Cogstate Limited

Hello, and thank you for joining us today for our Investor Update. My name is Ruth Ray.

I'm the Senior Marketing Manager here at Cogstate. And we are joined today by Brad O'Connor, our Chief Executive Officer; and Darren Watson, our Chief Financial Officer.

I'll go ahead and hand the time over to Brad, and I'll pop back in to help moderate the Q&A at the end of the session. So Brad, over to you.

Thank you, Ruth. Good morning, everybody.

Thank you for joining us for the presentation of Cogstate's 2023 financial results. I'll note our disclaimer that we will make forward-looking statements in this presentation and [ accept ] that you'll read that -- that disclaimer.

For those that have followed Cogstate for some time, you'll understand that we're on a mission to democratize brain health assessment. We want to make it easier for people to understand and measure their cognition.

And I think over the last 12 months, as a society, we've made substantial steps towards that goal. Cogstate has been -- been in existence for over 20 years now.

We have a fantastic scientific pedigree. We have a long track record.

We have a number of very strong commercial relationships in the pharmaceutical industry. We've got a fantastic team of over 370 team members comprised of over 160 employees plus the global network of consulting neuropsychologists.

We've had a tough financial year '23, but with a really growing addressable market and well-validated offering strong commercial partnerships with those relevant drug developers and a strong balance sheet, so we're really well positioned to grow. What I want to start today is talking about what's been happening outside of Cogstate in the broader industry, and the really positive external market conditions that we find ourselves operating in currently.

So just last month, the U.S. Food and Drug Administration, the FDA, approved Eisai's monoclonal antibody, lecanemab or what will be marketed in the United States as Leqembi for release -- for the treatment of early Alzheimer's disease.

So this is the first ever therapy to go through a full FDA approval for early Alzheimer's disease. Subsequent to that approval, we saw that the U.S.

Centers for Medicare and Medicaid, released updated guidance in relation to the reimbursement of those drugs, stating that they will provide full reimbursement of those treatments provided that those patients go through a -- [ was a ] fairly light touch CMS facilitated registry to keep track of those patients and understand the ongoing health profile of patients on drug. At the same time, in the June quarter, we saw Lilly released their Phase 3 data in relation to a similar drug donanemab.

They have now submitted that data to the FDA, and they're expecting regulatory action before the end of calendar year '23. There's no reason to believe that, that therapy might also be approved.

And so by 2024, we expect to have 2 treatments on market for early Alzheimer's disease. I think it's worth pausing just to consider the -- how momentous that occasion is for the industry and the society, as a whole for patients, their caregivers, but similarly for Cogstate and its impact on our Clinical Trials business, as well as our Healthcare segment.

Looking at the FY '23 year just finished, it's fair to say the tough year for Cogstate. What we wanted to do today was to give some more context in relation to those trading conditions we experienced in FY '23, and why we're seeing those changing, as we head into FY '24.

So the first is the clinical trial sales contracts declined substantially from what was a record in financial year '22. So we signed over $82 million worth of sales contracts in financial year '22 down to $34 million in financial year '23.

So a number of reasons for that. One is that our large customers.

We're focused very much on the close out their Phase 3 programs and their regulatory submission. That's what I referred to on the previous slide.

Those issues are now resolved, and we'll talk about what they're planning to do in the future. In the biotech market, we saw that those smaller biotech companies really impacted by slowing access to capital and slowed down their R&D program substantially.

However, over the last 3 months, we've seen a substantial pickup in activity in those smaller biotechs, who are focused, particularly in the rare disease market, and that's really encouraging for us. We did have a reasonably solid first half results in terms of sales contracts with over $27 million with the sales contracts signed through that 6 months, but that was followed by a really disappointing June half year of only $6.7 million worth of sales contracts executed in that period.

It's worth noting that the win rate through that period. So the amount of contracts executed versus opportunities in front of us remained unchanged.

But what we saw was a substantial decrease in volume of opportunities through that period, that was obviously concerning. We were confident that, that would reverse soon.

And pleasingly, we've seen that over the last 3 months. So since May 2023, the level of request for proposals or sales opportunities, volume has increased substantially, both in terms of the number of opportunities and the total value of that sales pipeline bringing that sales pipeline back to financial year '22 levels, which obviously underpinned that really strong sales that we executed in that financial year '22.

