REG - Renalytix PLC - Half-year Report
18/03/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250318:nRSR0149Ba&default-theme=true
RNS Number : 0149B Renalytix PLC 18 March 2025
Renalytix plc
("Renalytix" or the "Company" or the "Group")
Half Year Report
LONDON and NEW YORK, 18 March 2025 - Renalytix plc (LSE: RENX) (OTCQB: RNLXY),
a precision medicine company with lead testing service kidneyintelX.dkd, the
only FDA-approved and Medicare reimbursed prognostic test to support
early-stage risk assessment in chronic kidney disease, announces its unaudited
results for the six months ended 31 December 2024 ("H1 FY25").
Renalytix's precision medicine technology relies on the combination of
proprietary blood biomarkers, advanced machine learning algorithms and
clinical data to generate accurate measurements of chronic disease progression
and therapeutic drug response. The Company's first FDA validated prognostic
test, kidneyintelX.dkd is recommended in the international clinical care
guidelines and is available to help prevent the worst effects and
unsustainable costs associated with diabetic kidney disease ("DKD") in an
estimated 14 million patients In the United States today.
Key Financial Highlights
· On track to meet, or potentially exceed, target of 20% average
quarter-to-quarter growth
· Forward guidance on expected revenue remains: $3.2m in FY25, $8.5m in
FY26 and $17.5m in FY27
· Revenues of $1.3m
- Continued quarterly sales growth moving into Q3 FY25
- With full Medicare insurance payment beginning in July 2024,
commercial insurance reimbursed testing revenue increased 28% over the H1
FY24, and now accounts for 80% of total testing revenues.
- The total number of commercial payers increased by 51% over H1
FY24.
- Additional integrated testing service with ACPNY, a large doctor
practice in New York
· Significant progress to reduce overall cash burn rate to c.£560,000
($710,000) per month by end of FY FY25 as stated in the Company's FY24 results
announcement
- Disciplined cost controls have led to a 56.5% reduction in
administrative costs to $8.0m (HY 2024: $18.4m)
· Cash and cash equivalents as at 31 December 2024 of $9.2m (30 June
2024: $4.7m)
Strong progress against commercial strategy
· Approximately 850 individual doctors have now ordered over 15,000
kidneyintelX.dkd tests to date
· Revenue and ordering doctor base has further diversified with full
roll-out of ACPNY care network New York
· Time from submitted bill for test to payment received has been
reduced by 65% during H1 FY25
· Operational improvements have also resulted in a 50% reduction in
laboratory test turn-around time
· Increasing depth of pharmaceutical collaborations applying
KidneyIntelX technology in precision medicine therapeutic development
· Series of data release scheduled for calendar year 2025
· Progress with discussions for:
- additional care provider implementations
- additional insurance payors for coverage contracts and supported
deployment of testing services
- collaborations with Pharmaceutical and Clinical Research to
incorporate kidneyintelX technology in their clinical development and
commercial programmes
- third-parties to generate value from our intellectual property
assets
James McCullough, CEO of Renalytix commented: "With Medicare coverage and
additional insurance contracts in place this fiscal year, we are now seeing a
significantly higher portion of our total revenue coming from commercially
insured testing versus clinical study work. We expect this trend to continue
during the next reporting period. Further, we expect to expand distribution
of kidneyintelX.dkd with initiatives from both new insurance payors, care
networks and hospital systems this year."
For further information, please contact:
Renalytix plc www.renalytix.com (http://www.renalytix.com)
James McCullough, CEO Via Walbrook PR
Stifel (Nominated Adviser and Joint Broker) Tel: 020 7710 7600
Nicholas Moore / Nick Harland / Brough Ransom / Ben Good
Oberon Capital (Joint Broker) Tel: 020 3179 5300
Mike Seabrook / Nick Lovering / Jess Cave
Walbrook PR Limited Tel: 020 7933 8780 or renalytix@walbrookpr.com
(mailto:renalytix@walbrookpr.com)
Paul McManus / Alice Woodings Mob: 07980 541 893 / 07407 804 654
About Renalytix (www.renalytix.com (http://www.renalytix.com) )
Renalytix (LSE: RENX) (OTCQB: RNLXY) is an artificial intelligence-enabled in
vitro diagnostics company, focused on optimizing clinical management of kidney
disease to drive improved patient outcomes. Renalytix has received FDA
approval and Medicare reimbursement for kidneyintelX.dkd which is now offered
commercially in the United States.
Unrecognized and uncontrolled kidney disease remains one of the largest
barriers to controlling cost and suffering in the United States and the United
Kingdom's medical system, affecting over 14 million and 8 million people,
respectively. After five years of development and clinical validation,
kidneyintelX.dkd is the only FDA-approved and Medicare reimbursed prognostic
tool capable of understanding a patient's risk with kidney disease early where
treatment has maximal effect. kidneyintelX.dkd is now being deployed across
large physician group practices and health systems in select regions of the
United States.
