UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the date of June 16, 2021

Commission File Number 001-39124

Centogene N.V.

(Translation of registrant’s name into English)

Am Strande 7

18055 Rostock

Germany

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F.... Form 40-F.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):


Centogene N.V.

On June 16, 2021, Centogene N.V. (the “Company”) issued a press release reporting its financial results for the three months ended March 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1.

Attached hereto as Exhibit 99.2 and 99.3 are also the financial statements of the Company for the three months ended March 31, 2021 and the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2021, respectively. All exhibits attached hereto are incorporated by reference herein.

Exhibit 99.1 to this Report on Form 6-K shall not be deemed “filed” for purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the U.S. Securities Act of 1933, as amended, or the Exchange Act.

Exhibits 99.2 and 99.3 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statement on Form S-8 (Registration Number 333-234551) of the Company and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

2


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CENTOGENE N.V.

Date: June 16, 2021

By:

/s/ Richard Stoffelen

Name:

Richard Stoffelen

Title:

Chief Financial Officer

3


Exhibit Index

Exhibit

    

Description of Exhibit

99.1

Press Release dated June 16, 2021

99.2

Unaudited Condensed Consolidated Interim Financial Statements as of and for the Three Months ended March 31, 2021

99.3

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months ended March 31, 2021

4


Exhibit 99.1

CENTOGENE Reports First Quarter 2021 Financial Results in the Lead Up to

Virtual Investor Event

Further signs of recovery in the core rare disease business

Recorded revenues of €65.0 million in Q1 2021, driven by revenues from COVID-19 testing, up over 400% compared to €12.1 million in Q1 2020
Achieved positive adjusted EBITDA, driven by COVID-19 testing revenues, while continuing to invest in the Company’s rare disease core business
Added over 25,000 patients to rare disease-centric Bio/Databank in Q1 2021
Demonstrated sequential revenue growth in the Diagnostics segment and signed five new Pharma partnership deals
Announced key additions to the management team, including Rene Just as Chief Financial Officer and Michael Motz as Chief Commercial Officer, Pharma

Hosting Virtual Investor Event on June 22 to outline strategic direction of the Company

CAMBRIDGE, Mass. and ROSTOCK, Germany, and BERLIN, June 16, 2021 (GLOBE NEWSWIRE) Centogene N.V. (Nasdaq: CNTG), a commercial-stage company focused on generating data-driven insights to diagnose, understand, and treat rare diseases, today announced financial results for the first quarter ended March 31, 2021.

Executive Commentary

“We experienced a solid start to the year – reporting strong revenues, supporting rare disease patients with best-in-class diagnostic testing, and establishing new pharma collaborations. With the extension of our collaboration with our partners Takeda and Denali, as well as the recent initiation of the EFRONT Study with Alector, we have further added to our collaborative momentum and to enhancing our knowledge of rare neurological diseases,” said Andrin Oswald, M.D., Chief Executive Officer at CENTOGENE. “Our Bio/Databank is central to securing such partnerships and offers unmatched and continuously expanding insights to patients seeking the most accurate diagnosis and to Pharma companies seeking to accelerate orphan drug development. Together with the newly-formed CENTOGENE Executive Team, I look forward to outlining how we are going to unlock the significant value potential of CENTOGENE’s assets and to foster growth and value creation opportunities at the upcoming Virtual Investor Event.”

Richard Stoffelen, CENTOGENE’s Chief Financial Officer, added, “We are happy to have been able to continue our significant investments in the Company’s core rare disease business. This was supported by the positive EBITDA contribution from COVID-19 testing. As the Company continues through 2021, we will continue to invest in its capabilities and deliver more value to patients and shareholders.”

Solid Foundation for Further Recovery in 2021

With a strong focus on its core business as a data-centric company focusing on rare diseases, CENTOGENE has continued to spearhead scientific and collaborative progress in this field amid the global pandemic. As vaccine rollout continues and lockdowns begin to lift, the Company is seeing further growth in both its core Clinical Diagnostics and Pharma segments – further solidifying its leading position in the rare disease space.

Further information on the Company’s Q1 2021 Earnings, including the management’s discussion and analysis of financial condition and results of operations, can be found by visiting EDGAR on the SEC website at www.sec.gov as well as the Investor Relations page of the Company’s website at http://investors.centogene.com.

Financial Guidance

Diagnostics recovery and newly signed Pharma partnership deals indicate a return to solid core business growth for 2021. Regarding CENTOGENE’s COVID-19 testing segment, the Company recognizes that uncertainties remain around global vaccine rollout, epidemiological impact of new mutations, and testing policies – making accurate predictions impossible. Based on the trajectory at the end of Q1 2021, CENTOGENE anticipates revenues from the COVID-19 testing segment to be at least on par with 2020.


Virtual Investor Event

The Company will be hosting a Virtual Investor Event on Tuesday, June 22, 2021, at 9:00 a.m. - 11:00 a.m. EDT / 3:00 p.m. - 5:00 p.m. CEST and will not be hosting a separate quarterly earnings call. To register and learn more about CENTOGENE’s Virtual Investor Event, visit: https://www.centogene.com/es/virtual-investor-event.html

The relevant links will also be available on the Investor Relations page of the Company’s website at https://investors.centogene.com.

About CENTOGENE

CENTOGENE engages in diagnosis and research around rare diseases transforming real-world clinical, genetic, and multiomic data to diagnose, understand, and treat rare diseases. Our goal is to bring rationality to treatment decisions and to accelerate the development of new orphan drugs by using our extensive rare disease knowledge and data. CENTOGENE has developed a global proprietary rare disease platform based on our real-world data repository with over 3.9 billion weighted data points from approximately 600,000 patients representing over 120 different countries as of December 31, 2020.

The Company’s platform includes epidemiologic, phenotypic, and genetic data that reflects a global population, as well as a biobank of patients’ blood samples and cell cultures. CENTOGENE believes this represents the only platform focused on comprehensive analysis of multi-level data to improve the understanding of rare hereditary diseases. It allows for better identification and stratification of patients and their underlying diseases to enable and accelerate discovery, development, and access to orphan drugs. As of December 31, 2020, the Company collaborated with over 30 pharmaceutical partners.

Important Notice and Disclaimer

This press release contains statements that constitute “forward-looking statements” as that term is defined in the United States Private Securities Litigation Reform Act of 1995, including statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results, in contrast with statements that reflect historical facts. Examples include discussion of our strategies, financing plans, growth opportunities, and market growth. In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project” or “expect,” “may,” “will,” “would,” “could,” or “should,” the negative of these terms or similar expressions. Forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to the Company. However, these forward- looking statements are not a guarantee of our performance, and you should not place undue reliance on such statements. Forward-looking statements are subject to many risks, uncertainties, and other variable circumstances, such as negative worldwide economic conditions and ongoing instability and volatility in the worldwide financial markets, the effects of the COVID-19 pandemic on our business and results of operations, possible changes in current and proposed legislation, regulations and governmental policies, pressures from increasing competition and consolidation in our industry, the expense and uncertainty of regulatory approval, including from the U.S. Food and Drug Administration, our reliance on third parties and collaboration partners, including our ability to manage growth and enter into new client relationships, our dependency on the rare disease industry, our ability to manage international expansion, our reliance on key personnel, our reliance on intellectual property protection, fluctuations of our operating results due to the effect of exchange rates, or other factors. Such risks and uncertainties may cause the statements to be inaccurate and readers are cautioned not to place undue reliance on such statements. Many of these risks are outside of the Company’s control and could cause its actual results to differ materially from those it thought would occur. The forward-looking statements included in this press release are made only as of the date hereof. The Company does not undertake, and specifically declines, any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments, except as required by law.

For further information, please refer to the Risk Factors section in our Annual Report for the year ended December 31, 2020, on Form 20-F filed with the SEC on April 15, 2021, and other reports and documents furnished to or filed with the U.S. Securities and Exchange Commission (SEC). You may get these documents by visiting EDGAR on the SEC website at www.sec.gov.

Media Contact:

CENTOGENE

Lennart Streibel

Investor Relations

investor.relations@centogene.com

FTI Consulting

Bridie Lawlor O’Boyle

+1.917.929.5684

bridie.lawlor@fticonsulting.com


Centogene N.V.

