28 Jun 2012 07:00
Embargoed: 0700hrs, 28 June 2012
Akers Biosciences, Inc.
("ABI" or the "Company")
Preliminary Results for the Year Ended 31 December 2011
Operational Summary
§ Successfully completed an oversubscribed secondary offering of $3.3 million net to ABI in February 2011
§ Completed development of PIFA PLUSS PF4 test - a product line extension of the Company's flagship PIFA Heparin/PF4 Rapid Assay. PIFA PLUSS PF4 incorporates ABI's patented and FDA-cleared seraSTAT Rapid Blood Cell Separator technology into the rapid PIFA platform to integrate the preparation of a whole blood patient sample into the rapid test procedure, shaving at least ninety minutes off the time-to-result
§ Granted two additional Unites States Patents: Novel, semi-quantitative test strip utilized in the Company's Tri-Cholesterol "Check" product and the Rapid Blood Cell Separator technology. The Company's Intellectual Property portfolio consists of 23 Patents
§ Comprehensive protocol completed at major US university confirmed PIFA Heparin/PF4 Rapid Assay as a Rule-Out test for Heparin-Induced Thrombocytopenia (HIT) given its highly favourable 100% Negative Predictive Value. A peer-reviewed Journal Article is pending
Financial Summary
§ Revenue for the Company's flagship PIFA Heparin/PF4 Rapid Assay: $1.1 million (2010: $940k)
§ Revenue for 2011: $1.8 million (2010: $3.1 million)
§ Gross Profit Margin: 49.9% (2010: 57.8%)
§ Adjusted Loss Before Tax: $3.58 million (2010 loss: $920k)
§ Earnings Before Interest, Depreciation, Taxes & Amortization (EBIDTA): loss $3.3 million (2010 loss: $649k)
§ Basic & diluted loss per share: $0.02 (2010: $0.01)
§ Inventory at year end: $685k (2010: $685k)
§ Company is debt free with current assets in cash and cash equivalents at year-end of $1.2 million (2010: $423k)
Post Year-End Developments
§ ABI solidified a private-label contract manufacturing relationship with a multilevel marketing organization lead by seasoned industry professionals
§ Initiated US launch of the PIFA PLUSS PF4 rapid HIT Antibody Rule-Out test
Thomas A. Nicolette, President and CEO, commented,
"Despite some setbacks in our distribution network for some of our emerging and second-tier products, ABI continued to demonstrate revenue growth for the PIFA Heparin/PF4 Rapid Assay. For 2012, we are focused on the comprehensive, US launch of the PIFA PLUSS PF4 rapid test and enhancing our market position for the PIFA Heparin/PF4 Rapid Assay with the help of our dedicated technical sales team and energized distribution network. We are also pleased with our progress in becoming a product development and contract manufacturing resource to companies within the nutraceutical testing marketplace and look forward to delivering measurable results this year."
Enquiries:
Thomas A. Nicolette, President and CEO
Tel. +1 856 848 8698
Antony Legge or Noelle Greenaway
Daniel Stewart & Company plc (Nomad and Broker)
Tel. +44 (0)20 7776 6550
Chairman's and Chief Executive's Report
The annual financial results for the Company, in US Dollars, for the year ended 31 December 2011 are presented within.
The PIFA Heparin/PF4 Rapid Assay-momentum initiated in 2010 continued into 2011 as the Company gained Heparin-Induced Thrombocytopenia ("HIT") testing market share, particularly in the United States. Our distribution relationships with Cardinal Health ("Cardinal") and Fisher HealthCare ("Fisher"), paired with the launch of ABI's dedicated technical sales account executives, resulted in a 15.1% increase in sales revenue over the Company's 2010 annual performance. For the first time since the launch of the product, sales of the PIFA Heparin/PF4 Rapid Assay exceeded $1M. Other PIFA platform tests sold exclusively to United States government entities also contributed to the Company's bottom line, bringing PIFA's total contribution to gross revenue to over $1.2M.
Sales of rapid tests that incorporate ABI's MPC Biosensor breath condensate technology rounded out the majority of the remaining product revenue for 2011 totalling $432k. Despite increased competition in the breath alcohol testing market in the United States, the brand recognition of BreathScan in the human resources testing sector allowed product sales to hold steady at 2010 levels. Demand for the products outside the USA fell below expectations as regulatory authorities in Australia and various countries in the EU required BreathScan International Ltd., ABI's strategic partner in those regions, to obtain country-specific certifications which could not be facilitated within 2011. In total, Revenue for 2011 totalled $1,785,068 with a Gross Profit Margin of 49.9%.
