Prenetics Announces First Quarter 2024 Financial Results
Prenetics Global (NASDAQ: PRE) has released its unaudited financial results for Q1 2024. The company reported a 30.2% increase in revenue to $6.4 million and a 159.8% rise in gross profit to $3.8 million compared to Q1 2023. Adjusted EBITDA improved by 55.9%, amounting to a loss of $4.1 million. Prenetics holds cash and short-term assets totaling $86.6 million. Insighta, a joint venture focused on early cancer detection, also had a cash balance of $79.8 million.
The company is strategically pivoting towards the U.S. consumer healthcare market, establishing dual headquarters in the U.S. and focusing on science-based health solutions. Insighta is progressing with promising pre-clinical data on prostate cancer and is set to commence a 1,500-person clinical trial in July 2024.
- Revenue increased by 30.2% to $6.4 million in Q1 2024.
- Gross profit surged by 159.8% to $3.8 million in Q1 2024.
- Adjusted EBITDA improved by 55.9% despite being a loss of $4.1 million.
- Cash and short-term assets totaled $86.6 million as of March 31, 2024.
- Insighta, a joint venture, holds $79.8 million in cash.
- Initiated strategic realignment focusing on the U.S. consumer healthcare market.
- Insighta's pre-clinical data on prostate cancer is promising.
- Insighta received approvals for a 1,500-person clinical trial starting in July 2024.
- Adjusted EBITDA remains a loss of $4.1 million despite improvements.
Insights
Prenetics' first quarter results show a notable 30.2% increase in revenue and a 159.8% rise in gross profit, which is a significant improvement over the previous year. This impressive growth is further highlighted by the 55.9% reduction in Adjusted EBITDA losses, indicating stronger financial management and operational efficiency. The company also maintains a strong liquidity position with
While the improvements are promising, the adjusted EBITDA still being negative at
For retail investors, the key takeaway is that Prenetics is in a transformative phase. The financial health and growth potential look strong, but there is an underlying need for sustained profitability. The strategic focus on the U.S. market could be a game-changer if executed effectively.
Prenetics' strategic realignment towards the U.S. consumer healthcare market is a bold move aimed at tapping into a vast market with significant growth potential. The U.S. healthcare market is known for its high consumer spending on health and wellness products, making it an attractive target for expansion.
By establishing dual headquarters and focusing on consumer accessibility, Prenetics is positioning itself to leverage its science-based approach in a market that values innovation and health improvements. This pivot could open new revenue streams and boost the company's market presence in the long term.
However, the competitive landscape in the U.S. healthcare market is fierce, with numerous established players. Prenetics will need to differentiate itself through unique value propositions and robust marketing strategies to capture market share.
Investors should keep an eye on how well the company navigates this transition and whether it can achieve significant market penetration and growth in the U.S. sector.
The progress of Insighta, Prenetics' joint venture in early cancer detection, is noteworthy. The promising pre-clinical data on prostate cancer and the upcoming 1,500 person clinical trial mark significant milestones. Early cancer detection is a critical area with substantial potential impact on public health and success in this venture could dramatically enhance Prenetics' market value and reputation.
Pre-clinical data showing promising results is an early indicator, but the real test lies in the clinical trials. A successful trial could lead to breakthroughs in early cancer screening, offering a substantial market opportunity given the increasing demand for early diagnostic tools.
Investors should be aware that while the venture appears promising, it also comes with inherent risks typical of medical research ventures, including the uncertainty of clinical trial outcomes and regulatory approvals.
First Quarter Revenue Increased
Confirms Strategic Pivot Targeting the U.S. Consumer Healthcare Market
Reaffirms 2024 Revenue Range of US
LOS ANGELES, June 18, 2024 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ: PRE) (“Prenetics” or the “Company”), a leading health sciences company, today announced unaudited financial results for the first quarter ended March 31, 2024, along with recent business updates.
