Hello everyone, and welcome to the BioPorto Annual Report for 2021. Throughout the call, all participants will be in listening only mode, and afterwards there will be a Q&A session. Today, I am pleased to present CEO Tony Parella and CFO Neil Goldman. Speakers, please go ahead.
Thank you for the introduction, Simon, and for hosting the call today. A warm welcome to everyone on this 2021 annual report call. As a short introduction to those of you who haven't participated before, my name is Tony Parella, and I have been the CEO of BioPorto since November 2021. With me today is Neil Goldman, our Executive Vice President and CFO, who also joined BioPorto last November. Together, we form the new executive management team. Neil and I are thrilled to be here to talk about 2021, even though our roles during that financial year were limited. Before we begin, let me remind you that the company's remarks made during this conference call today, April 6, 2022, may include predictions, estimates, or other information that might be considered forward-looking. I encourage you to review the company's annual report and other announcements filed with Nasdaq.
In today's presentation, I would like to talk about the impact acute kidney injury or AKI has on both patients and health systems, why that creates a significant market opportunity for BioPorto in the NGAL test, and review highlights of 2021. Neil will discuss the main financial highlights of the annual report and talk about our 2022 financial outlook. I will pull this together with a review of our go-forward strategy and then open up the call for questions, which will be moderated by Simon. We are all here, the entire BioPorto team and all of you, our shareholders, because acute kidney injury is the third leading cause of death annually. When hospitalized, 20% of adults and 25% of children are affected by AKI.
It's relatively unheard of outside the clinical community because AKI usually starts with another disease state, including cardiac surgery, sepsis, COVID, and many others, where the administration of common medication can be toxic to the kidneys. The frequency of AKI results in significant, clinical and economic burdens. As you can see, hospital stays are longer, more patients need dialysis, and tragically, mortality rates are 25% higher. For patients who survive, the impact of AKI continues for years after their time in the hospital. Together, AKI costs the U.S. healthcare system between $5 billion - $24 billion annually. This can be improved if patients at risk for AKI are identified early and therapy is adjusted accordingly. What does that mean for BioPorto? Well, to start, NGAL is a protein biomarker that is expressed in the early stages of acute kidney injury.
The earlier it is assessed that a patient may be at risk for AKI, the better the clinician is informed on how to treat the patient. An estimated global NGAL market of $3 billion, with the largest portion being an estimated $1.2 billion in the U.S. That's why our No. 1 strategic focus is to launch an FDA-approved product in the U.S. I realize that isn't a surprise for anyone familiar with BioPorto's history. However, strategic decisions can be as much about what you won't do as they are about what you will do. That's especially true for a company like BioPorto, which only has about 30 employees. I'll talk more about our strategy later in the call, but I wanted to communicate the importance of this focus right up front. For BioPorto, 2021 was a year of tracking towards a U.S. breakthrough.
We believe those patient, clinical, and economic burdens are some of the factors that led the U.S. FDA to grant the NGAL test Breakthrough Device designation status for a submission focused on pediatrics. Breakthrough status gives our application a priority for review after the submission. Unfortunately, COVID-19, the COVID-19 pandemic, including the resurgence from the Omicron variant, restricted BioPorto's ability to execute on the pivotal clinical trial. It meant that we once again faced delays in the enrollment of our patients for the U.S. pediatric clinical studies, which forms part of the submission to the FDA. That said, our interim data analysis in August 2021 provided results on key characteristics such as sensitivity and specificity that were consistent with our expectations. We continue to push hard to complete the enrollment of the study despite reduced access to patients.
With recent trends towards lower COVID rates, we remain on track with our previously announced plan to complete patient enrollment in the first half of 2022. As mentioned in my introduction, BioPorto also got a new management team after Peter Mørch Eriksen resigned and was later elected to the board of directors. Both Neil and I have been extremely busy since we started in November, getting familiar with the company, its technology and stakeholders, and we are absolutely thrilled to contribute to the success of BioPorto. My growing understanding of the clinical impact has only increased my determination to bring our life-saving test to the market. After significant education on acute kidney injury and its prevalence, and through many meetings with nephrology and critical care key opinion leaders from leading U.S. hospitals, it is clear that healthcare providers face a very serious, underdiagnosed, and highly lethal disease.
The candid and strong desire by clinicians that BioPorto get the NGAL test onto the U.S. market has been overwhelming to experience, because we can save lives by identifying patients at risk of AKI and adjusting their care accordingly. Based on clinician feedback, my belief in the need for BioPorto to succeed has grown even stronger. In addition to meeting key stakeholders, I have also worked with the leadership team to create three pillars in BioPorto's strategy to deliver the NGAL biomarker as the new standard of care in assessment of kidney health, prepare the company to commercialize and scale, and build a strong team dedicated to the mission. We are a small company with a unique technology and very high ambition.