The over 15,000 patients that have been tested by kidneyintelX.dkd have
produced a substantial body of real-world performance data. In patient
populations where kidneyintelX.dkd has been deployed, a demonstrated and
significant increase in diagnosis, prognosis, and treatment rates have been
recorded. kidneyintelX.dkd now has full reimbursement established by Medicare,
the largest insurance payer in the United States, at $950 per reportable
result. kidneyintelX.dkd is also recommended for use in the international
chronic kidney disease clinical guidelines (KDIGO).
Chairman's Statement
Overview
As I approach 100 days as Executive Chairman, I am pleased to report that we
continued to make strong progress against the commercial strategy outlined to
shareholders at our fundraise in October last year. Most importantly, we
remain on track to deliver against revenue and expense targets for the year
ended June 2025 and beyond.
With new customers onboarding we continue to deliver quarterly revenue growth
and I'm pleased to confirm that Q2 to Q3 quarterly revenue growth is in line
with our 20% average growth expectations. Discussions regarding further
distribution partnerships continue to advance and our cost control efforts
remain on track.
I firmly believe Renalytix has the technology, reimbursement support and
clinical care guidelines backing to change the course of one of the largest
and costliest chronic disease classes in the US and ultimately beyond.
kidneyintelX.dkd, is the only kidney prognostic test that is FDA approved; has
full Medicare reimbursement granted at $950 per test; is recommended in the
international clinical care guidelines; is available to approximately 14m US
diabetic kidney disease ("DKD") patients; and is able to address the needs of
approximately ~250 million DKD patients globally.
For the first time an early prognosis is now available through
kidneyintelX.dkd, and with the availability of new life saving medications,
expensive dialysis for advanced kidney disease is largely preventable.
kidneyintelX.dkd is able to identify early-on those chronic kidney disease
patients at high-risk of ending up with kidney failure and on dialysis, before
it's too late. Those receiving a kidneyintelX.dkd high-risk score are
identified as being 18 times more likely
(https://www.kidneyintelx.com/evidence/) to have a significant decline in
kidney function or kidney failure than those with a low-risk result.
Real-world deployment of KidneyIntelX has resulted in increased, but targeted,
use (to higher risk patients) of kidney protective therapies, timely referrals
to kidney specialists and risk assessment by KidneyIntelX is associated with
improved clinical outcomes.
Renalytix has now generated over 15,000 patient risk reports and over 850
unique doctors have ordered KidneyIntelX - distribution milestones we intend
to expand through advancing partnership discussions and our own direct sales
efforts in 2025.
There are four key areas of our business where we have made good progress and
which will support value creation for shareholders:
1. Test Service Sales
At this stage in our growth I know that the most important short-term
deliverable is to demonstrate consistent and accumulative test sales growth
and ensure we hit our overall revenue expectations as set out at the end of
last year. In H1 FY25 we recognised a total of $1.3m in revenues, and I am
delighted to say that we have continued to demonstrate quarterly testing sales
growth moving into Q3 FY25, and remain on track to meet, or potentially
exceed, our target of 20% average quarter-over-quarter growth expectations
across the full year and beyond. The team has been actively and successfully
growing our customer pipeline and are confident that we will meet or exceed
our $3.2m forecast for FY25, as well as providing a visible pathway to
reaching our FY26 revenue target of $8.4m, and $17.5m in FY27.
It is also significant that we continue to expand the diversity of our revenue
sources. In addition to our robust business which continues with Mount Sinai
Health System, we have added integrated testing services with a large doctor
practice ACPNY in New York, and an expanded programme with existing Gulf Coast
customer Singing River and others. These have increased daily testing
volumes and we expect to announce additional programmes in the near future,
which will continue to grow the base of doctors deploying KidneyIntelX to
fight kidney disease.
2. Pharmaceutical and Clinical Research Opportunities
Revenue diversification has received a boost in Q2-25 from increasing activity
with our pharmaceutical collaborations and this has continued into Q3 and we
expect to report additional activities over the coming months. KidneyIntelX
is increasingly playing a role in understanding which patients will benefit
from drug interventions and when. A "precision medicine solution" like
KidneyIntelX is becoming more and more critical in the United States, where
the availability of multiple therapies to treat kidney disease and diabetes
has created a great opportunity for improved patient outcomes, but where
inappropriate use can result in enormous expense running to thousands of
dollars per month over a patient's lifetime. The recently released KDIGO
guidelines stressed the importance of a validated, solution to understand risk
earlier in the disease cycle, to inform complex and costly therapy decisions,
and that this is absolutely essential for cost control and minimizing
unnecessary side effects. KidneyIntelX is the only available product that does
just that!
We believe our close working relationships with leading pharmaceutical and
research organisations, including disclosed programmes with Astra Zeneca, the
PRIME-CKD Consortium, University of Michigan, University Medical Center
Groningen and Steno Diabetes Center are building a substantial value
proposition in the KidneyIntelX platform and follow-on products in
development. At this pivotal time where Governments are struggling to address
the unsustainable cost of exploding chronic disease, KidneyIntelX offers a
pathway to a validated, regulated and paid-for preventative medicine tool that
is standardized for use by anyone.
