Full Press Release Details
Applied DNA Second Fiscal Quarter 2021 Financial
Results Feature 384% Year-Over-Year Growth in Revenues
Million Compare with $0.6 Million a Year-Ago and $1.6 Million in the First Quarter of Fiscal 2021 -
STONY BROOK, N.Y. - May 13, 2021 - Applied
DNA Sciences, Inc. (NASDAQ: APDN) (the "Company"), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing,
today announced consolidated financial results for the three and six months ended March 31, 2021.
"We are pleased to deliver
a strong fiscal second quarter with year-over-year revenue growth of 384%, capping an impressive first half of the fiscal year distinguished
by demand for our COVID-19 diagnostics and surveillance testing offerings (cumulatively "COVID-19 testing business"),"
said Dr. James A. Hayward, president and CEO, Applied DNA. "Our strategic and operational execution across non-COVID-19 testing
initiatives was also notable: we launched our first-ever clinical trial for a therapeutic candidate in the form of a LinearDNA
COVID-19 vaccine candidate for the veterinary market; advanced our cGMP capabilities and compliance roadmap that is a precursor to securing
more lucrative CMO relationships and lays the foundation potentially to disrupt the market for the manufacturing of nucleic acid-based
therapies; established a recurring revenue stream from the dietary supplements industry via Nutrition21's use of our CertainT platform;
strengthened our capital position, and deepened the management team to support our growth goals."
Continued Dr. Hayward, "Our COVID-19 testing
strategy is increasingly informed by the acceleration in vaccine distribution. While traditional positive/negative testing remains a
component of our go-to-market strategy, we believe that we are well-positioned despite increasing vaccination rates given our ability
to detect SARS-COV-2 mutations. The expansion of our COVID-19 product portfolio with our Selective Genomic Surveillance (SGS )
Panel and expanded intended use of our EUA for our LineaTM COVID-19 Assay Kit to include asymptomatic serial screening testing
reflects a differentiated capability that expands our addressable market to include populations that can serve as a nexus for vaccinated
and under-vaccinated populations coming together with increasing frequency, such as skilled nursing facilities, and supports the reopening
of schools and workplaces. With our newly expanded intended use, together with the receipt of a New York clinical laboratory permit and
CLIA certification for COVID-19 testing using EUA-authorized methods and devices by our Applied DNA Clinical Labs, LLC subsidiary, we
believe our COVID-19 testing business presents a compelling opportunity for continued top-line growth.
"During the second half
of the fiscal year, we will focus on positioning our COVID-19 testing business for the expected ongoing need for tests and services to
support clients' reopening strategies. While today our SGS Panel is available on a research use only (RUO) basis, our logical next
step would be to seek an EUA to bring this critical tool out from the lab and to every Emergency Room and other healthcare providers
that serve as the first line of defense against coronavirus variants to potentially inform their use of monoclonal antibody and convalescent
plasma therapies. Concurrently and in line with our phased approach to cGMP that is further bolstered by preliminary positive neutralizing
antibody results in domestic felines in our LinearDNA COVID-19 vaccine candidate clinical trial, we intend to explore an expansion of
our LinearDNA-based therapeutic pipeline into classes of therapies that will best utilize the many benefits of our LinearDNA platform.
"While the speed and shape
of the global recovery and timing of its impact on our supply chain security business remain uncertain, over the past year, we have seen
brands and their supply chains put more emphasis on supply chain security and transparency to enhance their market position exiting the
pandemic. We continue to position our CertainT platform as an enabler of the trust that both brands and consumers seek
in a post-pandemic world, which, following the passage of the Uyghur Forced Labor Prevention Act, has further catalyzed our interest
in leveraging our deep expertise in cotton genotyping and new next-generation sequencing capability to support brands' regulatory
requirements and ethical responsibilities."
Concluded Dr. Hayward, "Our
strong balance sheet affords us substantial strategic and operational flexibility, as well as the ability to make both short- and longer-term
investments in our businesses. We believe these investments in R&D and pre-commercial and commercial initiatives further enhance
our growth profile."
