Full Press Release Details
NEWS RELEASE - REGULATED INFORMATION
8 NOVEMBER 2023, 4:00PM EDT / 22:00 CET
MDxHealth Reports Results for the Third Quarter
Nine-Month Period Ended September 30, 2023
IRVINE, CA, and HERSTAL, BELGIUM -
November 8, 2023 - MDxHealth SA (NASDAQ/Euronext: MDXH), a commercial-stage precision diagnostics
company, today announced its financial results for the third quarter and nine-month period ended September 30, 2023.
Michael K. McGarrity, CEO of mdxhealth, commented:
"We are pleased to report strong operating results for the third quarter of 2023, which reflects our continued focus on and commitment
to commercial execution and operating discipline. Looking ahead, we expect strong revenue growth, gross margin improvement and reduction
in cash burn, all leading to our projected turn to operating profitability. With respect to guidance, we expect to reach the high end
of our 2023 revenue guidance of $65-70 million, and continue to believe we will turn profitable on an adjusted EBITDA basis in the first
for the third quarter ended September 30, 2023
review for the three and nine months ended September 30, 2023
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||
| USD in '000 (except per share data) Unaudited | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||
| Revenue | 19,350 | 11,154 | 73 | % | 50,795 | 24,163 | 110 | % | ||||||||||||||||
| Cost of goods | (6,797 | ) | (4,931 | ) | 38 | % | (19,537 | ) | (12,168 | ) | 61 | % | ||||||||||||
| Gross Profit | 12,553 | 6,223 | 102 | % | 31,258 | 11,995 | 161 | % | ||||||||||||||||
| Operating expenses | (17,114 | ) | (18,153 | ) | (6 | )% | (52,279 | ) | (40,948 | ) | 28 | % | ||||||||||||
| Operating loss | (4,561 | ) | (11,930 | ) | (62 | )% | (21,021 | ) | (28,953 | ) | (27 | )% | ||||||||||||
| Net loss | (10,045 | ) | (13,502 | ) | (26 | )% | (32,380 | ) | (31,606 | ) | 2 | % | ||||||||||||
| Basic and diluted loss per share | (0.04 | ) | (0.08 | ) | (50 | )% | (0.13 | ) | (0.20 | ) | (35 | )% |
Results for the three months ended September
Revenue increased 73% to $19.3 million compared
to $11.2 million for the prior year. Excluding GPS, revenue increased 45% to $11.3 million compared to $7.8 million for the prior year.
Gross profit increased 102% to $12.6 million compared
to $6.2 million for the prior year. Gross margins were 64.9% as compared to 55.8% for the prior year, an improvement of 908 basis points
attributed to contribution from Select mdx reimbursement and Resolve mdx.
Operating loss decreased 62% to $4.6 million compared
to $11.9 million for the prior year, driven by improved margins as well as a 6% reduction in operation expenses.
Net loss decreased 26% to $10.0 million compared
to $13.5 million for the prior year, driven by the factors mentioned above, partially offset by an increase of $3.8 million in financial
expenses, of which $3.6 million was non-cash and primarily related to the GPS contingent consideration.
Results for the nine months ended September
Revenue increased 110% to $50.8 million compared
to $24.2 million for the prior year. Excluding GPS, revenue increased 38% to $28.7 million compared to $20.8 million for the prior year.
Gross profit increased 161% to $31.3 million compared
to $12.0 million for the prior year. Gross margins were 61.5% as compared to 49.6% for the prior year, an improvement of 1,190 basis points.
Operating loss decreased 27% to $21.0 million
compared to $29.0 million for the prior year, driven by improved margins, partially offset by an increase in operating expenses related
to the additional field sales personnel associated with the GPS acquisition.
Net loss increased 2% to $32.4 million compared
to $31.6 million for the prior year, driven by the factors mentioned above as well as an increase of $8.6 million in financial expenses,
of which $6.8 million was non-cash and primarily related to the GPS contingent consideration, with the remainder primarily related to
increased interest expense.
Cash and cash equivalents as of September 30,
2023, were $32.7 million.
Transition to Sole Listing of Shares on NASDAQ
An extraordinary general shareholders' meeting
of the Company held on November 3, 2023, approved the proposed transition from a dual listing of the Company's American Depositary Shares
on Nasdaq and ordinary shares (the "Shares") on Euronext Brussels to a sole listing of Shares on Nasdaq (the "Transaction"),
as well as the share consolidation with respect to all outstanding Shares by means of a 1-for-10 reverse stock split (the "Share
Consolidation"). As a result, the Company can now start implementing the Transaction and Share Consolidation, as further outlined
in the press release issued by the Company on November 6, 2023.