In FY25, we have or are beginning active programmes with pharmaceuticals
companies looking to incorporate KidneyIntelX technology in their clinical
development and commercial programmes and will update shareholders as these
advance. We would also expect to provide updates on additional data for
publication in coming months, which will provide additional support for
generating and concluding these commercial opportunities.
3. Reimbursement
With Medicare coverage granted in August 2024, over 50% of our addressable
patient population gained full insurance coverage for KidneyIntelX at $950 per
test. Medicare coverage, coupled with learned improvements in customer
service and billing operations have brought about a 65% reduction in H1 FY25
in the time from when we submit an insurance claim to when we collect cash
payment. We are continuing to pursue new coverage with a large regional
insurance payer who operates in our Northeast and Southwest existing markets.
The United States insurance reimbursement market is severely complex and we
are proud that a majority of the 14 million patients in our addressable market
now have full insurance coverage for KidneyIntelX testing services.
4. Cost Control
Cost control remains a top priority while we expand our revenue base. Whilst
launching a product of this nature into the US market is expensive, we have
continued to make significant progress on reducing our expenses. Our new
Global Financial Controller, Dominic O'Brien, has been working with the Board
since December 2024 to ensure we reduce costs wherever possible without
compromising revenue generation.
Conclusion
We have made significant progress in a short space of time and I am confident
we will achieve our goals for this financial year in terms of revenue growth
and cost reduction.
It is clear to me that KidneyIntelX is a unique prognostic test that supports
significant improvements in patient outcomes, whilst dramatically reducing the
high costs to healthcare systems globally associated with the management of
this chronic disease. With quarterly sales and third-party strategic interest
increasing, we believe the market is beginning to understand the enormous
benefits of utilising kidneyIntelX in patient care.
Thank you for all of your support and I look forward to continuing to deliver
on expectations.
Julian Baines MBE
Executive Chairman
Financial Review
The results presented cover the six months ended 31 December 2024 ("H1 FY25").
The presentational currency for Renalytix plc and its subsidiaries (together,
the "Group") is the United States Dollar.
INCOME STATEMENT
Revenue
Commercial test revenues grew significantly during the period following
Medicare insurance coverage, the successful electronic integration of
KidneyIntelX testing in a large New York integrated healthcare provider,
deployment of additional direct to doctor sales personnel, and an increase in
activity with pharmaceutical collaborators. Broader commercial adoption with
Medicare payment has helped to reduce our reliance on revenues generated
through non-recurring activities such as non-insurance reimbursed clinical
study testing. The Group's commercial test revenues are sensitive to
insurance reimbursement coverage and particularly Medicare and Medicare
Advantage timely payment. KidneyIntelX billed testing to Medicare and Medicare
Advantage has now achieved 95%+ payment on submitted testing claims.
Commercial test volumes represented 82% of total volume compared to 60% in the
prior period and is expected to increase through the remainder of the fiscal
year. The Group recognised $1.3 million in total revenue in H1 FY25 (H1 FY24:
$1.2 million), with $1.2 million in testing revenue in the period (H1 FY24:
$1.2 million) and $0.1 million in pharmaceutical services revenue (H1 FY24:
$nil).
Cost of sales
The cost of sales associated with the revenue was $0.8 million for H1 FY25,
compared to $1.0 million for the cost of sales associated with the revenue for
H1 FY24. The decrease in cost of sales mainly relates to the reclassification
of depreciation of $26k (H1 FY24: $0.2 million) related to equipment used in
the revenue process from cost of sales to administrative expenses due to a
review of standard cost methodology.
Administrative costs
Significant cost reduction across the business led to lower administrative
costs of $10.4 million in H1 FY25 compared with H$18.4 million in H1 FY24, a
reduction of $8.0 million for the period.
The major items of expenditure were general and administrative costs which
included $4.6 million in employee- related costs (H1 FY24: $7.2 million), $1.6
million in subcontractors, legal, accounting, and other professional fees (H1
FY24: $3.8 million), $0.3 million in external R&D Services, lab supplies
and lab services (H1 FY24: $3.7 million), $0.02 million in depreciation and
amortisation (H1 FY24: $1.1 million), $0.4 million in insurance (H1 FY24: $0.7
million), $0.4 million in IT related costs (H1 FY24: $0.6 million), $0.2
million in marketing and public relations (H1 FY24: $0.5 million), $nil in
impairment loss on property and equipment (H1 FY24: $0.3 million), $0.2
million in office related expenses including rent (H1 FY24: $0.2 million),
$0.2 million in stock exchange listing and filing fees (H1 FY24: $0.1
million), and $0.1 million in other miscellaneous expenses (H1 FY24: $0.2
million). We anticipate further expense reductions to occur through the
remainder of FY25.
Gain (loss) on financial assets at fair value through profit or loss
The Group accounts for the investment in VericiDx equity securities at fair
value, with changes in fair value recognised in the income statement. During
H1 FY25, we recorded a loss of $0.2 million to adjust the VericiDx investment
to fair value. During H1 FY24, we recorded a loss of $0.2 million to adjust
the VericiDx investment to fair value.
