Renalytix
plc
("Renalytix" or the
"Company")
Renalytix Reports Financial
Results for Third Quarter of Fiscal Year 2024
LONDON and NEW YORK, May 15, 2024 - 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 third quarter ended March 31,
2024.
The
Company made continued progress towards commercial adoption with
inclusion of KidneyIntelX in clinical guidelines, issuance of a
Medicare coverage draft, performance of new direct to physician
sales force, April launch of U.S. Food and Drug Administration
("FDA") De Novo authorized kidneyintelX.dkd, and release of new
real-world outcomes evidence. Optimization of shareholder
value continues with year over year significant expense reductions,
completion of equity financing, and the initiation of a strategic
sale process.
Highlights include:
•
|
KidneyIntelX included as only
biomarker test for prognostic risk assessment in landmark update of
international clinical practice guidelines (https://kdigo.org/guidelines/)
|
•
|
Medicare Local Coverage
Determination draft issued for FDA-authorized kidneyintelX.dkd by
Medicare contractor National Government Services (NGS) with final
issuance expected in the near term
|
•
|
Formal launch of the FDA-authorized
kidneyintelX.dkd in April 2024
|
•
|
Customer experience improvements
implemented including simplified physician order requisition,
increased patient access to national blood draw network, revamped
marketing and education materials
|
•
|
New primary care sales force
completed its first quarter of operations with a 33% quarter over
quarter increase in independent primary care physician test order
volume during the three months ended March 31, 2024
|
•
|
Appointed Howard Doran to president
concurrent with organizational changes to focus to accelerating
sales and marketing of FDA-authorized kidneyintelX.dkd
test
|
•
|
Formal strategic sale process
initiated with multiple potential acquirers now in
discussions
|
•
|
Completed common stock equity
financings raising aggregate gross proceeds of $13.5 million
(including post-period activity)
|
•
|
Continued operating expense
reduction with 50% year-over-year reduction in head count and
approximately 40% total lower operating costs
|
•
|
With FDA and clinical guidelines
achieved, process initiated for potential ex-U.S. partners to
improve non-dilutive company cash position and expand incremental
sales opportunities
|
•
|
U.S. government added the
FDA-authorized kidneyintelX.dkd to 10-year Government-wide
Acquisition Contract (GWAC) at a price of $950 per reportable
result. The contract covers tests provided by any government
healthcare facility
|
•
|
Total volume of 806 tests during the
quarter, of which 82% were billable
|
Third Quarter 2024 Financial Results
During the three months ended March
31, 2024, the Company recognized $0.5 million of
revenue, compared to $0.7 million for the three months ended March
31, 2023. Cost of revenue for the three months ended March
31, 2024 and 2023, was $0.6
million.
Operating
expenses for the three months ended March 31, 2024 were $6.5 million, compared to $11.0 million during the prior
year period. Operating cash burn in the fiscal third quarter
was $4.9 million, nearly 40% lower than the fiscal second quarter
and a 50% reduction from the year ago period.
Within
operating expenses, research and development
expenses were $2.2 million for the three months ended March
31, 2024, decreasing by $1.7 million from $3.9
million for the three months ended March 31,
2023. The decrease was attributable to a $1.3
million decrease related to external R&D projects and studies
with Mount Sinai, Wake Forest and Joslin, a decrease of $0.3
million in compensation and related benefits, and a $0.1 million
decrease in other operating expenses.
General and administrative expenses
were $3.9 million for the three months ended March 31, 2024, decreasing by $3.2 million
from $7.1 million for the three months ended March 31,
2023. The decrease was driven by even further cost
cutting measures, which resulted in a $2.6 million decrease in
compensation and related benefits, a $0.3 million decrease in other
operating expenses, and a $0.3 million decrease in insurance
costs.
Net loss was $7.7
million for the three months ended March 31, 2024,
compared with $12.1 million for the prior year
period.
Cash and
cash equivalents totaled $4.7 million as of
March 31, 2024.
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. EDT / 1:30 p.m. BST.
