Akers Biosciences Reports Earnings for Q1 2016
PIFA Heparin/PF4 Rapid Tests Sales Up 88%; Total Revenues up
45%
THOROFARE, NJ-(Marketwired - May 12, 2016) - Akers Biosciences,
Inc. (NASDAQ: AKER) (AIM: AKR), ("Akers Bio" or the "Company"), a
developer of rapid health information technologies, reports its
financial results for the first quarter ended March 31, 2016.
Q1 Highlights
- Product Revenue for Q1 was $738,023 (Q1 2015: $411,714) -
representing an increase of 79% over the corresponding quarter last
year
- Flagship PIFA Heparin/PF4 Rapid Assay products driving growth,
with $635,173 worth of sales in Q1 (Q1 2015: $338,361) - almost
entirely to US hospitals - representing an increase of 88% over the
corresponding quarter last year
- Demand for PIFA Heparin/PF4 Rapid Assay withstood the new
increased pricing schedule implemented in Q1, reflecting clinical
dependence on the test from existing customers
- We believe that the new sales strategy of targeting hospital
networks should now begin to accelerate growth in volumes as well
as price
- BreathScan Alcohol Breathalyzers sales ticking up with $64,785
generated in Q1 (Q1 2015: $41,361) - with some sales coming from
new markets including the UK and South Africa
- Received $2,500,000 order for PIFA Heparin/PF4 Rapid Assay
products from China during Q1 - $250,000 already fulfilled in Q2 -
balance to ship at various intervals from now through December 31,
2016
- Gross profit for Q1 was $537,995 (Q1 2015: $283,706) -
representing an increase of 90% over the corresponding quarter last
year
- Loss before income tax was $1,508,929 (Q1 2015: loss of
$1,321,799) - representing an increase of 14% arising mainly from
non-recurring costs and costs associated with the re-organization
of the sales and marketing staff and programs
- Cash and marketable securities at March 31, 2016 was $2,622,857
(at December 31, 2015: $4,427,163) - reflecting several significant
non-recurring expenditures
- An operational cost rationalization program was initiated in Q1
- benefits expected to start flowing through late in Q2 and be
fully realized in Q3 thereby accelerating path to
profitability
Raymond F. Akers, Jr. PhD, Co-founder and Chief Scientific
Director, commented:
"During Q1, a new commercial team focused on driving sales of
our flagship test for Heparin-induced thrombocytopenia (HIT) to US
hospital Integrated Delivery Networks was put in place and a
restructuring of our sales organization was initiated. An evidence
based outcome proposition was implemented with our customers and
distribution partners to improve our value expressed in price. The
results are noteworthy.
Domestic demand for this flagship test continues to grow, with
$635,173 worth of sales recorded in Q1, coming almost entirely from
US hospitals. This represents an increase of 88% over the
corresponding quarter last year. It is encouraging to note that
this sales growth is currently expressed mainly in the increase in
the price of the products. This provides us with increasing
confidence that, as the benefits of the sales strategy to focus on
hospital networks begins to flow through, we are well placed to
benefit from an accelerated increase in unit sales growth as well
as price.
The attractive growth in demand in the US for PIFA Heparin/PF4
Rapid Assay products is mirrored in China. In March, 2015 we
announced a $2,500,000 order for PIFA Heparin/PF4 Rapid Assay
products from our exclusive distributor for the tests in China,
NovoTek Therapeutics Inc. A nominal amount from this order was
fulfilled in Q1. $250,000 has already been fulfilled in Q2 and the
substantial balance will be shipped at various intervals from now
through December 31, 2016. The US and China business for PIFA
Heparin/PF4 Rapid Assay is strongly underpinning the anticipated
significant growth in revenues for this year, compared to last
year.
Another product showing signs of improvement in the current year
is BreathScan Alcohol Breathalyzers. Whilst recording only a modest
$64,785 in Q1 it should be noted that this includes initial sales
to new customers in the UK and South Africa which may in time
provide an increasing and recurring flow of revenues.
