Oxford, UK: Sensyne Health plc (LSE: SENS) (“Sensyne” or the “Company” or the “Group”), the British Clinical AI technology company, today announces its Interim Results for the 6 months ended 31 October 2019.
Lord (Paul) Drayson, CEO of Sensyne Health plc, commented:
“I am pleased to report that Sensyne Health has made excellent commercial and scientific progress in the first six months of the year. The Company has met all of the 24-month objectives set out at the time of the IPO in August 2018 ahead of schedule and we are now very well positioned to progress our strategy. We are making good progress on work with our pharmaceutical partners, Bayer and Roche, as well as our clinical AI software development partners, Cognizant and Agorai. Consequently, we currently have significant visibility of a minimum £2m of revenue being earned in FY20 from our existing contracts. However, the Board believes that the current share price does not reflect either the value of what the business has achieved to date, or the significant growth prospects available to Sensyne Health in future.”
- Signed first major pharmaceutical collaboration agreement for £5m with Bayer to accelerate the development of new treatments for cardiovascular disease using Clinical Artificial Intelligence
- Signed agreements with Cognizant and Agorai as partners for the launch and sale of our digital health software products in the U.S.
- Entered into additional partnership with Bayer on new UK artificial intelligence ‘LifeHub’ for data-driven drug discovery, disease detection and diagnosis
- Entered into a formal research agreement with the UK MHRA (Medicines and Healthcare products Regulatory Agency) to contribute to the development of methods to validate software algorithms used in digital health
- Entered into a partnership with Evotec, Oxford University Innovation, Oxford Sciences Innovation and the University of Oxford called LAB10x to accelerate the commercialisation of the next generation of digital therapeutics and data-driven drug discovery from Clinical Artificial Intelligence research and digital health innovations
- The number of unique patients represented in the data held by NHS partner trusts stands at 2,367,000 (FY19: 2,105,000)
- 27,234,000 patient admissions represented in the data held by NHS partner trusts (FY19: 20,057,000)
- Signed research collaboration with Roche to apply artificial intelligence for clinical trial design
- First project selected to receive funding from LAB10x partnership, ParkAI, a clinician-driven tool to manage the symptoms of Parkinson’s disease
- Total revenues of £0.4m for the period to 31 October 2019 (HY19: £0.0m)
- Adjusted operating loss from continuing operations of £7.4m (HY19: £5.1m)
- Operating loss of £9.8m for the period to 31 October 2019 (HY19: £10.3m)
- Cash and cash equivalents of £40.5m at 31 October 2019 (FY19: £49.3m)
Analyst and Investor briefing
Lord Drayson, Chief Executive Officer, and Lorimer Headley, Chief Financial Officer, will present the interim results for analysts and investors today at 12.00 GMT. There will be a simultaneous live conference call and webcast.
For more details please contact firstname.lastname@example.org at Consilium Strategic Communications.
A replay of today’s webcast of the meeting and the presentation slides will be available on the investor section of Sensyne Health’s website after the event at https://www.sensynehealth.com/investors/investor-hub
For more information please contact:
+44 (0) 330 058 1845
Lord (Paul) Drayson, Chief Executive Officer
Lorimer Headley, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Joint Broker)
+ 44 (0) 20 7418 8900
Dr Christopher Golden
Liberum (Joint Broker)
+ 44 (0) 20 3100 2000
Consilium Strategic Communications
+44 20 3709 5700
About Sensyne Health
Sensyne Health plc is a clinical AI company that works in partnership with the NHS to improve patient care and accelerate the discovery and development of new medicines. Sensyne Health is listed on the AIM Market of the London Stock Exchange (SENS.L).
Sensyne Health has made excellent commercial and scientific progress in the first six months of the year, signing agreements with Bayer, Cognizant and Agorai, and since the half-year end with Roche, that prove the value of its capabilities in medical and data science. The Company met all the 24-month objectives set at the time of IPO in August 2018 ahead of schedule and is now very well positioned to benefit from the accelerating adoption of Clinical AI by the global pharmaceutical industry, through its unique partnership model with the UK NHS and its growing roster of collaborations.
During the half-year period we met a major milestone, signing our first major pharmaceutical agreement with Bayer, delivering £5m of revenue across the two-year contract. Not only does this agreement deliver a 4% share of the revenue to our NHS partners, but as it is in the field of cardiovascular disease aligns the priorities of the pharmaceutical scientists we work with and those of our NHS partners. At the beginning of October 2019, we were able to extend our partnership with Bayer with the launch of Bayer’s LifeHub UK project where Sensyne Health will work with Bayer to develop AI-enabled radiology to enhance patient outcomes.
We have continued to work with our NHS partners on curation and analysis of data, including historical records, resulting in the number of unique patient records increasing by 12% to 2.4m (FY19: 2.1m) and the number of patient encounters represented by 36% to 27.2m (FY19: 20.1m). The numbers of unique patient records and patient encounters will be further increased once Sensyne receives NHS England approval for the SRAs with Wye Valley NHS Trust and George Eliot Hospital NHS Trust announced on 28 January 2019.
Following on from the success of signing the agreement with Bayer, in December 2019 we announced our second partnership with a major pharmaceutical company, Roche. This collaboration will focus on identifying patient populations in one disease area and assessing and collating anonymised patient data with anonymised electronic patient record information to support clinical trial planning.
Our LAB10x partnership with Evotec SE, Oxford University Innovation Ltd and Oxford Sciences Innovation plc has made its first award to a research project being undertaken at the University of Oxford. LAB10x will lend its support to ParkAI, a clinician-driven tool to manage the symptoms of Parkinson’s disease developed by a team led by Michele Hu, Professor at the Nuffield Department of Clinical Neurosciences at the University of Oxford.
