Epigenomics reported H1/2019 revenues of €679k, down 12% YoY and below our €1.4m estimate, due largely to a reduction in licensing revenue resulting from termination of the collaboration with Chinese partner BioChain. Importantly, the latter was partly offset by an 84% YoY increase in product revenue from Epi proColon, and we expect solid underlying growth momentum to continue throughout H2/2019E. Management adjusted FY2019 financial outlook to €2.0m - €4.0m (from €3.0m - €6.0m), due to the delay in the reimbursement decision in the US. We have revised our model to reflect the Chinese licensing agreement termination and our new estimates are in line with updated company outlook. We continue to see the positive commercial outlook of Epigenomic's liquid biopsy tests based on their differentiated profile, fast readouts, large target markets and a significant health economic benefit. We reduce our target price (“TP”) to €3.25 (from €4.01) and maintain our OUTPERFORM recommendation.
