Making headway towards commercialisation

BioPorto Diagnostics 11 November 2019 Outlook
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BioPorto Diagnostics

Making headway towards commercialisation

Clinical outlook

Healthcare equipment & services

11 November 2019

Price

DKK2.9

Market cap

DKK507m

Shares in issue

174.9m

Free float

139.1m

Code

BIOPOR

Primary exchange

NASDAQ Copenhagen

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

11.3

(6.5)

(28.0)

Rel (local)

2.9

(14.0)

(37.5)

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DKK4.14

DKK2.56

Business description

BioPorto Diagnostics is a diagnostic company focused on the development and commercialisation of biomarker-based assays. The company’s portfolio includes The NGAL Test, for prediction of acute kidney injury, and an extensive antibody library.

Next events

Paediatric AKI FDA decision

Q419

Adult AKI application submission

Q419

Launch of NGAL Test in US

H120

Analysts

Nathaniel Calloway

+1 646 653 7036

Wiktoria O’Hare

+1 646 653 7028

BioPorto Diagnostics is a research client of Edison Investment Research Limited

BioPorto announced the decision to supplement its 510(k) paediatric application with additional data, rather than withdraw it. The FDA’s decision relating to The NGAL Test’s use in the risk assessment of acute kidney injury (AKI) in paediatric populations is expected by year end. In addition, the adult AKI programme is on track with expected FDA submission by year end. Our valuation is DKK993m (DKK5.67 per basic share).

Year end

Revenue (DKKm)

PBT*
(DKKm
)

EPS*
(DKK)

DPS
(DKK)

P/E
(x)

Yield
(%)

12/17

25.2

(34.2)

(0.21)

0.0

N/A

N/A

12/18

26.0

(42.5)

(0.24)

0.0

N/A

N/A

12/19e

31.5

(62.3)

(0.32)

0.0

N/A

N/A

12/20e

53.7

(54.7)

(0.27)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Paediatric programme back on track

In July 2019, the FDA requested additional information (AI) relating to ‘the clinical study data and collection of retrospective samples’, which could have been due to underrepresentation of certain subgroups, the manner of sample collection, or a number of other possibilities. The company initially guided the need to withdraw and resubmit its application; however, after conducting a thorough review and a productive dialogue with the FDA, BioPorto decided to respond to the AI letter in October 2019. The FDA’s conclusion is expected by year end since BioPorto’s response to the AI continues the 510(k)-clearance process, whereas a withdrawal and re-submission would have pushed back the overall timeline into 2020.

Adult programme proceeding as expected

The brief delay in the paediatric programme will impact on the adult AKI indication timeline as submission is expected by year end following the completion of the ongoing pivotal clinical trial. Since there are over 20 times more adult intensive care unit (ICU) patients than paediatric, the adult indication is the primary value driver for The NGAL Test and we also expect the test to enter follow-on indications, such as the emergency room and post-surgical markets. Continued enrolment is expected to include an additional 150–200 patients to supplement the clinical data in the 510(k) application and, upon FDA clearance, the company will commence commercialisation via its own salesforce and its distribution partners, Roche and Siemens.

Valuation: DKK993m (DKK5.67 per basic share)

We have not changed our valuation, which sits at DKK993m (DKK5.67 per basic share). We no longer anticipate a paediatric timeline delay, so we removed the clinical trial and associated expenses. Our expected commercialisation timeline has been pushed back by six months and we project that the company will need to raise DKK35m to reach sustainable profitability in 2021.

Investment summary

Company description: Commercial-stage diagnostic developer

BioPorto is a diagnostic company focused on the development and commercialisation of biomarker-based assays. The company is revenue generating and its portfolio includes The NGAL Test, an antibody library, ELISA kits, and other laboratory-use products. Its core commercial strategy is to launch The NGAL Test, a diagnostic for the rapid prediction of AKI risk, in the US. NGAL is a biomarker for AKI that increases in concentration in urine and blood plasma in a matter of hours following kidney injury, allowing for intervention before permanent damage occurs. The current standard of care biomarker, serum creatinine (sCr), can take over 24 hours to increase following AKI, at which point intervention is limited since substantial loss in renal function has occurred.

Valuation: DKK993m (DKK5.67 per basic share)

We have not changed our valuation, which sits at DKK993m (DKK5.67 per basic share). We no longer anticipate a paediatric timeline delay, so we removed the clinical trial and associated expenses. Our expected commercialisation timeline has been pushed back by six months and we project that the company will need to raise DKK35m to reach sustainable profitability in 2021. Following product clearance, the immediate market is the ICU and it remains our main value driver at DKK694m. We assign a 50% probability of success in the ICU environment and a 30% probability of success in the emergency department and cardiothoracic surgery settings. The majority of test sales are expected to be through the company’s distribution partners, Roche and Siemens, who are also the major providers of clinical chemistry platforms on which The NGAL Test runs. Our valuation also includes continued sales of The NGAL Test and the company’s other products for research purposes.

Financials: Room to grow

The company is revenue generating with sales of DKK26m in 2018. In Q219, the company revised full-year sales guidance to DKK32m for 2019, down from DKK40m. It is currently awaiting FDA feedback for the paediatric 510(k) application and continuing patient enrolment for the adult AKI clinical study, both of which require limited R&D costs and are offset by incoming revenue. We also increased administrative costs in line with current trends. In June 2019, BioPorto raised DKK36.7m by issuing 9.3m new shares at market price in a private placement. The proceeds were designated to support ongoing studies, product clearance of The NGAL Test, preparation for The NGAL Test US commercialisation, and strengthening overall liquidity. We forecast that BioPorto will need DKK35m in additional capital (up from our previous assumption of DKK10m), to reach sustained profitability in 2021. The increase is largely attributable to reduced revenue guidance for 2019.

Sensitivities: Risks of approval and adoption

The company has previously sought approval for The NGAL Test from the FDA and been rejected, and although it has been in communication with the agency regarding the AI request for the paediatric indication, there is no guarantee reviewers will be satisfied with BioPorto’s response to the request. The measurement of NGAL is potentially confounded by a number of other conditions, including sepsis, which is the leading cause of AKI in the ICU setting and can partially explain the significant variability seen in NGAL studies. The company also faces commercial hurdles associated with changing longstanding clinical practices in that sCr measurement is embedded into the AKI diagnosis despite its limitations. To this end, BioPorto is targeting inclusion into clinical guidelines, which will depend largely on the strength of clinical data and widespread support from the medical community.

