Prenetics Announces Second Quarter 2023 Financial Results

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HONG KONG, Sept. 15, 2023 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ: PRE) (“Prenetics” or the “Company”), a leading genomics-driven health sciences company, today announced financial results for the second quarter ended June 30, 2023, along with recent business updates.

Second Quarter 2023 Financial Highlights

  • Revenue from continuing operations of US$5.7 million
  • Adjusted EBITDA from continuing operations of US$(5.3) million
  • Cash and other short-term assets1 of US$214.5 million as of June 30, 2023

First Half 2023 Financial Highlights

  • Revenue from continuing operations of US$11.6 million
  • Adjusted EBITDA from continuing operations of US$(15.1) million

"We've always maintained that 2023 would be a transformative year for Prenetics, and our recent strides underscore that belief. We've channelled significant investments into areas where we see not just potential, but a clear path to dominance. Our collaboration with Prof. Dennis Lo, particularly in the realm of early cancer detection, stands as a testament to our commitment and vision. Today, our future business strategy is crystallized into three distinct yet interconnected units: prevention, early cancer detection, and targeted therapy. I am both extremely excited and optimistic about the trajectory we're on, and I believe that the best is yet to come for Prenetics," said Danny Yeung, Chief Executive Officer and Co-Founder of Prenetics.

______________________________

1 Represents current assets, including cash and cash equivalents totaling US$177.2 million, financial assets at fair value through profit or loss of US$13.6 million, and trade receivables of US$5.6 million, amongst other accounting line items under current assets.

Recent Highlights

  • Completed transaction with Prof. Dennis Lo for Insighta as a 50/50 Joint Venture for Multi-Cancer Early Detection in July 2023. Prenetics provided US$100m in consideration, with US$80m in cash and US$20m of shares in Prenetics. Initial clinical trial data is promising. A large multi-country overseas clinical trial is set to begin in early 2024.
  • ACT Genomics is expected to launch a 500-gene panel and a 100-gene panel comprehensive genomic profiling “liquid” biopsy test by the fourth quarter of 2023.
  • ACT Genomics product development work continues for a Minimal Residual Disease (MRD) test is expected to be rolled out by Q2 2024.
  • Multiple distribution and partnership deals are being discussed for Southeast Asia and in the Middle East. More details will be shared once available.
  • Significant improvement in operational efficiency and cost optimization, reducing adjusted EBITDA from continuing operations from a loss of US$(9.8) million in the first quarter of 2023 to US$(5.3) million in the current quarter with further reductions expected in the second half of 2023.

About Prenetics

Prenetics (NASDAQ:PRE), a leading genomics-driven health sciences company, is revolutionizing prevention, early detection, and treatment. Our prevention arm, CircleDNA, uses whole exome sequencing to offer the world's most comprehensive consumer DNA test. Insighta, our US$200 million joint venture with renowned scientist Prof. Dennis Lo, underscores our unwavering commitment to saving lives through pioneering multi-cancer early detection technologies. Insighta plans to introduce Presight for lung and liver cancers in 2025, and to expand with Presight One for 10+ cancers in 2027. Lastly, ACT Genomics, our treatment unit, is the first Asia-based company to achieve FDA clearance for comprehensive genomic profiling of solid tumors via ACTOnco. Each of Prenetics' units synergistically enhances our global impact on health, truly embodying our commitment to 'enhancing life through science’. To learn more about Prenetics, please visit www.prenetics.com

Investor Relations Contact:

investors@prenetics.com

Forward-Looking Statements
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, objectives of management for future operations of the Company, and growth opportunities are forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties, therefore they should not be relied upon as being necessarily indicative of future results. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: the Company’s ability to further develop and grow its business, including new products and services; its ability to execute on its new business strategy in genomics, precision oncology, and specifically, early detection for cancer; the results of case control studies and/or clinical trials; and its ability to identify and execute on M&A opportunities, especially in precision oncology. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties described in the “Risk Factors” section of the Company’s most recent registration statement on Form F-1 and the prospectus therein, and the other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Basis of Presentation

Unaudited Financial Information and Non-IFRS Financial Measures has been provided in the financial statements tables included at the end of this press release. An explanation of these measures is also included below under the heading “Unaudited Financial Information and Non-IFRS Financial Measures.”

Unaudited Financial Information and Non-IFRS Financial Measures

To supplement Prenetics’ consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), the Company is providing non-IFRS measures, adjusted EBITDA from continuing operations, adjusted gross profit from continuing operations and adjusted (loss)/profit attributable to equity shareholders of Prenetics. These non-IFRS financial measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-IFRS financial measures are useful to investors in evaluating the Company's ongoing operating results and trends.

