September Quarterly Business Update 2017
Oct 30, 2017 -
- Company readies for increasing commercial activities with key in-house appointments and restructuring of resources.
- Company releases performance validation data for its Next Generation Sequencing product PG-Seq with clinical validation underway.
- QOQ revenues maintained; cash on hand at 30 September 2017 was $1.39 Million.
Adelaide, 30 October 2017: RHS Limited (ASX: RHS) (“RHS” or the “Company”) announces its third quarter cash flow report for the quarter ending 30 September 2017, together with a business update.
With the expansion of the number and diversity of products developed and launched by RHS, it has become timely to form a dedicated technical team with specific focus and responsibility on manufacturing, quality control, technical support and services led by the Clinical Operations Manager. This team is distinct from the product development, improvement and innovation team led by the Chief Scientific Officer who are working closely with key strategic partners to provide proof of principle for expanded novel applications for DOPlify™, in particular focussing on the personalised medicine genomic revolution through liquid biopsy.
RHS has recently announced the successful completion of extensive validation of the Company’s new Next Generation Sequencing workflow PG-Seq™, which is now being externally validated by clinical partners ahead of full commercial release of the research use product. This product is expected to significantly increase revenue streams from the pre-implantation genetic screening and diagnosis workflows, after WGA with DOPlify™.
The relationships with major international companies continue to develop, being driven by expanded proof of principle of the RHS products in IVF, liquid biopsy and applied research.
Subsequent to 30 September 2017,
- RHS was awarded funding for further development and customisation of software for the analysis of Next Generation Sequencing data from TechInSA through the HWA Lab program
- Progressed our patent on target sequence enrichment to PCT and filed a trademark application for DOPlify™, which accompanies the registered trademark for EmbryoCellect®
- At the Fertility Society of Australia meeting in Adelaide in October, the Company;
- Released summary performance data for PG-Seq™ from over 400 samples demonstrating aneuploidy detection of 98.4% in 5 cells and 95.8% in single cells. This data confirms that PG-Seq™ is equivalent in performance to other commercially available NGS products for PGS, whilst offering twice the throughput to the Illumina product VeriSeq using the same equipment.
- Jointly released with Repromed (part of the Monash IVF Group ASX:MVF) initial pilot data on the use of PG-Seq™ for testing spent embryo culture media for non-invasive PGS showing correlation between the media and embryo biopsy for 21 of 22 embryos. This data formed the foundation for an expanded joint development project. Additional data will be presented at the American Society for Reproductive Medicine meeting in San Antonio 30 October to 1 November.
- Also released data on the use of PG-Seq™ for embryo identification using the mitochondrial genome. This data can be used to confirm that a batch of embryos were from the same mother, which provides a novel, readily accessible tracking opportunity for large service laboratories or busy clinics processing large volumes of embryos through genetic testing.
- Presented data on the use of PG-Seq™ in miscarriage testing and the development of a fast microarray protocol aimed at allowing EmbryoCellect® to be completed within a 5 hour window. The intent is that a result would then be available within the same standard work day as the embryo has been biopsied. This protocol would be the shortest on the market by over 2 hours, which is a significant advantage for laboratory workflow efficiencies.
- RHS will exhibit next week at the American Society for Reproductive Medicine meeting in San Antonio. This is the largest fertility meeting in the US and is expected to be attended by over 6,500 delegates. RHS is presenting further data on PG-Seq™ validation including details on the resolution of the product for detecting chromosome errors of a much smaller size and will present a poster relating to the optimisation of the PG-Seq™ protocol, which was selected for a short video presentation. Repromed will also present data on the non-invasive PGS protocol being co-developed with RHS.
- Clinical validation of PG-Seq™ has commenced with external independent clinical collaborators who have significant experience with other commercially available PGS platforms. These validation studies involve testing a second biopsy from an embryo that has already been testing using another PGS product. Full commercial release of PG-Seq™ will take place in early 2018, with product to be supplied in the interim through a targeted early access program. The kit will contain DOPlify™, NGS reagents and software for the analysis of up to 96 biopsies.
- RHS held DOPlify™ web-based training seminars in Australasian, European and US time zones. Webinars for PG-Seq™ are currently being scheduled.
- RHS was nominated for and won Corporate LiveWire’s Innovation & Excellence Award 2018 for Most Innovative in Healthcare Research.
- Invoicing trends continued positively despite significant Northern hemisphere vacation periods during the quarter and seasonal fluctuations in IVF cycles going through the RHS services. The upward trend is anticipated to accelerate in coming quarters following the increase in IVF groups expressing interest in RHS’ products and services.
During the September quarter, the Company:
- Received cash revenue of $70K, being a smaller increase on the prior quarter than anticipated due to fluctuations in PGS service demand beyond the Company’s control, though increasing kit sales for broader applications was pleasing.
- Continued to control operating costs closely with gross operating cash outflows for the quarter of ($649K), compared to ($596K) in Q2 and ($502K) in Q1 and the quarterly average for the 2016 year of ($464K). Increased costs were attributed to inventory of DOPlify™ and EmbryoCellect®; and incurred in relation to exhibiting at conferences and laboratory consumables required for the recently completed validation of PG-Seq™. Net operating cash outflows for the quarter totalled ($577K). RHS will submit the EMDG application for 2016/17 in the current quarter.
- Appointed Alwin Hui to the role of Chief Commercial Officer (ASX announcement 18th August), establishing a dedicated sales and marketing team.
- Increased employee numbers from 9 to 12 providing a structure for sales and marketing alongside dedicated focus on services, manufacturing and quality control, external strategic collaboration and co-development and new product development.
- With the release of DOPlify™, RHS now offers a platform technology for the amplification of small amounts of DNA that has application across a diverse and extensive range of opportunities. The Company retains its focus on IVF but is actively expanding its reach into oncology through strategic industry and research connections. These relationships have formed since RHS’ release of DOPlify™ and have been strengthened by our exhibition at the American Association for Cancer Research Annual Meeting 2017 in Washington DC April 1-5 and the University of Ghent’s published benchmarking study comparing the performance of commercially available whole genome amplification kits.