Similarly through FY '23, we saw our revenue decline. Our Clinical Trials revenue was down 11% from '22 to '23.

So a few reasons for that. One is that revenue from contracts on hand at the beginning of the year was delayed.

We saw some of that revenue delayed by slow recruitment into one very large Phase 3 trial. Pleasingly, that issue is now resolved.

And then revenue from contracts that we executed through that first half of financial year '23 was also delayed due to the pause of 2 Phase 3 trials. That revenue delay distinct from the one above.

But again, those issues are now resolved, and those 2 trials are now kicking into gear, which is pleasing for us. The other thing that I think is important to note is the improved second half performance from the December half into the June half.

So in the June half, we saw revenue up -- just under $1.5 million. We saw profit before tax, up $3 million and operating cash flow up $1.3 million.

So a much better second half performance. Look, I'll just touch on the financial year highlights before handing over to Darren Watson, who will go through a lot of these numbers in more detail.

But as I mentioned, $34 million worth of sales contracts executed in Clinical Trials through the FY '23 year, we saw group revenue of just a little over $40 million. So that was off 10% from the prior year.

Clinical Trials revenue down 11% in that period. Operating net cash flow of $1.7 million positive cash flow from operations through the financial year.

We have $132.5 million worth of contract of future revenue. Our profit before tax for the year was $3 million.

That was ahead of guidance, but down from the prior year. And we ended the year with a little shy of USD 28 million net cash holdings.

As we look forward to the 2024 financial year, we have really strong expectations for growth this year. In Alzheimer's disease, the approval and launch of the first disease-modifying therapies really opens the door to line extension and combination therapy trials for Cogstate, I'll talk about that in a little while.

But essentially, what we're saying is, there's an increasing pipeline of opportunities for Cogstate from that increased research and development spend. We expect to see brain health awareness and diagnostics will be an important focus, as we see those new Alzheimer's therapies come onto market.

And we note that in conjunction with our partner, Eisai, we're planning the launch -- the commercial launch of our physician tool named Cognigram during this fiscal year '24. And the other thing in Alzheimer's disease, we're seeing other large pharma companies entering the market and planning trials in this space.

And we note there that just this month, Cogstate has secured a Phase 2 trial in pre-symptomatic Alzheimer's disease from a new customer. So really pleasing to see the expansion of that customer base.

In terms of Clinical Trial sales for FY '24, as I mentioned previously, that request for proposal volume has increased substantially, and so we're seeing that just value of opportunity to increase back to those FY '22 levels. Then on top of that, we're seeing a number of programs with -- from some of our existing customers that have start date in calendar year '24.

So it's not just the existing pipeline of opportunities that are already been identified, but we see the greater number of opportunities coming down the track also. In terms of revenue for fiscal year '24, the delays we've experienced in financial year '23 have now been resolved, and so we're expected to grow revenue from '23 to '24.

We note that we have a strong backlog of work already contracted with just shy of $28 million of Clinical Trials revenue contracted for financial year '24. And actually, a higher level, over $30 million of the -- of Clinical Trials revenue contracted for financial year '25.

So that's strong contract revenue basis underpins our revenue and revenue growth from '23 to '24 to '25. We expect that our profit will increase with expected revenue increases.

And we note that the staff cost reductions that we executed in May of this year will start to show benefit in the financial year '24, as we were running at lower cost base. What I want to do now is to really talk about some of the reasons, the drivers for that increased sales activity that we're seeing at the moment.

Certainly, there's a substantial amount that comes from Alzheimer's disease and our existing partnerships in Alzheimer's disease. So our existing large customers are planning new studies in Alzheimer's disease, and we see a substantial amount of work coming from that.

But on top of that, we've been able to add 3 new customers to our portfolio, all of which are top 10 pharma companies entering the Alzheimer's disease space. So really pleasing to see that as expected that the positive data from the Phase 3 studies that read out over the last 12 months have encouraged new pharma companies to enter the race for new Alzheimer's disease therapeutics.