Management is excluding from some or all of its non-IFRS results (1) Employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) finance income and exchange gain or loss, net, and (4) certain items that may not be indicative of our business, results of operations, or outlook, including but not limited to non-cash and/ or non-recurring items. These non-IFRS financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on an IFRS basis as well as a non-IFRS basis and also by providing IFRS measures in the Company's public disclosures.

In addition, other companies, including companies in the same industry, may not use the same non-IFRS measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-IFRS measures as comparative measures. Because of these limitations, the Company's non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the non-IFRS reconciliations provided in the tables captioned “Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)”, “Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)” and “Reconciliation of (loss)/profit attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)” set forth at the end of this document.

 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of financial position
(Expressed in United States dollars unless otherwise indicated)
      
 June 30, March 31, December 31,
 2023 2023 2022
 $ $ $
Assets     
Property, plant and equipment10,031,570 11,809,757 13,102,546
Intangible assets14,101,566 14,463,400 14,785,875
Goodwill33,800,276 33,800,276 33,800,276
Interests in associates559,193 677,339 788,472
Deferred tax assets7,631 7,626 243,449
Deferred expenses7,097,641 5,119,170 6,307,834
Other non-current assets741,816 1,064,194 1,292,462
Non-current assets66,339,693 66,941,762 70,320,914
      
Deferred expenses8,588,431 4,547,611 4,577,255
Inventories3,768,880 3,420,013 4,534,072
Trade receivables5,636,969 5,718,516 41,691,913
Deposits, prepayments and other receivables5,594,273 6,488,436 6,889,114
Amount due from an associate138,781 181,942 -
Financial assets at fair value through profit or loss13,593,201 17,537,608 17,537,608
Short-term deposits- 19,872,581 19,920,160
Cash and cash equivalents177,179,297 166,335,875 146,660,195
Current assets214,499,832 224,102,582 241,810,317
Total assets280,839,525 291,044,344 312,131,231
      
Liabilities     
Deferred tax liabilities2,694,720 2,924,369 3,185,440
Warrant liabilities1,822,139 2,314,609 3,574,885
Lease liabilities3,255,461 3,627,663 3,763,230
Other non-current liabilities823,082 830,562 949,701
Non-current liabilities8,595,402 9,697,203 11,473,256
      
Trade payables4,226,392 7,505,724 7,291,133
Accrued expenses and other current liabilities19,349,105 6,460,445 15,611,421
Contract liabilities3,703,874 4,917,268 5,674,290
Lease liabilities2,779,193 2,779,426 2,882,933
Liabilities for puttable financial instrument213,435,228 17,459,600 17,138,905
Tax payable8,534,527 8,692,193 8,596,433
Current liabilities52,028,319 47,814,656 57,195,115
Total liabilities60,623,721 57,511,859 68,668,371
      
Equity     
Share capital315,791 15,882 13,698
Reserves215,291,050 228,232,194 237,050,429
Total equity attributable to equity shareholders of the Company215,306,841 228,248,076 237,064,127
Non-controlling interests4,908,963 5,284,409 6,398,733
Total equity220,215,804 233,532,485 243,462,860
Total equity and liabilities280,839,525 291,044,344 312,131,231

_________________________________

2 In connection with the acquisition of ACT Genomics, the remaining shareholders of ACT Genomics - representing 25.61% of the fully diluted shareholding of ACT Genomics that Prenetics does not own - were granted put options which allow these remaining shareholders to put their remaining shares to Prenetics under certain conditions. The liabilities arising from such put option are recorded as liabilities for puttable financial instrument, and are valued at the present value of the exercise price of the put option.

3 Represents number of authorized and issued shares as follows:

 June 30, March 31, December 31,
 2023 2023 2022
      
Number of authorized shares of $0.0001 each500,000,000 500,000,000 500,000,000
      
Number of issued shares157,905,434 158,820,280 136,983,110

 


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
    
 For the six months ended
 June 30,  June 30, 
 2023  2022 
 $ $
   (Restated)
Continuing operations   
Revenue11,600,319  8,291,318 
Direct costs(6,988,941) (5,524,587)
Gross profit4,611,378  2,766,731 
Other income and other net gain/(losses)2,629,405  (585,463)
Selling and distribution expenses4(4,672,953) (2,454,979)
Research and development expenses4(6,177,592) (3,941,463)
Administrative and other operating expenses4(23,158,344) (36,608,463)
Loss from operations(26,768,106) (40,823,637)
Fair value loss on financial assets at fair value through profit or loss(3,944,407) (1,659,343)
Share-based payments on listing5-  (89,546,601)
Fair value loss on preference shares liabilities-  (60,091,353)
Fair value gain/(loss) on warrant liabilities1,752,746  (1,539,577)
Share of losses of associates(225,284) - 
Other finance costs(108,358) (3,883,002)
Loss before taxation(29,293,409) (197,543,513)
Income tax credit268,827  1,971,231 
Loss from continuing operations(29,024,582) (195,572,282)
Discontinued operation   
(Loss)/profit from discontinued operation, net of tax6(4,156,608) 18,409,191 
Loss for the period(33,181,190) (177,163,091)
    
