MagForce AG Publishes Financial Results for the First Half of 2016

MagForce AG (Frankfurt, Entry Standard, XETRA: MF6, ISIN: DE000A0HGQF5), a leading medical device company in the field of nanomedicine focused on oncology, published today its financial results for the first half of 2016, ending on June 30, 2016, and operative highlights.
Operative Highlights:
Brain Cancer NanoTherm(TM) Therapy at MagForce AG
In Europe, MagForce AG is continuing to expand the commercialization
phase of its valuable NanoTherm(TM) therapy: The first phase was to
install NanoActivators(R) in Germany and assist the neurosurgeons and
radiologists as they became familiar with NanoTherm(TM) therapy and its
applicability. The second phase was to initiate the Company’s
commercialization efforts with the goal of increasing patient inquiries
to 100 per month. The combination of clinical success and marketing
efforts will result in the Company achieving the targeted patient
inquiry level. MagForce is currently half way there. In the third phase,
cross-border reimbursement processes have been optimized based on the
fact that a majority of the patients requesting treatment require the
implementation of the Cross-Border Directive of the European Union.
However, the medical procedure for treating glioblastoma generally
requires surgery and radiation resulting in the patient’s obligation to
fund the country differential costs for surgery and radiation in his
home country and the higher costs for these treatments in Germany, as
well as for the NanoTherm(TM) therapy.
During 2016, MagForce has streamlined the implementation of the cross-
border reimbursement process, however, due to the aggressiveness of
glioblastoma, there is a limited time interval to achieve treatment.
Toward that end, the Company will continue its efforts to increase the
medical awareness of the value of NanoTherm(TM) therapy to allow earlier
patient inquiries.
Phase four of the Commercialization Program will be to obtain domestic
reimbursement for NanoTherm(TM) therapy in Germany and selected
countries in the EU where MagForce has the CE Mark for the treatment of
brain tumors.
As mentioned three months ago, Management is actively exploring
financing options, such as third-party leases of NanoActivator(R)
equipment, or other non-equity financing options in order to further
accelerate MagForce’s expansion in Europe.
Prostate Cancer Therapy at MagForce USA, Inc.
In the USA, MagForce USA, Inc.’s has filed an Investigational Device
Exemption (IDE) with the USA Food and Drug Administration (FDA) for
NanoTherm(TM) therapy to treat Intermediate Risk Prostate Cancer in
2015. MagForce is still working with the FDA to update preclinical
studies, which were conducted approximately ten years ago, to current US
regulatory standards and continues making very good progress toward
adapting NanoTherm(TM) therapy as a focal treatment for prostate cancer.
NanoTherm(TM) therapy for the focal treatment of prostate cancer is
viewed as a very promising complement to current treatment approaches.
These preclinical studies are underway with interim results clearly
supporting the earlier European data.
The purpose of the proposed Focal Thermal Ablation Registration study
that will enroll up to 120 men is to demonstrate that NanoTherm(TM) can
ablate cancer lesions for patients who have Gleason Score 7 prostate
cancer and are under active surveillance. By ablating the lesions,
patients will be able to maintain active surveillance and avoid surgery
and other treatments with their well-known side effects.
“I am still confident we will achieve our original targets in terms of
market entry and commercialization of NanoTherm(TM) therapy in the USA
because we clearly have a “time safety factor” built in our business
plan, plus we have accelerated the ambulatory prostate NanoActivator(R)
chair development to ensure timely delivery of this device. In Europe,
our commercial treatment rate is still too slow but the medical results
are very gratifying. The experiences we made from our commercialization
efforts over the past 18 months pinpointed how to reach our
commercialization targets, and we are enforcing the respective
implementation. We are on the right path and overall making progress
with our brain cancer Commercialization Program in Europe,” commented
Dr. Ben J. Lipps, CEO of MagForce AG and MagForce USA, Inc. “In summary,
I am very optimistic that MagForce will develop and expand our
NanoTherm(TM) therapy into a valued therapy for the treatments of brain
cancer and prostate cancer and move towards achieving the goals set in
the five year target plan. The growing interest in applying
NanoTherm(TM) therapy for the treatment of brain tumors and the progress
of our work with the FDA are very encouraging. Thus, we are successfully
moving forward on our exciting and challenging path.”
Financial Results and Outlook:
Results of operations, net assets and financial position
MagForce adopted new revenue reporting rules for periods starting after
December 31, 2015. In addition, MagForce reports for the first time Non-
GAAP financial measures that are used by MagForce’s management to make
operating decisions, as they facilitate internal comparisons of
MagForce’s performance to historical results. MagForce’s management
believes that Non- GAAP measures provide investors with means of
evaluating, and an understanding of how MagForce’s management evaluates,
MagForce’s performance and results on a comparable basis that is not
otherwise apparent on a German GAAP basis, since many non-recurring,
infrequent or non-cash items that MagForce’s management believes to be
not indicative of the core performance of the business may not be
excluded when preparing financial measures under German GAAP.