Unaudited interim condensed consolidated statements of comprehensive loss

for the three months ended March 31, 2021 and 2020

(in EUR k)

    

    

For the three months ended March 31

    

Note

2020

    

2021

    

Revenue

 

4, 5

12,105

 

64,960

 

Cost of sales

 

7,018

 

51,947

 

Gross profit

 

5,087

 

13,013

 

Research and development expenses

 

2,691

 

4,335

 

General administrative expenses

 

7,898

 

11,596

 

Selling expenses

 

2,326

 

1,949

 

Impairment of financial assets

 

7

1,174

 

95

 

Other operating income

 

6.1

945

 

366

 

Other operating expenses

 

6.2

101

 

34

 

Operating loss

 

  

(8,158)

 

(4,630)

 

Interest and similar income

 

  

 

 

Interest and similar expense

 

  

449

 

259

 

Financial costs, net

 

(449)

 

(259)

 

Loss before taxes

 

  

(8,607)

 

(4,889)

 

Income tax expenses

 

129

 

 

Loss for the period

 

  

(8,736)

 

(4,889)

 

Other comprehensive income, all attributable to equity holders of the parent

 

  

76

 

121

 

Total comprehensive loss

 

  

(8,660)

 

(4,768)

 

Attributable to:

 

  

 

 

Equity holders of the parent

 

  

(8,599)

 

(4,803)

 

Non‑controlling interests

 

  

(61)

 

35

 

(8,660)

 

(4,768)

 

Loss per share - Basic and diluted (in EUR)

 

  

(0.43)

 

(0.22)

 

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements

1


Centogene N.V.

Unaudited interim condensed consolidated statements of financial position

as at December 31, 2020 and March 31, 2021

(in EUR k)

Assets

    

Note

    

Dec 31, 2020

    

Mar 31, 2021

Noncurrent assets

 

  

 

  

 

  

Intangible assets

 

 

12,407

 

12,594

Property, plant and equipment

 

 

16,590

 

17,196

Right-of-use assets

22,120

 

21,303

Other assets

 

7

 

1,967

 

3,023

 

53,084

 

54,116

Current assets

 

  

 

 

Inventories

 

 

11,405

 

9,322

Trade receivables and contract assets

 

7

 

29,199

 

28,604

Other assets

 

7

 

8,286

 

8,171

Cash and cash equivalents

 

8

 

48,156

 

45,221

 

97,046

 

91,318

 

150,130

 

145,434

Equity and liabilities

    

Note

    

Dec 31, 2020

    

Mar 31, 2021

Equity

 

  

 

  

 

  

Issued capital

 

9

 

2,654

 

2,691

Capital reserve

 

9

 

125,916

 

127,921

Retained earnings and other reserves

 

  

 

(62,888)

 

(67,691)

Non‑controlling interests

 

  

 

95

 

130

 

65,777

 

63,051

Noncurrent liabilities

 

  

 

 

Non‑current loans

 

10.1

 

401

 

301

Lease liabilities

 

10.1

 

17,677

 

16,882

Deferred tax liabilities

 

 

207

 

207

Government grants

 

10.2

 

8,950

 

8,660

 

27,235

 

26,050

Current liabilities

 

  

 

 

Government grants

 

10.2

 

1,342

 

1,293

Current loans

 

10.1

 

2,492

 

3,994

Lease liabilities

 

10.1

 

3,528

 

3,299

Trade payables

 

10.2

 

31,736

 

25,098

Liabilities from income taxes

10.2

58

58

Other liabilities

 

10.2

 

17,962

 

22,591

 

57,118

 

56,333

 

150,130

 

145,434

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements

2


Centogene N.V.

Unaudited interim condensed consolidated statements of cash flows

for the three months ended March 31, 2020 and 2021

(in EUR k)

For the three months ended March 31

    

Note

    

2020

    

2021

Operating activities

 

  

 

  

 

  

Loss before taxes

 

  

 

(8,607)

(4,889)

Adjustments to reconcile loss to cash flow from operating activities

 

  

 

Amortization and depreciation

 

5

 

2,084

3,286

Interest income

 

 

Interest expense

 

 

449

259

Expected credit loss allowances on trade receivables and contract assets

7

1,174

95

Share‑based payment expenses

 

11

 

1,057

2,042

Other non‑cash items

 

  

 

(192)

(184)

Changes in operating assets and liabilities

 

  

 

Inventories

 

 

(4,040)

2,083

Trade receivables and contract assets

 

7

 

773

500

Other assets

 

7

 

(234)

(941)

Trade payables

 

10.2

 

1,619

(6,638)

Other liabilities

 

10.2

 

1,751

4,629

Cash flow from / (used in) operating activities

 

  

 

(4,166)

242

Investing activities

 

  

 

Cash paid for investments in intangible assets

 

5

 

(1,191)

(1,326)

Cash paid for investments in property, plant and equipment

 

 

(644)

(1,970)

Grants received for investment in property, plant and equipment

 

10.2

 

207

 

Cash flow used in investing activities

 

  

 

(1,628)

(3,296)

Financing activities

 

  

 

 

Cash received from loans

 

10.1

 

414

1,587

Cash repayments of loans

 

10.1

 

(1,060)

(185)

Cash repayments of lease liabilities

 

10.1

 

(1,044)

(1,222)

Interest paid

 

 

(230)

(61)

Cash flow from / (used in) financing activities

 

  

 

(1,920)

119

Changes in cash and cash equivalents

 

  

 

(7,714)

(2,935)

Cash and cash equivalents at the beginning of the period

 

  

 

41,095

48,156

Cash and cash equivalents at the end of the period

 

  

 

33,381

45,221

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements

3


Centogene N.V.

Unaudited interim condensed consolidated statements of changes in equity

for the three months ended March 31, 2020 and 2021

Attributable to the owners of the parent

Currency

Non-

Issued

Capital

translation

Retained

controlling

Total

in EUR k

    

Note

    

capital

    

reserve

    

reserve

    

earnings

    

Total

    

interests

    

equity

 

As of January 1, 2020

2,383

98,099

(40,622)

59,860

(938)

58,922

Loss for the period

  

(8,675)

(8,675)

(61)

(8,736)

Other comprehensive loss

  

76

76

76

Total comprehensive loss

 

 

76

 

(8,675)

 

(8,599)

 

(61)

 

(8,660)

Share-based payments

11

1,057

1,057

1,057

Disposal of non-wholly owned subsidiary

6.2

268

268

As of March 31, 2020

2,383

 

99,156

 

76

 

(49,297)

 

52,318

 

(731)

 

51,587

Attributable to the owners of the parent

Currency

Non-

Issued

Capital

translation

Retained

controlling

Total

in EUR k

    

Note

    

capital

    

reserve

    

reserve

    

earnings

    

Total

    

interests

    

equity

 

As of January 1, 2021

2,654

125,916

(48)

(62,840)

65,682

95

65,777

Loss for the period

  

(4,924)

(4,924)

35

(4,889)

Other comprehensive loss

  

121

121

121

Total comprehensive loss

 

 

121

 

(4,924)

 

(4,803)

 

35

 

(4,768)

Share-based payments

11

2,042

2,042

2,042

Exercise of options

37

(37)

As of March 31, 2021

2,691

 

127,921

 

73

 

(67,764)

 

62,921

 

130

 

63,051

The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements

4


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

1 General company information

Centogene N.V. (“the Company”) and its subsidiaries (“the Group”) focus on rare diseases and seek to transform real-world clinical and genetic or other data into actionable information for patients, physicians and pharmaceutical companies. The mission of the Company is to bring rationality to treatment decisions and to accelerate the development of new orphan drugs by using our knowledge of the global rare disease market, including epidemiological and clinical data and innovative biomarkers.

On November 7, 2019, the Company completed an initial public offering (“IPO”) and has since been listed on Nasdaq Global Market under stock code “CNTG”. Centogene N.V. is a public company with limited liability incorporated in the Netherlands, with registered office located at Am Strande 7 in 18055 Rostock, Germany and Dutch trade register number 72822872.

In July 2020, the Company completed a follow-on offering of 3,500,000 common shares of the Company (the “Follow-on Equity Offering”), consisting of 2,000,000 common shares offered by the Company and 1,500,000 common shares offered by selling shareholders at a price to the public of USD 14.00 per common share (i.e. EUR 12.71 per share). Aggregate offering proceeds, net of underwriting discounts, commissions and transaction costs, were EUR 22 million to the Company.

2 Basis of preparation

The interim condensed consolidated financial statements for the three months ended March 31, 2020 and 2021 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements as of December 31, 2019 and 2020 and for the three years ended December 31, 2020. Unless otherwise specified, "the Company" refers to Centogene N.V. and Centogene GmbH throughout the remainder of these notes, while "the Group" refers to Centogene N.V., Centogene GmbH and its subsidiaries.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2020. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective, and there are no new or amended standards or interpretations that are issued and became effective for the 2021 annual reporting period, that have a material impact on the Group.

These interim condensed consolidated financial statements are presented in euro, which is the Group's functional currency. Unless otherwise specified, all financial information presented in euro is rounded to the nearest thousand (EUR k) in line with customary commercial practice.

3 Effect of COVID-19 Pandemic

The COVID-19 pandemic has spread worldwide and continues to cause many governments to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closures of borders and requiring maintenance of physical distance between individuals.

