Akers Biosciences Announces H1 and Q2 2016 Earnings
Sales of Flagship Rapid HIT Test +68% Over H1 2015 and +57% Over
Q2 2015; Conference Call Scheduled for 9:00 a.m. Eastern Time
Today
THOROFARE, NJ-(Marketwired - Aug 11, 2016) - Akers Biosciences,
Inc. (NASDAQ: AKER) (AIM: AKR.L), ("Akers Bio" or the "Company"), a
developer of rapid health information technologies, reports its
financial results for the six months ("H1") and three months ("Q2")
ended June 30, 2016.
Financial Highlights:
- Product revenue up 47% for H1 2016 to $1,694,510 (Q2 2016
product revenue: $956,486)
- Total revenue up 15% for H1 2016 to $1,694,510 (Q2 2016 total
revenue: $956,486)
- Sales of flagship PIFA Heparin/PF4 Rapid Assay products in H1
2016 up 68% to $1,514,255 (Q2 2016 PIFA Heparin/PF4 Rapid Assay
sales: $879,081)
- Significant improvement in gross margin to 72% in H1 2016 from
62% in the corresponding period last year (Q2 2016 gross margin:
71%) reflecting the increase in average sale price of PIFA
Heparin/PF4 Rapid Assay products
- Gross profit up 34% in H1 2016 to $1,217,634 (Q2 2016 gross
profit: $679,638)
- Loss before income tax in H1 2016 reduced by 26% to
$(2,517,861) (Q2 2016 loss before income tax: $(1,008,932))
- Cash and marketable securities at June 30, 2016 of
$1,927,560
- Reductions in key costs began to impact in Q2 2016 with full
effect expected to be realized in H2 2016
Operational Highlights:
- Experiencing strong growth from flagship PIFA Heparin/PF4 Rapid
Assay product sales boosted by sales to China ($2,500,000 order
from Novotek for 2016 placed in H1 2016 of which $505,380 shipped
in H1 2016 and balance due in tranches through H2 2016)
- Strengthened commercial team in H1 2016 with the appointments
of Douglas Carrara and Tony Saporito (both ex-Becton, Dickinson) in
senior sales and marketing roles
- Restructuring of in-field sales and marketing team ongoing for
PIFA Heparin/PF4 Rapid Assay products to focus less on individual
hospitals and more on integrated delivery networks (hospital
groups)
- Received Notice of Allowance in H1 2016 for key US patent
covering the Company's flagship product, the PIFA Heparin/PF4 Rapid
Assay
- Signed first distribution agreement in Q2 2016 for newly
launched Akers Wellness product, BreathScan OxiChek, with Aero-Med
- and shipped first products
- Completed clinical trial in Q2 2016 for rapid Chlamydia test -
results were highly successful with 96% overall agreement with
reference laboratory method
Commentary from Raymond F. Akers, Jr. PhD, Co-founder, Chief
Scientific Director and John J. Gormally, Chief Executive
Officer:
Akers Bio met its objectives in all key areas of the business
during the second quarter. We saw 57% growth in sales of our
flagship rapid test for heparin-induced thrombocytopenia - which we
are now selling in volume in both China as well as the US. The
Company is now tracking a gross profit margin across the business
in excess of 70% reflecting the successful implementation of sales
price increases in our core product, while cost of production
remained generally the same. We signed our first distribution deal
for a new Akers Wellness product, BreathScan OxiChek, with a major
distributor and shipped our first order. Furthermore, we made
significant advances in product development with the highly
successful clinical trial of our rapid, five-minute, finger stick
blood test for Chlamydia - the first of its kind.
Additionally, during Q2 we began realizing meaningful reductions
in operating costs related to the implementation of the cost
management program commenced at the end of Q1. These cost savings
are evident in the Q2 financial statements with further benefits
expected to be fully realized in the second half of the year.
