4basebio AG: 4basebio AG Reports positive Financial Results for Fiscal Year 2019 – Financial Guidance Met

DGAP-News: 4basebio AG / Key word(s): Annual Results
24.04.2020 / 07:30
The issuer is solely responsible for the content of this announcement.

4basebio AG Reports positive Financial Results for Fiscal Year 2019 –
Financial Guidance Met

Conference call to be held today, 24 April 2020, 3:00pm CET/2:00pm BST

4basebio meets full year financial guidance:

– Revenues for 2019 of EUR 15.7 million up 19% (2018: EUR 13.1 million)
– Adjusted EBITDA increases by 198% to EUR 2.9 million (2018: EUR 1.0 million)

– EUR 120 million proceeds on 2 January 2020 from sale of proteomics and immunology businesses to Abcam plc
– Retained core genomics technology focussed on development of synthetic DNA for application in gene therapy and gene vaccine markets
– Continued Buy and Build strategy underpinned by very strong cash position

Heidelberg, Germany and Cambridge, UK, 24 April 2020 – 4basebio AG (Frankfurt: 4BSB; ISIN: DE000A2YN801; Prime Standard) today reported positive results for the fiscal year ending December 31, 2019.

“2019 has been a remarkably successful year for the company. During the first three quarters of the year, we continued with our focus on strong growth and ongoing commercial opportunities across our proteomics, immunology and genomics assets. As a result, we are pleased to announce that we achieved our financial objectives in 2019, with a strong increase in adjusted EBITDA underpinned by a double-digit revenue growth,” explained Dr Heikki Lanckriet, CEO of 4basebio.

“Importantly, the sale of our proteomics and immunology businesses to Abcam for €120m signed in November 2019 confirmed management’s long held view of the Company’s genuine enterprise value and has also reshaped the focus of the group: Our exciting retained genomics technology is highly relevant to the development of synthetic DNA for application in gene therapy and gene vaccine markets, two rapidly emerging seismic trends in personalised medicine. Over the next two years, the development of synthetic DNA manufacturing capacity will become the principal focus of our business,” Dr Lanckriet continued.

David Roth, CFO of 4basebio, noted: “The Abcam transaction represented a highly successful implementation of our buy and build strategy which the company undertook between 2016 and 2018, with the sale of the assets acquired through the purchases of Expedeon, Innova and TGR. This means that 4basebio has now significant cash resources to support its ongoing growth strategy.”

2019 Financial Results:
Revenues in fiscal year 2019 amounted to EUR 15.7 million (2018: EUR 13.1 million) in line with the original forecast for the year (Guidance: double digit revenue growth). The growth in revenues arose from a combination of acquisitive and organic growth and includes the revenues of TGR Biosciences for the full year (2018: eight months). Revenues for 2019 results increased 19% over 2018 as a result.

Total net operating expenses increased to EUR 17.4 million in 2019 (2018: EUR 13.7 million) with the expansion of the Group. This included other operating expenses of EUR 1.4 million (2018: income of EUR 1.2 million) from a revaluation of acquisition earn outs at year end. Excluding this item, the increase in operating expenses of EUR 1.3 million was mainly driven by increasing business scale.

Reported EBITDA was EUR 1.1 million for the year (2018: EUR 1.8 million), this change was driven by the year on year change in acquisition earn outs of -EUR 2.4 million. Adjusted EBITDA for the year was EUR 2.9 million (2018: EUR 1.0 million); this is in line with the revised market guidance issued in October 2019 of EUR 2.5 to 3.0 million for adjusted EBITDA. Prior to the sale of assets to Abcam, the Company has considered, as in previous years, adjusted EBITDA to be a key metric. This excludes charges and income relating to depreciation, amortisation and acquisition accounting as well as equity settled share compensation; it also excludes EUR 360 thousand of accrued expenses relating to the 2020 Abcam transaction.

Loss before taxes (EBT) in 2019 was EUR 2.6 million (2018: EUR 503 thousand). The reported net loss for 2019 was EUR 2.6 million (2018: EUR 301 thousand). This is primarily a consequence of the year on year change in acquisition earn outs of -EUR 2.4 million, and EUR 360 thousand of Abcam transaction related accrued expenses.

Non-current assets at EUR 52.2 million were broadly consistent with the previous year (EUR 51.8 million) and reflect primarily goodwill and intangible assets arising on recent acquisitions. Current assets reduced to EUR 10.0 million compared with EUR 12.4 million in 2018. This is directly due to a reduction in cash balances following settlement of certain financial obligations.

