On November 9, 2021 Prenetics Group Limited ("Prenetics" or the "Company"), a global leader in genomic and diagnostic testing, reported its financial results for the six months ended June 30, 2021 (Press release, Prenetics, NOV 9, 2021, View Source [SID1234594907]). Prenetics delivered significant revenue growth, driven by continued demand across the world for its genomic and diagnostic testing services, including increased demand for COVID-19 testing as travel gradually resumes globally.
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The Company has publicly filed a registration statement on Form F-4 ("the Registration Statement") with the U.S. Securities and Exchange Commission ("SEC"), which contains a preliminary proxy statement/prospectus in connection with its previously announced proposed business combination with Artisan, a special purpose acquisition company founded by Adrian Cheng. The planned business combination continues to progress and is expected to close in the first quarter of 2022.
"We are pleased with our progress toward becoming a publicly-traded company, which we expect to occur in the first quarter of 2022. Prenetics again passed many milestones in the first half of 2021, growing revenue by 1,039% year on year, indicating a strong increase in demand for our testing services and the robustness of our technology. Going forward, we will continue to execute our growth strategy to put us amongst the fastest growing healthcare companies worldwide." said Danny Yeung, Group CEO & Co-founder of Prenetics.
He continued, "But I believe we are just getting started. We are at an inflection point within the healthcare ecosystem on how healthcare is to be delivered. Prenetics has a strong product pipeline and, as part of our global M&A strategy, we have already identified international targets in the area of rapid diagnostics and in digital health which would be highly complementary to our mission of decentralizing healthcare and bringing healthcare closer to millions of people globally."
Prenetics has a strong existing business and a robust product pipeline which include:
Circle HealthPod – Health Monitoring System providing rapid, lab-quality molecular testing for COVID-19 — anytime, anywhere. Circle HealthPod has received CE-IVD mark for point-of-care use. A usability study was completed in the U.S. and a clinical validation is in progress with aim to receive EUA from U.S. FDA by the first half of 2022. The Company has already begun developing assays to expand Circle HealthPod’s testing capacity to cover a range of tests traditionally conducted in clinical laboratories such as tests for influenza and STDs.
Circle ColoClear – Non-invasive stool-based FIT-DNA test for colorectal cancer screening. To be launched in the first half of 2022.
Circle SnapShot – At-home blood test with a user-friendly blood sample collection and result delivery system. To be launched in 2022.
Financial Highlights for the Six Months ended June 30, 2021
(1) For a reconciliation to the most directly comparable IFRS measure see the section titled "Unaudited Financial Information and Non-IFRS Financial Measures."
Revenue reached an all-time-high of US$136.5 million, an increase of 1,039% from US$12.0 million in the same period in 2020. This uplift was driven by increased demand for laboratory testing, including travel related COVID-19 testing.
For the six months ended June 30, 2021, Prenetics’ clients for its COVID-19 testing services include the Hong Kong government, Hong Kong International Airport, Multiple UK Airports, English Premier League and several global corporates including Virgin Atlantic, Carnival Cruise Line, and Sky TV.
Adjusted gross profit was US$57.0 million, an increase of 1,257%, from US$4.2 million in the same period in 2020, delivering a gross margin of 41.8%.
Adjusted EBITDA was US$31.5 million, increased by US$34.6 million year-over-year, due to increased operating efficiencies and scalability of the business.
As of June 30, 2021, the Company had cash and trade receivables of US$97.9 million, consisting of US$37.6 million of cash and US$60.3 million of trade receivables.
Recent Business Highlights
Prenetics announced on September 16, 2021 that it had entered into a definitive merger agreement with Artisan, a special purpose acquisition company privately founded by Adrian Cheng. The completion of the transaction is estimated to be by the first quarter of 2022. Upon completion of the transaction, the combined company ("PubCo")’s securities are expected to be traded on the Nasdaq under the ticker symbol "PRE".
Prenetics has now processed more than 6 million laboratory tests. On October 19, 2021, the Company announced that it was appointed as the official RT-PCR COVID-19 testing partner for the Standard Chartered Hong Kong Marathon 2021 that took place on October 24, 2021.
The Company continues to expand the utility and opportunity of next generation sequencing technologies in both consumer and clinical settings. In November 2021, the Company announced the addition of PacBio’s SMRT HiFi sequencing technology to its genetic screening services. PacBio’s technology will be a key component of Prenetics’ Circle Medical offering, a genetic test geared towards addressing the diagnostic needs of physicians and improving the accuracy of detecting mutations.
The Company has signed a strategic partnership agreement with EC Healthcare (stock code: 2138 Hong Kong), Hong Kong’s largest non-hospital medical group, to integrate all of Prenetics testing services as a service offering to EC Healthcare’s patients.
Prenetics has also made additions to its senior management team to support the company’s rapid growth. Yvonne Wong joined as the Chief Corporate Development Officer and is responsible for leading the company’s corporate development, ESG and CSR efforts. She has over 28 years of experience working in top-tier financial institutions and advising family offices and NGOs. CY Chan joined as the Chief People Officer and is responsible for leading the company’s people operations and culture strategy. He was formerly the CPO of HKBN Ltd. leading its HR and CSR functions.
Outlook
Based on its robust performance in the first half of 2021, Prenetics expects its revenue for 2021 to be ahead of its previous forecast of $205 million stated in the Investor Presentation of Artisan and Prenetics dated September 15, 2021. Whilst the Company is encouraged by the growth trajectory it has achieved, it maintains its projected annual revenues of more than US$600 million in 2025.