- Molecular Disease Screening Microarray Feasibility Study Completed
- Initial Serological Disease Screening FDA 510(k) Submission Accepted
- Commencement of EU Expanded Immunohematology Field Trial Activities
- Continued Strong Top Line Growth in the Quarter and Year to Date
JERSEY,
“We are very pleased to start the year off with EU field trial activities underway for our expanded IH microarray. This marks an important milestone towards having available the first powerful commercial menu combination of the initial SDS and expanded IH microarrays later this year,” said
Mr. Walt added “the acceptance of the 510(k) application is also a key step toward both regulatory clearance in the world’s largest market and the subsequent initiation of U.S. hyper-care sites once approved. The ongoing strong growth in product sales from our conventional liquid reagents business underscores the relevance of our reagent development to the transfusion diagnostics market.”
MosaiQ Platform
MosaiQ, Quotient's next-generation platform is designed to deliver fast, comprehensive antigen typing, antibody detection and disease screening results, using a single low volume sample in a high throughput automated format. MosaiQ represents a transformative and highly disruptive unified testing platform for transfusion diagnostics. Feasibility has also been demonstrated with respect to the detection of DNA using the MosaiQ platform. Through MosaiQ, Quotient expects to deliver substantial value to donor testing laboratories worldwide by providing affordable, routine comprehensive characterization and screening of blood products, on a single automated instrument platform. MosaiQ is designed to radically reduce labor costs and complexity associated with existing practice.
Regulatory and Commercial Milestones
- Initial European Regulatory Approval – Quotient filed for European regulatory approval for its initial MosaiQ IH microarray in late
September 2018 and was notified of its approval onApril 30, 2019 . - European Hyper-Care Launch – Following the receipt of the CE mark for the initial IH microarray, Quotient commenced a hyper-care launch with four of ten selected customers.
Ongoing Microarray Menu Development – Quotient’s activities for the expansion of the IH and SDS testing menus included the completion of the verification and validation (V&V) concordance study for the expanded IH microarray menu which was announced inOctober 2019 . The V&V study for the expanded SDS microarray menu is planned for the second quarter of calendar 2020.- Field Trials – Quotient commenced European field trial activities with the expanded IH microarray menu in the first quarter of calendar 2020 with U.S. field trial activity expected to follow thereafter. Quotient has completed U.S. field trial activity for the initial SDS microarray and expects to commence European and U.S. field trial activities for the expanded SDS microarray in the second half of calendar 2020.
- Ongoing Regulatory Approval Process – Quotient completed a CE mark submission for the initial SDS microarray on
June 30, 2019 . Quotient filed for U.S. regulatory approval for the initial SDS microarray onDecember 23, 2019 . Initial European regulatory submissions for the expanded IH microarray are expected during the first half of calendar year 2020 with U.S. regulatory submissions following later in the year. The European regulatory submission for the expanded SDS microarray is expected in the second half of calendar year 2020.
Fiscal Third Quarter 2020 Financial Results
“The conventional reagent business recognized strong product sales of
Key revenue and profit results are summarized below (expressed in thousands, except percentages)
| Quarter Ended | Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales — OEM Customers | $ | 5,071 | $ | 4,719 | $ | 15,354 | $ | 14,744 | ||||||||
| Product sales — direct customers and distributors | 2,565 | 2,004 | 7,547 | 6,090 | ||||||||||||
| Other revenues | 305 | — | 1,055 | 19 | ||||||||||||
| Total revenue | $ | 7,941 | $ | 6,723 | $ | 23,956 | $ | 20,853 | ||||||||
| Product sales from standing orders (%) | 72 | % | 67 | % | 71 | % | 67 | % | ||||||||
| Gross profit | $ | 3,409 | $ | 2,537 | $ | 10,889 | $ | 8,050 | ||||||||
| Gross profit as a % of total revenue | 42.9 | % | 37.7 | % | 45.5 | % | 38.6 | % | ||||||||
| Gross margin on product sales (%) | 40.6 | % | 37.7 | % | 42.9 | % | 38.5 | % | ||||||||
| Operating (loss) | $ | (22,357 | ) | $ | (19,028 | ) | $ | (59,221 | ) | $ | (58,629 | ) | ||||
The operating loss for the quarter ended
Capital expenditures totaled
During the quarter ended
As at
Outlook for the Fiscal Year Ending
- Product revenue is expected to be in the range of
$30.7 million to $31.1 million for the full fiscal year. - Operating loss, reflecting incremental investments in our development priorities, is expected to be in the range of
$78 to $80 million including approximately$18.5 million of non-cash expenses such as depreciation, amortization and stock compensation and approximately$2.0 million in one-time termination and transition benefit costs. - Capital expenditures are still expected to be in the range of
$5 million to $7 million .
