NEW YORK — German molecular diagnostics firm Epigenomics on Thursday reported a 28 percent drop in first quarter revenues as orders for its test kits by US customers fell amid reimbursement uncertainty.
For the three-month period ended March 31, Epigenomics' revenues dropped to €239,000 ($257,358) from €331,000 in the same quarter last year. Sales of products, including the firm's US Food and Drug Administration-approved blood test for colorectal cancer screening Epi proColon, were down 32 percent to €219,000 from €322,000.
Epigenomics attributed the sales decline to the failure of certain US customers to sell existing supplies of Epi proColon amid reimbursement uncertainty, precluding repeat orders for the test. Epigenomics said that the US Centers for Medicare and Medicaid Services opened a National Coverage Determination (NCD) review of Epi proColon in February and that it expects CMS will issue a proposed NCD by Aug. 28 and a final NCD by Nov. 28.
Epigenomics' Q1 net loss for the period was €3.0 million, or €.07 per share, versus a net loss of €3.0 million, or €.08 per share, a year earlier. The change in loss per share in part reflects a higher number of shares outstanding following a capital increase in November.
R&D spending in the quarter were essentially flat year-over-year at €1.6 million, while SG&A expenses decreased nearly 17 percent to €2.0 million from €2.4 million. Epigenomics said the higher SG&A costs in Q1 2019 were primarily due to greater market preparation measures the company undertook while expecting a faster reimbursement decision from CMS.
At the end of March, Epigenomics had cash, cash equivalents, and marketable securities totaling €11.0 million.
Looking ahead, Epigenomics said it continues to expect full-year 2020 revenues in the range of €1.0 million to €2.0 million, with a cash burn between €11.5 million and €14.0 million.
The firm also noted that a significant decrease in activities related to ongoing clinical studies, including a post-approval study of Epi proColon, occurred toward the end of the first quarter due to the SARS-CoV-2 pandemic. The resulting cost effect is expected to impact its second quarter financial results.