In other disease areas like Parkinson's disease, MS, depression and sleep, we're seeing -- we're seeing that we're gaining traction in those diseases and broadening our -- the base of indications that -- in which Cogstate works and particularly a pickup in the rare and pediatric trials, including pediatric obesity or the GLP-1 studies that are getting a lot of attention at the moment in terms of the success of those therapeutics in both diabetes and weight loss programs. And then finally, we're seeing the continued trend for what we're calling patient-friendly trial design or at-home decentralized assessment has been an important part of Cogstate being able to identify new opportunities, and that really relates to the appropriateness of the Cogstate digital measures for use in those decentralized trials.

Looking at Alzheimer's disease, specifically and the commercial opportunity that exists for Cogstate, I think it's important just to remind everybody of the financial significance that Alzheimer's disease plays in our broader financial structure. So over the last 2 financial years, only 24% of the sales opportunities that we've been focused on have been in Alzheimer's disease, but 70% of the value of sales contracts executed over that period have been in Alzheimer's disease.

So that just reflects the size and scale of those -- particularly the large Phase 3 Alzheimer's disease projects, and therefore, the revenue impact they have in our business. And whilst we've seen breakthrough treatments from both Lilly and Eisai over the last 12 months, I think it's important to note that these are far from perfect, and there's still room for improvement on those drugs, and we, therefore, expect continued investment in research to improve upon the results have been shown so far.

What's really important to note is, and this was shown particularly with the Lilly data that was presented at the Alzheimer's Association Meeting in Amsterdam last month was that the earlier treatment really showed a much greater benefit to patients, and so that early diagnosis and timely diagnosis of the disease is really important to better health outcomes. Again, that just reinforces the role that really sensitive digital assessments can play in delivering better health outcomes for those patients.

In terms of increased future R&D spend in Alzheimer's disease, we've seen in other indications that positive data and regulatory approval certainly leads to a de-risking of future investment by other companies. And there's no reason to believe that Alzheimer's disease will be different to what we've seen in other indications.

The other thing that I think really important to note is that over the course of the next 12 months, Eisai and Lilly will have revenue from the drug launch of their new therapies. And certainly, we see within large pharma companies an increase in R&D spend, whether it's the revenue line to protect and to grow, and we expect that to happen.

And then we expect new mechanisms, line extension and combination therapies, I'll talk about what that means in a minute, but we expect that there will be continued spend from an R&D perspective. All of this adds up to a growing market for Cogstate technology and services, both in our Clinical Trials business, as well as our Healthcare business.

Digging a little deeper into the opportunities with those approved treatments, our expectations that we will see drugs like Leqembi and donanemab trialed in different, but associated diseases. So we would expect them to be trialed in Lewy-body dementia, frontal temporal dementia, as well as Alzheimer's disease and down syndrome.

I should note that the individual companies haven't spoken publicly to their intention to go into these areas, but that would just be our expectation based on the logical assessment of what you would do with that drug having achieved that approval. The other thing that is important to note is that the analysis of both the Eisai Lilly data focused heavily on the role that tau plays in terms of treatment benefit for patients on the lowering of amyloid.

Both of those companies have tau programs in development. And so, we would expect in the future that they would seek to run combination tau and amyloid treatments to show improved benefit from that combined treatment.

Finally, in the context of Alzheimer's disease, I want to talk about pre-symptomatic Alzheimer's disease, sometimes referred to in the industry as pre-clinical Alzheimer's disease. So pre-symptomatic treatment, the idea of that is to lower amyloid burden in patients before such time as it causes Alzheimer's disease.

So this is [ analogized ] to the management of cholesterol, where we're seeking to lower cholesterol, and therefore, lead to better health outcomes in terms of cardiac safety. So -- so far, Cogstate's been involved in 100% of the ongoing and those pre-symptomatic Alzheimer's disease studies that we know are about to start.

So we had some very early experience in this running the A4 study that included Lilly's prior generation drug, solanezumab, and Cogstate is being involved in that for some time, showing the sensitivity of the Cogstate assessments in that very early stage Alzheimer's disease. A key -- and I think it's important to note there that -- that 100% market share has been hard one, but we expect to benefit from that over -- over some time into the future.

And the reality is that for our competitors, they just cannot show the experience in this stage of Alzheimer's disease. So it positions Cogstate really well.

The key difference there is the need for more sensitive instruments, both the digital assessments, as well as the clinical assessment. So our expertise and advantage in terms of digital assessments is well known.

