Microsaic losses persist on spiralling costs

Microsaic Systems' shares dropped on Monday after it reported that costs are likely to remain elevated in 2019, having contributed to annual losses widening last year.

For the year ended 31 December the mass spectrometry instrument developer's loss before tax widened to £3.0m, an increase of 5% compared to the year before, as a 69% increase in revenue to £0.6m was offset by a 52% increase in cost of sales to £0.3m and an 8% increase in total operating expenses to £3.3m.

Glenn Tracey, chief executive of Microsaic, said: "2018 marks the year of accelerated growth for the business. Microsaic has increased its customer base from one partner to eight and has extended its geographic reach to now include Southeast Asia, Europe and North America, with further growth planned in 2019. As CEO for just over a year, I am encouraged with the company's progress, particularly in business development, which continues to expand globally. This has contributed to top-line growth in 2018 of 69%, and I am confident that we will continue to see strong growth in 2019."

The revenue increase was driven by a jump in product revenue of 104% to £0.5m, while operating expenses increased due to "increased business development" as had been expected.

A statement from Microsaic said expenses are projected to jump again in 2019 due to the AIM traded company's "business plan to meet its commercialisation and product development goals".

"I am also pleased with our operational development, following the transfer of our clean-room facility and assembly to our manufacturing partner. Targeted investment will be made in 2019 to further strengthen our capabilities in comercialisation and product development," said Tracey.

A statement from Microsaic said it is in early stage discussions with several potential partners in the Healthcare and Life Sciences sectors and "remains optimistic" about the commercial viability of its differentiated technology for large molecule applications.

At the end of the year the company had cash and cash equivalents of £5.4m, up from £3.2m at the same point the year before.

Microsaic Systems' shares were down 5.16% at 1.38p at 0842 GMT.