Earnout payment to Exact Sciences
On August 23, 2023, mdxhealth and Exact Sciences
Corporation amended their existing Oncotype DX GPS prostate cancer business asset purchase agreement, deferring mdxhealth's initial
earnout payment by 3 years, from 2024 to 2027, in consideration for an amendment fee of $250,000 in cash and 250,000 of the Company's
ADSs, a 5-year subscription right (warrant) to acquire up to 1,000,000 of the Company's ADSs at an exercise price of $5.265 per
ADS (representing a 50% premium to the market price of the ADSs as of August 18, 2023), and an increase in the potential aggregate earnout
amount from $70 million to $82.5 million. The Company agreed to convene a general shareholders' meeting to approve the subscription right.
Under the terms of the amended asset purchase agreement, mdxhealth has agreed to make earn-out payments to Exact Sciences in each of fiscal
years 2025, 2026 and 2027, based upon certain revenues related to fiscal years 2024, 2025 and 2023, respectively. At the option of mdxhealth,
the earn-out amounts can be settled in cash or through the issuance of additional ADSs or Shares of the Company (valued as a function
of the volume weighted average trading price of the Company's Shares at the end of the relevant earnout period) to Exact Sciences, provided
that the aggregate number of shares held by Exact Sciences shall not exceed more than 7.5% (increased from 5% in the initial agreement)
of the outstanding shares of mdxhealth.
On August 9, 2023, mdxhealth announced that Cigna,
one of the largest health insurers in the United States, expanded commercial and Medicare Advantage coverage to include the Company's
Select mdx for Prostate Cancer test. With the addition of Select mdx, Cigna will now provide insurance coverage across mdxhealth's
full menu of precision diagnostic cancer tests, including its Confirm mdx and GPS tests, which represent more than 15 million lives under
coverage. Contracted coverage with Cigna for the Select mdx test is expected to take effect in Q4 of this year.
Michael K. McGarrity, Chief Executive Officer
and Ron Kalfus, Chief Financial Officer, will host a conference call and Q&A session today at 4:30 PM EST / 22:30 CET. The call will
be conducted in English and a replay will be available for 30 days.
To participate in the conference call, please
select your phone number below:
United States: 1-888-886-7786
The Netherlands: 0800 022 7908
United Kingdom: 4480 065 22435
Conference ID: 00680078
To ensure a timely connection, it is recommended
that users register at least 10 minutes prior to the scheduled start time.
Mdxhealth is a commercial-stage precision diagnostics
company that provides actionable molecular information to personalize patient diagnosis and treatment. The Company's tests are based
on proprietary genomic, epigenetic (methylation) and other molecular technologies and assist physicians with the diagnosis and prognosis
of urologic cancers and other urologic diseases. The Company's U.S. headquarters and laboratory operations are in Irvine, California,
with additional laboratory operations in Plano, Texas. European headquarters are in Herstal, Belgium, with laboratory operations in Nijmegen,
and linkedin.com/company/mdxhealth
For more information:
LifeSci Advisors (IR & PR)
This press release contains forward-looking
statements and estimates with respect to the anticipated future performance of MDxHealth and the market in which it operates, all of which
involve certain risks and uncertainties. These statements are often, but are not always, made through the use of words or phrases such
as "potential," "expect," "will," "goal," "next," "potential,"
"aim," "explore," "forward," "future," and "believes" as well as similar expressions.
Forward-looking statements contained in this release include, but are not limited to, statements regarding expected future operating results;
expectations for development of new or improved products and services and their impact on patients; our strategies, positioning, resources,
capabilities and expectations for future events or performance; and the anticipated benefits of our acquisitions, including estimated
synergies and other financial impacts. Such statements and estimates are based on assumptions and assessments of known and unknown risks,
uncertainties and other factors, which were deemed reasonable but may not prove to be correct. Actual events are difficult to predict,
may depend upon factors that are beyond the company's control, and may turn out to be materially different. Examples of forward-looking
statements include, among others, statements we make regarding expected future operating results, product development efforts, our strategies,
positioning, resources, capabilities and expectations for future events or performance. Important factors that could cause actual results,
conditions and events to differ materially from those indicated in the forward-looking statements include, among others, the following:
uncertainties associated with the coronavirus (COVID-19) pandemic, including its possible effects on our operations, and the demand for