Renalytix Reports Financial Results for First Quarter of Fiscal Year 2024
Renalytix plc (NASDAQ: RNLX) (LSE: RENX) reported financial results for fiscal Q1 ended September 30, 2023. Recent highlights include ongoing financing discussions, cost-cutting initiatives, FDA authorization of kidneyintelX.dkd, Medicare reimbursement process advancements, senior executive appointment, and distribution agreement execution. The company also revealed first quarter 2024 financial results, with a $0.5 million revenue and a net loss of $10.2 million.
Positive
Ongoing financing discussions aim to provide operating runway through early calendar 2026
FDA authorization of kidneyintelX.dkd and real-world outcomes data published
Long-term Medicare reimbursement process advanced with August independent Clinical Advisory Committee meeting
Distribution agreement executed to expand availability of kidneyintelX.dkd to an estimated four million diabetic kidney disease (DKD) patients in the Middle East
Company recognized $0.5 million of revenue during the first quarter of fiscal 2024
Negative
Net loss of $10.2 million for the three months ended September 30, 2023
11/14/2023 - 07:00 AM
LONDON and SALT LAKE CITY, Nov. 14, 2023 (GLOBE NEWSWIRE) -- Renalytix plc (NASDAQ: RNLX) (LSE: RENX), an artificial intelligence-enabled in vitro diagnostics company, focused on optimizing clinical management of kidney disease to drive improved patient outcomes and advance value-based care, today reported financial results for the fiscal first quarter ended September 30, 2023.
Recent Highlights (including post period events)
Financing discussions in process with goal to provide operating runway through at least early calendar 2026, enabled by cost reductions and sales growth from adoptions by new hospital systems and independent physicians Cost cutting initiative projected to reduce payroll expense by over 35% and total SG&A by over 30% year-over-year. Now with FDA authorization of kidneyintelX.dkd, real-world outcomes data published, and anticipation of inclusion in final medical guidelines, personnel have been realigned to focus on sales KidneyIntelX EPIC-integrated commercial roll-out progressing at Atrium Health with expected integration completion in December 2023 Additional Illinois hospital system launch expected December 2023 to highlight health equity benefits of KidneyIntelX guided care pathway in diabetes Long-term Medicare reimbursement process advanced with August independent Clinical Advisory Committee meeting for Local Coverage Determination (LCD), and submission of application for National Coverage Determination (NCD) Second Medicare contractor, First Coast Options, now paying for billed KidneyIntelX tests Additional key commercial payer coverage achieved, including contracts with: BlueCross and BlueShield of Texas, the largest statewide health care plan serving 7,000,000 members Parkland Community Health Plan (PCHP), a Dallas-based insurance plan with over 300,000 covered lives Provider Network of America (PNOA) a PPO plan contracted with 525,000 physicians, 27,500 hospitals and membership of over 8 million patients across all 50 states Evidence from 12 months of care following KidneyIntelX prognostic testing released at American Diabetes Association demonstrated clinical actions that led to improvement in both diabetes (A1C reductions) and kidney health (eGFR slope improvement) in patients with type 2 diabetes and chronic kidney disease; detailed results paper submitted for publication Senior executive Howard Doran appointed as chief business officer, leading global sales effort with full direct-to-physician sales force expected to be in field by January 2024 Testing volumes in fiscal first quarter: Total tests of 1,297 of which 56% were billable, compared to 1,232 (57% billable) in the prior quarter and 1,252 (82% billable) in the prior-year fiscal first quarter. Certain study-related tests at Mount Sinai are no longer billable following transition from Mount Sinai as payor to traditional commercial insurance billing, as previously communicated 699 tests conducted at Mount Sinai (529 were billable) 396 tests conducted at Atrium Health Wake Forest (to date, all non-billable study tests); Remainder mainly direct-to-physician billable commercial testing Clinical advisory board featuring multi-disciplinary experts formed to advise on adoption of FDA authorized kidneyintelX.dkd within the 14 million patient addressable market in the U.S. Distribution agreement executed to expand availability of kidneyintelX.dkd to an estimated four million diabetic kidney disease (DKD) patients in the Middle East Intellectual property: U.S. Patent Office allows patent claims for intellectual property exclusively licensed to Renalytix, specifically biomarkers sTNFR1 and sTNFR2 used in KidneyIntelX technology IP relating to protein biomarker pipeline continues to expand with data presented at American Society of Nephrology Kidney Week from collaborators at Joslin showing potential for expanded indications and utility KidneyintelX.dkd recommended for pricing by Centers for Medicare & Medicaid Services (CMS) at $950 per test, matching the pricing of the pre-FDA authorized version of the prognostic; final decision to be made by the end of December 2023. First Quarter 2024 Financial Results $0.5 million of revenue, compared to $1.0 million for the three months ended September 30, 2022. Cost of revenue for the three months ended September 30, 2023 was $0.5 million , compared to $0.7 million for the three months ended September 30, 2022.