That calls for clear prioritization and focus on what we aim to achieve in the next 12 months-18 months, which is to obtain U.S. FDA approval of our flagship product, the NGAL Test, for use in pediatrics and drive its adoption in the U.S., which is the largest market for in vitro diagnostics in the world. An important step of the strategy was completed in March 2022, when despite times of great difficulty and volatility, we closed a fully subscribed preemptive rights offering for new shares as part of a long-term capital plan that includes a potential U.S. listing. I am very thankful for the support and clear mandate from both existing shareholders as well as new investors to focus our efforts and to execute this strategy. It is a strategy that I firmly believe will bring BioPorto to a very successful and bright future.
With that, I'll now turn over the call to Neil for information on the 2021 financials.
Thanks, Tony, and please let me just start by saying that I am every bit as excited as you are to be with BioPorto. During my short time with the company, I have had the pleasure of speaking with a growing number of shareholders and investors, and I look forward to strengthening these relationships going forward. Moving on to the 2021 results. For the year ended December 31, 2021, revenue was DKK 24.3 million, representing growth of 5% compared to the prior year period. That figure was within the updated guidance framework provided in the Q3 2021 report. The increase in revenue was driven by an increase in antibody sales, which are related to the timing of the R&D activities of our customers. This increase was offset somewhat by a reduction in overall NGAL revenues.
However, on a regional basis, we experienced a 13% increase in sales of the NGAL Test for research use only purposes in the U.S., which we interpreted as a positive signal that is indicative of growing clinician interest. As Tony will further describe, rest of world NGAL sales are an investment focus for us in 2022. Turning to operating results, for the year ended December 31, 2021, EBIT loss was DKK 65 million, or 3% larger than the prior year period. That figure was within the updated guidance framework provided in the Q3 2021 report. The EBIT loss for the year was lower than originally expected due to changes in management and other employees and the resulting reversal of expenses for their forfeited warrants, offset to some degree by recruiting costs.
As of December 31, 2021, our cash position was DKK 45.5 million. During the 12 months ended December 31, 2021, our operations, including net investments, used net cash of DKK 65 million. As announced last week, we just closed a DKK 100.4 million, fully subscribed preemptive rights issue to strengthen BioPorto's long-term financial position. Nearly 70 million new shares were offered at a subscription price of DKK 1.50 + 4 subscription rights. As Tony said earlier, we are indeed very appreciative of the mandate provided to us from our shareholders and investors to execute on our focused strategy. These funds will enable our team to focus on BioPorto's strategy to deliver the NGAL biomarker as the new standard of care in assessment of kidney health, prepare the company to commercialize and scale, and build a strong team dedicated to our mission.
This offering is part of our long-term capital plan that includes a potential U.S. listing. Since the U.S. is the largest market for in vitro diagnostics, including the NGAL test, we plan to build a dynamic presence there to support our future customers. Therefore, U.S. institutional investors represent a natural source for the future capital that will eventually be needed to fund BioPorto's onward growth and expansion. This chart illustrates a potential approach, and I want to emphasize potential, for how future financing might align with our plans for the pediatric submission of the NGAL test and its subsequent expansion to additional populations and indications. That could include a targeted cross-border offering, a listing on U.S. Nasdaq, or other steps. To be clear, we have not yet defined the future capital structure or other key elements related to this type of process.
In addition, the chart's timeline is intended to be illustrative for all of the activities on the chart. In the middle of the chart, you can see our plans for the pediatric NGAL submission to the FDA, including completing our clinical trial collection by the end of the second quarter of 2022, followed by compiling the results in other technical files and then submitting it to the FDA for its review. The FDA targets up to 150 calendar days after submission of a De Novo application to respond. That timeline excludes any time that may be needed for BioPorto to respond to FDA inquiries, which stops the clock on that schedule. Finally, once we submit the De Novo application, our clinical and R&D teams will direct their focus to expanding the NGAL test to the adult population, expanded claims, other lab instruments, et cetera.
Now, I'll provide an overview of our 2022 financial outlook and then turn the call back to Tony to talk about our strategy. For 2022, BioPorto expects revenue of approximately DKK 24 million-DKK 26 million, EBIT loss of approximately DKK 95 million-DKK 100 million, and Adjusted EBITDA loss of approximately DKK 76 million-DKK 81 million. I would like to highlight that with our announcement today, we are adding a new guidance figure, adjusted earnings before interest, taxes, depreciation, and amortization, or Adjusted EBITDA. This figure also excludes the non-cash impact of share-based compensation. Therefore, it is intended to be a closer measure to cash flow than EBIT. I refer you to our annual report for other disclosures related to this non-IFRS measure. Here are key assumptions in these outlook figures.
As I mentioned earlier, EBIT from 2021 was favorably impacted on a non-cash basis by approximately DKK 4 million from the forfeiture of warrants and related reversal of equity compensation expenses for members of management and other team members that resigned. Naturally, we don't expect that to repeat in 2022. The combined impact of this accounting treatment is approximately DKK 15 million of non-cash EBIT loss compared to 2021. Costs related to clinical studies are assumed to be comparable to fiscal 2021. EBIT is assumed to be negatively affected by the full year impact of 2021 hires of management and other team members. Similarly, costs related to sales and marketing are assumed to increase compared to 2021, associated with the preparation for commercializing the NGAL Test in the U.S. and increasing cost to expand support for distribution in the rest of the world.