In product research and development, the Company made a major
advancement in the commercialization of the first rapid test for
Chlamydia, the most prevalent sexually transmitted disease in the
world, using a finger stick blood sample. A clinical trial was
carried out across two sites in the US. The results were highly
successful with overall agreement between the PIFA/Chlamydia Rapid
Assay and the reference laboratory method of 96% in patient
populations of acute infection and historical exposure.
Akers Bio's PIFA/Chlamydia Rapid Assay is an antibody test that
has been developed to identify infection of Chlamydia in five
minutes or less and we believe the availability of a rapid test in
doctors' offices or health clinics that does not require an
invasive genital swab procedure - and can lead to the provision of
immediate therapy - could have a significant impact in reducing the
spread of this disease. Akers Bio is pursuing FDA 510(k) market
clearance for the US for this product and is evaluating the
regulatory requirements in the territories covered by its
international distribution network.
The strong commercial performance enabled the Company to achieve
total revenue for Q2 of $956,486, resulting in a gross profit of
$679,638. Administrative, sales and marketing, R&D and other
costs - together with amortization of non-current assets - turned
this into a markedly reduced net loss for the period of $1,008,932
- a reduction of more than 50% compared to Q2 2015. We expect the
net loss to continue to decline as the impact of growing revenues
and shrinking expenses takes further hold in the second half of the
year.
Revenue from the Company's PIFA Heparin/PF4 Rapid Assay products
was boosted by the receipt of a $2.5 million order from Novotek,
the Company's exclusive distributor for these products in China, in
Q1. Approximately $500,000 of this order was shipped and paid in Q2
with the material balance expected to be shipped and payable in
tranches throughout the remainder of the year. In the US, we are in
the process of reshaping the sales and marketing strategy for this
product to focus less on individual hospitals and more on
integrated delivery networks where the purchasing volume potential
of a single new customer with multiple hospitals in its group has
the capacity to dramatically transform domestic sales of this
product. This approach requires fewer sales personnel in the field
- and this is reflected in a reduction of sales and marketing staff
from 12 to 6 in the first half - but going forward is likely to
require additional, more senior sales representatives with the
appropriate level of access to the integrated delivery network's
decision makers.
We were delighted to welcome two new accomplished senior sales
and marketing executives to the Company earlier this year. Douglas
Carrara joined as Vice President, Global Marketing and Commercial
Operations. He has over 25 years' experience in the clinical
diagnostics arena, particularly within sales, marketing and global
operations. Tony Saporito joined as Vice President, US Sales and
Distribution. He has a track record of building and leading
high-performance businesses in the medical device and clinical
diagnostics areas for two decades.
Our first distribution agreement for the Company's digital
health and wellness information platform was established in Q2 with
Aero-Med. Developed by Akers Bio as part of the Akers Wellness
line, BreathScan OxiChek is the first disposable breath test to
rapidly determine levels of oxidative stress in the body by
measuring the levels of certain abundant free radicals. Frequent
use may help health practitioners to monitor and adjust their
clients' regimen of nutritional supplementation in order to manage
oxidative stress - an indicator of the overall health and wellbeing
of a person. OxiChek works with BreathScan Lync, the new
bluetooth-enabled reading device from Akers Wellness, to enable
users to monitor oxidative stress via a mobile device. Through
Aero-Med, we are targeting the large anti-aging, functional and
integrative health and wellness treatment practitioner market in
the US, where first shipment was achieved at the end of Q2. We are
in active discussions with other distribution partners for OxiChek
with capabilities within other target markets and believe this
product could make an attractive contribution in the second half of
the year.
With approximately $2 million of sales to Novotek anticipated in
the second half for PIFA Heparin/PF4 Rapid Assay products in China,
and the continuing improvements in our domestic sales effort for
these products, we have very good visibility over revenues in our
core business. In addition, we expect to see contributions from
other tests, such as alcohol breathalyzers and BreathScan OxiChek,
gaining momentum in the second half of the year. At the same time
the Company is implementing tight cost controls in all key areas of
the business. The Company has turned a corner and the combined
effect of improved sales and reduced costs is accelerating the path
to profitability - a goal which we believe is now coming firmly
into view.