We continue to advance the marketing and distribution strategy
for new breath tests designed for the health and wellness industry
via our Akers Wellness line. These include the consumer-focused
METRON, as well as the BreathScan OxiChek and BreathScan KetoChek
tests which work with a new bluetooth-enabled reading device,
BreathScan Lync and its associated Akers Wellness mobile app, to
enable consumers and professional users to monitor trends in health
via a mobile device. We believe that having the ability to generate
near-instant health information is key to the future of medicine.
With our Akers Wellness tests, clinicians, suppliers of nutritional
supplements and diet plans, health coaches or even consumers
themselves, can now monitor their - or their clients' - health over
time by utilizing Akers Wellness products. We hope to see sales
contributions from these tests towards the end of the current year
as customer interest begins to translate into orders.
The Company's gross margin improved significantly in Q1, rising
to 73% as the benefits of price increases in our core product began
to flow through, together with reduced costs associated with
product manufacturing. This enabled the Company to achieve a gross
profit of $537,995 - a 90% increase on the corresponding quarter in
2015. Administrative, sales and marketing and R&D costs -
together with amortization of non-current assets - turned this into
a net loss of $1,516,958 for the quarter, an increase of 14%,
arising mainly from non-recurring costs and the costs associated
with the re-organization of the sales and marketing staff and
programs.
Outlook
Early indicators of the Company's performance for 2016 are
encouraging with US sales of PIFA Heparin/PF4 Rapid Assay products
trending upwards, enhanced by a healthy order book for the shipment
of these products into China. Furthermore, we believe our material
reductions in overheads by the year end will accelerate our path to
profitability.
These factors alone - regardless of any anticipated contribution
from other products such as our breath based suite of tests -
underpin the Board's confidence that the Company will materially
outperform 2015 in fiscal 2016."
Summary of Statements of Operations for the Three Months Ended
March 31, 2016
Revenue
Akers Bio's revenue for the three months ended March 31, 2016
totalled $738,023, a 45% increase from the three months ended March
31, 2015. Product revenue increased by 79%, primarily a result of
sales of our PIFA Heparin/PF4 Rapid Assay products. The elimination
of license fee revenue following the cancellation of the License
and Supply Agreement with ChubeWorkx Guernsey Limited in May, 2015
reduced the net revenue improvement year-over-year.
The table below summarizes our revenue by product line for the
three months ended March 31, 2016 and 2015 as well as the
percentage of change year-over-year:
|
|
|
|
|
|
|
|
|
|
Product Lines
|
|
3 Months Ended March 31, 2016
|
|
|
3 Months Ended March 31, 2015
|
|
|
Percent Change
|
|
MicroParticle Catalyzed Biosensor ("MPC")
|
|
$
|
64,785
|
|
|
$
|
41,361
|
|
|
|
57
|
%
|
Particle ImmunoFiltration Assay ("PIFA")
|
|
|
635,173
|
|
|
|
338,361
|
|
|
|
88
|
%
|
Other
|
|
|
38,065
|
|
|
|
31,992
|
|
|
|
19
|
%
|
Product Revenue Total
|
|
$
|
738,023
|
|
|
$
|
411,714
|
|
|
|
79
|
%
|
License Fees
|
|
|
-
|
|
|
|
98,333
|
|
|
|
(100
|
)%
|
Total Revenue
|
|
$
|
738,023
|
|
|
$
|
510,047
|
|
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's MPC product sales increased 57% during the three
months ended March 31, 2016 over the same period of 2015. The
increase is associated to sales of the Company's BreathScan Alcohol
Breathalyzer products in Great Britain and increased domestic
demand for the product which represents 53% of the Company's MPC
product revenue.
While all the MPC product sales in the three months ended March
31, 2016 came from BreathScan Alcohol Breathalyzers, we expect to
begin generating sales of other MPC products within our health and
wellness line, including the METRON disposable breath test for
ketones and the BreathScan Lync products later in 2016.
