Cambridge Cognition Holdings plc share price, company news, analysis and interviews

Cambridge Cognition Holdings plc (LON:COG) Chief Executive Officer Matthew Stork caught up with DirectorsTalk for an exclusive interview to discuss highlights from interim results, main drivers to the increased order book, how the acquisitions are progressing, debt funding and the outlook for this year and 2024.

Q1: Matthew, interim results have been announced today. Could you just take us through the highlights?

A1: Cambridge Cognition reported a very positive first half with a contracted order book up to nearly £20 million, orders up 5% on the preceding period and revenues just ahead of last year. It’s been difficult trading conditions, we’re seeing some improvements now.

In the first half we’ve had really good progress, you may well know that we made two acquisitions, one at the end of last year and one right at the beginning of this year. We’ve integrated those, reorganised the business as well, reduced costs substantially while continuing to grow our sales pipeline and deliver developments.

So, we’re in a good position for the second half and really looking forward to continuing to grow the business and move into profitability.

Q2: You mentioned an increased order book to £19.9 million for the company, what were the main drivers?

A2: Well, the biggest driver is that we’re now able to sell the combined solutions from the three companies, so touchscreen, cognitive assessments and eCOA from Cambridge Cognition, the voice-based assessments for the Winterlight Labs business that we acquired at the start of this year, and also the decentralised clinical trial solutions and that’s really helped drive that and move it forward.

Q3: You mentioned the two acquisitions of Clinpal and Winterlight Labs in late 2022 and January 2023, can we have an update on how they’re progressing and the impact that they’re having on the company?

A3: Right at the start of this year of course we were still completing the acquisition of Winterlight and then our objective for the first half was to integrate the acquisitions and gain early wins and we have done just that.

So, commercially, we’ve combined the sales teams, that was the first thing we did. We completed targeted cross-selling and joint promotion, particularly at conferences where all three companies or two of the three have been previously. We’ve integrated the businesses fully, so we’ve got one organisational structure, merging the teams for example, one product team, one sales team as I already discussed, one development team and so on.

At the same time, we’ve completed developments of new solutions for both Winterlight and Clinpal, expanding the breadth of the offering further as was planned when we made the acquisitions.

The impact really is considerable, in the short term alone we’re seeing numerous conversations with customers about combined offerings, which will help grow orders and revenues and we’re also continuing to position Cambridge Cognition as a leader in the space.

Moreover, we are really pleased with our new team members and really delighted, culturally the teams fit really well together and we’ve got much deeper expertise in the broader field now, so really good progress.

Q4: The company also announced a debt funding today, could you just talk us through the reasoning behind the funding and what it’ll actually allow the company to do?

A4: We announced a £3 million pound secured term loan to provide the company with additional working capital and to support continued investment in product development and solution integration.

Q5: Just thinking about going forward, how would you describe the outlook for Cambridge Cognition for 2023 and next year?

A5: The outlook’s really really good for us in that, while we saw trading conditions being difficult late in 2022 and at the start of ‘23, we’ve seen a renewed level of engagement from major pharmaceutical companies, particularly with high level of interest in our solutions. We’d expect further improvement in the future, particularly as interest rates drop and investment flows more freely into the smaller biotech sectors.

We’ve got a really good healthy pipeline of opportunities now and that sizeable, contracted order book so we’re looking forward to more revenue growth. Having reduced costs over the first half, we’re in a good position to move towards profitability this half and further profitability next year. We’re really excited about the future, it’s a dynamic area and we’re looking forward to 2024 and beyond.

Cambridge Cognition Holdings plc (LON:COG) Chief Executive Officer Matthew Stork caught up with DirectorsTalk for an exclusive interview to discuss interim results, growth drivers, their strengthened leadership team, new therapeutic areas and what investor can expect in the next six months.

Q1: First off, Matthew, congratulations on Cambridge Cognition’s interim results to the 30^th of June. Could you just talk us through the highlights of the first half?

A1: We’re really pleased with the results. We had strong financial growth, won major contracts in neuroinflammatory disorders, schizophrenia and PTSD with our gold standard cognitive assessments, CANTAB, and our digital solutions as well. We also started a major validation study with our voice-based solution, NeuroVocalix, really exciting results from those and as well, we’ve expanded our team and are investing for further growth.

Q2: Now, you mentioned growth in revenue of 31% for the company compared to the first half of last year. What’s driving that growth?

A2: Well, we had strong orders growth in 2021 for contracts due to start later in 2021 and in early 2022 so we’ve recognised revenues from those contracts at start and then on an ongoing basis of course.

The underlying drivers for those growths really are that we’ve been delivering on commercial execution, for example, we tripled the number of leads generated by our sales marketing team in the period and we’ve expanded our product range over the last few years and continue to do so with more cognitive assessments, electronic clinical outcomes assessments, that’s questionnaires and scales typically used in clinical trials, and developing and launching virtual clinical trial modules.

So, we’ve got an attractive, broader portfolio, and we can also upsell more customers.

Q3: You’ve also strengthened your senior leadership team with a number of appointments, could you just expand on it for us?

