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Biocartis H1 Revenues Drop 2 Percent

NEW YORK – Belgian oncology molecular diagnostics firm Biocartis reported on Thursday that its revenues for the first half of 2020 fell 2 percent year over year.

For the six months ended June 30, Biocartis' total revenues fell to €16.7 million ($19.8 million) from €17.1 million in 2019.

Product sales rose 14 percent year over year to €11.4 million from €10.0 million. Idylla cartridge sales rose 28 percent to €9.6 million from €7.5 million. Within product sales, commercial revenues rose 9 percent to €10.5 million from €9.6 million a year earlier, while R&D revenues soared 117 percent to €930,000 from €429,000 in 2019.

Collaboration revenues, meanwhile, fell 30 percent to €4.7 million in H1 2020 from €6.8 million a year ago. Service revenues rose 51 percent to €530,000 from €351,000.

The company installed 101 Idylla instruments during the first half of 2020 — compared to 156 in H1 2019 — as a direct consequence of the COVID-19 pandemic, bringing its total installed base to 1,411. The firm sold 9,584 commercial cartridges in H1, representing a year-over-year increase of 12 percent.

On a conference call following the release of the earnings, Biocartis CEO Herman Verrelst noted that the firm expects cartridge volume growth with strong demand for the Idylla SARS-COV-2 Test, which the firm has submitted to the US Food and Drug Administration for potential Emergency Use Authorization.

Highlighting that the Idylla SARS-COV-2 test has been distributed to a select number of large US customers to assess its clinical performance, Verrelst said that the firm expects to further commercialize the assay in Europe with a CE mark following an EUA approval in the US. The firm also believes the test will offset a temporary slowdown in the Idylla core oncology business. 

In a statement, Verrelst said that the coronavirus pandemic "left its marks" but because of "a loyal customer base and a swift recovery towards the ends of Q2 2020, the net impact from COVID-19 was limited in Europe: growth of European cartridge volume remained robust and is now back in line with our pre-pandemic expectations."

In the US, the firm saw that the recovery in Q2 2020 was less pronounced than in Europe, as several states are grappling with a high number of COVID-19 cases. In addition, COVID-19 measures did not allow new customer access to labs, which prevented the growth of both Idylla installed base expansion and commercial cartridge volumes in the US and Europe.

"In oncology, we managed to stabilize our business and return to growth in Europe and the US mainly thanks to Idylla's fully automated testing, which has shown to be very useful in times where all lab resources are focused on priority pandemic testing," Verrelst added. "We now see complimentary opportunity in infectious diseases, and we have developed an Idylla SARS-CoV-2 Test, for which we expect strong demand in H2 2020, particularly in the US."

However, Biocartis saw that in the rest of the world (outside Europe, the US, Japan, and China), cartridge growth was the most impacted by the pandemic, with an unrealized COVD-19 peak particularly in Latin America. At the same time, the firm noted that it has received new market authorizations for the Idylla MSI Test in Colombia, Canada, Malaysia, and Singapore, and for the Idylla EGFR mutation test in Argentina.

Biocartis' loss for the first half of 2020 widened to €31.6 million, or €0.56 per share, from €29.7 million, or €0.53 in H1 2019.

The company's R&D spending in the first half of the year inched up about 2 percent to €20.3 million from €20.0 million in 2019. Meanwhile, its SG&A costs fell 5 percent to €14.4 from €15.2 million.

As of June 30, Biocartis had cash and cash equivalents of €149.7 million.

For full year 2020, Biocartis now expects its commercial cartridge volume to grow about 30 percent, which would represent a volume of 228,000 Idylla cartridges. The firm is also targeting an installed base growth in the range of 300 to 350 new instrument placements.

Partnering with Immunexpress, Biocartis plans to introduce a new, rapid test for sepsis in Europe in Q3, with a potential US Food and Drug Administration 510(k) clearance for the assay later this year.

However, Biocartis also noted that it has suspended its partnership with Exact Sciences to develop the Idylla IVD Oncotype Dx Breast Recurrence Score test project due to the pandemic.

Biocartis also announced this week that it has expanded a collaboration with UK-based Life Arc to develop infectious and immune-related disease assays on the Idylla platform. As part of the new agreement, LifeArc holds a non-exclusive license to use the Idylla platform to develop infectious and immune-related diseases to support patient stratification and treatment monitoring of patient with bacterial, fungal, viral, and other infections.

Biocartis expects to submit a 510(k) application the FDA for its Idylla MSI test for colorectal cancer in Q4 2020. However, the firm said that the premarket approval submission to the agency for its Idylla RAS test, has been delayed to H1 2021.

In lung cancer, Verrlest noted that Biocartis is experiencing "a minor delay" for its Idylla gene fusion assay, which it now expects to launch in early Q1 2021.