Throughout the fiscal year, the Company also focused its attention on the development of product line extensions, and in tandem, ABI was granted two US Patents, bringing ABI's Intellectual Property portfolio to a total of 23 Patents. Of particular interest is US Patent 7,896,167 B2 which safeguards the Company's novel , and FDA-cleared blood cell separator technology, marketed as seraSTAT, from competitive infiltration. seraSTAT forms the basis of the Company's PIFA PLUSS PF4 rapid test that was launched in late 2011. This point-of-care extension of the PIFA Heparin/PF4 Rapid Assay integrates the specimen preparation step into the assay procedure. Conventional methods of blood cell separation are labour-intensive, time-consuming, and typically involve phlebotomy and laboratory personnel, as well as electrically-powered centrifuges and other specialised equipment. seraSTAT requires an easily-obtained, and frequently-drawn whole blood sample, and within minutes, extracts the required and measured patient sample for immediate introduction into the PIFA PLUSS PF4 device. Subsequently, the rapid detection or rule-out of HIT-antibodies is delivered in less than ten minutes. Initial PIFA PLUSS PF4 field testing has garnered much support for the integrated HIT antibody test system, with laboratory staffs uniformly citing its ease-of-use and time- and cost-saving properties as unique and welcomed benefits to improve patient care. ABI envisions that seraSTAT may be marketed as a stand-alone product or in combination with PIFA and its other technologies to enhance the Company's product pipeline.
ABI also experienced a few set-backs within its distribution network during FY 2011. In late 2010, an agreement was announced with Al Tadawi Medical Equip TR LLC (later acquired by PharmaNova Medical Equipment ("PharmaNova")) to expand the sale of the Tri-Cholesterol "Check" product into the Middle East and India. As a result of uncertainty of PharmaNova's future success, a majority of the $1.65M 2010-receivable was reserved in 2011. In addition, and as was previously announced , in the latter part of 2011, Pulse Health, LLC ("Pulse") experienced difficulties in the manufacture of their reagent that was to be supplied to ABI to enable the Company to manufacture Pulse's Revelar breath tubes. Although out of ABI's control, the reagent shortage resulted in severe delays in the Company's production schedule and the quantities delivered to Pulse in FY 2011 were approximately $1.2M lower than originally expected.
Expenditures related to the Company's Research and Development activities held relatively steady in comparison to those of 2010 (2011: $698k (2010: $674k)). ABI's Sales and Marketing expenses increased exponentially from the prior year with the addition of a technical sales team initially charged with the task of developing direct hospital accounts for the PIFA Heparin/PF4 Rapid Assay (2011: $707k (2010: $254k)). At the close of 2011, a strategic shift in the sales team's focus was implemented to accelerate growth in PIFA sales through distribution. The objective is now to support and work collaboratively with both Cardinal's and Fisher's respective dedicated sales forces totalling over 300 strong, as their combined customer networks provide ABI with immediate access to key decision makers in the majority of US hospitals.
Considering management's conservative stance on the PharmaNova reserve, and the delay in shipments to Pulse, ABI's adjusted loss before tax is $3.58M (2010 loss: $919k) and basic & diluted loss per share is $0.02 (2010 loss: $.01). The total value of inventory held by the Company at 31 December 2011 was similar to FY2010 (2011: $685k (2010: $685k).
Outlook
For 2012, ABI is focused on a comprehensive, US launch of the PIFA PLUSS PF4 rapid test, and is actively seeking partners for international distribution. Having dedicated technical resources to support PIFA in the field has energized the Company's US distributors to renew their focus on the PIFA Heparin/PF4 Rapid Assay; measurable results are expected to accrue beginning Q3:2012. To further drive sales, ABI anticipates the publishing of peer-reviewed Journal articles that provide third party verification of the positioning of the PIFA assays as cost- and time-efficient and clinically effective rapid, HIT-antibody Rule-Out tests. ABI plans to complete the product development of its PulmoHealth Check line in 2012 now that the PLUSS product has been launched. Finally, the Company has well-established product development capabilities that utilize ABI's MPC Biosensor breath condensate technology within the emerging nutraceutical testing and monitoring sector. ABI is solidifying private-labelled contract manufacturing relationships with multilevel marketing organizations that have leadership positions in the nutraceutical supply industry
The Directors believe that the continuing improvement in the Company's commercial prospects is not reflected in its current share price and that this has a detrimental impact on the Company's ability to raise further funds to invest in the growth opportunities currently available to it. The Board is reviewing a number of options which might improve the situation.