First Quarter 2024 Financial Highlights
- Revenue from continuing operations of US
$6.4 million in the first quarter 2024, an increase of30.2% as compared to the first quarter 2023. - Gross profit from continuing operations of US
$3.8 million in the first quarter 2024, an increase of159.8% as compared to the first quarter 2023. - Adjusted EBITDA from continuing operations of US
$(4.1) million in the first quarter 2024, an improvement of55.9% as compared to the first quarter 2023. - Cash and other short-term assets1 of US
$86.6 million as of March 31, 2024. Additionally, Insighta2, our 50/50 joint venture in early cancer detection with Professor Dennis Lo, had a cash balance of US$79.8 million in its balance sheet as of March 31, 2024.
Danny Yeung, Chief Executive Officer and Co-Founder of Prenetics remarked: “The first quarter of 2024 marked a good start for our company, showcasing solid growth in revenue and gross profit. These results demonstrate firm governance of our financial position with no debt supported by a resilient and talented team.
As we enter the second half of 2024, we are making significant strides in our strategic realignment with a keen focus on the consumer healthcare market in the USA. Our purpose remains dedicated to our science first approach in our pivot to consumer healthcare to broaden accessibility to science based health and wellness. To support this growth, we have established dual headquarters with a presence in the US which will position us to seize new opportunities both domestically and globally. We look forward to sharing more details on the new direction of Prenetics in the near future,” concluded Mr. Yeung.
Recent Business Updates
- Continued improvement on financial performance, achieving
30.2% increase in revenue from continuing operations, a55.9% reduction in adjusted EBITDA loss, and ended the quarter with strong financial position of cash and short-term assets position of US$86.6 million as of March 31, 2024. - Initiate a strategic realignment with an accelerated focus on the consumer healthcare sector, presenting vast global opportunities, beginning with the USA.
- Insighta, the Company’s early cancer detection venture continues to show significant progress as initial pre-clinical data on Prostate cancer shows very promising results.
- Insighta has received all approvals necessary to move forward with a 1,500 person clinical trial with patient recruitment to begin in July 2024.
______________________________
1 Represents current assets, including cash and cash equivalents and short-term deposits totaling US
2 As of March 31, 2024, we owned
About Prenetics
Prenetics (NASDAQ:PRE), a leading genomics-driven health sciences company, is revolutionizing prevention, early detection, and treatment. Our prevention arm, CircleDNA, uses whole exome sequencing to offer the world’s most comprehensive consumer DNA test. Insighta, our
Investor Relations Contact:
investors@prenetics.com
PRE@mzgroup.us
Forward-Looking Statements
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, objectives of management for future operations of the Company, and growth opportunities are forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties, therefore they should not be relied upon as being necessarily indicative of future results. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: the Company’s ability to further develop and grow its business, including new products and services; its ability to execute on its new business strategy in genomics, precision oncology, and specifically, early detection for cancer; the results of case control studies and/or clinical trials; and its ability to identify and execute on M&A opportunities, especially in precision oncology. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties described in the “Risk Factors” section of the Company’s most recent registration statement and the prospectus therein, and the other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
Basis of Presentation
Unaudited Non-IFRS Financial Measures has been provided in the financial statements tables included at the end of this press release. An explanation of these measures is also included below under the heading “Unaudited Non-IFRS Financial Measures”.
Unaudited Non-IFRS Financial Measures
To supplement Prenetics’ consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), the Company is providing non-IFRS measures, adjusted EBITDA from continuing operations, adjusted gross profit from continuing operations and adjusted loss attributable to equity shareholders of Prenetics. These non-IFRS financial measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-IFRS financial measures are useful to investors in evaluating the Company’s ongoing operating results and trends.
Management is excluding from some or all of its non-IFRS results (1) Employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) finance income and exchange gain or loss, net, and (4) certain items that may not be indicative of our business, results of operations, or outlook, including but not limited to non-cash and/ or non-recurring items. These non-IFRS financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on an IFRS basis as well as a non-IFRS basis and also by providing IFRS measures in the Company’s public disclosures.
