Cogstate Ltd · ASX:CGS
Cogstate — FY2016 Earnings Presentation
27 slides from Cogstate's earnings presentation, September 2016
Slide 1: Business Update & 2016 Financial Year Results
BUSINESS UPDATE & 2016 FINANCIAL YEAR RESULTS INVESTOR PRESENTATION SEPTEMBER 2016
Slide 2: Mission statement on brain health measurement
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. It’s our core focus, and we won’t stop until cognitive assessmen
Slide 3: Company Snapshot
COMPANY SNAPSHOT CAPITAL STRUCTURE SHAREHOLDERS Share Price (2 September 2016) $0.80 Board & Management 43.1% Fully paid ordinary shares 112m Former Director (Finkel) 8.04% Market Capitalisation $86.1m Top 20 83.7% Net Cash (30 June 2016) $7.4m MANAGEMENT & BOARD SHARE PRICE CHART Brad O’Connor CEO
Slide 4: Cogstate Highlights
COGSTATE HIGHLIGHTS • Cogstate is a leader in Cognitive Assessment • Cognitive Assessment and Training Market is projected to grow from USD 2.4 Billion in 2015 to 7.5 Billion by 20201 • 99% of FY16 revenue comes from Clinical Trials and Precision Recruitment, where revenue is driven by volume and si
Slide 5: Simplifying the Measurement of Cognition In:
SIMPLIFYING THE MEASURMENT OF COGNITION IN: © 2015 Cogstate Ltd. All rights reserved. 5
Slide 6: Validated through use in over 1,500 studies
VALIDATED THROUGH USE IN OVER 1,500 STUDIES ACROSS ACADEMIC AND CLINICAL RESEARCH © 2015 Cogstate Ltd. All rights reserved. 6
Slide 7: Business Milestones
BUSINESS MILESTONES RETURN TO RECORD SALES STRONG OPERATIONAL CONTRIBUTIONS FROM PROFITABILITY CONTRACTS OF DELIVERY DRIVING NEW PRODUCT US$28.5 MILLION REPEAT BUSINESS Delivered on our guidance First full year contribution to return to positive EBIT, Another record year for 76% of new contracts sig
Slide 8: Summary of FY16 Financial Performance
SUMMARY OF FY16 FINANCIAL PERFORMANCE RECORD REVENUES & MAINTAINED GROSS FINANCIAL LEVERAGE POSITIVE EBIT MARGIN THE INCREASE IN REVENUE HAS EVEN AS HEADCOUNT GREW TO DELIVERED SIGNIFICANT EBIT DELIVERED ON GUIDANCE WITH KEEP PACE WITH DEMAND IMPROVEMENT EBIT OF A$1.0M FY16 FY15 Change A$ millions A
Slide 9: Financial Update - FY16 Annual Report
FINANCIAL UPDATE- FY16 ANNUAL REPORT STRONG GROWTH IN NEW SALES STRONG GROWTH IN REVENUE CONTRACTS & GROSS MARGIN © 2015 Cogstate Ltd. All rights reserved. 9
Slide 10: Positive FY17 Business Outlook
POSITIVE FY17 BUSINESS OUTLOOK CONTRACTED REVENUE PIPELINE HIGHEST-TO-DATE Started 2016 financial year with A$10.9M of contracted revenue for FY16 and recognized an additional A$16.3M from new contracts signed during the financial year. Began 2017 financial year with A$33.9M of contracted revenue (A
Slide 11: Full Service Solution for Measuring Cognition in Clinical Trials
FULL SERVICE SOLUTION FOR MEASURING COGNITION IN CLINICAL TRIALS © 2015 Cogstate Ltd. All rights reserved. 11
Slide 12: Key Financial Features of Clinical Trials Business
KEY FINANCIAL FEATURES OF CLINICAL TRIALS BUSINESS 99% Clinical Trials is our key Our revenue is driven by Contract life (often beyond revenue driver– clinical the volume of clinical 12 months) provides trials and precision trials, not their success. security of revenue into recruitment accounted fo
Slide 13: Cogstate Clinical Trials Experience
COGSTATE CLINICAL TRIALS EXPERIENCE • Over time, increasing use in phase II and phase III • Higher contract value in later stage studies © 2015 Cogstate Ltd. All rights reserved. 13
Slide 14: Driving the Momentum: Executing Commercial Strategy
DRIVING THE MOMENTUM 1 EXECUTING COMMERCIAL STRATEGY • • Targeted sales strategy delivering results – a 4x increase in proposals vs PCP Fully resourced commercial team as of Oct 2015 + utilisation of scientific subject matter experts 2 FAVOURABLE INDUSTRY TRENDS • • Expanded reach: Identification of
Slide 15: Driving the Momentum: Favourable Industry Trends