Company description: AKI front and centre

BioPorto was founded in 2000 in Copenhagen and publicly listed on NASDAQ Copenhagen in 2004. The company was initially founded to commercialise intellectual property licensed from the Statens Serum Institut, although it expanded its portfolio to include several important proprietary assets. The company’s primary focus is on the development and commercialisation of The NGAL Test for the risk assessment of AKI, while another noteworthy asset is the generic rapid assay device (gRAD), which is a generalisable point-of-care lateral flow device. NGAL is a biomarker secreted by the kidney shortly following injury and has been studied as a potential replacement for the standard of care, sCr. The benefit of NGAL is that it has the potential to deliver a more accurate assessment in a matter of hours, enabling interventions to preserve function, whereas sCr can take over 24 hours to reach detectable levels among other limitations. The test is commercially available in the US for research purposes and approved in Europe and some APAC countries, but the company’s primary goal is approval in the US as a clinical diagnostic. It has completed clinical trials (although it has not released this data) and submitted an application to the FDA for approval for the prediction of AKI risk. We expect the product to initially be targeted to the intensive care setting. Potential future markets include the emergency department setting and continuous monitoring of AKI following surgery. The product is currently developed for use in high throughput systems, and the company has already established distribution contracts with the major commercial players in this space: Roche and Siemens.

Exhibit 1: The NGAL Test launch timing

Event

Date

Application submitted to FDA: paediatric indication

July 2018

FDA response expected: paediatric indication

Q419

Application submission to FDA: adult indication

Q419

Launch of NGAL test: paediatric indication (pending FDA clearance)

H120

Event

Application submitted to FDA: paediatric indication

FDA response expected: paediatric indication

Application submission to FDA: adult indication

Launch of NGAL test: paediatric indication (pending FDA clearance)

Date

July 2018

Q419

Q419

H120

Source: BioPorto Diagnostics

AKI: Desperate need for a diagnostic

AKI is a major risk to human health and wellbeing given the range of different causative factors and the potential for it to progress to long-term renal dysfunction. It is defined as the rapid deterioration in kidney function over hours or days. However, the damage associated with the condition is frequently reversible if the injury is identified quickly and patients are treated. There is therefore significant incentive to develop diagnostics that can quickly identify AKI in at-risk individuals.

There are a wide range of causes for AKI. The single largest contributing comorbidity to these rates of AKI is sepsis, which is responsible for 26% to 50% of all cases of AKI.1 The aetiology of sepsis-induced AKI is complex and includes both direct damage to the kidneys as well as a reduction in blood flow (hypoperfusion). Hypoperfusion is a general causative factor for AKI and conditions or procedures that reduce blood flow to the kidney increase the risk of AKI. These include surgical procedures, in particular cardiac surgery, which is associated with exceptionally high rates. As many as 30% of patients undergoing cardiac surgery have complications associated with AKI.2 AKI is responsible for a fivefold increase in mortality associated with these procedures. Due to the well understood and predictable nature of the risks in this population, these patients are routinely followed for AKI during their recovery period. Other major surgeries also carry a risk of AKI, albeit at lower rates. Other conditions that can cause a severe drop in blood pressure or fluid loss and thus hypoperfusion can cause AKI, such as bleeding, diarrhoea, overdoses on NSAIDs, allergic reactions and shock associated with trauma, although this list is by no means exhaustive.

  Alobaidi R, et al. (2015) Sepsis-Associated Acute Kidney Injury. Semin Nephrol 35, 2-11.

  O’Neal JB, et al. (2016) Acute kidney injury following cardiac surgery: current understanding and future directions. Crit Care 20,187.

Given the range of conditions that can lead to AKI, the condition is relatively common. Based on measurement of sCr (more on this test below), the rate of AKI in the US is over 0.5% per year in the general population.3 Approximately 2% of hospital inpatients and 40% of those in intensive care have AKI.4 It is difficult to separate the prognosis of AKI from the underlying disorders, but AKI significantly increases the risk of death in a stage specific manner: odds ratio (OR) of 2.2 for stage 1, 6.1 for stage 2 and 8.6 for stage 3.5 Among patients with AKI severe enough to require renal replacement, mortality has been observed as high as 60%.6 Moreover, there is increasing evidence that even after resolution of AKI, the event is correlated with increased risk of developing chronic kidney disease.7

  Hsu CY, et al. (2007) Community-based incidence of acute renal failure. Kidney Int 72, 208-212.

  Bellomo R, et al. (2012) Acute kidney injury. Lancet 380, 756-766.

  Thakar CD, et al. (2009) Incidence and outcomes of acute kidney injury in intensive care units: a Veterans Administration study. Crit Care Med 37, 2552-2558.

  Uchino S, et al. (2005) Acute renal failure in critically ill patients: a multinational, multicenter study. J Am Med Assoc 294, 813-818.

  Lakhnir S, et al. (2014) Acute kidney injury and chronic kidney disease as interconnected syndromes. N Eng J Med 371,58-66.

Detection of AKI

AKI is classically diagnosed and staged based on the concentration of creatinine in serum and urine output. Both measurements are proxies for the glomerular filtration rate (GFR), or the rate at which the kidney can process liquid. Creatinine is the metabolic product of creatine degradation in muscle that is typically filtered from the blood by the kidney. Given that its production is relatively constant, an increase in serum levels can be indicative of renal dysfunction. The Kidney Disease International Global Organization (KDIGO) provides the criteria for staging AKI (Exhibit 2).

Exhibit 2: Staging of AKI based on KDIGO criteria

Stage

sCr

Urine output

1

1.5–1.9× baseline or ≥0.3 mg/dl above baseline

<0.5 ml/kg/hr for 6–12 hr

2

2.0–2.9× baseline

<0.5 ml/kg/hr for >12 hr

3

≥3.0× baseline, ≥4.0 mg/dl, or initiation of renal-replacement therapy

<0.3 ml/kg/hr for ≥24 hr or anuria for ≥12 hr

Source: Kidney Disease International Global Organization

Despite its widespread use, there are significant limitations in the use of sCr as a tool to diagnose AKI. The primary limitation is that changes in GFR are indicative of kidney damage, and therefore some injury and loss of function has already occurred by the time a change is measurable. This is exacerbated because creatinine must build up in the serum and it can take significant time for changes in GFR to manifest as measurable changes in creatinine. These measurements are typically taken over several days to provide adequate time to detect changes from baseline. This substantially increases the burden on providers and increases the probability that marginal cases of AKI will go undetected under a reasonable timeframe.

Baseline rates of creatinine can differ significantly between individuals and within the same individual due to a range of factors. Therefore, to be used as a biomarker, multiple measurements are required to establish a baseline and changes from this baseline. Patients of unknown status may already have elevated creatinine when they are initially tested, confounding the detection of issues. Moreover, the clearance of other substances such as medication can significantly affect the rate of creatinine clearance.

