October 29, 2020
After he already broke with his distributor last year in the sluggish American market, Herman Verrelst, the top executive of the Mechelen diagnostic specialist Biocartis, has once again lost an important partner. The investor drops out.
sells Idylla machines – mini labs the size of a bread machine – and cartridges to labs and hospitals. A lab technician places a drop of blood, urine or body tissue in the cartridge and slides it into the Idylla like a cassette. The result is known about two hours later.
Herman Verrelst, who has been CEO of Biocartis since August 31, 2017, had great expectations for sales in the crucial American market in particular, but had to swallow a serious blow there last year. After all, he had to end 2019 Confess disappointing sales in the US market.
In that key market, Verrelst broke off relations with his important distribution partner Thermo Fisher Scientific. ‘We thought the advance in the US would go faster. We miscalculated, ‘Verrelst admitted in September 2019. Since then he tries with Biocartis on its own crack the complex American market.
A year later, Verrelst and co loses another strategic partner: Exact Sciences. Reason: ‘changed market conditions’.
Rewind to September 2017. Biocartis signs a strategic collaboration agreement with the American Genomic Health. This has since been taken over by the listed company Exact Sciences
The idea at the time was that Biocartis would develop a faster version of Genomic Health‘s breast cancer test. The American giant has a test on the market to indicate the correct treatment for breast cancer and called on the people of Mechelen to make a Biocartis version in a cartridge for the European market.
Thursday evening came the confirmation that it is over and out between Biocartis and Exact Sciences, ‘driven by the uncertain timing of a product launch due to the pandemic, and a decision by Exact Sciences to shift priorities to other initiatives. ‘said the press release. Earlier it became known that the collaboration with Genomic Health had been suspended due to the consequences of the corona pandemic.
According to Herman Verrelst, “The impact of this termination on future growth is limited, as the collaboration was limited to the European market in which we already offer an extensive menu of tests to our established customer base. This termination will not affect our ambitions to grow in the US and our export markets, nor our financial performance in 2020. ‘
Nevertheless, the end of the collaboration is seen as a new blot on the blazon of Biocartis CEO Verrelst. “This is another serious setback in the outlook,” says Degroof Petercam analyst Thomas Guillot. ‘We estimate the value of the collaboration with Genomic at 1.6 euros per share. The setback comes on top of the already weak balance sheet, in combination with a strong cash burn.
On the Brussels stock exchange, Biocartis tumbles down to almost 20 percent to 3.33 euros. That is close to the record low at the start of the pandemic, around 3 euros on 17 March, and 70 percent below the 11.50 euros that Biocartis debuted five years ago.