MAUNA KEA TECHNOLOGIES (EPA:MKEA) 2011 half-year results

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31/08/2011 17:45

PRESS RELEASE

                           2011 half-year results

* Implementation of sales strategy in private clinics and community hospitals
  begins
* +11% growth in clinical sales
* New people added to Sales and Marketing teams
* FDA Clearance for Cellvizio(r) 100 series obtained

Paris, 31 August 2011:

Today Mauna Kea Technologies (NYSE Euronext: MKEA), leader in the endomicroscopy
field, announced its half-year results ended 30 June 2011.

                                      1HY 2011       1HY 2010
In kEUR - IFRS                  (30 June 2011) (30 June 2010)
Operating income

Incl. Sales                              1,820          1,960
Incl. Other Income                         436            677
Total income                             2,256          2,637
Operating expenses
Incl. Cost of Goods Sold                   757            760
Incl. Research and Development             845            907
Incl. Sales & Marketing                  2,406          2,164
Incl. Overhead expenses                  1,224            908
Incl. Share-based Payments                 190            140
Total expenses                           5,422          4,879
Operating profit                        -3,167         -2,242
Net profit                              -3,151         -2,064

Activity: +11% growth in clinical sales (use of Cellvizio in clinical
institutions)

Sales for the first half of 2011, which were down by 7.1%, consisted kEUR1,629
in clinical sales and kEUR191 in pre-clinical sales (use of Cellvizio(r) in
preclinical research). Clinical sales were up by 11% compared to the first half
of 2010. In June, the Company posted its first sales in the United States and
France to community hospitals, which now constitute the core target of the Mauna
Kea Technologies sales strategy and its primary engine of growth.

The pre-clinical sales are down by 61%. The drop in pre-clinical business is due
specifically to the budget freeze in the United States, which disrupted the
distribution of research funds from the NIH (National Institutes of Health), the
foremost source of financing for this type of research equipment.

The other income includes subsidies, research tax credits and other credits, as
well as the share of subsidies linked to reimbursable advances. Their 35.6%
decline is primarily due to the near-absence of subsidies received in the first
half of 2011 versus kEUR558 received during the same period last year, as the
subsidies related to the robotics surgery program (Persee) are contractually
scheduled for the second half of 2011.

With respect to the analysis of the sales trend by product and by category,
sales of equipment were down by 18.7% to kEUR1,119, taking into account the
decline in pre-clinical sales. Sales of consumables (miniprobes) posted a gain
of 2% to kEUR388, thus representing 21% of sales, compared to 19% for the first
half-year of 2010.

Compared to the first half of 2010, the sale of associated services advanced by
53% to kEUR313.

As of 30 June 2011, Mauna Kea Technologies had an installed base of 193
Cellvizio(r) worldwide, 111 of them in clinical institutions and 82 in
preclinical research centers. Geographically, North America and Europe, which
are the two historical marketing zones for Cellvizio(r), contributed 55% and 29%
of sales, respectively, although Asia and the Middle East represent 6% and 10%
of sales, respectively.

Operating profit: in line with Company expectations

Operating expenses were kEUR5,422 for the first 6 months of the year versus
kEUR4,879 in the first half of 2010, i.e. an increase of 11.1%, in line with the
Company's expectations. The gross margin rate, which was 58% at 30 June 2011, is
close to the margin rate at 30 June 2010, which was 61%. The increase in Sales &
Marketing expenses as well as overhead expenses shows that Mauna Kea
Technologies is gearing up for growth. Sales and Marketing continue to be the
Company's largest spending item, and accounted for 44% of all operating expenses
in the first half of 2011, while the ratio of Research and Development expenses
to results remained stable, at 46%.

Mauna Kea Technologies had 67 employees at 30 June 2011 versus 64 employees at
30 June 2010.

After counting a financial income of kEUR17 versus kEUR178 at 30 June 2010, due
to foreign-exchange variations and tax, the Company's net profit is
(kEUR3,151).

