25
September 2024
GENinCode
Plc
("GENinCode", the "Company"
or the "Group")
Interim report
First US commercial sales
for LIPID inCode® and CARDIO
inCode® tests
Oxford, UK. GENinCode Plc (AIM:
GENI), the predictive genetics company focused on the prevention of
cardiovascular disease ("CVD") and risk of ovarian cancer announces
its unaudited interim results for the six months ended 30 June
2024.
Financial and
Operational highlights
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First half revenues increased 46% to £1.39m (30
June 2023: £0.95m), driven by growth across the UK, EU and US
businesses
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First US commercial sales for LIPID
inCode® test for the diagnosis of familial
hypercholesterolemia ("FH") and CARDIO inCode® test for
the genetic risk of coronary artery disease ("CAD")
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FDA 'De
Novo' completion of substantive review. Ongoing FDA
discussions regarding additional information
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American
Journal of Preventive Cardiology publication on
CARDIO inCode-Score® [https://www.sciencedirect.com/science/article/pii/S2666667724000291]
and ESC Preventive Cardiology and ESC Annual Congress
presentations
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Commercial programmes with US health
institutions including Atrium, IU Health and UT South
Western
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US Notice of Allowance (granted patent status)
for CARDIO inCode-Score®
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NHS expansion of LIPID inCode® for
FH diagnosis in North of England
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Growth of LIPID inCode® in
University Clinic Dresden, Germany for primary care diagnosis of
FH
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Growth of LIPID inCode® and THROMBO
inCode® in Spain and Italy for diagnosis of
FH
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CARDIO inCode® pilot progressing in
Extremadura region, Spain
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NICE guideline recommendation for
the Risk of Ovarian Cancer Algorithm (ROCA) test
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Outlook for
second half of 2024
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Significant increase in year-on-year
revenue growth and reduced losses
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Commercial expansion of LIPID
inCode® and CARDIO inCode® across the US market
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Progression of De Novo FDA regulatory submission for
the approval of the CARDIO inCode® medical device to accelerate US
sales
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Expansion of the NHS programme for
LIPID inCode®, introduction of CARDIO inCode® and collaborative
developments with pharmaceutical 'precision medicine'
partners
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Expansion of the MVZ Uniklinikum,
Germany collaborative programme
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Expansion of CARDIO
inCode® commercial pilots into Catalonia and introduction to other
regions
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Commence commercial programmes in
the NHS following NICE guideline recommendation for the ROCA
test
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Continued strengthening of the
commercial, marketing and selling teams to support revenue
growth
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Financial
highlights
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First half revenues increased 46% to
£1.39m (30 June 2023: £0.95m)
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Successful completion of secondary placing of
£3.7m (Gross £4.0m) to support scale up and
expansion
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Reduced Adjusted EBITDA loss of
£2.16m (30 June 2023: loss of £3.37m)
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Reflecting Increased revenues and
reduced operating costs
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Cash reserves of £2.92m at 30 June
2024 (31 Dec 2023: £2.48m)
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Matthew Walls, Chief Executive Officer of GENinCode Plc
said: "We have had a very positive first half of 2024 with a solid
increase in revenues of 46% across the Group, including our first
commercial sales in the US. We continue to expand on
our relationships with the NHS and across Europe, whilst increasing
our presence in the US. The NICE recommendation for the ROCA test
was a key milestone and provides a significant cost-saving benefit
for the NHS as well as giving patients with a high
risk of familial ovarian cancer more options than were previously
available to them.
"We look forward to a successful remainder of 2024 with
further expansion of our products and continued collaborations with
key partners. On behalf of the Board, I would like to
thank our valued shareholders for their support, and we look
forward to sharing further positive updates."
Investor
presentation
Matthew Walls, Chief Executive Officer, and
Paul Foulger, Chief Financial Officer, will provide a live
presentation relating to the results via the Investor Meet Company
platform on Wednesday, 25 September at 4pm BST.
The presentation is open to all existing and
potential shareholders. Questions can be submitted pre-event via
the Investor Meet Company dashboard until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company
for free and add to meet GENinCode here.
