SYGNIS Reports Financial Results for Fiscal Year 2014
News May 09, 2015
SYGNIS AG has reported results for the fiscal year ending 31 December 2014.
During 2014, SYGNIS’ focus was on the development of its proprietary product pipeline in the field of molecular diagnostics and DNA tools for Next Generation Sequencing (NGS). With the introduction of the new product and commercialization strategy, SYGNIS has strengthened corporate control over the commercialization of its proprietary technology and related products. In addition to the licensing strategy, SYGNIS is now generating revenues through direct sales, non-exclusive distribution agreements and proprietary product launches.
Key building blocks of the new strategy were the development of the TruePrime™ product line addressing a multitude of applications for the amplification of various DNA or RNA species. The first kits targeting DNA amplification from single cells were launched in January 2015. Global launch of the second product line SunScript™ Reverse Transcriptase (RT) followed in April 2015.
Operational highlights in 2014:
In February 2014, QIAGEN launched the first two products in a series of kits based on SYGNIS’ proprietary amplification technology, SensiPhi®. The two kits, REPLI-g WTA Single Cell Kit and REPLI-g Cell WGA & WTA Kit are commercialized globally by QIAGEN under an exclusive license agreement with signed in July 2012.
In May 2014, SYGNIS announced that it had signed a patent agreement with SYSTASY Bioscience GmbH, a service provider in the drug discovery industry. The transferred IP is part of a broader IP family covering SYGNIS’ proprietary Double Switch technology for the qualitative and quantitative detection of interactions between two proteins. SYGNIS still maintains other patents linked to this technology with the aim of signing additional non-exclusive agreements with other companies.
In November 2014, SYGNIS introduced its first product family for whole genome amplification. TruePrime™ is the brand name of a series of kits dedicated to the amplification of various DNA or RNA species for a multitude of applications. TruePrime™ stands for a revolutionary change in the way DNA or RNA is amplified. While the current gold standard MDA (multiple displacement amplification) needs short pieces of DNA (“oligonucleotides”) to start off the amplification, TruePrime™ does not need any synthetic random primers. The first TruePrime™ kits were launched in January 2015.
In December, SYGNIS granted BioCat GmbH non-exclusive rights to promote, market, sell, and support TruePrime™ Single Cell WGA kit for the DNA amplification of single cells for NGS applications.
Also in December 2014, SYGNIS successfully completed a capital increase and raised gross proceeds of €4.95 million by issuing 2,475,678 new shares. The company is using the proceeds to further expand its proprietary product portfolio and finance operating activities until break-even, which is expected in 2016.
Pilar de la Huerta, CEO and CFO of SYGNIS, commented: “The year 2014 was marked by the transition of SYGNIS from a technology licensing player to a product company. With the launch of our first proprietary product lines, TruePrime™ and SunScript™ at the beginning of this year, we have executed our new strategy and paved the ground for future growth. In parallel, we have set up our sales and marketing capacities, promoted our own products and signed a series of important distribution agreements with leading industry partners in Europe, North America and Asia. With our broad portfolio of proprietary technologies and products, we believe we are best positioned to benefit from the growth of industrial Next Generation Sequencing and single cell analysis applications in personalized medicine, molecular diagnostics and drug development.”
Fiscal year 2014:
In the financial year 2014, the operating result (EBIT) amounted to -€ 3.2 million (2013:
-€ 4.3 million) as operating expenses have been reduced. However, the reported net loss for the period was € 3.5 million (2013: € 3.2 million), primarily as the tax income on tax losses carry-forwards from the previous year omitted.
Revenues for the fiscal year 2014 amounted to € 0.4 million (2013: € 0.5 million), and are primarily attributable to the Caco-2 licensing rights in the USA, an upfront payment for the product Double Switch, the exclusive license agreement with QIAGEN and services rendered by the Company. Excluding the upfront payment received in 2013 for the non-exclusive license agreement signed with QIAGEN in 2013, the regular revenues of the Company showed a growth tendency.
Total operating expenses have decreased to € 3.6 million compared to the previous year (2013: € 4.8 million). This development is mainly due to lower R&D costs of € 1.4 million (2013: € 2.2 million) following the new strategy, and lower impairment losses of € 0.3 million (2013: € 0.6 million).
Total assets rose to € 12.5 million in 2014 compared to € 11.3 million in 2013, primarily due to the increase in cash and cash equivalents by € 1.6 million as a result of the successful capital increase in December 2014.
Cash outflow from operating activities in 2014 remained unchanged at € 3.6 million. Cash outflow from investing activities was € 0.6 million (2013: € 0.1 million), Cash flow from financing activities was € 5.5 million (2013: € 5.5 million), mainly resulting from the inflow from the capital increases of € 5.9 million (less costs of issuing equity of € 0.5 million). In the previous year it included cash inflows from new loans amounting to €2.7 million, next to the capital increase of €2.8 million.
The Company’s liquidity level has significantly improved as of 31 December 2014 and increased to € 3.8 million compared to € 2.2 million in the previous year.
Revenues in the fiscal year 2015 are dependent on the market launch success of the first proprietary DNA amplification kits and on revenue growth arising from the license agreement with QIAGEN for additional products based on QualiPhi. Furthermore, SYGNIS expects first revenues from the out-licensing of Double Switch. Depending on the success of these commercialization activities, revenues in 2015 are forecasted in the range of approximately € 0.7 million, with a strong upside potential in 2016.
In 2015, expenditure for Research & Development is expected to decrease as SYGNIS is focusing in product development instead of basic research. On the other hand, marketing and commercial expenses are projected to increase due to the commercialization and production of our own kits. Administration expenses will remain level of 2014. The Company expects net losses to be significantly lower than in 2014.
As a result of the successful capital increase in December 2014, cash and cash equivalents at year-end 2014 amounted to € 3.8 million. With these financial resources and the expected cash inflows during 2015 SYGNIS possesses sufficient liquidity until break-even is reached, which is expected to be in 2016.