Centogene uncertain on “Going Concern”; 19% equity pool


SCentogene NV hares (CNTG) were down 19% on Nov. 24 and closed at $ 7.20, after the world leader in genetic diagnostics for rare diseases reported poor third-quarter results and expressed concerns about the company’s capacity to continue to operate.

Centogene is a commercial-stage company focused on transforming clinical, genetic and biochemical data into medical solutions for patients. The company generates data-driven information to diagnose, understand and treat rare diseases.

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Q3 results

The company announced an adjusted loss of € 0.96 per share, significantly higher than the loss of € 0.27 per share recorded in the quarter of the previous year.

In addition, revenue decreased 17% year-on-year to € 30.2 million from € 36.3 million. The decrease is mainly due to a reduction in COVID-19 commercial testing revenue, from 27.4 million euros to 20.2 million euros in the third quarter of 2020. In addition, there was a decrease of 28% of Pharma revenues which offset the 43% increase in Diagnostics revenues.

Concerns as an operating business

Along with the results announcement, the company reported that the company’s cash and cash equivalents stood at 25.7 million euros at September 30, 2021, compared to 34.8 million euros at the end of the year. of the previous quarter. The company added, “There is uncertainty as to the ability of the company to continue as a going concern. “

Financial guidelines 2021

Based on the third quarter results, the company has updated its revenue forecast for fiscal 2021.

Driven by revenue from COVID-19, the company predicts that total revenue will grow between 30% and 40% year-over-year.

The company said the percentage of total revenue from COVID-19 testing has declined over the past three quarters and is expected to decline further in the fourth quarter. Ultimately, it will gradually disappear by the end of the first quarter of 2022.

In fiscal 2021, the company expects its core business to achieve medium to high growth. However, Core Business saw a 20% decrease in FY2020 compared to FY2019.

Management weighs

Centogene CFO René Just commented, “While the sales team is fully focused on the core business, we are also prudently managing the phase-out of our ancillary COVID-19 testing business. We will leverage this process to also streamline the operational footprint of the core business and fully align with the strategic framework unveiled to shareholders in June. “

He added: “This is expected to result in savings of up to 15 million euros in annualized terms excluding restructuring costs, mainly reflecting a reduction in personnel and operating expenses and will reduce the rate of the company’s cash consumption. . “

The Taking of Wall Street

The Wall Street community is cautiously bullish on the stock, with a moderate buy consensus rating based on 2 buys. The Centogene NV average price target of $ 19.50 implies a potential upside of 170.83% from current levels. However, stocks have lost 38% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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