Since the second quarter of 2020, the COVID-19 pandemic has resulted in a slowdown in our Diagnostics and Pharmaceutical businesses. As part of the Company’s initiative to assist local, national and international authorities as well as other partners in their efforts to facilitate the earliest possible diagnosis of COVID-19 and thereby contribute to allowing society to return to a “new” normal, the Company commenced testing for COVID-19 in March 2020.

5


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

During the three months ended March 31, 2021, the Group continued the COVID-19 testing activities started in 2020 with a leading role in providing testing services at airports in Germany. Furthermore, new variants of the virus have emerged since mid-December 2020. How these mutations develop and their impact on the effectiveness of vaccines is not yet fully clear. Furthermore, vaccination campaigns in several countries started during the three months ended March 31, 2021, and due to the expected increase in the availability of vaccines during the second quarter, the expectation is that governments will reduce restrictions during 2021. How and when this would affect the potential prolongation of the need for testing on a broader scale is not clear yet.

Although the Group is taking a number of measures aimed at minimizing disruptions to the business and operations, and while the provision of testing for the COVID-19 virus is anticipated to generate additional revenues for us, the full extent to which the global COVID-19 pandemic may impact the business will depend on future developments, which are highly uncertain and cannot be predicted, such as the duration of the pandemic, the availability of vaccines, the probability of the occurrence of further outbreaks and the ultimate impact on the financial markets and the global economy, and could result in an unforeseen negative impact on the business and future results of operations.

4 Revenues from contracts with customers

in EUR k

Three Months Ended March 31, 2020(1)

    

Pharmaceutical

    

Diagnostics

    

COVID-19

Total

Rendering of services

4,274

7,542

13

11,829

Sales of goods

276

276

Total Revenues from contracts with external customers

4,550

7,542

13

12,105

Recognized over time

4,274

7,542

11,816

Recognized at a point in time

276

13

289

Total Revenues from contracts with external customers

4,550

7,542

13

12,105

Geographical information

Europe

 

44

1,604

 

13

1,661

—Germany*

 

19

60

 

13

92

—Netherlands**

3

3

Middle East

 

3

4,415

 

4,418

—Saudi Arabia#

 

3,033

 

3,033

North America

 

4,503

620

 

5,123

—United States#

 

4,503

471

 

4,974

Latin America

 

746

 

746

Asia Pacific

 

157

 

157

Total Revenues from contracts with external customers

 

4,550

 

7,542

 

13

12,105


(1)             Since the COVID-19 business has been reported as a separate segment as from the third quarter of 2020, the comparative figures for the three months ended March 31, 2020 were adjusted retrospectively for both the COVID-19 and diagnostics segments.

6


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

in EUR k

Three Months Ended March 31, 2021

    

Pharmaceutical

    

Diagnostics

COVID-19

    

Total

Rendering of services

3,393

6,383

54,977

64,753

Sales of goods

205

2

207

Total Revenues from contracts with external customers

3,598

6,383

54,979

64,960

Recognized over time

3,393

6,383

11,844

21,620

Recognized at a point in time

205

43,135

43,340

Total Revenues from contracts with external customers

3,598

6,383

54,979

64,960

    

Geographical information

 

Europe

 

149

1,214

54,121

55,484

—Germany*#

 

53

52,345

52,398

—Netherlands**

2

1,768

1,770

Middle East

 

29

4,135

4,164

North America

 

3,405

464

780

4,649

Latin America

 

15

410

425

Asia Pacific

 

160

78

238

Total Revenues from contracts with external customers

 

3,598

 

6,383

54,979

 

64,960


* country of the incorporation of Centogene GmbH

** country of the incorporation of Centogene N.V.

# countries contributing more than 10% of the Group’s total consolidated revenues for the three months ended March 31, 2020 and 2021, respectively.

The Group collaborated with the majority of pharmaceutical partners on a worldwide basis in 2020 and 2021. In addition, in cases where pharmaceutical partners are developing a new rare disease treatment, it is generally anticipated that the final approved treatment will be made available globally. As a result, the Group allocates the revenues of the pharmaceutical segment by geographical region by reference to the location where each pharmaceutical partner mainly operates, which is based on the region from which most of their revenues are generated. The allocation of revenues in the diagnostics segment and COVID-19 segments is based on the location of each customer.

Pharmaceutical segment

During the three months ended March 31, 2021, revenues from one pharmaceutical partner represented 4.7% of the Group's total revenues (the three months ended March 31, 2020: 26.4%).

COVID-19 segment

During the three months ended March 31, 2021, revenues from two COVID-19 partners represented 4.4% and 17.1% of the Group’s total revenues for the quarter (the three months ended March 31, 2020: nil).

To support the expansion of test offerings, the Company acquired laboratory facilities and equipment, developed a Corona Test Portal and leased laboratory space at several locations in Germany. Additionally, COVID-19 testing capacity is provided through a custom-built CentoTruck, a mobile laboratory in a container setup to carry out the COVID-19 analysis. Total investments in COVID-19 testing as of March 31, 2021 amounted to approximately EUR 1,416k in property, plant and equipment (the three months ended March 31, 2020: EUR 30k). An amount of EUR 354k is included in intangible assets and relates to the development of the Corona Test Portal (the three months ended March 31, 2020: nil).

7


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

5 Segment information

in EUR k

Three months ended March 31, 2020

    

Pharmaceutical

    

Diagnostics

    

COVID-19

Corporate

    

Total

Total Revenues from contracts with external customers

4,550

7,542

13

12,105

Adjusted EBITDA

 

2,608

138

(51)

(7,712)

(5,017)

Capital Expenditures

 

Additions to property, plant and equipment and right-of-use assets

 

787

30

587

1,404

Additions to intangible assets

 

1,002

189

1,191

Other segment information

 

Depreciation and amortization

564

544

976

2,084

Research and development expenses

 

2,691

2,691

in EUR k

Three Months Ended March 31, 2021

    

Pharmaceutical

    

Diagnostics

    

COVID-19

Corporate

    

Total

Total Revenues from contracts with external customers

3,598

6,383

54,979

64,960

Adjusted EBITDA

 

1,497

1,054

10,167

(12,020)

698

Capital Expenditures

 

Additions to property, plant and equipment and right-of-use assets

 

6

234

1,416

314

1,970

Additions to intangible assets

 

322

354

650

1,326

Other segment information

 

Depreciation and amortization

414

406

927

1,539

3,286

Research and development expenses

 

4,335

4,335

Adjustments to EBITDA

Adjustments to EBITDA include non-cash charges in relation to depreciation, amortization (including impairments), and share-based payments as well as net financial costs, and income taxes. Certain costs, and related income, are not allocated to the reporting segment results and represent the residual operating activities of the Group reported as ‘Corporate’. These include corporate overheads, which are responsible for centralized functions such as communications, information technology, facilities, legal, finance and accounting, insurance (D&O), human resources, business development and strategic initiatives, certain professional and consulting services, procurement, research and development and other supporting activities.

Increases in corporate expenses for the three months ended March 31, 2021 are mainly due to increased personnel costs, legal and administrative costs and additional investments in IT support and data center costs.

8


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

Reconciliation of segment Adjusted EBITDA to Group loss for the period

For the three months ended March 31

    

2020

    

2021

Reported segment Adjusted EBITDA

 

2,695

 

12,718

Corporate expenses

 

(7,712)

 

(12,020)

 

(5,017)

 

698

Share-based payment expenses (Note 11)

 

(1,057)

 

(2,042)

Depreciation and amortization

 

(2,084)

 

(3,286)

Operating loss

 

(8,158)

 

(4,630)

Financial costs, net

 

(449)

 

(259)

Income tax expenses

 

(129)

 

Loss for the three months ended March 31

 

(8,736)

 

(4,889)

Non-current asset locations

Non-current assets of the Group consist of right-of-use assets (under IFRS 16), property, plant and equipment, as well as intangible assets. All of such assets are located in Germany, which is the country of the business address of Centogene GmbH, except for property, plant and equipment of EUR 503k (December 31, 2020: EUR 516k) and right-of-use assets of EUR 625k (December 31, 2020: EUR 709k), which are located in the United States.

,

6 Other income and expenses

6.1Other operating income

For the Three months ended March 31

    

in EUR k

    

2020

    

2021

    

Government grants

702

340

 

Others

243

26

 

Total other operating income

945

366

 

Government grants contain performance-based grants to subsidize research, development and innovation in the state of Mecklenburg-Western Pomerania from funds granted by the European Regional Development Fund. Furthermore, government grants contain the release of deferred income from investment related grants.