Product sales in the fourth quarter of fiscal 2020 are expected to be in the range of
Quarterly product sales can fluctuate depending upon the shipment cycles for red blood cell based products, which account for approximately two-thirds of current product sales. These products typically experience 13 shipment cycles per year, equating to three shipments of each product per quarter, except for one quarter per year when four shipments occur. The timing of shipment of bulk antisera products to OEM customers may also move revenues from quarter to quarter. Some seasonality in demand is also experienced around holiday periods in both
Conference Call
Quotient will host a conference call on
A replay of this conference call will be available through
About
Building on 30 years of experience in transfusion diagnostics, Quotient is a commercial-stage diagnostics company committed to delivering solutions that reshape the way diagnostics is practiced. MosaiQ, Quotient’s proprietary multiplex microarray technology, offers the world’s first fully automated, consolidated testing platform, allowing for multiple tests across different modalities. MosaiQ is designed to be a game-changing solution, which Quotient believes will increase efficiencies, improve clinical practice, deliver significant workflow improvements, and create operational cost savings to laboratories around the world. Quotient's operations are based in Eysins,
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements regarding our expectations of continued growth, the development, regulatory approval, commercialization and impact of MosaiQ and other new products (including the application of MosaiQ to infectious disease diagnostics), current estimates of fourth quarter and full year fiscal 2020 operating results and expectations regarding our future funding sources. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include delays or denials of regulatory approvals or clearances for products or applications; market acceptance of our products; the impact of competition; the impact of facility expansions and expanded product development, clinical, sales and marketing activities on operating expenses; delays or other unforeseen problems with respect to manufacturing, product development or field trial studies; adverse results in connection with any ongoing or future legal proceeding; continued or worsening adverse conditions in the general domestic and global economic markets; as well as the other risks set forth in the Company's filings with the
The Quotient logo and MosaiQ™ are registered trademarks or trademarks of
CONTACT:
| Quotient Limited | ||||||||||||||||
| Condensed Consolidated Statements Of Comprehensive Loss | ||||||||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product sales | $ | 7,636 | $ | 6,723 | $ | 22,901 | $ | 20,834 | ||||||||
| Other revenues | 305 | — | 1,055 | 19 | ||||||||||||
| Total revenue | 7,941 | 6,723 | 23,956 | 20,853 | ||||||||||||
| Cost of revenue | 4,532 | 4,186 | 13,067 | 12,803 | ||||||||||||
| Gross profit | 3,409 | 2,537 | 10,889 | 8,050 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,290 | 2,233 | 7,123 | 6,359 | ||||||||||||
| Research and development, net | 14,160 | 11,788 | 38,895 | 37,356 | ||||||||||||
| General and administrative expense | 9,316 | 7,544 | 24,092 | 22,964 | ||||||||||||
| Total operating expense | 25,766 | 21,565 | 70,110 | 66,679 | ||||||||||||
| Operating loss | (22,357 | ) | (19,028 | ) | (59,221 | ) | (58,629 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense, net | (7,008 | ) | (5,679 | ) | (20,384 | ) | (14,614 | ) | ||||||||
| Other, net | 1,894 | (1,536 | ) | 1,600 | (5,516 | ) | ||||||||||
| Other expense, net | (5,114 | ) | (7,215 | ) | (18,784 | ) | (20,130 | ) | ||||||||
| Loss before income taxes | (27,471 | ) | (26,243 | ) | (78,005 | ) | (78,759 | ) | ||||||||
| Provision for income taxes | (14 | ) | (11 | ) | (41 | ) | (33 | ) | ||||||||
| Net loss | $ | (27,485 | ) | $ | (26,254 | ) | $ | (78,046 | ) | $ | (78,792 | ) | ||||
| Other comprehensive income (loss): | ||||||||||||||||
| Change in fair value of effective portion of foreign currency cash flow hedges | $ | 487 | $ | 41 | $ | 209 | $ | (320 | ) | |||||||
| Change in unrealized gain on short-term investments | 148 | 169 | 342 | 416 | ||||||||||||
| Foreign currency gain (loss) | 254 | (176 | ) | (771 | ) | 554 | ||||||||||
| Provision for pension benefit obligation | 48 | 35 | 144 | 107 | ||||||||||||
| Other comprehensive income (loss) | 937 | 69 | (76 | ) | 757 | |||||||||||