A problem in evaluating the utility of sCr as a diagnostic tool is that historically AKI has been defined in terms of sCr and little corroborative evidence has been available. One study, however, used biopsy data from deceased kidney donors to retrospectively evaluate the performance of sCr as a diagnostic.8 Biopsies from these patients were examined for evidence of acute tubular injury (ATI) and compared to sCr measurements. It should be noted that ATI is a subtype of AKI and is the leading cause of AKI in a hospital setting (approximately 50%).9 The results from this study suggest that sCr is a very poor indicator of ATI (Exhibit 3). The area under the curve (AUC) for sCr to identify any grade ATI was 0.52. This value increased marginally to 0.58 when the test was evaluated for the detection of severe ATI. AUC is a measure of the strength of a diagnostic irrespective of the particular cut-off value used for diagnosis, where 1.00 is a perfect test and 0.50 indicates no diagnostic value. So in this case sCr performed poorly.

  Moledina DG, et al. (2017) Performance of serum creatinine and kidney injury biomarkers for diagnosing histologic acute tubular injury. Am J Kidney Dis 70, 807-816.

  Perazella MA, et al. (2010) Urine Microscopy Is Associated with Severity and Worsening of Acute Kidney Injury in Hospitalized Patients. Clin J Am Soc Nephrol 5, 402-408.

Exhibit 3: Performance of sCr vs histology of ATI

Severe ATI vs No ATI

Any ATI vs No ATI

Sample size

483

581

AUC

0.58

0.52

sCr criteria

Sensitivity

Specificity

Sensitivity

Specificity

Stage I AKI or higher

51%

61%

42%

61%

Stage II AKI or higher

26%

84%

20%

84%

Source: Moledina et al.

As an alternative to sCr, urine output can be used. However, monitoring of urine is unwieldy in clinical practice and is generally limited to patients with a catheter. Moreover, this measurement is rendered ineffective by diuretics. There is not as much clinical data to support urine output, because retrospective data are generally unavailable and clinical studies have had mixed results.10

  Cruz DN, et al. (2009) Clinical review: RIFLE and AKIN – time for reappraisal. Crit Care 13, 211.

NGAL: A better alternative

Due to the limitations of sCr, there has been an effort to identify other biomarkers with improved performance. The most concerted effort has been focused on the investigation of NGAL. It was first identified as a marker for AKI in 2003 and has subsequently been the subject of multiple studies. Perhaps the clearest benefit of NGAL over sCr is evident in the time course of its elevation following kidney injury (Exhibit 4). NGAL is elevated within hours of the damage that results in AKI, as opposed to sCr, which requires a prolonged period of impaired GFR. Moreover, there is increasing evidence that patients that are identified by NGAL carry an increased risk for adverse events such as need for replacement therapy and death even when they are sCr negative.11 NGAL is elevated before major loss of function, which should enable earlier intervention to halt progressive deterioration.

  Haase M, et al (2011) The outcome of neutrophil gelatinase-associated lipocalin-positive subclinical acute kidney injury: a multicenter pooled analysis of prospective studies. J Am Coll Cardiol 57, 1752–1761.

Exhibit 4: Time course of biomarker elevation in AKI

Source: BioPorto Diagnostics

NGAL is a member of the lipocalin family, a class of proteins that bind hydrophobic molecules. It binds specifically to siderophores, proteins that bind to iron and aid in its metabolism. The protein was first discovered for its role in the innate immune system. Neutrophils secrete NGAL in response to the presence of bacteria, and the NGAL will then bind to bacterial siderophores to limit iron metabolism in the bacteria and limit their growth. However, expression of NGAL is not limited to the immune system. A range of different tissues, including but not limited to the kidney, secrete NGAL in response to cellular damage. Due to this, an increase in serum concentrations of the protein is associated with a range of indications including infection, inflammatory disorders, cancer and obesity. NGAL can be isolated from either the urine or plasma, with differing results. Urine NGAL provides a more direct readout of protein released in the kidney, but is affected by urine production and complicated by common conditions such as urinary tract infection. Plasma NGAL provides a less variable baseline but can be complicated by injury or inflammation in other tissues. Whether urine or plasma NGAL is a better indicator is an unsettled question in the space, although BioPorto is advancing a plasma-based test, initially citing better reproducibility.

Two products have previously been developed for use as a NGAL test in the clinical setting, although neither was approved in the US for diagnosis of AKI. Abbott developed a urine NGAL test for use with its Architect clinical chemistry platform. It was submitted to the FDA in 2010 but did not receive approval. Alere also developed a point-of-care plasma NGAL test for use with its Triage MeterPro platform. However, it was not submitted for FDA approval. Alere was subsequently purchased by Abbott in 2017, and as the Triage NGAL test was one of many products, it was likely not a motivating factor. BioPorto launched its first NGAL-based bioassay in 2006. This was the first commercially available NGAL ELISA kit available worldwide, albeit limited to research purposes. The company subsequently launched in 2010 a new version of the assay prepared for use in a high-throughput clinical chemistry analyser branded The NGAL Test.

Previous noteworthy NGAL studies

NGAL has been investigated in a large number of clinical studies, both in urine and in plasma, and significant variability between results has been observed. A recent meta-analysis was performed that examined the capacity of biomarkers to predict the initiation of renal replacement therapy, an intervention to limit the damage from AKI.12 Urine NGAL was evaluated in 12 studies and showed a pooled AUC of 0.720, and plasma NGAL was evaluated in 16 studies with a pooled AUC of 0.787. AUCs in the meta-analysis for NGAL ranged from 0.260 to 0.884. A consistent factor that has been cited as a source of this variability has been the differing response of patients with sepsis. As mentioned above, sepsis is the most common cause of AKI in intensive care patients, but the systemic inflammation associated with the condition results in the release of NGAL from neutrophils. Although the test retains utility in sepsis patients, the AUC for predicting renal replacement therapy can drop significantly, 0.700 in one targeted study.13 NGAL may be a better biomarker in patient populations outside the ICU with lower rates of confounding factors such as sepsis. For instance, one study using BioPorto’s NGAL antibodies (although not performed by the company) that examined 635 patients presenting in an emergency department (instead of an ICU) showed dramatically better statistics: 90.0% sensitivity, 99.5% specificity and an AUC of 0.948.14

  Klein SJ, et al. (2018) Biomarkers for prediction of renal replacement therapy in acute kidney injury: a systematic review and meta-analysis. Int Care Med 44, 323-336.

  Hjortrup PB, et al. (2015) Predictive value of NGAL for use of renal replacement therapy in patients with severe sepsis. Acta Anaesthesiol Scand 59, 25–34.

  Nikolas TL, et al. (2008) Sensitivity and Specificity of a Single Emergency Department Measurement of Urinary Neutrophil Gelatinase–Associated Lipocalin for Diagnosing Acute Kidney Injury. Ann Int Med 148, 810-819.

Another issue that has limited the interpretation of NGAL studies is that frequently the readout used to evaluate the test is the presence of AKI, as evaluated under the standard diagnostic criteria, ie sCr. This is a problem intrinsic to this field, and has been highlighted in research.15 Even a perfect test (100% sensitivity and specificity) will have substantially lower apparent statistics when measured against an imperfect gold standard. The fact that NGAL can identify patients at increased risk of major intervention or death that are sCr negative is also supportive of this fact.11

  Waikar SS, et al. (2012) Imperfect Gold Standards for Kidney Injury Biomarker Evaluation. J Am Soc Nephrol 23, 12-21.

