8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
February 15, 2024

 

Renalytix plc

(Exact name of registrant as specified in its Charter)

 

England and Wales

001-39387

Not Applicable

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

Finsgate

5-7 Cranwood Street

London EC1V 9EE

United Kingdom

(Address of principal executive offices) (Zip Code)

 

+44 20 3139 2910
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Ordinary shares, nominal value £0.0025 per ordinary share

n/a

The Nasdaq Stock Market LLC*

American Depositary Shares, each representing two ordinary shares, nominal value £0.0025 per ordinary share

RNLX

The Nasdaq Stock Market LLC

 

* Not for trading, but only in connection with the listing of the American Depositary Shares on The Nasdaq Stock Market LLC.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


 

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 15, 2024, Renalytix plc (the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2023. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

Exhibit

Exhibit Description

99.1

Press release dated February 15, 2024

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

renalytix plc

 

 

 

Dated: February 14, 2024

By:

/s/ James McCullough

 

 

James McCullough
Chief Executive Officer

 

 


EX-99.1

Exhibit 99.1

 

https://cdn.kscope.io/ef43d89a25c8cd0342d0386ad8799be5-img102423453_0.jpg 

Renalytix plc

(“Renalytix” or the “Company”)

 

Renalytix Reports Financial Results for Second Quarter of Fiscal Year 2024

 

LONDON and SALT LAKE CITY, February 15, 2024 – Renalytix plc (NASDAQ: RNLX) (LSE: RENX) (the “Company”), an artificial intelligence-enabled in vitro diagnostics company, focused on optimizing clinical management of kidney disease, today reported financial results for the fiscal second quarter ended December 31, 2023. The Company plans to issue another announcement following today’s report of financial results regarding the date and time of its conference call and webcast to discuss second quarter financial results and other key events.

 

The Company made significant progress during the quarter in revenue generation, reimbursement coverage, the publication of real-world evidence and operating cost management, setting the stage for potential future growth. Highlights include:

During the three months ended December 31, 2023, we recognized $0.7 million of revenue related to sales of KidneyIntelX, compared to the previous quarter reported revenue of $0.5 million.
KidneyintelX.dkd, the first U.S. Food and Drug Administration (“FDA”), authorized in vitro prognostic test that uses an artificial intelligence-enabled algorithm to aid in assessment of the risk of progressive decline in kidney function, officially included in the lab fee schedule by Centers for Medicare & Medicaid Services (CMS) at $950 per test.
KidneyIntelX™ and kidneyintelX.dkd included in the proposed Local Coverage Determination (LCD) published by National Government Services (NGS) on February 8, 2024, and on the agenda for the LCD open public meeting on February 29, 2024.
NGS has resumed consistent payment for tests under individual claims review (ICR), allowing revenue recognition of 318 tests billed to Medicare (including prior period tests). Total billable volume of 734 tests during the second quarter (representing 69% of all tests in the period, including non-billable study tests).
Real-world evidence continues to demonstrate the benefits of KidneyIntelX early risk assessment as published in the Journal of Primary Care and Community Health, in which 12 months of care following KidneyIntelX prognostic testing was associated with clinical actions that led to significant improvement in care and outcomes including a 61% increase in kidney protective drug prescriptions among patients in the high-risk group.
Operating cost reductions commenced during the fiscal second quarter continued with a fiscal third quarter cash burn target approximately 33% less than in the prior quarter and approximately 50% less than in the first quarter of fiscal 2024.

 

Second Quarter 2024 Financial Results

 

During the three months ended December 31, 2023, we recognized $0.7 million of revenue related to sales of KidneyIntelX. During the three months ended December 31, 2022, we recognized $1.0 million revenue related to sales of KidneyIntelX and $0.2 million of revenue of pharmaceutical services revenue related to services performed for AstraZeneca. The $0.5 million decrease in revenue was primarily driven by a $0.3 million decrease in KidneyIntelX billable testing volumes due to the transition to a commercial billing structure under our arrangement with Mount Sinai and a decrease of $0.2 million of pharmaceutical services revenue.


 

 

Operating expenses for the three months ended December 31, 2023 were $8.9 million, compared to $10.1 million for the three months ended December 31, 2022. We have taken significant actions to lower annual expenditures with a targeted annualized cash burn rate of under $23 million within our fiscal third quarter of 2024 (down from $37 million in the 2023 fiscal year), while preserving revenue generating activity.