What's perhaps less well known is the capability that Cogstate has in terms of the delivery of those clinical assessments via consulting neuropsychologists, as well as the assessment and auditing of those assessments that are conducted at trial sites. The earlier stage of these patients in a pre-symptomatic disease, so these are otherwise well people allows for the greater application of decentralized trial approach.

So this is that at-home, tele-health style assessment. To-date, Cogstate is the only provider of central health -- central rating, which is a tele-health assessment of a primary endpoint in an Alzheimer's Phase 3 trial.

So I'll say that again, we're the only people to have delivered that tele-health assessment in as a -- of a primary endpoint in Alzheimer's Phase 3 trial. That's a fantastic claim.

And I think that is the type of claim that underpins the fact that we've just secured a new customer in that pre-symptomatic Alzheimer's disease space. The other thing I just wanted to touch on before handing over to Darren to run through the financial results is just the opportunity we're seeing in rare diseases.

The -- we're seeing as a general statement that a number of biotech companies are looking at a rare disease as an opportunity to run a tightly cost controlled clinical trial program and get regulatory approval in respect of -- in respect of those compounds. And we are benefiting from that push of those biotech companies.

Now, Dr. Pam Ventola, who's the VP of Science at Cogstate and leads up our push into rare disease.

She's a highly respected consultant and scientists in the industry. She authored -- we note that she authored a publication providing evidence for the clinic -- for clinical meaningfulness of change seen in a trial from Rett Syndrome.

So to just put that into layman's term, Pam defined ahead of the trial, what success would look like, managed those aspects of the trial and then was, be able to -- was able to report back to the regulator that those success metrics have been met. She's -- similarly, she's published a paper showing the applicability, in fact, the benefit of central rating tele-health style assessment in rare disease trials.

And that kind of conduct is now becoming the norm in rare disease trials, both from a reduced cost, but an improved outcome point of view. And to the extent that the regulators, the FDA is now recommending this approach to biotech companies, and they're citing the Cogstate publication on this subject.

So again, we're really well positioned there in terms of the growth profile into rare disease trials. So I'm going to pause now and hand over to Darren, who's going to run through in a bit more detail the financial year '23 results.

Thanks, Brad. So this chart details the profit and loss for the financial year 2023.

As Brad mentioned earlier, revenue for the year at $40.5 million was down 10% from the prior year. This was caused by revenue delays associated with specific issues on a small number of trials that Brad outlined earlier, as well as the low second half new contract sales that were achieved during the second half.

We did see improvement in the second half over the first half, the second half revenue hitting $20.9 million compared to the first half of $19.5 million, an increase of $1.4 million, with many of those issues around revenue delays beginning to come to a resolution through that second half. Gross contribution for the year was $21.2 million, down 20% from the prior year and down almost 7 points of margin.

The decline in revenue was the driving factor, but also the fact that our Clinical Trials cost is largely of a fixed nature. So while we initially held our resource levels in anticipation of revenue growth, adjustments were made in the second half, as part of the restructure of the business that we undertook in May.

Additionally, the contribution was impacted by the lower software licenses with our software license mix down to 10% of Clinical Trials revenue down from the record of about 22% in FY '22. That decline in the gross contribution, together with an increase in our operating expense resulted in EBITDA of about $5.3 million for FY '22, which is down 59% on the prior year record of $13 million.

And then, there's a small increase in depreciation and amortization year-to-year and therefore, results in our EBIT of $2.7 million, down from the record in FY '22 of $10.7 million. I think it's important to note here that the second half EBITDA, EBIT and net profit before tax were stronger than the first half with stronger revenue than the rebalanced business from the restructure, returning their business closer to our target levels of profitability.

If I turn to the next page, as Brad covered a little earlier, contract sales for FY '23 worth $34 million, down from the record level of $82.5 million in FY '22, as the graph on the left here illustrates. While the first half was reasonable at $27.3 million, the focus on closing out the Phase 3 trials and the subsequent regulatory submissions, as Brad mentioned earlier, together with the lower spend that we're seeing from biotechs in the current constrained market, saw only $6.7 million of sales in the second half.

Alzheimer's continues to be the main driver of our sales, accounting for 70% of the value in FY '23. The graph to the bottom right of the table here show the breakout of our new contract sales between Phases.

