Hoersholm, Denmark, March 23, 2018 – Medical Prognosis Institute A/S (“MPI”) publishes the Annual Report for 2017. The complete report is available in the attached document. A summary of the Annual Report is presented below. MPI has for 2017 upgraded accounting policies to IFRS and prepared its first consolidated financial statements. The main changes when compared to previous used standard (DK GAAP) are an addition of the recognition of share-based payments (such as granted shares, share options, or share appreciation rights) which were not subject to previously accounting standard, investment in associates and development costs. After IFRS the loss for the year 2017 is affected negatively by share-based payments of DKK 15 million due to an extraordinary granting of warrants to board members and executive management to compensate for the cancellation of warrants issued in 2014 and 2016. The share-based payments have no cash effect and the result is in line with what is expected.
“I’m proud to announce this Annual Report which is in line with expectations and has been prepared on the basis of IFRS. The upgrading of the reporting standard is a step towards the ambition to move to the main market on Nasdaq, Stockholm. The change of reporting rules gives a better insight of the resources spent and the values gained”, said Peter Buhl Jensen, M.D., DMSc and CEO of Medical Prognosis institute. “The ambition of moving to the main market is driven by the fact that we are producing encouraging data in our drug pipeline – beginning with LiPlaCis as well as our recent ability to attract significant and high quality projects from big pharma,“ Peter Buhl Jensen further commented.
Revenue amounted to TDKK 5 145 in 2017 (TDKK 4 384 for the corresponding period in 2016). Revenue for the 2nd half of 2017 amounted to TDKK 2 085 (TDKK 3 140 for the corresponding period in 2016).
Loss before depreciation amounted to TDKK -23 794 of which TDKK 12 975 is share based payments with no cash effect but accounted for due to IFRS requirement (Loss before depreciation in 2016 were TDKK -13 769 where TDKK 461 was share based payment with no cash effect). The share-based payment is reflecting an extraordinary granting of warrants to board members and executive management to compensate for the cancellation of warrants issued in 2014 and 2016.
The development in profit margin amounted to -463 % (last year -315 %). Gross loss before depreciation for the 2nd half of 2017 amounted to TDKK -7 712 (TDKK -8 417 for the corresponding period in 2016). The development in gross profit margin for the 2nd half of 2017 amounted to -370 % (last year -268 %).
Staff expenses amounted to TDKK -18 577 (last year TDKK -6 274). Eliminating for share-based payment TDKK 12 975 salaries and wages would be TDKK 5 602. Staff expenses for the 2nd half of 2017 amounted to TDKK -3 387 (TDKK -5 099 for the corresponding period in 2016).
Profit/loss before financial income and expenses showed a loss of TDKK -23 848 (last year a loss of TDKK -13 814). This loss is in line with the guidance in the half year interim report.
Loss before tax amounted to TDKK -30 980 (last year a loss of TDKK -13 958). Tax amounted to TDKK 590 (last year TDKK 2 650) and relates to tax refund of the tax losses from research and development costs.
The Company realized a net loss of TDKK -30 390 affected by the non-cash share based payment (last year a net loss of TDKK -11 308). Net loss for the 2nd half of 2017 amounted to TDKK -11 022 (TDKK -6 992 for the corresponding period in 2016).
Total assets amounted to TDKK 12 654 (last year TDKK 16 364) and primarily consist of cash and investments and warrants in associates. Total liabilities amounted to TDKK 10 209 (last year TDKK 5 056) and primarily consist of the Company’s trade payables and deferred income.
The Company’s cash flow was a negative TDKK -1 959 (last year a negative TDKK -30).
Outlook for 2018
The EBITDA as a stand-alone company is expected to be in the range of DKK -10 to -12 million.
No events materially affecting the assessment of the Annual Report have occurred after the balance sheet date.
Distribution of profit
The Board of Directors proposes that the loss for the year is transferred to retained earnings.
Capital resources and liquidity
As a development company, and like other similar companies, MPI over the years has shown negative cash flow why the company is dependent on being recapitalized until reaching the point where a positive cash flow begins. The Board of Directors and Management are constantly monitoring MPI’s financial position and are prepared to take the adequate measures to secure the ongoing activities of the company.