Underlying net cash outflows from operating activities further improved from an outflow of EUR 158 thousand in 2018 to an inflow of EUR 1.1 million in 2019. Cash outflow from investing activities amounted to EUR 925 thousand, compared to EUR 6.7 million in the previous year. Cash flows from financing activities changed to an EUR 2.9 million outflow due to repayment of debt obligations, compared with a EUR 11.2 million inflow in the year 2018. The company closed the year with cash balances of EUR 3.7 million

Outlook 2020:
During 2020, 4basebio will report a significant accounting profit due to the disposal of its proteomics and immunology assets to Abcam which completed on 1 January 2020 with proceeds of EUR 120 million. In the near term however, it is expected that the group will report operational losses and cash outflows as the Group re-invests to scale and expand its activities. The operational cash burn for 2020, excluding expenses relating to the Abcam transaction, from the remaining business is expected to between EUR 2.5 million to EUR 3.5 million with revenues between EUR 0.5 million and EUR 1.0 million

4basebio is now primarily focussed on the development of commercial quantities of synthetic DNA for use in gene therapy and gene vaccine markets. The synthetic biology market is expected to reach US$38.7 billion in 2020[1] with a CAGR[2] of 44.2%. DNA synthesis is the largest segment of this market with a CAGR of 57.8%.

Synthetic DNA is a new technology, with very clear performance, safety and cost benefits in comparison to current DNA bio fermentation manufacturing processes.

Over the next two years, 4basebio expects to invest up to EUR 15.0 million in the ongoing development of its proprietary technology for DNA manufacture, the subsequent scaling of its business and the development of a DNA manufacturing facility to produce commercial quantities of synthetic, clinical grade DNA. Alongside this we will continue our buy and build strategy with the aim of acquiring assets and technologies in gene therapy and vaccine workflows which are complementary to the core synthetic DNA production technology.

Management believes the pursuit of this strategy offers a value creation opportunity that can in due course significantly exceed the EUR 120 million disposal of the immunology and proteomics assets.

Conference call details:
4basebio will host a conference call (conducted in English) today, 24 April 2020, at 3:00pm CET/2:00pm BST, to discuss the consolidated financial statements and important developments during the reporting period and to provide a strategic update and financial outlook.

Interested parties may pre-register and will receive dedicated dial-in details to easily and quickly access the call.
Link: https://services.choruscall.de/DiamondPassRegistration/register?confirmationNumber=8476800&linkSecurityString=9a125af80
After registration, please check your email for your Confirmation.

The conference call will be accompanied by a slide presentation which can be accessed during the call by following this Link: https://78449.choruscall.com/dataconf/productusers/4basebio/mediaframe/37444/indexl.html (Presentation only, no sound – advised for participants on the phone)

Please dial in 5 minutes before the beginning of the event.

An audio recording of the conference call will be available the next day on the Company’s website at www.investors.4basebio.com

Consolidated Financial Statements (IFRS):
The proteomics and immunology businesses sold to Abcam with effect from January 1, 2020 have been classified as a disposal group held for sale and as discontinued operations as of December 31, 2019 in accordance with the requirements of IFRS 5. Within the group financial statements, the income and expenses and the assets and liabilities, attributable to the discontinued operations in the consolidated financial statements had to be summarized in one item and the prior-year figures adjusted accordingly. In the following tables, the earnings situation, the assets and liabilities as well as the financial situation of the 4basebio Group is presented both with regard to the discontinued business areas and with regard to the continued operations of the 4basebio Group. The two business areas proteomics and immunology account for the majority of the items previously reported in the consolidated income statement and balance sheet.

Consolidated income statement          
    2019   2018
    Divisions     Divisions  
[in TEUR]   Con-tinued Discon-tinued Total   Con-tinued Discon-tinued Total
Sales revenues   1,052 14,605 15,657   1,174 11,954 13,128
Other operating income   145 70 215   221 1,009 1,230
Operating expenses   -4,994 -12,658 -17,652   -4,473 -10,470 -14,943
Result from operating activities (EBIT)   -3,797 2,017 -1,780   -3,078 2,493 -585
                 
Financial result   -308 -460 -768   229 -147 82
Income taxes   317 -422 -105   20 182 202
                 
