Unaudited revenues up 594% on H1 2020 and 52% on H1 2019, reflecting new business model
Microsaic (AIM: MSYS), the developer of point of need mass spectrometry (“MS”) instruments is delighted to announce that a strategic change of business model early in 2021 has resulted in recovery of growth in revenues, increasing to £0.499m in H1 2021, significantly above H1 2020 and that of H1 2019, a pre-pandemic benchmark.
First Half Highlights:
· Unaudited revenues of £0.499m
o 594% increase over H1 2020 (£0.072m) and 52% over H1 2019 (£0.328m).
· January: transformative placing which raised £5.5m (gross), board changes and strategic shift away from independent development to a commercial strategy with external partners.
· Five key commercial hires to accelerate revenues on environmental detection of water contamination and in human health markets, delivering real-time on-site monitoring and data analytics with connected Internet of Things (“IoT”), AI and support services.
· March: commercial agreement with DeepVerge plc (“DeepVerge”; AIM: DVRG), through which Microsaic products and services are being deployed internationally in applications such as water monitoring of chemicals and pathogens, and in support of DeepVerge’s rapidly growing Labskin division.
· May: initial shipments to a new Chinese partner to obtain a medical licence in China for real-time therapeutic monitoring of drugs with commercialisation (including service and reagents revenue sharing) expected in 2022.
· May: collaboration with Swansea University to combine real-time monitoring of environmental water using AI in determining the link between environmental chemical pollution and human health.
· June: further order from DeepVerge under the framework agreement
Post Period Events:
· July: The world first demonstration of real-time monitoring of on-line production of biotherapeutic drugs such as vaccines and anti-cancer treatments using Process Analytical Technology within a Microsaic micro-engineered MS solution.
Ongoing commercial developments
· Disruptive low-cost and mobile system to detect organic chemicals in water and wastewater adapted for in-field deployment.
· Detection of volatile contaminants in water, with product demonstration expected in H2 of this year. This significantly expands the reach of applications with mobile capability for environmental regulatory authorities.
· Multiple collaboration projects, including in-surgery cancer diagnostics, with the aim to secure commercial supply agreements with the potential to revolutionise surgical oncology interventions.
Glenn Tracey, CEO of Microsaic Systems plc, commented:
” I am thrilled to report this transformational performance for the first half of 2021, after the effects that the COVID-19 lockdown had on our customers, employees in 2020 and the financial strain this placed on the Company. The new commercial strategy of collaborating, partnering and revenue sharing has moved the Company away from equipment-only sales. We are now offering integrated real-time data analytics with AI alongside our mass spectroscopy hardware, providing complete solutions such as in-field environmental testing and on-site human diagnostics. The change of strategy and adjustment to a revenue sharing business model has demonstrated solid evidence of sales growth which is expected to continue into H2.
Given the ongoing uncertainties over the effects of further waves of COVID-19 across multiple geographies, the Board remains cautious on short-term forecasting. Accordingly, we will consider whether it is appropriate to reinstate guidance to analysts after publication of the interim results, which is expected to take place during the autumn. However, prospects over the mid-term are looking more positive, with the encouraging first half results being more reflective of the Company’s potential, and we look forward to our next scheduled performance update. ”
Related party transaction
On 24 March 2021, the Company announced that it had entered into a non-exclusive Framework Services Agreement (the “Agreement”) with DeepVerge. The multi-year Agreement provides for the supply by Microsaic to DeepVerge of miniaturised mass spectrometry equipment and services, across DeepVerge’s sales, marketing, and distribution channels. The Agreement included an initial order of three units as well as a commitment to purchase further units in connection with the installation of pilot demonstration facilities at DeepVerge’s York laboratories (together, the “Orders”).
The Company has processed a further smaller purchase order from DeepVerge (the “Further Order”) under the Agreement, supplying certain additional mass spectrometry equipment for quality and contamination detection in a range of markets including water and soil analysis. The value of the Further Order is approximately £72,000 and constitutes a related party transaction under Rule 13 of the AIM Rules. Additionally, Microsaic is loaning an additional item of equipment to DeepVerge for no consideration, to enable an early evaluation of certain technical aspects of its potential use.
At the time of entering into the Agreement, the independent directors, being Glenn Tracey and Bevan Metcalf, considered, having consulted with the Company’s nominated adviser, that the terms of the Agreement, were fair and reasonable insofar as the Company’s shareholders are concerned. The independent directors also consider that the terms of the Further Order are consistent with the Agreement and with the terms of the initial Orders, and therefore they consider that the terms of the Further Order continue to be fair and reasonable insofar as shareholders are concerned.
Microsaic Systems plc
Glenn Tracey, CEO – Bevan Metcalf, FD
+44 (0)1483 751 577
About Microsaic (www.microsaic.com)
Microsaic listed on AIM in 2011 to develop and commercialise micro-engineering chip-based mass spectrometry equipment. Having invested £30m over the last 20 years before and after the IPO, Microsaic has a robust patent portfolio in cutting-edge technology purpose-built for “Industry 4.0” which enables analytical detection and characterisation at the point-of-need, whether within a human health environment, conventional laboratory setting, or within a bioprocessing facility for continuous mass spectrometer detection and monitoring of data at any step in the process workflow.
Microsaic’s products and systems are commercially available through global markets via a network of regional and local partners, targeting its core laboratory, manufacturing, and point-of-need applications.
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