Investors who already follow GENinCode on the Investor
Meet Company platform will automatically be invited.
For more
information visit www.genincode.com
Enquiries:
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GENinCode Plc
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www.genincode.com or via Walbrook PR
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Matthew Walls, CEO
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Paul Foulger, CFO
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Cavendish Capital Markets Limited
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Tel: +44
(0)20 7397 8900
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Giles Balleny / Dan Hodkinson
(Corporate Finance)
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Nigel Birks (Life Sciences
Specialist Sales)
Ondraya Swanson (Corporate
Broking)
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Dale Bellis / Michael Johnson
(Sales)
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Walbrook PR Limited
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Anna Dunphy / Louis Ashe-Jepson /
Phillip Marriage
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Tel: 020
7933 8780 or genincode@walbrookpr.com
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About
GENinCode:
GENinCode Plc is a UK based company
specialising in genetic risk assessment and prevention of
cardiovascular disease. Cardiovascular disease is the leading cause
of death and disability worldwide.
GENinCode operates business units in
the UK, Europe through GENinCode S.L.U, and in the United States
through GENinCode U.S. Inc.
GENinCode predictive technology
provides patients and physicians with globally leading preventive
care and treatment strategies. GENinCode CE marked
invitro-diagnostic molecular tests combine clinical algorithms and
bioinformatics to provide advanced patient risk assessment to
predict and prevent cardiovascular disease.
Chief Executive's Statement
On behalf of the Board, I am pleased to present
the interim report for the six-month period ended 30 June 2024 for
GENinCode Plc. This statement provides a summary of progress over
the first half of the 2024 financial year and the outlook over the
next reporting period.
Introduction
GENinCode is engaged in the
prevention of cardiovascular disease (CVD) and ovarian cancer.
GENinCode polygenic (multiple gene) tests and technology are novel
and proprietary and focused on CVD which accounts for around 18
million deaths annually, representing approximately 31 per cent. of
all deaths worldwide. The estimated global cost of CVD is forecast
to reach approximately $1.04 trillion by 2030.
The Company's portfolio comprises
advanced genomic precision tests using molecular genotyping,
sequencing, and AI bioinformatics to risk assess patients' DNA from
a blood or saliva sample. DNA is analysed for the presence of
genetic variants to determine a patient's Polygenic Risk Score
(PRS) and assess their cardiovascular 'lifetime' genetic
risk.
Business review
On 10 January 2024, the Company
successfully completed a net fundraising of £3.74m. Following the
fundraise the first half saw revenues
increase 46% over the prior period to £1.39m (H1 2023: £0.95m).
Sales growth, net of increased operating costs, gave rise to a
reduced Adjusted EBITDA loss of (£2.16m) (H1 2023: (£3.37m)),
reflecting the strengthening revenues, improving margins and
reduced operating costs across the Group.
The first half included engagement
of our first commercial testing in US healthcare institutions
following the introduction of last year's Early Access Program. We
now have 20 clinics and hospital institutions who are onboarding
and are beginning to purchase tests for the diagnosis of familial
(inherited) hypercholesterolemia and risk assessment of coronary
heart disease. Over the period we completed commercial
agreements with Wake Forest University Baptist Medical
Center/Atrium Health, University of California Irvine (UCI),
Indiana University Health (IU Health) and University of Texas South
Western, (UT South Western). We expect to see
continued strengthening in our US revenues over the second half as
we roll-out our commercial programme and educate physicians on our
preventive cardiology
tests.
The US Food and Drug Administration (FDA)
De-Novo submission for
CARDIO inCode-Score was filed in November 2023 and the FDA has
recently completed its substantive review. Whilst the FDA
submission and review process has been protracted and longer than
expected, discussions remain progressive and constructive. The FDA
have requested additional information as part of their review of
the CARDIO inCode-Score medical device and we anticipate this
should finalise the review process. We expect to provide this
information over the coming months and give a further update
towards the end of this year. Approval of CARDIO inCode-Score will
extend our US commercial offering enabling laboratory testing
across the US.
