June Quarterly Business Update 2017
Aug 01, 2017 -
- QOQ growth forecast maintained; cash on hand at 30 June 2017 was $1.99 Million.
- Company’s commercial and scientific resources bolstered as interest in products and genomic services escalates
The Company is prudently resourcing to meet the current and expanding interest in its products and IVF Preimplantation Genetic Screening (PGS) services. The Company anticipates appointing a senior sales, marketing and business development executive, and is also bolstering the scientific team to meet increasing demand for products, services and advanced technical support for new applications of RHS products and expectations of continued growth. The Company continues to work through significant projects with major international companies involving expanded applications of DOPlify™ across IVF, “liquid biopsy” and broader fields of research and applied use.
Subsequent to 30 June 2017,
- Increased invoicing trends are evident for both products and services, which supports forecasted QOQ revenue increases continuing. This includes a fourth Australian IVF provider commencing as an RHS PGS service customer. The PGS/Preimplantation Genetic Diagnosis (PGD) service remains an integral part of RHS allowing in house product end user experience, which assists with product training, communication of competitive advantages and technical support, as well as forming an important part of RHS revenues.
- Illumina have announced that they will no longer supply their microarray products 24sure and 24sure+ from 2018. This has increased interest in RHS’ EmbryoCellect® as users of the Illumina microarray products search for a replacement. RHS has already optimised and released a protocol for ready cross-validation of 24sure and EmbryoCellect® using archival samples and sells a lab validation kit to enable clinics to make the transition rapidly and confidently.
- RHS introduced a new product PG-Seq™ at the European Society for Human Reproduction and Embryology (ESHRE) meeting in Geneva, early July 2017. PG-Seq™ is a complete PGS solution using Next Generation Sequencing (NGS) that includes RHS’ DOPlify™ whole genome amplification (WGA), NGS library preparation reagents and software for data analysis. RHS released interim validation data obtained from 197 samples using an Illumina MiSeq sequencing platform confirming accuracy for the detection of aneuploidy and smaller genetic changes down to 7Mb in size. The complete validation dataset is scheduled for release in October at the American Society for Reproductive Medicine meeting. PG-Seq™ enables high-throughput PGS analysis of twice as many samples as the Illumina PGS product VeriSeq (48 compared to 24) and can be combined with RHS’ Target Sequence Enrichment for PGS and single gene disorder detection (PGD).
- RHS held a DOPlify™ web-based training seminar in the Australasian timezone with further seminars being held in the European and US timezones over the coming days. These seminars provide RHS with an opportunity to present their products and latest data to current and potential customers and have been attended by more than 40% of the addressable market.
During the June quarter, the Company:
- Received cash revenue of $63K, being an increase on the prior quarter and consisted of growth in both kit sales and service provision.
- Successfully completed a placement to sophisticated investors in June 2017, raising $1.5 million before capital raising costs.
- Continued to control operating costs closely with gross operating cash outflows for the quarter of ($596K), compared to ($502K) in Q1 and the quarterly average for the 2016 year of ($464K). Increased costs were related to conference attendance and exhibition and increased laboratory consumables used in the validation of PG-Seq™. Net operating cash outflows for the quarter totalled ($275K), down from ($470K) in the previous quarter. The forecast gross outflows for the next quarter of ($707K) reflect ($123k) of inventory purchases to ensure RHS is equipped to meet anticipated increased demand for EmbryoCellect® and DOPlify™.
- Received confirmation that RHS’ DOPlify™ is world leading in its use in both preimplantation screening and circulating tumour cell applications, based on results from the University of Ghent’s comparison of single cell WGA kits. The University of Ghent presented the results at the Cambridge Healthtech Institute’s Fifth International Molecular Diagnostics conference in Lisbon 10-13 April and the data was published in Nature Scientific Reports in June. The results, together with ease of use, robustness and flexibility provide DOPlify™ with a clear competitive advantage. (Refer ASX Announcement 13 April 2017 and RHS Website Deleye_2017_performance_of_four_modern_whole_genome_amplification_methods.pdf).
- Extended the Company’s presence outside of the reproductive genomics market, as an exhibitor at the American Association for Cancer Research Annual Meeting 2017 in Washington DC April 1-5. The overwhelming positive response has encouraged RHS to demonstrate proof of principle with key collaborators for the rapidly emerging liquid biopsy market, which is the testing of circulating tumour cells and cell free tumour DNA, a market estimated to reach USD$13.4bn by 2020.
- Changed its name from Reproductive Health Science Limited to RHS Limited. All of the above product and technical developments provided RHS with the opportunity to reposition and rebrand the Company as a single cell molecular tools company. Our deep expertise in amplifying and assessing limited DNA, including single cell genomes, has positioned RHS as a global leader.
- Entered into a co-development project with Repromed (part of the Monash IVF Group) on non-invasive PGS was announced at the RHS AGM on the 26th May 2017. This non-invasive approach to embryo screening has the potential to improve IVF outcomes by making PGS more accessible for patients. A media release between Repromed and RHS can be found at the RHS website by the following link: http://www.rhsc.com.au/news. It is anticipated that an update on the co-development project and trial will occur around the time of the annual meeting of the American Society for Reproductive Medicine (ASRM) to be held in San Antonio in late October 2017 where the abstract co-authored by Repromed and RHS has been accepted for oral presentation.
- Published a 5 hour protocol for its first product, EmbryoCellect®. This is the shortest array protocol on the market and is significantly shorter than what is achievable using NGS. EmbryoCellect® is a solution to comfortably support fresh embryo transfer with results available the day of biopsy.
- Co-authored an abstract that has been accepted for poster presentation at the American Society for Histocompatibility and Immunogenetics (11-15 September, San Francisco) with European company GenDx (http://www.gendx.com/) on the use of DOPlify™ with target sequence enrichment for HLA typing from 5 cells. This protocol currently requires a blood sample containing 50-200 ng of purified DNA or more than 8,000 cells of DNA.