Fair value adjustment of convertible debt
During the period we settled the previous convertible bond and issued a new
convertible bond in its place. The derecognition of the previous convertible
bond led to a recognised loss of $0.4 million in the statement of
comprehensive income.
We elected to account for the previous convertible notes at fair value with
qualifying changes in fair value recognised through the income statement until
the notes are settled. This excludes fair value adjustments related to
instrument-specific credit risk, which are recognised in other comprehensive
income. During H1 FY25, we recorded a loss of $0.4 million to adjust the old
convertible notes to fair value. During H1 FY24, we recorded a loss of $1.3
million to adjust the old convertible notes to fair value.
The new convertible bonds have been accounted for as an embedded derivative
with changes in fair value of the embedded derivatives recognised in the
income statement. The change in fair value recognised in the income statement
at H1 FY25 was $nil.
Finance income (expense)
During H1 FY25, we recognised a loss of $0.5 million (H1 FY24: $0.5 million
gain), which was comprised of $0.01 million interest income earned on our cash
deposits (H1 FY24: $0.2 million), $0.5 million of foreign exchange losses (H1
FY24: $0.2 million gain), $0.1m interest expense(H1 FY24: $0.0 million) and
$0.04 million of grant income (H1 FY24: $0.1million).
BALANCE SHEET
Net current assets
In October 2025 the Group refinanced its debt financing into long term
non-amortising bonds. The Group also raised £11.8 million ($14.8m) in capital
from an equity raise. The increase in capital combined with the significant
reduction in short term debt liability helped the Group to move from a net
current liability position of ($5.0 million) at 30 June 2024 to a net current
asset position of $6.6 million at 31 December 2024.
Inventory
Inventory consists of consumable materials used by the labs to carry out
KidneyIntelX tests. Inventory on hand at 31 December 2024 totaled $0.4 million
(30 June 2024: $0.3 million). Inventory increased in the period to ensure
sufficient inventory to fulfill increased volume demand.
Fixed assets
Property, plant, and equipment consists of laboratory equipment being used to
support testing and product development activities. At 31 December 2024, the
Group held $0.2 million in net property, plant, and equipment (30 June 2024:
$0.2 million).
There was no impairment of fixed assets during the period. At 30 June 2024 the
Group recognised an impairment of $10.2 million in relation its intangible
assets which comprised of trademark trade names, licenses, trade secrets and
capitalised development costs. Despite that the financial forecast model
showed a steady growth in revenues, the Directors took a conservative approach
in recognising the impairment of intangible assets.
Investment in Verici Dx plc ("Verici Dx")
At 31 December 2024, the group held 8,581,682 shares in Verici Dx. The fair
value of the investment in Verici Dx was $0.4 million (30 June 2024: $0.7
million).
Convertible note
In April 2022, the Company issued amortising senior convertible bonds with a
principal amount of $21.2 million due in April 2027 (the "Bonds"). The Bonds
were issued at 85% par value with total net proceeds of $18.0 million. The
Group elected to account for the Bonds at fair value. This bond was settled
during the period with a new convertible bond issued in its place with the
previous convertible bond derecognised.
A new non-amortising bond was issued in November 2024 for $7.8 million with a
maturity date of July 2029. Interest accrues on a quarterly basis and may be
settled or rolled into the Bond on a payment in kind ("PIK") election. The
bond contains a conversion feature allowing the bond to be converted to shares
during the Bond period. This conversion feature meets the definition of an
embedded derivative. The debt component is recognised on an effective interest
basis and the equity component is accounted for at fair value at the reporting
date with changes in fair value recognised in the income statement. Changes in
fair value of the embedded derivatives recognised in the income statement at
H1 FY25 were $nil. The value of the debt host contract at 31 December 2024 was
$6.4 million and the value of the embedded derivative was $1.5 million.
Cash
The Group raised gross proceeds of £11.8 million ($14.8m) through an equity
placing in October 2024. At 31 December 2024 the Group had cash and cash
equivalents of $9.2 million (30 June 2024: $4.7 million). The cash is held
in multiple short term deposit accounts.