| Comprehensive loss | $ | (26,548 | ) | $ | (26,185 | ) | $ | (78,122 | ) | $ | (78,035 | ) | ||||
| Net loss available to ordinary shareholders - basic and diluted | $ | (27,485 | ) | $ | (26,254 | ) | $ | (78,046 | ) | $ | (78,792 | ) | ||||
| Loss per share - basic and diluted | $ | (0.37 | ) | $ | (0.46 | ) | $ | (1.14 | ) | $ | (1.53 | ) | ||||
| Weighted-average shares outstanding - basic and Diluted | 73,768,845 | 56,619,356 | 68,722,475 | 51,512,352 | ||||||||||||
| Quotient Limited | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| December 31, 2019 |
March 31, 2019 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,664 | $ | 4,096 | ||||
| Short-term investments | 133,371 | 90,729 | ||||||
| Trade accounts receivable, net | 5,037 | 3,348 | ||||||
| Inventories | 19,791 | 15,551 | ||||||
| Prepaid expenses and other current assets | 3,856 | 3,202 | ||||||
| Total current assets | 166,719 | 116,926 | ||||||
| Restricted cash | 9,015 | 7,507 | ||||||
| Property and equipment, net | 43,425 | 47,293 | ||||||
| Operating lease right-of-use assets | 22,798 | — | ||||||
| Intangible assets, net | 687 | 751 | ||||||
| Deferred income taxes | 564 | 605 | ||||||
| Other non-current assets | 4,747 | 4,688 | ||||||
| Total assets | $ | 247,955 | $ | 177,770 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,513 | $ | 5,936 | ||||
| Accrued compensation and benefits | 5,899 | 6,149 | ||||||
| Accrued expenses and other current liabilities | 12,839 | 12,458 | ||||||
| Current portion of operating lease liability | 3,157 | — | ||||||
| Current portion of deferred lease rental benefit | — | 435 | ||||||
| Current portion of finance lease obligation | 522 | 471 | ||||||
| Total current liabilities | 25,930 | 25,449 | ||||||
| Long-term debt | 153,717 | 121,855 | ||||||
| Operating lease liability, less current portion | 21,139 | — | ||||||
| Deferred lease rental benefit, less current portion | — | 1,144 | ||||||
| Finance lease obligation, less current portion | 950 | 865 | ||||||
| Defined benefit pension plan obligation | 7,998 | 7,368 | ||||||
| 7% Cumulative redeemable preference shares | 20,163 | 19,375 | ||||||
| Total liabilities | 229,897 | 176,056 | ||||||
| Total shareholders' equity | 18,058 | 1,714 | ||||||
| Total liabilities and shareholders' equity | $ | 247,955 | $ | 177,770 | ||||
| Quotient Limited | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| Nine months ended December 31, |
||||||||
| 2019 | 2018 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (78,046 | ) | $ | (78,792 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 8,996 | 9,503 | ||||||
| Share-based compensation | 3,375 | 3,576 | ||||||
| Increase in deferred lease rentals | 215 | 266 | ||||||
| Swiss pension obligation | 551 | 453 | ||||||
| Amortization of deferred debt issue costs | 7,736 | 4,097 | ||||||
| Accrued preference share dividends | 788 | 788 | ||||||
| Deferred income taxes | 41 | 33 | ||||||
| Net change in assets and liabilities: | ||||||||
| Trade accounts receivable, net | (1,638 | ) | 315 | |||||
| Inventories | (3,838 | ) | 147 | |||||
| Accounts payable and accrued liabilities | (2,268 | ) | (5,076 | ) | ||||
| Accrued compensation and benefits | (268 | ) | (664 | ) | ||||
| Other assets | (406 | ) | 3,833 | |||||
| Net cash used in operating activities | (64,762 | ) | (61,521 | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Increase in short-term investments | (95,000 | ) | (119,000 | ) | ||||
| Realization of short-term investments | 52,700 | 21,883 | ||||||
| Purchase of property and equipment | (3,941 | ) | (3,047 | ) | ||||
| Purchase of intangible assets | — | (3 | ) | |||||
| Net cash used in investing activities | (46,241 | ) | (100,167 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Repayment of finance leases | (337 | ) | (358 | ) | ||||
| Proceeds from drawdown of new debt | 25,000 | 36,000 | ||||||
| Debt issuance costs and fees paid to noteholders | (874 | ) | (5,113 | ) | ||||
| Proceeds from issuance of ordinary shares and warrants | 90,728 | 113,745 | ||||||
| Net cash generated from financing activities | 114,517 | 144,274 | ||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | (1,438 | ) | 4,187 | |||||
| Change in cash and cash equivalents | 2,076 | (13,227 | ) | |||||
| Beginning cash and cash equivalents | 11,603 | 25,205 | ||||||
| Ending cash and cash equivalents | $ | 13,679 | $ | 11,978 | ||||
| Supplemental cash flow disclosures: | ||||||||
| Income taxes paid | $ | — | $ | — | ||||
| Interest paid | $ | 15,959 | $ | 11,435 | ||||
Source: Quotient Limited