 

Within operating expenses, research and development expenses were $3.2 million for the three months ended December 31, 2023, which decreased by $0.1 million from $3.3 million for the three months ended December 31, 2022. The decrease was attributable to a $1.2 million decrease in compensation and related benefits, offset by a $1.1 million increase related to external R&D projects and studies with Mount Sinai, Wake Forest and Joslin.

 

General and administrative expenses were $5.3 million for the three months ended December 31, 2023, decreasing by $1.5 million from $6.8 million for the three months ended December 31, 2022. The decrease was driven by even further cost cutting measures, which resulted in a $1.7 million decrease in compensation and related benefits, including share-based payments, due to decreased headcount, and a $0.5 million decrease in other operating expenses, offset by a $0.5 million increase in legal fees and a $0.2 million increase in consulting and professional fees. We have implemented a plan to further reduce payroll expense and total general and administrative expenses while preserving our sales capacity.

 

Net loss was $8.5 million for the three months ended December 31, 2023, compared to a net loss of $10.4 million for the three months ended December 31, 2022.

 

Cash and cash equivalents totaled $5.6 million as of December 31, 2023.

 

For further information, please contact:

 

Renalytix plc

www.renalytix.com

James McCullough, CEO

Via Walbrook PR

 

 

Stifel (Nominated Adviser, Joint Broker)

Tel: 020 7710 7600

Alex Price / Nicholas Moore / Nick Harland / Samira Essebiyea

 

 

 

Investec Bank plc (Joint Broker)

Tel: 020 7597 4000

Gary Clarence / Shalin Bhamra

 

 

 

Walbrook PR Limited

Tel: 020 7933 8780 or renalytix@walbrookpr.com

Paul McManus / Alice Woodings

Mob: 07980 541 893 / 07407 804 654

 

 

CapComm Partners

 

Peter DeNardo

 

Tel: 415-389-6400 or investors@renalytix.com

 

 

About Renalytix

Renalytix (NASDAQ: RNLX) (LSE: RENX) is an in-vitro diagnostics and laboratory services company that is the global founder and leader in the new field of bioprognosis™ for kidney health. The leadership team, with a combined 200+ years of healthcare and in-vitro diagnostic experience, has designed its KidneyIntelX laboratory developed test to enable risk assessment for rapid progressive decline in kidney function in adult patients with T2D and early CKD (stages 1-3). We believe that by understanding how disease will progress, patients and providers can take action early to improve outcomes and reduce overall health system costs. For more information, visit www.renalytix.com.

 

 


 

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Examples of these forward-looking statements include statements concerning: the commercial prospects of KidneyIntelX, including whether KidneyIntelX will be successfully adopted by physicians and distributed and marketed, the rate of testing with KidneyIntelX in health care systems, expectations and timing of announcement of real-world testing evidence, the potential for KidneyIntelX to be approved for additional indications, the Company’s expectations regarding the timing and outcome of regulatory and reimbursement decisions, the ability of KidneyIntelX to curtail costs of chronic and end-stage kidney disease, optimize care delivery and improve patient outcomes, the Company’s expectations and guidance related to partnerships, testing volumes and revenue for future periods, the Company’s expectations regarding the Company’s ability to obtain and maintain intellectual property protection for its diagnostic products and the Company’s ability to operate its business without infringing on the intellectual property rights of others, and the forecast of the Company’s cash runway and the implementation and potential for additional financing activities and cost-saving initiatives. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “seeks,” and similar expressions are intended to identify forward-looking statements. The Company may not actually achieve the plans and objectives disclosed in the forward-looking statements, and you should not place undue reliance on the Company’s forward-looking statements. Any forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These risks and uncertainties include, among others: that KidneyIntelX is based on novel artificial intelligence technologies that are rapidly evolving and potential acceptance, utility and clinical practice remains uncertain; the Company has only recently commercially launched KidneyIntelX; and risks relating to the impact on the Company’s business of the COVID-19 pandemic or similar public health crises. These and other risks are described more fully in the Company’s filings with the Securities and Exchange Commission (SEC), including the “Risk Factors” section of its annual report on Form 10-K filed with the SEC on September 28, 2023, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed with the SEC on November 14, 2023 and other filings the Company makes with the SEC from time to time. All information in this press release is as of the date of the release, and the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

RENALYTIX PLC

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

 


 


 

For the Three Months Ended December 31,


 


 

For the Six Months Ended December 31,


 

(in thousands, except share data)


 

2023


 


 

2022


 


 

2023


 


 

2022


 

Revenue


 

$

709


 


 

$

1,192


 


 

$

1,168


 


 

