Cogstate Ltd · ASX:CGS
Cogstate — FY2018 Earnings Presentation
41 slides from Cogstate's earnings presentation, Aug 13, 2018
Slide 1: FY18 Results Presentation
FY18 Results Presentation 12 months to 30 June 2018 Release date: 13 August 2018 © 2018 Cogstate Ltd. All rights reserved. 1
Slide 2: Investment Summary
Investment Summary All results presented in US$ • Continued growth in Clinical Trials sales contracts and revenue delivered in FY18. Growth expected to continue into FY19. • Notification of Clinical Trials study cancellations received July 2018. Despite this, contracted future revenue at 30-Jun-18 (
Slide 3: Investment summary
Investment summary “ • Key messages We believe that brain health is profoundly important to quality of life and should be easier to measure. That’s why we so passionately apply our expertise, access to data and flexible technology to simplify the measurement of cognition.” 32
Slide 4: Investment Highlights
Investment Highlights All results presented in US$ FY18 • $36m clinical trials sales contracts; up 22% • Revenue $29m; up 10% • Adjusted EBITDA* from continuing operations $3.6m; up 102% • Profit before tax $0.1m; $0.77m improvement * Adjusted EBITDA excludes share based compensation for purposes of
Slide 5: Clinical Trials Sales and Revenue Growth
Clinical Trials Sales and Revenue Growth Sales Contracts Executed, by Financial Recognised Revenue, by Year (US$) Financial Year (US$) 40,000,000 35,000,000 35,000,000 30,000,000 30,000,000 25,000,000 25,000,000 20,000,000 20,000,000 15,000,000 15,000,000 10,000,000 10,000,000 5,000,000 5,000,000 -
Slide 6: Investment Highlights
Investment Highlights All results presented in US$ Healthcare • Regulatory clearance achieved in US, EU, Canada & Australia • Sales contracts $0.7m, delivering revenue of $0.4m • Loss from operations $1.9m, approx. double FY18 loss • Strategy adjustment : will seek distribution and license of techno
Slide 7: Investment Highlights
Investment Highlights All results presented in US$ Strategy Adjustment – Implementation of Restructure and Cost Reduction • Significant restructure undertaken Apr-18 through Aug-18 – Major impact in Healthcare (Cognigram) segment – Minor impact in Clinical Trials as well as Shared Services (legal, f
Slide 8: Investment Highlights
Investment Highlights All results presented in US$ FY19 Guidance – Profit Growth • Continued growth in Clinical Trials sales contracts and revenue delivered in FY18. Growth expected to continue into FY19. • As a result of restructure, approx $2m of non-recurring costs will be incurred in 1H19 • 1H19
Slide 9: Addressing an Unmet Need in Clinical Research
Addressing an Unmet Need in Clinical Research For drug candidates that cross the blood-brain barrier, pharmaceutical researchers need reliable and valid measures to understand how these drugs impact human cognition There are traditional, paper-and-pencil neuropsychological assessments available for
Slide 10: What is our unfair advantage?
What is our unfair advantage? 10
Slide 11: Improving Signal to Noise: Key Advantages of Cogstate Computerized Assessments
Improving Signal to Noise: Key Advantages of Cogstate Computerized Assessments • Objective & standardized administration by a non- psychologist – Eliminates the inter- and intra-rater variability that can compromise conclusive clinical trial outcomes • Assessments are brief & repeatable – Each test
Slide 12: Beyond Computerized: End-to-End Solution for Reliable Measures of Cognition
Beyond Computerized: End-to-End Solution for Reliable Measures of Cognition Scientific Consulting Scale Management Central Review Rater Training Enhanced eCOA 12
Slide 13: Cogstate eSource Platform
Cogstate eSource Platform Cogstate Additional Computerized eCOAs Paper & Pencil Testing (eClinRO, ePRO, Assessments eObsRO) (eCRF) (ePerfO) Software Application 13
Slide 14: Cogstate eSource Platform
Cogstate eSource Platform Cloud-based Data Management System Cogstate Additional Computerized eCOAs Paper & Pencil Testing (eClinRO, ePRO, Assessments eObsRO) (eCRF) (ePerfO) Software Application 14
Slide 15: Cogstate eSource Platform
Cogstate eSource Platform Central Monitoring & Rater Engagement Central Rating & Quality Adjudication Assurance Services Data Management Cloud-based Data Management & Reporting System Cogstate Additional Computerized eCOAs Paper & Pencil Testing (eClinRO, ePRO, Assessments eObsRO) (eCRF) (ePerfO) So
Slide 16: The Market Opportunity
The Market Opportunity 16
Slide 17: Large & Growing Cognitive Assessment Market
Large & Growing Cognitive Assessment Market • Research Cosmos forecasts the market size $4.1 for cognitive assessment and training in healthcare to grow from USD 962.0 Million in 2016 to USD 4,127.2 Million by 2021, at a BILLION CAGR of 33.8%. • “The applications segment [represented in this forecas
Slide 18: Large & Growing Cognitive Assessment Market
Large & Growing Cognitive Assessment Market • Research Cosmos forecasts the market size $4.1 for cognitive assessment and training in healthcare to grow from USD 962.0 Million in 2016 to USD 4,127.2 Million by 2021, at a BILLION CAGR of 33.8%. • “The applications segment [represented in Clinical thi
Slide 19: Macro Tailwinds for Increased Pharma R&D Spend & Outsourcing Penetration
Macro Tailwinds for Increased Pharma R&D Spend & Outsourcing Penetration 19