These partnerships prove the value of Sensyne Health’s capabilities in medical and data science.
We expect to launch GDm-Health, our first product in the U.S. market, in 2020 with our partners Cognizant and Agorai, leveraging on the work by our U.S. Healthcare provider partner Jefferson Health who have been conducting a clinical and economic evaluation of GDm-Health.
Recently, the UK Government has been moving towards a national strategy for the commercial use of anonymised patient data based upon the creation of a sovereign capability at a national level. As we commented on 16 December 2019, the outcome of the UK General Election returning a Conservative government with a significantly increased majority, has now removed a degree of uncertainty from the operating environment for the Company. Sensyne Health, with its attractive and unique NHS partnership model providing a shared financial return back into the NHS, is uniquely positioned.
Our ‘double bottom line’ business model has attracted interest from a wide variety of parties since we came to market through our IPO in 2018. Whilst the UK and the NHS remain our focus, we have also received interest from overseas on how our model might be adopted elsewhere with key attractions being our approach to making patients the priority and providing a fair return to the healthcare data provider. We are exploring opportunities to deploy our partnership model in new markets outside of the United Kingdom.
Over the past six months, we have made significant progress in building in-house algorithmic expertise to analyse EPR data. We have worked in cardiovascular disease exploring the patient heterogeneity in heart failure to identify patient sub-populations and have developed proprietary algorithms that can be applied to other disease areas. We have also developed algorithms to predict a heart attack based on data contained within the EPR.
We have noticed the strongly increasing interest by the global pharmaceutical industry in partnering with organisations able to use advanced analytical techniques to analyse large sets of anonymised patient data. This is driving demand for ever larger population datasets to undertake this research in drug discovery and clinical development. Our initiatives in the UK and elsewhere are designed to increase the size and scope of datasets we have access to and enable us to remain competitive in this fast-moving area with access to datasets that are sufficiently large and relevant to attract pharmaceutical partner interest.
Our unique strategic position, strengthening the Board and senior management team, provides a platform for the Company to take strategic action in 2020 as the field progresses apace. We are currently exploring a small number of strategic M&A opportunities that have the potential to scale our business more quickly in order to achieve a leadership position in the Clinical AI market and hence create significant value for shareholders.
Revenue for the half year period ending 31 October 2019 is £0.4m (HY19: £0.0m). The increase compared to the prior period was primarily from work taking place on the Bayer contract that commenced towards the end of HY20, and that will contribute more significantly to revenue in the second half of FY20. It also includes income for use of our Quality Assurance and Regulatory Affairs (QARA) department and infrastructure by the LAB10x venture with Evotec, Oxford Sciences Innovation and Oxford University Innovation.
Our total research and development expenditure was £5.2m (HY19: £3.7m) following increases in investment in our scientific programmes.
Our adjusted operating loss was £7.4m (HY19: £5.1m), reflecting further investment on increasing and retaining personnel as we continue to scale our business with expenditure on employment and recruitment costs in HY20 of £4.3m (HY19 £3.7m), which is net of share-based payments, expansion of our R&D and commercial activities in the UK and progress in the US, our new facility in Oxford which we took up at the end of September 2018, and our HY19 results having only included costs for just over two months as a listed business following our IPO on 18 August 2018.
Our operating loss was £9.8m (HY19: £10.3m). In addition to the £2.3m increase in adjusted operating loss, amortisation costs increased by £0.7m reflecting the three SRAs entered into in summer 2018 being in place for the full period. This was offset by a reduction of £0.9m in share-based payment expenditure and having no exceptional costs in HY20 (HY19: £2.7m).
The loss before taxation was £9.9m (HY19: £10.3m).
We closed the period with cash and cash equivalents of £40.5m (FY19: £49.3m). At 31 December 2019, cash and cash equivalents were £37.2m. In addition to the operating expenditure described above, we committed £0.6m in capital expenditure on expanding our ‘Cold Room’ secure data facilities in Oxford.
The investment in joint arrangements balance of £0.5m represents our first payment made to the LAB10x fund of £0.6m, net of a share of loss in the period of less than £0.1m. A further £1.1m is payable in two equal instalments in FY21 and FY22.
We currently have significant visibility of a minimum £2m of revenue being earned in FY20 from our existing contracts with Bayer, Roche, Cognizant and Agorai. Beyond FY20, the Board is planning for a shift in the Group’s anticipated revenue mix with a more visible and significant proportion expected from our work with Cognizant and Agorai in software products. The Group continues to pursue deals with pharmaceutical companies; however, the timing and structure of such deals remains hard to predict. We also recognise it is important that we continue to build larger patient datasets so that we can enhance the value of our offering to the pharmaceutical sector. Finally, the Board remains of the view that the Company continues to be well positioned to grow revenues from UK Government initiatives on patient data and potential new opportunities in overseas markets due to the Company’s unique partnership model, strong capabilities in discovery science and practical experience in data curation and analysis over the past 18 months.
In October 2019, Charles Swingland resigned as Chairman and Annalisa Jenkins became Acting Chairman. In November 2019 we appointed A&O Consulting to conduct a review of corporate governance. In December 2019, Annalisa Jenkins and Andrew Gilbert stepped down from the Board and Sir Bruce Keogh became Interim Chairman. As a result of these changes, feedback from our shareholders and initial findings from our continuing corporate governance review, we are in the process of strengthening our Board, senior management and some of our corporate governance processes. In December, we announced that we had appointed head-hunters to search for an Independent Non-Executive Chairman and additional Non-Executive Directors. Our Nominations Committee has started to meet with the shortlist of well-qualified candidates for the role of Chairman. We expect to make further announcements on this process in due course.
Click here for full copy of the RNS announcement
Click here for a copy of our Interim Report and Accounts for the 6 months ended 31 October 2019