A significant factor that can be difficult to capture in these statistical studies is the improvement in care NGAL can provide. In particular, the ability to identify patients sooner and before significant loss of function can translate into improved outcomes and the associated reduction in costs. Even if NGAL were unable to provide a statistical improvement in AKI prediction rates, there are still significant benefits from earlier assessment. One study modelled these factors and estimated costs savings in the range of $408–522 per patient admitted to an emergency department.16 The models in the study were using real world outcomes data from two emergency departments in New York tested for urine NGAL and sCr.

  Parikh A, et al. (2017) Does NGAL reduce costs? A cost analysis of urine NGAL (uNGAL) & serum creatinine (sCr) for acute kidney injury (AKI) diagnosis. PLOS One 12, e0178091.

BioPorto’s first clinical trial

BioPorto conducted its first US registration trial in 2014 and 2015 across four clinical centres. The purpose of the trial was to identify the correct parameters, such as NGAL thresholds for the clinical identification of AKI using both plasma and urine. It enrolled 245 patients from ICUs and AKI was determined using the KDIGO guidelines by a panel of physician adjudicators. The data reported by the investigators segregated the patients into two populations: those with stage 2 or 3 AKI, and those with stage 1 AKI or no AKI. Samples were taken from the patients daily.

Exhibit 5: The NGAL Test statistics for stage 2/3 AKI

Fluid

Sensitivity

Specificity

AUC

EDTA plasma

78.8%

73.0%

0.76

Heparin plasma

72.7%

73.8%

0.77

Urine

69.7%

76.8%

0.79

Source: Tecson et al. 2017

The statistics from the study were positive. AUC measurements were 0.76 and above, and sensitivity and specificity measurements were approximately 70% or higher. These results are largely in line or better than those previously presented in the literature on NGAL, although it should be noted that they represent the identification of just stages 2 and 3 AKI. When the investigators examined patients with persistent (two days or more) stage 2/3 AKI, the results were further improved to a maximum AUC of 0.85 with the use of EDTA plasma.

The FDA rejected the company’s application package including these data. There are limited details on the reason behind the FDA’s decision in this case, although the company has stated that the rejection was “primarily because the dataset for mild cases of AKI did not support approval”. When explaining the decision to exclude patients with stage 1 AKI from the primary end point, the investigators cited the observation from prior studies that many patients classified in this category are subject to transient sCr elevations without parenchymal AKI. In other words, the stated reason for this exclusion was aforementioned variability in the sCr gold standard.

Ongoing clinical programme and FDA registration

In July 2018, the company submitted its second 510(k) application to the FDA for clearance of The NGAL Test in adults. This application was made based on a clinical trial that the company initiated in 2017. The endpoint for the 2017 clinical trial was was the prediction of stage 2 or 3 AKI, with a secondary endpoint as an aid in the prediction of persistent (two days or more) grade 2 or 3 AKI. This clinical trial enrolled over 500 patients from intensive care patients across 17 clinical sites in the US and only enrolled hypotensive patients within the first 24 hours of their admission to the ICU. Four blood samples were collected from each patient and AKI was subsequently graded based on KDIGO guidelines by an independent adjudication panel. Results from the study have not been released, although they may be in the future at a medical conference or publication to support commercialisation. The purpose of the registration study was to test the clinical validity of the test, ie does The NGAL Test (specifically the 140ng/mL cut off) predict AKI outcomes. Although we have limited detail on the study, notable changes from the previous clinical trial are the increased enrolment and number of clinical sites, as well as the prospective diagnostic threshold. The previous clinical trial did not have a predefined cut-off for prediction of AKI risk, which is a statistically weaker approach that may have affected the FDA assessment.

In October 2018, the FDA requested additional information (AI) in order to continue the application process citing further data was needed to support the AKI rule-out claim. In response to the AI, BioPorto is actively enrolling an additional 150–200 patients to complement the original prevalence data collected in 2017 and 2018 leading up to its submission of a revised application to the FDA expected in Q419. It is difficult to assess the specific area of data deficiency for which the FDA required more data, but the rule-out claim that was cited was contingent on the negative predictive value (NPV) of the test. This statistic depends upon both the sensitivity and specificity of the test, as well as the underlying rate of the disorder (AKI). The latter is further complicated by the fact that AKI is defined in terms of serum creatinine levels, on which NGAL is aiming to improve. Any of these factors could be elements on which the agency requires clarification, albeit not limited to these.

The current FDA application is for ‘risk use with AKI’, as stated by the company. An important consideration for the FDA (as well as the eventual marketing of the test) is the test’s positive and negative predictive value (PPV and NPV). The PPV measures the fraction of positive tests in which the patient truly has AKI, and conversely for NPV. Importantly, both of these statistics depend on the incidence rate of AKI in the particular setting in which they are measured. The company has stated that it hopes its application supports the use of The NGAL Test to ‘rule out AKI within 48 hours in ICU populations’. Ruling out AKI is a proposition centred on the NPV of the test. The company may expand the approved indications for The NGAL Test through further clinical testing. These include approval for risk assessment in the emergency department setting and the monitoring of AKI risk following surgery. We will have better insight into the potential of these programmes following FDA approval and potentially upon the release of details of the most recent clinical trial.

Although the ultimate hope is that physicians will be able to intervene to prevent kidney damage, they were not provided with test results in this study to accurately assess the test’s validity. The company may perform future clinical trials to measure if its use can alter outcomes, although it has not made any announcements to this effect.

The company is also studying the analytical performance of The NGAL Test in a series of 10 studies in the US, Denmark and Japan. These studies were performed in parallel with the registration study and provided additional support for the safety, reproducibility and other parameters for the FDA application.

There is also a clinical trial that has been registered by Cincinnati Children’s Hospital to examine The NGAL Test for paediatric AKI. Unlike in the registration trial, this study will specifically examine AKI as a result of nephrotoxic medications and it will use testing urine as opposed to plasma. In July 2019, the FDA requested additional information relating to ‘the clinical study data and collection of retrospective samples’, which could have been due to underrepresentation of certain subgroups, the manner of sample collection, or a number of other possibilities. The company initially guided that it would need to withdraw and resubmit its application following the AI request; however, after conducting a thorough review and a productive dialogue with the FDA, BioPorto decided to respond to the FDA’s questions allowing for the 510(k)-clearance process to continue. The original collection of samples had previously been tested with the NGAL ELISA test, so the results were roughly known in advance, although now this will not be the case. Thankfully, given guidance that the new data the company is gathering will also use retrospective samples, we know the request was not for a prospective trial, which would be prohibitively difficult given the indication.

