Bioporto A/S
CSE:BIOPOR
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Bioporto A/S
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Welcome to this analyst call for the Interim Report for the 3-month period ended March 31, 2022. [Operator Instructions] Speakers, please begin.
Thank you, Denise. And a warm welcome to everyone participating on this Q1 '22 earnings release call. We are thankful that you have chosen to spend your morning or afternoon with us to review the latest quarterly report.
As some of you may know, my name is Tony Pare. I joined BioPorto as CEO 6 months ago. With me today is Neil Goldman, our Executive Vice President and CFO, who joined BioPorto at the same time.
Next slide, please, to the forward-looking statements. Before we begin, let me remind you that the company's remarks made during the conference call today, May 11, 2022, may include predictions, estimates or other information that may be considered forward-looking.
Sorry. Let's move to the slide where we have the first quarter summary, please. Looking back at the first quarter of 2022, I am happy with the progress and achievements we have made during Neil's and my first full quarter working with the team here at BioPorto. We have delivered strong performance in sales of the NGAL Test with a growth of 70% over the first quarter of 2021, including an impressive 116% growth in the U.S. for research use-only sales. To me, that is one single (sic) [ signal ] that we are gaining customer interest in the important U.S market.
However, I do want to temper my excitement with the fact that not all customers order every quarter. So these results, to some degree, reflect the benefit of timing on some of these orders.
Furthermore and even more important to the future of the company, we continue making solid progress in enrollment of patients for the U.S. FDA application for pediatric use of the NGAL Test. Therefore, our guidance in this regard has not changed. Specifically, we remain confident that we will complete the targeted enrollment of patients by the end of June 2022. This is a very important step in the assembly of our submission package since it is completely reliant on factors that we can't totally control, which is the ability to find and obtain consent from patients to participate in the clinical trial. We will then finalize the analysis of the data to support the FDA filing.
Concurrently, our teams are focused on completing the submission documentation and preparing quality assurance and production to launch the NGAL Test in the U.S. The NGAL Test has been granted breakthrough device designation by the FDA for expedited review. Breakthrough device designation is granted by the FDA for devices that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or condition and where neither approved nor cleared alternatives exist.
And finally, a highlight of the quarter was successfully securing a fully subscribed share offering. Funds transferred on April 1 with net proceeds of DKK 93 million, which provides a runway for the execution of our strategic targets.
Next slide, please. Let's turn back to our strategy. During 2022 and into 2023, our attention in BioPorto will be on preparing for the launch of the NGAL Test in the U.S. initially for pediatric and subsequently for adults. Along the way, we will work to sustain our other revenue streams and continue to develop a pipeline of potential new products, but let me be clear, those other activities will never take priority over our focus on a U.S. launch of an FDA-cleared product.
And that is the theme in the first pillar of our strategy, which is to drive NGAL Test market adoption and have a pipeline of high-value medical products, first and foremost, completing the clinical trial and submitting an application to the FDA. In the meantime, we will generate NGAL awareness by promoting its use in the rest of the world through our distributor partners.
As we get closer to launching in the U.S., we will invest in the U.S. commercial team and premarket to key target accounts. We have recently made investments in some business development and marketing personnel in the U.S. However, we will be conservatively balanced in this regard, leaning in with additional investment following our FDA submission and when we get some sense of approval time lines.
Our second pillar is to strengthen the company to scale and execute. We do so by investing in our production, quality and documentation systems while solidifying our supplier relationships. We have completed audit on our quality system to identify gaps and to ensure the company is FDA audit-ready. It also means focusing on our core business operations and financing of the company.
Our third pillar is to attract, develop and retain the best and brightest employees aligned with our value. Building the team for the future of BioPorto, we need to recruit the very best to help drive success. As people are becoming increasingly selective, it is our job and goal to constantly ensure that BioPorto be a company where employees are motivated to join and stay.
Next slide, please. Having painted the picture of where we are going, let me bring you up to speed on where we are in the regulatory process for getting clearance for the NGAL Test in the U.S. In November 2021, we stated our expectations to complete enrollment for the third part of a 3-part clinical study to support an FDA submission of the NGAL Test for use in identifying children at risk for acute kidney injury by the end of the first half of 2022. As I shared during my introductory comments, I'm happy to reiterate that we remain on track to do so.