Conference call information:
Thursday, August 11, 2016 at 2.00 p.m. BST (9:00 a.m. Eastern
Time)International: 1-719-325-2499US: 1-888-417-8465Conference ID:
5673717Webcast: https://public.viavid.com/index.php?id=120809.
Summary of Statements of Operations for the Six Months Ended
June 30, 2016 and 2015
Akers Bio's revenue for the six months ended June 30, 2016
totaled $1,694,510, a 15% increase from the six months ended June
30, 2015. Product revenue increased by 47%, primarily a result of
sales of our PIFA Heparin/PF4 Rapid Assay products. Total revenue
was impacted by the elimination of license fee revenue following
the cancellation of the License and Supply Agreement with
ChubeWorkx Guernsey Limited ("ChubeWorkx") in May, 2015 in respect
to BreathScan Alcohol Breathalyzer products.
The table below summarizes our revenue by product line for the
six months ended June 30, 2016 and 2015 as well as the percentage
of change year-over-year:
|
|
|
|
|
|
|
|
Product Lines
|
|
6 MonthsEndedJune 30, 2016
|
|
6 MonthsEndedJune 30, 2015
|
|
Percent Change
|
|
Particle ImmunoFiltration Assay ("PIFA")
|
|
$
|
1,514,255
|
|
$
|
898,959
|
|
68
|
%
|
|
|
|
|
|
|
|
|
|
|
MicroParticle Catalyzed Biosensor ("MPC")
|
|
|
109,703
|
|
|
209,805
|
|
(48
|
)%
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
70,552
|
|
|
47,650
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
Product Revenue Total
|
|
$
|
1,694,510
|
|
$
|
1,156,414
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
License Fees
|
|
|
-
|
|
|
320,556
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
$
|
1,694,510
|
|
$
|
1,476,970
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from the Company's PIFA Heparin/PF4 Rapid Assay products
increased 68% during the six months ended June 30, 2016 over the
same period of 2015, reflecting the partial fulfillment of the $2.5
million order from Novotek, our exclusive distributor in the
Peoples Republic of China.
The Company received a $2.5 million order for our PIFA
Heparin/PF4 Rapid Assay products from Novotek on February 29, 2016.
The Company received an initial payment of $250,000 on April 29,
2016 and a second payment of $250,000 on June 28, 2016 for
scheduled product shipments, per the terms of sale. The remaining
products will be scheduled to ship at various points throughout the
current fiscal year with revenue being recognized when the criteria
for the recognition of revenue is met. The Company recognized
$505,380 for PIFA Heparin/PF4 products from Novotek during the six
months ended June 30, 2016.
The Company's MPC product sales declined 48% during the six
months ended June 30, 2016 over the same period of 2015. A
distributor's initial stocking order of approximately $146,000 for
the Company's BreathScan Alcohol Breathalyzer products in Great
Britain was included for the six months ended June 30, 2015. Net of
this significant order, MPC product sales increased 72% for the six
months ended June 30, 2016.
While most of the MPC product sales in the six months ended June
30, 2016 came from BreathScan Alcohol Breathalyzers, we have begun
generating sales of other MPC products within our health and
wellness line, primarily the Company's BreathScan OxiChek
disposable breath test for oxidative stress.
Other operating revenue increased due to a rise in miscellaneous
component sales and shipping and handling fees.
The Company's gross margin improved significantly, rising to 72%
(2015: 62%) for the six months ended June 30, 2016. The improvement
is attributed to improved margins for the PIFA Heparin PF/4
products resulting from the increase in average selling price of
these products.