In addition, other companies, including companies in the same industry, may not use the same non-IFRS measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-IFRS measures as comparative measures. Because of these limitations, the Company’s non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the non-IFRS reconciliations provided in the tables captioned “Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)”, “Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)” and “Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted loss attributable to equity shareholders of Prenetics (Non-IFRS)” set forth at the end of this document.
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of financial position
(Expressed in United States dollars unless otherwise indicated)
| March 31, | December 31, | ||||
| 2024 | 2023 | ||||
| Assets | |||||
| Property, plant and equipment | $ | 4,585,957 | $ | 5,777,794 | |
| Intangible assets | 13,169,672 | 13,424,648 | |||
| Goodwill | 29,170,123 | 29,170,123 | |||
| Interests in equity-accounted investees | 98,244,733 | 98,464,875 | |||
| Financial assets at fair value through profit or loss | 9,371,064 | 9,371,064 | |||
| Deferred tax assets | 27,630 | 27,680 | |||
| Deferred expenses | 1,483,348 | 3,530,756 | |||
| Other non-current assets | 948,811 | 743,173 | |||
| Non-current assets | 157,001,338 | 160,510,113 | |||
| Deferred expenses | 8,272,025 | 8,312,890 | |||
| Inventories | 2,815,607 | 3,126,776 | |||
| Trade receivables | 4,106,052 | 4,058,007 | |||
| Deposits, prepayments and other receivables | 5,708,610 | 5,284,848 | |||
| Amount due from a related company | 2,556 | 5,123 | |||
| Amount due from an equity-accounted investee | 126,177 | 132,114 | |||
| Financial assets at fair value through profit or loss | 11,034,200 | 11,034,200 | |||
| Short-term deposits | — | 16,000,000 | |||
| Cash and cash equivalents | 54,518,588 | 45,706,448 | |||
| Current assets | 86,583,815 | 93,660,406 | |||
| Total assets | $ | 243,585,153 | $ | 254,170,519 | |
| Liabilities | |||||
| Deferred tax liabilities | $ | 2,327,331 | $ | 2,614,823 | |
| Warrant liabilities | 143,264 | 223,850 | |||
| Lease liabilities | 669,373 | 867,215 | |||
| Other non-current liabilities | 464,215 | 823,345 | |||
| Non-current liabilities | 3,604,183 | 4,529,233 | |||
| Trade payables | 1,637,568 | 1,671,019 | |||
| Accrued expenses and other current liabilities | 7,100,324 | 8,174,815 | |||
| Contract liabilities | 5,542,678 | 6,111,017 | |||
| Lease liabilities | 1,079,449 | 1,502,173 | |||
| Liabilities for puttable financial instrument3 | 14,472,666 | 14,622,529 | |||
| Tax payable | 7,385,897 | 7,402,461 | |||
| Current liabilities | 37,218,582 | 39,484,014 | |||
| Total liabilities | 40,822,765 | 44,013,247 | |||
| Equity | |||||
| Share capital4 | 18,326 | 18,308 | |||
| Reserves | 199,425,243 | 206,339,490 | |||
| Total equity attributable to equity shareholders of the Company | 199,443,569 | 206,357,798 | |||
| Non-controlling interests | 3,318,819 | 3,799,474 | |||
| Total equity | 202,762,388 | 210,157,272 | |||
| Total equity and liabilities | $ | 243,585,153 | $ | 254,170,519 | |
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2024 | 2023 | 2023 | |||||||||
| (Restated) | |||||||||||
| Continuing operations | |||||||||||
| Revenue | $ | 6,413,397 | $ | 5,428,460 | $ | 4,924,035 | |||||
| Direct costs | (2,630,751 | ) | (2,758,288 | ) | (3,467,939 | ) | |||||
| Gross profit | 3,782,646 | 2,670,172 | 1,456,096 | ||||||||