Slide 20: Application in Alzheimer's Disease & Well Beyond
Application in Alzheimer’s Disease & Well Beyond Safety Efficacy Does the therapy Does the therapy improve negatively impact aspects of thinking? aspects of thinking? e.g. Alzheimer’s disease e.g. oncology 20
Slide 21: Application in Alzheimer's Disease & Well Beyond
Application in Alzheimer’s Disease & Well Beyond >70 >100 Languages Indications & Dialects >55 >400 Peer Reviewed Countries Publications 21
Slide 22: Alzheimer's Disease Market is Still Growing
Alzheimer’s Disease Market is Still Growing • Despite repeated failures, the number of drugs entering phase 2 clinical trials continues to grow • With improved knowledge and biomarkers of disease, focus has switched to new mechanisms of action • Pharma companies continued commitment to R&D reflectiv
Slide 23: Changes in AD Study Design Requires New Thinking on Endpoint Selection
Changes in AD Study Design Requires New Thinking on Endpoint Selection AD Research is Focusing Earlier in the Disease • More “prevention trials” that are seeking to measure cognitive change very early in the disease when the changes in cognition are most subtle • This strategy requires a shift away
Slide 24: Changes in AD Study Design Requires New Thinking on Endpoint Selection
Changes in AD Study Design Requires New Thinking on Endpoint Selection AD Research is Focusing Earlier in the Disease • More “prevention trials” that are seeking to measure cognitive change very early in the disease when the changes in cognition are most subtle • This strategy requires a shift away
Slide 25: Cogstate Has Successfully Pushed into Rare Diseases
Cogstate Has Successfully Pushed into Rare Diseases – a Growing Market Opportunity Source: http://www.fdalawblog.net/2017/01/orphan-drug-approvals-and-designations-dipped- slightly-in-2016-but-orphan-drug-designation-requests/ 25
Slide 26: Strategy for Growth
Strategy for Growth 26
Slide 27: areas, as we’ve done in AD and pediatric oncology. Cogstate’s
Cogstate will continue to Full suite of solutions for Continuing and expanding our support large pharma (currently single-site to large global strategic academic work with 14 of the top 15 by studies partnerships in high-growth R&D spend), but small and areas, as we’ve done in AD and mid-size pharma
Slide 28: Case Study: Building a Better Verbal Memory Test
Case Study: Building a Better Verbal Memory Test • The International Shopping List Test (ISLT) is a 12- word, 3-trial word learning test developed by Cogstate with established validity and reliability for the detection of memory impairment in even the early stages of Alzheimer’s disease • The unique
Slide 29: Rare Disease Case Study: New Novel Measures for Uncharted Territory
Rare Disease Case Study: New Novel Measures for Uncharted Territory • Current outcome assessments for CNS-based trials have clear limitations which are further magnified in rare disease trials. Small sample sizes mean outcome measures must be refined to be highly targeted to the indication and drug
Slide 30: FY18 Results
FY18 Results 30
Slide 31: Financial Analysis
Financial Analysis All results presented in US$ Full Year Ended 30-Jun-17 30-Jun-18 • Clinical Trials sales contracts $36.1m, up Revenue from operations 26,404,953 28,956,884 22% Clinical Trials • Revenue $28.96m, up 10% Revenue 26,187,137 28,080,187 Clinical Trials EBITDA 14,861,048 15,905,193 56.7
Slide 32: Restructure
Restructure All results presented in US$ • Annualised staff costs in excess of $5m removed from the business through restructure implemented from April 2018 – July 2018 – These costs accounted for $3.46m of costs of sales and operating costs in FY18 • In total, 30 roles removed from the business – 1
Slide 33: FY19 Guidance
FY19 Guidance All results presented in US$ • Contracted revenue position is consistent with the prior year – Even after taking into account recent contract cancellations due to failure of two potential Alzheimer’s disease therapies • Sales growth prospects are good, but even at flat sales, profit is
Slide 34: Cogstate
oi Cogstate
Slide 35: Financial Analysis
Full Year Ended Financial Analysis Revenue from operations 30-Jun-17 26,404,953 30-Jun-18 28,956,884 All results presented in US$ Clinical Trials Revenue 26,187,137 28,080,187 Cost of sales (excluding dep'n) (8,191,704) (8,548,455) Data from Slide 31, presented in expanded Gross Margin 17,995,433 19
Slide 36: Appendix: Alzheimer's disease prevalence and cost
Appendix: Alzheimer’s disease prevalence and cost 36
Slide 37: Increasing prevalence
Increasing prevalence Millions of people with Alzheimer's WN Ages 65-74 = Ages 75-84 = I Ages 85+ 14 12 a Seago T Year 2010 2020 2030 2040 2050 Fig. 4. Projected number of people age 65 and older (total and by age) in the U.S. population with Alzheimer’s dementia, 2010 to 2050. Created from data fro
Slide 38: Increasing mortality
Increasing mortality Percentage 125 123% 100 Th 11% 16% 55% T T T T T Cause Breast Prostate Heart Stroke HIV Alzheimer's of death cancer cancer disease disease Fig. 5. Percentage changes in selected causes of death (all ages) between 2000 and 2015. Created from data from the National Center for Heal
Slide 39: Substantial caregiver impact
Substantial caregiver impact 39
Slide 40: Substantial societal impact
Substantial societal impact 40
Slide 41: Huge cost to healthcare systems
Huge cost to healthcare systems 41