$

2,161


 

Cost of revenue


 


 

480


 


 


 

711


 


 


 

982


 


 


 

1,407


 

Gross profit


 


 

229


 


 


 

481


 


 


 

186


 


 


 

754


 

Operating expenses:


 


 


 


 


 


 


 


 


 


 


 


 

Research and development


 


 

3,225


 


 


 

3,326


 


 


 

6,012


 


 


 

7,083


 

General and administrative


 


 

5,339


 


 


 

6,810


 


 


 

11,398


 


 


 

15,060


 

Impairment loss on property and equipment


 


 

306


 


 


 


 


 


 

306


 


 


 


 

Performance of contract liability to affiliate


 


 


 


 


 

(7

)


 


 


 


 


 

(19

)

Total operating expenses


 


 

8,870


 


 


 

10,129


 


 


 

17,716


 


 


 

22,124


 

Loss from operations


 


 

(8,641

)


 


 

(9,648

)


 


 

(17,530

)


 


 

(21,370

)


 


 


 


 


 


 


 


 


 


 


 


 


 

Equity in net losses of affiliate


 


 


 


 


 


 


 


 


 


 


 

(9

)

Foreign currency (loss) gain, net


 


 

(89

)


 


 

(108

)


 


 

200


 


 


 

699


 

Fair value adjustment to VericiDx investment


 


 

202


 


 


 

(345

)


 


 

(245

)


 


 

(1,199

)

Fair value adjustment to convertible notes


 


 

(114

)


 


 

(440

)


 


 

(1,321

)


 


 

(730

)

Other income, net


 


 

161


 


 


 

97


 


 


 

261


 


 


 

211


 

Net loss before income taxes


 


 

(8,481

)


 


 

(10,444

)


 


 

(18,635

)


 


 

(22,398

)

Income tax (expense) benefit


 


 

(4

)


 


 


 


 


 

(4

)


 


 

1


 

Net loss


 


 

(8,485

)


 


 

(10,444

)


 


 

(18,639

)


 


 

(22,397

)


 


 


 


 


 


 


 


 


 


 


 


 


 

Net loss per ordinary share—basic


 

$

(0.09

)


 

$

(0.14

)


 

$

(0.19

)


 

$

(0.30

)

Net loss per ordinary share—diluted


 

$

(0.09

)


 

$

(0.14

)


 

$

(0.19

)


 

$

(0.30

)


 

Weighted average ordinary shares—basic


 


 

97,268,051


 


 


 

74,891,844


 


 


 

96,017,946


 


 


 

74,848,278


 

Weighted average ordinary shares—diluted


 


 

97,268,051


 


 


 

74,891,844


 


 


 

96,017,946


 


 


 

74,848,278


 


 


 


 


 


 


 


 


 


 


 


 


 


 

Other comprehensive income (loss):


 


 


 


 


 


 


 


 


 


 


 


 

Changes in the fair value of the convertible notes


 


 


 


 


 

(920

)


 


 

75


 


 


 

(523

)

Foreign exchange translation adjustment


 


 

(401

)


 


 

588


 


 


 

(359

)


 


 

(499

)

Comprehensive loss


 


 

(8,886

)


 


 

(10,776

)


 


 

(18,923

)


 


 

(23,419

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

RENALYTIX PLC

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

(in thousands, except share and per share data)


 


 


 

December 31, 2023


 


 

June 30, 2023


 

Assets


 


 


 


 


 


 


 


 

Current assets:


 


 


 


 


 


 


 


 

Cash and cash equivalents


 


 


 

$

5,619


 


 

$

24,682


 

Accounts receivable


 


 


 


 

1,370


 


 


 

776


 

Prepaid expenses and other current assets


 


 


 


 

1,261


 


 


 

1,424


 

Total current assets


 


 


 


 

8,250


 


 


 

26,882


 

Property and equipment, net


 


 


 


 

576


 


 


 

1,027


 

Right of Use Asset


 


 


 


 

102


 


 


 

159


 

Investment in VericiDx


 


 


 


 

1,220


 


 


 

1,460


 

Other Assets


 


 


 


 

1,128


 


 


 

1,101


 

Total assets


 


 


 

$

11,276


 


 

$

30,629


 


 


 


 


 


 


 


 


 


 

Liabilities and Shareholders’ Equity


 


 


 


 


 


 


 


 

Current liabilities:


 


 


 


 


 


 


 


 

Accounts payable


 


 


 

$

2,109


 


 

$

1,485


 

Accounts payable – related party


 