Thomas A. Nicolette, President and Chief Executive Officer
Raymond F. Akers, Jr. PhD, Chairman
28 June 2012
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AKERS BIOSCIENCES, INC AND SUBSIDIARIES | |||
Consolidated Statement of Operations | |||
As of 31 December 2011 and 2010 | |||
2011 | 2010 | ||
$ | $ | ||
Revenues: | |||
Product Revenue | 1,785,068 | 3,053,281 | |
License Revenue | - | - | |
Total Revenue | 1,785,068 | 3,053,281 | |
Cost of Sales: | |||
Product Cost of Sales | (894,562) | (1,287,686) | |
Total Cost of Sales | (894,562) | (1,287,686) | |
Gross Profit | 890,506 | 1,765,595 | |
Other Income | 316,819 | 3,163 | |
Administrative Expenses | 3,250,195 | 1,521,084 | |
Sales and Marketing Expenses | 707,790 | 254,089 | |
Research and Development Expenses | 698,426 | 674,682 | |
Non-Cash Share Based Compensation | 27,766 | 111,015 | |
Amortization of Non-Current Assets | 375,978 | 340,481 | |
Impairment of Non-Current Assets | - | - | |
Loss from Operations | (3,852,830) | (1,132,593) | |
Other Income/Expenses | |||
Foreign Currency Transaction (Income)/Expense | 29,628 | 70,703 | |
Investment (Income)/Expense | (290) | - | |
Total Other Expense/(Income) | 29,338 | 70,703 | |
Loss Before Income Taxes | (3,882,168) | (1,203,296) | |
Income Tax Benefit | 297,890 | 283,413 | |
Net Loss | (3,584,278) | (919,883) | |
Basic & diluted loss per share | $ (0.02) | $ (0.01) | |
Weighted average basic & diluted common | |||
shares outstanding | 163,219,502 | 114,386,516 | |
AKERS BIOSCIENCES, INC AND SUBSIDIARIES |
Consolidated Statements of Changes in Equity (Deficit) |
As of 31 December 2011 and 2010 |
Share | Capital | Accumulated | Total | |
Capital | Reserves | Deficit | Equity | |
$ | $ | $ | $ | |
Balance at 31 December 2008 | 77,799,990 | (67,521,728) | 10,278,262 | |
Changes in Equity for 2009 | ||||
Net loss for the year | (4,628,017) | (4,628,017) | ||
77,799,990 | - | (72,149,745) | 5,650,245 | |
Recognition of share based payments for options & warrants | 1,506,613 | 1,506,613 | ||
Exercise of warrants & stock options | 21,505 | 21,505 | ||
Balance at 31 December 2009 | 79,328,108 | - | (72,149,745) | 7,178,363 |
Changes in Equity for 2010 | ||||
Net loss for the year | (919,883) | (919,883) | ||
79,328,108 | - | (73,069,628) | 6,258,480 | |
Recognition of share based payments for options & warrants | 164,436 | 164,436 | ||
Sale of ordinary shares | 20,320 | 20,320 | ||
Exercise of warrants & stock options | 2,632 | 2,632 | ||
Balance at 31 December 2010 | 79,515,496 | - | (73,069,628) | 6,445,868 |
AKERS BIOSCIENCES, INC AND SUBSIDIARIES | |||
Consolidated Cash Flow Statements | |||
As of 31 December 2011 and 2010 | |||
Year Ended | Year Ended | ||
31-Dec-11 | 31-Dec-10 | ||
$ | $ | ||
Cash flows from operating activities | |||
Net loss for the year | (3,584,278) | (919,883) | |
Adjustments for: | |||
Provisions for bad debts | 1,650,185 | 12,320 | |
Non-cash equity position in BreathScan Int'l | (290) | - | |
Non-cash share based compensation | 27,766 | 111,015 | |
Depreciation, amortization & impairment of non-current assets | 525,332 | 484,029 | |
(1,381,285) | (312,519) | ||
Movements in working capital | |||
(Increase)/decrease in trade and other receivables | (476,809) | (1,605,875) | |
(Increase) in inventories | (52) | (8,271) | |
(Increase)/decrease in other assets | (2,687) | 35,463 | |
Decrease in trade and other payables | (400,929) | 162,102 | |
(880,477) | (1,416,581) | ||
Net cash used in operating activities | (2,261,762) | (1,729,100) | |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (57,179) | (256,285) | |
Capitalized development costs | (190,550) | (263,290) | |
Net cash used in investing activities | (247,729) | (519,575) | |
Cash flows from financing activities | |||
Proceeds from issuance of ordinary shares | 3,017,746 | 20,320 | |
Proceeds from issuance of warrants | 261,300 | 2,632 | |
Net cash from financing activities | 3,279,046 | 22,952 | |
Net decrease in cash and cash equivalents | 769,555 | (2,225,723) | |
Cash and cash equivalents at beginning of year | 423,250 | 2,648,973 | |
Cash and cash equivalents at end of year | 1,192,805 | 423,250 | |
Supplemental Disclosure of Cash Flow Information | |||
Non-cash financing activities | |||
Exchange of a long-term receivable, less impingement and | |||
deferred revenue for patent rights | 2,062,410 | - | |
Issuance of shares for settlement of other payables | - | 41,250 | |
Issuance of shares & warrants in exchange for deferred charges | - | 12,171 | |
Annual Report and Accounts
The Annual Report and Accounts will be posted to shareholders on 30 June 2012 and will be available thereafter on the Company's website: www.akersbiosciences.com