- First European hypercare launch site initiated following CE mark approval
- Initial Serological Disease Screening microarray submitted for CE marking
- U.S. field trial activities for initial Serological Disease Screening commenced
- 13 blood grouping reagents approved by the
FDA for use with OEM automation - Record liquid reagent revenues recognized once again in the quarter
JERSEY,
“There is a lot to be both pleased about and also to be proud of in this quarter’s achievements. The first hypercare site which was up and running in July marks a real milestone for our Company and the MosaiQ technology, commented
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 nucleic acids (DNA or RNA) 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 immunohematology (IH) microarray in late
September 2018 and was notified of its approval onApril 30, 2019 . - European Commercialization – Following the CE mark for the initial IH microarray, Quotient commenced a hypercare launch with the first of nine selected customers during
July 2019 . Ongoing Microarray Menu Development – Quotient continues to plan for the expansion of the IH and SDS testing menus during the second half of calendar 2019.- Field Trials – Quotient expects to commence European and U.S. field trials with the expanded IH microarray menu in the second half of calendar 2019. Quotient has commenced U.S. field trial activity for the initial SDS microarray and expects to commence European and U.S. field trials for the expanded SDS microarray early in calendar 2020.
- Ongoing Regulatory Approval Process – Quotient completed a CE mark submission for the initial SDS microarray in June 2019. Quotient expects to file for U.S. and European regulatory approval for the expanded IH microarray early in calendar year 2020 and for the expanded SDS microarray later in the first half of 2020.
Fiscal First Quarter 2020 Financial Results
“The conventional reagent business continues to deliver top line growth, with record product sales of
Key revenue and profit results are summarized below (expressed in thousands):
| Quarter Ended | ||||||||
| June 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenue: | ||||||||
| Product sales —OEM Customers | $ | 5,737 | $ | 5,647 | ||||
| Product sales — direct customers and distributors | 2,432 | 2,217 | ||||||
| Other revenues | — | 19 | ||||||
| Total revenue | $ | 8,169 | $ | 7,883 | ||||
| Product sales from standing orders (%) | 68 | % | 65 | % | ||||
| Gross profit | $ | 3,606 | $ | 3,818 | ||||
| Gross profit as a % of total revenue | 44.1 | % | 48.4 | % | ||||
| Gross margin on product sales (%) | 44.1 | % | 48.3 | % | ||||
| Operating (loss) | $ | (18,424 | ) | $ | (18,538 | ) | ||
Capital expenditures totaled
Quotient ended the quarter with
Financing Event
On
Outlook for the Fiscal Year Ending
- Total product sales are still expected to be in the range of
$30 to $31 million for the full fiscal year. Other revenue (product development fees) of approximately$1.0 million are also expected. Forecasted other revenue assumes the receipt of milestone payments contingent upon achievement of regulatory approval for certain products under development. The receipt of these milestone payments involves risks and uncertainties. - Operating loss, reflecting incremental investments in our development priorities, is expected to be in the range of
$77 to $82 million including approximately$18.5 million of non-cash expenses such as depreciation, amortization and stock compensation. - Capital expenditures are expected to be in the range of
$5 to $10 million .
Product sales in the second 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 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 second 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 | ||||||||
| June 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenue: | ||||||||
| Product sales | $ | 8,169 | $ | 7,864 | ||||
| Other revenues | — | 19 | ||||||
| Total revenue | 8,169 | 7,883 | ||||||
| Cost of revenue | 4,563 | 4,065 | ||||||
| Gross profit | 3,606 | 3,818 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 2,580 | 2,281 | ||||||
| Research and development, net | 11,653 | 12,570 | ||||||
| General and administrative expense | 7,797 | 7,505 | ||||||
| Total operating expense | 22,030 | 22,356 | ||||||
| Operating loss | (18,424 | ) | (18,538 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense, net | (6,086 | ) | (3,116 | ) | ||||
| Other, net | 952 | (3,512 | ) | |||||
| Other expense, net | (5,134 | ) | (6,628 | ) | ||||
| Loss before income taxes | (23,558 | ) | (25,166 | ) | ||||
| Provision for income taxes | (13 | ) | (11 | ) | ||||
| Net loss | $ | (23,571 | ) | $ | (25,177 | ) | ||
| Other comprehensive income (loss): | ||||||||
| Change in fair value of effective portion of foreign currency cash flow hedges | $ | (120 | ) | $ | (332 | ) | ||
| Unrealized gain on short-term investments | 147 | 26 | ||||||