Costs related to R&D are assumed to increase compared to 2021, including as a result of the full year impact of 2021 hirings, investments in quality systems, and other costs related to preparing and submitting the De Novo application of the NGAL test in the U.S. to the FDA. BioPorto's performance and guidance for 2022 is dependent on the global development of the pandemic. The guidance above is predicated on an assumption of the continuing opening of societies and the normalization of access to hospitals, research laboratories, and regulatory bodies. I'll now turn the call back to Tony.
Thanks, Neil. Turning back to our strategy, this is the slide I shared at the beginning of the call. Neil's and my focus over the last almost five months have been to review and refine our strategy and communicate it internally and externally on a consistent basis. Our strategy is straightforward. As you know, the best strategies are simple strategies, and especially for a company our size, strategic decisions can be as much about what you won't do as they are about what you will do. As we look at this year and into next year, BioPorto will be highly focused on preparing for the launch of the NGAL test in the U.S., initially for pediatrics and subsequently for adults. Along the way, we will work to sustain our other revenue streams and continue to develop a pipeline of potential new products.
Let me be clear, those other activities will never take a priority over our focus on a U.S. launch of an FDA-cleared product. Let me focus on the three pillars of our strategy. The first pillar is to drive NGAL test market adoption and have a pipeline of high medical value products. First and foremost is our objective to complete our trial and submit an application to the FDA. In the meantime, we can generate NGAL awareness by promoting its use in the rest of the world through our distributor partners. We will focus on providing them the education and tools to do this effectively while recruiting key opinion leaders to promote on our behalf. As we get closer to launch in the U.S., including getting a sense of the likelihood and timing of approval, we will invest in the U.S. commercial team in pre-market to key target accounts.
Our second pillar is to strengthen the company to scale and execute. This means investing in our quality and documentation systems so they are FDA audit-ready. It also means focusing on our core business operations in financing the company, which is well underway. Our third and very important pillar is to attract, develop, and retain the best and brightest employees aligned with our values. As we build a team, we need to recruit the very best to help drive success. The pandemic has driven employee turnover in many businesses globally. Employees are more selective than ever on where they would be employed. Our goal is for BioPorto to be the company where employees are motivated to join and stay.
I would like to conclude by saying the demand for our potentially life-saving products is high, and our focus remains on the timely execution of all tasks to get our NGAL assay on the market and accelerate market adoption. The future of the company is in the hands of a very talented team. I would like to say a big thank you to our employees, customers, and shareholders as we continue on this journey to have a significant impact on providing better care for some of the most vulnerable patients. This concludes our presentation. Back to you, Simon, as we would be happy to answer questions.
Thank you, Tony. Ladies and gentlemen, we will now begin the Q&A session. That you are aware, we will only take questions from analysts. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Our first question comes from Yi Chen with H.C. Wainwright. Please go ahead.
Good morning, Yi.
Yi, if your phone is on mute, please unmute so you may ask your question.
Sorry about that. Thank you for taking my question. Just to clarify, you expect to report data from the NGAL Test trial in the second half and also submit the FDA application in the second half of this year. Is that correct?
That is correct, Yi. That's our target is to submit as soon as we can, after our trial is complete, after we perform the analytical analysis and validations required for the submission. That is our target to submit in the second half of the year.
You also expect to start the trial for NGAL for adult use in the second half of this year?
Yeah, no, I won't say that we can commit to that at this point in time, Yi. We will start the work and conversations required to identify exactly which adult populations we will go after and the form of submission that you know we are targeting to get that claim. As a reminder, the second claim will likely be a 510(k), which is not a De Novo application, which has a shorter, you know, we hope to be a shorter review period because you know we will now have a predicate device that we can base our submission on.
Could you comment on the enrollment size of the adult NGAL Test trial versus the NGAL Test for pediatric? Based on your past experience, how soon do you expect to complete the adult NGAL Test trial once it's started?
Yeah, there's a lot of unknowns there, Yi. Part of what we have started currently is the process of identifying what is that adult claim that we wanna go after, and that will drive basically the trial that we have to put together and the set of data that we have to put together.
Okay. Could you also comment on whether the company will start any, you know, preliminary activities for commercial preparation for the NGAL Test in the U.S.?
Yeah. There are a couple things that we have to do to prepare ourselves for launch. One is to educate clinicians on AKI and the clinical community on AKI and really help them understand you know how much this is impacting their patients today. It's well known among nephrologists but we have to get the critical care clinicians you know knowledgeable about AKI. The other thing that we have to do is get the publications that are out there today where NGAL as a biomarker of AKI has been proven and you know there are a number of studies on that. We need to get that across the community. Start hiring the folks, right?
We've already started to hire folks to help us with that education piece.
Got it. Thank you.
Thank you, Yi.
As a reminder, if you wish to ask a question, please press zero one on your telephone keypad. At this time, we have no further questions. I will now hand back to our speakers for any closing comments.
No. Again, I just want to reiterate a big thank you to our shareholders, the folks that support BioPorto. We will keep you informed as we progress on our progress on our journey to success.
This now concludes our conference call. Thank you all for participating. You may now disconnect your lines.