Cambridge Cognition Holdings plc (LON:COG) Chief Executive Officer Matthew Stork caught up with DirectorsTalk for an exclusive interview to discuss the highlights of their interim results, increase in new orders, the outlook and what to expect in the coming months.
Q1: First off, interim results just released, can you talk us through the main highlights of the year to date?
A1: We’re very pleased with performance and as we’ve been executing new strategy, moving from an R&D phase through to commercialisation phase and that’s proving successful.
So, orders are up 87% year on year and we’ve had a strong conversion to revenues, they were up 39% on the same period last year. We’ve continued to deliver even with COVID-19 as a backdrop and the growth in orders is offset and what has been a slight slowdown because of the pandemic.
At the same time, we’ve reduced our cost base as we’ve been focusing on commercialisation and our admin expenditure is down by 18and on the prior year.
So, overall, we’ve posted a considerably improved operating profit and cash position so a good start of the year.
Q2: Now, we’ve seen major contract wins across all product families and at all stages of clinical development. Can you just expand on the Cambridge Cognition offering for us a little bit?
A2: So, the company is a digital health tech company and provides software to understand and assess brain health and we do that primarily for high value clinical trials, and that that’s the majority, nearly all of our business.
We work with the top pharmaceutical companies and well-funded companies around the world and we’ve got four main product areas:
- The lead product is CANTAB, it’s our flagship product, well known in the sector and that’s a leading cognitive assessment and that’s used, say, monthly.
- We’ve got digital solutions that measure cognition on a daily, once/ twice a day, or frequent basis.
- We have electronic clinical outcomes assessments, eCOA product as they’re called, and they collect details from patients and clinicians about progression.
- We then have a new voice-based assessment system in development as well.
Q3: The announcement highlighted new orders confirmed in the period increased, as you said earlier, 87% to £4.93 million. Can you tell us more about that and how the company has been impacted by COVID-19?
A3: So, we shifted strategy to be commercially focused and that’s been helping us drive orders growth, we launched the new eCOA, electronic clinical outcomes assessment solution late last year and we’ve been actively selling our digital solution.
They resulted in number of large orders and a very good number of medium and smaller orders throughout the first half and indeed into Q3. In the note we posted good orders growth in the first half but they carried on through July and August and we’ve built a really good backlog of good contracted orders to carry us through into the future as well.
COVID-19 has been difficult for us, not surprisingly, first and foremost, we’ve taken care of our team to make sure that we reduce contact with other people to avoid spreading the disease. We’ve been working from home pretty much from the start and all of our systems work remotely very well and we’ve had absolutely no business disruption which has been good news.
For the business though, we’ve had some difficulties with some, a minority, of clinical trials being paused at some point, most over the main lockdown period, so they’ve all subsequently restarted. At the same time, there have been an industry rethink so clinical trials are really the lifeblood for pharma company so there’s been a shift to thinking about virtual or part-virtual clinical trials, and that’s been a silver lining for us.
We’ve provided support for virtual clinical trials since 2015 and we’ve won two orders for these in the first half and we’ve got many more opportunities for virtual orders that we’re discussing with our customers now.
Q4: Just looking forward though, how would you describe the outlook for Cambridge Cognition and what can we look forward to seeing in the coming months?
A4: Well, we’ve got a positive outlook through to the year end and into 2021. We’ve got forecast revenue recognition that’s on track for the year and we continue to have a strong pipeline of opportunities aim to be profitable in Q4 2020.
As we move into 2021, we’ll continue to expand our offering and add further sales resources to build the business. Of course, with COVID-19 and the pandemic that creates uncertainties but at the same time, there is that silver lining of more opportunities for us as well.
We’re in a really exciting position we think overall, and we’re in fast growth, 20% or so growth in markets, and large markets as well, $1 billion market is the size of eCOA market. There are major shift changes happening with more digital trials and more virtual clinical trials. We believe we’re well poised to take advantage of those trends and grow further.