And you can see, again, a strong mix of both Phase 2 and Phase 3 trial signings in FY '23. Turning to the Clinical Trials business.

Revenue was at $35.7 million for FY '23, down 11% from the prior year, and as we've discussed, the revenue delays being the main cause of that. We did see improvement in the second half, as some of those causes began to ease, with revenue growing to $18.6 million in the second half.

The margins were impacted by the lower revenue, the higher staff costs, as I mentioned before. We initially [ retained ] resource levels in anticipation of revenue growth, but adjusted for that in May.

And also a lower software license mix with our software license revenue declining from the record highs of FY '22, which were at 22% of Clinical Trials revenue to just above 10% in FY '23. Again, it's important to note here that the second half stronger revenue and stronger margins illustrates that the restructure we undertook in May returns the business back to historical or target levels of margin.

Turning to the next chart, which illustrates the future contract revenue run-off. On the bottom left, you can see the contract revenue run-off.

So for FY '24, we have revenue under contract for Clinical Trials of $27.7 million and Healthcare revenue of $4.2 million. That revenue grows again in FY '25.

So it gives us confidence of growth in FY '24 and '25. In the bottom right-hand table illustrates the percentage of revenue under contract at the beginning of the year relative to our full year revenue.

And you can see that FY '23 are significantly different to the prior years. A couple of impacts in here, one being that a large portion of the revenue under contract at the beginning of the year, close to $5 million actually shifted out to future periods, as a result of the revenue delays that we have talked about.

And in the abnormally low second half of new contract sales has resulted in low in-period revenue. And so, we believe that FY '20 through FY '22 more representative of future years, that is FY '23, which had those 2 unusual scenarios of revenue that has shifted to future periods, and the lower, in particular, the low second half contract signings.

Turning to the Healthcare business, you can see revenue of $4.4 million, essentially flat year-on-year. The $4.4 million primarily consists of the amortization of the 2 Eisai deals, both the global and Japan deals, and the margin slightly down from the prior year, down by 1.3 points.

First half was impacted by an external study that was undertaken on our behalf in terms of go-to-market opportunities around the Healthcare business, which will be beneficial to us, as we enter the -- into FY '24. And then the second half sees us return to the -- the more expected or consistent margins for our Healthcare business.

Finally, on the next chart, just from a cash flow point of view. As Brad mentioned earlier, our positive net operating cash flow of $0.7 million, they are down considerably from last year.

Clearly, the key driver to that is the lower EBITDA declining from $13 million in the prior year down to $5.3 million. A couple of important notes continuing to invest in the business, so you can see capitalized software development costs of $2.1 million, reflecting the ongoing investment in the technology that underpins the business.

And also from a financing cash point of view, the $0.6 million relating to the share buyback program that was undertaken in the second half of FY '23. And so the combination of the operating cash flow, those investing activities and the financing activities sees a small reduction in our net cash over the year of $1.9 million, but we remain in a very strong cash position of $28.7 million of net cash at 30 June.

So it positions us well from our ability to continue to invest into the business. And with that, I will hand back to Brad.

Thank you, Darren. So just to wrap up before we open up for questions.

And just before I get into this, I'll remind people that there's 2 ways to ask questions. The first is you can type your questions into the question pane on the control panel.

You'll see a chat there from [ Cogstate's meetings ] inviting you to do that. The other is you can raise your hand and the moderator will unmet you, so that you can ask your question verbally.

So we encourage you to do either of those. So just focusing, I suppose, on as we look forward that we believe that we're like that our business is really well positioned for growth.

So we're absolutely seeing momentum returning to the business, and particularly, that comes from the growing opportunity in Alzheimer's disease. Our existing customers are planning new trials.

We note that most of those have a start date in the 2024 calendar year. But certainly, we're expecting new trials come from our existing customers.

We're seeing an expansion of our customer base, and we're encouraged by the addition of 3 new large pharma customers over the last few months. Those 3 companies are all top 10 pharma companies in terms of rating -- ranking by revenue.

We're planning our go-to-market for Cognigram in the U.S.A. So just a reminder, the Cognigram is the Class II medical device that's received FDA clearance.