Unaudited Consolidated Income Statement
FOR THE PERIOD ENDED 31 DECEMBER 2024
UNAUDITED UNAUDITED AUDITED
Period to Period to Year to
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Continuing Operations
Revenue 1,251 1,168 2,289
Cost of Sales (753) (954) (2,076)
Gross profit 498 214 213
Administrative expenses (8,026) (18,395) (30,733)
Operating loss (7,528) (18,181) (30,520)
Impairment of Intangibles - - (10,472)
Loss on financial assets at fair value through profit or loss (229) (244) (505)
Fair value adjustment of convertible debt (384) (1,320) (3,750)
Finance (expenses) income - net (469) 459 (223)
Loss before tax (8,610) (19,286) (45,470)
Taxation - - -
Loss for the Period (8,610) (19,286) (45,470)
Earnings per Ordinary share
Basic $(0.05) ($0.20) ($0.42)
Diluted $(0.05) ($0.20) ($0.42)
Consolidated Statement of Comprehensive Income
FOR THE PERIOD ENDED 31 DECEMBER 2024
UNAUDITED UNAUDITED AUDITED
Period to Period to Year to
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Loss for the period - continuing operations (8,610) (19,286) (45,470)
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss
Changes in the fair value of the convertible notes (125) 75 306
Settlement of convertible notes (252) - -
Currency translation differences (348) (281) (270)
Other comprehensive (loss) / income for the period (725) (206) 36
Total comprehensive loss for the period (9,335) (19,492) (45,434)
Unaudited Consolidated Statements of Financial Position
AS AT 31 DECEMBER 2024
UNAUDITED UNAUDITED AUDITED
As at As at As at
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Assets
Non-current assets:
Property, plant and equipment 187 570 213
Right of Use Asset - 113 -
Intangible Assets - 11,563 -
Other long term assets 64 161 71
Total non-current assets 251 12,407 284
Current Assets
Inventory 417 512 271
Security Deposits 65 132 77
Financial asset at fair value through profit or loss 417 1,220 698
Trade and other receivables 510 1,370 722
Prepaid and other current assets 572 614 364
Cash and cash equivalents 9,209 5,619 4,680
Total current assets 11,190 9,467 6,812
Total assets 11,441 21,874 7,096
Equity attributable to owners of the parent
Share capital 1,063 318 491
Share premium 137,864 108,162 121,814
Share-based payment reserve 14,779 13,988 14,452
Accumulated other comprehensive income (1,811) (1,331) (1,086)
Retained earnings/(deficit) (153,264) (118,470) (144,654)
Total equity (1,369) 2,667 (8,984)
Liabilities
Current liabilities:
Trade and other payables 4,605 10,716 7,544
Current lease liabilities - 118 46
Note payable current - 3,063 4,159
Total current liabilities 4,605 13,897 11,749
Non-current liabilities
Note payable non-current 8,205 5,310 4,331
Total non-current liabilities 8,205 5,310 4,331
Total liabilities 12,810 19,207 16,080
Total equity and liabilities 11,441 21,874 7,096
Unaudited Consolidated Statements of Cash Flows
FOR THE PERIOD ENDED 31 DECEMBER 2024
UNAUDITED UNAUDITED AUDITED
Period to Period to Year to
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Cash flows from operating activities:
Loss before income tax (8,610) (19,286) (45,470)
Adjustments for
Depreciation 26 152 184
Amortisation and impairment charges - 1,102 2,255
Impairment of Assets 10,472
Impairment of property and equipment - 306 631
Share-based payments 327 620 1,083
Unrealised loss (gain) on financial asset at fair value through profit or loss 217 244 505
Realised loss on sale of ordinary shares in VericiDx 42 - 136
Fair value adjustment of convertible debt 384 1,058 3,750
Foreign Exchange loss (gain) 387 (1,008) (154)
Changes in working capital
Trade and other receivables 213 (594) 54
Prepaid assets and other current assets (643) 684 235
Inventory (146) 206 447
Trade and other payables (2,530) (831) (3,958)
Net cash used in operating activities (10,333) (17,347) (29,830)
Cash flows from investing activities:
Proceeds from sale of investments 22 - 117
Net cash generated by investing activities 22 - 117
Cash flows from financing activities
Repayment of convertible notes - (1,660) (1,660)
Payment of costs (5) -
Proceeds from issuance of ordinary shares (net of issue costs) 18,511 - 11,817
Cost of repayment of convertible bond (3,476) - -
Proceeds from the issuance of ordinary shares under employee share purchase - 93 93
plan
Lease payments - (81) (156)
Net cash generated from/(used in) financing activities 15,035 (1,653) 10,094
Net increase/(decrease) in cash and cash equivalents 4,724 (19,000) (19,619)
Cash and cash equivalents at beginning of period 4,680 24,682 24,682
Effect of exchange rate changes on cash (195) (63) (383)
Cash and cash equivalents at end of period 9,209 5,619 4,680
Unaudited Consolidated Statement of Changes in Equity
FOR THE PERIOD ENDED 31 DECEMBER 2024
Share-based Accumulated
other
Share Capital Share Premium payment reserve comprehensive income Retained earnings Total Equity
$'000 $'000 $'000 $'000 $'000 $'000
At 30 June 2023 and 1 July 2023 299 104,953 13,513 (1,127 ) (99,184 ) 18,454
Comprehensive income
Loss for the period - - - - (19,286 ) (19,286 )
Other comprehensive income
Changes in fair value of convertible notes - - - 75 - 75
Currency translation differences - - - (281 ) - (281 )
Total comprehensive income - - - (206 ) (19,286 ) (19,492 )
Transactions with Owners
Share-based payments - - 620 - - 620
Shares issues under ESPP - 93 - - - 93
Shares issued for repayment of convertible bond 18 2,978 - - - 2,996
Vesting RSUs 1 138 (143 ) (4 )
Total transactions with owners of the parent, recognised directly in equity 19 3,209 476 - - 3,705
At 31 December 2023 and 1 January 2024 318 108,162 13,989 (1,333 ) (118,470 ) 2,667
Comprehensive income
Loss for the period (26,184 ) (26,184 )
Other comprehensive income
Changes in fair value of convertible notes 231 231
