The CogState Limited (ASX: CGS) share price is currently rising as the company announced a business update to the market. Shares in the small cap healthcare company are currently rising by 5.82%. This takes the Cogstate share price to $1.00.
Business update
The Cogstate share price is rising today as the company announced a business update regarding the company’s quarterly sales results.
The company announced that its clinical trials sales contracts executed in the third quarter of FY21 total US$10.7 million. This means Cogstate’s total value of sales executed so far this financial year amounts to US$33.3 million.
Cogstate half year report
Cogstate released its business report today following the announcement of the company’s half-year report. Management also outlined its outlook in the report.
During the first half, the Cogstate executed contracts of $22.6 million. Notably, this was down on the $26.9 million received in the prior corresponding quarter (pcp). However, this did not stop the company’s revenue from rising strongly. For the half, group revenue increased by 59% to $13.9 million.
As a result of this strong growth, the company’s earnings also rose on its last half. Net profit after tax (NPAT) was -US$0.4 million compared to -US$2.7 million in the prior half.
In regards to the company’s cash flow and balance sheet, net cash flow from operations was US$13.2 million. With its balance sheet also sitting healthily at $18.5 million.
Management commentary
Commenting on the half-year result, Cogstate CEO, Brad O’Connor, said:
Cogstate delivered a strong improvement on 1H20 with revenue benefitting from the significant increase in Clinical Trials sales contracts over the last 18 months and cashflow benefitting from an upfront licence fee payment associated with our now global partnership with Eisai Co. Ltd in the Healthcare segment.
Outlook for Cogstate
Looking forwards the company is projecting big things thanks to its recent global licence agreement with Eisai. As a result, contracted future revenue has increased to $74.8 million, which is up 96% on pcp.
For the end of this financial year, Cogstate is aiming to be NPAT positive. However, crucially this assumes that its ongoing clinical trials are unaffected by the global pandemic.
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Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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