Cost of sales for the six months ended June 30, 2016 decreased
by 16% to $476,876 (2015: $567,367). Direct cost of sales decreased
to 13% of product revenue while other cost of sales decreased to
15% for the six months ended June 30, 2016 as compared to 24% and
25% respectively for the same period in 2015.
General and administrative expenses for the six months ended
June 30, 2016, totaled $1,739,806, which was a 29% decrease as
compared to $2,444,964 for the six months ended June 30, 2015.
Sales and marketing expenses for the six months ended June 30,
2016 totaled $1,238,754, which was a 10% increase as compared to
$1,128,792 for the six months ended June 30, 2015.
Research and development expenses for the six months ended June
30, 2016 totaled $685,280 as compared to $683,799 for the six
months ended June 30, 2015.
Other income, net of expenses for the six months ended June 30,
2016 totaled $13,899, which was an 80% decrease as compared to
$69,209 for the six months ended June 30, 2015.
For the six months ended June 30, 2016 and 2015, the Company
generated a net loss attributable to shareholders of $2,517,861 and
$3,408,028, respectively. As of June 30, 2016 and December 31,
2015, the Company has an accumulated deficit of $96,693,860 and
$94,175,999 and had cash and marketable securities totaling
$1,927,560 and $4,427,163, respectively.
Summary of Statements of Operations for the Three Months Ended
June 30, 2016 and 2015
Akers Bio's revenue for the three months ended June 30, 2016
totaled $956,486, a 1% decrease from the three months ended June
30, 2015. Product revenue increased by 28%, primarily a result of
sales of our PIFA Heparin/PF4 Rapid Assay products. The total
revenue decline was the result of the elimination of license fee
revenue following the cancellation of the License and Supply
Agreement with ChubeWorkx Guernsey Limited ("ChubeWorkx") in May,
2015 in respect to BreathScan Alcohol Breathalyzer products.
The table below summarizes our revenue by product line for the
three months ended June 30, 2016 and 2015 as well as the percentage
of change year-over-year:
|
|
|
|
|
|
|
|
Product Lines
|
|
3 MonthsEndedJune 30, 2016
|
|
3 MonthsEndedJune 30, 2015
|
|
Percent Change
|
|
Particle ImmunoFiltration Assay ("PIFA")
|
|
$
|
879,081
|
|
$
|
560,598
|
|
57
|
%
|
|
|
|
|
|
|
|
|
|
|
MicroParticle Catalyzed Biosensor ("MPC")
|
|
|
44,918
|
|
|
168,444
|
|
(73
|
)%
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
32,487
|
|
|
15,658
|
|
107
|
%
|
|
|
|
|
|
|
|
|
|
|
Product Revenue Total
|
|
$
|
956,486
|
|
$
|
744,700
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
License Fees
|
|
|
-
|
|
|
222,222
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
$
|
956,486
|
|
$
|
966,922
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from the Company's PIFA Heparin/PF4 Rapid Assay products
increased 57% during the three months ended June 30, 2016 over the
same period of 2015, reflecting the partial fulfillment of the $2.5
million order from Novotek, our exclusive distributor in the
Peoples Republic of China.
The Company received a $2.5 million order for our PIFA
Heparin/PF4 Rapid Assay products from Novotek on February 29, 2016.
The Company received an initial payment of $250,000 on April 29,
2016 and a second payment of $250,000 on June 28, 2016 for
scheduled product shipments, per the terms of sale. The remaining
products will be scheduled to ship at various points throughout the
current fiscal year with revenue being recognized when the criteria
for the recognition of revenue is met. The Company recognized
$473,853 for PIFA Heparin/PF4 products from Novotek during the
three months ended June 30, 2016.
The Company's MPC product sales declined 73% during the three
months ended June 30, 2016 over the same period of 2015. A
distributor's initial stocking order of approximately $146,000 for
the Company's BreathScan Alcohol Breathalyzer products in Great
Britain was included for the three months ended June 30, 2015. Net
of this significant order, MPC product sales increased 100% for the
three months ended June 30, 2016.