| Other income and other net gain | 747,891 | 715,562 | 1,077,091 | ||||||||
| Selling and distribution expenses5 | (1,898,473 | ) | (1,908,415 | ) | (2,501,274 | ) | |||||
| Research and development expenses5 | (2,731,050 | ) | (2,586,477 | ) | (3,233,538 | ) | |||||
| Impairment loss of goodwill | — | (3,900,268 | ) | — | |||||||
| Administrative and other operating expenses5 | (9,059,929 | ) | (10,362,374 | ) | (11,689,809 | ) | |||||
| Loss from operations | (9,158,915 | ) | (15,371,800 | ) | (14,891,434 | ) | |||||
| Fair value loss on financial assets at fair value through profit or loss | — | (3,190,379 | ) | — | |||||||
| Fair value gain on warrant liabilities | 80,586 | 671,550 | 1,260,276 | ||||||||
| Share of loss of equity-accounted investees | (216,245 | ) | (688,183 | ) | (112,751 | ) | |||||
| Other finance (costs)/income | (16,339 | ) | 1,073 | (43,844 | ) | ||||||
| Loss before taxation | (9,310,913 | ) | (18,577,739 | ) | (13,787,753 | ) | |||||
| Income tax credit/(expense) | 285,938 | (10,678 | ) | 80,655 | |||||||
| Loss from continuing operations | (9,024,975 | ) | (18,588,417 | ) | (13,707,098 | ) | |||||
| Discontinued operation | |||||||||||
| (Loss)/profit from discontinued operation, net of tax6 | (26,615 | ) | (1,026,983 | ) | 2,733,358 | ||||||
| Loss for the period | (9,051,590 | ) | (19,615,400 | ) | (10,973,740 | ) | |||||
| Other comprehensive income for the period | |||||||||||
| Item that may be reclassified subsequently to profit or loss: | |||||||||||
| Exchange difference on translation of foreign operations | (430,444 | ) | 1,118,149 | (636,502 | ) | ||||||
| Total comprehensive income for the period | $ | (9,482,034 | ) | $ | (18,497,251 | ) | $ | (11,610,242 | ) | ||
| Loss attributable to: | |||||||||||
| Equity shareholders of Prenetics | $ | (8,568,095 | ) | $ | (19,047,124 | ) | $ | (10,398,430 | ) | ||
| Non-controlling interests | (483,495 | ) | (568,276 | ) | (575,310 | ) | |||||
| $ | (9,051,590 | ) | $ | (19,615,400 | ) | $ | (10,973,740 | ) | |||
| Total comprehensive income attributable to: | |||||||||||
| Equity shareholders of Prenetics | $ | (9,001,379 | ) | $ | (18,677,610 | ) | $ | (10,495,918 | ) | ||
| Non-controlling interests | (480,655 | ) | 180,359 | (1,114,324 | ) | ||||||
| $ | (9,482,034 | ) | $ | (18,497,251 | ) | $ | (11,610,242 | ) | |||
| Loss per share: | |||||||||||
| Basic | $ | (0.70 | ) | $ | (1.57 | ) | (0.99 | ) | |||
| Diluted | (0.70 | ) | (1.57 | ) | (0.99 | ) | |||||
| Loss per share - Continuing operations: | |||||||||||
| Basic | (0.70 | ) | (1.49 | ) | (1.25 | ) | |||||
| Diluted | (0.70 | ) | (1.49 | ) | (1.25 | ) | |||||
| Weighted average number of common shares: | |||||||||||
| Basic | 12,215,904 | 12,114,922 | 10,522,621 | ||||||||
| Diluted | 12,215,904 | 12,114,922 | 10,522,621 | ||||||||
PRENETICS GLOBAL LIMITED
Unaudited Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2024 | 2023 | 2023 | |||||||||
| (Restated) | |||||||||||
| Loss from operations from continuing operations under IFRS | $ | (9,158,915 | ) | $ | (15,371,800 | ) | $ | (14,891,434 | ) | ||
| Employee equity-settled share-based payment expenses | 1,937,268 | 2,055,858 | 2,940,984 | ||||||||
| Depreciation and amortization | 1,719,555 | 1,564,816 | 1,796,990 | ||||||||
| Other strategic financing, transactional expense and non-recurring expenses | 2,096,563 | 6,263,188 | 1,847,131 | ||||||||
| Finance income, exchange gain or loss, net | (700,589 | ) | (673,740 | ) | (1,000,131 | ) | |||||