And we're expecting that Eisai will take that into the market late calendar '23, early calendar '24. Obviously, sales contracts in our Clinical Trials segment will be critical to revenue growth, and the timing of execution of those sales contracts will impact just how much revenue we recognize in fiscal '24.

But we are obviously encouraged by the fact that the sales pipeline has increased to those FY '22 levels. In May 2023, so just a couple of months ago, we initiated a cost reduction.

We exited a number of people from the business, and we restructured the business. That restructure is going very well.

The cost base reduction was enabled by technology efficiency gains that we've invested in over the last couple of years and have positioned Cogstate for profitable revenue growth. And Darren mentioned that we've seen those Clinical Trials contribution margins get back into sort of target range through the June half of the financial year and the cost base reductions that we executed in May will position us well to maintain that sort of margin in fiscal '24.

We expect to grow our revenue and profit in FY '24. But at this stage, we're not providing specific guidance pending the execution of those sales contracts, just so we can see -- get greater certainty in respect of the timing of the revenue.

I think it's one of those questions, where the quantum of the revenue is less in question, and the timing of the revenue, and therefore, the impact in fiscal '24. But we note that we'll update the market again at our AGM scheduled for late October.

Finally, we note that coming out with this release, we -- the share trading window for Cogstate will reopen, and we will recommence our share buyback and be back in the market tomorrow. And we -- and that decision to recommence the buyback reflects the Board's view of value relative to where we're trading currently, as well as our strong cash position.

So with that, I'm going to open up to questions. [Operator Instructions]

Fantastic. Thank you so much, Brad and Darren for walking us through this information.

We do have several questions and to what we've just been speaking about in terms of Healthcare and Cognigram, we've had several questions about that area. And I do want to ask one of them that regarding Eisai's go-to-market planning, does the planned application of Cognigram match the expectations that were in place when the partnership was signed?

And what needs to happen for Cogstate to reach above minimum contracted royalty revenue?

Yes. This is, I mean, a complex question to answer, I suppose, in terms of expectations.

I think this has been a moving target for all of us in terms of the expectations of getting drugs on to market, the moving goalpost that has been reimbursement of those drugs. We're really pleased to see CMS' updated statement in terms of reimbursement of those therapies in the United States market.

So absolutely, as we get to towards the end of this calendar year and the start of '24 calendar year, I think having the sales activities, putting that Cognigram product into the hands of primary care physicians absolutely meets our expectations and our -- I suppose, our ambitions with respect to the product. We believe that, that's a substantial opportunity, and we've always believed that is a substantial opportunity.

The original investment thesis for Cogstate revolved around the idea of putting technology into the hands of primary care physicians and allowing them to better identify the earlier stages of cognitive decline that might be associated with Alzheimer's disease. So that absolutely meets our expectations in terms of -- or ambitions in terms of what we want to do with the product and having a partner, who has a therapy on the market obviously positions us really well.

In terms of what it will take to exceed the minimum royalties that we're receiving under that agreement, it's really just quantum of -- quantum of applications of the technology, so number of tests, number of patients, really. So it's a product of getting the product on market in the hands of the sales force, calling on primary care doctors and really making that part of standard of care.

It's probably too early to talk at this stage about what that rollout looks like, and I would be breaching confidence if I was to do so. But we're excited to think that it's finally happening.

We've been working on this for over 20 years. So it's exciting.

It certainly is exciting, Brad. Thanks for that.

A little bit of a switch here to something else that was just brought up. So regarding the share buyback, what should be expected?

And would you say that Cogstate is in a position to be a bit more aggressive in this than maybe we have been in the past?

So I think the question probably reflects a little bit of a lack of understanding of what Cogstate can do. So we're limited somewhat by the volume of stock that goes through the screen.

So just so that people understand the mechanics of how this works, when stock is crossed by a broker, which [ is offered to use ] in respect of Cogstate, we don't participate in that, and we are limited to how much stock we can buy on a certain day. We're limited to 25% of the stock that's traded through the screen on any individual day.

So we've been as aggressive, as we can be. On most days, we've hit that limit.

And so, we were a function of how much stock is going through the screen. So it hasn't been -- and we were also limited in terms of the maximum price that we can pay for stock.

So we can't [ bid the ] stock up. These [ deferrals would ] prevent us from doing that.

