SYGNIS Reports Financial Results for a Successful Fiscal Year 2013
News Apr 02, 2014
SYGNIS AG has reported results for the fiscal year ending December 31, 2013.
Due to the merger of SYGNIS with X-Pol Biotech (X-Pol) effective December 4, 2012, the results for fiscal year 2013 are not fully comparable to the financial results reported for the prior year.
Following the reverse acquisition, the fiscal year 2013 includes the consolidated income and expenses of the new merged SYGNIS group, whereas the previous year records the total income and expenses of X-Pol for 2012 and those of the old SYGNIS only for the month of December 2012.
Adjusted for this effect, i.e. assuming that the income and expenses of both parts of the business would have been fully taken into account already in fiscal year 2012, the pro forma comparison of periods shows that cost savings measures have led to a significant decrease in total expenses by 52% to € 4.8 million (pro forma FY 2012: € 9.8 million). The operating result (EBIT) improved by 55% to -€ 4.3 million (pro forma FY 2012: -€ 9.4 million).
During 2013 SYGNIS was strongly focused on three main business areas. The most important part was to secure the financial resources required. This was followed by the development of the new business strategy, researching and developing of new tools for DNA amplification and sequencing and finally the complete integration of the two sites following the merger.
In March 2013, the Company was granted a shareholder loan of € 0.7 million followed by a loan from a new international investor group in July 2013 of € 0.6 million which are due to expire at the end of 2015 and 2014 respectively.
In December 2013, the Company successfully completed a rights offering and private placement and raised gross proceeds of € 3.1 million. With this additional cash the company believes it is fully financed until reaching break-even in 2015.
In May 2013, SYGNIS signed a second license agreement for the distribution of a new amplification buffer with QIAGEN. From this agreement SYGNIS has received proceeds in the form of an upfront payment and expects royalties going forward. Resulting from a global exclusive license agreement signed in 2012, QIAGEN has launched the first two products of a series of kits based on SYGNIS’ proprietary amplification technology QualiPhi®, now renamed SensiPhi®at the beginning of 2014. The Company expects first sales revenues from to these products in the first half of 2014.
Pilar de la Huerta, CEO / CFO, commented: “The fiscal year 2013 was initially marked by restructuring activities, ongoing cost containment and strong and finally successful efforts to finance the new business model of the company. Despite these limitations, which also are responsible for some delays and shortcomings in revenues, we finally concluded the year with significant success. With the launch of two DNA amplification kits by QIAGEN based on our proprietary technology SensiPhi®, we achieved a major milestone and established our polymerase as the potential future gold standard for isothermal DNA amplification. We expect these two products to be the first in a series of innovative kits targeting sophisticated applications in DNA amplification. With our broad portfolio of proprietary technologies, we are best positioned to sign additional license agreements with market leading industry partners in the fields of Next Generation Sequencing, personalized medicine, molecular diagnostics and drug development.”
For the following explanations it must be noted that the 2012 reported figures only include SYGNIS AG expenses for the month of December.
In the financial year 2013, the reported net loss for the period was € 3.2 million (2012: € 2.4 million).
Revenues for the fiscal year 2013 amounted to € 0.5 million (2012: € 0.2 million), mainly derived from the completion of the second license agreement with QIAGEN, from the marketing of Caco-2 licensing rights in the U.S. and from services provided but were hit by a delay in major product launches as well as an expected further licensing deal.
Total operating expenses have increased to € 4.8 million compared to the previous year (2012: € 2.6 million). The increase primarily resulted from higher research and development costs of € 2.2 million (2012: € 1.0 million) as well as increased administrative costs of € 1.8 million (2012: € 0.4 million).
Total assets rose to € 11.3 million in 2013 compared to € 9.6 million in 2012, primarily due to the increase in cash and cash equivalents by € 1.7 million as well as deferred tax assets by € 1.0 million. Equity decreased slightly to € 6.0 million in 2013 compared to € 6.3 million in the previous year.
Cash outflow from operating activities in 2013 was € 3.6 million (2012: € 1.3 million). This was especially due to the increased operating expenses for the period. Cash outflow from investing activities was € 0.1 million (2012: cash inflow of € 0.5 million). Cash flow from financing activities was € 5.5 million (2012: € 0.5 million), resulting from the inflow from the capital increase of € 2.8 million (€ 3.1 million less charges related to the capital increase of € 0.3 million) and loans of € 2.7 million.
The liquidity level of the Company as of 31 December 2013 has significantly improved and amounted to € 2.2 million compared to € 0.6 million (including securities) in previous year.
Together with its licensee QIAGEN, SYGNIS will work on the development of additional innovative products for isothermal DNA amplification based on its proprietary polymerase SensiPhi® expected to be launched during 2014 to further expand the existing product portfolio commercialized by QIAGEN.
Besides SensiPhi®, SYGNIS owns an impressive portfolio of proprietary technologies in the field of Next Generation Sequencing including QualiPhi® mutants and PrimPol as well as DoubleSwitch, an innovative screening platform to be used in drug development. QualiPhi® mutants and PrimPol are technologies in late-stage development while DoubleSwitch is ready to commercialize. The Company aims to conclude up to three license agreements with industry partners for these products and technologies in 2014.
Depending on the market launch of additional products based on SensiPhi® and on the success of commercialization activities around out-licensing of QualiPhi® mutants, PrimPol and Double Switch, SYGNIS forecasts revenues in 2014 within a range of € 2.0 to € 2.5 million.
Expenditure for 2014 in the areas of Research & Development and Administration will remain on the level of 2013. The Company expects net loss to be significantly reduced in fiscal year 2014.
Based on the financial resources that are currently available, SYGNIS expects the operating expenses to be covered until break even situation which is estimated to be achieved in 2015.