Currency translation differences (5 ) 16 11
Total comprehensive income - (5 ) - 247 (26,184 ) (25,942 )
Transactions with Owners
Share-based payments 463 463
Shares issued for repayment of convertible bond 12 2,000 2,012
Shares issued under Securities Purchase Agreement 161 13,372 13,533
Less issue costs (1,716 ) (1,716 )
Total transactions with owners of the parent, recognised directly in equity 173 13,651 463 247 (26,184 ) (11,650 )
At 30 June 2024 and 1 July 2024 491 121,813 14,452 (1,086 ) (144,654 ) (8,984 )
Comprehensive income
Loss for the period - - - - (8,610 ) (8,610 )
Other comprehensive income
Changes in fair value of convertible notes - - - (125 ) - (125 )
Settlement of convertible notes (252 ) (252 )
Currency translation differences - - - (348 ) - (348 )
Total comprehensive income - - - (725 ) (8,610 ) (9,335 )
Transactions with Owners
Share-based payments - - 327 - - 327
Shares issued for repayment of convertible bond 37 1,551 - - - 1,588
Shares capital issued 535 17,976 - - - 18,511
Cost of repayment of convertible bond - (3,476 ) - - - (3,476 )
Total transactions with owners of the parent, recognised directly in equity 572 16,051 327 - - 16,950
At 31 December 2024 1,063 137,864 14,779 (1,811 ) (153,264 ) (1,369 )
Notes to the Financial Statements
1. GENERAL INFORMATION AND BASIS OF PRESENTATION
Renalytix Plc (the "Company") is a company incorporated in the United Kingdom.
The Company is a public limited company, which is listed on the AIM market of
the London Stock Exchange and OTCQB market. The address of the registered
office is 2 Leman Street, London, United Kingdom, E1W 9US. The Company was
incorporated on 15 March 2018 and its registered number is 11257655.
The principal activity of the Company and its subsidiaries (together "the
Group") is as a developer of artificial intelligence- enabled diagnostics for
kidney disease.
The financial statements are presented in United States Dollars ("USD")
because that is the currency of the primary economic environment in which the
Group operates.
2. BASIS OF PRESENTATION
This interim financial report, which is unaudited, does not constitute
statutory accounts within the meaning of section 434(3) of the Companies Act
2006. These interim financial statements have been prepared in accordance with
the AIM rules and IAS 34.
The accounts of Renalytix plc for the period ended 30 June 2024, which were
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 ("UK-adopted international
accounting standards"), have been delivered to the Registrar of Companies.
Those accounts were prepared and audited as required by the Companies Act
2006.
The financial statements are presented in United States Dollars ("USD")
because that is the currency of the primary economic environment in which the
Group operates. This interim financial report for the six-month period ended
31 December 2024 (including comparatives for the six months ended 31 December
2023 and 12 months to 30 June 2024) was approved by the Board of Directors on
17 March 2025.
New standards, amendments, and interpretations not adopted by the group
The group did not adopt any new standards, amendments or interpretations in
year as they did not have a material impact on the financial statements.
New standards, amendments, and interpretations issued but not effective for
the period ended 31 December 2024, and not early adopted
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning on or after 1 January 2025 and have not
been applied in preparing these financial statements. None of these is
expected to have a significant effect on the financial statements of the
Group.
Amendments to IAS 21 -- Lack of Exchangeability (effective for annual periods
beginning on or after 1 January 2025).
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or
after 1 January 2026).
IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective for
annual periods beginning on or after 1 January 2027) Amendments to IAS 12:
Deferred Tax Related to Assets and Liabilities Arising From a Single
Transaction.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for
annual periods beginning on or after 1 January 2027) Amendments to IAS 7 and
IFRS 7: Supplier Finance Arrangement.
3. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
financial statements are set out below.
Going concern
The Group and Company meet their day-to-day working capital requirements
through the use of cash reserves.
The Directors have considered the applicability of the going concern basis in
the preparation of these financial statements.
During the period the Group restructured its debt financing with all debt now
repayable in 2029 with no capital repayments in the short term. The Group also
has the option to capitalise interest payments. This, along with the £11.8
million equity raise completed in October 2024 has significantly strengthened
our net current asset position, and reduces our short term debt obligations.
Revenues have continued to grow in line with the Group forecasts aided by our
successful implementation of a New York healthcare system during the period.
The Directors are confident of replicating the implementation with other
healthcare systems over the next 12 months to grow revenues significantly. The
Group has made significant cost savings through reduced headcount, as well as
professional and service related fees following its delisting from the NASDAQ.
The Directors are aware that as opportunities arise, working capital
restraints may mean the Group needs to seek additional funding through public
or private equity offerings, debt financings, other collaborations, strategic
alliances and licensing arrangement in order to ensure it can support growth
potential and capitalise on current and new opportunities within the market.
