Genedrive LON:GDR, the AIM-listed, Manchester-based molecular diagnostics company published its final results for the year ending 30th June 2022 today (21st November)
The company reported a 92.9% fall in revenues to around GBP50,000 from revenues of around GBP690,000 in 2021. This saw its losses increase to GBP4.7m from around GBP700,000 in 2021. In a statement this morning, the company said: “[revenue] was adversely impacted by absence of Covid-19 revenue, due to the timing of bringing an approved product to the market. In the prior year, revenue also included [US] [Department of Defence] sales that were not recurring in the current year.”
However, Russ Shaw, Genedrive’s chief financial officer still classed the company as a going concern, stating: “Following the equity fund raise which completed in October 2021 the company has a cash runway to the end of the June 2023 financial year. We are confident in gaining commercial traction and securing significant revenues, but due to the time required to achieve this, we will require additional funding in our 2023 financial year. As described in the accounting policies, we continue to adopt a going concern basis for the preparation of the accounts, but the above condition represents a material uncertainty that may cast significant doubt on the group and company’s ability to continue as a going concern.”
Genedrive opened trading today at 12.75p but had dropped by 17.7% in the first hour of trading to 10.5p. The company has offered a -75.1% year-to-date return, a -41.1% one-year return and its shares have ranged between 9.5p and 82p over a 52-week period. The company has a current market cap of GBP11.8m.
The company remains debt-free and has GBP4.6m cash-in-hand, up from GBP2m for the same period of 2021. The company stated: “The directors have concluded that it is necessary to draw attention to the revenue and cost forecasts in the business plans during the period to June 2024. The group and company does not currently have sufficient cash resources to continue as a going concern during the forecast period due to the time expected to be needed to gain commercial traction in its revenues. The forecasts prepared by the directors include a plan to raise additional funds from shareholders or debt providers in the financial year to June 2023.”
At the end of September, Genedrive raised GBP1.1m through an equity placement. This was part of a stated intention to raise GBP10.5m in funding, but to date has only raised GBP7.1m.
Banking on Covid
Genedrive is banking on the commercial success of its Covid-19 diagnostic equipment. Dr. Ian Gilham, the company’s chairman said in a statement this morning: “In response to the COVID-19 pandemic, global diagnostic needs changed almost overnight, and we refocussed the company’s resources on developing Covid-19 tests to help support the fight against this devastating virus.”
The company was given the green light by the UK Medicines and Healthcare Products regulatory authority for its COV19-ID kit to be marketed and sold in the UK in May. The COV19-ID test received CE-mark approval in December 2021, which meant the product could be marketed across the EU. The company signed distribution agreements covering Spain, Portugal, Oman, and the United Arab Emirates. Its first commercial orders were received in March 2022.
However, despite retooling operations to develop testing kits for Covid-19, orders have been disappointing in this segment, with product approvals coming too late and Coronavirus restrictions being lifted before the company was able to start marketing its product. Gilham said: “Our Covid-19 POC test was CE-marked in December 2021, later than originally intended due to complexity of technical development and regulatory delays but was in the end granted a CTDA (Coronavirus Test Device Approval) in May 2022. Regrettably, the timing of these approvals came as restrictions were being lifted, which meant that we gained limited sales traction in the year. These restrictions have remained lifted, but we are able to commercialise and supply if market conditions change.”
Simple-to-use
The company is focused on developing and commercialising low cost, rapid, versatile, simple to use and robust point of need molecular diagnostics platform for the diagnosis of infectious diseases and for use in patient stratification – also known as genotyping – pathogen detection and other indications. Genedrive has built its business around molecular diagnostics and hopes its products will play an important role in the diagnostic and treatment challenges presented by global health issues.
Genedrive has been established for 22 years, and listed on AIM in 2007, trading as Epistem Holdings Inc. With an historical founding in the provision of contract research services to Pharmaceutical and Biotech companies, the business was renamed Genedrive in July 2016 to reflect the new direction of the company targeting molecular diagnostic requirements at the point of need. The legacy contract research services divisions were divested in June 2018.
As well as its Covid-19 diagnostic tools, Genedrive produces an HCV-ID test for Hepatitis C diagnosis and its mt-RNR1 test for antibiotic induced hearing loss. It also provides a range of assays to the US Military for field-based pathogen detection. Genedrive also has an active development programme underway for Tuberculosis detection and drug resistance assessment.
David Budd, chief executive concluded in the statement: “I am excited for what we are achieving. Our focus on pharmacogenetic testing and investment in the development of new products will start to bear more fruit in the second half of the current financial year. While there is a time delay in adoption by the NHS for new innovations, our AIHL test is supported by the outcomes which dramatically improve lives and has the potential to save the NHS millions of pounds every year. The route to adoption of new clinical tests however takes time, as healthcare systems are conservative in their nature and face inevitable budgetary constraints.”