DRIVING THE MOMENTUM 1 EXECUTING COMMERCIAL STRATEGY • • Alzheimer’s/Dementia: Increased trial activity in early stage disease / prevention Major Psychiatric Disorders (SZ, MDD): Increase in research activity 2 FAVOURABLE INDUSTRY TRENDS • • Cognitive Safety Concerns: Regulatory requirements in paed
Slide 16: Driving the Momentum: Expanding Portfolio of Solutions
DRIVING THE MOMENTUM 1 EXECUTING COMMERCIAL STRATEGY • Breadth of services and expertise in Clinical Trials to provide full service support for computerised or paper-and- pencil scales Allows Cogstate to deliver cognitive 2 outcome measures regardless of the fit- FAVOURABLE for-purpose approach se
Slide 17: Precision Recruitment
PRECISION RECRUITMENT™ AD trials seeking to enroll participants at the earliest stages of disease must advertise trials to the general public with memory concerns. This advertising has led to a great influx of “the worried well” who fail screening at the study site, creating costly inefficiencies an
Slide 18: The Cogstate Brief Battery
THE COGSTATE BRIEF BATTERY Test Name Question Task Paradigm Main Domain EXAMPLE: ONE BACK TASK Measured Detection Has the card turned Simple Reaction Psychomotor over? Time Function Identification Is the card red? Choice Reaction Attention Time One Card Have you seen this Pattern Learning Learning c
Slide 19: Optimize Brief Battery Tests for Unsupervised and Online Assessment
OPTIMIZE COGSTATE BRIEF BATTERY TESTS FOR UNSUPERVISED AND ONLINE ASSESSMENT MINIMAL DEPENDENCE ON INSTRUCTIONS Task stimuli and response requirements are trained dynamically DYNAMIC INTRODUCTION OF TASK RULES Once individual demonstrates understanding of requirements then rules for task performance
Slide 20: How Precision Recruitment Works
HOW PRECISION RECRUITMENT WORKS Cogstate (Registries, Targeted Ads, Call Centers) Enrollment Outreach Study Prescreen Cognitive On-site Medical Website (Registration + Questionnaire + Prescreen Screen Site selection) Recruitment Firm Recruitment Firm © 2015 Cogstate Ltd. All rights reserved. 20
Slide 21: Study Sponsor Benefits
STUDY SPONSOR BENEFITS ACCELERATE THE PACE AND PRECISION OF THE RECRUIT • Reduced on-site screen fail rate and cost • Quick access to a targeted pool of participants in the Cognition Registry FULLY COMPATIBLE WITH EXISTING CLINICAL TRIAL RECRUITMENT WORKFLOW • Scalable and modular functionality • Fl
Slide 22: Business Outlook for FY2017
BUSINESS OUTLOOK FOR FY2017 CONTRACTED REVENUE FAVOURABLE OUTLOOK R&D INVESTMENT PIPELINE HIGHEST-TO- FOR CLINICAL TRIALS FOCUSED ON DATE GROWTH GROWING MARKETS WE BEGIN THE 2017 FINANCIAL POSITIVE INDUSTRY GROWTH CONTINUED ACADEMIC RESEARCH YEAR WITH A$33.9M OF TRENDS: INDEPENDENT RESEARCH SUPPORT,
Slide 23: Cogstate
COGSTATE ASSESS + MONITOR « IMPROVE
Slide 24: Appendix 1 - Board of Directors
APPENDIX 1 - 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 25: Appendix 2 – Contracted Revenue Pipeline
APPENDIX 2 – CONTRACTED REVENUE PIPELINE As at As at 30 June 2016 30 June 2015 Year 1 FY17 A$17.5m FY16 A$10.9m Year 2 FY18 A$ 9.7m FY17 A$ 6.5m Year 3-5 FY19-FY22 A$ 6.7m FY18-FY20 A$ 4.0m Total A$33.9m A$21.4m 1. Contracts are denominated in US$. Spot rate at respective dates have been used to cal
Slide 26: Appendix 3 - Summary Balance Sheet
APPENDIX 3 - SUMMARY BALANCE SHEET 30 JUNE 2016 30 JUN 2015 A$’000,000 A$’000,000 Assets - Cash and cash equivalents 7.47 5.50 - Trade and other receivables 5.26 4.90 - Other current assets 0.94 0.46 - Property, plant and equipment 1.71 1.12 - Deferred tax assets 3.85 1.94 - Intangible assets 0.40 0
Slide 27: Appendix 4 - Summary Cash Flow
APPENDIX 4 - SUMMARY CASH FLOW 30 JUNE 2016 30 JUN 2015 A$’000,000 A$’000,000 Cash flows from operating activities - Receipts from customers 31.11 18.05 - Payments to suppliers and employees (29.11) (21.31) - R&D Rebate received 0.55 0.48 Net cash inflow / (outflow) from operating activities 2.55 (2