Conference Call Details:
To participate in the live
conference call via telephone, please register
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/k57ufszy
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
|
About Renalytix
Renalytix (NASDAQ: RNLX) (LSE: RENX)
is an artificial intelligence enabled in-vitro diagnostics and laboratory
services company that is the global founder and leader in the field
of bioprognosis™ for kidney health. In late 2023, our
kidneyintelX.dkd test was recognized as the first and only
FDA-authorized prognostic test to enable early-stage CKD (stages
1-3b) risk assessment for progressive decline in kidney function in
T2D patients. By understanding how disease will progress, patients
and clinicians can take action earlier to improve outcomes and
reduce overall health system costs. For more information,
visit
www.renalytix.com.
Forward-Looking
Statements
Statements contained in this press release regarding matters
that are not historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended. Examples of these forward-looking statements
include statements concerning: the commercial prospects of
KidneyIntelX, including whether KidneyIntelX will be successfully
adopted by physicians and distributed and marketed, the rate of
testing with KidneyIntelX in health care systems, expectations and
timing of announcement of real-world testing evidence, the
potential for KidneyIntelX to be approved for additional
indications, the Company's expectations regarding the timing and
outcome of regulatory and reimbursement decisions, the ability of
KidneyIntelX to curtail costs of chronic and end-stage kidney
disease, optimize care delivery and improve patient outcomes, the
Company's expectations and guidance related to partnerships,
testing volumes and revenue for future periods, the Company's
expectations regarding the Company's ability to obtain and maintain
intellectual property protection for its diagnostic products and
the Company's ability to operate its business without infringing on
the intellectual property rights of others, and the forecast of the
Company's cash runway and the implementation and potential for
additional financing activities and cost-saving initiatives. Words
such as "anticipates," "believes," "estimates," "expects,"
"intends," "plans," "seeks," and similar expressions are intended
to identify forward-looking statements. The Company may not
actually achieve the plans and objectives disclosed in the
forward-looking statements, and you should not place undue reliance
on the Company's forward-looking statements. Any forward-looking
statements are based on management's current views and assumptions
and involve risks and uncertainties that could cause actual
results, performance or events to differ materially from those
expressed or implied in such statements. These risks and
uncertainties include, among others: that KidneyIntelX is based on
novel artificial intelligence technologies that are rapidly
evolving and potential acceptance, utility and clinical practice
remains uncertain; the Company has only recently commercially
launched KidneyIntelX; and risks relating to the impact on the
Company's business of the COVID-19 pandemic or similar public
health crises. These and other risks are described more fully in
the Company's filings with the Securities and Exchange Commission
(SEC), including the "Risk Factors" section of its annual report on
Form 10-K filed with the SEC on September 28, 2023, the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2023 filed with the SEC on November 14, 2023, the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31,
2024 filed with the SEC on February 14, 2024 and other filings the
