Quotient Limited Provides Update on COVID-19 Antibody Test Progress, Other Key Developments and Fourth Quarter and Full Year Fiscal 2020 Results
Quotient Limited (NASDAQ:QTNT) announced key developments, including a high-performance COVID-19 antibody test and resumed field trials for its MosaiQ platform. The company reported strong revenue growth, with product sales rising 10.2% year-over-year. The COVID-19 antibody test achieved 100% sensitivity and 99.8% specificity, with multiple contracts signed. However, the company faced an operating loss of $21.5 million for Q4 and acknowledged significant liquidity concerns. Quotient expects product sales between $32 to $34 million for fiscal 2021, contingent on evolving market conditions.
- Achieved 100% sensitivity and 99.8% specificity for COVID-19 antibody test.
- Product sales grew 10.2% year-over-year for fiscal 2020.
- Expanded MosaiQ field trials resumed in Europe.
- Multiple customer contracts signed for COVID-19 test and MosaiQ system.
- Operating loss of $21.5 million for Q4 fiscal 2020.
- Accumulated deficit of $483.4 million as of March 31, 2020.
- Significant doubt about liquidity and ability to continue as a going concern.
- Developed a high performance COVID-19 Antibody Test
- Several customer contracts signed for MosaiQ system and COVID-19 Antibody Test
- Transfusion Dx Expanded Immunohematology (IH) Field Trials have restarted following COVID related delays
- Initial Serological Disease Screening (SDS) CE Mark obtained
- Continued Strong Top Line Growth in Fourth Quarter and Full Year
JERSEY, Channel Islands, June 09, 2020 (GLOBE NEWSWIRE) -- Quotient Limited (NASDAQ:QTNT), a commercial-stage diagnostics company (Quotient or the Company), headquartered in Eysins, Switzerland, today summarized recent key achievements. These included Quotient's rapid development of a high performance COVID-19 antibody test based on its innovative MosaiQ™ platform and several commercial MosaiQ contracts. Quotient's European Field Trials in transfusion diagnostics recently restarted for the Company's expanded MosaiQ IH microarray. A CE Mark was obtained for the Company's initial SDS microarray. The Company also announced strong top line growth for both its fourth quarter ended March 31, 2020 and for the full financial year.
“The global coronavirus crisis was a shock to everyone, but we are very proud of how the Quotient team leveraged the knowledge we acquired over the past eight years, and the flexibility of the MosaiQ platform, to develop a state of the art COVID-19 antibody test. The test performs with
Mr. Walt added “I am pleased to report that we restarted the expanded IH Field Trials in Europe and we are expecting the first commercial transfusion menu in Q1 CY2021. I am also pleased that, despite the unprecedented disruption caused by the pandemic, we were able to exceed sales expectations for our Alba by Quotient reagent business.”
MosaiQ Platform
MosaiQ, Quotient's next-generation platform, is designed to deliver fast immunohematology, serological and molecular disease screening (MDS), using a single low volume sample on a high throughput automated platform. MosaiQ represents a transformative and highly disruptive unified testing system for transfusion diagnostics and beyond. Feasibility to deliver required performance in serological and molecular disease screening has been demonstrated. MosaiQ offers the potential to significantly reduce complexity and improve workflow for our customers.
Regulatory and Commercial Milestones
- New Product Development – The rapid development of the Company's MosaiQ COVID-19 antibody test is a notable success. It also represents an interesting opportunity because the test is primarily commercialized outside of donor labs and therefore outside Quotient’s initial target market. It introduces the MosaiQ platform to a different market. The first customer contract was signed shortly after the CE marking and the Company subsequently entered into several more contracts with customers in Europe and the United States.
- European Regulatory Approval – The CE mark for the initial MosaiQ IH microarray was obtained in April 2019 and for the initial SDS microarray in February 2020. The COVID-19 antibody test was CE marked on May 1, 2020 and is the fifth CE mark for the MosaiQ platform
- US Regulatory approval – Quotient submitted a 510(K) for the initial SDS microarray and the MosaiQ device in December 2019. The request for FDA Emergency Use Authorization of the COVID-19 antibody test was submitted on May 6, 2020
- Field Trials – Expanded IH field trials in Europe restarted recently after they were interrupted in March due to the coronavirus pandemic
- Ongoing Microarray Menu Development – Two benchmark studies were successfully completed for selected SDS and MDS parameters demonstrating the high performance of the MosaiQ technology
- Upcoming Regulatory Submissions– Submission of the expanded IH microarray in Europe is expected in Q4 of CY2020 followed by US submission in the first half of CY2021. The European submission of the expanded SDS microarray is expected in the second half of CY2021
Franz Walt commented “I am delighted with the Quotient team who were able to turn the crisis into a positive contribution to the fight against COVID-19 and who continue to deliver on our goals.”