With the exception of New York
State, we have state licensure for testing in all US states. We
expect to receive New York State licensure over the coming
months.
In March 2024, Kaiser Permanente
published a milestone publication in the American Journal of Preventive
Cardiology
https://www.sciencedirect.com/science/article/pii/S2666667724000291
on the clinical utility of CARDIO inCode-Score for
the prevention of coronary heart disease. This important
publication based on real world data (US patient medical records)
provides growing clinical evidence for the inclusion of polygenic
'lifetime' risk assessment for prevention of coronary heart disease
in the US ACC/AHA Preventive Care guidelines. The March 2024
publication has been followed by further presentations at the
European Society of Cardiology (ESC) Preventive Cardiology
conference in Athens and the recent ESC Annual Congress in London.
We expect to see growing numbers of publications and continued
favourable revision of the ACC/AHA guidelines for the use of
polygenic testing as we educate and advance testing in the
US market.
In the UK, we are progressing our NHS commercial collaboration to improve diagnosis and
turnaround time for testing of Familial Hypercholesterolemia (FH)
at reduced cost to the NHS. The LIPID inCode® implementation in the
North-East and North-Cumbria (Newcastle) has now extended to
include Leeds and Sheffield. We are in discussions to cross-apply
this model to the North-West Coast (including Liverpool and
Manchester) and other NHS England trusts to reduce the FH test
backlog and advance risk assessment for the prevention of coronary
heart disease. We are also expanding our commercial discussions
with pharmaceutical companies as part of the NHS program to
identify patients at the highest risk of cardiovascular disease and
align with advances in therapeutic treatment (precision
medicine).
There is continuing and growing
demand for LIPID inCode® in Spain and Italy and for the
introduction of THROMBO inCode®
in public hospital pathology
labs.
We are well progressed with the
first CARDIO inCode-Score®
pilot implementation study in the Spanish region of Extremadura
with preliminary results under review with Extremadura Health. The
Extremadura region has a population of ~ 1 million, with an
estimated 50,000 individuals at risk of a cardiovascular event,
e.g. heart attack. CARDIO inCode-Score® is
expected to change clinical practice by identifying those
individuals at high genetic risk and improve preventative
treatment.
Negotiations for the introduction of CARDIO
inCode-Score® are also underway in other
Spanish regions including Catalonia, Basque region, Madrid and
Andalucia. The Catalonia region has a population of ~ 7.7 million,
with an estimated 476,000 individuals at risk of a cardiovascular
event.
Our collaboration with University
Clinic Dresden for LIPID inCode® continues to build with expansion
across the Saxony region. The University Clinic
lipid centre treats over 6,000 patients with lipid disorders and
constitutes the largest academic lipid apheresis centre globally.
In Germany, 60% of the population suffer from high levels of
cholesterol and it is estimated that over a quarter of a million of
these cases relate to FH.
In March 2024, the Risk of Ovarian
Cancer Algorithm ("ROCA") test received NICE recommendation as the
preferred test for ovarian cancer surveillance in individuals at
high risk of ovarian cancer who do not undertake risk reducing
surgery. The new NICE guidance is focused on identifying and
managing familial and genetic risk of ovarian cancer.
Publication of NICE guidance is a
major breakthrough for the ROCA test. After many years of academic
and corporate investment, the ROCA test has been comprehensively
assessed by NICE as the surveillance technology of choice where
patients at high risk of familial ovarian cancer decide to defer
preventive surgery. Surveillance using the ROCA test will help
individuals feel more supported while they start or grow their
families or until they reach menopause, whilst also
providing a cost-saving benefit for the NHS. We are now assisting
the NHS to establish appropriate call and recall systems that will
enable the ROCA test to be offered by the NHS to all eligible
individuals.
Financial review
Revenue for the period was £1.39m (H1 2023:
£0.95m), a year-on-year increase of 46%, with a reduced Adjusted
EBITDA loss of (£2.16m) (H1 2023: (£3.37m)), the decreased loss
resulting from improving revenues and profit margins coupled with
lower operational costs across the Group.
