Cambridge Cognition Shares Plunge on Clinical Trial Setbacks
Cambridge Cognition shares dropped over 20% following revenue decline and clinical trial cancellations, highlighting challenges in the brain health technology sector.
Cambridge Cognition headquarters with company logo as shares experience significant market decline
Brain health technology firm Cambridge Cognition (AIM:COG) saw its shares tumble over 20% on Thursday after reporting revenue declines and the unexpected cancellation of two clinical studies, highlighting the volatile nature of the UK financial market's response to setbacks in the healthcare sector.
Financial Performance and Market Impact
The company reported new sales orders of £6.9 million for H1 2024, with the order book expanding to £16.4 million from £13.6 million at 2024's end. However, revenue declined to £4.3 million from £5.6 million year-over-year, mirroring the kind of market challenges that have affected other British firms facing revenue headwinds in recent months.
Operational Challenges
The company faced several operational hurdles:
- Adjusted EBITDA loss of £0.40 million
- Operating cash outflow of £0.3 million
- Cash reserves decreased to £0.4 million from £1.3 million
- Net debt position of £1 million
Clinical Trial Cancellations Impact
In a significant development that echoes market volatility concerns seen across various sectors, two clinical studies for the same drug candidate were cancelled after the sponsor halted development. This rare occurrence will reduce the order book by £0.8 million, affecting cash generation in H2 2025.
Market Outlook and Analysis
Despite these challenges, Cambridge Cognition projects full-year revenue between £9.5 to £10 million, with approximately £5.80 million of the current order book extending into 2026. Panmure Liberum maintains a "Buy" recommendation with a 56p price target, though noting the extended lead times between contract signing and revenue recognition as a growth constraint.
"The lead time between signing new contracts and revenue is making it difficult for the company to drive faster growth in the near term," stated analyst Julie Simmonds.
Thomas Reynolds
Correspondent for a London daily, specialist in British foreign policy and transatlantic issues.