Microsaic Systems plc (AIM: MSYS), the developer of chip-based mass spectrometry instruments, announced this morning its audited financial results for the year ended 31 December 2017.
Glenn Tracey, CEO, commented: “The results for the year were in line with the Board’s previous expectations and illustrate why we have shifted our strategy and development emphasis onto new market sectors, particularly the very substantial market for manufacturing biopharmaceuticals. We have been pleased with the progress we have made in this area, particularly with the collaboration with one of the foremost players in the global market for scientific instrumentation. We were also pleased to have completed development of our latest miniaturised mass spectrometer, the 4500 MiD®, which has been designed to be highly robust and have a greater mass range for the detection of larger molecules.”
Corporate Highlights
·Significant progress in realigning the primary focus of the Company on applications in the growing biopharma market;
·During the year, successfully completed a technical feasibility phase with one of the foremost players in the global market for scientific instrumentation in a bioprocessing application and moving this into technical integration, ahead of a potential commercialisation phase;
·Collaborations with UK and US leaders in bioprocessing science and technology, which will inform further OEM discussions and wider application opportunities;
·Completion of development of the 4500 MiD®, with extended mass range specifically designed for peptide and small protein detection, as the current market moves into biological synthesis;
·Memorandum of Understanding signed to further extend the Company’s outsourced manufacturing to increase capacity and focus future investments on product innovation;
·Cost reduction programme implemented in Q1, reducing non-R&D headcount and leading to a reduction in operating expenses of £616,704 compared with 2016; and
·Board strengthened with the appointment of Glenn Tracey CEO in September 2017 and Peter Grant as Non-Executive Chairman in January 2018.
Strategic Progress
During 2017, significant progress has been made in realigning the primary focus of the Company on applications in the growing biopharma market. In April we signed an amended agreement with one of the foremost players in the global market for scientific instrumentation. Following the successful completion of phase one, we signed a further extension to our collaboration in December. This second phase is expected to be completed in H2 2018, and our goal is to follow this with full phase three product development. This alone would represent a major commercial opportunity for the Company. During 2017, we have also continued to develop relationships with other partners to add further sales opportunities in the biopharma market.
The Company has a strong product development programme aimed at supporting its bioprocessing applications and maintaining its leading position in miniaturised mass spectrometer detection instruments and technologies. Enhancements currently in the pipeline will further extend the mass range for biologics detection, and introduce new capabilities, such as on-line desalting, which allows for the purification of biomolecules in real time.
Key Financials for the year ended 31 December 2017
In June 2017 the Company advised that conditions in our traditional small molecule markets continued to be challenging, and as a result, our H1 revenues were significantly reduced compared with H1 2016. In H2 these conditions continued, with some improvement in sales over H1 but, as expected, full year revenues at £342,514 were substantially lower than 2016 (£851,180). The challenge of achieving growth in our traditional markets illustrates why we have shifted our strategy and development emphasis onto new market sectors, particularly in bioprocessing, where we believe there are significant commercial opportunities in the medium to long term.
The Board mitigated the impact of the fall in revenues by reducing overheads, ensuring that the cash position at 31 December 2017 was in line with market expectations at the time of the 2016 fundraise, whilst at the same time maintaining R&D capacity. Overheads in 2017 were £3,049,611, £616,704 below 2016 and, as a result, EBITDA at -£2,754,284 (2016: -£3,267,408), loss before tax at £2,888,482 (2016: £3,405,804) and cash at £3,182,176 (2016: £5,728,544) were all broadly in line with the Board’s expectations.
