This afternoon cognitive testing business CogState Limited (ASX: CGS) warned investors financial results for FY 2018 and FY 2019 will be weaker-than-expected due to the recent termination of Alzheimer's disease trials by its customers.
Over the quarter to June 30 2018 CogState reported a cash outflow of $1.3 million, although it did flag a corresponding increase in receivables of $1.1 million over the quarter.
For the full year it posted a cash outflow of $2.46 million on revenue of $29 million, with revenue growth clocking in at 9.6% over FY 2017.
CogState also reported that it has a "contracted revenue backlog of $34.8 million at 30 June 2018 to be recognised in FY 19 and beyond".
As at 30 June 2018 it had $4.4 million cash on hand, which suggests the balance sheet is in reasonable shape.
This is a mixed update as while revenue growth is reasonable the business also appears to be growing costs and the news around the cancelled Alzheimer's trials is a concern for a business that's core operational performance metric remains the provision of cognitive clinical trials services.
It was only recently trumpeting the deal to support all Alzheimer's clinical trials for pharmaceutical giant, Eli Lilly, however, the trials' potential winding back based on today's news is likely behind the near 10% falls in the share price to 71 cents.
CogState is due to hand in its full year profit report to the market on August 13, where more details will be provided over profit guidance for FY 2019.