Other comprehensive income for the period   
Item that may be reclassified subsequently to profit or loss:   
Exchange difference on translation of:   
- financial statements of subsidiaries outside Hong Kong1,157,683  (4,775,936)
Total comprehensive income for the period(32,023,507) (181,939,027)
    
Loss attributable to:   
Equity shareholders of Prenetics(32,206,003) (177,163,044)
Non-controlling interests(975,187) (47)
 (33,181,190) (177,163,091)
    
Total comprehensive income attributable to:   
Equity shareholders of Prenetics(30,533,737) (181,938,980)
Non-controlling interests(1,489,770) (47)
 (32,023,507) (181,939,027)
    
Loss per share:   
Basic(0.20) (3.57)
Diluted(0.20) (3.57)
    
Loss per share - Continuing operations:   
Basic(0.18) (3.94)
Diluted(0.18) (3.94)
    
Weighted average number of common shares:   
Basic158,656,029  49,616,648 
Diluted158,656,029  49,616,648 


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
      
 For the three months ended
 June 30,  March 31,  June 30, 
 2023  2023  2022 
 $ $ $
   (Restated) (Restated)
Continuing operations     
Revenue5,695,579  5,904,740  4,183,499 
Direct costs(3,559,119) (3,429,822) (2,822,908)
Gross profit2,136,460  2,474,918  1,360,591 
Other income and other net gain/(losses)1,406,281  1,223,124  (556,361)
Selling and distribution expenses4(2,171,640) (2,501,313) (1,132,136)
Research and development expenses4(2,703,038) (3,474,554) (2,192,768)
Administrative and other operating expenses4(10,834,043) (12,324,301) (20,267,592)
Loss from operations(12,165,980) (14,602,126) (22,788,266)
Fair value loss on financial assets at fair value through profit or loss(3,944,407) -  (1,659,343)
Share-based payments on listing5-  -  (89,546,601)
Fair value loss on preference shares liabilities-  -  (31,815,352)
Fair value gain/(loss) on warrant liabilities492,470  1,260,276  (1,539,577)
Share of losses of associates(112,533) (112,751) - 
Other finance costs(51,464) (56,894) (1,420,446)
Loss before taxation(15,781,914) (13,511,495) (148,769,585)
Income tax credit/(expense)245,877  22,950  (246,859)
Loss from continuing operations(15,536,037) (13,488,545) (149,016,444)
Discontinued operation     
(Loss)/profit from discontinued operation, net of tax6(6,671,413) 2,514,805  4,839,249 
Loss for the period(22,207,450) (10,973,740) (144,177,195)
      
Other comprehensive income for the period     
Item that may be reclassified subsequently to profit or loss:     
Exchange difference on translation of:     
- financial statements of subsidiaries and associates outside Hong Kong1,794,185  (636,502) (4,245,198)
Total comprehensive income for the period(20,413,265) (11,610,242) (148,422,393)
      
Loss attributable to:     
Equity shareholders of Prenetics(21,807,573) (10,398,430) (144,177,194)
Non-controlling interests(399,877) (575,310) (1)
 (22,207,450) (10,973,740) (144,177,195)
      
Total comprehensive income attributable to:     
Equity shareholders of Prenetics(20,037,819) (10,495,918) (148,422,392)
Non-controlling interests(375,446) (1,114,324) (1)
 (20,413,265) (11,610,242) (148,422,393)
      
Loss per share:     
Basic(0.14) (0.07) (2.91)
Diluted(0.14) (0.07) (2.91)
      
Loss per share - Continuing operations:     
Basic(0.10) (0.08) (3.00)
Diluted(0.10) (0.08) (3.00)
      
Weighted average number of common shares:     
Basic158,963,468  157,839,309  49,616,648 
Diluted158,963,468  157,839,309  49,616,648 


______________________________

4 Includes equity-settled share-based payment expenses (excluding share-based payment on listing) from continuing operations as follows:

 For the six months ended
 June 30, June 30,
 2023 2022
 $ $
   (Restated)
Selling and distribution expenses103,868 31,424
Research and development expenses1,360,896 1,245,847
Administrative and other operating expenses4,731,546 16,489,378
Total equity-settled share-based payment expenses (excluding share-based payment on listing)6,196,310 17,766,649

 

 For the three months ended
 June 30, March 31, June 30,
 2023 2023 2022
 $ $ $
   (Restated) (Restated)
Selling and distribution expenses58,613 45,255 23,745
Research and development expenses874,389 486,507 708,511
Administrative and other operating expenses2,340,502 2,391,044 9,511,007
Total equity-settled share-based payment expenses (excluding share-based payment on listing)3,273,504 2,922,806 10,243,263


5 The acquisition of the net assets of Artisan Acquisition Corp. (“Artisan”) on May 18, 2022 does not meet the definition of a business under IFRS and has therefore been accounted for as a share-based payment. The excess of fair value of Prenetics shares issued over the fair value of Artisan’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.