Fiscal Fourth Quarter and Full Year Financial Results
The Alba by Quotient reagent business once again generated strong revenue growth during fiscal 2020, with product revenues growing
Key revenue and profit results are summarized below (expressed in thousands, except percentages)
| Quarter Ended | Year Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| 40%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: |
| Product sales —OEM Customers | $ | 5,863 | $ | 5,543 | $ | 21,217 | $ | 20,287 | ||||||||
| Product sales — direct customers and distributors | 2,837 | 2,288 | 10,384 | 8,378 | ||||||||||||
| Other revenues | — | 450 | 1,055 | 469 | ||||||||||||
| Total revenue | $ | 8,700 | $ | 8,281 | $ | 32,656 | $ | 29,134 | ||||||||
| Product sales from standing orders (%) | 68 | % | 70 | % | 70 | % | 68 | % | ||||||||
| Gross profit | $ | 3,964 | $ | 3,854 | $ | 14,856 | $ | 11,904 | ||||||||
| Gross profit as a % of total revenue | 45.6 | % | 46.5 | % | 45.5 | % | 40.9 | % | ||||||||
| Gross margin on product sales (%) | 45.6 | % | 43.5 | % | 43.7 | % | 39.9 | % | ||||||||
| Operating (loss) | $ | (21,469 | ) | $ | (20,325 | ) | $ | (80,691 | ) | $ | (78,955 | ) |
The operating loss for the quarter and the year ended March 31, 2020 included termination and transition benefit costs of approximately
Capital expenditures totaled
As at March 31, 2020 Quotient had
Outlook for the Fiscal Year Ending March 31, 2021
- Total product sales of Alba by Quotient reagents in the range of
$32 t o$34 million compared to product sales in fiscal 2019 of$31.6 million . A forecast of COVID-19 antibody tests is not currently possible due to the uncertainties related to the development of this new market. No other revenues are expected. - Capital expenditures in the range of
$5 t o$10 million . - Average monthly cash use for operations in the range of
$5 t o$6 million excluding potential revenue related to COVID-19 antibody test.
Alba by Quotient product sales in the first quarter of fiscal 2021 are expected to be within the range of
The Company is not providing guidance on the operating loss due to the uncertainty around revenues derived from MosaiQ by Quotient COVID-19 antibody tests.
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 Europe and the United States. As a result of these factors, Quotient expects to continue to see seasonality and quarter-to-quarter variations in product sales. The timing of product development fees included in other revenues is mostly dependent upon the achievement of pre-negotiated project milestones.
The accompanying condensed consolidated financial statements have been prepared on a basis which assumes that Quotient will continue as a going concern. However, the Company has incurred net losses from operations in each year since it commenced operations in 2007 and had an accumulated deficit of
Conference Call
Quotient will host a conference call on Tuesday, June 9 at 8:00 a.m. Eastern Time to discuss its fourth quarter fiscal 2020 financial results. Participants may access the call by dialing 1-877-407-0784 in the U.S. or 1-201-689-8560 outside the U.S. The access code is 13704376. The conference call will be webcast live on the Company’s website at www.quotientbd.com.
A replay of this conference call will be available through June 16, 2020 by dialing 1-844-512-2921 in the U.S. or 1-412-317-6671 outside the U.S. The replay access code is 13704376.
About Quotient Limited
Building on over 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 create operational cost savings to laboratories around the world. Quotient's operations are based in Eysins, Switzerland, Edinburgh, Scotland and Newtown, Pennsylvania.
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 potential for using the Company’s MosaiQ technology to infectious disease diagnostics), current estimates of first quarter and full year fiscal 2021 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 proceedings, including the ongoing arbitration with OCD; continued or worsening adverse conditions in the general domestic and global economic markets, including as a result of the global COVID-19 pandemic; as well as the other risks set forth in the Company's filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Quotient disclaims any obligation to update these forward-looking statements.
The Quotient logo, Quotient MosaiQ and MosaiQ™ are registered trademarks or trademarks of Quotient Limited and its subsidiaries in various jurisdictions.