So we have acquired as much stock, as we've been able to under those conditions, and we'll continue to do so.

Thanks, Brad. Next question.

Contracted revenue from financial year '24 dropped from $32.6 million at the half year to $27.7 million at June 30, which is a decline of nearly $5 million. It sounds like some of the trials may have been pushed back in the past 6 months, and could you talk to maybe what has occurred here?

Yes. So that's exactly right.

So compared to the figures released with the half year at the end of February of '23, you saw a decline of $4.9 million in contracted revenue for '24, you saw an increase of contracted revenue for '25 of $3.5 million, an increase in '26 of $0.3 million, an increase at fiscal '27, a $0.7 million and an increase for fiscal '28 of $4.1 million. So overall, over those 5 financial years, you've seen contracted revenue actually increased from $92.2 million at February to $95.9 million, as at today, but the timing of those has changed.

Now, so there's certainly an element of those delays we referred to earlier, sort of pushing activities to the [ right ], and we've talked about that at length over the last 6 months. The other thing that's, I think, really important to note here is these changes and movements in terms of -- this is expectations in terms of when do we expect activities will occur that allow us to invoice.

Those expectations change all the time. And these numbers do move quarter-to-quarter, and they always have constantly.

It becomes more obvious when you have a really slow sales half, as we did through the June half. So normally, if we had a half of $20 million, $30 million, $40 million worth of sales contracts executed over that period, you would have just seen that growth in '24 and '25 contracted revenue that would sort of muffle a little bit of that movement that you see quarter-to-quarter and half-to-half in terms of the timing of -- the expected timing of revenue recognition.

So there's a little bit here of when the tide goes out, you see more of what's happening behind the scenes. But the analysis that, that listener has identified is 100% correct.

So again, $4.9 million reduction of contract revenue for '24. But then overall, $3.7 million -- every other period has increased in terms of contracted revenue.

So an overall increase of $3.7 million of contracted revenue for those 5 years.

Thanks, Brad. I appreciate you laying that out.

Another question. So looking at trials in this pre-symptomatic AD area, we've seen some difficulties in recruitment.

And the question is about how trial sponsors might navigate some of those recruitment difficulties, and maybe I might add how Cogstate may help address that, some of those -- those challenges? So we -- maybe might I'll have to endure some of the delays that have been experienced.

So again, I think the -- I think there's 2 aspects in respect of delays. So firstly, the difficulty of recruiting of those patients is absolutely a fair comment.

The second thing in relation to delays, though, is about -- and a little bit of it is about -- is around expectations. So it's a delay if your expectations were wrong.

And yes, clearly, through fiscal year '23, our expectations, we're wrong though, we're guided by our pharma company customer in that situation, but with the benefit of hindsight those expectations were incorrect. So there's 2 aspects to it.

In terms of improving recruitment into those trials, I think the absolutely, there's a role to play for digital cognitive measures, as a screening tool in that space. I think the other thing, though, that really increases the rate of recruitment into those trials is the release of blood-based biomarkers.

So this is the ability to assess amyloid in people's brain via blood test. Obviously, that makes the comparison to that blood test is a PET scan or analysis of amyloid in CSF, so via lumbar puncture.

So a blood test really reduces the friction point in terms of identification of patients, who might participate in that trial. And we think that the release of those blood tests, which is coming shortly will really be the thing that speeds recruitment into those trials more than anything else.

And Brad, you brought up biomarkers, which is -- actually leads perfectly into another question we had about the growth of importance and understanding of biomarkers in Alzheimer's disease. And the question is around how Cogstate tests may align with biomarkers?

Yes. So it's really important, and it's a very good observation.

The -- so what you're looking for in Alzheimer's disease presently and is both the presence of amyloid and the presence of cognitive impairment. So you need both of those aspects for a diagnosis for the existing treatments for the ones that are coming onto market currently.

And so there's a need to wrap both of those things together in terms of availability for primary care physicians, as well as specialist clinicians. And there's a number of discussions that we're part of currently to think about how as an industry do we make those tools more widely available to physicians.

I think the important thing to note is that those blood tests are not yet quite ready for commercial launch, but they're getting very close, and we expect them on market very soon.

Thank you so much, Brad. We're going to take just a few more questions here, folks.

