWeb) – MDxHealth this morning reported that its revenues for the first half of 2017 have risen 87 percent, driven mostly by a one-time buy-out of patents related to colorectal cancer by Exact Sciences.

For the six months ended June 30, the European molecular diagnostics company reported total revenues of $24.3 million, up from $12.9 million in the year-ago period. Product revenues rose 10 percent to $12.0 million from $10.9 million in H1 2016, while Exact Sciences paid total gross proceeds of $15.0 million for the company's colorectal cancer patents, including royalties accrued since July 2016.

The companies signed a technology license and royalty agreement in July 2010, and Exact was required to pay MDxHealth milestone-based royalties on sales of products or services covered by the licensed intellectual property. In April, the companies agreed to terminate the license agreement in favor of a royalty buy-out agreement and a patent purchase agreement.

The ConfirmMDx prostate cancer diagnostic test accounted for 93 percent of the product revenues in the first half of 2017 compared to 98 percent in the first half of 2016. MDxHealth reported that nearly 15,000 patients were tested worldwide across all of its products, with SelectMDx for Prostate Cancer representing approximately 35 percent of the total. "Our test volumes grew 44 percent in the first half of 2017 compared to the same period in 2016, utilizing the same number of active reps in the field," MDxHealth US Chief Operating Officer Christopher Thibodeau said in a statement.

Further, the company noted it was awarded US government contracts for ConfirmMDx, highlighted the global launch of SelectMDx and the US commercial launch of the AssureMDx for Bladder Cancer liquid biopsy test, and touted 21 new payor contracts in the US for both ConfirmMDx and SelectMDx.

"With 21 new payor contracts, ancillary services contracts covering eight Veterans Affairs hospitals and a healthcare services agreement with Kaiser Southern California Permanente Medical Group year to date, we continue to establish broader coverage for our prostate cancer tests," MDxHealth CEO Jan Groen said in the statement. "Driving payor contracts will drive test orders, because urologists are more willing to order a test that is covered by the patient's insurance."

Groen added that SelectMDx is gaining momentum in Europe, and has seen a volume increase of nearly 319 percent to 1,200 tests from the first half of 2016.

The company reported first-half 2017 net income of $538,000, or $.01 per share, compared to a net loss of $7.6 million, or $.17 per share, in H1 2016.

Total operating expenses for the first six months of the year rose 17 percent to $18.7 million from $16.0 million year over year. The increase was partly due to accelerated expansion of the firm's sales force in the US and the impact of investments made during 2016 such as the build-out of the European commercial and laboratory operations. On a conference call with analysts, MDxHealth CFO Jean-Marc Roelandt said the company is expecting SG&A costs of about $40 million for the full year, with the increase being due to continuing expansion of the company's sales force. R&D expenses are expected to stay stable at 20 percent of revenue, he added.

MDxHealth ended the half with cash and cash equivalents of $30.5 million.

For full-year 2017, the company is maintaining its product and service revenue guidance of growth between 55 percent and 75 percent, excluding royalties and milestone payments. MDxHealth expects its recent sales force expansion to drive patient test volume in the second half, and is predicting that the increasing payor coverage and positive medical policy decisions should also drive revenue growth for both SelectMDx and ConfirmMDx.

The company has also submitted SelectMDx for inclusion in the guidelines of the National Comprehensive Cancer Network. It has completed several studies to bolster its case for inclusion, and has submitted the data to the review committee, Groen said on the analyst call. However, as there are only a few slots per year that are open for new inclusions in the guidelines, it remains to be seen whether SelectMDx will be included in 2017 or 2018, he added.