Centogene reporting its financial results for the three months and nine months ended September 30, 2019
CAMBRIDGE, Mass. and ROSTOCK, Germany and BERLIN, Dec. 05, 2019 (GLOBE NEWSWIRE) -- CENTOGENE N.V. (Nasdaq: CNTG), a commercial-stage company focused on rare diseases that transforms real-world clinical and genetic data into actionable information for patients, physicians and pharmaceutical companies, announced today a corporate update and reported financial results for the third quarter and the nine months ended September 30, 2019.
Recent Corporate Highlights
- On November 7, 2019, Centogene completed a corporate reorganization in connection with an initial public offering in the United States, and Centogene N.V. (“the Company”) became the holding company of Centogene AG, and the ultimate parent company of the group. On the same day, Centogene N.V.’s shares began trading on the Nasdaq Global Market, after pricing an initial public offering of 4,000,000 common shares at $14.00 per common share, raising net proceeds of approximately $47.1 million, after deducting underwriting discounts, commission and other expenses
- Continued expansion of collaborations with existing and new pharmaceutical partners, including a data access and collaboration agreement with Pfizer Inc. (NYSE: PFE) announced on November 13, 2019
- Continued expansion of global proprietary rare disease platform with approximately 2.1 billion weighted data points, from approximatively 465,000 patients representing 120 different countries as of September 30, 2019
- Completion of sale and leaseback transaction of our Rostock, Germany headquarters in July 2019
“CENTOGENE made solid progress so far in 2019. The recent data access and collaboration agreement with Pfizer Inc. announced on November 13, 2019 further acknowledges the value attributed to our global rare disease repository," said Arndt Rolfs, CEO of CENTOGENE. “With the proceeds from the IPO, we will continue the momentum of our research and development programs to further support the orphan drug development of our pharmaceutical partners, and continue to provide valuable diagnostic testing to rare disease patients. We have a life-long commitment to our patients.”
Nine months ended September 30, 2019 and Q3 2019 Financial Highlights
Cash and Cash Equivalents
Cash and cash equivalents as of September 30, 2019, were € 6.1 million, compared to € 9.2 million as of December 31, 2018.
Revenue
Our revenue is principally derived from the provision of pharmaceutical solutions and diagnostic tests enabled by our knowledge and interpretation?based platform.
Revenue for the nine months ended September 30, 2019 was € 33.6 million, an increase of approximately € 3.2 million, or 10% as compared to the same period in 2018. Revenue from our pharmaceutical segment was € 13.5 million for the nine months ended September 30, 2019, similar to that of the prior year period, while the revenue from our diagnostics segment was € 20 million for the nine months ended September 30, 2019, an increase of approximately € 3.1 million, or 19% as compared to that of the prior year period.
Total revenue was € 11.6 million for the three months ended September 30, 2019, a decrease of approximately € 1.7 million, or 13% as compared to the prior year period. Revenue from our pharmaceutical segment for the three months ended September 30, 2019 were € 4.8 million, a decrease of approximately € 2.4 million, or 33% as compared to the prior year period. The non-recurring revenue in the third quarter of 2018 consisted of upfront payments totaling € 4.0 million related to the entry into collaboration agreements with Evotec International GmbH and Denali Therapeutics Inc. The decrease in revenues for the three months ended September 30, 2019 when compared to the same prior year period, was mainly driven by this non-recurring revenue.
Revenue from our diagnostics segment for the three months ended September 30, 2019 was € 6.8 million, an increase of approximately € 0.7 million, or 11% as compared to the same period in 2018. Our diagnostics revenue for the three months ended September 30, 2019 was split into approximately 51% from whole exome sequencing (WES) and whole genome sequencing (WGS, or sequencing with high volume of data), 40% from standard genetic testing (which includes our single gene, CNV and mutation quantification products) and panel sequencing and 9% from non-invasive prenatal testing (NIPT).
Research and development expenses (“R&D”)
Our R&D expenses for the three months ended September 30, 2019 were € 2.0 million, an increase of approximately € 0.6 million, or 41% as compared to the prior year period. The increase is primarily attributed to expenses associated with the expansion of our proprietary information platform, as well as development of new products and solutions.
Our R&D expenses for the nine months ended September 30, 2019 were € 6.1 million, an increase of approximately € 2.3 million, or 62% as compared to the prior year period.
General administrative expenses (“G&A”)
Our G&A expenses for the three months ended September 30, 2019 were € 4.9 million, a decrease of approximately € 0.6 million, or 11% as compared to the prior year period. The decrease is primarily attributed to a decrease in share-based compensation expenses. The share?based compensation expenses for the three months ended September 30, 2019 included in G&A expenses amounted to € 0.3 million, a decrease of € 1.9 million as compared to the prior year period.
Our G&A expenses for the nine months ended September 30, 2019 were € 16.5 million, an increase of approximately € 2.0 million, or 14% as compared to the prior year period. The increase is mainly attributable to an overall headcount increase and related costs as a result of business expansion, as well as an increase in IT infrastructure investment.
Comprehensive loss attributable to equity holders
Comprehensive loss attributable to equity holders for the three months ended September 30, 2019 was € 4.2 million or € 13 per share (basic and diluted based on 322,007 issued and outstanding common and preferred shares as of September 30, 2019), as compared to € 1.1 million or € 4 per share for the prior year period.
Comprehensive loss attributable to equity holders for the nine months ended September 30, 2019 was € 15.7 million or € 49 per share, as compared to € 7.5 million or € 29 per share for the prior year period.