Revenue
Spain continues to be the largest
region for sales and enjoyed a year-on-year growth of 21%. Sales in
the UK increased to £328k (H1 2023: £131k), reflecting the full
six-month revenue benefit of LIPID inCode® sales to the NHS
effective from May 2023.
The Group enjoyed its first revenues
in the US and recognised £71k of LIPID inCode® sales in the period.
LIPID inCode® continues to be the leading revenue generating
product in the Company, representing over 60% of the sales, boosted
by the significant increase in UK sales to the NHS as highlighted
above.
Gross profit
Gross profit was £730k (H1 2023:
£467k). The gross profit margin increased to 52.6% (H1 2023:
49.2%). Geographically, the gross profit margins generated from
Spain remained the same at the sub 50% level, however the Group
benefitted from 55%+ margins from the UK sales and 70%+ margins
from the US sales.
Administrative expenses
In H1 2024, administrative expenses
decreased to £2.89m
(H1 2023: £3.84m). The decrease was due to a concerted effort
to reduce and contain expenditure across a number of areas, notably
salaries, consultancy fees, marketing, and development costs. Of
particular note are the fees payable to our US commercialisation
partner, Eversana which reduced by £265k in the
period.
Operating loss and adjusted earnings before interest tax and depreciation
The Group generated an operating
loss of £2.48m (H1 2023: (£3.59m)). We consider a more meaningful
measure of underlying performance is reflected in the Adjusted
EBITDA, which for H1 2024 showed a loss of £2.16m (H1 2023:
(£3.37m)). The Adjusted EBITDA excludes the effects of share-based
payments of £143k (H1 2023: £51k), and depreciation and
amortisation costs of £172k (H1 2023: £174k).
On 26 April 2024, the Company
announced that it had approved and granted (on 14 April 2024) new
share options over an aggregate of 19,380,630 new ordinary shares
at an exercise price of 5 pence and 10 pence each in the Company to
certain directors and employees. Additionally, on 8 April 2024,
6,984,500 of the options previously granted were surrendered for
nil consideration. Following the grant of the new options and the
options surrender, there are options over a total of 19,580,630
ordinary shares in the Company. This is reflected in the increase
in share-based payments in the period.
Tax
The first half included a tax credit
of (£8k) (H1 2023: credit of (£6k)).
Non-current assets
The Company has a capitalised
property plant and equipment total, net of depreciation
of £305k (31
December 2023: £425k), reflecting investment in equipment required to
commission the UK laboratory in the latter part of 2022.
Additionally, the Company has a capitalised intangible assets
total, net of amortisation of £128k (31 December 2023: £138k).
This related to the application of new
patents in various geographical regions.
The 'right-of-use' asset
representing the impact of leasing the new lab in Hammersmith,
London was £242k at 30 June 2024 (31 December 2023: £282k). IFRS16
introduces a single lessee accounting model and requires a lessee
to recognise assets and liabilities for all leases with a term of
more than 12 months unless the underlying asset is of low value. A
lessee is required to recognise a right-of-use asset representing
its right to use the underlying leased asset and a lease liability
representing its obligation to make lease payments.
Goodwill was £149k at 30 June 2024
(31 December 2023: £149k), representing the impact of acquiring the
entire issued share capital of Abcodia Limited in the second half
of 2022.
Current Assets
The Group holds very little finished
goods and work in progress, largely because approximately 60% of
its revenues originate from service-based testing with test kits
'made to order' and then delivered directly from the kit
manufacturer/supplier to the customer.
Trade and Other Receivables
increased from £582k at 31 December 2023 to £805k at 30 June 2024;
reflecting the higher revenues across the Group in the
period.
Non-Current Liabilities
Trade and Other Payables remained at
£0k at 30 June 2024 (31 December 2023: £0k). In the previous period
at 30 June 2023, this was £940k mainly representing payments to our
US commercialisation partner.
In September 2022, the Company
acquired Abcodia Limited and its algorithmic technology, the Risk
Assessment of Ovarian Cancer Algorithm (ROCA) test. A contingent
consideration of £191k has been recorded (31 December 2023: £178k),
representing the present value of the likely
consideration.