Domestic sales of the Company's PIFA Heparin/PF4 Rapid Assay
products increased 80% during the three months ended March 31,
2016, primarily reflecting the new pricing schedule implemented
during the period. Demand for the PIFA PF/4 Classic and PIFA PF/4
PLUSS products has remained steady, regardless of the increased
pricing and we believe demand will increase with the implementation
of the new sales and marketing strategy targeting hospital
networks. The Company has restructured its sales and marketing
staff, replacing the senior management team, reducing the number of
Area Business Directors ("ABD") to five and implementing a highly
targeted program to enhance the ABD's ability to expand market
share through direct sales and by supporting the sales
representatives of Akers' US distribution partners, Cardinal
Health, Fisher HealthCare and Typenex Medical.
The Company received a $2.5 million order for our PIFA
Heparin/PF4 Rapid Assay products from Novotek, our exclusive
distributor in the Peoples Republic of China on February 29, 2016.
The Company received an initial payment of $250,000 on April 29,
2016 for the first scheduled product shipment, 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 also received a specialized order for PIFA Heparin/PF4
from Novotek, totaling $27,600 during the three months ended March
31, 2016.
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 73%
(2015: 56%) for the three months ended March 31, 2016.
Cost of sales for the three months ended March 31, 2016
decreased by 12% to $200,028 (2015: $226,341). Direct cost of sales
decreased to 11% of product revenue while other cost of sales
decreased to 16% for the three months ended March 31, 2016 as
compared to 12% and 43% respectively for the same period in
2015.
General and Administrative Expenses
General and administrative expenses for the three months ended
March 31, 2016, totaled $923,560, which was a 32% increase as
compared to $698,434 for the three months ended March 31, 2015.
The increase in personnel costs for the three months ended March
31, 2016 is associated with the addition of a staff accountant in
June 2015 and the Company's new Chief Executive Officer in November
2015.
Professional service costs increased for the three months ended
March 31, 2016. A significant increase in accounting and legal fees
($230,115 (2015: $75,775)) was offset by decreases in personnel
recruiting and general consulting fees ($19,733 (2015:
$90,942)).
Increases in general consulting, stock exchange and transfer
agent fees ($55,286 (2015: $34,065)) were offset by a significant
decline in investor relations fees ($61,754 (2015: $95,454)) during
the three months ended March 31, 2016 accounting for the decline in
stock market and investor relations costs.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended March
31, 2016 totaled $725,324, which was a 26% increase as compared to
$575,252 for the three months ended March 31, 2015.
Research and Development
Research and development expenses for the three months ended
March 31, 2016 totaled $363,292, which was a 19% increase as
compared to $305,574 for the three months ended March 31, 2015.
Other Income and Expense
Other income and expenses for the three months ended March 31,
2016 totaled $8,029, which was a 79% decrease as compared to
$38,398 for the three months ended March 31, 2015.
Liquidity and Capital Resources
For the three months ended March 31, 2016 and 2015, the Company
generated a net loss attributable to shareholders of $1,508,929 and
$1,321,799, respectively. As of March 31, 2016 and December 31,
2015, the Company has an accumulated deficit of $95,684,928 and
$94,175,999 and had cash and marketable securities totaling
$2,622,857 and $4,427,163, respectively.
Financial Statements
A Form 10-Q containing the detailed report of operations and
financial statements is available for viewing on the Company's
website at www.akersbio.com or www.sec.gov.
Conference Call Information:
Thursday, May 12, 2016 at 9:00 a.m. Eastern Time US:
1-888-359-3627 International: 1-719-457-1512 Conference ID: 2299421
Webcast: http://public.viavid.com/index.php?id=119627
About Akers Biosciences, Inc.
Akers Biosciences 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.
For more information, contact: Akers Biosciences, Inc. Raymond
F. Akers, Jr. PhD Co-founder and Chief Scientific Director Tel. +1
856 848 8698 Taglich Brothers, Inc. (Investor Relations) Chris
Schreiber Tel. +1 917 445 6207 Email: cs@taglichbrothers.com
finnCap (UK Nominated Adviser and Broker) Adrian Hargrave / Scott
Mathieson (Corporate Finance) Steve Norcross (Broking) Tel. +44
(0)20 7220 0500 Vigo Communications (Public Relations) Ben Simons /
Fiona Henson Tel. +44 (0)20 7830 9700 Email:
akers@vigocomms.com
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