The current cost base for the Group is built to support the future growth in
revenues through increased test volumes and additional pharmaceutical
services. Costs can be further reduced if the revenue growth is slower than
anticipated to extend cashflow. The Directors have also identified additional
cash inflows including R&D tax credits and divestment of assets to
increase cash reserves. Despite having the ability to reduce costs if
necessary, the Directors have concluded that as the business model relies on
continued significant revenue growth and on additional cash receipts such as
the R&D tax credit which have not yet been secured, there is a material
uncertainty on the Group's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that may
result from the outcome of this going concern uncertainty.
Accounting policies
The same accounting policies, presentation and methods of computation have
been followed in these condensed interim financial statements as were applied
in the preparation of the company's annual financial statements for the year
ended 30 June 2024.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Company makes estimates and assumptions regarding the future. Estimates
and judgments are continually evaluated based on historical experience and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual results may differ
from these estimates and assumptions. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year relate to:
· Convertible debt recorded at fair value through profit or
loss (note 10).
· Sharebased payments
5. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Executive
Directors who make strategic decisions. At present the Directors consider the
business to operate in a single segment.
6. REVENUE
Testing services revenue
Testing services revenue is generated from the KidneyIntelX platform, which
provides analytical services to customers. Each individual test is a
performance obligation that is satisfied at a point in time upon completion of
the testing process (when results are reported) which is when control passes
to the customer and revenue is recognised. During H1 FY25, the Company
recognised $1.2 million of testing services revenue. Sales tax and other
similar taxes are excluded from revenues. There was $1.2 million of testing
services revenue recognised in H1 FY24.
Pharmaceutical services revenue
Pharmaceutical services revenue is generated from the provision of analytical
services to customers. Contracts with customers generally include an initial
upfront payment and additional payments upon achieving performance milestones.
The Group uses present right to payment and customer acceptance as indicators
to determine the transfer of control to the customer which may occur at a
point in time or over time depending on the individual contract terms. Sales
tax and other similar taxes are excluded from revenues. During the period
ended 31 December 2024, $0.1 million of pharmaceutical services revenue was
recognised. The amount of pharmaceutical services revenue recognised in the
period ended 31 December 2023 was $nil.
7. COST OF SALES - ANALYSIS BY NATURE
UNAUDITED UNAUDITED AUDITED
Period to Period to Period to
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Direct labour 222 280 585
Rent 190 171 338
Freight and sample collection 186 132 309
Depreciation and amortisation - 195 409
Inventory movements 71 90 275
Royalties 84 86 160
Total cost of sales 752 954 2,076
The total cost of sales reduced in H1 FY25. This is due to depreciation and
amortisation of $26k (H1 FY24: $0.2m) being reclassified to administrative
expenses due to a review of standard cost methodology.
8. EXPENSES - ANALYSIS BY NATURE
UNAUDITED UNAUDITED AUDITED
Period to Period to Period to
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Employee benefit expense 4,631 7,174 12,077
Contract labour 816 1,589 2,418
Depreciation and amortisation 26 1,060 2,030
Professional fees 931 5,381 9,104
Laboratory supplies 64 301 401
Impairment loss on property and equipment - 306 -
Other expenses 1,558 2,584 4,703
Total administration expenses 8,026 18,395 30,733
The Group significantly reduced its administrative expenses during H1 FY25
through cost cutting measures, including a reduction in headcount. We
anticipate further expense reductions to occur through the remainder of FY25.
9. EARNINGS PER SHARE
Basic net loss per ordinary share is computed by dividing net loss by the
weighted average number of ordinary shares outstanding during each period.
Diluted net loss per ordinary share includes the effect, if any, from the
potential exercise or conversion of securities, such as options which would
result in the issuance of incremental ordinary shares. Potentially dilutive
securities outstanding as of 31 December 2024 have been excluded from the
computation of diluted weighted average shares outstanding as they would be
anti-dilutive. Therefore, the weighted average number of shares used to
calculate both basic and diluted net loss per share is the same.
The following potentially dilutive securities have been excluded from the
computation of diluted weighted-average shares of ordinary shares outstanding
as they would be anti-dilutive:
UNAUDITED UNAUDITED AUDITED
Period to Period to Period to
31 December 2024 31 December 2023 30 June 2024
Stock options to purchase ordinary shares 7,916,182 7,259,741 7,473,866
Restricted stock units 1,120 11,105 7,930
Conversion of convertible note 2,992,660 4,625,019 3,264,719
10,909,962 11,895,865 10,746,515
The Company was incorporated on 15 March 2018 with 50,000 ordinary shares of
£1.00 each, and as a result of subdivisions (100:1 on 4 May 2018 and then 4:1
on 24 October 2018), the resulting founding shares became 20,000,000 at
£0.0025 each.
