The Cogstate Limited (ASX: CGS) share price has been fluctuating today after the company released a business update to the ASX.
Earlier today the Cogstate share price was trading 2.33% higher but has now dipped into the red and is down by 0.47% to $1.07 per share.
About Cogstate
Cogstate is a neuroscience technology company aiming to optimise brain health assessments. As such the company provides services to measure cognition and optimise the assessment of brain health to aid in new medicine development and provide earlier clinical insights.
What did Cogstate announce?
This morning, ASX healthcare company Cogstate released its quarterly sales update. The company reported that its clinical trials sales contracts executed during the last quarter of 2020 amounted to US$14.3 million.
That result takes the total value of sales during the first half of FY21 to US$22.6 million, which is down from US$26.9 million the prior corresponding period. The company noted that the global pandemic has resulted in sales delays for the company.
In the healthcare segment of the business, Cogstate also announced that it has received a payment from Japanese pharmaceutical giant Eisai. The payment is part of a global license agreement, in which Eisai has agreed to pay Cogstate an upfront royalty of US$15 million to exclusively distribute its digital cognitive technologies. In addition, the agreement provides for cumulative royalties of at least US$30 million over the term of the license, unless terminated earlier.
Management commentary
The strong half year result follows the record US$46.0 million of sales contracts executed in FY20.
Cogstate CEO Brad O'Connor welcomed the news, saying:
In the context of the global pandemic and the various stay-at-home orders in place around the world, which have certainly made trial recruitment and participation more difficult than normal, the clinical trials sales result is very pleasing. This result demonstrates that the level of demand from pharmaceutical companies for Cogstate technology and services that was evident during FY20 has continued into FY21, notwithstanding the challenging external environment.
The company also noted that its recent deal signed with Eisai has not been included in the quarterly or half yearly results.
The Cogstate share price is trading 194% higher than this time last year, and on current prices the company has a market capitalisation of $182 million.