 


 


 

707


 


 


 

1,451


 

Accrued expenses and other current liabilities


 


 


 


 

4,259


 


 


 

6,644


 

Accrued expenses – related party


 


 


 


 

3,673


 


 


 

1,963


 

Current lease liability


 


 


 


 

111


 


 


 

130


 

Convertible notes-current


 


 


 


 

3,063


 


 


 

4,463


 

Total current liabilities


 


 


 


 

13,922


 


 


 

16,136


 

Convertible notes-noncurrent


 


 


 


 

5,310


 


 


 

7,485


 

Noncurrent lease liability


 


 


 


 


 


 


 

41


 

Total liabilities


 


 


 


 

19,232


 


 


 

23,662


 


 


 


 


 


 


 


 


 


 


 

Commitments and contingencies (Note 10)


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

Shareholders’ equity:


 


 


 


 


 


 


 


 

Ordinary shares, £0.0025 par value per share: 107,189,897 shares authorized; 99,930,156 and 93,781,478 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively


 


 


 


 

305


 


 


 

286


 

Additional paid-in capital


 


 


 


 

190,437


 


 


 

186,456


 

Accumulated other comprehensive loss


 


 


 


 

(1,734

)


 


 

(1,450

)

Accumulated deficit


 


 


 


 

(196,964

)


 


 

(178,325

)

Total shareholders’ (deficit) equity


 


 


 


 

(7,956

)


 


 

6,967


 

Total liabilities and shareholders’ (deficit) equity


 


 


 

$

11,276


 


 

$

30,629


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

RENALYTIX PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 


 


 

For the Six Months Ended December 31,


 

(in thousands)


 

2023


 


 

2022


 

Cash flows from operating activities:


 


 


 


 


 


 

Net loss


 

$

(18,639

)


 

$

(22,397

)

Adjustments to reconcile net loss to net cash used in operating activities


 


 


 


 


 


 

Depreciation and amortization


 


 

235


 


 


 

258


 

Impairment of property and equipment


 


 

306


 


 


 


 

Stock-based compensation


 


 

909


 


 


 

1,584


 

Equity in losses of affiliate


 


 


 


 


 

9


 

Reduction of Kantaro liability


 


 


 


 


 

(55

)

Fair value adjustment to VericiDx investment


 


 

245


 


 


 

1,199


 

Unrealized foreign exchange gain


 


 


 


 


 

271


 

Realized foreign exchange gain


 


 

(163

)


 


 


 

Fair value adjustment to convertible debt, net interest paid


 


 

1,059


 


 


 

730


 

Non cash lease expense


 


 

57


 


 


 

52


 

Changes in operating assets and liabilities:


 


 


 


 


 


 

Accounts receivable


 


 

(594

)


 


 

81


 

Prepaid expenses and other current assets


 


 

45


 


 


 

494


 

Receivable from affiliates


 


 


 


 


 

(22

)

Accounts payable


 


 

618


 


 


 

2,773


 

Accounts payable – related party


 


 

(744

)


 


 

(1,083

)

Accrued expenses and other current liabilities


 


 

(2,465

)


 


 

1,367


 

Accrued expenses – related party


 


 

1,708


 


 


 

(566

)

Deferred revenue


 


 


 


 


 

(46

)

Net cash used in operating activities


 


 

(17,423

)


 


 

(15,351

)


 


 


 


 


 


 


 


 

Cash flows from investing activities:


 


 


 


 


 


 

Payment for long term deferred expense


 


 


 


 


 

(64

)

Net cash used in investing activities


 


 


 


 


 

(64

)


 


 


 


 


 


 


 

Cash flows from financing activities:


 


 


 


 


 


 

Payment of convertible notes principal


 


 

(1,660

)


 


 

(1,648

)

Payment of issuance costs


 


 

(5

)


 


 


 

Proceeds from purchase of ordinary shares under employee share purchase plan


 


 

93


 


 


 

116


 

Net cash used in financing activities


 


 

(1,572

)


 


 

(1,532

)

Effect of exchange rate changes on cash


 


 

(68

)


 


 

(570

)

Net decrease in cash and cash equivalents


 


 

(19,063

)


 


 

(17,517

)

Cash and cash equivalents, beginning of period


 


 

24,682


 


 


 

41,333


 

Cash and cash equivalents, end of period


 

$

5,619


 


 

$

23,816


 

Supplemental noncash investing and financing activities:


 


 


 


 


 


 

Cash paid for interest on convertible debt


 

$

249


 


 

$