| Foreign currency gain (loss) | (1,014 | ) | 357 | |||||
| Provision for pension benefit obligation | 48 | 36 | ||||||
| Other comprehensive income (loss) | (939 | ) | 87 | |||||
| Comprehensive loss | $ | (24,510 | ) | $ | (25,090 | ) | ||
| Net loss available to ordinary shareholders - basic and diluted | $ | (23,571 | ) | $ | (25,177 | ) | ||
| Loss per share - basic and diluted | $ | (0.36 | ) | $ | (0.55 | ) | ||
| Weighted-average shares outstanding - basic and diluted | 66,078,290 | 45,796,533 | ||||||
| Quotient Limited | ||
| Condensed Consolidated Balance Sheets | ||
| (In Thousands) | ||
| (Unaudited) |
| June 30, 2019 |
March 31, 2019 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,528 | $ | 4,096 | ||||
| Short-term investments | 84,151 | 90,729 | ||||||
| Trade accounts receivable, net | 4,724 | 3,348 | ||||||
| Inventories | 16,712 | 15,551 | ||||||
| Prepaid expenses and other current assets | 3,326 | 3,202 | ||||||
| Total current assets | 115,441 | 116,926 | ||||||
| Restricted cash | 9,016 | 7,507 |
||||||
| Property and equipment, net | 45,506 | 47,293 | ||||||
| Operating lease right-of-use assets | 17,615 | — | ||||||
| Intangible assets, net | 707 | 751 | ||||||
| Deferred income taxes | 592 | 605 | ||||||
| Other non-current assets | 4,568 | 4,688 | ||||||
| Total assets | $ | 193,445 | $ | 177,770 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,342 | $ | 5,936 | ||||
| Accrued compensation and benefits | 4,372 | 6,149 | ||||||
| Accrued expenses and other current liabilities | 9,441 | 12,458 | ||||||
| Current portion of operating lease liability | 2,723 | — | ||||||
| Current portion of deferred lease rental benefit | — | 435 | ||||||
| Capital lease obligation | 457 | 471 | ||||||
| Total current liabilities | 22,335 | 25,449 | ||||||
| Long-term debt | 148,088 | 121,855 | ||||||
| Operating lease liability, less current portion | 16,176 | — | ||||||
| Deferred lease rental benefit, less current portion | — | 1,144 | ||||||
| Capital lease obligation, less current portion | 753 | 865 | ||||||
| Defined benefit pension plan obligation | 7,647 | 7,368 | ||||||
| 7% Cumulative redeemable preference shares | 19,638 | 19,375 | ||||||
| Total liabilities | 214,637 | 176,056 | ||||||
| Total shareholders' equity (deficit) | (21,192 | ) | 1,714 | |||||
| Total liabilities and shareholders' equity (deficit) | $ | 193,445 | $ | 177,770 | ||||
| Quotient Limited |
| Condensed Consolidated Statements of Cash Flows |
| (In Thousands) |
| (Unaudited) |
| Quarter ended June 30, |
||||||||
| 2019 | 2018 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (23,571 | ) | $ | (25,177 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 3,038 | 3,333 | ||||||
| Share-based compensation | 1,178 | 1,347 | ||||||
| Amortization of lease incentive | (109 | ) | (108 | ) | ||||
| Swiss pension obligation | 183 | 155 | ||||||
| Amortization of deferred debt issue costs | 2,107 | 291 | ||||||
| Accrued preference share dividends | 263 | 263 | ||||||
| Deferred income taxes | 13 | 11 | ||||||
| Net change in assets and liabilities: | ||||||||
| Trade accounts receivable, net | (1,439 | ) | (141 | ) | ||||
| Inventories | (1,160 | ) | (28 | ) | ||||
| Accounts payable and accrued liabilities | (3,713 | ) | (5,401 | ) | ||||
| Accrued compensation and benefits | (1,699 | ) | 1,057 | |||||
| Other assets | (145 | ) | 3,280 | |||||
| Net cash used in operating activities | (25,054 | ) | (21,118 | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Increase in short-term investments | (15,000 | ) | — | |||||
| Realization of short-term investments | 21,724 | — | ||||||
| Purchase of property and equipment | (1,138 | ) | (1,428 | ) | ||||
| Net cash generated from (used in) investing activities | 5,586 | (1,428 | ) | |||||
| FINANCING ACTIVITIES: | ||||||||
| Repayment of finance leases | (94 | ) | (116 | ) | ||||
| Proceeds from drawdown of new debt | 25,000 | 36,000 | ||||||
| Debt issuance costs and fees paid to noteholders | (874 | ) | (1,213 | ) | ||||
| Proceeds from issuance of ordinary shares and warrants | 63 | 2,195 | ||||||
| Net cash generated from financing activities | 24,095 | 36,866 | ||||||
| Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | (686 | ) | 3,304 | |||||
| Change in cash, cash equivalents and restricted cash | 3,941 | 17,624 | ||||||
| Beginning cash, cash equivalents and restricted cash | 11,603 | 25,205 | ||||||
| Ending cash, cash equivalents and restricted cash | $ | 15,544 | $ | 42,829 | ||||
| Supplemental cash flow disclosures: | ||||||||
| Income taxes paid | $ | — | $ | — | ||||
| Interest paid | $ | 7,221 | $ | 5,069 | ||||
| Reconciliation of cash, cash equivalents and restricted cash: | ||||||||
| Cash and cash equivalents | $ | 6,528 | $ | 35,629 | ||||
| Restricted cash | 9,016 | 7,200 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 15,544 | $ | 42,829 | ||||
Source: Quotient Limited