And if there are others that don't get answered, please do feel free to e-mail us at [email protected], and we are happy to continue answering questions. So the next question we have here is the interaction earlier this year with a potential purchaser clearly indicates the Board is open to recommending a sale at the right price.

Has the Board considered running a formal sale process?

So good question. I think -- so 2 aspects to that.

I think -- I think that's true to say that well, I would imagine that every board is open to a sale at the right price. But yes, I can confirm that our Board absolutely is open to a sale at the right price, and the right price is the critical aspect.

In terms of running a process, I think it's important to understand, where that -- those previous discussions fell down, and a lot of it related to the fact that we were experiencing, so we Cogstate, we're experiencing those revenue delays, the complexities in relation to our current period revenue, and therefore, current period earnings, which obviously has implications in terms of valuation. So I think as we look forward as a business, and we look at the opportunities that we see in front of us, we look at the sales pipeline that is growing so rapidly, as well as the additional opportunities that we see coming through calendar year '24, I think in terms of maximizing return for our shareholders, which is what we're focused on, it's about identifying when is the right time if we were to run a process.

I would argue that now it's not the right time coming off the back of these results that we've just released these fiscal '23 results. I think realistically, our shareholders would benefit from Cogstate printing some much stronger numbers, which we intend to do.

And then we could -- and then, it might be an appropriate time to think about that.

Thanks so much, Brad. The final question we're going to take tonight is -- or sorry, I'm in the United States, it is -- this morning in Australia, but how is Cogstate innovating?

What's new and evolving inside the organization to stay ahead of the curve and stay sharp?

Thank you. It's an excellent question.

So a number of areas, where we're focused on innovation. I think the first I'll touch on is -- is phone-based assessment.

We've seen the relevance of at-home assessment. We've also seen -- we're seeing the demand for -- we expect to see the demand for general brain health awareness tools.

And I think the launch of app-based smartphone assessments that can be delivered to individuals, to consumers, as part of that general brain health awareness and making people aware of decline and giving them the agency to act on that. It's the first area that we're innovating in.

And we've just in the process of finalizing some studies that have been run at Monash University here in Melbourne that demonstrate the sensitivity and the utility of those smartphone-based assessments. And we have plans for how we'll launch those into both the Clinical Trials and the Healthcare market.

And then more broadly, we've invested over the last couple of years in building out our, what we refer to as our data lake, our data ability to ingest to analyze and to report data. I think that's a really critical aspect in terms of innovation, especially as we focus on getting more tests into the market, as part of our healthcare opportunity and the thought that we will be able to create very large data sets from which we can learn and from which we can analyze and show trends and show opportunities and show earlier identification of disease, both to our pharma partners, as well as to physicians -- and well -- as well as consumers.

And so I think that's a really critical area of innovation. The other areas, where we've been focused on innovating has been just from an operational perspective, so how do we run our business internally.

We referred to the fact that we were able to reduce our headcount in May because of some technology innovation that we've been working on over the previous 12 months. So it's really about reducing the man hours that it takes to conduct a number of our activities using technology better that's purpose built for our offering and then delivering against that and actually taking the hard step of reducing the headcount, where we identify those or where we have delivered those technology innovations.

So that's 3 areas -- the 3 main areas, where we're focused in terms of innovation.

Thank you so much, Brad. And it certainly is an exciting time, so much momentum right now in the industry, and it's exciting to be part of it.

With that, we would love to give an opportunity, Darren and Brad, any final words for our audience?

I'd just like to finish by thanking everybody for your continued interest in Cogstate, where we're really focused on the momentum that exists in the business currently. And we see, as I've mentioned, the opportunity for significant growth into '24 and '25 and [ year-end ].

The launch of these new Alzheimer's therapies really changes the market opportunity for Cogstate and changes the health outcomes for a number of individuals, so it's really exciting. So thank you, again.

Yes. Same -- so same thoughts from myself, Ruth.

I think the opportunity for [ FY '23 ] to FY '24 and FY '25, very exciting, and we're looking forward to delivering on that opportunity.

Fantastic. Well, thank you so much, Darren and Brad, and for all of you for joining.

Again, we appreciate you being with us today. And we look forward to sharing more information with you, as time goes on and more webinars.

Thanks so much all.

Thank you.

Thank you.