Finally, FDA approval only represents the first milestone toward commercial adoption of the test. The company will have to alter clinical practice to achieve market share. We expect as part of this effort that the company will seek the inclusion of the test into medical guidelines published by physician organisations. The company has stated its intent to engage KDIGO for inclusion in its guidelines, and continues to meet with KDIGO officials. However, the actual adoption of NGAL as a standard by KDIGO or any other organisation will take time and depend on the strength of the clinical data.

Sales, licensing and intellectual property

The NGAL Test is already commercially available for research purposes and North American sales were DKK12.2m in 2018, as compared to DKK10.9m in 2017, showing 30% growth year-over-year. In Q219, North American sales were DKK4.0m, as compared to Q119 sales of DKK2.8m, with 43% quarter-over-quarter growth. The majority of North American sales are sourced from the US and we expect the ramp in sales to progress once the product is cleared by the FDA.

The company has global distribution agreements with both Roche and Siemens, as well as a small direct sales channel that provides the test. We expect these distributors to be the primary sales channels following FDA approval, although we expect the company to hire a small sales team dedicated to the promotion of The NGAL Test. The primary commercial hurdle will be altering the longstanding clinical practice regarding the use of sCr for AKI, which will take physician outreach and education, which we expect the internal sales team to perform. Other aspects of the launch should be smooth considering it seamlessly integrates into the existing workflow and is billable under existing DRG codes.

The company entered into an arrangement with Abbott in 2014 to cross-license their respective intellectual property. The company has also in-licensed additional patents from Columbia University regarding the NGAL technology. The company’s proprietary and in-licensed patent families cover a range of aspects of the NGAL technology and its applications including the use of urine and plasma, the use of serial sampling and the diagnostic threshold, among others. The test is not without some degree of intellectual property risk: patents begin to expire in 2025, although we expect the portfolio as it stands to provide a decent commercial runway through approximately 2028.

Other testing methodologies

In addition to NGAL, a number of other biomarkers have been investigated as alternatives to sCr (Exhibit 6). The most prominent research (other than into NGAL) has been into KIM-1 (kidney injury molecule 1) and IL-18. KIM-1 is a protein that is upregulated in the kidney following reperfusion injury in renal tubules and is a direct measure of injury (although not as the name would suggest exclusively kidney injury). IL-18 on the other hand is a pro-inflammatory cytokine secreted by macrophages that are released in response to various inflammatory conditions, including AKI. The performance of these biomarkers has generally underperformed NGAL in the clinic (AUC of 0.68 and 0.63 respectively compared to 0.74 for NGAL in one study).17 However, the performance of these markers tends to improve with more severe AKI, and one study demonstrated superior results for the use in combination: AUC of 0.93 for KIM-1 + IL-18 compared to 0.89 for NGAL + sCr for the ability to predict stage 3 AKI or death.18

  Hall IE, et al. (2011) Risk of poor outcomes with novel and traditional biomarkers at clinical AKI diagnosis. Clin J Am Soc Nephrol 6, 2740-2749.

  Arthur JM, et al. (2014) Evaluation of 32 urine biomarkers to predict the progression of acute kidney injury after cardiac surgery. Kidney Int 85, 431-438.

Exhibit 6: Selection of alternative AKI biomarkers

Marker

Name

Notes

NGAL

Neutrophil gelatinase-associated lipocalin

Component of the innate immune system, secreted by neutrophils and the kidney and other tissues following injury.

L-FABP

Liver-type fatty acid-binding protein

Long chain fatty acid transporter, elevated in response to tissue damage of multiple types.

IL-18

Interleukin 18

Proinflammatory cytokine produce from macrophages, associated with ischemic injury.

KIM-1

Kidney injury molecule 1

Protein specific to the kidney, upregulated following ischemia.

Cys C

Cystatin C

Protease inhibitor, ubiquitously expressed, clearance rate associated with GFR like sCr.

TIMP-2 + IGFBP-7

NephroCheck

Only branded proprietary AKI test available for the identification if imminent stage 2/3 AKI.

Source: Various

The only commercially available alternative test is NephroCheck, marketed by Astute Medical. Astute Medical was a private healthcare company that was acquired by BioMérieux in April 2018 for approximately $90m. NephroCheck and associated systems are its sole products, but there is limited visibility on sales.

The test combines readouts of two biomarkers, TIMP-2 and IGFBP-7, in the company’s proprietary linear flow devices to be used in a dedicated testing platform (the Astute140 device). These proteins were discovered in a longitudinal study of 300 biomarkers in 2013, and thus have a shorter history of study compared to other biomarkers.19 The test is intended for use in patients following major cardiac or pulmonary events for AKI monitoring. NephroCheck was evaluated in two clinical studies. The first clinical study enrolled 408 patients and found a sensitivity of 90–93% and a specificity of 45–49% (with values varying based on the laboratory used). However, in the second clinical study of 126 patients, sensitivity dropped significantly to 76% with a specificity of 51%. This implies a negative predictive value of only 88% in the second study, meaning that 12% of patients that were ruled as AKI free in the study really had kidney injury. However, in spite of these limitations, given the low bar set by sCr, the test has been shown to improve outcomes following cardiac surgery,20, 21 and the test (or more accurately TIMP-2 and IGFBP-7 testing) was recently included in the consensus guidelines from the ERAS Cardiac Surgery group presented to the American Association for Thoracic Surgery (moderate level of recommendation).

  Kashani K, et al. (2013) Discovery and validation of cell cycle arrest biomarkers in human acute kidney injury. Crit Care 17, R25.

  Göcze I, et al. (2017) Biomarker-guided intervention to prevent acute kidney injury after major surgery: the prospective randomized BigpAK Study. Ann Surg 267, 1013-1020.

  Meersch M, et al. (2017) Prevention of cardiac surgery-associated AKI by implementing the KDIGO guidelines in high risk patients identified by biomarkers: the PrevAKI randomized controlled trial. Intensive Care Med 43, 1551-1561.

The antibody portfolio

Although the company’s primary focus is the FDA approval of The NGAL Test and commercialisation in the US, it has an extensive portfolio of antibodies that generate recurring revenue through sales for research (Exhibit 7). In addition to the antibodies and ELISA kits derived from them, the company sells a small number of proteins (predominantly NGAL standards) and sera for research use. The company had sales of DKK26.0m in 2018 (including NGAL products).