9. SHARE CAPITAL
Group and Company Total Number of Ordinary Shares Share Premium Total
Movement Shares $'000 $'000 $'000
At 30 June 2022 74,760,432 241 85,444 85,685
12-Sep-22 Shares issues under ESPP 131,412 74,891,844 - 116 116
At 31 December 2022 74,891,844 241 85,560 85,801
8-Feb-23 Private Placement 18,722,960 93,614,804 57 19,248 19,305
7-Mar-23 Shares issues under ESPP 166,674 93,781,478 1 144 145
At 30 June 2023 93,781,478 299 104,952 105,251
17-Jul-23 Shares issued for repayment of convertible bond 1,052,422 94,833,900 3 1,673 1,676
4-Aug-23 Vesting of RSUs 185,540 95,019,440 1 138 139
6-Oct-23 Shares issues under ESPP 75,328 95,094,768 - 93 93
19-Oct-23 Shares issued for repayment of convertible bond 2,335,388 97,430,156 7 1,338 1,345
15-Dec-23 Shares issued for repayment of convertible bond 2,500,000 99,930,156 8 523 531
At 31 December 2023 99,930,156 318 108,717 109,035
14-Mar-24 Shares issued under the Securities Purchase Agreement 19,986,031 119,916,187 63 3,964 4,027
10-Apr-24 Shares issued for repayment of convertible bond 3,636,162 123,552,349 11 1,442 1,454
16-Apr-24 Shares issued under the Securities Purchase Agreement 2,666,667 126,219,016 8 989 998
22-Apr-24 Shares issued under the Securities Purchase Agreement 1,333,334 127,552,350 4 498 502
24-Apr-24 Shares issued under the Securities Purchase Agreement 26,815,841 154,368,191 85 6,203 6,288
At 30 June 2024 154,368,191 491 121,813 122,304
17-Jul-24 Shares issued for repayment of convertible bond 11,557,322 165,925,513 37 1,551 1,588
9-Oct-24 Shares capital issued 24,007,773 189,933,286 78 2,515 2,594
6-Nov-24 Shares capital issued 141,272,726 331,206,012 456 11,985 12,441
At 31 December 2024 331,206,012 1,063 137,864 138,927
Ordinary Shares have a par value of £0.0025 each. All issued shares are fully
paid.
10. CONVERTIBLE DEBT
The amortising senior bonds with a due date in April 2027 ("old bond") were
settled in the period and replaced with a new non amortising convertible bond
with a due date in July 2029 ("new bond"). The old bond was recognised at fair
value with changes in the value recognised through profit or loss. The fair
value of the instrument specific credit risk was recognised through other
comprehensive income. During H1 FY25 repayments of capital and interest were
$1.2 million (H1 FY24: $5.0 million), changes recognised for the fair value of
the bond were $0.8 million (H1 FY24: $1.3 million) and changes in fair value
of instrument specific risk were $0.1million (H1 FY24: ($0.1 million)). The
old bond was settled by the issuance of 33,000,000 shares (£2,500,000) and
the issuance of a new bond for $7.8 million.
The new bond was issued in November 2024 and has a maturity date of July 2029.
There are no capital repayments for the bond. Interest is payable in cash at
5.5% of the bond on a quarterly basis, or the Group can elect to pay 7.5% on a
Payment in Kind ("PIK") basis where the interest is added to the bond at the
end of each quarter. The bond holder has a right to convert the bonds into
shares at a price of $0.30 per share during the conversion period which starts
on 1 April 2026. The bond issuer has a cash alternative election where by they
can settle the amount of shares due upon conversion by the bond holder in
cash. The cash price due is calculated by the weighted average share price in
the 10 days prior to the election made by the bond holder.
The convertible debt option is considered to be an embedded derivative and in
accordance with the applicable accounting standards must be recognised
separately from the host debt contract at fair value. Upon initial recognition
management obtained a quote for a Bond on the same terms without a conversion
clause. The interest rate on the quoted bond was for 12%. Management used this
to determine the fair value of the embedded derivative at inception of the
bond. The fair value of the embedded derivative at inception was $1.5 million,
with the debt host contract accounted for under the effective interest rate
method at $6.4 million.
As the quote obtained for the fair value of the embedded derivative was close
to the period end it was determined this was an appropriate fair value as at
31 December 2024. Therefore no charge has been booked in the profit and loss
statement as there has been no change in fair value since inception. Interest
of $0.1 million has been accrued on a PIK basis during the period.
UNAUDITED UNAUDITED AUDITED
As at As at As at
31 December 2024 31 December 2023 30 June 2024
$'000 $'000 $'000
Beginning of Period 8,490 11,948 11,948
Fair value adjustments 762 1,320 3,750
Change due to payment of principal and interest (1,209) (4,950) (6,176)
Change in credit risk 125 (75) (306)
FX Impact (46) 130 (726)
Subtotal 8,123 8,373 8,490
Derecognise Old Bond (8,123) - -
Recognise New Bond 7,767 - -
Accrued Interest on New Bond 121 - -
Fair value adjustments (378) - -
Settlement of convertible notes 782 - -
FX Impact (404) - -
End of Period 7,888 8,373 8,490
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAPDXFENSEFARecent news on Renalytix
See all newsREG - Renalytix PLC - Holding(s) in Company
AnnouncementREG - Renalytix PLC - Holding(s) in Company
AnnouncementREG - Renalytix PLC - Holding(s) in Company
AnnouncementREG - Renalytix PLC - Holding(s) in Company
AnnouncementREG - Renalytix PLC - Late Breaking KidneyIntelX data show care impact
Announcement