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Mass spectrometry

Microsaic Systems Revenues up 50.8% with good growth through 2019

Microsaic Systems plc (LON:MSYS), the developer of point of need mass spectrometry instruments, has today announced its audited financial results for the year ended 31 December 2019.

Financial highlights

  • Revenues up 50.8% at £0.87m (2018: £0.58m);
  • Gross margin 38.8% (2018: 41.8%); margins in H2 were 42.9% versus 31.9% in H1, reflecting better pricing from focussing on niche markets;
  • Operating expenses of £3.39m, 2.7% above last year due to additional investment in business development and R&D;
  • Net loss of £2.77m is in line with last year; and
  • Cash balances at year end of £2.62m (2018: £5.40m) and broadly in line with the Board’s expectations.

Key events

  • Significant progress in the traditional ‘small molecule’ chemical and pharmaceutical markets, with four new agreements signed during the year, bringing the total number of OEM and distribution agreements to 12;
  • Manufacturing is now fully outsourced;
  • Launch in January 2019 of the MiD® ProteinID detector products (“ProteinID”), which can measure in-situ small and large molecules, such as target proteins, their metabolites, and process feedstocks, and which has broad potential for applications in life-science markets, including bioprocessing;
  • Collaboration agreement signed with the Massachusetts Institute of Technology (“MIT”) to develop market targeted applications for ProteinID;
  • Positive results from a proof of concept study for ProteinID undertaken by the Centre for Process Innovation (“CPI”), highlighting key product benefits of the Microsaic technology in bioprocessing applications; and
  • Partnership announced with the CPI to demonstrate a working concept for a completely on-line analysis system for real-time control of bioprocessing.

Key events (post year-end)

  • On 26 February 2020 Microsaic announced that it had signed a global collaboration and joint sales and marketing heads of terms with Axcend Corp (“Axcend”) to integrate the compact Microsaic 4500 MiD® MS with the portable Axcend Focus LC® (“LC/MS system”), and to commercialise the combined system globally using both companies’ direct sales and selected distribution channels; and
  • On 3 March 2020 the Company announced the appointment of WH Ireland Ltd as joint broker.

Outlook

Good progress has continued to be made with signing new partners. The first part of the year has, however, had a slow start for orders and sales as commercial activities have been impacted, especially in China, SE Asia and other markets affected by the macroeconomic and local impact of the Covid-19 virus. Nonetheless, the Board believes that there will be further revenue growth in these territories in 2020, provided normal commercial activities resume fairly soon. The Company’s broader international sales growth is expected to come from three main sources:

(i) Growth from existing and new OEM and distribution partners across multiple application areas and geographies;

(ii) Extending the Company’s product offering with the launch of a range of new complete system products. These products will be integrated with Microsaic’s current offering and are aimed at providing a cost-effective approach to traditional liquid separation and protein separation; and

(iii) Direct sales to key targets in Europe which will benefit from the expanded product portfolio plus the provision of product servicing and maintenance contracts to drive after sales revenues.

The Board also expects further progress in bioprocessing from its collaboration with the CPI and MIT to deliver a concept for “on-line MS” bioprocessing, having been validated by a range of end-user applications.

Given the progress to date, and the planned expansion of the product portfolio, the Board remains confident in the longer-term prospects for the business. In light of this, the Board is considering the financing options available to the Company to ensure it is sufficiently capitalised for the opportunities ahead.

Glenn Tracey, CEO of Microsaic Systems, commented

“2019 saw good growth as the Company progressed its commercialisation strategy. Microsaic now has 12 OEM and distribution agreements, four of which were signed during the year, which has extended the Company’s global reach to include areas such as Southeast Asia, Korea, South Korea, and Japan.

“I am pleased with our operational development; at the beginning of the year we launched ProteinID which has wide-ranging potential and throughout the year gained traction with the likes of MIT and the CPI showing that bioprocessing remains a very exciting growth opportunity for the Company.

“Microsaic’s continues to enhance its industry profile and we aim to further strengthen our capabilities in 2020 in terms of commercialisation and product development.”

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