Fiscal Second Quarter 2021 Financial Highlights:
| Revenues increased 384% for the second quarter of fiscal 2021 to $2.7 million, compared with $552 thousand reported in the same period of the prior fiscal year and increased 65% from $1.6 million for the first quarter of fiscal 2021. The increase in revenues year over year was due primarily to an increase in service revenues of approximately $1.4 million and an increase of $767 thousand in product revenues. The increase in service revenue was primarily from revenues derived from our safeCircle COVID-19 surveillance testing. The increase in product revenue was mainly attributable to an increase in sales of our Linea COVID-19 Assay Kit. | ||
| Total operating expenses increased to $4.6 million for the second fiscal quarter of 2021, compared with $3.0 million in the prior fiscal year's second quarter. This increase is primarily attributable to an increase in payroll of $315 thousand for staffing of Applied DNA Clinical Labs, LLC (ADCL), as well as an increase of $277 thousand for supplies and equipment to operate the ADCL laboratory. The increase in operating expenses also related to an increase in stock-based compensation expense of $422 thousand relating to officer stock option grants that vested immediately. The increase is also the result of increases in research and development expenses of $171 thousand and depreciation and amortization of $133 thousand. | ||
| Net loss applicable to common stockholders for the quarter ended March 31, 2021 was $1.5 million, or $0.21 per share, compared with a net loss of $3.0 million, or $0.79 per share, for the quarter ended March 31, 2020. | ||
| Excluding non-cash expenses, Adjusted EBITDA was negative $1.5 million and negative $2.6 million for the quarters ended March 31, 2021 and 2020, respectively. See below for information regarding non-GAAP measures. | ||
| Cash and cash equivalents stood at $13.9 million on March 31, 2021, compared to $7.8 million as of September 30, 2020. |
Six-Month Financial Highlights:
| Revenues increased 262% for the first six months of fiscal 2021 to $4.3 million, compared with $1.2 million reported in the same period of the prior fiscal year. The increase in revenues year over year was due primarily to an increase in service revenues of approximately $2.0 million and an increase of $1.1 million in product revenues. The increase in service revenue was primarily from revenues derived from our safeCircle COVID-19 surveillance testing. The increase in product revenue was mainly attributable to an increase in sales of our Linea Assay Kit. | ||
| Total operating expenses increased to $9.0 million for the first six months of fiscal 2021, compared with $6.1 million in the same period of the prior fiscal year. This increase is primarily attributable to an increase in payroll of $1 million. The increase in payroll relates to additional headcount to staff at ADCL, as well as an increase for officer bonuses. The increase in operating expenses also related to an increase in stock-based compensation expense of $725 thousand primarily relating to officer stock option grants that vested immediately. | ||
| Net loss applicable to common stockholders for the six-months ended March 31, 2021 was $6.3 million, or $1.00 per share, compared with a net loss of $5.6 million, or $1.76 per share, for the first six months of fiscal 2020. |
Fiscal Second Quarter 2021 Conference Call Information
The Company will hold a conference call and webcast to discuss its
fiscal second quarter-end 2021 results on Thursday, May 13, 2021 at 4:30 PM ET. To participate on the conference call, please follow
the instructions below. While every attempt will be made to answer investors' questions on the Q&A portion of the call, not
all questions may be answered.
Replay (available 1 hour following the conclusion of the live call
through May 21, 2021):
For those unable to attend the live call, a copy of management's
PowerPoint presentation will be available for review under the IR Calendar' section of the company's Investor Relations
Information about Non-GAAP Financial Measures
As used herein, "GAAP" refers to accounting principles
generally accepted in the United States of America. To supplement our condensed consolidated financial statements prepared and presented
in accordance with GAAP, this earnings release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined in Rule 101
of Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-GAAP financial measure is a numerical measure
of a company's historical or future performance, financial position, or cash flows that either excludes or includes amounts that
are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The presentation
of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial
information presented in accordance with GAAP. We use this non-GAAP financial measure for internal financial and operational decision-making
purposes and as a means to evaluate period-to-period comparisons of the performance and results of operations of our core business. Our
management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the performance of our
business by excluding non-cash expenses that may not be indicative of our recurring operating results. We believe this non-GAAP financial
measure is useful to investors as they allow for greater transparency with respect to key metrics used by management in its financial
and operational decision making.
"EBITDA"- is defined as earnings (loss) before interest
expense, income tax expense and depreciation and amortization expense.
"Adjusted EBITDA"- is defined as EBITDA adjusted to exclude
(i) stock-based compensation and (ii) other non-cash expenses.
About Applied DNA Sciences
Applied DNA is commercializing LinearDNA ,
its proprietary, large-scale polymerase chain reaction ("PCR")-based manufacturing platform that allows for the large-scale
production of specific DNA sequences.
The LinearDNA platform has utility in the nucleic
acid-based in vitro diagnostics and preclinical nucleic acid-based drug development and manufacturing market. The platform is
used to manufacture DNA for customers as components of in vitro diagnostic tests and for preclinical nucleic acid-based drug development
in the fields of adoptive cell therapies (CAR T and TCR therapies), DNA vaccines (anti-viral and cancer), RNA therapies, clustered regularly
interspaced short palindromic repeats (CRISPR) based therapies, and gene therapies. Applied DNA has also established a COVID-19 diagnostic
and testing offering that is in the early stages of commercialization and is grounded in the Company's deep expertise in DNA.
The LinearDNA platform also has non-biologic
applications, such as supply chain security, anti-counterfeiting and anti-theft technology. Key end-markets include textiles, pharmaceuticals
and nutraceuticals, and cannabis, among others.
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The Company's common stock is listed on NASDAQ under ticker
symbol APDN,' and its publicly traded warrants are listed on OTC under ticker symbol APPDW.'
Applied DNA is a member of the Russell Microcap Index.
About the Linea COVID-19 Assay
Kit and the Linea COVID-19 Selective Genomic Surveillance (SGS) Mutation Panel
The LineaTM COVID-19 Assay Kit is
a real-time RT-PCR test intended for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens including anterior
nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs,
mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by