To further optimize and secure the financial position of the company the management is continuously considering relevant improvement initiatives, e.g. sales of the company’s share position in Oncology venture Sweden AB, partnering deals, capital increases or loan facilities. The Board of Directors and Management have confidence in the company as a going concern (stand alone or as merged), and consequently, the Financial Statements have been prepared in accordance with the going concern principles.
Selected announcements and news in 2017
- On December 15th, MPI announced that a publication titled “Drug response prediction in high-risk multiple myeloma” is to be published in the scientific magazine “Gene”. In the publication it is demonstrated that MPI’s Drug Response Predictor – DRP® – can predict sensitivity to melphalan (PFS prolonged) and bortezomib (PFS prolonged and better RR).
- On November 1st, MPI announced that the United States Patent & Trademark Office (USTPO) has allowed and registered its primary trademark, DRP®, used in connection with the Company’s core predictive biomarker platform and services.
- On September 19th, MPI announced early data from Oncology Ventures ongoing LiPlaCis® Phase 1/2 study which showed response and clinical benefits in hard to treat patients with metastatic Breast Cancer.
- On the 9th of August, Aktieinfo.net published an investor analysis on MPI’s spinout Oncology Venture Sweden AB.
- On the 19th of July, MPI announces that Oncology Venture and Novartis Pharma AG (Basel, Switzerland) have entered into an agreement providing Oncology Venture with an option right to execute an exclusive license to develop and commercialize an undisclosed small molecule, kinase inhibitor in clinical development. The molecule has been explored in multiple therapeutic indications including a variety of solid tumors.
- On the 7th of July, MPI announces that that Oncology Venture has entered into an exclusive global license agreement with Eisai Inc. for Eisai’s Phase 2 PARP inhibitor E7449 – now called 2X-121.
- On the 5th of July, MPI announced that the company had raised DKK 8 (SEK 10.3) million in a rights issue. The amount secures financing until H2 2018.
- On the 27th of June, MPI announces that data from the ongoing LiPlaCis Phase 1/2 study shows that tumor response to LiPlaCis can be predicted by the Drug Response Predictor independent of tumor type and including Breast Cancer.
- On the 8th of June, MPI announces that 2X Oncology Inc., a US spin-out from Oncology Venture, has obtained the Investigational New Drug (IND – i.e. allowance to run clinical trials in the US) application for the liposomal doxorubicin 2X-111 drug candidate.
- On the 31st of May, MPI announces that the first patient has entered the Oncology Venture APO010 Phase 1/2 study for Multiple Myeloma (MM).
- On the 29th of May, Oncology Venture is informed by the US Patent Office that it will allow the claims in a patent application for a response predictor (DRP®) for Oncology Ventures anticancer drug Irofulven.
- On the 21st of April, MPI announced that the Company increases its share capital with nominal DKK 6,190 as a result of exercise of 123,800 warrants.
- On the 12th of April, MPI – Epirubicin-DRP data for Breast Cancer is accepted for presentation at the 2017 American Society of Clinical Oncology (ASCO) annual meeting in Chicago, Illinois. The data demonstrates that the efficacy of chemotherapy with epirubicin, one of the most used drugs in Breast Cancer, can now be predicted by DRP.
- On the 28th of March, MPI’s spinout Oncology Venture in-licenses 2BBB Medicines BV’s Phase 2 lead product ‘2B3-101’ for 2X Oncology’s pipeline.
- On the 24th of March, MPI announces that Oncology Venture will develop a Companion Diagnostic utilizing MPI’s Drug Response Predictor, DRPTM technology for an undisclosed Eisai oncology therapeutic agent.
- The 8th of March, MPI exercises 100,000 warrants in Oncology Venture Sweden AB. The exercised warrants are part of the 302,243 warrants in Oncology Venture that MPI was granted in return for Oncology Venture’s extended exclusive license to the MPI Drug Response Prediction (DRP®) technology.
- On the 24th of January, MPI announces that in a study of 4 breast cancer drugs for personalized medicine, data for epirubicin, fulvestrant, anastrazole and exemestan demonstrated with statistical significant values that the PRP® could predict whether the individual patients responded on the treatment with the mentioned drugs or not.
- On the 19th of January, MPI’s spinout Oncology Venture is granted EUROSTARS funds from the Norwegian Research Council and Innovationsfonden in Denmark for the further clinical development of LiPlaCis.