Company makes with the SEC from time to time. All information in
this press release is as of the date of the release, and the
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by
law.
RENALYTIX PLC
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
|
For the Three Months Ended
March 31,
|
|
|
For the Nine Months Ended
March 31,
|
|
(in thousands, except share
data)
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Revenue
|
|
$
|
535
|
|
|
$
|
724
|
|
|
$
|
1,703
|
|
|
$
|
2,885
|
|
Cost of revenue
|
|
|
601
|
|
|
|
603
|
|
|
|
1,583
|
|
|
|
2,010
|
|
Gross profit (loss)
|
|
|
(66
|
)
|
|
|
121
|
|
|
|
120
|
|
|
|
875
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
2,216
|
|
|
|
3,943
|
|
|
|
8,228
|
|
|
|
11,026
|
|
General and
administrative
|
|
|
3,854
|
|
|
|
7,095
|
|
|
|
15,252
|
|
|
|
22,155
|
|
Impairment loss on property,
equipment and other long-lived assets
|
|
|
417
|
|
|
|
-
|
|
|
|
723
|
|
|
|
-
|
|
Performance of contract liability to
affiliate
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19
|
)
|
Total operating expenses
|
|
|
6,487
|
|
|
|
11,038
|
|
|
|
24,203
|
|
|
|
33,162
|
|
Loss from operations
|
|
|
(6,553
|
)
|
|
|
(10,917
|
)
|
|
|
(24,083
|
)
|
|
|
(32,287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net losses of
affiliate
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9
|
)
|
Foreign currency gain (loss),
net
|
|
|
15
|
|
|
|
(461
|
)
|
|
|
215
|
|
|
|
238
|
|
Fair value adjustment to VericiDx
investment
|
|
|
40
|
|
|
|
129
|
|
|
|
(205
|
)
|
|
|
(1,070
|
)
|
Fair value adjustment to convertible
notes
|
|
|
(1,196
|
)
|
|
|
(1,168
|
)
|
|
|
(2,517
|
)
|
|
|
(1,898
|
)
|
Other (expense) income,
net
|
|
|
(49
|
)
|
|
|
310
|
|
|
|
212
|
|
|
|
521
|
|
Net loss before income
taxes
|
|
|
(7,743
|
)
|
|
|
(12,107
|
)
|
|
|
(26,378
|
)
|
|
|
(34,505
|
)
|
Income tax (expense)
benefit
|
|
|
-
|
|
|
|
1
|
|
|
|
(4
|
)
|
|
|
2
|
|
Net loss
|
|
$
|
(7,743
|
)
|
|
$
|
(12,106
|
)
|
|
$
|
(26,382
|
)
|
|
$
|
(34,503
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary
share-basic
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.44
|
)
|
Net loss per ordinary
share-diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.44
|
)
|
Weighted average ordinary
shares-basic
|
|
|
97,654,961
|
|
|
|
85,560,783
|
|
|
|
98,184,650
|
|
|
|
78,366,984
|
|
Weighted average ordinary
shares-diluted
|
|
|
97,654,961
|
|
|
|
85,560,783
|
|
|
|
98,184,650
|
|
|
|
78,366,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in the fair value of the
convertible notes
|
|
$
|
155
|
|
|
$
|
593
|
|
|
$
|
230
|
|
|
$
|
70
|
|
Foreign exchange translation
adjustment
|
|
|
21
|
|
|
|
505
|
|
|
|
(338
|
)
|
|
|
6
|
|
Comprehensive loss
|
|
$
|
(7,567
|
)
|
|
$
|
(11,008
|
)
|
|
$
|
(26,490
|
)
|
|
$
|
(34,427
|
)
|
RENALYTIX PLC
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share and per
share data)
|
|
|
|
March 31,
2024
|
|
|
June 30,
2023
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
4,704
|
|
|
$
|
24,682
|
|
Accounts receivable
|
|
|
|
|
554
|
|
|
|
776
|
|
Prepaid expenses and other current
assets
|
|
|
|
|
1,082
|
|
|
|
1,424
|
|
Total current assets
|
|
|
|
|
6,340
|
|
|
|
26,882
|
|
Property and equipment,
net
|
|
|
|
|
230
|
|
|
|
1,027
|
|
Right of Use Asset
|
|
|
|
|
-
|
|
|
|
159
|
|
Investment in VericiDx
|
|
|
|
|
1,060
|
|
|
|
1,460
|
|
Other Assets
|
|
|
|
|
1,139
|
|
|
|
1,101
|
|
Total assets
|
|
|
|
$
|
8,769
|
|
|
$
|
30,629
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
2,101
|
|
|
$
|
1,485
|
|
Accounts payable - related
party
|
|
|
|
|
3,027
|
|
|
|
1,451
|
|
Accrued expenses and other current
liabilities
|
|
|
|
|
4,273
|
|
|
|
6,644
|
|
Accrued expenses - related
party
|
