Genetic Technologies Reports FY21 Results as it Turns the Corner on its Commercialization Strategy
Genetic Technologies Reports FY21 Results as it Turns the Corner on its Commercialization Strategy
Company to present at H.C. Wainwright 23rd Annual Global Investment Conference taking place virtually September 13-15, 2021
MELBOURNE, Australia, Aug. 31, 2021 (GLOBE NEWSWIRE) — Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE, “Company”, “GTG”), a global leader in Genomics based tests in health, wellness and serious disease, is pleased to provide the financial results for the year ended June 30, 2021.
- Revenues from customers of A$120k including receipt of first month sales from the partnership with Infinity Biologix, an increase of A$110k on FY20
- Revenue in future periods will increase following the acquisition of EasyDNA on August 16, 2021
- Launched COVID-19 Risk Test in partnership with Infinity Biologix in the US
- Multi-Test development nearing completion with coverage of ~70% of all serious disease with release planned for late calendar year 2021
- Partnered with Taliaz for the sale and distribution rights of PREDICTIX, to be incorporated in GTG’s Multi-Test
- Strengthened patent portfolio with the inclusion of US Patent No. 11,031,098 – ‘Computer Systems and Methods for Genomic Analysis’
- Established a leading scientific advisory board comprising Professor Jon Emery, Professor Finlay Macrae AO, and Dr Ora K Gordan
- Strong and expanded management team following appointment of Simon Morriss, CEO; Mike Tonroe, CFO and post year end appoint of Carl Stubbings as Chief Commercial Officer
- Strong cash balance with pro forma cash balance of A$17.6 million inclusive of post year end settlement of acquisition of EasyDNA
- Post year end acquisition of EasyDNA for US$4 million (US$2.5 million in cash and US$1.5 million in shares), providing global platform and expansion into genomics-based ‘Health and Wellness’ sector in 40 countries
- Net cash used for operations of A$6.3 million, due mainly to the increase in R&D, investment in Next Generation Sequencing (NGS) equipment and operating expenses as the Company executes on its commercialisation strategy
- Received A$1.3 million in R&D tax incentives and COVID-19 government assistance
Genetic Technologies has undertaken a significant transformation over the year. The Company has continued to execute against strategy and underpinned its future growth following the acquisition of EasyDNA. The Company has a strong Board and management team and a solid pipeline of products in development. GTG is well-positioned with a clear platform and means for distribution of its predictive health tests.
Simon Morriss, Genetic Technologies’ CEO, stated, “We have executed on a number of strategic milestones over the year. This included the completion and launch of the COVID-19 Risk Test, the partnership with Taliaz, the establishment of the Multi-Test product base and the post year end acquisition of EasyDNA. These initiatives have transformed the Company from a predominantly R&D base to actively commercializing its products. We are thrilled with the progress thus far and look forward to what lies ahead as we begin to embed EasyDNA and start to leverage this acquisition to drive revenue growth. We have further initiatives underway including the upcoming launch of our Multi-Test in the latter half of calendar year 2021 and continue to assess opportunities for future product innovation.”
Commercialization and Product Overview
The Company has a clear strategy on commercialization and has the product base and distribution network to successfully execute on this strategy in the coming years. Key avenues for commercialization of launched products currently include the consumer-initiated testing and online sales and marketing platform (CIT) available in Australia and the US. With the recent inclusion of the EasyDNA business the Company intends to leverage this platform to enhance the visibility and awareness of its existing products.
Additionally, Genetic Technologies is engaging in sales via medical professionals for business to business (B2B) purposes and direct-to-consumer (DTC) testing requiring no medical supervision for products under consideration including non-medical based genetic and gut microbiome testing, subject to regulatory approval and target market assessment.
Genetic Technologies now has distribution coverage of the Australian and US geographies and has identified Europe and the UK as the next regions the Company intends to enter. The Company is assessing the European CE certification requirements for its products and will update the market on its progress within these regions as further clarity on timing is obtained. An Asian market entry for relevant products will also be assessed in due course.
As previously outlined in the quarterly update on July 26, 2021, the three-year co-exclusive license agreement between IBX and Genetic Technologies was announced on 3 March 2021 for the production, distribution, sales and marketing of Genetic Technologies’ COVID-19 Risk Test in the US with the product launch at the end of May 2021. The regulatory environment in the US continues to evolve post the year end with the New York State Department of Health (NYSDOH) reviewing the emergency use status of all COVID related tests and testing collection devices. This required placing a temporary sales hold on the IBX web portal which has remained in place since July 9, 2021, however the review has successfully concluded, and the test is expected to be made available from August 31. The Company continues to closely monitor the US regulatory environment in respect of COVID-19.
Intellectual Property and Regulatory Approvals
Genetic Technologies was granted patent no 11,031,098 on 11 June 2021. This patent describes efficient methods for identifying variations that occur in the human genome and relating those variations to the genetic basis of disease and drug response. The methods form the basis of Genome-Wide Association Studies, particularly those focused on identifying single nucleotide polymorphisms associated with drug response ie. pharmacogenomic or pharmacogenetic markers.