CONTACT: Peter Buhler, Chief Financial Officer – peter.buhler@quotientbd.com; +41 22 545 52 26
| Quotient Limited |
| Condensed Consolidated Statements Of Comprehensive Loss |
| (in thousands, except share and per share amounts) |
| (unaudited) |
| Quarter Ended | Year Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| 40%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: |
| Product sales | $ | 8,700 | $ | 7,831 | $ | 31,601 | $ | 28,665 | ||||||||
| Other revenues | — | 450 | 1,055 | 469 | ||||||||||||
| Total revenue | 8,700 | 8,281 | 32,656 | 29,134 | ||||||||||||
| Cost of revenue | 4,736 | 4,427 | 17,800 | 17,230 | ||||||||||||
| Gross profit | 3,964 | 3,854 | 14,856 | 11,904 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,731 | 2,278 | 9,853 | 8,637 | ||||||||||||
| Research and development, net | 14,847 | 13,321 | 53,744 | 50,677 | ||||||||||||
| General and administrative expense | 7,855 | 8,580 | 31,950 | 31,545 | ||||||||||||
| Total operating expense | 25,433 | 24,179 | 95,547 | 90,859 | ||||||||||||
| Operating loss | (21,469 | ) | (20,325 | ) | (80,691 | ) | (78,955 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense, net | (3,474 | ) | (5,404 | ) | (23,859 | ) | (20,018 | ) | ||||||||
| Other, net | 838 | (853 | ) | 2,438 | (6,369 | ) | ||||||||||
| Other expense, net | (2,636 | ) | (6,257 | ) | (21,421 | ) | (26,387 | ) | ||||||||
| Loss before income taxes | (24,105 | ) | (26,582 | ) | (102,112 | ) | (105,342 | ) | ||||||||
| Provision for income taxes | (620 | ) | (11 | ) | (661 | ) | (44 | ) | ||||||||
| Net loss | $ | (24,725 | ) | $ | (26,593 | ) | $ | (102,773 | ) | $ | (105,386 | ) | ||||
| Other comprehensive income (loss): | ||||||||||||||||
| Change in fair value of effective portion of foreign currency cash flow hedges | $ | (366 | ) | $ | 197 | $ | (157 | ) | $ | (123 | ) | |||||
| Change in unrealized gain on short-term investments | 212 | 380 | 554 | 796 | ||||||||||||
| Foreign currency gain (loss) | (1,931 | ) | 1,410 | (2,702 | ) | 1,964 | ||||||||||
| Provision for pension benefit obligation | 1,890 | (994 | ) | 2,034 | (887 | ) | ||||||||||
| Other comprehensive income (loss) | (195 | ) | 993 | (271 | ) | 1,750 | ||||||||||
| Comprehensive loss | $ | (24,920 | ) | $ | (25,600 | ) | $ | (103,044 | ) | $ | (103,636 | ) | ||||
| Net loss available to ordinary shareholders - basic and diluted | $ | (24,725 | ) | $ | (26,593 | ) | $ | (102,773 | ) | $ | (105,386 | ) | ||||
| Loss per share - basic and diluted | $ | (0.31 | ) | $ | (0.41 | ) | $ | (1.44 | ) | $ | (1.92 | ) | ||||
| Weighted-average shares outstanding - basic and diluted | 80,336,180 | 65,147,289 | 71,610,035 | 54,874,391 |
| Quotient Limited |
| Condensed Consolidated Balance Sheets |
| (In Thousands) |
| (Unaudited) |
| March 31, 2020 | March 31, 2019 | |||||||
| 70%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: |
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,923 | $ | 4,096 | ||||
| Short-term investments | 116,871 | 90,729 | ||||||
| Trade accounts receivable, net | 5,402 | 3,348 | ||||||
| Inventories | 20,501 | 15,551 | ||||||
| Prepaid expenses and other current assets | 3,775 | 3,202 | ||||||
| Total current assets | 150,472 | 116,926 | ||||||
| Restricted cash | 9,017 | 7,507 | ||||||
| Property and equipment, net | 40,165 | 47,293 | ||||||
| Operating lease right-of-use assets | 21,493 | — | ||||||
| Intangible assets, net | 625 | 751 | ||||||
| Deferred income taxes | 237 | 605 | ||||||
| Other non-current assets | 4,454 | 4,688 | ||||||
| Total assets | $ | 226,463 | $ | 177,770 | ||||
| LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,826 | $ | 5,936 | ||||
| Accrued compensation and benefits | 7,210 | 6,149 | ||||||
| Accrued expenses and other current liabilities | 15,490 | 12,458 | ||||||
| Current portion of operating lease liability | 3,033 | — | ||||||
| Current portion of deferred lease rental benefit | — | 435 | ||||||
| Current portion of finance lease obligation | 598 | 471 | ||||||
| Total current liabilities | 31,157 | 25,449 | ||||||
| Long-term debt | 153,024 | 121,855 | ||||||
| Operating lease liability, less current portion | 19,914 | — | ||||||
| Deferred lease rental benefit, less current portion | — | 1,144 | ||||||
| Finance lease obligation, less current portion | 1,117 | 865 | ||||||