Exhibit 7: Classes of antibodies provided by BioPorto

Category

Examples

Notes

Animal NGAL tests

Mouse, rat, dog, pig, monkey

For use in drug development to assess renal toxicity

Allergy

Human IgE, gliadin

Only commercially available human monoclonal IgE

Appetite hormones

GLP-1, Exendin, Peptide YY

Useful for diabetes and obesity research

Complement system

MBL, C1s, C9

Used for study of infectious disease and immunodeficiency

Autoimmune disease

Gc-Globulin, P1CP

Applications for the study of Hashimoto's, Graves’ and Crohn’s diseases

Infectious disease

poliovirus, influenza B, tuberculosis

Useful in testing, histology, laboratory diagnostics

Coagulation

Factor IX, antithrombin, D dimer

Study of common and rare clotting disorders

Source: BioPorto

One highlight of this portfolio includes the animal NGAL tests. The company provides antibodies and standards for a range of non-human mammalian species. These may provide a more sensitive measure of kidney injury for use in detecting renal toxicity in preclinical drug development. The company is also the only provider of monoclonal human IgE, an antibody of naturally low abundance in the body that is the primary mediator of allergic reaction. In addition to antibodies and ELISA kits, the company also sells test for mannan binding lectin (MBL) in a clinical chemistry format similar to The NGAL Test. MBL is a protein important for the innate immune system and low levels are indicative of a compromised immune system. The expansion of the MBL test into a clinical diagnostic along the same lines of The NGAL Test is a potential future avenue of development, although we do not include it in our model.

The company’s customers for the antibody portfolio span the healthcare space and include almost every large pharma company, such as Pfizer, Eli Lilly, Merck, GSK, etc. Additionally, it counts large academic institutions and research institutes as clients, such as the Karolinska Institutet and the La Jolla Institute.

The gRAD: a customisable lateral flow device

Aside from BioPorto’s biologic products, it has developed a generalisable lateral flow device called the gRAD (Exhibit 8). The device consists of a paper test strip similar to that used for at-home diagnostics such as urine glucose strips, ovulation tests, etc. However, unlike these products, the gRAD does not come pre-loaded with detection antibodies. Instead, it can be arbitrarily used in any detection system consisting of a biotinylated antibody and a gold conjugated antibody. The strip contains a biotin binding region (presumably with some type of avidin) that captures the biotinylated antibody and immobilises the analyte, which is subsequently detected by the gold conjugated antibody. The product can therefore be used to assay biomarkers that otherwise lack a point-of-care test, without the need for high-cost capital equipment such as clinical chemistry instruments. The product has potential in segments of healthcare where capital equipment is unavailable, such as in field work, at the bedside and in the office of general practitioners. The gRAD was launched in 2015, but only constitutes a small portion of the company’s revenues to date. The product could potentially be used as a platform to develop tests using the company’s antibodies for the point-of-care setting, although this would require additional clinical studies and is hypothetical at this stage.

Exhibit 8: Schematic of gRAD testing protocol

Source: BioPorto

Sensitivities

The biggest hurdle faced by BioPorto is the regulatory risk associated with the upcoming FDA decision on The NGAL Test. NGAL is heavily studied and, despite variability in the reported results, there is substantial benefit over the sCr standard of care even in the worst-case scenario. The barrier in this case is in communicating these benefits to the FDA and satisfying its internal standards. We have limited insight into what criteria will be used to evaluate The NGAL Test, but we can say that previous evaluations of this technology have been stringent.

The FDA has previously rejected all applications for NGAL products, including from BioPorto. Relating to the company’s adult indication, a second 510(k) application was submitted in July 2018 and the FDA subsequently requested additional information (AI) citing further data was needed to support the AKI rule-out claim. BioPorto is currently enrolling an additional 150–200 patients in response to the FDA’s request and plans to resubmit a revised application by year end. Separately, the company submitted a 510(k) application for a paediatric indication in May 2019 and the FDA requested AI in July 2019 citing an issue with ‘the clinical data and collection of retrospective samples’. BioPorto bypassed having to withdraw and resubmit the application by responding to the information request and a response from the FDA is expected by year end. The company has had numerous discussions with the agency regarding a pathway to approval, but these are by no means a guarantee. However, the approval of NephroCheck in 2014 indicates the agency recognises the need for innovation in this area. An FDA dismissal would not necessarily mean the product is not approvable, but it will likely necessitate additional clinical studies and delay the product’s commercialisation. Finally, if the company does receive FDA approval, we expect it to continue to perform clinical trials in additional clinical settings to expand the market for the product, each of which will carry its individual clinical and regulatory risk.

The company’s commercial strategy is to leverage its existing relationships with distributers supported by a small internal sales team. This will allow it to achieve substantial commercial reach with limited overheads, but it does leave the company at the mercy of the distributers. We believe this arrangement is optimal, given that Roche and Siemens are major suppliers of the capital equipment needed to run the test and have existing relationships with the hospital customer base. However, there is the unavoidable risk these companies will not act in the best interests of The NGAL Test or BioPorto.

BioPorto is a commercial-stage company with growing revenue streams, which significantly reduces the financial burden of its development programmes. However, we do expect the company to require additional capital to bring The NGAL Test to market, which carries associated risks. However, given the potential near-term approval and commercialisation in the US, we expect this amount to be limited. We forecast the company will need DKK35m in additional capital to reach profitability in 2021, contingent on receiving FDA approval.

Valuation

We have not changed our valuation, which sits at DKK993m (DKK5.67 per basic share). Our valuation is based on a series of assumptions about the company’s products and their commercialisation. We have modelled three target markets for The NGAL Test:

ICU patients: we believe this market is supported by the current FDA application, which is estimated as 4.6 million people in the US per year.22 All of these patients of unknown AKI status are a potential market. We model four tests per patient in this setting as we expect continued evaluation for development of AKI. We model a peak penetration of 30%.

  Healthcare Cost and Utilization Project, 2014.

Emergency department patients: we believe the company will need to perform an additional clinical study (modelled for 2020) to support approval in 2021 for this indication. As a potential market we model the population of patients that would normally receive creatinine testing (approximately 7%) of the 145 million annual emergency department admissions in the US.23 We estimate one test per patient and 30% peak penetration.

  National Hospital Ambulatory Medical Care Survey, CDC, 2016.

Monitoring following cardiothoracic surgery: an additional study is needed in 2020 to support approval in 2021. This population has been heavily studied in the literature and has a clear medical need, so we estimate 50% peak penetration with an average of four tests per patient. An estimated 530,000 cardiothoracic surgeries were performed in 2010 in the US and this is estimated to increase to 850,000 by 2035.24

  American Associated for Thoracic Surgery, 2016.

This list of potential indications is not exhaustive. However, we believe expansion beyond this will be predicated on success in these areas first, although we may add other indications if the company is successful in these areas. We assign a 50% probability of success for the ICU market given the advanced nature of the programme, the results released to date and the applicability to this patient population. We are also encouraged by the FDA’s approval of NephroCheck in 2014, which signals an openness to and need for innovation in this area. Consequently, emergency department and post-surgery markets have lower probabilities of success at 30%. We expect each of these indications will require new clinical studies, which we model costing approximately DKK13m each. The company is engaged in a study of paediatric AKI patients following nephrotoxic medications, which we do not explicitly include in our valuation as we expect the sales to be incremental. However, we do believe expanding into the paediatric market will provide goodwill surrounding the test that can potentially boost other indications.

