First Half 2017 Financial Review
Key unaudited consolidated figures for the six months ended June 30, 2017 (thousands of US dollars, except per share data):
As of or for the six months ended June 30
2017
2016
Change
Change
as a %
Revenue
24,260
12,945
11,315
87.4%
Gross profit
19,261
8,457
10,804
127.8%
Operating expenses
(18,709)
(15,985)
(2,724)
(17.0)%
EBITDA (profit/(loss))
1,433
(6,699)
8,132
Operating profit/(loss) (EBIT)
552
(7,528)
8,080
Net income/(loss)
538
(7,618)
8,156
Earnings per share, basic ($)
0.01
(0.17)
0.18
Revenue and income
Total revenue for the first six months ended June 30, 2017, increased by 87% to $24.3 million, compared to $12.9 million a year earlier. Revenue included the sale of the Company's patents directed towards colorectal cancer to Exact Sciences. Excluding revenue from Exact Sciences for both periods, total revenue increased by approximately 10% to $12 million during the first half of 2017. ConfirmMDx accounted for 93% of such revenue in the first half of 2017, compared to 98% in the first half of 2016. Test volumes for SelectMDx grew tenfold year-on-year and account for 35% of total volumes, while the revenue contribution in this early stage of payor adoption in the US amounts to 5%. Revenue recognized on the sales of ConfirmMDx and SelectMDx represented nearly 50% of total gross billings, a level comparable to 2016. A marginal increase in the revenue recognition rate for ConfirmMDx was offset by the lower rate applicable to the fast-growing test volumes of SelectMDx.
The gross profit margin on products and services remained level with last year at nearly 60% with improvements for ConfirmMDx being offset by the lower margins on SelectMDx given the initial lower levels of revenue recognition.
Operating expenses for the six months ended June 30, 2017 amounted to $18.7 million, up $2.7 million compared to the first half of 2016. The increase partly resulted from the accelerated expansion of the sales force in the US to address the mounting market opportunity for its robust portfolio of molecular diagnostic tests for urology. Also, reflected in the increase, is the impact for the full 6 months of investments made during 2016 such as the build-out of the European operations including commercial and laboratory staff.
Operating profit and EBITDA improved by $8.1 million to $0.6 million and $1.4 million, respectively, largely attributable to the royalty buy out by Exact Sciences.