Result for the period   -3,788 1,135 -2,653   -2,829 2,528 -301
                 
Earnings per share                
                 
> Basic, loss for the year attributable to ordinary equity holders   -0.07 0.02 -0.05   -0.06 0.05 -0.01
> Diluted, loss for the year attributable to ordinary equity holders   -0.06 0.02 -0.04   -0.05 0.05 -0.01

 

Consolidated balance sheet      
[in TEUR] 31.12.2019 31.12.2018 Δ in %
Non-current assets 52,214 84% 51,808 81% 1%
thereof: continuing operations 3,646        
thereof: discontinued operations 48,568        
Current assets 10,037 16% 12,369 19% -19%
thereof: continuing operations 2,501        
thereof: discontinued operations 7,536        
           
Total assets 62,251 100% 64,177 100% -3%
           
Equity 48,096 77% 46,502 73% 3%
Non-current liabilities 6,093 10% 9,916 15% -39%
thereof: continuing operations 1,532        
thereof: discontinued operations 4,562        
Current liabilities 8,061 13% 7,759 12% 4%
thereof: continuing operations 2,535        
thereof: discontinued operations 5,527        
           
Total equity and liabilities 62,251 100% 64,177 100% -3%

 

Within the group financial statements, the consolidated cash flow statement includes cash inflows and outflows attributable to both discontinued operations and continuing operations. In the following table, the cash flows of the 4basebio Group is presented both with regard to the discontinued operations and with regard to the continuing operations of the 4basebio Group.

Consolidated Cashflows          
[in TEUR] 2019   2018   Δ in %
Cash flow from operating activities 1,098   -158   + >100
thereof: continuing operations -2,694   -3,129    
thereof: discontinued operations 3,792   2,971    
Cash flow from investing activities -925   -6,707   + >100
thereof: continuing operations -421   -441    
thereof: discontinued operations -504   -6,266    
Cash flow from financing activities -2,875   11,187   – >100
thereof: continuing operations -902   7,224    
thereof: discontinued operations -1,973   3,963    
           
Foreign Exchange 161   -38    
Opening Cash 6,238   1,954    
Closing Cash 3,697   6,238   – >40

 

The Company’s 2019 Annual Report will be available online in the 4basebio website investors’ section from April 30, 2020.

For further information, please contact:

4basebio AG
Dr. Heikki Lanckriet, CEO/CSO
Phone: +44 1223 873 364
Email: heikki.lanckriet@4basebio.com

Dr. Robert Mayer, Manager IR
Phone: +49 171 3876540
Email: robert.mayer@4basebio.com

MC Services AG
Julia Hofmann
Phone: +49 89 210228 0
Email: 4basebio@mc-services.eu

About 4basebio AG:

4basebio AG, formerly operating under the name of Expedeon AG, is an enabler of exciting advances in medical science and patient care. After divestment of its immunology and proteomics products portfolio on January 1 2020, the Company changed its name to 4basebio AG reflecting the enhanced focus on technologies and products centered around DNA. The Company is focusing on DNA manufacturing to supply DNA products for therapeutic and other uses requiring large amounts of high-purity DNA, such as the fast-growing market of novel gene therapies and gene vaccines. Besides DNA manufacturing, 4basebio aims at providing research and diagnostic products based on its RNA reverse transcriptase, DNA polymerase and DNA primase enzymes, addressing the research tools and diagnostic products markets.

4basebio AG has offices in Germany, Spain, UK, and the US. The Company is listed on the Prime Standard segment of the Frankfurt Stock Exchange (Ticker: 4BSB; ISIN: DE000A2YN801).

More information: www.investors.4basebio.com

# # # This publication is intended for information only and constitutes neither an offer to sell nor an invitation to buy securities. Some statements included in this press release, relating neither to proven financial results nor other historical data, should be viewed as forward-looking, i.e. not definite. Such statements are mainly predictions of future results, trends, plans or goals. These statements should not be considered to be total guarantees since given their very nature they are subject to known and unknown risks and imponderability and can be affected by other factors as a consequence of which the actual results, plans and goals of 4basebio AG may deviate greatly from the established conclusions or implied predictions contained in such statements. 4basebio does not undertake to publicly update or revise these statements in the light of new information or future results or for any other reason. # # #

[1] Allied Market Research: “Global Synthetic Biology Market (Products, Technologies, Applications and Geography) – Global Opportunity Analysis and Forecast – 2013 – 2020”
[2] Compound annual growth rate


24.04.2020 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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