We model commercialisation in both the US (strategically the main focus) and Europe for these clinical populations. The US market is more attractive given that we expect adoption to be quicker following FDA approval, with first sales expected in 2020. The product is already CE marked and commercially available in Europe. However, widespread adoption in the clinical setting will need published clinical studies to support marketing. Additionally, we expect adoption in Europe to be slower than the US because of the greater control of central regulators over the implementation of new clinical methodologies. We forecast limited costs of selling (modelled as 10% of revenue), because we expect most sales to go through distributor channels and for the company’s internal salesforce to be small. We expect COGS, including royalties, to be small at approximately 5% of the list price.

Our valuations continue to be based on a $20 list price per assay for The NGAL Test. This corresponds to approximately $2,000 for a 100-assay kit, which is in line with current pricing, although we forecast a modest 2% increase in price per year. We model the price to distributors at approximately 50% the list price ($10 per assay). Our valuation for the pre-commercial indications is based on a risk adjusted NPV model at a 12.5% discount rate (our standard for pre-commercial products). We do not expect a significant tail on revenue after the company’s IP expires in 2028 as we expect it to be replaced in distributor channels.

We model the company’s research products (including The NGAL Test for the research market) using a DCF model at a 10% discount rate (our standard for commercial products) and a -5% terminal growth rate. We conservatively expect sales of DKK31.5m for 2019, a 21% growth rate year-on-year, primarily driven by the company’s focus on getting The NGAL Test approved and subsequent commercialisation. We do not include the gRAD in our valuation, but we may do so at a later point if the product is more widely adopted. Unallocated costs in our model include administrative costs and exploratory research.

The major inflection point for the valuation will be the FDA approval decision, expected by end of 2019. We may adjust our valuation if data from the registration trial are released because the statistics from this study should illuminate the potential of the product in future indications. Finally, we may adjust our valuation following feedback on The NGAL Test from medical associations, which will provide a barometer for physician perceptions and rates of adoption. The inclusion of the test into any medical guidelines such as KDIGOs will represent a best-case scenario.

Exhibit 9: Valuation of BioPorto

Program

Market

Probability of success

Peak revenue ($m)

Valuation (DKKm)

The NGAL Test

ICU

50%

185.4

693.7

ED

30%

173.8

323.0

Post-surgery

30%

55.7

97.0

Research

100%

3.1

20.7

Paediatrics

50%

16.9

19.0

Other products

Research

100%

2.8

19.2

Unallocated costs

(231.4)

Total

941.2

Net cash and equivalents (Q219) (DKKm)

51.4

Total firm value (DKKm)

992.6

Total shares (m)

174.9

Value per share (DKK)

5.67

Dilutive warrants (m)

16.5

Total diluted shares (m)

191.5

Value per diluted share (DKK)

5.51

Source: BioPorto reports, Edison Investment Research. Note: ED: emergency department.

Financials

BioPorto has generated consistent revenue from the sale of its research products. The company reported sales of DKK26m in 2018 and is expecting DKK32m in sales for 2019, a growth rate of 23% over 2018. BioPorto’s revenue guidance for 2019 was revised down in Q219 from approximately DKK40m. Revenue guidance is in line with our expectations due to the increased spending associated with the anticipated NGAL product launch. Revenue in Q219 was DKK7.8m compared to DKK7.2m in 2017, growing by 10%, driven by increased US revenues from The NGAL Test for research use and large bulk orders of antibodies. We have adjusted our 2019 estimated sales to DKK31.5m from DKK38.6m due to the paediatric programme delay, which has increased our expected financing requirement. We now forecast that BioPorto will need DKK35m in additional capital, an increase from DKK10m, to reach sustained profitability in 2021. This increase is driven by the lower revenue expectations carried forward.

In July 2019, BioPorto concluded a fund-raise yielding gross proceeds of DKK36.7m by issuing 9.3m new shares at market price in a private placement. The proceeds were designated to support ongoing studies, product clearance of The NGAL Test, preparation for The NGAL Test US commercialisation and strengthen overall liquidity. The company analysed retrospective samples as part of the response to the FDA’s AI request regarding the paediatric 510(k) submission and is continuing patient enrolment for the adult AKI clinical study, both of which require limited R&D costs and are offset by incoming revenue.

Exhibit 10: Financial summary

DKK'000s

2017

2018

2019e

2020e

31-December

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

25,155

26,016

31,534

53,727

Cost of Sales

(6,907)

(8,181)

(9,651)

(12,343)

Gross Profit

18,248

17,835

21,884

41,385

Sales

(18,545)

(20,935)

(33,778)

(32,070)

R&D

(21,930)

(18,676)

(23,487)

(36,668)

Administrative

(14,267)

(20,005)

(29,986)

(30,286)

EBITDA

 

 

(33,134)

(42,103)

(60,782)

(54,548)

Operating Profit (before amort. and except.)

 

 

(33,638)

(42,646)

(62,511)

(54,783)

Amortisation of acquired intangibles

0

0

0

0

Exceptionals

0

0

0

0

Share-based payments

(2,856)

865

(2,856)

(2,856)

Reported operating profit

(36,494)

(41,781)

(65,367)

(57,639)

Net Interest

(570)

164

234

117

Exceptionals

0

0

0

0

Profit Before Tax (norm)

 

 

(34,208)

(42,482)

(62,278)

(54,666)

Profit Before Tax (reported)

 

 

(37,064)

(41,617)

(65,134)

(57,522)

Reported tax

4,821

3,569

6,680

5,900

Profit After Tax (norm)

(29,758)

(38,124)

(55,891)

(49,059)

Profit After Tax (reported)

(32,243)

(38,048)

(58,454)

(51,622)

Discontinued operations

0

0

0

0

Net income (normalised)

(29,758)

(38,124)

(55,891)

(49,059)

Net income (reported)

(32,243)

(38,048)

(58,454)

(51,622)

Average Number of Shares Outstanding (m)

145

157

174

183

EPS - normalised (ore)

 

 

(20.59)

(24.34)

(32.13)

(26.86)

EPS - diluted normalised (DKK)

 

 

(0.21)

(0.24)

(0.32)

(0.27)

EPS - basic reported (DKK)

 

 

(0.22)

(0.24)

(0.34)

(0.28)

Dividend (DKK)

0.00

0.00

0.00

0.00

Revenue growth (%)

21.4

3.4

21.2

0.0

Gross Margin (%)

72.5

68.6

69.4

77.0

EBITDA Margin (%)

-131.7

-161.8

-192.7

-101.5

Normalised Operating Margin

-133.7

-163.9

-198.2

-102.0

BALANCE SHEET

Fixed Assets

 

 

2,623

3,563

9,382

9,147

Intangible Assets

1,629

1,374

5,625

5,625

Tangible Assets

263

1,437

2,983

2,748

Investments & other

731

752

774

774

Current Assets

 

 

