Cogstate Ltd · ASX:CGS
Cogstate — Shareholder Meeting (October 2015)
31 slides from Cogstate's shareholder meeting presentation, Oct 22, 2015
Slide 1: Annual General Meeting Business Update
ANNUAL GENERAL MEETING BUSINESS UPDATE 22 OCTOBER 2015
Slide 2: Introducing Our Board of Directors
INTRODUCING OUR BOARD OF DIRECTORS • MARTYN MYER AO - Chairman Founder with long history of supporting neurosciences in Aust. • DAVID DOLBY - Non-Executive Director Director Dolby Laboratories Inc. and Dolby Family Ventures, an early stage venture firm focused on building great technology companies.
Slide 3: Cogstate
COGSTATE • Founded in 1999 • Listed on Australian Securities Exchange in 2004 (ASX.CGS) • >90 employees across 4 global locations • UK based European Business Development Director started in October AUSTRALIA UNITED STATES UNITED STATES SPAIN Melbourne New Haven, CT New York, NY Barcelona © 2015 Cog
Slide 4: Leaders in the Measurement of Cognition
LEADERS IN THE MEASUREMENT OF COGNITION 1 COGNITION = THINKING Attention | Memory | Learning | Reasoning | Comprehension 2 COGNITIVE CHANGE IS IMPORTANT TO MEASURE Neurological Disease | Head injury | Drug Effect Cognitive Assessment and Training Market Worth 7.5 Billion USD by 2020 According to a n
Slide 5: © 2015 Cogstate Ltd. All rights reserved.
© 2015 Cogstate Ltd. All rights reserved. 5
Slide 6: © 2015 Cogstate Ltd. All rights reserved.
© 2015 Cogstate Ltd. All rights reserved. 6
Slide 7: Cogstate Organisational and Systems Changes
COGSTATE ORGANISATIONAL AND SYSTEMS CHANGES FOCUS ON CORE BUSINESS Divestment of Axon Sports Training Business COMMERCIAL TEAM IN PLACE Achieving record sales contracts EXPANDED OFFERING Commercialisation of Precision Recruitment ADVANCING THE SCIENCE Involved in major landmark public/private partne
Slide 8: Cogstate Clinical Trials – Driving Revenue Growth & Profitability
COGSTATE CLINICAL TRIALS – DRIVING REVENUE GROWTH & PROFITABILITY © 2015 Cogstate Ltd. All rights reserved. 8
Slide 9: Clinical Trials Portfolio of Services Is the Deepest in the Industry
CLINICAL TRIALS PORTFOLIO OF SERVICES FOR COGNITIVE ASSESSMENT IS THE DEEPEST IN THE INDUSTRY “ From well-validated computerised batteries to expert support for traditional paper-and-pencil tests, science, innovation and ” excellence in delivery are at the core of everything we do. © 2015 Cogstate L
Slide 10: Accurate and Universal Testing Solution
ACCURATE AND UNIVERSAL TESTING SOLUTION RAPID | REPEATABLE | SENSITIVE © 2015 Cogstate Ltd. All rights reserved. 10
Slide 11: Deep Experience Across Phases and Indications
DEEP EXPERIENCE ACROSS PHASES AND INDICATIONS ACADEMIC RESEARCH CLINICAL TRIALS Phase IV (4) >1,000 >200 Phase III (30) ACTIVE/COMPLETED ACTIVE/COMPLETED STUDIES STUDIES Phase I (103) 67 45 Phase II (81) INDICATIONS COUNTRIES >300 >90 Alzheimer’s disease, Schizophrenia, Major Depressive PEER REVIEWE
Slide 12: Key Financial Features of Clinical Trials Business
KEY FINANCIAL FEATURES OF CLINICAL TRIALS BUSINESS • Clinical Trials is our key revenue driver. Accounts for 94% of sales in FY15. • Our revenue is driven by the volume of clinical trials, not their success. This differentiates Cogstate to many other companies in this space. • Contract life (often b
Slide 13: Financial Review and Update
FINANCIAL REVIEW AND UPDATE © 2015 Cogstate Ltd. All rights reserved. 13
Slide 14: Summary of 2015 Financial Year Results
SUMMARY OF 2015 FINANCIAL YEAR RESULTS • Revenue from ordinary activities up 30% to A$16.2m • Clinical Trials revenue up 42% to A$15.2m • EBITDA of -A$2.3m, delivered positive EBITDA of A$0.2m in 2H15 • Net loss after tax of –A$5.1m (includes A$2.2m asset impairment) FY15 (A$m) actual FY14 (A$m) act
Slide 15: FY15 – Improved Second Half
FY15 – IMPROVED SECOND HALF 1ST HALF 2ND HALF FY15 FY14 SUMMARY FINANCIAL RESULTS $’000,000 $’000,000 $’000,000 $’000,000 Clinical Trials · Revenue 5.56 9.62 15.18 10.69 · Cost of Sales -2.87 -3.57 -6.44 -5.22 Gross Margin 2.69 6.05 8.74 5.47 · Net Recovery of Pass-through Costs 0.09 0.07 0.16 0.11
Slide 16: Clinical Trials Sales Momentum Continues to Build
CLINICAL TRIALS SALES MOMENTUM CONTINUES TO BUILD Value of Clinical Trials Contracts Signed 26 24 Record Clinical Trials sales contracts 22 signed in FY15, totaling US$23.7m, 20 an increase of 165% (PCP US$9.0m) 18 US$ Millions 16 14 12 10 Sales contracts signed financial year 8 to date, totaling US
Slide 17: Sales Momentum Providing Revenue Growth
SALES MOMENTUM PROVIDING REVENUE GROWTH 20,000,000 As a result, we started FY16 with a 18,000,000 contracted revenue pipeline for the year significantly ahead of where we started 16,000,000 FY15 14,000,000 US$9.6m of sales contracts signed since 12,000,000 1 July 2015 have added A$7.8m to contracted
Slide 18: What Is Driving This Momentum?
