Molecular testing business Genedrive’s caution over going concern status
Manchester molecular testing business, genedrive, reported deeper losses for the year to June 30, 2023, and minimal revenues, which its chief financial officer, Russ Shaw, admits raises doubts about its status as a going concern.
Sales for the year were £55,000, up from £49,000 the previous year. The pre-tax loss of £5.981m is higher than £5.631m in 2022. The business has cash at bank of £2.6m, against £4.6m at the same time a year ago.
During the reporting period its MT-RNR1 ID Test received a positive final recommendation in NICE’s (National Institute for Health and Care Excellence) Early Value Assessment programme and has begun roll-out in Greater Manchester hospitals.
Commercial distribution agreements for its Antibiotic Induced Hearing Loss (AIHL) test are in place covering Spain, France, Austria, Greece, Saudi Arabia, Kuwait, Turkey and the Netherlands.
Genedrive is benefiting from a £1.2m multi-partner grant awarded for the validation of its CYP2C19 ID Kit in time-critical NHS settings. The company is expected to receive approximately £200,000 directly.
An Investor Placing Agreement of up to £5m was secured, with £2.3m drawn down during the year and a further £0.6m drawdown post year end.
And a pre-submission process is ongoing with America’s Food and Drug Administration (FDA) to determine regulatory process and requirements to place AIHL into the American market.
The company said it needs to bridge the funding gap before revenue generation allows is to be self-sufficient. The board said it is actively considering financing options.
It said this short term funding requirement is partly as a result of the uncertainty of further drawdowns from the Investor Placing Agreement which are conditional on certain factors including the company’s share price. Genedrive remains in close dialogue with the investors, further drawdowns would extend the cash runway and, therefore, the timeline for its planned financing activities.
As well as equity or debt financing the company is also actively seeking non-dilutive funding such as grants, funding partners for the FDA approval and charitable organisations willing to support the adoption of its quality-of-life enhancing innovations.
Chief financial officer, Russ Shaw, said: “As described in the accounting policies, we continue to adopt a going concern basis for the preparation of the accounts, but the combination of the above factors represent a material uncertainty that may cast significant doubt on the group and company’s ability to continue as a going concern.”
However, CEO, James Cheek, said: “I’m excited to be part of a company that is innovating pharmacogenetic testing by bringing the test closer to the patient, thereby making a real difference in patients’ lives and helping clinicians make quick insightful decisions that improve patient safety. We continue to develop and create solutions that challenge what is possible and improve patient outcomes.
“We are pioneers in what we do, so there is no well-trodden path between our technological advances and the commercial benefits. The NICE recommendation for our AIHL test demonstrates the beneficial impact of the test to both patients and wider society, whilst simultaneous providing potential and substantial cost savings to the NHS and we see that as instrumental to our UK roll out and expansion into international market.”
He added: “Our focus remains on pharmacogenetic testing as we continue to invest in product development focusing on maximising the benefits of our continually advancing Genedrive platform, characterised by its compactness, user-friendliness, rapid results, precision, and cost-effectiveness, qualities that makes it well suited for extensive adoption.
“We believe our products are uniquely positioned for time-critical pre-emptive pharmacogenetic testing in emergency care and we will continue to explore opportunities outside of MT-RNR1 and CYP2C19.”