62,981

62,638

45,325

33,402

Stocks

3,434

3,631

3,173

4,058

Debtors

6,380

8,036

7,776

13,248

Cash & cash equivalents

47,080

46,709

23,393

5,113

Other

6,087

4,262

10,983

10,983

Current Liabilities

 

 

(8,653)

(9,217)

(14,546)

(51,154)

Creditors

(3,412)

(4,451)

(7,588)

(9,196)

Tax and social security

(182)

(141)

(2,333)

(2,333)

Short term borrowings

0

0

0

(35,000)

Other

(5,059)

(4,625)

(4,625)

(4,625)

Long Term Liabilities

 

 

(883)

(787)

(1,815)

(1,815)

Long term borrowings

0

0

0

0

Other long term liabilities

(883)

(787)

(1,815)

(1,815)

Net Assets

 

 

56,068

56,197

38,346

(10,420)

Shareholders' equity

 

 

56,068

56,197

38,346

(10,420)

CASH FLOW

Op Cash Flow before WC and tax

(33,134)

(42,103)

(60,782)

(54,548)

Working capital

2,325

(631)

(4,801)

(4,749)

Exceptional & other

(595)

(74)

256

117

Tax

2,005

4,799

6,680

5,900

Net operating cash flow

 

 

(29,399)

(38,009)

(58,648)

(53,280)

Capex

(38)

(1,483)

(2,425)

0

Acquisitions/disposals

0

0

0

0

Net interest

0

0

0

0

Equity financing

40,921

39,319

36,749

0

Other

(45)

(198)

(2,121)

0

Net Cash Flow

11,439

(371)

(26,445)

(53,280)

Opening net debt/(cash)

 

 

(35,641)

(47,080)

(46,709)

(20,264)

Other non-cash movements

0

0

0

0

Closing net debt/(cash)

 

 

(47,080)

(46,709)

(20,264)

33,016

Source: BioPorto reports, Edison Investment Research

Contact details

Revenue by geography

Tuborg Havnevej 15, st.
2900 Hellerup
Denmark
+45 45 29 00 00
www.bioporto.com

N/A

Contact details

Tuborg Havnevej 15, st.
2900 Hellerup
Denmark
+45 45 29 00 00
www.bioporto.com

Revenue by geography

N/A

Management team

CEO: Peter Mørch Eriksen

CMO: Christopher Bird

Peter Mørch Eriksen was appointed CEO of BioPorto in July 2013. He has more than 15 years of experience within medtech/life science in Denmark and abroad. Before joining BioPorto, Peter was CEO of Sense and before this, he held positions as vice president of Medtronic in both the US and Denmark. In addition to being CEO of BioPorto, he chairs the board of MTIC, is a board member at Nervex, a member of Lund University Advisory Board and director of PMEconsult ApS.

Christopher Bird was appointed CMO of BioPorto in August 2019. He most recently served as head of North American medical and scientific affairs at Roche Diagnostics Corp, where he was responsible for strategy and execution of all clinical education, study management, and field support during his 10-year tenure. Chris has a BA in Physiology from Brigham Young University, an MA in Biochemistry and Molecular Biology from the University of California Los Angeles, and a DPhil in Molecular Immunology from Oxford University.

CFO: Ole Larsen

President of BioPorto Diagnostics, Inc: Amy Winslow

Ole Larsen was appointed CFO of BioPorto in June 2018. He most recently came from Bavarian Nordic, a NASDAQ-listed Danish biotechnology company focused on cancer immunotherapies and vaccines for infectious diseases. From 2008, Ole served as executive vice president and CFO and was responsible for finance, IR and IT. Before this, he held CFO positions at two of the largest Danish and Nordic media groups, Nordisk Film and Berlingske Tidende.

Amy Winslow was appointed president of BioPorto Diagnostics, Inc in April 2019. She most recently served as president and CEO of Magellan Diagnostics, a Boston-based point-of-care diagnostics company. Prior to Magellan, among other roles, Amy served as VP of marketing for Athena Diagnostics and as marketing manager at Genzyme Transgenics. She holds an MBA from Harvard Business School and a BA in Biology from Brown University.

COO: Jan Kuhlmann Andersen

Chairman: Thomas Magnussen

Jan Kuhlmann Andersen was appointed COO of BioPorto in August 2016. He is an experienced executive, having worked with sales in the life sciences area, mostly in US-owned companies such as FMC, Cambrex, Fisher Scientific and Thermo Fisher Scientific since 1995. From 2007 and until joining BioPorto, Jan was vice president, sales and marketing, in the animal health and nutrition division of Chr. Hansen.

Thomas Magnussen is chairman and co-founder and partner in QuantumWise and Zylinc, respectively, as well as an entrepreneur in the high-tech space, engaging in start-up companies with global business scope. He has experience in commercialisation strategies and from industries including nanotechnology, ICT and medtech.

Management team

CEO: Peter Mørch Eriksen

Peter Mørch Eriksen was appointed CEO of BioPorto in July 2013. He has more than 15 years of experience within medtech/life science in Denmark and abroad. Before joining BioPorto, Peter was CEO of Sense and before this, he held positions as vice president of Medtronic in both the US and Denmark. In addition to being CEO of BioPorto, he chairs the board of MTIC, is a board member at Nervex, a member of Lund University Advisory Board and director of PMEconsult ApS.

CMO: Christopher Bird

Christopher Bird was appointed CMO of BioPorto in August 2019. He most recently served as head of North American medical and scientific affairs at Roche Diagnostics Corp, where he was responsible for strategy and execution of all clinical education, study management, and field support during his 10-year tenure. Chris has a BA in Physiology from Brigham Young University, an MA in Biochemistry and Molecular Biology from the University of California Los Angeles, and a DPhil in Molecular Immunology from Oxford University.

CFO: Ole Larsen

Ole Larsen was appointed CFO of BioPorto in June 2018. He most recently came from Bavarian Nordic, a NASDAQ-listed Danish biotechnology company focused on cancer immunotherapies and vaccines for infectious diseases. From 2008, Ole served as executive vice president and CFO and was responsible for finance, IR and IT. Before this, he held CFO positions at two of the largest Danish and Nordic media groups, Nordisk Film and Berlingske Tidende.

President of BioPorto Diagnostics, Inc: Amy Winslow

Amy Winslow was appointed president of BioPorto Diagnostics, Inc in April 2019. She most recently served as president and CEO of Magellan Diagnostics, a Boston-based point-of-care diagnostics company. Prior to Magellan, among other roles, Amy served as VP of marketing for Athena Diagnostics and as marketing manager at Genzyme Transgenics. She holds an MBA from Harvard Business School and a BA in Biology from Brown University.

Principal shareholders

(%)

Ejendomsselskabet Jano

11.50

Media-Invest Danmark

10.38

Companies named in this report

Abbott (ABT), Roche (RHHBY), Siemens (SIEGY)


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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by BioPorto Diagnostics and prepared and issued by Edison, in consideration of a fee payable by BioPorto Diagnostics. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

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Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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