(Alliance News) - Neuroscience technology company Cambridge Cognition Holdings PLC on Thursday reported a fall in interim revenue in line with previous guidance that sales were lower than expected.
In the six months to June 30, revenue fell by 21% to GBP2.2 million from GBP2.8 million and its pretax loss widened to GBP1.7 million from GBP1.0 million. Administrative expenses rose 3.4% to GBP3.5 million from GBP3.4 million.
More positively however, its contracted order book rose 6.6% year-on-year to GBP6.3 million from GBP6.0 million. Cambridge Cognition attributed this to contract wins from its digital solutions and voice testing platform.
Software revenue fell 17% to GBP2.1 million from GBP2.5 million and Services revenue fell by 26% to GBP1.3 million from GBP936,000. The Hardware segment, though a small part of the company, delivered a 33% rise in revenue to GBP40,000 from GBP30,000.
Software and Services revenue was hit by a fall in sales in its clinical trials business which Cambridge Cognition blamed on two of its pharmaceutical customers merging, leading to a delay in sales contracts being finalised.
There was also a reduction in the number trials to test cognitive safety in cardiovascular and pain medication programmes, a sector that Cambridge Cognition has achieved "significant commercial success in recent years".
Cambridge Cognition added that an industry-wide fall in later-stage clinical trials for Alzheimer drugs, following "several high-profile clinical trial failures", also hurt the company.
Looking ahead, the firm forecasts a year-on-year fall in revenue to GBP5.5 million, down 10% from GBP6.1 million in 2018.
Cambridge Cognition's outlook thereafter is more positive however, due to its "substantial and growing qualified order pipeline", it expects to return to revenue growth in 2020. As it moves projects into the commercialisation phase, research & development expenses will also fall, the company added, and it plans to breakeven in the fourth quarter of 2020.
Chief Executive Matthew Stork said: "As announced in our trading update on August 27, trading in the core business in the first half has been challenging. However, R&D investment in recent years has helped deliver first half successes across a number of areas.
"Following a recent strategic review, conducted since I joined the company in March, we have refocused on the high-value clinical trials market, concentrating on sales of CANTAB with eCOA add-on sales and digital and voice-based cognitive assessment solutions. The strengths of the company in providing biomarkers and supporting clinical trials for central nervous systems disorders puts us in a great position to thrive in the growing digital market."
Shares in the company were untraded in London on Thursday morning, last quoted at 26.00 pence.
Cambridge Cog (COG)