Predictive Technology Group Reports Second Quarter Fiscal 2020 Financial Results and Provides Corporate Update - Seite 2

Mr. Robinson concluded, “As we enter the back half of our fiscal year, we continue to execute on our growth plan, and we believe that our emergence as a women’s health leader, together with our anticipated up-listing to the Nasdaq exchange, will unlock significant long-term value for our shareholders.”

Fiscal Second Quarter and Recent Highlights

• Announced positive interim beta test results on over 1,000 patients tested with ARTguide at Houston Fertility Institute. Initial test results exceed all expectations and parameters established during research and development and prospective data continue to accumulate regarding pregnancy rates and other treatment outcomes.
• In January, announcement of a molecular diagnostic oncology development collaboration with Atrin Pharmaceuticals to develop diagnostic tools to facilitate improved selection of cancer patients who would most benefit from treatment with Atrin’s DNA Damage and Response inhibitors and other small molecule ATR inhibitors
• In October, announced the successful U.S. launch of FertilityDX, a comprehensive genetic testing service that identifies barriers to healthy pregnancy and birth, allowing doctors to tailor fertility treatments
• Continued to work to satisfy Nasdaq listing requirements with the goal of up-listing PRED shares to the Nasdaq exchange

Fiscal Second Quarter 2020 Results

Revenues from operations (net) for the three months ended December 31, 2019 totaled $7.3 million, compared with $10.7 million for the three months ended December 31, 2018. The decrease of $3.4 million was primarily due to the decline in sales volume of allograft products as compared to the year-ago period. The decrease in sales volume is due to increased FDA enforcement efforts affecting the regenerative medicine industry as a whole, which has negatively impacted the size of the market for regenerative medicine services and caused a contraction of sales of allograft products. 

Cost of goods sold (“COGS”) for the three months ended December 31, 2019 was $5.8 million (or 79.6% of revenue) compared with $3.1 million (or 28.6% of revenue) for the three months ended December 31, 2018. The increase in COGS is primarily due to $1.9 million in scrap expense and idle capacity costs resulting from efforts to curtail production in response to the trend in allograft sales. In addition, there was a $0.8 million increase in scrap expense due to a decrease in average quality control pass rates for WIP product compared to the three months ended December 31, 2018.