Mauna Kea Technologies Reports First Half 2017 Sales

Regulatory News:

Mauna Kea Technologies (Paris:MKEA) (OTCQX:MKEAY) (Euronext: MKEA, OTCQX: MKEAY) inventor of Cellvizio®, the multidisciplinary confocal laser endomicroscopy platform, today announced its sales for the half-year ended June 30, 2017. The Company will host a conference call today to review the sales results (see call information below).

Sacha Loiseau, Ph.D., Founder and Chief Executive Officer of Mauna Kea Technologies declared, "Total sales in the first half of 2017 declined 26%, while Americas clinical sales increased 12% in the same period. Both of these results reflect our strategic focus on transitioning to a Cellvizio pay-per-use business model in the U.S. We continue to believe this new model represents a significant opportunity to accelerate Cellvizio adoption and build long-term recurring revenue for consumable probes. While our progress in the second quarter was below our expectations due to slower deal-closings and delays in expanding the U.S. sales team, we exited the second quarter with a large pipeline of consignment opportunities we hope to convert in the second half of 2017. We continued to reduce marketing expenditures and evaluate channel strategies outside the U.S., which contributed to sales decrease in these regions. Finally, while we remain confident regarding our commercial partnership with Cook Medical, delays in the timing of Cook’s commercial launch in urology impacted our sales for the first half.”

First Half 2017 Sales

First Half 2017 Sales by Category

In the first half of 2017, the Company sold 14 Cellvizio systems and secured contracts for 8 new systems under consignment in the U.S., compared to 26 systems sold and 6 consignment systems shipped in the first half of 2016. Shipped consumable probes unit volume amounted to 254 units, compared to 414 probes sold in the first half of 2016. The number of probe reorders (probes sold to existing customers or pay-per-use customers) was 222 in the first half of 2017, compared to 306 in the first half of 2016, reflecting increasing volumes in the U.S. (+14%) and significantly lower volumes in other markets (-53%).

First Half 2017 Sales by Geography with split by activity (Clinical / Pre-clinical)

Clinical sales

The main focus of the Company is implementing its new pay-per-use business model for Cellvizio’s core GI applications in the U.S., which represents a significant market opportunity and is supported by positive reimbursement coverage (cf. press release dated 4 November 2016). As a result, clinical sales in the Americas region increased 12% in the first half of 2017, driven by continuing positive momentum in the U.S., partially offset by the impact of the Company’s transition to a consignment model in this market and by a slower pace of sales reps recruitment.

Clinical sales decreased 59% in the Asia-Pacific region and 44% in the EMEA as the company continued to focus its resources on the growth of its core clinical business in the U.S.

Pre-clinical sales

Pre-clinical sales are by nature less recurring compared to clinical ones. Therefore comparison from one period to the other one is difficult. Pre-clinical sales declined 25% in the first half of 2017, with growth in the EMEA region offset by declines in the Americas and Asia-Pacific regions, reflecting the inherent lumpiness in this business and the Company’s focus on its clinical business.

1H 2017 Quarterly data

2017 quarterly sales by Geography with Split by activity Clinical / Pre-clinical sales

2017 units quarterly sales per type

Mauna Kea Technologies will host a conference call today at 7:15 PM (CET / Paris time) / 1:15 PM (ET / New York time) to discuss the Company’s 1H 2017 sales results and to provide a business update. The conference call will be hosted by Sacha Loiseau (CEO). To access the conference call, please use one of the following dial-in numbers at least 5 minutes prior to the scheduled start time and follow the instructions: USA: +1 646-722-4939 / UK: +44 – 2033679461 / FR: +33 (0)1 70 77 09 46. Following the conclusion of the live call, a replay will be available for 90 days. To access the replay, please dial one of the following numbers: USA: +1 877 64 230 18/ UK: +44(0) 2033679460 / FR: +33(0)1 72 00 15 00. The passcode for the replay is: 309922#.

About Mauna Kea Technologies
Mauna Kea Technologies is a global medical device company focused on eliminating uncertainties related to the diagnosis and treatment of cancer and other diseases thanks to real time in vivo microscopic visualization. The Company’s flagship product, Cellvizio, has received clearance to sell a wide range of applications in more than 40 countries, including the United States, Europe, Japan, China, Canada, Brazil and Mexico. For more information on Mauna Kea Technologies, visit www.maunakeatech.com

Disclaimer
This press release contains forward-looking statements concerning Mauna Kea Technologies and its activities. Such forward looking statements are based on assumptions that Mauna Kea Technologies considers to be reasonable. However, there can be no assurance that the anticipated events contained in such forward-looking statements will occur. Forward- looking statements are subject to numerous risks and uncertainties including the risks set forth in the registration document of Mauna Kea Technologies registered by the French Financial Markets Authority (Autorité des marchés financiers (AMF)) on May 31, 2017 under number D.17-0574 and available on the Company's website (www.maunakeatech.com), and to the development of economic situation, financial markets, and the markets in which Mauna Kea Technologies operates. The forward-looking statements contained in this release are also subject to risks unknown to Mauna Kea Technologies or that Mauna Kea Technologies does not consider material at this time. The realization of all or part of these risks could lead to actual results, financial conditions, performances or achievements by Mauna Kea Technologies that differ significantly from the results, financial conditions, performances or achievements expressed in such forward-looking statements. This press release and the information it contains do not constitute an offer to sell or to subscribe for, or a solicitation of an order to purchase or subscribe for, Mauna Kea Technologies shares in any country.

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