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(Alliance News) - Shares in Cambridge Cognition Holdings PLC collapsed Tuesday after the company said it expects to report its loss widened in the first half due to "difficult" trading conditions.
Shares in the neuroscience technology firm were 42% lower in London in morning trade at 36.35 pence each.
Cambridge Cognition estimated its loss for the six months to June 30 widened to GBP1.7 million from GBP1.0 million the year before. The company also expects to report a 21% drop in revenue to GBP2.2 million from GBP2.8 million.
"Whilst trading has been difficult this year for the core product range, the company is taking steps to improve commercialisation and to improve sales in the second half of 2019 and beyond into 2020," said Chief Executive Matthew Stork.
For the full year, Cambridge Cognition expects its loss to widen to GBP2.8 million from GBP1.4 million in 2018. The company is guiding for revenue of GBP5.5 million in 2019, 9.8% behind 2018's GBP6.1 million.
"Given the first half performance, action has been taken to reduce operating costs and to improve commercialisation. The company has a substantial qualified order pipeline for the remainder of the year and therefore expects a return to revenue growth in 2020 and, together with planned reductions in R&D expenditure for those projects moving into commercialisation, plans to breakeven in fourth quarter 2020," the company added.
At the end of the first half, Cambridge Cognition had an order book of GBP6.3 million, 5.0% higher than the year before. The company attributed this to contract wins from its digital solutions and voice testing platform in the first half.
The company said it carried out a strategic review at the beginning of 2019 to see where best to increase R&D spending.
Stork said: "A strategic review of the business, undertaken since I joined the company in March 2019, indicates that the prospects for the products that the company has developed over the last few years, particularly Digital solutions, eCOA and NeuroVocalix, are excellent. The changes seen in our market underline the importance of these investments."
The lower sales in the company's core clinical trials business was attributed to "several short-term market factors". These included the merger of the company's two largest pharmaceutical customers and a reduction in clinical trials assessing the cognitive safety profile of cardiovascular and pain medication.
"In addition, several recent high-profile clinical trial failures for drugs for Alzheimer's disease prompted several pharmaceutical companies to prune their late-stage pipelines," the company added.