A3: We’ve got an excellent leadership team, most of us worked together for many years now. This year we’d promoted Dr. Francesca Cormack to be our Chief Scientist, she’s extremely knowledgeable, professional in the sector, really well known and joins from within the company so we know her very well, of course. We’ve also hired Stephen Symonds to be our CFO, Steven joins from a background with extensive financial experience and direct knowledge of drug development from his previous company so he’s a great hire into the team.

Q4: Now, you talk about PTSD as a new therapeutic area with potential growth, how are you going about developing opportunities in new therapeutic areas?

A4: We set out a goal a few years ago to expand new therapeutic areas with our existing portfolio and we had great success in schizophrenia and in neuro-oncology over the last couple of years and now, we’re really pleased to be working on PTSD studies as well.

There’s a real unmet need in the area and a number of new drugs, there’s only a couple of drugs available for PTSD but there are a number of new areas being worked on. Our scientists have been working with some leading early adopters in the field providing consultation on possible clinical trial design and protocols and we’ve been really fortunate in succeeding in winning contracts and collaborations in those fields.

The payoff is really likely to be over a number of years into the future as those trial results are released, and then we should be in position to expand usage in those therapeutic areas.

Q5: Just looking forward, what can investors expect from Cambridge Cognition in the next six months?

A5: We’re operating in growth markets and we’re continuing to invest in commercial execution and developing new IP and pursuing corporate business development opportunities. So, we’ve got a lot of work happening in the background and we expect to see more progress over the next six months, for sure.

Financially, we’ve got an excellent contracted order book, which is now up at £18.6 million, that’s a record for the company, as of the end of June, and a really healthy pipeline of opportunities.

So, we’ve got good coverage of the second half of 2022, and reasonable visibility of 2023 already. On top of that, we’re working on projects that could support faster growth into the future so it’s a really exciting place to be.

Cambridge Cognition Holdings plc (LON:COG) Chief Executive Officer Matthew Stork caught up with DirectorsTalk for an exclusive interview to discuss interim results, sales order of 74%, Monument Therapeutics, launch of Neurovocalix and what investors can expect over the next 6-12 months.

Cambridge Cognition Holdings is a world leading neuroscience technology company committed to enhancing global reserahc, accelerating treatment development and improving patient outcomes in conditions affecting brain health by optimising the assessment of cognition. This week, the company has announced its interim results for the six months ended 30^th June 2021 and joining me today to discuss the update is CEO Matthew Stork.

Q1: First off, congratulations on a strong set of interim results, could you just talk us through the highlights?

A1: We’re really pleased with our financial results in the first six months of this year with really good commercial performance and execution of our strategy.

We’ve achieved a record level of orders in the half and, as a result, we’ve seen a growth in revenues of 50% to £4.5 million and we’ve also returned a profit.

Commercially, we’ve had a lot of success. We’ve won a long term evergreen licencing agreement, contracting new therapy areas including a long COVID and a brain cancer study, two studies there. Also, an order for our largest ever funded study which is a mixture of at-home longer tests plus short daily tests, two to three  times a day as well.

We’ve also continued to execute our strategy, for example expanding our portfolio, that’s been one of our strategies with the provision into our production solution of Neurovocalix that can conduct common verbal cognitive tests. We’ve also spun-out Monument Therapeutics so it’s been a really successful first half.

Q2: You mentioned an increase in sales order of 74% to £8.6 million, what’s that down to?

A2: It’s down to several factors. We’ve been really focussing on commercial delivery and also investing in sales resource over the last couple of years to increase coverage and at the same time, there have been underlying market factors causing market growth with upswing in clinical trials for central nervous systems’ disorders of around 20%. During the pandemic, a shift, and more investment in virtual clinical trials, or at least in part, so maybe hybrid clinical trials as well.

Our solution is ideal for those, we’ve demonstrated that the tests that we provide work very similarly at home as they do in the clinic and so we’ve been taking orders for those. We’ve also been taking a couple of very large less usual order such as the big study mentioned earlier.

Q3: The company completed the successful spin-out and venture financing of Monument Therapeutics, how will that affect the company?

A3: Monument is a really exciting drug development company and we’ve been incubating it for a couple of years now. We started off mainly grant funded and the development plans has moved into needing more funding to start clinical trials in its own right.

After the venture capital investment, we continued to be a major shareholder, owning around a third of the company at the moment and we have a licence agreement in place that will pay royalties on successful commercialisation by Monument.

So, it provides us with another potential revenue stream in the future as well.

Q4: You also mentioned the launch of Neurovocalix which is now ready for clinical trials, what does that mean for the business?

A4: We’re really excited about the potential for Neurovocalix, it can automate common verbal cognitive tests to be used by many neuroscientists, phycologists, neurologists in clinical trials.

In Q1, we completed development of a regulatory compliance system that can be used by our pharmaceutical clients in clinical trials. Now we’re working with leading universities to validate the system, show that it works with patients to demonstrate that it’s collecting the right data.

We’re marketing the solution now, we’ve got several clients interested in placing orders, of course they want the validation data so we expect to land those once the validation is done.

Q5: Just looking forward, what can investors expect from Cambridge Cognition in the next 6-12 months?

A5: We’re progressing well through the second half of the year already, of course, and we’re tracking well towards the year-end and we really continue to focus on our commercial execution, broadening our portfolio, investing in developing new solutions and building partnerships.

I’m really looking forward to a successful full year for 2021.

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.