Lease liability was £180k at 30 June
2024 (31 December 2023: £221k), relating to IFRS 16 requiring Right
of Use lease liability being recognised.
Current Liabilities
Trade and Other Payables decreased
from £2.40m at 31 December 2023 to £1.38m at 30 June 2024. This
decrease was due to, a) In December 2023, £616k of funds was
collected from investors in advance of the closure of the fundraise
which completed on 10th January 2024; this inflated the
'Other payables' line on the balance sheet at 31 December 2023, and
b) In the first half of 2024, over £400k of deferred liabilities
was paid to our US commercial partner, reducing the balance to just
£30k at 30 June 2024.
Lease liability was £81k at 30 June
2024 (31 December 2023: £78k), relating to IFRS 16 requiring Right
of Use lease liability being recognised.
Cash flow and working capital
Operating cash outflow decreased from
(£4.82m) in H1 2023 to (£3.39m) in H1 2024. The decrease is largely
explained by the drop-through of decreased operating losses,
coupled with the change in net working capital, mainly as a result
of decreased payments during the period.
Net cash flows used in investing
activities decreased from (£38k) in H1 2023 to £60k in H1 2024,
reflecting decreased expenditure on laboratory equipment in the UK
and US, offset by bank interest income.
Net cash flows from financing
activities was £3.70m in the period (H1 2023: (£35k)). On 10
January 2024, the Company allotted a total of 81,147,560 new
ordinary shares in connection with a fundraising of 5 pence per
share; a net amount of £3.74m was raised (gross:
£4.06m).
As a result of the above activities
there was an overall increase in cash and cash equivalents of £431k
from £2.48m at 31 December 2023 to £2.92m at 30 June
2024.
Capital structure
Following the issue of 81,147,560
new ordinary shares on 10 January 2024, the Group had 176,964,426
shares in issue at 30 June 2024.
Outlook for second half of 2024
Over the second half of 2024, the Company
expects to strengthen its revenues across its UK, EU and US
business primarily through expansion of LIPID inCode®,
CARDIO inCode-Score® and THROMBO
inCode®.
With US commercial revenues now
beginning to complement UK and EU revenues, we are focused on
educating physicians on the clinical utility of our tests and
international revenue growth. Driven by increasing market awareness
of genetic 'CVD lifetime risk' and healthcare systems focus on
'disease prevention' we expect to see increasing demand for our
tests. We will maintain tight control over operational costs to
target a breakeven position over the medium term and de-risk our
business model whilst delivering sales growth across our core
markets.
Over the remainder of this financial year, the
Company expects to complete the following key
deliverables:
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Significant increase in year-on-year
revenue growth and reduced losses
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Commercial expansion of LIPID
inCode® and CARDIO inCode® in the US
market
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Progression of the De Novo FDA regulatory submission for
the approval of the CARDIO inCode® medical device to
accelerate US sales
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Expansion of the NHS programme for
LIPID inCode®, introduction of CARDIO inCode®
and collaborative development with pharmaceutical 'precision
medicine' partners
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Expansion of the MVZ Uniklinikum,
Germany collaborative programme
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Commercial expansion of LIPID
inCode® and THROMBO inCode® in Spanish public
hospitals
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Expansion of CARDIO
inCode® commercial pilots in Catalonia and other Spanish regions
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Following NICE guideline approval
for the ROCA test, commencement of first commercial programs in the
NHS and EU
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Continued strengthening of the
commercial, marketing and selling teams to support revenue
growth
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Commensurate with this growth we
will build investment in our manpower resources and expertise as
well as explore acquisition opportunities to take advantage of the
opportunities open to the Company.
We continue to build our business
and believe our tests are industry leading and will deliver
significant investor returns. We would like to thank our investors,
Board, management and employees for their strength and
determination in helping support and drive our business
growth.
We look forward to updating our
investors on our progress.
Matthew Walls
Chief Executive Officer
25 September 2024