|
|
|
|
1,060
|
|
|
|
1,963
|
|
Current lease liability
|
|
|
|
|
78
|
|
|
|
130
|
|
Convertible notes-current
|
|
|
|
|
4,449
|
|
|
|
4,463
|
|
Total current liabilities
|
|
|
|
|
14,988
|
|
|
|
16,136
|
|
Convertible
notes-noncurrent
|
|
|
|
|
4,892
|
|
|
|
7,485
|
|
Noncurrent lease
liability
|
|
|
|
|
-
|
|
|
|
41
|
|
Total liabilities
|
|
|
|
|
19,880
|
|
|
|
23,662
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note
10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Ordinary shares, £0.0025 par value
per share: 128,042,743 shares
authorized; 119,916,187 and 93,781,478 shares issued
and
outstanding at March 31, 2024 and June 30, 2023,
respectively
|
|
|
|
|
368
|
|
|
|
286
|
|
Additional paid-in
capital
|
|
|
|
|
194,786
|
|
|
|
186,456
|
|
Accumulated other comprehensive
loss
|
|
|
|
|
(1,558
|
)
|
|
|
(1,450
|
)
|
Accumulated deficit
|
|
|
|
|
(204,707
|
)
|
|
|
(178,325
|
)
|
Total shareholders' (deficit)
equity
|
|
|
|
|
(11,111
|
)
|
|
|
6,967
|
|
Total liabilities and shareholders'
(deficit) equity
|
|
|
|
$
|
8,769
|
|
|
$
|
30,629
|
|
RENALYTIX PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Nine Months Ended
March 31,
|
|
(in
thousands)
|
|
2024
|
|
|
2023
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(26,382
|
)
|
|
$
|
(34,503
|
)
|
Adjustments to reconcile net loss to
net cash used in operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
304
|
|
|
|
388
|
|
Impairment loss on property,
equipment and other long-lived assets
|
|
|
723
|
|
|
|
-
|
|
Stock-based compensation
|
|
|
1,291
|
|
|
|
2,358
|
|
Equity in losses of
affiliate
|
|
|
-
|
|
|
|
9
|
|
Reduction of Kantaro
liability
|
|
|
-
|
|
|
|
(55
|
)
|
Fair value adjustment to VericiDx
investment
|
|
|
205
|
|
|
|
1,070
|
|
Unrealized foreign exchange
loss
|
|
|
-
|
|
|
|
327
|
|
Realized loss on sale of ordinary
shares in VericiDx
|
|
|
94
|
|
|
|
-
|
|
Realized foreign exchange
gain
|
|
|
(144
|
)
|
|
|
-
|
|
Fair value adjustment to convertible
debt, net interest paid
|
|
|
2,255
|
|
|
|
1,898
|
|
Non cash lease expense
|
|
|
67
|
|
|
|
78
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
222
|
|
|
|
154
|
|
Prepaid expenses and other current
assets
|
|
|
310
|
|
|
|
(77
|
)
|
Accounts payable
|
|
|
617
|
|
|
|
358
|
|
Accounts payable - related
party
|
|
|
1,576
|
|
|
|
370
|
|
Accrued expenses and other current
liabilities
|
|
|
(2,519
|
)
|
|
|
2,704
|
|
Accrued expenses - related
party
|
|
|
(904
|
)
|
|
|
(485
|
)
|
Deferred revenue
|
|
|
-
|
|
|
|
(46
|
)
|
Net cash used in operating
activities
|
|
|
(22,285
|
)
|
|
|
(25,452
|
)
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
Purchase of equipment
|
|
|
(3
|
)
|
|
|
-
|
|
Payment for long term deferred
expense
|
|
|
-
|
|
|
|
(59
|
)
|
Net cash used in investing
activities
|
|
|
(3
|
)
|
|
|
(59
|
)
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
Payment of convertible notes
principal
|
|
|
(1,660
|
)
|
|
|
(3,262
|
)
|
Proceeds from issuance of ordinary
shares in Private Placement
|
|
|
5,072
|
|
|
|
20,296
|
|
Payment of offering costs
|
|
|
(1,044
|
)
|
|
|
(666
|
)
|
Proceeds from purchase of ordinary
shares under employee share
purchase plan
|
|
|
93
|
|
|
|
116
|
|
Net cash provided by financing
activities
|
|
|
2,461
|
|
|
|
16,484
|
|
Effect of exchange rate changes on
cash
|
|
|
(151
|
)
|
|
|
721
|
|
Net decrease in cash and cash
equivalents
|
|
|
(19,978
|
)
|
|
|
(8,306
|
)
|
Cash and cash equivalents, beginning
of period
|
|
|
24,682
|
|
|
|
41,333
|
|
Cash and cash equivalents, end of
period
|
|
$
|
4,704
|
|
|
$
|
33,027
|
|
Supplemental noncash investing and
financing activities:
|
|
|
|
|
|
|
Cash paid for interest on
convertible debt
|
|
$
|
249
|
|
|
$
|
-
|
|