6.2Other operating expenses

For the Three months ended March 31

    

in EUR k

    

2020

    

2021

    

Currency losses

 

34

 

Others

101

 

 

Total other operating expenses

101

 

34

 

During the three months ended March 31, 2020, the Group disposed of its entire 51% interest in LPC GmbH (“LPC”) to the minority shareholders for a consideration of EUR 213k, of which EUR 200k is to be paid over a period of four years (and included in other assets, see note 7). The related non-controlling interest of EUR 268k (accumulated share of loss) was debited to profit or loss, and the sale resulted in a loss of EUR 101k.

9


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

7 Trade receivables and other assets

in EUR k

    

Dec 31, 2020

    

Mar 31, 2021

Noncurrent

 

  

 

  

Other assets - Rental deposits

 

1,867

 

2,923

Other assets – Others

100

100

 

1,967

 

3,023

Current

 

 

Trade receivables, net

 

25,656

 

25,863

Contract assets, net

 

3,543

 

2,741

Other assets

 

8,286

 

8,171

 

37,485

 

36,775

Total non-current and current trade receivables and other assets

39,452

39,798

Other non-current assets

The non-current portion of other assets mainly include cash deposits of EUR 2,250k used to secure a bank guarantee of EUR 3,000k relating to the leases of Rostock headquarters building, cash deposits of EUR 192k, used to secure a bank guarantee of EUR 257k, relating to the leases of Berlin office and EUR 285k for the leases of certain plant and machineries. It also includes the non-current part of the consideration receivable for the sale of LPC for EUR 100k. (see note 6.2).

Trade receivables and contract assets

Trade receivables are non-interest bearing and are generally due in 30 to 90 days. In general, portfolio-based expected credit loss allowances are recognized on trade receivables and contract assets.

in EUR k

    

Dec 31, 2020

    

Mar 31, 2021

 

Not past due

 

24,185

 

21,768

Past due 1-30 days

 

2,228

 

4,117

Past due 31-90 days

 

797

 

869

Past due more than 90 days

 

6,757

 

6,713

Total gross amount of trade receivables and contract assets

 

33,967

 

33,467

Expected credit loss rate

 

  

 

Not past due

 

1.6

%  

0.7

%

Past due 1-30 days

 

3.1

%  

2.3

%

Past due 31-90 days

 

7.7

%  

8.5

%

Past due more than 90 days

 

63.0

%  

67.8

%

Expected credit loss rate on total gross trade receivables and contract assets

 

14.0

%  

14.5

%

Expected credit loss

 

4,768

 

4,863

The addition to the allowance for expected credit losses amounts to EUR 95k, which was included in the impairment of financial assets in the profit and loss account (the three months ended March 31, 2020: EUR 1,174k).

Other current assets

The current assets include VAT receivables of EUR 259k (December 31, 2020: EUR 226k), prepaid expenses of EUR 3,781k (December 31, 2020: EUR 4,431k), receivables related to exercised share-based payment grants of EUR 1,225k (December 31, 2020: 1,253k), receivables related to COVID-19 bank or credit card transactions of EUR 1,260k (December 31, 2020: 1,076k), as well as receivables from grants of EUR 442k (2020: EUR 442k).

10


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

8 Cash and short-term deposits

As of March 31, 2021, the Group has pledged its short-term deposits with carrying amount of EUR 1,500k (December 31, 2020: EUR 1,500k) and EUR 2,500k (December 31, 2020: EUR 2,500k) respectively, to fulfil collateral requirements in respect of existing secured bank loan and overdraft facility up to EUR 2,500k. In addition, the Group has pledged its short-term deposits of EUR 1,000k (December 31, 2020: EUR 1,000k) related to two other overdraft facilities worth EUR 500k each.

The restriction applying to the collateral may be terminated at any time subject to the full amount of the relevant bank loans and the overdrafts being repaid.

9 Equity

Common Shares

As of March 31, 2021, 22,422,743 common shares of Centogene N.V. with a nominal value of EUR 0.12 were issued and fully paid up (December 31, 2020: 22,117,643). As of March 31, 2021, the authorized but unissued common share capital amounted to EUR 6,789k (December 31, 2020: EUR 6,826k).

The holders of common shares are entitled to the Company's approved dividends and other distributions as may be declared from time to time by the Company, and are entitled to vote per share on all matters to be voted at the Company's annual general meetings.

Capital reserve

As of March 31, 2021, capital reserve included a share premium of EUR 107,461k (December 31, 2020: EUR 107,498k), being amounts paid in by shareholders at the issuance of shares in excess of the par value of the shares issued, net of any transaction costs incurred for the share issuance.

In addition, it also included amounts recorded in respect of share-based payments. For additional information on the share-based payments, see note 11.

10 Financial liabilities

10.1Interest-bearing liabilities

in EUR k

    

Dec 31, 2020

    

Mar 31, 2021

Noncurrent liabilities

 

  

 

  

Non‑current portion of secured bank loans

 

401

 

301

Total noncurrent loans

 

401

 

301

Lease liabilities

 

17,677

 

16,882

Total noncurrent liabilities

 

18,078

 

17,183

Current liabilities

 

 

Current portion of secured bank loans

 

567

 

467

Other bank loans

387

405

Bank overdrafts

 

1,538

 

3,122

Total current loans

 

2,492

 

3,994

Current portion of lease liabilities

 

3,528

 

3,299

Total current liabilities

 

6,020

 

7,293

Total noncurrent and current liabilities

 

24,098

 

24,476

11


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

As of March 31, 2021, short-term cash deposits of EUR 1,500k (December 31, 2020: EUR 1,500k were used to secure the secured bank loan outstanding (see note 8).

Other bank loans outstanding as of March 31, 2021 represented bank loans granted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Subject to certain reporting and review requirements, the Company applied for forgiveness of the amount in December 2020 after the 24-week covered period beginning on the date of disbursement of the loan.  The Company anticipates that the outcome of the application will be available in the first half of 2021. The amount which is forgiven will be considered as government grant income, while any remaining amount not forgiven will be repaid by the Company. Accordingly, the entire amount was classified as current.

The following table is based on the original terms and conditions:

Conditions and statement of liabilities

The outstanding interest-bearing liabilities as of March 31, 2021 and December 31, 2020 have the following conditions:

Dec 31, 2020

Mar 31, 2021

Nominal

Carrying

Nominal

Carrying

in EUR k

Currency

Nominal interest rate

Maturity

amount

amount

amount

amount

Secured bank loan

    

EUR

    

2.95%

2017‑22

    

968

    

968

    

768

    

768

Other bank loan

USD

1%

2020-22

387

    

387

405

405

Bank overdrafts

 

EUR

 

4.75%

Rollover

 

498

    

498

 

497

 

497

Bank overdrafts

 

EUR

 

3.75%

Rollover

 

628

    

628

 

2,215

 

2,215

Bank overdrafts

 

EUR

 

4.50%

Rollover

 

412

    

412

 

410

 

410

Lease liabilities

EUR

2.1%-3.5%*, 5.4%-9.1%

2017-31

21,205

    

21,205

20,181

20,181

Total interestbearing financial liabilities

 

  

 

  

  

 

24,098

 

24,098

 

24,476

 

24,476

*     represents the incremental borrowing rate of the Group at the commencement of the leases

The bank overdrafts of EUR 2,215k as of March 31, 2021 (December 31, 2020: EUR 628k) were secured by short-term deposits with a carrying amount of EUR 2,500k (December 31, 2020: EUR 2,500k) (see note 8). The other bank overdrafts of EUR 907k (December 31, 2020: EUR 910k) were secured over two short-term deposits with a carrying amount of EUR 500k each (see note 8).

10.2Trade payables and other liabilities

in EUR k

    

Dec 31, 2020

    

Mar 31, 2021

Trade payables

 

31,736

 

25,098

Government grants (deferred income)

 

10,292

 

9,953

Contract liabilities

4,479

5,250

Others

 

13,483

 

17,341

Trade payables and other liabilities

 

59,990

 

57,642

Non‑current

 

8,950

 

8,660

Current

 

51,040

 

48,982

Government grants mainly include investment-related government grants. These were received for the purchase of certain items of property, plant and equipment for the research and development facilities in Mecklenburg-Western Pomerania, including the Rostock facility. The grants were issued in the form of investment subsidies as part of the joint federal and state program, "Verbesserung der regionalen Wirtschaftsstruktur" (improvement of the regional economic structure) in connection with funds from the European Regional Development Fund. No additional grants were received during the three months ended March 31, 2021 that are related to the purchase of certain items of property, plant and equipment (the three months ended March 31, 2020: EUR 207k).

12


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

In addition, other liabilities include a provision for outstanding invoices of EUR 5,787k (December 31, 2020: EUR 1,245k), personnel-related liabilities for vacation and bonuses totaling EUR 4,579k (December 31, 2020: EUR 4,032k), a VAT payable of EUR 2,565k (December 31, 2020: EUR 4,578k receivable), as well as liabilities for wage and church tax of EUR 1,773k (December 31, 2020: EUR 1,988k).