WHAT IS DRIVING THIS MOMENTUM? FULLY RESOURCED • Targeted strategy delivering results – a 10x increase in proposals vs PCP COMMERCIAL • Utilisation of Subject Matter Experts SALES TEAM • Identification and execution of RFPs • Alzheimer’s/Dementia Increased trial activity looking at early stage disea
Slide 19: Business Update Q1 FY16
BUSINESS UPDATE Q1 FY16 Revenue of A$6.1m Second largest Record revenue A Net Operating A return to positive realised in 1Q16, up quarter of new pipeline totaling Cash Outflow of EBIT in 1Q16. 80% on 1Q15. contract signings in A$35.4m of which -A$0.76m in Sept Excluding the A$2.2m US$ terms (the A$1
Slide 20: Outlook
OUTLOOK Maintain prior guidance for a return to positive EBIT in FY16, with positive EBIT also expected in 1H161 Management are targeting Gross Profit margins of 57%-60% On a constant currency basis, management expect FY16 overheads to remain broadly in line with the levels of 2H15 (annualised) 1. E
Slide 21: Recent and Upcoming Innovations
RECENT AND UPCOMING INNOVATIONS © 2015 Cogstate Ltd. All rights reserved. 21
Slide 22: Precision Recruitment
PRECISION RECRUITMENT™ An online pre-screener that streamlines and accelerates clinical trial recruitment using remote cognitive assessment • AD trials are increasingly requiring hard-to-find asymptomatic patients. These trials see up to 90% on-site screen failures; causing dramatic, costly recruitm
Slide 23: Centred Around the Cogstate Brief Battery
CENTRED AROUND THE COGSTATE BRIEF BATTERY COGSTATE TESTS ARE UNIQUELY SUITED TO DETECT SUBTLE CHANGES IN BRAIN FUNCTION IN OTHERWISE ASYMPTOMATIC PATIENTS: • Most critically, the ability to test people remotely, in their own homes • Large data set of normal patients for comparison Asymptomatic Sympt
Slide 24: Other Recent and Upcoming Innovations
OTHER RECENT AND UPCOMING INNOVATIONS • iPad Based Computerized Cognitive Assessment • Technology being utilised in the DIAN-TU and A4 trials has now been commercialised and is available for deployment into clinical trials • First contracted study to kick off in December 2015 • Additional studies in
Slide 25: Investment Summary
INVESTMENT SUMMARY © 2015 Cogstate Ltd. All rights reserved. 25
Slide 26: Summary: Investment Highlights
SUMMARY: INVESTMENT HIGHLIGHTS • Leaders in the measurement of cognition – providing services and software across four key areas. • Clinical trials is our main revenue driver (94% of FY15 sales). Importantly, we are reliant on the volume of clinical trials, not their success. This is a key point tha
Slide 27: Appendix 1 – Contracted Revenue Pipeline
APPENDIX 1 – CONTRACTED REVENUE PIPELINE US$9.6m of new sales contracts signed since 1 July 2015 have added an additional A$7.8m to FY16 contracted revenue. This is in addition to the A$10.9m that was secured at 1 July 2015: As at 30 June As at 22 October 2015 As at 22 October 2014 2015 Year 1 FY16
Slide 28: Appendix 2 – Contracts Signed vs. Revenue
APPENDIX 2 –CONTRACTS SIGNED VS. REVENUE 14,000,000 12,000,000 10,000,000 8,000,000 A$ 6,000,000 4,000,000 2,000,000 - Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Contracts Signed Revenue © 2015 Cogstate Ltd. All rights reserved. 28
Slide 29: Appendix – Contracts Signed vs. Revenue (Book-to-Bill)
APPENDIX 3 –CONTRACTS SIGNED VS. REVENUE New contract signings in QUARTERLY BOOK-TO-BILL RATIO 1Q16 of A$11.7m exceeded 4.50 the A$5.8m of revenue in Contracts / Revenue 4.00 the same period by 2.02x Future Growth 3.50 3.00 (Book-to-Bill ratio). This is 2.50 the fifth consecutive quarter 2.00 1.50 w
Slide 30: Appendix 5 - Summary Balance Sheet
APPENDIX 5 - SUMMARY BALANCE SHEET 30 JUN 2015 30 JUN 2014 A$’000,000 A$’000,000 Assets - Cash and cash equivalents 5.50 7.13 - Trade and other receivables 4.90 2.77 - Other current assets 0.46 0.43 - Property, plant and equipment 1.12 1.32 - Deferred tax assets 1.94 1.33 - Intangible assets 0.40 2.
Slide 31: Cogstate
COGSTATE ASSESS + MONITOR « IMPROVE