On August 12, 2020 Epigenomics AG (FSE: ECX, OTCQX: EPGNY, the "Company") reported operational highlights and financial results for the second quarter and first half of 2020 (Press release, Epigenomics, AUG 12, 2020, View Source [SID1234563555]).

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Operational highlights

In late February 2020, the Centers for Medicare and Medicaid Services (CMS) initiated the National Coverage Determination (NCD) review process on Epi proColon. This milestone will result in a proposed NCD by August 28 and a final reimbursement decision by the end of November. The public response during the initial 30-day public comment period in March was overwhelmingly positive. Epigenomics’ management is confident that the public support combined with the results of the microsimulation model and the major FDA approval studies will lead to a positive reimbursement decision.
Moreover, the National Comprehensive Cancer Network (NCCN) – a major medical society in the U.S.A. – included Epi proColon in April 2020 in its colorectal cancer (CRC) guidelines. The inclusion of Epi proColon in accordance with FDA-approved indications underlines the blood test’s potential to significantly increase CRC screening rates in the U.S.A.
A study published last week in the Journal of the National Cancer Institute (JNCI) concluded that Epi proColon(R) is the test of choice for the millions of individuals not willing to participate in FIT or colonoscopy screening. Annual mSEPT9 screening resulted in more Quality-adjusted-life-years gained (QALYG), CRC cases averted and CRC deaths averted than both annual FIT screening and Cologuard(R) every three years, albeit at a higher colonoscopy referral rate.
As a result of the capital increase successfully completed at the end of March and the cost-cutting measures taken in connection with the ongoing Covid-19 pandemic – including reduction in Executive Board and Supervisory Board compensation – the Company had sufficient cash and cash equivalents at the end of June 2020 to finance the Company well into the first quarter of 2021.
Greg Hamilton, CEO of Epigenomics AG commented: "With the recent JNCI study publication adding the robust body of evidence supporting Epi proColon we are eagerly anticipating the upcoming NCD publication within the next two weeks. CMS has indicated they are on track to issue the decisions on time despite the Covid 19 pandemic. With the upcoming reimbursement proposal at the end of August and the final decision by the end of November 2020, we are closer than ever to our major goal of CMS reimbursing Epi proColon. A positive reimbursement decision would be the breakthrough for our Company and we are confident that CMS will recognize the contribution that Epi proColon can make to the fight against colorectal cancer and thus will decide in the best interest of patients."

6M 2020 financial results

Total revenue in the first six months of 2020 decreased by 53% to EUR 322 thousand (6M 2019: EUR 679 thousand) compared to the same period of the previous year, due to the effects of Covid-19 in the second quarter. Epigenomics experienced significant decline in April and May but has seen a recovery in June and July. Product revenue fell from EUR 660 thousand in the first half of 2019 to EUR 293 thousand in the reporting period.
Research & development costs declined from EUR 3,867 thousand in the prior year to EUR 2,754 thousand. The decrease was mainly driven by the Covid-19 interruption of almost all clinical studies in the U.S.A., specifically the post-approval study for Epi proColon.
Selling, general and administrative costs also decreased by EUR 958 thousand to EUR 3,901 thousand (6M 2019: EUR 4,859 thousand) in the reporting period, due to the reduction in sales and marketing activities, as virtually all relevant events such as conferences and trade fairs were cancelled due to the pandemic.
Overall, operating costs fell from EUR 9.4 million to EUR 7.4 million compared to the first half of the previous year due to the impact of Covid-19 and the Company’s subsequent cost reduction measures.
Adjusted EBITDA (before share-based payment expenses) for the first six months of 2020 was EUR -5.7 million (6M 2019: EUR -7.2 million).
The net loss for the period improved to EUR 6.4 million (6M 2019: EUR 7.4 million); the loss per share was EUR 0.14 (6M 2019: EUR 0.21). This was also impacted by the increased number of shares resulting from the capital increases executed in the second half of 2019 and in March 2020.
The cash outflow from operating activities fell significantly in the first half of 2020 by EUR 2.3 million to EUR 5.5 million (6M 2019: 7.8 million). This is due to both the improved operating result (EBIT) and changes in current assets.
As of June 30, 2020, the Company had cash and cash equivalents of EUR 8.7 million (including marketable securities) compared to EUR 11.0 million at the end of 2019.
Outlook 2020:
Revenue / EBITDA / Cash consumption

Due to the continued uncertainty surrounding the effects of Covid-19, and like many publicly traded companies, Epigenomics AG is pulling its revenue guidance for 2020, however, the Company maintains its previous, adjusted EBITDA (before share-based payment expenses) guidance of between EUR -10.5 million to EUR -12.5 million and cash consumption guidance in a range of EUR 10.5 million to EUR 12.5 million.
Further Information

The financial report for the first six months of 2020 is available on the Epigenomics website: View Source." target="_blank" title="View Source." rel="nofollow">View Source

Conference call for analysts and investors

Epigenomics AG will host a conference call for analysts and investors today at 4.00 pm (CET) / 10.00 am (EDT). The presentation can be accessed on the Company’s website: View Source

Participants are kindly asked to dial in 10 minutes prior to the start of the call.

An audio replay of the conference call will be provided on the Company’s website subsequently.