Circassia Group plc has reported revenue growth of 27 per cent in a trading update for the six months ended 30 June 2021 as it continues to implement its business strategy, focussing exclusively on NIOX.
Circassia is an Oxford-headquartered medical device company focused on point of care asthma diagnosis and management.
Affecting nearly 340 million people worldwide, Asthma is a common lung disease and is the world’s most common chronic disease among children.
The major underlying cause of Asthma is airway inflammation, which can be irritated by external triggers, such as allergens, tobacco smoke, cold air, chest infections and certain chemicals.
Circassia’s NIOX measurement and monitoring products are used by physicians around the world to evaluate the underlying inflammation.
- NIOX business EBITDA positive for the first time (excluding corporate costs)
- Net cash £11.3m
- Completion of runoff period for Tudorza and Duaklir
- Settlement of Beyond Air dispute, with potential upside to Circassia
Management has unaudited revenues for the Niox business for the six months ended 30 June 2021 were approximately £14.5 million, up 27 per cent on the same period in the previous year and up 16 per cent on the second half of 2020.
Clinical revenues were up 16 per cent to approximately £12.1 million and up 10 per cent on H2 2020, as more patients were able to visit their physician. Whilst Clinical revenues are yet to return fully to pre-COVID levels, sales in the first half of 2021 were approximately 84 per cent of underlying sales in H1 2019. H1 2021 clinical revenue included a one-off £0.6 million benefit arising from the final unwinding of certain historical trading arrangements in China.
The Research business made a strong start to the year as clinical studies run by our customers resumed. Revenues were more than double those of H1 2020 at £2.4 million, up 50 per cent on H2 2020 and up 9 per cent on the first half of 2019.
The discontinued COPD business traded profitably during the first quarter, with the transfer of these products back to AstraZeneca completed on 31 March 2021.
Management has also changed the sales and marketing strategy to reduce fixed costs by putting greater emphasis on third-party distribution. Tight cost control and changing the business model has resulted in a dramatic 34 per cent reduction in overheads, from almost £14.0 million in H1 2020 to approximately £9.2 million in H1 2021.
This, together with the impact of the £0.6 million one-off item referred to above, has resulted in a corresponding improvement in H1 2021 EBITDA to approximately £0.5 million for the Niox business (before corporate overheads) compared with an EBITDA loss of £4.8 million in H1 2020.
Unaudited net cash at 30 June 2021 was £11.3 million, with the Group having a net cash outflow of £1.1 million in the period. Additionally, the company raised £5.0 million in equity in March 2021.
As previously announced on 26 May and subject to FDA approval of their product, the settlement reached with Beyond Air, Inc. will provide further cash resources of up to $16.5 million over time.
Circassia expects to release its interim results for the six months ended 30 June 2021 on 16 September 2021.
Ian Johnson, Circassia’s Executive Chairman, said: “We are pleased to report that the Niox business has turned a corner and, with the building blocks now in place, is profitable at the EBITDA level for the first time in the history of the company.
“Management continues to implement the new business model to generate top-line growth and to drive further benefit from the significantly reduced cost base in the second half.
“Accordingly, the Board believes that, notwithstanding revenue visibility continuing to be limited, the company’s full year EBITDA performance is likely to be ahead of current market expectations.”