11 Share-based payments

Expenses from share-based payment arrangements

During the three months ended March 31, 2020 and March 31, 2021, the following share-based payment arrangements existed leading to the expenses include in general administrative expenses for services received during the respective periods:

Three months ended March 31

in EUR k

2020

2021

Expenses arising from equity-settled share-based payment transactions

 

- 2020 and 2021 grants to management board and employees

429

- 2020 grants to new CEO

799

- Supervisory board grant, including ESOP 2019

1,057

814

Total expenses arising from sharebased payment transactions

1,057

 

2,042

Share-based award activity

A detailed description of the Company’s share-based payment arrangements is included in Note 20 of the Group’s annual consolidated financial statements for the year ended December 31, 2020. During the three months ended March 31, 2021 there were no changes to the terms and conditions of the Company’s share-based payment arrangements.

The following table presents a summary the Company’s share-based payment arrangement activity for the three months ended March 31, 2021.

ESOP 2017

2019-2021 awards (1)

number of awards (options and RSUs)

Number

WAEP

Number of options

WAEP (USD)

Number of RSUs

WAEP

Outstanding as of January 1

549,005

0.12

154,925

11.60

1,885,100

Granted during the year(1)

0.12

15,000

12.52

59,488

Exercised during the year

(140,169)

0.12

(164,931)

Outstanding as of March 31

408,836

0.12

169,925

11.68

1,779,657

Vested as of March 31

408,836

75,757

588,988

Exercisable as of March 31

408,836

75,757

588,988

_____________________________________

(1)The granted and outstanding options and RSUs do not include the number of RSUs to be granted to the new CEO from 2022 and also do not include the number of RSUs and options to be granted to certain supervisory board members annually in 2021 and thereafter, as these number of grants depends on the trailing volume-weighted average stock price of the Company.

13


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

The option and RSUs for the years 2019-2021 as included in the table above reflect the activity related to the share-based payment awards ESOP 2019, management board and employees, new CEO awards in 2020, and supervisory board.

Grants awarded

In March 2021, 59,488 RSUs and 15,000 options were granted to management, subject to the terms of the 2019 Plan, the applicable award agreements and the terms specified in the authorization from the Supervisory Board for this purpose. The options awards and 30,000 RSUs will vest in three equal tranches over a three-year period and 29,488 RSUs will vest in four equal tranches over a four-year period starting January 1, 2022. The grant date fair value of these grants will be recognized in profit or loss over the service period by using the graded approach.

The options referred to above vest only if the 20 trading day volume-weighted average stock price of the Company’s shares preceding the vesting date of each tranche exceeds the exercise price of USD 12.52. This hurdle is considered a market condition. Therefore, expenses would not be reversed, if the tranches do not ultimately vest.

The RSUs referred to above have no performance-based vesting conditions. Each RSU represents a right to receive a payment in cash or shares equal to the value of the RSU at the exercise date. The Company has a choice to settle either in cash, in shares or a combination thereof. In line with this, both types of awards are to be settled in shares and expire on the 10th anniversary of the grant date.

The fair value of the RSUs is based on the observed value of the underlying shares. As no dividend payments are expected over the vesting period, no further adjustment is required. The weighted average fair value of RSUs granted under the 2019 Plan during the three months ended March 31, 2021 was USD 12.05. The fair value of the options awarded during the three months ended March 31, 2021 was determined using a Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. The weighted average fair value of the options granted under the 2019 Plan during the three months ended March 31, 2021 was USD 7.36.

Exercises

During the three months ended March 31, 2021, 140,169 ESOP 2017 options were exercised. The weighted average share price at the date of exercise was USD 11.67. During the three months ended March 31, 2021, 164,931 RSUs related to the 2020 managmeent board and employment grant were exercised. The weighted average share price at the date of exercise was USD 12.04.

12 Commitments

Future payments for non-cancellable leases

The Group has various lease contracts in relation to the expansion of the Rostock headquarters and leasing of the Frankfurt laboratory, Airport Berlin, Airport Düsseldorf, Airport Frankfurt and additional laboratory space in Hamburg. The future lease payments and utilities for these non-cancellable lease contracts are EUR 206k within one year, EUR 1,686k within five years and EUR 4,855k thereafter (December 31, 2020: EUR 283k, EUR 1,686k and EUR 4,855k respectively).

The Group has various non-cancellable lease contracts of office equipment and storage spaces which had a lease term of less than 12 months or were related to leases of low-value assets, and therefore the short-term lease recognition exemption was applied to these contracts. The future lease payments for these non-cancellable lease contracts are EUR 28k within one year (December 31,2020: EUR 33k) and EUR 5k within five years (December 31, 2020: EUR 9k).

14


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

Future payment obligations

As of March 31, 2021, the Group concluded agreements with suppliers, for goods and services to be provided subsequent to March 31, 2021 with a total payment obligation of approximately EUR 2,937k (December 31, 2020: EUR 4,669k).

13 Contingent Liabilities

In May 2016, the Company was informed in writing by the Universitair Medisch Centrum Utrecht ("UMCU") that a claim had been initiated against UMCU regarding a prenatal diagnostic test that the Company conducted at their request which failed to identify a specific mutation present in a patient. On October 1, 2018, the UMCU and Neon Underwriting Limited formally filed a legal claim in the local court in Rostock, Germany against the Company alleging that the Company’s negligence in performing the test resulted in the misdiagnosis of the patient. UMCU is seeking recovery for compensatory damages as a result of the alleged misdiagnosis. By court order of November 8, 2018, the Regional Court of Rostock set the amount in dispute at EUR 880k.

On November 12, 2018, the Company submitted a notice to the Regional Court of Rostock with the intention to defend against the claim. On January 3, 2019, the Company filed a motion to dismiss in which the Company denied the merits of the claim. UMCU and Neon Underwriting Limited responded to this motion on March 15, 2019 with a statement of reply, and the parties have since made several court filings setting out their arguments since. By order dated June 3, 2019, the Regional Court of Rostock provided a first set of questions to be answered by an expert witness. Following a request by the Court, the Director of the Institute of Genetics at the University of Bonn recommended a professor for human genetics from the University of Aachen be appointed as an expert witness in this case. The Company agreed to such recommendation.

As of March 31, 2020, the amount in dispute was EUR 1.3 million. The matter was assigned to a new judge, due to the illness of the prior judge, and the decision to appoint the recommended expert witness is still pending.

The Company intends to continue to rigorously defend its position and considers that it is not probable the legal claim towards the Company will be successful and as a result has not recognized a provision for this claim as of March 31, 2020. In addition, in case a settlement would be required, the Company believes that the corresponding liability will be fully covered by the respective existing insurance policies.
Certain of our original shareholders agreed to reimburse us for the payments that we make to option holders under the 2016 Plan. Upon completion of the Follow-on Equity Offering, the relevant payables to the holders of vested options were settled mainly by the proceeds received from such original shareholders from the sale of their shares in the Follow-on Equity Offering. We have received a demand from one such original shareholder that alleges that it should have paid less to us in connection with the settlement of such payables. We believe such demand to be baseless and, should such original shareholder institute formal legal proceedings against us, intend to defend our interests vigorously.
The higher regional court of Rostock issued a final decision by which it has retroactively invalidated a contract entered into between Centogene GmbH (the “Company”) and the State of Mecklenburg-Western Pomerania (“MVP”) for COVID-19 testing, due to non-compliance by MVP with the public tender requirements of the German government. As a result of the invalidation, MVP now has a claim under German law against the Company for repayment of the full amount invoiced and received under the contract (EUR 2.3 million). The Company also has a claim against MVP for compensation for the value of services provided in expectation of the validity of the contract.

In disputes of this kind, the amounts of these two claims would typically equal each other and could be offset against one another. However, definitive and formal assurance from MVP that it will take the view that the amount of its claim equals and offsets the amount of the Company's claim has not yet been

15


Notes to the unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021

provided in writing. To the extent that MVP's claim exceeds the Company's claim against MVP, Centogene may have a payment obligation, which could materially adversely affect the Group’s financial position and results of operations.

The current understanding between MVP and Centogene is that the Company’s services were provided at market value and that despite the court’s invalidation of the contract, Centogene has a claim against MVP for EUR 2.3 million. A contractual agreement putting this understanding in writing has been finalized and is currently in the process of being signed.

14 Subsequent Events

Grant of restricted stock units

In the second quarter of 2021, 22,469 RSUs were granted to management, subject to the terms of the 2019 Plan and the applicable award agreement. The RSUs will vest in four equal tranches over a four-year period starting January 1, 2022.