The participation of 15 top hospitals across the U.S. to conduct their enrollment has been very fulfilling. Being such a pivotal element of our strategy and value creation, I am very pleased with our R&D and regulatory teams' ability to drive and deliver on these important milestones for the company.
After completion of enrollment, we will proceed with data analysis to assemble the clinical support documentation portion. This clinical package is combined with all of our bench testing protocols, analysis and documentation to form the de novo submission package for FDA review. As you know, the review process can take as much as 150 calendar days to complete, which does not include time where the clock has stopped to answer FDA inquiries.
Next slide, please. At this stage, I'll turn the call over to Neil for a breakdown of Q1 2022 results.
Thanks, Tony. I'm also glad to be here to present the financial figures for the quarter and if you could advance the slide to the one with the charts, please. For the quarter ending March 31, 2022, revenue was DKK 6.5 million, representing a growth of 17% compared to the prior year period. Our Q1 2022 revenue was the highest first quarter revenue in BioPorto's history. Most of the growth reflected strong sales of the NGAL Test, which totaled DKK 3.7 million during the first quarter of 2022 compared to DKK 2.2 million in the prior year period.
ELISA kit revenue increased during the first quarter of 2022 by 138% over the prior year period to DKK 0.9 million. Combined sales of the NGAL Test and ELISA kits more than offset the DKK 1.1 million reduction in antibody revenue compared to the prior year period. Antibody revenue was consistent with our expectations in the absence of an individual bulk order during the quarter.
Next slide, please. I'd next like to share further details on sales of the NGAL Test in Q1 2022. Notably, sales in the U.S. totaled DKK 2.7 million, which is a 116% increase over the prior year period. Sales in the U.S. are on a research use-only or RUO basis, and they reflected to a certain degree the timing of customer orders.
The NGAL Test sales in the rest of the world totaled DKK 1.1 million, which represents a solid 10% increase over the prior year period. Overall, as I shared on the prior slide, the NGAL Test total revenues were DKK 3.7 million during the quarter ended March 31, 2022, representing an increase of 70% over the prior year period.
Next slide, please. Turning to operating results for Q1 2022. The EBIT loss for the period was DKK 18.2 million, almost to the kroner the same level as the prior year period. Adjusted EBITDA of DKK 15.2 million for the first quarter of 2022 represents an improvement of DKK 0.5 million compared to the prior year period.
Looking at our cash burn. We reduced the cash used in operations and net investments in Q1 2022 from DKK 21.3 million in Q1 2021 to DKK 17.1 million in Q1 2022. This DKK 4.2 million improvement was principally related to our management of working capital.
Moving to the balance sheet. At March 31, 2022, BioPorto's cash position was DKK 27 million. But as you likely know, we completed a rights offering on April 1, 2022, that provided net proceeds of DKK 93.1 million. Therefore, on a pro forma basis, our cash position was DKK 120 million at the end of the first quarter. The DKK 93.1 million increase in equity from the rights offering is already reflected on the balance sheet as of March 31, 2022, because the offering was bound before the end of the quarter. The gross proceeds and expenses from the offering are classified in our March 31 balance sheet in other receivables and other payables, respectively.
Next slide, please. Finally, I'd like to briefly review some details of the offering. As I mentioned on the prior slide, the company raised DKK 93.1 million in net proceeds from a fully subscribed preemptive rights issue announced in March 2022, with binding commitments in March and a financial closing on April 1, 2022. 66.9 million new shares were offered at a subscription price of DKK 1.50 plus 4 subscription rights. These proceeds are enabling our team to focus on BioPorto's strategy to deliver the NGAL biomarker as the new standard of care in the assessment of kidney health, prepare the company to commercialize and scale and build a strong team dedicated to our mission.
As Tony and I have described previously, the offering was an important part of our long-term capital plan that includes a potential U.S. listing. Since the U.S. is the largest market for in vitro devices, including the NGAL Test, we plan to build a dynamic presence there to support our future customers.
Now handing it back to you, Tony, for closing remarks, and please advance to the next slide.
Thank you, Neil. As I stated in the introduction, I believe we are off to a good start in BioPorto with this first full quarter from our new team. We are on track with completing enrollment for the study's objectives and preparing a submission for the NGAL Test to the U.S. FDA. We have implemented a focused strategy, closed a fully subscribed share issue and have closed the books on Q1 2022 with a solid growth trajectory and a cash burn in line with our expectations.
