The 2016 financial year has been very successful for Cogstate. A focused commercial strategy together with operational excellence has driven another record year of sales growth and, importantly, the transition to profitability.
Delivered on our guidance to return to positive EBIT (earnings before interest and tax), recording EBIT of A$1.0M for the 2016 financial year. Focused commercial strategy driving results.
Another record year for contracts signed with US$28.5M signed in FY16, an increase of 20% on FY15.
76% of new contracts signed across the Clinical Trials customer base were from repeat clients.
First full year contribution from Precision Recruitment™, which was launched in July 2015. Cogstate has invested significantly in the Product Development team during FY16 to increase the speed to market for the next generation product offering.
Our technologies and experts have contributed to over 1,200 academic research studies in diverse therapeutic indications including Alzheimer’s disease, HIV, multiple sclerosis, oncology, Parkinson’s disease, epilepsy, and schizophrenia.
Cogstate will begin the 2017 financial year with A$33.9M of contracted revenue, an increase of 58% compared to the beginning of FY16. This provides the company with high revenue visibility.
Positive industry growth trends regarding the volume and scale of clinical trials are expected to increase. Independent research firm, MarketsandMarkets predicts that the Cognitive Assessment and Training market will continue to grow at an average of 25.6%P.A. until 2020.
Continued engagement with academic research communities, particularly in the areas of Alzheimer’s disease, oncology and paediatrics, expected to result in further product development insights and data generation for informing customers in the Clinical Trials business.
Fully supported rollout of Precision Recruitment™ continues to further diversify revenue streams. Product development is focused on upgrading the core product suite to deliver operational efficiencies and enhancements that can also be applied across other products, including device independence, unsupervised assessment, and expanded libraries of translations and test menus.
|Clinical Trials & Precision Recruitment Revenue||27.16||15.70||11.46|
|Revenue from External Customers||27.25||16.07||11.18|
|Net Profit After Tax||2.64||-5.06||7.70|
Cogstate’s focused commercial strategy and the strengthening of its business development team over the 2016 financial year were major contributers to the delivery of record revenue and positive EBIT.
In the 2016 financial year, contracted revenue has continued to grow at a faster rate than recognised revenue in each quarter, laying the foundation for continued revenue growth.
Gross margins from Clinical Trials have been maintained despite the significant growth in staff numbers required to support the growing business.
Validated through use in over 1,400 studies across Academic and Clinical Research
Cogstate Clinical Trials Experience – 255 Active/Completed Studies
Cogstate supports the measurement of cognition across the following therapeutic indications…
Cogstate signed US$28.5M (A$39.0M) of new sales contracts in the 2016 financial year, continuing the strong growth trend experienced in 2015.
Cogstate continues to play an integral part in clinical trials to find a treatment for Alzheimer’s disease, with 45% of all new contracts signed in FY16 contributing to this field (40% in FY15). Two significant contracts in this indication were signed in FY16, each worth in excess of A$4.8M over the life of the contract.
Cogstate started the 2016 financial year with A$10.9M of contracted revenue. Of the new contracts signed during the year, Cogstate recognised an additional A$16.3M of Clinical Trials revenue in FY16.
Cogstate will begin the 2017 financial year with A$17.5M of contracted revenue to be recognised during FY17, an increase of 60% on FY16.
The combined effects of the improved contracted revenue position at the start of the 2016 financial year, as well as the growth in new sales contracts delivered 73% revenue growth in Clinical Trials and Precision Recruitment for FY16.
Cogstate’s Clinical Trials business produced a gross margin of A$15.8M for the 2016 financial year, 77% growth from the A$8.9M gross margin achieved in FY15.
With the growth in sales, it has been necessary for Cogstate to hire additional resources. New positions have been primarily for roles directly focused on delivery of Clinical Trials solutions. Even with this growth in full-time resources, Cogstate has maintained gross margins within the Clinical Trials business.
Continued Commitment to Research
Over the past year, Cogstate has continued to build on its involvement in important international research studies and academic collaborations across various indications, including Alzheimer’s disease, HIV, multiple sclerosis, paediatric and adult oncology, Parkinson’s disease, epilepsy, and schizophrenia.
Product Development – A Platform Approach
Cogstate has delivered underlying earnings growth from its core business whilst investing in Product Development that will deliver future value.
The Product Development team has implemented a single, scalable technology platform (Cogstate Solutions Platform) for the delivery of cognitive assessment products across different markets. This platform approach allows for faster solutions deployment and for features developed within one cognitive assessment product to be rapidly applied to other products in adjacent markets.