Leadership transition

On May 26, 2021 the Company announced that Richard Stoffelen, the Company’s Chief Financial Officer (CFO), has decided to step down as CFO of Centogene and leave the Company as of June 30, 2021. The financial impact of the departure of Richard Stoffelen, in the second quarter of 2021, includes additional expenses relating to 6 months base salary aggregating to EUR 235k, as well as additional share-based payment expenses of approximately EUR 131k relating to all options and RSUs granted in 2020 that would vest immediately.

Furthermore, the Company announced the nomination of Rene Just as CFO, which will be proposed to the shareholders at the upcoming Annual General Meeting (AGM). Rene joined the Company on June 1, 2021.

These unaudited interim condensed consolidated financial statements were approved by management on June 16, 2021.

16


Exhibit 99.3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with Centogene N.V.’s unaudited interim condensed consolidated financial statements as of December 31, 2020 and March 31, 2021 and for the three months ended March 31, 2020 and 2021 included as Exhibit 99.2 to this report on Form 6-K. We also recommend that you read our management’s discussion and analysis and our audited consolidated financial statements and the notes thereto included in our annual report for the year ended December 31, 2020 on Form 20-F, filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the U.S. Securities and Exchange Act of 1934, as amended, on April 15, 2021 (the “Annual Report”).

Unless otherwise indicated or the context otherwise requires, all references to “Centogene N.V.” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Centogene N.V. and its subsidiaries.

The following discussion is based on our financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), which may differ in material respects from generally accepted accounting principles in the United States and other jurisdictions.

This discussion and analysis is dated as of June 16, 2021.

Overview

We are a commercial-stage company with our core businesses focused on rare diseases that transforms real-world clinical and genetic or other data into actionable information for patients, physicians and pharmaceutical companies. Our goal is to bring rationality to treatment decisions and to accelerate the development of new orphan drugs by using our knowledge of the global rare disease market, including epidemiological and clinical data and innovative biomarkers. Our platform includes multiomic data (such as epidemiologic, phenotypic and genetic and other data) that reflects a global population, and also a biobank of these patients’ blood samples. We believe this represents the only platform that comprehensively analyzes multi-level data to improve the understanding of rare hereditary diseases, which can aid in the identification of patients and improve our pharmaceutical partners’ ability to bring orphan drugs to the market.

We have identified three reportable segments:

Pharmaceutical. Our pharmaceutical solutions provide a variety of services to our pharmaceutical partners, including target discovery, early patient recruitment and identification, epidemiological insights, biomarker discovery and patient monitoring. Our information platforms, access to rare disease patients and their biomaterials, and ability to develop proprietary technologies and biomarkers enable us to provide services to our pharmaceutical partners in all phases of the drug development process as well as post-commercialization. Revenues from our pharmaceutical segment are generated primarily from collaboration agreements with our pharmaceutical partners. In addition, we have a variety of biomarker programs, and we are also pursuing a multi-omics approach, with a focus on the metabolome, to enhance diagnostic yields beyond genetic sequencing and testing and build a biomarker discovery pipeline for rare diseases. Our novel approach includes a tandem mass spectrometry methodology and artificial intelligence and, combined with the large volume of datasets in our global rare disease platform, has demonstrated value by enhancing diagnostic information and contributing to our biomarker pipeline. Such and other biomarker candidates are then further validated and optimized in epidemiological clinical trials.

Diagnostics. Our diagnostics segment provides genome, exome and targeted genetic sequencing, testing and interpretation as well as other diagnostics services to our clients worldwide, who are typically physicians, laboratories or hospitals, either directly or through distributors. As of March 31, 2021, we believe we offer the broadest diagnostic testing portfolio for rare diseases, covering over 19,000 genes using over 10,000 different tests. In turn, the data collected from our diagnostics services and biomaterials allow us to continue to grow our repository and our CentoMD database.

COVID-19 testing. While not a core business, our COVID-19 testing business has been managed and reported as a separate segment since the third quarter of 2020 due to its financial significance for our Company. We started offering COVID-19 testing in March 2020. Our initial COVID-19 test was a molecular diagnostic test performed for the in vitro qualitative detection of RNA from the SARS-CoV-2 in oropharyngeal samples from presymptomatic probands according to the recommended testing by public health authority guidelines. It has also been validated in the College of American Pathologists (CAP) / Clinical Laboratory Improvement Amendments of 1988 (CLIA) / International Organization for Standardization (ISO) certified analytical laboratory and has received Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA) for use by authorized laboratories. The majority of these tests are performed in airport locations at the Frankfurt, Hamburg, Dusseldorf, and Berlin airports. Furthermore, tests are offered through collaborations with the state

1


government and other companies. The vast majority of our testing volume is RT-PCR testing whereby we also offer antigen testing, genotyping analysis and full virus genome sequencing.

In the three months ended March 31, 2021, we received over 882,000 total test requests, of which 852,200 account for COVID-19 tests. Excluding the COVID-19 test requests, we received 29,800 test requests in the three months ended March 31, 2021, representing a 7.5% decrease as compared to the three months ended March 31, 2020 of 32,200 non-COVID-19 related test requests.

Our revenue for the three months ended March 31, 2021 was €64,960 thousand, an increase of €52,855 thousand, or 436.6%, from €12,105 thousand for the three months ended March 31, 2020. Our pharmaceutical, diagnostics and COVID-19 segments contributed 5.6%, 9.8% and 84.6%, respectively, of our total revenues for the three months ended March 31, 2021, as compared to 37.6%, 62.3% and 0.1% for the pharmaceutical, diagnostics and COVID-19 segments, respectively, of our total revenues for the three months ended March 31, 2020. The number of test requests received by our pharmaceutical segment in the three months ended March 31, 2021 was 13,800, representing a decrease of 21.6% as compared to 17,600 test requests received in the three months ended March 31, 2020, due to sustained negative effects of the pandemic since the second quarter of 2020. Test requests received by our diagnostics segment in the three months ended March 31, 2021, was 13,100, representing an increase of 3.1% as compared to 12,700 in the three months ended March 31, 2020. The number of test requests received by our COVID-19 segment in the three months ended March 31, 2021, was 852,200, compared to 300 in the three months ended March 31, 2020.

Since the inception of our business, our research and development has been substantially devoted to our biomarkers, knowledge-based platform and interpretation-based solutions. For the three months ended March 31, 2021, we incurred research and development expenses of €4,335 thousand, an increase of €1,644 thousand, or 61.1%, from €2,691 thousand for the three months ended March 31, 2020. We received 2,900 test requests for our internal research and development projects in the three months ended March 31, 2021, representing an increase of 53% as compared to 1,900 test requests in the three months ended March 31, 2020.

For the three months ended March 31, 2021, our loss before taxes was €4,889 thousand, a decrease of €3,718 thousand, or 43%, from €8,607 thousand for the three months ended March 31, 2020.

Recent Developments

Effect of the COVID-19 Pandemic

The COVID-19 pandemic, which began in December 2019, has spread worldwide and continues to cause many governments to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closures of borders and mandatory maintenance of physical distance between individuals.

Since the second quarter of 2020, the COVID-19 pandemic has resulted in a slowdown in our Diagnostics and Pharmaceutical businesses. As part of the Company’s initiative to assist local, national and international authorities as well as other partners in their efforts to facilitate the earliest possible diagnosis of COVID-19 and thereby contribute to allowing society to return to a “new” normal, the Company commenced testing for COVID-19 in March 2020.

During the three months ended March 31, 2021, we continued the COVID-19 testing activities started in 2020 with a leading role in providing testing services at airports in Germany. Furthermore, new variants of the virus have emerged since mid-December 2020. How these mutations develop and their impact on the effectiveness of vaccines is not yet fully clear. Furthermore, vaccination campaigns in several countries started during the three months ended March 31, 2021, and due to the expected increasing availability of vaccines in 2021, the expectation is that governments will further reduce restrictions during 2021. How and when this, and possible travel related testing, would affect the potential prolongation of the need for testing on a broader scale is not clear yet.

Total investments in COVID-19 testing as of March 31, 2021 amounted to €1,770 thousand, of which €1,416 thousand are property, plant and equipment. An amount of €354 thousand is included in intangible assets and relates to the development of the Corona Test Portal.

Although we are taking a number of measures aimed at minimizing disruptions to our business and operations, and while the provision of testing for the COVID-19 virus is anticipated to generate additional revenues for us, the full extent to which the global COVID-19 pandemic may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, such as the duration of the pandemic, the availability of vaccines, the probability of the occurrence of further outbreaks and the ultimate impact on the financial markets and the global economy, which could result in an unforeseen negative impact on our business and our future results of operations.

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Research and Development

Despite the disruption from the COVID-19 pandemic, we continued to expand our medical and genetic knowledge of rare genetic diseases, with the vision of shortening the diagnostics process for rare disease patients and accelerating the development of new orphan drugs. In particular, we entered into a collaboration with Alector subsequent to March 31, 2021 to accelerate diagnosis for patients with Genetic Neurogenerative Disease. The new clinical study helps identify patients with genetic forms of Frontotemporal Dementia in order to diagnose, understand and cure the disease.