In terms of financial guidance for 2022, we remain on track to meet our guidance as most recently stated in our annual report for 2021. Specifically, revenue of approximately DKK 24 million to DKK 26 million, EBIT loss of approximately DKK 95 million to DKK 100 million and adjusted EBITDA loss of approximately DKK 76 million to DKK 81 million.
As can be seen, the adjusted EBITDA loss this year will be higher than last year. This is due to higher costs related to sales and marketing compared to 2021 to prepare for commercialization of the NGAL Test in the U.S. and increasing cost to expand support for distribution in the rest of the world.
Can we advance the slide, please? It hasn't been advanced yet. Similarly, costs related to R&D are planned to increase over 2021 levels as a result of a full year impact of 2021 hirings, investments in quality systems and other costs related to preparing and submitting the de novo application of the NGAL Test in the U.S. to the FDA.
Finally, the full year impact of hires of management and other team members will also increase the adjusted EBITDA loss compared to last year. These are all investments in the future of BioPorto that I believe will prepare the company to execute on our strong potential after we have expectedly obtained clearance to sell the NGAL Test in the U.S.
On a final note, I want to express my gratitude to all of our employees for their hard work and dedication during my nearly 6 months at BioPorto. We have accomplished a lot in this short time, and our focus is on delivering results.
The theme I shared during our annual report has not changed. It is focused on executing our strategy and achieving our financial targets. And importantly, I am focused on keeping you and the market informed on our progress within the framework of what is prudent to disclose considering both NASDAQ rules and the competitive environment.
Therefore, to increase transparency and strengthen our shareholder dialogue, we have decided to host a monthly call where we will take questions and, to the degree possible, provide answers on what is top of your mind. Following this call, the next monthly call will be in June, so please watch for the invitation, which will come from our partner, HC Andersen Capital.
With that, I will hand it over back to Denise as we are happy to take questions.
[Operator Instructions] The first question comes from Yi Chen from H.C. Wainwright.
This is Chait on behalf of Yi Chen, and congratulations on the excellent progress. Just a quick question on the pivotal study. I know you spoke about target enrollment reaching by the second quarter. But how long does it usually take for the final analysis to be completed after complete enrollment? And based on that, I mean how should we start thinking about the final sensitivity and specificity of the assay?
Yes. So the analysis will take some time, Yi (sic) [ Chait ]. I would say it's a matter of months, not days. So it will take some time to assemble that data and understand whether we have a complete data set.
One of the things that I want to reiterate is that we will not submit to the FDA unless we believe that the submission package is approvable. And so that means the data has to be clean, the data needs to reflect the level of sensitivity and specificity as well as positive predictive value and negative predictive value that we believe will be approvable by the FDA.
On top of that, we also need to complete all our technical documentation and build a package that is complete and that we hope minimizes the number of questions that comes back from the FDA on it.
Awesome. And just a quick follow-up on some of your commercialization plans. I know you spoke about ramping up marketing and even R&D spend. But maybe comment on the educational efforts that you're having to do or anticipate to do to inform physicians about NGAL's predictability. Any feedback so far either from physicians or even from your customers would be very helpful.
Yes. So it wasn't that long ago, I attended a conference in San Diego. It was the Acute Kidney Injury CRRT Conference. CRRT stands for continuous renal replacement therapy. And I will tell you that many of the presentations that I went to at that conference mentioned NGAL as a possible biomarker, as a biomarker for acute kidney injury. And there was definitely a lot of anticipation on the part of clinicians that I met with there that this biomarker could be available to them on a cleared basis relatively quickly. There's definitely a demand that is out there, at least based on my interactions with the clinicians that I have met.
Excellent. And lastly, do you see any supply chain or inflation impact moving forward based on some of the recent news we've seen?
I'm sorry, Yi, can you say that again? I didn't hear it clearly.
Any impact from the supply chain and even inflation numbers that we've seen recently, any...
Okay. Yes. So from a supply chain standpoint and an inflation perspective, we haven't necessarily felt that impact yet. There's nothing to say that we won't in the future. We are able to produce a product that we need, at least for our trials and for supplying the customers that we have today. That doesn't mean that won't change in the future.
There are no further questions. Dear speakers, back to you.
Thank you, Denise. And I just want to close out by saying thank you to all our shareholders, our investors as we pursue this very important milestone of getting the submission completed and FDA approval. And we will continue to be very transparent in terms of where we are in the process and understand what's the top of your mind as we move along with these monthly meetings. Thank you again.
Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.