These Non-GAAP measures should not be considered in isolation from, as
substitutes for, or superior to financial measures prepared in
accordance with German GAAP.
Due to the adoption of new revenue reporting rules (sec. 277 para. 1 HGB
as amended by BilRuG) for periods starting after December 31, 2015,
revenue includes also management recharges to subsidiaries that were
included in other operating income in prior years. For additional
information we refer to the Notes to the Interim Financial Statements.
Net loss (prior year: profit) for the first half year was EUR 3.2
million (prior year: EUR 0.5 million) while Non-GAAP net loss slightly
decreased for the half year by EUR 0.1 million to EUR 2.2 million (prior
year: EUR 2.3 million).
Compared to the prior year reporting period personnel expenses increased
by EUR 0.2 million to EUR 1.7 million chiefly due to the formation of a
new commercial team to accelerate the Company’s efforts to establish
NanoTherm(TM) therapy in Germany and the EU. The additional expenses
attached to this indispensable staffing were compensated by frugal use
of MagForce’s resources in other areas of controllable expense spending.
Revenues and other operating income amounted to EUR 0.7 milllion (prior
year: EUR 4.9 million), while Non-GAAP revenue and other operating
income increased by EUR 0.1 million to EUR 0.7 million (prior year: EUR
0.6 million). Revenues and other operating income include revenues from
commercial treatment of patients with NanoTherm(TM) therapy on a cash
basis as well as reimbursement of treatment costs by third parties and
recharges to subsidiaries. The Non-GAAP increase chiefly stems from
higher personnel recharges to subsidiaries of EUR 0.4 million compared
to EUR 0.3 million in the prior year period.
Revenue and other operating income were adjusted to Non-GAAP for the
extension of the distribution and development rights for the countries
Canada and Mexico in January 2015 amounting to EUR 3.0 million as well
as the sale of two NanoActivator(R) devices to MagForce USA, Inc. in the
first half year of 2015 in the amount of EUR 1.2 million. Revenue
includes also management recharges to subsidiaries that were included in
other operating income in prior years.
Cash outflows from operating activities amounted to EUR -3.4 million
(prior year: EUR -3.8 million). Cash inflows from investing activities
amounted to EUR 3.1 million (prior year: EUR 0.1 million), and cash
flows from financing activities amounted to EUR 2.3 million (prior year:
EUR nil).
Liquid funds of the Company including cash and cash equivalents of EUR
3.4 million (December 31, 2015: EUR 1.4 million) as well as short term
loans of EUR nil (December 31, 2015: EUR 3.1 million) amounted to EUR
3.4 million at the end of the period (December 31, 2015: EUR 4.5
million).
Financial outlook 2016
For the financial year 2016 the Company expects an increase in revenues
from the treatment of patients with NanoTherm(TM) therapy compared to
last year. A more economical enterprise resource planning will result in
further reduced operating costs. Adjusted for the special effects of the
out- licensing transaction in 2015 that reduced the net loss by EUR 3.0
million, the Company expects a reduction of the net loss for the fiscal
year 2016. With its liquidity and current plans, the Company will be
able to cover its operating expenses through 2017.
About MagForce AG and MagForce USA, Inc.
MagForce AG, listed in the entry standard of the Frankfurt Stock
Exchange (MF6, ISIN: DE000A0HGQF5), together with its subsidiary
MagForce USA, Inc. is a leading medical device company in the field of
nanomedicine focused on oncology. The Group’s proprietary NanoTherm(TM)
therapy enables the targeted treatment of solid tumors through the
intratumoral generation of heat via activation of superparamagnetic
nanoparticles. Mithril Capital Management, a growth-stage technology
fund founded by Ajay Royan and Peter Thiel, along with MagForce AG, are
investors and strategic partners in MagForce USA, Inc.
NanoTherm(TM), NanoPlan(R), and NanoActivator(R) are components of the
therapy and have received EU-wide regulatory approval as medical devices
for the treatment of brain tumors. MagForce, NanoTherm, NanoPlan, and
NanoActivator are trademarks of MagForce AG in selected countries.
For more information, please visit: www.magforce.com.
Get to know our Technology: video (You Tube)
Stay informed and subscribe to our mailing list.
Disclaimer
This release may contain forward-looking statements and information
which may be identified by formulations using terms such as “expects”,
“aims”, “anticipates”, “intends”, “plans”, “believes”, “seeks”,
“estimates” or “will”. Such forward-looking statements are based on our
current expectations and certain assumptions, which may be subject to a
variety of risks and uncertainties. The results actually achieved by
MagForce AG may substantially differ from these forward-looking
statements. MagForce AG assumes no obligation to update these
forward-looking statements or to correct them in case of developments,
which differ from those, anticipated.