As of March 31, 2021, our global proprietary rare disease platform included a real-world data repository with approximately 628 thousand patients representing 120 different countries, an increase of 5% as compared to the number of patients in our platform as of December 31, 2020 of 600 thousand patients. The size of this repository is significant when it is understood that datasets of as low as 20 patients can improve diagnostics interpretation power and accelerate pharmaceutical validation.

Financial Operations Overview

Our revenue is principally derived from the provision of pharmaceutical solutions and diagnostic tests enabled by our knowledge and interpretation-based platform, as well as from our COVID-19 testing solution.

Besides the recent impact of our COVID-19 testing related revenue, we expect our revenue to increase over time as we continue to expand our commercial efforts internationally with a focus on further growth in our pharmaceutical segment. Within our core business, we expect revenue from our diagnostics segment to grow in absolute terms but decrease as a percentage of total revenue if there is growth in our pharmaceutical segment. The development of the COVID-19 testing revenues will strongly depend on the further development of the COVID-19 pandemic.

Changes in revenue mix between our pharmaceutical, diagnostics and COVID-19 segments can impact our results period over period. We typically incur lower costs for the provision of solutions in our pharmaceutical segment and therefore generate higher returns from our pharmaceutical segment contracts than from our diagnostics and COVID-19 segment contracts.

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Results of Operations

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

    

For the Three Months Ended

March 31, 

    

2020

    

2021

    

(unaudited,

€ in thousands)

Condensed consolidated statement of comprehensive loss:

  

 

  

Revenue

12,105

 

64,960

Cost of sales

7,018

 

51,947

Gross profit

5,087

 

13,013

Research and development expenses

2,691

 

4,335

General administrative expenses

7,898

 

11,596

Selling expenses

2,326

 

1,949

Impairment of financial assets

1,174

 

95

Other operating income

945

 

366

Other operating expenses

101

 

34

Operating loss

(8,158)

 

(4,630)

Interest and similar expenses

449

 

259

Finance costs, net

(449)

(259)

Loss before taxes

(8,607)

 

(4,889)

Income tax expenses

129

 

Loss for the period

(8,736)

 

(4,889)

Other comprehensive income/(loss)

76

 

121

Total comprehensive loss for the period

(8,660)

 

(4,768)

Attributable to:

Equity holders of the parent

(8,599)

 

(4,803)

Non-controlling interests

(61)

35

(8,660)

(4,768)

Loss per share – Basic and diluted (in €)

(0.43)

 

(0.22)

Revenue

Our total revenues for the three months ended March 31, 2021 were €64,960 thousand representing an increase of €52,855 thousand, or 436.6% as compared to the three months ended March 31, 2020.

The graphic below shows the number of test requests for the diagnostics, pharmaceutical and COVID-19 segments, as well as the number of test requests received for our internal research projects during the three months ended March 31, 2021 and 2020.

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Graphic

The breakdown of our revenue by segment was as follows:

    

For the Three Months

Ended March 31, 

    

2020

    

2021

 

(unaudited,

 

€ in thousands)

Revenue by segment:

 

  

 

  

Pharmaceutical

 

4,550

 

3,598

Diagnostics

 

7,542

 

6,383

COVID-19

13

54,979

Total Revenue

 

12,105

 

64,960

Revenues from Pharmaceutical segment

Revenues from our pharmaceutical segment were €3,598 thousand for the three months ended March 31, 2021, a decrease of €952 thousand, or 21%, from €4,550 thousand for the three months ended March 31, 2020. Our partnership agreements are structured on a fee per sample basis, milestone basis, fixed fee basis, royalty basis or a combination thereof. The 21% decrease was primarily due to the impact of the COVID-19 pandemic, which slowed the clinical studies of our pharmaceutical partners.

During the three months ended March 31, 2021, we entered into five new collaborations and successfully completed 16 collaborations resulting in a total of 55 active collaborations at March 31, 2021, compared to 66 active collaborations at December 31, 2020 and 64 active collaborations as of March 31, 2020. Revenues from our new collaborations totalled €76 thousand for the three months ended March 31, 2021 with no upfront payments.

The graphs below show our revenues for the three months ended March 31, 2021 and 2020, resulting from our collaborations with our pharmaceutical partners, split between drug development stages:

5


Graphic

During the three months ended March 31, 2021, revenues from one pharmaceutical partner represented 4.7% (or 30.5% if COVID-19 revenues are excluded) of our total revenue, as compared to 26.4% for the three months ended March 31, 2020.

Revenues from Diagnostics segment

Revenues from our diagnostics segment were €6,383 thousand for the three months ended March 31, 2021, a decrease of €1,159 thousand, or 15%, from €7,542 thousand for the three months ended March 31, 2020. We received approximately 13,100 test requests in our diagnostics segment during the three months ended March 31, 2021, representing an increase of approximately 3.1% as compared to approximately 12,700 test requests received for the three months ended March 31, 2020.

For the three months ended March 31, 2021 and 2020, our total diagnostic segment revenues were split amongst our primary testing products as follows:

Graphic

Graphic

The decrease in revenues, due to the pandemic, was primarily related to a decrease in test requests for WES and WGS during the three months ended March 31, 2021. Total revenues from WES and WGS for the three months ended March 31, 2021 amounted to €3,159 thousand, representing a decrease of 24% as compared to €4,155 thousand for the three months ended March 31, 2020. The total number of WES and WGS test requests received in the diagnostics segment for the three months ended March 31, 2021 was approximately 4,000, representing a decrease of 11% as compared to approximately 4,500 test requests received for the three months ended March 31, 2020.

6


Revenues from COVID-19 testing segment

Revenues generated from our COVID-19 business for the three months ended March 31, 2021 amounted to €54,979 thousand. We received 852,200 thousand requests for our COVID-19 tests in the three months ended March 31, 2021 as compared to 300 in the three months ended March 31, 2020. During the three months ended March 31, 2021, revenues from two COVID-19 testing partners represented 17.1%and 4.4% respectively, of our total revenues.

Revenue by geographical region

The breakdown of our revenue from all of our segments, in the aggregate, by geographical region was as follows:

    

For the Three Months

    

 

Ended March 31, 

 

    

2020

    

2021

    

    

 

(unaudited,

 

€ in thousands)

Revenue by geographical region:

 

  

 

  

 

Europe

 

1,661

 

55,484

 

of which: Germany

 

92

 

52,398

 

of which: Netherlands

 

 

1,770

 

Middle East

 

4,418

 

4,164

 

North America

 

5,123

 

4,649

 

of which: United States

 

4,974

 

4,588

 

Latin America

 

746

 

425

 

Asia Pacific

 

157

 

238

 

Total Revenue

 

12,105

 

64,960

 

In cases where our pharmaceutical partners are developing a new rare disease treatment, we generally anticipate that the final approved treatment will be made available globally. As a result, we allocate the revenues of our pharmaceutical segment by geographical region by reference to the location where each pharmaceutical partner mainly operates, which is based on the region from which most of their revenues are generated. The allocation of revenues in our diagnostics and COVID-19 segments is based on the location of each customer.

Our North America region contributed €4,649 thousand to revenues for the three months ended March 31, 2021, a decrease of €474 thousand, or 9.3%, from €5,123 thousand for the three months ended March 31, 2020, primarily driven by the decrease in revenues from our pharmaceutical segment, of which over 94.6% are allocated to the North America region. Revenues from the North America region represented 7.2%, of our total revenues for the three months ended March 31, 2021, as compared to 42.3% for the three months ended March 31, 2020.

Our Middle East region contributed €4,164 thousand to revenues for the three months ended March 31, 2021, a decrease of €254 thousand, or 5.7%, from €4,418 thousand for the three months ended March 31, 2020. This revenue decline was primarily attributable to the decrease in diagnostic sales.

Our Europe region contributed €55,484 thousand to revenue for the three months ended March 31, 2021, an increase of €53,823 thousand, or 3240%, from €1,661 thousand for the three months ended March 31, 2020. This increase was mainly driven by revenues from our COVID-19 testing during the year, as over 94.4% of such revenues were generated in Germany. Revenues from the Europe region represented 85.4% of our total revenues for the three months ended March 31, 2021 as compared to 13.7% for the three months ended March 31, 2020.

Cost of Sales

Cost of sales increased by €44,929 thousand, or 640.2%, to €51,947 thousand for the three months ended March 31, 2021, from €7,018 thousand for the three months ended March 31, 2020. Cost of sales for the three months ended March 31, 2021 represented 80.0% of total revenue, representing an increase of 22.0 percentage points as compared to 58.0% for the three months ended March 31, 2020.

