CogState Limited (ASX: CGS) shares performed well today after the company released its second quarterly report for FY21. At the market's close, the CogState share price was trading 8.3% higher at $1.105.
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What drove the CogState share price?
The CogState share price was on the rise today after the company posted strong results for the second quarter of FY21. During the period, CogState executed $14.3 million in sales contracts. This took total sales contracts for the 2020 calendar year to $41.7 million.
In regards to the health provider's cash flow, CogState recorded inflows of $13.95 million for the quarter, including net operating cash inflow of $15.5 million. Contributing to these numbers were cash receipts of $22.3 million received from customers and the one-off payment from Japanese pharmaceutical company Eisai.
Moreover, due to the significance of the agreement with Eisai, CogState is working with its advisors on the appropriate accounting treatment for the agreement. As such, audited half year revenue results will be included with the financial statements for the period ended 31 December. These are scheduled to be released on 25 February 2021 and will include details of the non-refundable cash payment Eisai paid to CogState for a global license agreement.
Business update
CogState's overall results for the December half were strong, exceeding the company's own expectations. During the half year, CogState executed sales contracts with existing customers in addition to first-time agreements with several new customers. In the context of restrictions relating to the pandemic, CogState advised it was particularly pleased with its success surrounding new customers.
The company's FY21 second quarter result represented 72% growth on the prior quarter but was 26% less than the previous corresponding period. However, the previous corresponding quarter included execution of large, phase III Alzheimer's disease contract with a total value in excess of $13 million. In comparison, the largest contract executed by the company in the December 2020 quarter was under $5 million.
Including today's gains, the CogState share price is currently trading 121% higher than this time last year.
