The Cogstate Limited (ASX: CGS) share price ripped more than 78% higher in early trade after the company released its quarterly cash flow statement and business update. It has since been sold down and is currently trading 30.95% higher at 55 cents per share.
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What did Cogstate announce?
The company's report was highlighted by a record high in sales contracts, with Cogstate executing $8.4 million in clinical trial sales contract for the quarter ending 30 June 2020. As a result, the company has completed $46 million in sales contracts for the year, making FY20 its most successful financial year.
Cogstate expects the substantial increase in clinical trial sales contracts to result in increased revenue for the quarter. The company also reported a cash positive quarter, with cash reserves totalling $10.6 million, an increase of $3.3 million during the period.
In addition to its cash flow statement for the quarter, Cogstate also provided the market with a business update regarding its partnership with ERT. According to the update, Cogstate has entered into a preferred partnership with ERT, which is a global leader in clinical endpoint data collection. The partnership will see the company deliver cognitive assessments via ERT's technology platform, providing Cogstate with the potential to significantly expand its distribution channel.
What does Cogstate do?
Cogstate is a neuroscience technology company that specialises in brain health assessments, with the aim of advancing development of new medicines and clinical insights. The company's technologies allow for rapid and reliable computerised cognitive tests, which are designed to replace traditional costly and error-prone paper assessments.
The company's clinical trial solutions provide quality assurance services that streamline the measurement of clinical outcomes, whilst also eliminating the need for duplicate hardware.
Foolish takeaway
The Cogstate share price was trading around 78% higher in early trade, hitting an intra-day high of 80 cents. Since then the company's share price has been sold-down and is currently trading around 30% higher at 55 cents.