Cash at 30 June 2011 was kEUR2,835. However that level of cash does not include
proceeds from the capital increase that Mauna Kea Technologies carried out in
July 2011, through its IPO on the NYSE Euronext Paris stock exchange.

Recent events: big success of IPO, setup of sales strategy and FDA Clearance for
the Cellvizio(r) 100 Series

Mauna Kea Technologies' successful IPO enabled it to raise 56.5 millions euros.
The world's only company to market miniaturized probe-based endomicroscopy
equipment, Mauna Kea Technologies now has the full leeway required to
successfully carry out its ambitious sales strategy.

During the first semester, Mauna Kea Technologies started the reinforcement of
its sales and marketing management. The Company notably recruited a Director of
Sales for the United States, who has 12-year of experience in sales of
innovative medical equipment, and a Vice-President Global Marketing, who has
more than 20 years of experience in all areas of marketing and more than 10
years in the field of innovative medical technologies.

Regarding clinical studies and as announced on 26 July 2011, the publication of
five new clinical studies in the most prestigious scientific journals is yet
another validation of the importance of the innovation provided by Cellvizio(r)
and the support from the medical community.

Mauna Kea Technologies announced that it has just obtained 510(k) clearance from
the US Food and Drug Administration (FDA) to market the next generation
endomicroscopy Cellvizio(r) system in the United States, called the Cellvizio(r)
100 Series. This clearance represents a major milestone for the Company. The
Cellvizio(r) 100 Series obtained the CE mark in April 2011 and has already been
launched in Europe.

Sacha Loiseau, Fou nder and CEO of Mauna Kea Technologies, says: "Mauna Kea
Technologies is now starting a new decisive phase in its history: backed by a
very large number of clinical publications that prove the full, high medical
value of Cellvizio(r), support from the foremost opinion leaders and Specialty
Societies, the regulatory clearances necessary in the United States and Europe
for marketing Cellvizio(r) in two medical specialties, and substantial
financing. We now have all the resources to successfully carry out marketing and
sales strategy. The next steps will consist of further additions to the sales
and marketing teams in the United States and France, as announced at the time of
the IPO".

About Mauna Kea Technologies
Mauna Kea Technologies is a global medical device company and leader in the
endomicroscopy market. The company researches, develops and markets innovative
tools to visualize and detect abnormalities in the gastro-intestinal and
pulmonary tracts. Its flagship product, Cellvizio(r), a probe-based Confocal
Laser Endomicroscopy (pCLE) system, provides physicians and researchers
high-resolution cellular views of tissue inside the body. Large, international,
multicenter clinical trials have demonstrated Cellvizio's ability to help
physicians more accurately detect early forms of disease and make treatment
decisions immediately. Designed to improve patent outcomes and reduce costs
within a hospital, Cellvizio can be used with almost any endoscope. Cellvizio
has 510(k) clearance from the U.S. Food and Drug Administration and the European
CE-Mark for use in the GI and pulmonary tracts.

For more information about Mauna Kea Technologies visit www.maunakeatech.com

Next press release: Q3 results 2011: 15 November 2011

United States
Erich Sandoval
Lazar Partners Ltd.
Tel: +1 917 497 2867
esandoval@lazarpartners.com

Mauna Kea Technologies
Eric Cohen
Vice President Finance
Tel: +33 1 70 08 09 70
investor-vpf@maunakeatech.com

France and Europe
ALIZE RP
Caroline Carmagnol
Tel: + 33 1 42 68 86 43 / + 33 6 64 18 99 59
caroline@alizerp.com
Anne -Sophie Cosquéric
Tel: + 33 1 42 68 86 41
Anne-sophie@alizerp.com

NewCap.
Investor Relations and Financial Communication
Pierre Laurent / Axelle Vuillermet
Tel: +33 1 44 71 94 94
maunakea@newcap.fr

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