Additional information regarding these financials is included in the notes to the interim condensed consolidated financial statements as of and for the three months and nine months ended September 30, 2019, which can be found by visiting EDGAR on the U.S. Securities and Exchange Commission website at www.sec.gov.
2019 Outlook
CENTOGENE has made solid progress in 2019. Our number of pharmaceutical partners have increased from 28 partners as of September 30, 2018 to 38 partners as of September 30, 2019, and over 10 new contracts have been signed with new and existing pharmaceutical partners in the nine months ended September 30, 2019. The recent data access and collaboration agreement with Pfizer Inc. announced on November 13, 2019 further acknowledges the value attributed to our global rare disease repository.
Looking forward, for full year 2019, we anticipate to have received over 130,000 order requests, allowing our data repository to grow to approximately 500,000 patients. We anticipate the total number of pharmaceutical partners to be over 40 partners by the end of 2019, and anticipate that revenue growth for full year 2019 will be approximately 20% when compared to full year 2018.
Centogene A.G.
Interim condensed consolidated statements of comprehensive loss
for the three and nine months ended September 30, 2018 and 2019
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||
(unaudited, € in thousands, except for loss per share) | |||||||||||
Revenue | 13,380 | 11,638 | 30,392 | 33,559 | |||||||
Cost of sales | 6,572 | 6,641 | 15,698 | 19,499 | |||||||
Gross profit | 6,808 | 4,997 | 14,694 | 14,060 | |||||||
Research and development expenses | 1,427 | 2,011 | 3,783 | 6,119 | |||||||
General administrative expenses | 5,493 | 4,884 | 14,523 | 16,487 | |||||||
Selling expenses | 1,791 | 1,778 | 4,639 | 6,144 | |||||||
Other operating income | 839 | 935 | 1,792 | 2,623 | |||||||
Other operating expenses | 68 | 92 | 733 | 556 | |||||||
Real estate transfer tax expenses | — | — | — | 1,200 | |||||||
Operating loss | (1,132 | ) | (2,843 | ) | (7,192 | ) | (13,823 | ) | |||
Interest and similar income | 2 | — | 16 | 12 | |||||||
Interest and similar expenses | 247 | 1,433 | 933 | 1,865 | |||||||
Finance costs, net | (245 | ) | (1,433 | ) | (917 | ) | (1,853 | ) | |||
Loss before taxes | (1,377 | ) | (4,276 | ) | (8,109 | ) | (15,676 | ) | |||
Income tax (benefits)/expenses | (152 | ) | — | (262 | ) | 163 | |||||
Loss for the period | (1,225 | ) | (4,276 | ) | (7,847 | ) | (15,839 | ) | |||
Other comprehensive (loss)/ income | (52 | ) | (1 | ) | (8 | ) | 9 | ||||
Total comprehensive loss for the period | (1,277 | ) | (4,277 | ) | (7,855 | ) | (15,830 | ) | |||
Loss per share (Basic and Diluted) | (4 | ) | (13 | ) | (29 | ) | (49 | ) | |||
Centogene A.G.
Supplemental selected segment information
for the three and nine months ended September 30, 2018 and 2019
For the three months ended September 30, | For the nine months ended September 30, | ||||||
2018 | 2019 | 2018 | 2019 | ||||
(unaudited, € in thousands) | |||||||
Revenues by segment: | |||||||
Pharmaceutical | 7,236 | 4,833 | 13,506 | 13,531 | |||
Diagnostics | 6,144 | 6,805 | 16,886 | 20,028 | |||
Total Revenues | 13,380 | 11,638 | 30,392 | 33,559 | |||
For the three months ended September 30, | For the nine months ended September 30, | ||||||
2018 | 2019 | 2018 | 2019 | ||||
(unaudited, € in thousands) | |||||||
Segment Adjusted EBITDA: | |||||||
Pharmaceutical | 5,916 | 3,400 | 10,673 | 9,561 | |||
Diagnostics | 842 | 757 | 2,417 | 1,298 | |||
Reconciliation of segment Adjusted EBITDA to Group loss for the period | For the three months ended September 30, | For the nine months ended September 30, | |||||||||
2018 | 2019 | 2018 | 2019 | ||||||||
(unaudited, € in thousands) | |||||||||||
Reported Segment Adjusted EBITDA | 6,758 | 4,157 | 13,090 | 10,859 | |||||||
Corporate expenses | (3,667 | ) | (4,917 | ) | (11,585 | ) | (14,922 | ) | |||
3,091 | (760 | ) | 1,505 | (4,063 | ) | ||||||
Share-based payment expenses | (2,779 | ) | (471 | ) | (5,051 | ) | (5,299 | ) | |||
Depreciation and amortization | (1,444 | ) | (1,612 | ) | (3,646 | ) | (4,461 | ) | |||
Operating loss | (1,132 | ) | (2,843 | ) | (7,192 | ) | (13,823 | ) | |||
Finance costs, net | (245 | ) | (1,433 | ) | (917 | ) | (1,853 | ) | |||
Income taxes benefits | 152 | — | 262 | (163 | ) | ||||||
Loss for the period | (1,225 | ) | (4,276 | ) | (7,847 | ) | (15,839 | ) | |||
Centogene A.G.
Interim condensed consolidated statements of financial position
As at December 31, 2018 and September 30, 2019
Assets | Dec 31, 2018 | Sep 30, 2019 | ||
(unaudited, € in thousands) | ||||
Non?current assets | ||||
Intangible assets | 8,795 | 12,466 | ||
Property, plant and equipment | 39,115 | 9,369 | ||
Right?of?use assets | — | < |