MDxHealth SA — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. Although the request refers to 2022 Q4, this filing is an annual report and does not provide a clear standalone fourth-quarter financial breakdown. Financial statements are prepared under IFRS as issued by the IASB and presented in U.S. dollars.
Business context
MDxHealth is a commercial-stage precision diagnostics company focused mainly on U.S. urology and prostate cancer testing. Its portfolio includes Confirm mdx, Select mdx, the acquired Genomic Prostate Score (GPS) test, and Resolve mdx for urinary tract infections. The GPS acquisition from Exact Sciences closed August 2, 2022, broadening the portfolio into treatment decision support for localized prostate cancer.
Financial results and liquidity
| Metric (US$ millions, except per-share data) | FY2022 | FY2021 |
|---|---|---|
| Revenue | 37.1 | 22.2 |
| Gross profit | 19.2 | 10.6 |
| Gross margin | 51.9% | 47.5% |
| Operating loss | (37.9) | (26.8) |
| Net loss | (44.0) | (29.0) |
| Net cash used in operating activities | (34.1) | (22.5) |
| Cash and cash equivalents at year-end | 15.5 | 58.5 |
| Loans and borrowings, carrying value | 35.5 | 12.1 |
Revenue rose 67% year over year; excluding GPS, FY2022 revenue was $27.7 million, up 25%. Confirm mdx generated $21.8 million (59% of revenue), GPS $9.3 million, and Resolve mdx $4.9 million; the remainder came from Select mdx and other sources. Medicare accounted for $15.8 million, or approximately 43% of revenue. The company reported a $288.3 million accumulated deficit.
Operating expenses increased: R&D was $7.6 million, selling and marketing $26.6 million, and general and administrative $23.5 million. The latter included $3.7 million of one-time GPS acquisition costs. Net financial expense increased to $6.1 million, including a $2.4 million GPS contingent-consideration fair-value charge and costs associated with refinancing the Kreos facility.
Current assets were $29.1 million and current liabilities $18.3 million at year-end. The company drew $35 million under an Innovatus facility in 2022 and repaid the Kreos facility. Investing cash outflow was $29.2 million, primarily reflecting the $25 million cash GPS purchase payment and capital expenditures. Financing cash inflow was $20.8 million.
After year-end, MDxHealth raised $43.0 million gross in a February–March 2023 public offering; management reported approximately $40.4 million in net proceeds. It stated that cash, expected product receipts, and those proceeds were expected to fund anticipated requirements for at least 12 months from the report date, based on forecasts and assumptions.
Changes, outlook, risks and unusual items
- Growth and mix: GPS contributed $9.3 million of FY2022 revenue after its acquisition. Confirm mdx’s share of revenue declined from 91% in 2021 to 59% in 2022, though it remains the largest product.
- Profitability and cash: Net loss widened by 52%, and operating cash use increased by $11.6 million. Management expects continued losses and significant cash outflows for at least the next 12 months; profitability depends on revenue growth and sufficient reimbursement.
- Acquisition consideration: GPS purchase consideration included $25 million cash, $5 million in shares, and contingent earn-outs of up to $70 million. The year-end fair-value liability was $52.9 million. Payments depend on revenue milestones and may be settled in cash or shares, subject to contractual terms. The filing describes earn-out periods and caps inconsistently in places; investors should consult the purchase agreement.
- Debt: Innovatus debt bears floating interest at the greater of prime or 4%, plus 4.25%, with interest-only payments for the first four years and maturity in August 2027. Additional $20 million and $15 million tranches may be available in 2024 and 2025, subject to conditions. The debt is secured by substantially all company assets, including key intellectual property, and includes restrictive covenants.
- Reimbursement and execution: Medicare coverage is important to revenue. Confirm mdx and GPS had positive Medicare coverage determinations; Select mdx’s Medicare technical review was completed successfully in April 2023, after year-end. Commercial-payor coverage, collections, test adoption, clinical evidence, and competition remain material uncertainties.
- Other risks and contingencies: The company reported no pending material legal proceedings, but sellers in the NovioGendix acquisition disputed approximately $880,000 of claimed milestones and had indicated possible arbitration. Other risks include continued operating losses and financing needs, regulatory changes for laboratory-developed tests, reimbursement and billing delays, competition, and dependence on key products and suppliers.
- Controls and audit: Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2022. A material weakness in interim close and reporting controls had been identified at September 30, 2022 after cutoff errors in previously released information; the errors were corrected and management reported remediation efforts. The auditor issued an unqualified opinion on the IFRS financial statements; the auditor did not attest to internal-control effectiveness.
- Operating plans: Management expects R&D and public-company costs to continue, while pursuing commercial adoption, reimbursement expansion, and pipeline development, including Monitor mdx. The filing gives no specific numerical revenue or profitability guidance.
Investor verification points
- Check subsequent revenue, test volumes, and product-level growth, particularly whether Confirm mdx concentration continues to decline and GPS growth supports the earn-out.
- Verify cash runway against operating cash burn, the terms and availability of the remaining Innovatus tranches, debt covenants, and the timing and form of GPS earn-out payments.
- Review Medicare and commercial-payor coverage, reimbursement rates, receivable aging and collections, and any changes to test coverage policies.
- Confirm remediation of interim reporting controls is sustained and review future filings for any restatement, new material weakness, or control changes.
- Resolve the NovioGendix milestone dispute and assess any resulting arbitration, payment, or legal exposure.
- Reconcile the filing’s differing descriptions of GPS earn-out measurement years and annual payment caps against the executed purchase agreement.
- Note the filing reports gross margin of 51.9% for 2022 and 47.5% for 2021; its accompanying narrative appears to contain a year-label typo.