Health Check: Genetic Signatures holds course
Genetic chair Caroline Waldron says a board and operational overhaul should boost performance – and the share price.
The board of molecular diagnostics house Genetic Signatures has acknowledged that US sales of its key commercialised product have not met expectations.
But the company’s recent “courageous decision making” should fix the problems, newly appointed chairman Caroline Waldron told shareholders.
Investors have focused on the US rollout of the company’s Easyscreen test, which detects eight gastrointestinal bugs in the one assay. No other test can do this. Approved by the US Food and Drug Administration (FDA) in June last year, Easyscreen avails of Genetic’s underlying platform, 3base.
Addressing today’s AGM, Waldron said US Easyscreen adoption had “progressed slower than expected” but the company was optimistic about long-term prospects. “We have adjusted our go-to-market approach and realigned our resources to better position ourselves to translate this potential into tangible revenue,” she said.
Genetic has moved from developing an in-house diagnostic to partnering with established market leaders. The company also has honed its focus on the most promising US states.
“These decisions, while tough, were made to enhance commercial outcomes and improve our operational efficiency.”
The company appointed a new CEO, Alison Rossiter in September last year and two new directors. Rossiter was the Australian head of Roche Diagnostics. The board also has taken “deliberate steps to improve the clarity, transparency, and accessibility” of its investor communications.
Genetic shares have tumbled 60% over the past 12 months, but they have improved 22% over the last month. Waldron says such share declines are common during a “whole of business reset” and the company is not for turning. “We firmly believe that the strategic changes made during the past year … are critical to the company’s long-term value creation.”
Despite the US malaise, Genetic managed sales of $5.4 million in the September quarter. That was 20% up on the prior quarter, 15% year on year and the biggest tally since the halcyon Covid days. Genetic has cash of $28 million as of the September quarter, following a $30 million raising post FDA approval.
