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Cellmid continues ecommerce momentum with strong FY2020 results despite economic disruption

Snapshot

The company has focused on ecommerce channels during the COVID-19 pandemic for its range of evolis hair care products but has also found a new revenue stream in SARS-CoV-2 tests for medical practitioners.

Cellmid Limited - Cellmid continues ecommerce momentum with strong FY2020 results despite economic disruption

Quick facts: Cellmid Limited

Price: 0.1 AUD

ASX:CDY
Market: ASX
Market Cap: $12.52 m
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Cellmid Limited (ASX:CDY) reached record revenue in quarter four of FY20 with new distribution channels across Australia, Asia and the USA performing well,

The company reported revenue of $3.06 million, up 115% on the previous corresponding period, with total FY2020 revenue of $8.511 million despite COVID-19 related economic disruption.

During the quarter, Cellmid secured access to and/or supply of a broad range of SARS-CoV-2 tests, including antibody and nucleotide tests as well as laboratory-based and point of care (POC) assays.

The company submitted the Wondfo POC test to the Doherty Institute for validation where, in the most relevant period of 14+ days following the onset of symptoms, it was shown to have the equal highest sensitivity of the tests reviewed so far.

Cellmid received the first commercial shipment of 12,000 Wondfo POC tests on April 14, 2020, and sold around 1,500 tests to medical practitioners since.

The impact of these sales on FY20 results has not been material, but as the pandemic is expected to persist for many months (if not years) Cellmid will continue to seek out opportunities for SARS-CoV-2 testing in Australia and overseas.

Distribution agreements

Cellmid signed an exclusive distribution agreement with Immunodiagnostics Limited (IMD) Hong Kong for laboratory-based, quantitative Enzyme Linked Immunosorbent Assays (ELISAs) and a point of care serology test for SARS-CoV-2 for Australia and New Zealand.

In addition, authorisation from Guangzhou Wondfo Biotech Co Ltd (SHE:300482) has been extended for Australia Application Pty Ltd to be a distributor of the Wondfo SARS-CoV-2 antibody test in Australia until December 30, 2020.

Consumer health revenue

The company reported highest-ever quarterly consumer health revenue of $2.88 million during the quarter – an increase of 107%, with the total for FY20 sitting at $7.4 million.

New ecommerce retailers and television shopping performed strongly during FY20 as retail channels started to open with Japan up 114% to $2.35 million, Australia up 103% to $409,000 and the US up 44% to $129,000.

This was a strong result, especially in the absence of bricks-and-mortar retail activity in Australia and the USA for 3-4 months during the pandemic.

The company continues to grow distribution channels for its evolis products

Australian and Asian demand

Strong quarter four revenue of $2.35 million in China was primarily the result of the QVC Today’s Special Value (TSV) event and the reopening of the Chinese export of Lexilis branded FGF5 inhibitor products and Jo-Ju in April 2020, following three months of lockdown.

Consumer health sales in Australia were up 45% for the year to $1.44 million with pharmacy wholesalers (API) and e-commerce representing the most significant channels.

Television shopping channel (Openshop) has delivered increasing revenue in Australia but despite the growth in e-commerce and TV shopping, the COVID-19 pandemic had a negative impact during quarter four - particularly with the delay of the Priceline experiential marketing launch.

Cellmid signed a trading agreement last year for its the evolis Professional anti-ageing hair care products to be available in 400 Priceline stores as well as on priceline.com.au.

While the launch was delayed, digital marketing launch activities commenced in July 2020, however, in-store events have been postponed again most recently due to the resurgence of the pandemic.

US ecommerce revenue

Consumer health sales in the US were up 51% in FY20 to $626,000 and up 44% in quarter four to $129,000 showing that, while business remains affected by the severity of the pandemic locally, ecommerce sales through retailers such as Bloomingdales, Saks and Macy’s are continuing.  

Cellmid launched its evolis Professional products on Amazon (USA) in June 2020 and orders from other pure ecommerce retailers (such as Dermstore) have been regular during the quarter.

Notably, the company’s most significant retail customer in the USA, Neiman Marcus, has started to open its stores, placing orders to restock the evolis products and recommencing ecommerce activities throughout June.

Looking forward, the company expects ongoing ecommerce revenue growth, recently signing an agreement (via its wholly-owned US subsidiary Advangen LLC) with Tru Beauty Concepts Inc. for the exclusive distribution of its évolis products in salons.

Tru Beauty currently services 40,000 salons in 11 states in the northeast of the US and also has a partnership with wholesale ecommerce hub, Salon Interactive, which hosts individual salon websites, making premium hair care products available to clients of participating salons, even if they are not physically open due to the COVID-19 pandemic.

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