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Epigenomics Q2 Revenues Slide 25 Percent

NEW YORK — German molecular diagnostics firm Epigenomics reported a 25 percent year-over-year decline in its second quarter revenues, while warning that its current cash reserves will only fund operations through the rest of the year.

For the three-month period ended June 30, Epigenomics revenues fell to €348,000 ($389,782) from €462,000 in the year-ago quarter. The company attributed the decline to a 96 percent drop in licensing revenues — to €9,000 from €212,000 — which failed to offset a 36 percent rise in product sales to €339,000 from €250,000. Licensing revenues were primarily impacted by Epigenomics' termination of an agreement for the Chinese rights to its Septin9 biomarker and Epi proColon with BioChain, which recently threatened legal action over the move. 

Epigenomics' Q2 net loss of €4.4 million, or €.12 per share, versus a year-ago net loss of €2.6 million, or €.11 per share.

Its R&D spending in the quarter climbed 53 percent to €2.3 million from €1.5 million as Epigenomics works to complete a cross-sectional, prospective study of its liver cancer test and a post-approval study of its flagship colorectal cancer screening test Epi proColon. Both studies are being run in the US. The firm's selling and administrative expenses, meanwhile, rose 19 percent to €2.5 million from €2.1 million.

As of June 30, Epigenomics had cash and cash equivalents totaling €8.4 million. The company said that it has enough cash for the remainder of the year, but that "we will need to raise funds in the second half of 2019 for 2020."

Citing continued difficulties obtaining Medicare reimbursement coverage for Epi proColon, Epigenomics lowered its 2019 sales targets for the test to a range of €2 million to €4 million, down from €3 million to €6 million. 

In May, the US Centers for Medicare & Medicaid Services (CMS) accepted Epigenomics' application for a National Coverage Determination review of Epi proColon. While the agency is required to reach a final reimbursement decision within nine months of opening the review process, that process has not yet begun due to limited resources, the company noted.

"We hope, however, that it will start soon so that we have a fixed timeframe at the end of which there will be clarity about the reimbursement of Epi proColon," it added.