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MDxHealth Nine-Month Revenues Up 38 Percent

NEW YORK (GenomeWeb) – MDxHealth reported on Thursday that its total revenues for the first nine months of 2017 rose 38 percent, largely due to the sale of its colorectal cancer patents to Exact Sciences.

For the nine months ended Sept. 30, revenues rose to $30.5 million from $22.0 million in the same period the year before. Excluding the $12.1 million sale of the patents to Exact Sciences, the company said total revenues rose approximately 3 percent to $18.4 million, including product revenues of $18.2 million, a 3 percent increase from product sales of $17.6 million in the first nine months of 2016.

Total patient test volume for the first nine months of 2017 rose 43 percent with more than 23,000 patients tested. The firm's SelectMDx for Prostate Cancer test, which helps identify patients at increased risk for aggressive disease, contributed to 7 percent of global product revenue. Its ConfirmMDx for Prostate Cancer test, which addresses false-negative biopsy concerns, accounted for 90 percent of sales, down from 97 percent of sales in the same period in 2016.

In Europe, SelectMDx test volume rose nearly 400 percent to more than 2,000 patients tested compared to 400 patients in the same period in 2016.

However, the company said sales growth was negatively affected by hurricanes Harvey and Irma, as volumes from Texas and Florida, which traditionally contribute significantly to order volumes, fell and depressed revenue in September. Further, MDxHealth said, a larger number of orders than usual were received during the last days of September, and the results for these tests were not reported by the end of the quarter. Had revenue from these orders been included and had the impact of the estimated impact of the hurricanes been excluded, pro forma revenue growth for the first nine months of 2017 would have been 11 percent year over year, the firm claimed.

"Hurricanes Harvey and Irma depressed industry-wide laboratory Q3 testing volumes and reduced ConfirmMDx test volumes in the affected states by an estimated 50 percent," MDxHealth CEO Jan Groen said in a statement. "However, overall growth of patient test volume remains strong. After nine months, we tested nearly as many patients as for the full year in 2016. Our expanded sales force has been fully deployed since early September and is expected to fuel growth in the fourth quarter and beyond."

The company also noted that it signed payor contracts with Blue Cross Blue Shield plans of Arizona and Idaho for ConfirmMDx during Q3, bringing the total number of payors covering that test to 62. It also signed a payor contract for SelectMDx with Lakehead Airforce Base during the quarter, bringing the total number of SelectMDx contracted payors to 15.

The company's net loss for the first nine months of 2017 narrowed to $7.4 million, or $.15 per share, from $10.3 million, or $.23 per share, a year earlier.

MDxHealth ended the period with $23.0 million in cash and cash equivalents.

For 2017, the company is targeting the lower end of its previous 55 percent to 75 percent product and service revenue growth guidance, given the volume shortfall resulting from the hurricanes in the third quarter and certain other factors. However, MDxHealth said, recently introduced pre-authorization requirements for molecular testing from certain US payors could delay the processing of ordered tests and adversely affect the company's revenue growth projections — such delays could push products and services revenue growth lower to a range of 45 percent to 55 percent. Accordingly, the company expects total revenues to grow by approximately 60 percent to 70 percent to $48 to $51 million.