Sygnis sells its own-brand TruePrime kits through its website and an international distributor network. A new enzyme, SunScript, has been added to the range. Kits may also be sold as OEM products with next-generation sequencing systems. A new kit for research in cancer diagnosis and monitoring could be added in 2016. Cash at 31 March was €2.5m. Q115 had revenues of €76k; total cash outflow was €1.29m.
Sygnis’s core IP is a range of novel engineered enzymes. Management believes the company can gain higher margins and become profitable by selling its own molecular biology kits with these enzymes. A new 2016 market might be cell-free tumour DNA for ‘liquid biopsy’ in cancer diagnostics. OEM kits may be sold with next-generation sequencing systems supplied by leading scientific equipment companies. TruePrime kits copy and amplify the whole genome, which enables a single cell to be sequenced. Amplification is a core molecular biology technique used before DNA analysis and gene sequencing. The new SunScript enzyme converts RNA messages in cells to DNA for analysis or sequencing. The enzyme is stable with high yields and sensitivity claimed; it can be combined with TruePrime.
Sales in FY14 predate the new direct strategy. Most revenues (€301k) were from Caco cell licences (used in preclinical pharmaceutical development). Royalties from Qiagen were disappointing at €15k, showing the need for direct sales. Sygnis has an e-commerce website and distributors in key territories like North America, Asia and Europe. It is promoting TruePrime at scientific conferences. Management kept control of costs in 2014 with a level operating cash outflow of €3.6m. Any major original equipment manufacturer (OEM) deal should add significantly to sales but will mostly affect 2016 if signed in H215. Q115 sales were €76k with a reported loss of €0.74m. Dr Viribay joined Sygnis as vice president, sales and marketing in April 2015 from Thermo Fisher.
Value progression depends on the success of the TruePrime and SunScript kits with more products planned. FY15 sales are guided by management in the Annual Report at €0.5-0.7m and at €2.5m in 2016; forecasts in a launch period are subject to high uncertainty. This puts Sygnis on a prospective FY16 market cap to sales multiple of about 17x, implying high growth expectations. Sygnis raised €4.9m gross in equity in late 2014 and had €3.7m year-end cash. FY14 cash outflow was €3.5m and €1.29m in Q115, including investments