- On the 9th of January, MPI announces that CE-marking for the in vitro diagnostic medical device (IVD); the Drug Response Predictor – DRP® – has been technically validated and registered for Oncology Ventures lead drug candidate LiPlaCis® allowing the product to be marketed in EU.
On the 5th of January, MPI increases its share capital with nominal DKK 6,337 as a result of exercise of 126,740 warrants.
Announcements after the end of 2017
On March 9th, 2018, MPI and Oncology Venture jointly announced that their respective Boards of Directors have agreed on a joint merger plan to accomplish a merger of the companies. The Merger will be implemented with MPI as the continuing legal entity and OV as the discontinuing entity. Following completion of the merger the combined company will be referred to as “Oncology Venture”. The combined company will continue to be listed on Nasdaq Stockholm First North. Following the merger of MPI and OV, it is the intention of the management of the combined company to bring the company to the Nasdaq main market in Stockholm. The Boards of Directors of Oncology Venture and MPI have identified considerable strategic and operational rationales for a merger, based on the companies’ complementary business models, strong business relations and high degree of interdependence, as well as the significant overlaps in terms of ownership structures and executive management teams. The proposed merger has the potential to create a leading oncology biotechnology company that deploys MPI’s unique biomarker technology (DRP®) with Oncology Venture’s capability of identifying and developing personalized cancer drugs.
On January 31st, 2018, MPI’s spinout Oncology Venture announces the second interim report from the Phase 2 part of an ongoing LiPlaCis® Phase 1/2 study in hard to treat metastatic breast cancer patients. Clinical response to LiPlaCis – a targeted liposomal formulation of cisplatin – is shown in 7 out of 10 evaluable patients, whereas conventional cisplatin treatment of metastatic breast cancer has reported a response rate of only 10 percent in previously conducted trials.
On January 15th, 2018, MPI announced that Oncology Venture has decided to execute the TKI license from Novartis.
For further information, please contact:
CEO, Peter Buhl Jensen, MD, Ph.D. Ulla Hald Buhl, IR & Communications
E-mail: [email protected] E-mail: [email protected]
Telephone: +45 21 60 89 22 Telephone +45 21 70 10 49
This information is information that Medical Prognosis Institute A/S is obliged to make public pursuant to the Securities Markets Act. The information was submitted for publication on March 23, 2018.
About MPI’s multiple biomarker called Drug Response Predictor – DRP®
MPI’s DRP® is a tool for developing tumor-derived genetic signatures to predict which cancer patients are high likely to respond to a given anti-cancer product. The DRP® has been tested in 37 trials, where 29 trials showed that drug-specific DRP® Biomarkers could predict which patients responded well to the treatment. The DRP® platform has amongst others been externally validated and published in collaboration with leading statisticians at the MD Anderson Cancer Center. The DRP® method can be used to design the Clinical Development Plan, i.e. to select which indications are relevant for a given anti-cancer drug. In addition to this, the individual genetic patterns of patients can be analyzed as part of a screening procedure for a clinical trial to ensure inclusion of patients with a high likelihood of response to the drug. DRP® builds on comparison between sensitive and resistant human cancer cell lines, including genomic information from cell lines combined with clinical tumor biology and clinical correlates in a systems biology network. The DRP® is a Big Data tool based on messenger RNA. The DRP® platform can be used in all cancer types, and has been patented for more than 70 anti-cancer drugs in the US.
Medical Prognosis Institute is a publicly traded international company specialized in improving cancer patients’ lives by developing Personalized Medicine using its unique DRP® technology. MPI’s exceptional opportunity to personalize cancer treatment begins with Breast Cancer moving on to Multiple Myeloma and Prostate Cancer as the first steps. MPI’s DRP® tool has shown its ability to separate patients who benefit and who do not benefit from a specific cancer treatment. This has been shown in as many as 29 out of 37 trials, and covers more than 80 anti-cancer treatments in a wide range of cancer indications. MPI has built a significant large database with over 1,400 screened breast cancer patients and is building up a database in Multiple Myeloma to be followed by Prostate cancer in collaboration with oncologists and hematologists throughout Denmark. MPI has ownership of Oncology Venture (Publ) a spinout with three anti-cancer drugs in pipeline entered and of the privately hold Special Purpose Vehicles, 2X Oncology Inc. and OV-SPV2 Aps with four products in pipeline.
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