While most of the MPC product sales in the three months ended
June 30, 2016 came from BreathScan Alcohol Breathalyzers, we have
begun generating sales of other MPC products within our health and
wellness line, primarily the Company's BreathScan OxiChek
disposable breath test for oxidative stress.
Other operating revenue increased due to a rise in miscellaneous
component sales and shipping and handling fees.
The Company's gross margin improved significantly, rising to 71%
(2015: 65%) for the three months ended June 30, 2016. The
improvement is attributed to improved margins for the PIFA Heparin
PF/4 products resulting from the increase in average selling price
of these products.
Cost of sales for the three months ended June 30, 2016 decreased
by 19% to $276,848 (2015: $341,025). Direct cost of sales decreased
to 12% of product revenue while other cost of sales decreased to
17% for the three months ended June 30, 2016 as compared to 19% and
27% respectively for the same period in 2015.
General and administrative expenses for the three months ended
June 30, 2016, totaled $816,244, which was a 53% decrease as
compared to $1,746,532 for the three months ended June 30,
2015.
Sales and marketing expenses for the three months ended June 30,
2016 totaled $513,430, which was a 7% decrease as compared to
$553,539 for the three months ended June 30, 2015.
Research and development expenses for the three months ended
June 30, 2016 totaled $321,989, which was a 15% decrease as
compared to $378,224 for the three months ended June 30, 2015.
Other income, net of expense for the three months ended June 30,
2016 totaled $5,870, which was a 81% decrease as compared to
$30,811 for the three months ended June 30, 2015.
About Akers Biosciences, Inc.
Akers Bio develops, manufactures, and supplies rapid screening
and testing products designed to deliver quicker and more
cost-effective healthcare information to healthcare providers and
consumers. The Company has advanced the science of diagnostics
while responding to major shifts in healthcare through the
development of several proprietary platform technologies. The
Company's state-of-the-art rapid diagnostic assays can be performed
virtually anywhere in minutes when time is of the essence. The
Company has aligned with major healthcare companies and high volume
medical product distributors to maximize product offerings, and to
be a major worldwide competitor in diagnostics.
Additional information on the Company and its products can be
found at www.akersbio.com. Follow us on Twitter @AkersBio.
Cautionary Statement Regarding Forward Looking Statements
Statements contained herein that are not based upon current or
historical fact are forward-looking in nature and constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements reflect the Company's
expectations about its future operating results, performance and
opportunities that involve substantial risks and uncertainties.
These statements include but are not limited to statements
regarding the intended terms of the offering, closing of the
offering and use of any proceeds from the offering. When used
herein, the words "anticipate," "believe," "estimate," "upcoming,"
"plan," "target", "intend" and "expect" and similar expressions, as
they relate to Akers Biosciences, Inc., its subsidiaries, or its
management, are intended to identify such forward-looking
statements. These forward-looking statements are based on
information currently available to the Company and are subject to a
number of risks, uncertainties, and other factors that could cause
the Company's actual results, performance, prospects, and
opportunities to differ materially from those expressed in, or
implied by, these forward-looking statements.
Contact Information
For more information:Akers Biosciences, Inc.John J. Gormally
(Chief Executive Officer)Raymond F. Akers, Jr. PhD (Co-founder and
Chief Scientific Director)Tel. +1 856 848 8698Taglich Brothers,
Inc. (Investor Relations)Chris SchreiberTel. +1 917 445 6207Email:
cs@taglichbrothers.comfinnCap (UK Nominated Adviser and
Broker)Adrian Hargrave / Scott Mathieson (Corporate Finance)Steve
Norcross (Broking)Tel. +44 (0)20 7220 0500Vigo Communications
(Public Relations)Ben Simons / Fiona HensonTel. +44 (0)20 7830
9700Email: akers@vigocomms.com
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