Genetic Technologies has submitted updates to the previously filed provisional patent for its COVID-19 Risk Test with IP Australia (2020901739 – Methods of assessing risk developing a severe response to Coronavirus infection) as submitted on 27 May 2020. The amendments were filed on 30 September 2020 and 17 February 2021.
The provisional patent covers the specific SNP algorithm designed by Genetic Technologies to calculate the PRS and the testing model that combines the PRS test and the clinical risk factors that together constitute the COVID-19 Risk Test.
Scientific Advisory Board Established
During the year, the Company established a Scientific Advisory Board (SAB) charged to advise the Board of Directors and executive leadership team on scientific matters involving product development, interactions with academic and other external research organizations, emerging concepts and industry trends, and the acquisition of technologies.
The SAB comprises Professor Jon Emery, Professor Finlay Macrae AO, and Dr Ora K Gordan, and members of the Genetic Technologies executive team and meets on a quarterly basis. While additional appointments may be made in the future, the three members bring a wide range of clinical and research experience and provide Genetic Technologies with coverage of both the Australian and US target markets.
Genetic Technologies’ SAB brings together some of the brightest minds in genomics, preventative healthcare, serious disease, and data driven research. Genetic Technologies’ board and management look forward to drawing on their advice and experience as we launch and develop leading technologies for individualized risk assessment of serious disease.
Corporate and Financial Overview
Genetic Technologies received revenue of A$120k associated with the agreement with IBX for the sale of the COVID-19 Risk Test and the sale of Genetype for Breast Cancer and Colorectal Cancer. Additionally, the Company accrued A$998k in R&D tax incentives over the period and A$288k in COVID-19 government assistance.
The Company’s cost of sales from continuing operations increased 44% to A$361k from A$251k in the prior year as a result of an increase in materials utilized for GeneType for Breast Cancer and Colorectal Cancer tests due to an increased number of revenue free sample tests conducted during the year.
Strategic investment in sales and marketing and a focus on investment in future growth through expanded internal capabilities and recruitments resulted in an increase to A$5.3 million in operating expenses from A$4.7 million in FY20. Additionally, laboratory, research and development costs increased 26% to A$3.1 million from A$2.5 million in the prior year. This reflected the increased development, and accelerated commercialization of the pipeline of the new PRS tests and Germline Testing division covering the following diseases: Breast cancer, Colorectal cancer, Prostate cancer, Ovarian cancer, Melanoma, Type-2-diabetes, Coronary artery disease, Atrial fibrillation, COVID severity. Overall, the Company reported a net loss after tax of A$7.1 million for the financial year (30 June 2020: A$6.3 million).
The Company remains well capitalized with a pro forma cash balance of A$17.6 million following the completion of the acquisition of EasyDNA on 16 August 2021. During the year the Company raised A$15.9 million in gross proceeds via two placements to US based institutional investors.
The Company announced the appointment of Simon Morriss to the position of Chief Executive Officer in January 2021. This was followed with the appointment of Mike Tonroe as Chief Financial Officer in June 2021 and the post year end appointment of Carl Stubbings to the role of Chief Commercial Officer. The Company is well-positioned as well with the addition of Keven Camilleri, following the acquisition of EasyDNA, as the Head of GTG’s Direct to Consumer Division.
Commenting on the outlook, Simon Morriss stated: “We have an exceptional team working with us, a high-caliber experienced Board and SAB and a clear pathway for growth. As we enter FY22 we are confident the strategic decisions we have made over FY21 and the direction the Company is heading will deliver strong growth as we continue our entry into the billion-dollar consumer genetics market.
“In just a few months we have seen a significant transformation in the Company and though we have further work to do to integrate the products, platforms and team from EasyDNA we have the resources at hand to execute with confidence. We thank our shareholders for their ongoing support over the past year and look forward to reporting on our progress over FY22.”
A copy of the Company’s annual report can be viewed at: https://www.gtglabs.com/investor-centre.
Upcoming Investor Conference
Genetic Technologies will be presenting at the H.C. Wainwright 23rd Annual Global Investment Conference taking place virtually September 13-15, 2021. The Company’s presentation will be available to conference registrants on-demand beginning at 7:00 a.m. ET on September 13.
About Genetic Technologies Limited
Genetic Technologies Limited (ASX: GTG; Nasdaq: GENE) is a diversified molecular diagnostics company. GTG offers cancer predictive testing and assessment tools to help physicians proactively manage patient health. The Company’s lead products GeneType for Breast Cancer for non-hereditary breast cancer and GeneType for Colorectal Cancer are clinically validated risk assessment tests and are first in class. Genetic Technologies is developing a pipeline of risk assessment products.
For more information, please visit www.gtglabs.com
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