6 We ceased our COVID-19 testing business entirely in 2023 Q2. As a result, COVID-19 testing business is reported as a discontinued operation under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In accordance with IFRS 5, the results of the discontinued operation have been presented separately from the continuing operations in the consolidated statements of profit or loss and other comprehensive income. The comparative information in the consolidated statements of profit or loss and other comprehensive income has also been re-presented to show the results of discontinued operation separately. 

 
PRENETICS GLOBAL LIMITED
Unaudited Financial Information and Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
    
Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)
    
 For the six months ended
 June 30,  June 30, 
 2023  2022 
 $  $ 
   (Restated)
Loss from operations from continuing operations under IFRS(26,768,106) (40,823,637)
Employee equity-settled share-based payment expenses6,237,845  17,960,605 
Depreciation and amortization3,935,194  924,050 
Other strategic financing, transactional expense and non-recurring expenses4,002,301  9,202,912 
Finance income, exchange gain or loss, net(2,469,946) 703,368 
Adjusted EBITDA from continuing operations (Non-IFRS)(15,062,712) (12,032,702)
    
Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)
    
 For the six months ended
 June 30,  June 30, 
 2023  2022 
 $  $ 
   (Restated)
Gross profit from continuing operations under IFRS4,611,378  2,766,731 
Depreciation and amortization719,974  51,786 
Adjusted gross profit from continuing operations (Non-IFRS)5,331,352  2,818,517 
    
Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)
    
 For the six months ended
 June 30,  June 30, 
 2023  2022 
 $  $ 
   (Restated)
Loss attributable to equity shareholders of Prenetics under IFRS(32,206,003) (177,163,044)
Employee equity-settled share-based payment expenses6,237,845  22,344,081 
Other strategic financing, transactional expense and non-recurring expenses9,917,705  10,549,874 
Share-based payment on listing        -  89,546,601 
Fair value loss on preference shares liabilities-  60,091,353 
Fair value (gain)/loss on warrant liabilities(1,752,746) 1,539,577 
Fair value loss on financial assets at fair value through profit or loss3,944,407  1,659,343 
Adjusted (loss)/profit attributable to equity shareholders of Prenetics Non-IFRS)(13,858,792) 8,567,785 


 
PRENETICS GLOBAL LIMITED
Unaudited Financial Information and Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
      
Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)
      
 For the three months ended
 June 30,  March 31,  June 30, 
 2023  2023  2022 
 $  $  $ 
   (Restated) (Restated)
Loss from operations from continuing operations under IFRS(12,165,980) (14,602,126) (22,788,266)
Employee equity-settled share-based payment expenses3,296,861  2,940,984  10,215,945 
Depreciation and amortization1,863,626  2,071,568  230,422 
Other strategic financing, transactional expense and non-recurring expenses3,077,902  924,399  7,638,653 
Finance income, exchange gain or loss, net(1,323,782) (1,146,164) 671,596 
Adjusted EBITDA from continuing operations (Non-IFRS)(5,251,373) (9,811,339) (4,031,650)
      
Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)
      
 For the three months ended
 June 30,  March 31,  June 30, 
 2023  2023  2022 
 $  $  $ 
    (Restated)  (Restated) 
Gross profit from continuing operations under IFRS2,136,460  2,474,918  1,360,591 
Depreciation and amortization335,648  384,326  26,729 
Adjusted gross profit from continuing operations (Non-IFRS)2,472,108  2,859,244  1,387,320 
      
Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)
      
 For the three months ended
 June 30,  March 31,  June 30, 
 2023  2023  2022 
 $  $  $ 
   (Restated) (Restated)
Loss attributable to equity shareholders of Prenetics under IFRS(21,807,573) (10,398,430) (144,177,194)
Employee equity-settled share-based payment expenses3,113,656  3,124,189  12,966,966 
Other strategic financing, transactional expense and non-recurring expenses7,678,799  2,238,906  8,854,689 
Share-based payment on listing-  -  89,546,601 
Fair value loss on preference shares liabilities-  -  31,815,352 
Fair value (gain)/loss on warrant liabilities(492,470) (1,260,276) 1,539,577 
Fair value loss on financial assets at fair value through profit or loss3,944,407  -  1,659,343 
Adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)(7,563,181) (6,295,611) 2,205,334