Akers Biosciences halved revenue in 3Q 2015. Seeks distributors in Europe and Scandinavia

Akers Biosciences, Inc., a medical device company reported product revenue for 3Q 2015 was $169,473, more than halved compared to 3Q 2014, when it was $359,980.

The company says this is reflecting lower than usual distributor stock depletion of PIFA Heparin/PF4 Rapid tests during the summer months. However, the company expects the demand to return to normal in 4Q.

The company said that PIFA Heparin/PF4 Rapid Assay products are now in over 200 US hospitals – and growing by  approximately 20 new hospitals per month, each worth an annualised average of $15,000 per
annum to Akers Bio.

The company reported loss before income tax at $2,326,893, compared to loss 3Q 2014, of $1,124,320.

The company comments that this is reflecting significantly expanded personnel costs, higher marketing costs associated with product launches, higher R&D costs associated with new product development and a one-off impairment ($466,476) of historic patents/trademarks no longer contributing to sales.

Raymond F. Akers, Jr. PhD, Co-founder and Executive Chairman, commented:

Raymond F. Akers Jr., Ph.D.
Co-founder and Executive Chairman

“Akers Bio’s product revenues in the first nine months of the year were $1,325,877. This is primarily being driven by the growth in domestic sales of our flagship rapid tests for Heparin-Induced Thrombocytopenia – an allergic reaction to the widely used blood thinner, heparin.”

 PIFA Heparin/PF4 Rapid Assay products in 500 hospitals by end of 2016

Akers further said:

“On this basis, assuming these average metrics continue, annualized PIFA Heparin/PF4 Rapid Assay product revenue for the US alone should be $3.75 million entering 2016. Furthermore, at the current growth rate, we believe we have the potential to be at close to 500 hospitals in the US by December 31, 2016.”

China next biggest ex-US markets, seeking distributors in Europe

The Chairman said that the company was making significant progress on its international strategy for PIFA Heparin/PF4 Rapid Assay business.

He said: “We believe that China could ultimately become one of the Company’s biggest ex-US markets for these tests and a huge advancement was made in the Chinese commercialization strategy when, earlier this month, the China Food and Drug Administration (CFDA) approved our tests for medical use throughout Mainland China.”

The Chairman said that the company is confident of a growing and material contribution to PIFA Heparin/PF4 Rapid Assay revenues from NovoTek, our exclusive distributor for this product in Mainland China.

Akers added that the company was seeking to establish marketing channels for PIFA Heparin/PF4 Rapid Assay products in countries including within Europe and Scandinavia.

Outlook

Comenting the outlook, Akers said:

“Like many medical device companies in the early phases of commercialization, Akers Bio has yet to establish consistent ordering patterns with its customers.”

“This was evident in the third quarter in the lower than usual distributor stock depletion of PIFA Heparin/PF4 Rapid Assays during the summer months which, in turn, reduced domestic product revenue for these products during the third quarter.”

However, I am pleased to say that our early sales figures indicate that demand in the US is returning to normal levels in the fourth quarter.”

Akers expressed his belief that the CFDA’s approval of PIFA Heparin/PF4 Rapid Assay products in China will serve as a catalyst for further orders there from the company’s exclusive distributor for the products prior to year-end.

Akers said: “While we have good revenue visibility through the remainder of the year in the domestic PIFA Heparin/PF4 Rapid Assay business, the overall outlook for the year is wholly dependent on the Company obtaining and fulfilling a number of substantial orders for these – and other – products from outside of the US in the remainder of the year.”

“It should be noted that $2.4 million of the $5.7 million loss before income tax in the first nine months of the year is non-recurring,” he added.

“Beyond year end, assuming we continue to add hospital customers in the US for PIFA Heparin/PF4 Rapid Assay products at the same rate, we should be moving into 2016 with a core revenue base from these products in the US alone of $3.75 million; and, with further acceleration of this growth rate anticipated, be on a clear path to doubling that moving into 2017.”

First three quarters trading dissapoints

“Whilst trading for the first three quarters of the year has been disappointing, the core US PIFA Heparin/PF4 Rapid Assay business, combined with the additional potential offered from international sales and from our Akers Wellness line, provides us confidence in the long term growth prospects of Akers Bio.”