| Defined benefit pension plan obligation | 6,353 | 7,368 | ||||||
| 20,425 | 19,375 | |||||||
| Total liabilities | 231,990 | 176,056 | ||||||
| Commitments and contingencies | — | — | ||||||
| Shareholders' (deficit) equity: | ||||||||
| Ordinary shares (nil par value) 80,398,326 and 65,900,447 issued and outstanding at March 31, 2020 and March 31, 2019 respectively | 459,931 | 368,958 | ||||||
| Additional paid in capital | 33,132 | 28,665 | ||||||
| Accumulated other comprehensive loss | (15,155 | ) | (14,884 | ) | ||||
| Accumulated deficit | (483,435 | ) | (381,025 | ) | ||||
| Total shareholders' (deficit) equity | (5,527 | ) | 1,714 | |||||
| Total liabilities and shareholders' (deficit) equity | $ | 226,463 | $ | 177,770 |
| Quotient Limited |
| Condensed Consolidated Statements of Cash Flows |
| (In Thousands) |
| (Unaudited) |
| Year ended March 31, | ||||||||||||
| 2020 | 2019 | 2018 | ||||||||||
| 55%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: | 2%; width: | 2%; width: | 9%; width: | 2%; width: |
| Net loss | $ | (102,773 | ) | $ | (105,386 | ) | $ | (82,338 | ) | |||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
| Depreciation, amortization and loss on disposal of fixed assets | 12,276 | 12,767 | 10,405 | |||||||||
| Share-based compensation | 4,467 | 4,957 | 4,156 | |||||||||
| Increase (decrease) in deferred lease rentals | 293 | 372 | (435 | ) | ||||||||
| Swiss pension obligation | 756 | 575 | 659 | |||||||||
| Amortization of deferred debt issue costs | 7,043 | 5,908 | 4,359 | |||||||||
| Accrued preference share dividends | 1,050 | 1,050 | 1,050 | |||||||||
| Deferred income taxes | 368 | 44 | (649 | ) | ||||||||
| Net change in assets and liabilities: | ||||||||||||
| Trade accounts receivable, net | (2,177 | ) | (637 | ) | (87 | ) | ||||||
| Inventories | (4,967 | ) | (93 | ) | (1,741 | ) | ||||||
| Accounts payable and accrued liabilities | 2,456 | 370 | (3,310 | ) | ||||||||
| Accrued compensation and benefits | 1,218 | 1,121 | 1,596 | |||||||||
| Other assets | (656 | ) | 3,297 | (2,083 | ) | |||||||
| Net cash used in operating activities | (80,646 | ) | (75,655 | ) | (68,418 | ) | ||||||
| INVESTING ACTIVITIES: | ||||||||||||
| Increase in short-term investments | (95,000 | ) | (119,000 | ) | (78,000 | ) | ||||||
| Realization of short-term investments | 69,412 | 34,735 | 88,395 | |||||||||
| Purchase of property and equipment | (4,598 | ) | (4,791 | ) | (21,604 | ) | ||||||
| Sale of property and equipment | — | — | 19,741 | |||||||||
| Payment of rent deposit | — | — | (5,043 | ) | ||||||||
| Purchase of intangible assets | (2 | ) | (3 | ) | (150 | ) | ||||||
| Net cash (used in) from investing activities | (30,188 | ) | (89,059 | ) | 3,339 | |||||||
| FINANCING ACTIVITIES: | ||||||||||||
| Repayment of finance leases | (524 | ) | (486 | ) | (1,692 | ) | ||||||
| Proceeds from drawdown of new debt | 25,000 | 36,000 | — | |||||||||
| Debt issue costs | (874 | ) | (1,216 | ) | — | |||||||
| Fee paid to noteholders | — | (3,900 | ) | — | ||||||||
| Proceeds from issuance of ordinary shares and warrants | 90,973 | 115,024 | 84,984 | |||||||||
| Net cash generated from financing activities | 114,575 | 145,422 | 83,292 | |||||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | (2,404 | ) | 5,690 | (2,802 | ) | |||||||
| Change in cash and cash equivalents | 1,337 | (13,602 | ) | 15,411 | ||||||||
| Beginning cash and cash equivalents | 11,603 | 25,205 | 9,794 | |||||||||
| Ending cash and cash equivalents | $ | 12,940 | $ | 11,603 | $ | 25,205 | ||||||
| Supplemental cash flow disclosures: | ||||||||||||
| Income taxes paid | $ | — | $ | — | $ | — | ||||||
| Interest paid | $ | 15,776 | $ | 11,838 | $ | 10,144 | ||||||
| Reconciliation of cash, cash equivalents and restricted cash: | ||||||||||||
| Cash and cash equivalents | $ | 3,923 | $ | 4,096 | $ | 20,165 | ||||||
| Restricted cash | $ | 9,017 | $ | 7,507 | $ | 5,040 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 12,940 | $ | 11,603 | $ | 25,205 |
FAQ
What were Quotient's Q4 fiscal 2020 financial results?
What is the performance of Quotient's COVID-19 antibody test?
What is Quotient's revenue outlook for fiscal 2021?
Has Quotient signed any new contracts recently?
What liquidity concerns does Quotient face?