Operating expenses for the three months ended September 30, 2023 was $8.8 million , compared to $12.0 million for the three months ended September 30, 2022. As previously stated in FY23, we have taken action to lower annual expenditures by over $11 million with additional cost reduction initiatives underway to extend cash runway while preserving revenue generating activity.
Within operating expenses, research and development expenses were $2.8 million for the three months ended September 30, 2023, decreasing by $1.0 million from $3.8 million for the three months ended September 30, 2022. The decrease was attributable to a $0.7 million decrease in compensation and related benefits and a $0.7 million decrease related to external R&D projects and studies with Mount Sinai, Wake Forest and Joslin Diabetes, offset by a $0.3 million increase related to consulting and professional fees and $0.1 million increase in other miscellaneous expenses.
General and administrative expenses were $6.1 million for the three months ended September 30, 2023, decreasing by $2.2 million from $8.3 million for the three months ended September 30, 2022. The decrease was driven by our ongoing cost cutting measures, which resulted in a $1.0 million decrease in compensation and related benefits, including share-based payments, due to decreased headcount, $0.4 million decrease in consulting and professional fees, $0.3 million decrease in insurance costs, $0.2 million decrease in marketing, and $0.3 million decrease in other operating expenses.
Net loss was $10.2 million for the three months ended September 30, 2023, compared to a net loss of $12.0 million for the three months ended September 30, 2022.
Cash and cash equivalents totaled $13.9 million as of September 30, 2023.
The Company will host a corresponding conference call and live webcast today to discuss the financial results and key topics including business strategy, partnerships and regulatory and reimbursement processes, at 8:30 a.m. (ET) / 1:30 p.m. (GMT).
Conference Call Details: here . Upon registering, a dial-in number and unique PIN will be provided in order for interested parties to join the conference call.Webcast Registration link: https://edge.media-server.com/mmc/p/mdyeh2j3
For further information, please contact: Renalytix plc www.renalytix.com James McCullough, CEO Via Walbrook PR Stifel (Nominated Adviser, Joint Broker) Tel: 020 7710 7600 Alex Price / Nicholas Moore / Nick Harland / Samira Essebiyea Investec Bank plc (Joint Broker) Tel: 020 7597 4000 Gary Clarence / Shalin Bhamra Walbrook PR Limited Tel: 020 7933 8780 or renalytix@walbrookpr.com Paul McManus / Alice Woodings Mob: 07980 541 893 / 07407 804 654 CapComm Partners Peter DeNardo Tel: 415-389-6400 or investors@renalytix.com
www.kidneyintelx.com www.renalytix.com
Forward-Looking Statements
RENALYTIX PLC CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For the Three Months Ended (in thousands, except share data) 2023 2022 Revenue $ 459 $ 969 Cost of revenue 502 696 Gross (loss) profit (43 ) 273 Operating expenses: Research and development 2,787 3,757 General and administrative 6,059 8,250 Performance of contract liability to affiliate — (12 ) Total operating expenses 8,846 11,995 Loss from operations (8,889 ) (11,722 ) Equity in net (losses) earnings of affiliate — (9 ) Foreign currency gain, net 289 1,730 Fair value adjustment to VericiDx investment (447 ) (854 ) Fair value adjustment to convertible notes (1,207 ) (1,213 ) Other income, net 100 114 Net loss before income taxes (10,154 ) (11,954 ) Income tax benefit — 1 Net loss (10,154 ) (11,953 ) Net loss per ordinary share—basic $ (0.11 ) $ (0.16 ) Net loss per ordinary share—diluted $ (0.11 ) $ (0.16 ) Weighted average ordinary shares—basic 94,767,841 74,804,712 Weighted average ordinary shares—diluted 94,767,841 74,804,712 Other comprehensive income (loss): Changes in the fair value of the convertible notes 75 397 Foreign exchange translation adjustment 42 (1,087 ) Comprehensive loss (10,037 ) (12,643 )
