BERLIN & NEVADA--(BUSINESS WIRE)-- MagForce AG (Frankfurt, Entry Standard, XETRA: MF6, ISIN: DE000A0HGQF5), a leading medical device company in the field of nanomedicine focused on oncology, published today its financial results for the fiscal year ending on December 31, 2014 and operative highlights.
Brain Cancer NanoTherm(TM) Therapy at MagForce AG
After establishing two further NanoActivator(R) devices at the University Hospitals in Münster and Kiel, in addition to the one at University Medical Center Charité in Berlin at the end of 2013, MagForce treated the first patient in its resumed Post Marketing Study MF 1001 in the first quarter of 2014. Additional NanoActivator(R) devices became operational in the world class hospitals in Frankfurt and Cologne during the first half of 2015, and the installation of the sixth NanoActivator(R) at the University Hospital at Göttingen is on schedule. This gives MagForce sufficient capacity to complete enrollment in its Post Marketing Glioblastoma Study as well as to accomplish its commercial treatment targets through 2017.
Commercial NanoTherm(TM) treatments have restarted in early 2015 and can now be more broadly performed, as NanoTherm(TM) therapy has CE certifications for the treatment of all Brain Cancers while the application of NanoTherm(TM) therapy in the Post Marketing Study is limited to recurrent Glioblastoma.
Prostate Cancer Therapy at MagForce USA, Inc.
Regarding the application of NanoTherm(TM) therapy for the focal treatment of Prostate Cancer, MagForce's unique technology is viewed as a very promising complement to current treatment approaches. In November 2014, the Company filed a Pre-Submission for NanoTherm(TM) therapy in intermediate risk Prostate Cancer with the FDA's Center for Devices and Radiological Health. Subsequently, in January 2015, an in-person meeting was held to discuss the agency's response. During this meeting MagForce received very constructive feedback on its submission and gained an understanding of the pathway to market in the USA. Based on this, MagForce USA, Inc. has recently filed an IDE with the FDA, and is now preparing itself to start the registration trial, once approved. The study, which is expected to enroll 120 patients, uses MagForce's NanoTherm(TM) technology to completely ablate Prostate Cancer lesions. By ablating the lesions, patients should be able to maintain active surveillance and avoid surgery and other treatments, with all the well-known side effects like impairment of urinary and sexual functions.
On March 10, 2014, MagForce AG incorporated MagForce USA, Inc., based in Nevada, USA, as a wholly owned subsidiary. This company will be responsible for opening up the North American market (USA, Puerto Rico, Mexico, Canada) for the Company's technologies and products. To strengthen the strategic focus of MagForce USA, Inc., all shares of MagForce Ventures GmbH were transferred to MagForce USA, Inc. against the issuance of 5,000,000 shares on May 15, 2014. In addition, a growth financing round was closed in the further course of 2014, with total proceeds of USD 15 million and an option to increase the size of the round to USD 30 million. Mithril Capital Management, founded by Ajay Royan and Peter Thiel, and MagForce AG are investors and strategic partners of MagForce USA, Inc. Because of the previously transferred prostate indication rights to MagForce Ventures GmbH, the US company is now fully able to start the process of developing and marketing NanoTherm(TM) therapy in this indication by itself.
Financial Results and Outlook:
Results of operations, net assets and financial position
MagForce's financial development in the fiscal year 2014 was in line with the Company's expectations. MagForce came closer to commercialization of its NanoTherm(TM) therapy and reached additional important milestones. Net loss was at EUR 1.0 million, so that is EUR 0.6 million below the previous year. However, excluding in both years the effects of outlicensing NanoTherm(TM) therapy rights for prostate cancer and brain tumors for the North America region (2014: EUR 6.9 million; 2013: EUR 5.2 million), net loss increased by EUR 1.2 million. This was mainly due to higher personnel costs resulting from an increased average staff number, the enlargement of the Management Board, and bonus payments in connection with financing rounds. Other operating expenses were affected by the increase of Investor Relations activities relating to the financing rounds in 2014, and associated rises in travel, legal, and consulting costs. Accordingly, operating expenses developed as forecasted.
Cash outflow from operating activities amounted to EUR 8.7 million, compared to EUR 6.8 million in the previous year. This increase relates primarily to higher operating expenses.
Liquidity at the end of 2014 was EUR 9.2 million, so this figure was nearly unchanged from the previous year (EUR 9.3 million). Overall, our capital structure has improved significantly in the last few years.
Looking forward, MagForce will have completed its target of installing and operating six NanoActivators(R) in Germany during the third quarter of 2015. This accomplisment will provide an operational clinical NanoTherm(TM) therapy structure to demonstrate expected medical value of NanoTherm(TM) therapy for the treatment of brain tumors as well as to continue the Post Marketing Glioblastom Study in Germany. During the second half of 2015, MagForce AG will also expand its efforts to establish a reimbursement structure for commercial NanoTherm(TM) brain cancer therapy in addition to that of private pay.
With respect to the Company's expansion phase outside Germany, MagForce USA, Inc. plans to submit an IDE with the FDA for the treatment of brain cancer with NanoTherm(TM) therapy after the approval has been granted for its IDE for the NanoTherm(TM) treatment of Intermediate Risk Prostate Cancer.
Given the roll-out plan and the ongoing clinical study, the Company expects the net loss for the fiscal year 2015 to be higher than in 2014. This increase is due to the discontinuation of special measures taken in 2014 from the out-licensing of distribution rights and to increased commercialization efforts, which can be seen in the context of the corresponding focus of the Company on key strategic value drivers. However, management expects revenues from commercial patients to start in 2015. MagForce treated a limited number of patients during the first half of 2015 but the Company expect to accelerate this process as 2015 progresses. For the fiscal year 2015, MagForce AG is forecasting a lower negative operating cash flow, which is partly due to increased cash revenue from product sales.
With its liquidity the Company will be able to cover its expenses until 2017.
About MagForce AG and MagForce USA, Inc.
MagForce AG, listed in the entry standard of the Frankfurt Stock Exchange (MF6, ISIN: DE000A0HGQF5), together with its subsidiary MagForce USA, Inc. is a leading medical device company in the field of nanomedicine focused on oncology. The Group's proprietary NanoTherm(TM) therapy enables the targeted treatment of solid tumors through the intratumoral generation of heat via activation of superparamagnetic nanoparticles. Mithril Capital Management, a growth-stage technology fund founded by Ajay Royan and Peter Thiel, along with MagForce AG, are investors and strategic partners in MagForce USA, Inc.
NanoTherm(TM), NanoPlan(R), and NanoActivator(R) are components of the therapy and have received EU-wide regulatory approval as medical devices for the treatment of brain tumors. MagForce, NanoTherm(TM), NanoPlan(R), and NanoActivator(R) are trademarks of MagForce AG in selected countries.
For more information, please visit: www.magforce.com.
This release may contain forward-looking statements and information which may be identified by formulations using terms such as "expects", "aims", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or "will". Such forward-looking statements are based on our current expectations and certain assumptions, which may be subject to a variety of risks and uncertainties. The results actually achieved by MagForce AG may substantially differ from these forward-looking statements. MagForce AG assumes no obligation to update these forward-looking statements or to correct them in case of developments, which differ from those, anticipated.
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