August 07, 2012 -- Universal Biosensors (ASX:UBI) today reported its half year financial result, with sales of its blood glucose test gaining momentum and driving a revenue increase of 133% to $14.7 million.
The company generated a gross profit of $5.0 million. Net losses for the half-year more than halved from $7.9 million to $3.4 million.
The strong performance comes as partner LifeScan, a Johnson & Johnson Company, continues the global roll-out of OneTouch Verio, the blood glucose test that features a disposable testing strip developed and manufactured by Universal Biosensors. UBI earns a service fee of around US1 cent for every test strip sold in addition to the product revenue it earns from the manufacture of strips. Revenue from service fees increased by 402% during the first half to around $1 million. Revenue from products grew 69% to $9.5 million for the half year as a result of a record six months of manufacturing at Universal Biosensors’ plant in Rowville, Victoria.
Paul Wright, CEO of Universal Biosensors said: “The strong sales numbers are encouraging and underline the Company’s transition from an R&D operation to a commercial enterprise. Sales momentum has continued to build as LifeScan launched the OneTouch Verio into the US market in January, contributing to a growth in both our service fees based on sales of test strips, and product revenue based on manufacturing volume.”
Also contributing to revenues from services was the Company’s R&D program with LifeScan and its collaboration with Siemens Healthcare Diagnostics. Universal Biosensors is collaborating with Siemens to develop a range of novel hand-held analysers for the point-of-care coagulation testing market. In the first half, UBI received its first US$1.5 million development milestone payment bringing the total payments from Siemens to June 30 to US$4.5 million. The Company has since received the second of six milestone payments from Siemens.
“Continuing to deliver against our R&D milestones with Siemens is an important validation of our technology and its ability to be applied to new applications in other large point-of-care diagnostic markets. With three coagulation tests in our pipeline, this market has the potential to be another strong revenue driver for us and should give investors confidence that we are building a sustainable and diversified company,” said Mr Wright.
UBI continued to progress its 12 month, US$4.5 million R&D program with LifeScan, which commenced in September 2011. This revenue is accounted for on a pro-rata basis over the period.
Research and development costs increased over the first half to $5.4 million, up 14% over the prior year. The increase reflected additional investment into coagulation product development as the Company progressed its collaboration with Siemens. General and administrative costs decreased by 4% over the six month period, as management remained focused on controlling non-essential expenditures.