RENALYTIX PLC CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share data) September 30, 2023 June 30, 2023 Assets Current assets: Cash and cash equivalents $ 13,891 $ 24,682 Accounts receivable 1,014 776 Prepaid expenses and other current assets 1,566 1,424 Total current assets 16,471 26,882 Property and equipment, net 944 1,027 Right of Use Asset 131 159 Investment in VericiDx 978 1,460 Other Assets 1,016 1,101 Total assets $ 19,540 $ 30,629 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 1,715 $ 1,485 Accounts payable – related party 1,653 1,451 Accrued expenses and other current liabilities 4,566 6,644 Accrued expenses – related party 2,539 1,963 Current lease liability 131 130 Convertible notes-current 4,569 4,463 Total current liabilities 15,173 16,136 Convertible notes-noncurrent 5,848 7,485 Noncurrent lease liability 10 41 Total liabilities 21,031 23,662 Commitments and contingencies (Note 10) Shareholders’ equity: Ordinary shares, £0.00 25 par value per share: 102,537,697 shares authorized; 95,019,440 and 93,781,478 shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively 290 286 Additional paid-in capital 188,031 186,456 Accumulated other comprehensive loss (1,333 ) (1,450 ) Accumulated deficit (188,479 ) (178,325 ) Total shareholders’ (deficit) equity (1,491 ) 6,967 Total liabilities and shareholders’ (deficit) equity $ 19,540 $ 30,629
RENALYTIX PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended September 30, (in thousands) 2023 2022 Cash flows from operating activities: Net loss $ (10,154 ) $ (11,953 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 127 130 Stock-based compensation 523 767 Equity in losses of affiliate — 9 Reduction of Kantaro liability — (12 ) Fair value adjustment to VericiDx investment 447 854 Unrealized foreign exchange loss — 456 Fair value adjustment to convertible debt, net interest paid 945 921 Non cash lease expense 28 — Changes in operating assets and liabilities: Accounts receivable (238 ) (322 ) Prepaid expenses and other current assets (153 ) 312 Receivable from affiliates — (13 ) Accounts payable 250 555 Accounts payable – related party 202 1,287 Accrued expenses and other current liabilities (2,060 ) (125 ) Accrued expenses – related party 579 22 Deferred revenue — (7 ) Net cash used in operating activities (9,504 ) (7,119 ) Cash flows from investing activities: Net cash used in investing activities — — Cash flows from financing activities: Payment of convertible notes principal (1,060 ) (1,060 ) Payment of issuance costs (5 ) — Proceeds from the issuance of ordinary shares under employee share — 116 Net cash used in financing activities (1,065 ) (944 ) Effect of exchange rate changes on cash (222 ) (2,230 ) Net decrease in cash and cash equivalents (10,791 ) (10,293 ) Cash and cash equivalents, beginning of period 24,682 41,333 Cash and cash equivalents, end of period $ 13,891 $ 31,040 Supplemental noncash investing and financing activities: Noncash lease liabilities arising from obtaining right-of-use assets $ 4 $ — Cash Paid for interest on convertible debt $ 249 $ 292
Recent highlights include ongoing financing discussions, cost-cutting initiatives, FDA authorization of kidneyintelX.dkd, Medicare reimbursement process advancements, senior executive appointment, and distribution agreement execution.
The company recognized $0.5 million of revenue and had a net loss of $10.2 million during the first quarter of fiscal 2024.
