Revenue rises, losses widen in first half at Renalytix

Artificial intelligence (AI)-focussed diagnostics company Renalytix reported first-half revenue of $1.3m (£0.99m) in its first half on Thursday, up from $0.4m year-on-year.

The AIM-traded firm said its cost of revenue for the period totalled $0.8m, rising from $0.2m a year earlier.

Administrative expenses for the six months ended 31 December totalled $27.5m, up from $14m year-on-year.

The company said the increase in expenses was driven by a $5.6m rise in employee-related costs, due to its ongoing hiring of key corporate and commercial personnel, as well as a $5m increase in consulting and professional fees as the company focussed on commercialisation.

It also put the increase down to research and development efforts and utility studies at Mount Sinai, Wake Forest and the University of Utah, as well as a $2.9m increase in corporate expenses such as marketing, IT, insurance, depreciation and amortisation.

Net losses before tax widened to $26.8m from $16.2m, while cash and cash equivalents fell $39.9m from $65.2m on 30 June.

“We reported testing revenues of $0.7m - this compares favourably with revenues from the first quarter of $0.5m,” said chairman Christopher Mills and chief executive officer James McCullough in a joint statement.

“Volumes with Mount Sinai have continued to increase into the third quarter, and we anticipate test volume to strengthen further as we progress through the remainder of the fiscal year.

“As additional hospital systems begin to come on stream into fiscal 2023 and beyond, we anticipate further increase to these testing volumes.”

Mills and McCullough said that in the second quarter, the company made a number of one-time investments pertaining to the recruiting, equipping, training and deploying of its salesforce, and associated marketing and other expenses to enable them to be most successful in the field.

“We are happy with the sales infrastructure we now have in place to pursue the large Veterans’ Affairs and commercial hospital revenue that is available to us.

“Much of this is included in one-time expenses that are not repeating, and indeed our quarterly burn rate is already reduced versus fiscal second quarter, and we plan to exercise continued prudent cash discipline.”

At 1226 BST, shares in Renalytix were up 18.8% at 320.75p.