| Adjusted EBITDA from continuing operations (Non-IFRS) | $ | (4,106,118 | ) | $ | (6,161,678 | ) | $ | (9,306,460 | ) | ||
Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)
| Three Months Ended | ||||||||
| March 31, | December 31, | March 31, | ||||||
| 2024 | 2023 | 2023 | ||||||
| (Restated) | ||||||||
| Gross profit from continuing operations under IFRS | $ | 3,782,646 | $ | 2,670,172 | $ | 1,456,096 | ||
| Employee equity-settled share-based payment expenses | 581 | 11,522 | — | |||||
| Depreciation and amortization | 279,561 | 309,812 | 384,326 | |||||
| Adjusted gross profit from continuing operations (Non-IFRS) | $ | 4,062,788 | $ | 2,991,506 | $ | 1,840,422 | ||
Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted loss attributable to equity shareholders of Prenetics (Non-IFRS)
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2024 | 2023 | 2023 | |||||||||
| (Restated) | |||||||||||
| Loss attributable to equity shareholders of Prenetics under IFRS | $ | (8,568,095 | ) | $ | (19,047,124 | ) | $ | (10,398,430 | ) | ||
| Employee equity-settled share-based payment expenses | 1,937,268 | 2,055,858 | 3,124,189 | ||||||||
| Other strategic financing, transactional expense and non-recurring expenses | 2,096,563 | 8,248,151 | 3,161,638 | ||||||||
| Fair value gain on warrant liabilities | (80,586 | ) | (671,550 | ) | (1,260,276 | ) | |||||
| Fair value loss on financial assets at fair value through profit or loss | — | 3,190,379 | — | ||||||||
| Adjusted loss attributable to equity shareholders of Prenetics (Non-IFRS) | $ | (4,614,850 | ) | $ | (6,224,286 | ) | $ | (5,372,879 | ) | ||
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3 In connection with the acquisition of ACT Genomics, the remaining shareholders of ACT Genomics - representing
4 Represents number of authorized and issued shares as follows:
| March 31, | December 31, | ||
| 2024 | 2023 | ||
| Number of authorized shares of | 33,333,333 | 33,333,333 | |
| Number of issued shares | 12,217,226 | 12,205,200 |
5 Includes equity-settled share-based payment expenses from continuing operations as follows:
| Three Months Ended | |||||||||
| March 31, | December 31, | March 31, | |||||||
| 2024 | 2023 | 2023 | |||||||
| (Restated) | |||||||||
| Direct costs | $ | 581 | $ | 11,522 | $ | — | |||
| Selling and distribution expenses | 1,053 | (632 | ) | 45,255 | |||||
| Research and development expenses | 758,394 | 675,928 | 486,507 | ||||||
| Administrative and other operating expenses | 1,155,752 | 1,339,419 | 2,391,044 | ||||||
| Total equity-settled share-based payment expenses | $ | 1,915,780 | $ | 2,026,237 | $ | 2,922,806 | |||
6 We ceased our COVID-19 testing business entirely in 2023 Q2, and other DNA testing operations in the EMEA regions in 2023 Q4. As a result, COVID-19 testing business and the operations in the EMEA regions are reported as a discontinued operation under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In accordance with IFRS 5, the results of the discontinued operation have been presented separately from the continuing operations in the consolidated statements of profit or loss and other comprehensive income. The comparative information in the consolidated statements of profit or loss and other comprehensive income has also been re-presented to show the results of discontinued operation separately.
FAQ
What were Prenetics' Q1 2024 financial results?
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