Cost of sales incurred by our pharmaceutical and diagnostics segments for the three months ended March 31, 2021 represented 60.4% and 63.2% of revenues from the respective segments, an increase of 18.8 percentage points and decrease of 4.6 percentage points, respectively, as compared to 41.6% and 67.8%, respectively, for the three months ended March 31, 2020. The increase for our pharmaceutical segment was mainly due to a relatively larger portion of revenues from clinical study related collaborations, where

7


higher staff costs and consumables were incurred, as compared to patient screening collaborations in prior years, where the consumable costs were comparatively low due to less expensive technologies being used in testing. The decrease for the diagnostics segment was mainly due to operational efficiency improvements, resulting in lower consumable costs per test being performed in the three months ended March 31, 2021.

Cost of sales incurred by our COVID-19 segment for the three months ended March 31, 2021 represent 83.4% of the revenues for the segment.

Gross Profit

As a result of the above factors, our gross profit increased by €7,926 thousand, or 155.8%, to €13,013 thousand for the three months ended March 31, 2021, from €5,087 thousand for the three months ended March 31, 2020.

Research and Development Expenses

Research and development expenses increased by €1,644 thousand, or 61.1%, to €4,335 thousand for the three months ended March 31, 2021, from €2,691 thousand for the three months ended March 31, 2020. The increase mainly represents personnel costs and IT-related expenses incurred in the research phase that do not qualify for capitalization.

General Administrative Expenses

General administrative expenses increased by €3,698 thousand, or 46.8%, to €11,596 thousand for the three months ended March 31, 2021, from €7,898 thousand for the three months ended March 31, 2020, principally due to increased personnel costs, legal and administrative costs and additional expenditure on IT support and data centers. In addition, the corporate expenses included share-based compensation expenses of EUR 2,042k for the three months ended March 31, 2021, an increase of EUR 985k as compared to EUR 1,057k for the three months ended March 31, 2020.

Selling Expenses

Selling expenses for the three months ended March 31, 2021 were €1,949 thousand, representing a decrease of €377 thousand, or 16.2% as compared to €2,326 thousand for the three months ended March 31, 2020. The decrease for the three months ended March 31, 2021 was principally due to a reduction in personnel expenses as well as a decrease in expenses incurred for conferences and exhibitions due to travel restrictions and other social-distancing measures as a result of the COVID-19 pandemic.

Impairment of financial assets

Impairment expenses for financial assets for the three months ended March 31, 2021 were €95 thousand, representing a decrease of €1,079 thousand from €1,174 thousand for the three months ended March 31, 2020. The impairment recorded at March 31, 2020 was related to the re-assessment of the receivables and contract assets arising from contracts with customers, partly due to the effect of the COVID-19 pandemic.

Other Operating Income / (Expenses)

Other operating income decreased by €579 thousand, or 61.3%, to €366 thousand for the three months ended March 31, 2021, from €945 thousand for the three months ended March 31, 2020, principally due to lower grant income received during the period.

Other operating expenses decreased by €67 thousand, or 66.3% to €34 thousand in the three months ended March 31, 2021, compared to the three months ended March 31, 2020.

Interest and Similar Income / (Expenses)

Net financial costs decreased by €190 thousand to €259 thousand for the three months ended March 31, 2021, from €449 thousand for the three months ended March 31, 2020, principally due to a foreign exchange loss of €147 thousand in the three months ended March 31, 2020.

Loss Before Taxes

As a result of the factors described above, our loss before taxes for the three months ended March 31, 2021 was €4,889 thousand, representing a decrease of €3,718 thousand from a loss before taxes of €8,607 thousand for the three months ended March 31, 2020.

8


Segment Adjusted EBITDA

We evaluate segment performance based on segment results and measure it with reference to Adjusted EBITDA. Adjusted EBITDA is a financial measure which is not prescribed by IFRS, which we define as income/loss before finance costs (net), taxes, and depreciation and amortization (including impairments), adjusted to exclude corporate expenses as well as share-based payment expenses. Our Segment Adjusted EBITDA was as follows:

    

For the Three Months

Ended March 31, 

    

2020

    

2021

 

(unaudited,

 

€ in thousands)

Segment Adjusted EBITDA:

 

  

 

  

Pharmaceutical

 

2,608

 

1,497

Diagnostics

 

138

 

1,054

COVID-19

 

(51)

 

10,167

Total segment Adjusted EBITDA

 

2,695

 

12,718

Adjusted EBITDA from our pharmaceutical segment for the three months ended March 31, 2021 was €1,497 thousand representing a decrease of €1,111 thousand, as compared to €2,608 thousand for the three months ended March 31, 2020. The decrease was primarily attributable to the decrease in revenues from the pharmaceutical segment, as well as the increase in cost of sales.

Adjusted EBITDA from our diagnostics segment for the three months ended March 31, 2021, was €1,054 thousand, an increase of €916 thousand as compared to €138 thousand for the three months ended March 31, 2020. The increase is mainly due to an impairment of financial assets of €1,174 thousand recognized for the three months ended March 31, 2020, compared to €95 thousand for the three months ended March 31, 2021.

Adjusted EBITDA from our COVID-19 segment for the three months ended March 31, 2021 was positive €10,167 thousand as compared to a negative €51 thousand for the three months ended March 31, 2020.

Liquidity and Capital Resources

Our cash requirements are principally for working capital and capital expenditures of all our businesses, including expansions and improvements to our laboratory facilities, technology infrastructure and research and development activities. In fiscal year 2021 and beyond, we anticipate that our capital expenditures in our rare disease business will increase from prior periods as we continue to increase our research and development efforts. Historically, our main source of liquidity has been our secured loans, municipal loans and government funding of research programs, and proceeds from our initial and July 2020 follow-on equity offerings.

Our financial condition and liquidity are and will continue to be influenced by a variety of factors, including our ability to continue to generate cash flows from our operations, our capital expenditure requirements, and the impact of the COVID-19 pandemic on financial markets and the global economy.

Our known material liquidity needs for periods beyond the next twelve months are described below under “Contractual Obligations and Commitments”. We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for more than 12 months.

Comparative Cash Flows

The table below summarizes our consolidated statement of cash flows for the three months ended March 31, 2021 and 2020:

9


    

For the Three Months

Ended March 31, 

    

2020

    

2021

 

(unaudited,

 

€ in thousands)

Consolidated statement of cash flows:

 

  

 

  

Cash flow (used in) / from operating activities

 

(4,166)

 

242

Cash flow (used in) / from investing activities

 

(1,628)

 

(3,296)

Cash flow (used in) / from financing activities

 

(1,920)

 

119

Net decrease in cash and cash equivalents

 

(7,714)

 

(2,935)

Cash and cash equivalents at the beginning of the period

 

41,095

 

48,156

Cash and cash equivalents at the end of the period

 

33,381

 

45,221

Operating Activities

Our cash flow from and used in operating activities primarily relates to changes in the components of our working capital, including cash received from our COVID-19 business, pharmaceutical partners and diagnostics clients, and payments made to our suppliers.

For the three months ended March 31, 2021, cash flow from operating activities was €242 thousand, an increase of €4,408 thousand as compared to cash flow used in operating activities of €4,166 thousand for the three months ended March 31, 2020. This change was mainly due to our COVID-19 testing business segment.

Investing Activities

Our cash flow used in investing activities consists of investments in intangible assets, property, plant and equipment.

For the three months ended March 31, 2021, cash flow used in investing activities was €3,296 thousand, as compared to cash flow used of €1,628 thousand from investing activities for the three months ended March 31, 2020. The increase was mainly due to investments made in respect of COVID-19 testing during the period of €1,770 thousand, of which €1,416 thousand was included in property, plant and equipment and €354 thousand related to the development of the Corona Test Portal.

Cash used in investment activities in our rare disease business includes mainly costs incurred in the development of new products and solutions, and the development of our IT driven and interpretation-based solutions. It also includes investment in property, plant and equipment used in the laboratories and other business operations.

Financing Activities

For the three months ended March 31, 2021, cash generated from financing activities was €119 thousand, an increase of €2,039 thousand as compared to cash flow used of €1,920 thousand for the three months ended March 31, 2020. The increase was primarily driven by the larger bank overdrafts which contributed €1,587 thousand as compared to €414 for the three months ended March 31, 2020. Furthermore, the amount used for the repayment of loans decreased from €1,060 thousand for the three months ended March 31, 2020 to €185 thousand for the three months ended March 31, 2021.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Contractual Obligations and Commitments

The table below presents the residual contractual terms of the financial liabilities and commitments, including estimated interest payments. The figures are undiscounted gross amounts, including estimated interest payments and interest on undrawn loan funds as of March 31, 2021, but without showing the impact of offsetting.

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Total

    

    

Between 1

    

Between 3

    

    

contractual

Less than

and