Cogstate Limited (CGS) Earnings Call Transcript & Summary

Hello, everyone. Welcome to the presentation of the 2020 financial statements of Cogstate Limited. My name is Brad O'Connor. I'm the Chief Executive of Cogstate. [Operator Instructions] As always, I'll start with some major themes for today's presentation. All year, I've been talking about the transformation of Cogstate's business. And we're now beginning to see that transformation reflect in the financial results of the business. And in many ways, we're beginning to see the benefit of the hard decisions that we made 2 years ago in mid-2018. During the 2020 financial year, the Clinical Trials segment delivered the best annual sales result that we've ever recorded. In the second half of the financial year, we saw the growth in sales contracts begin to drive revenue growth, which in turn, substantially improved the gross margin in the Clinical Trials segment of our business. The second half result was in line with our results that we recorded in the 2018 financial year. Thanks to the partnership with the Japanese pharmaceutical company Eisai, the Healthcare segment recorded its first positive segment result. The restructure that was undertaken in 2018, and which resulted in a substantial decrease in headcount in the Healthcare group, when combined with the strategic partnership with Eisai, has provided for revenue growth without any associated growth in costs. And overall, I'm really pleased to announce that Cogstate recorded a profit before tax for the second year. With cost control, the improved financial result recorded by the Clinical Trials segment for the second half of the year has resulted in an improvement in overall profitability, and Cogstate is beginning to show the financial leverage that I know many of our investors have been eager to see. So to start with the beginning, Cogstate was founded 20 years ago with a vision that we could develop technology that would allow assessment of brain health anywhere and for any purpose. Importantly, with an aging population and an increase in Alzheimer's disease and other dementias, Cogstate's goal was to make assessment of cognition as simple and as informative as taking your temperature. Cogstate is perfectly positioned to play a significant role in helping us -- helping the world to reimagine and shape evolving health care ecosystems. While we provide just one component of the jigsaw puzzle, we're also helping partners reimagine what that puzzle [indiscernible] look like. Cogstate has a proven ability to design and commercialize digital brain health assessments. Our tests have been used extensively and are highly validated, with unique ability to utilize the same tests in a clinical trial and in clinical practice. Cogstate's computerized batteries of rapid, reliable, simple and sensitive tests measure the core cognitive domains that are of interest in research studies. Our technology has been scientifically validated and is supported by literature in hundreds of peer-reviewed publications. The tests have also been shown to be valid for using different cultures and different language groups. Cogstate assessments have been reviewed and accepted by regulators the world over. But most importantly, [Audio Gap] and an intent to establish deep strategic partnerships to help reimagine and redesign health ecosystems. Proven partnerships, such as our relationship with Eli Lilly in Alzheimer's disease clinical trials or our involvement in important public-private partnerships that are focused on the treatment of asymptomatic Alzheimer's disease, the launch of online cognitive screening in Japan through our partnership with Eisai and our recent partnership with clinical trials technology provider ERT, all of these seem to demonstrate the ability and the intent to form relationships that challenge the status quo and seek to use technology to redesign health care. Cogstate has 2 revenue streams. Clinical Trials is our established business that generated USD 21 million of revenue in financial year '20. This is a project revenue model that provides us with great forward visibility and predictability of our revenue. The length of clinical trials provides a great tail to build from year-on-year. Healthcare, the use of Cogstate technology to measure brain health in the community, is our next horizon. It was the basis of the original investment proposition for the formation of Cogstate, and it is starting to become a reality as we get closer to the prospect of the release of a disease-modifying therapy for Alzheimer's disease. This is a subscription-based software revenue model sold through strategic partners, such as Eisai, who have other revenue in this case, revenue from therapeutics tied to the adoption of Cogstate software. So for the year to 30 June, 2020, Cogstate recorded a loss before tax of just over $2 million, which was a 46% improvement on the prior year. However, just as important as the annual result was the improvement we saw in the financial results in the second half of the financial year. 12 months ago, at the beginning of the 2020 financial year, we expressed confidence of an expected improvement in trading conditions in the Clinical Trials business. At that time, we said that we expected to be able to aggressively improve our Clinical Trials sales results during the 2020 year, but we expected that it would take some time for the improved sales to deliver an increasing revenue. That assessment proved to be accurate, and in the first half of the 2020 financial year, the contribution from the Clinical Trials segment fell significantly as a result of a decrease in revenue, which -- and this was in line with our expectations. However, in the second half of the year, the improved sales results began to deliver an increase in revenue, which, in turn, improved the contribution from the Clinical Trials segment. Combined with another positive contribution from the Healthcare segment in the second half of the year and cost control from year-to-year, Cogstate has been able to deliver a profit before tax of $823,000 for the second half of the year. Total revenue recorded for the second half of the year was $14 million. That was an improvement of $4.3 million compared to the first half of the year. As a result of cost control, the second half revenue increase, that $4.3 million increase, delivered an increase in profit before tax of $3.7 million compared to the first half. Through the next few slides, I want to break down those results for you and explain why we are now in position to deliver improved financial results in the coming periods. I'll start by looking at the Clinical Trials side of the business. In the Clinical Trials segment, Cogstate revenue is generated from the sale of technology and [indiscernible] services to pharmaceutical and biotechnology companies to demonstrate a drug's impact on cognition. Our support of Clinical Trials involves our computerized tests as well as services in respect of the management training, monitoring of conventional cognitive assessments. The services component of Cogstate work is performed by Cogstate employees, which means that the direct costs are quite fixed and don't flex as easily as we might like with movements in revenue. As this graph demonstrates really clearly, the direct costs associated with the delivery of technology and services in Clinical Trials have been fairly consistent from period-to-period and quite unrelated to the amount of revenue recognized. Clinical trial direct costs have been consistently in a range between approximately $6 million to $6.5 million per half year period over the last 3 years or over the last 6 half year periods. Over those same 6 half year period, revenue has fluctuated between a low of $8 million and a high of $15 million per half year, that is, even where revenue for the half year fell by over $7 million from high to low point, direct costs reduced only by $750,000 from high to low point. Therefore, we can see that the profit contribution of the Clinical Trials segment is directly linked to the revenue result. As revenue increases, the profit contribution from the Clinical Trials segment also increases. That's why the level of executed sales contracts is such a critical forward indicator for this part of our business. Increasing sales will, over time, result in an increase in revenue, and thereby, also increase in profit contribution from this segment of the Cogstate business. By the second half of the 2020 year, we can see that Cogstate has come through a very difficult 18 months from July 2018 to December 2019, and the Clinical Trials segment has returned to levels last seen in the 2018 financial year. I'll now look at the Healthcare segment before returning to the overall picture trying to put that back together for you. [indiscernible] the Clinical Trials segment, Cogstate develops tools specifically designed to aid health care professionals with an objective assessment of cognition. The system branded as Cognigram allows a regular and standardized testing to assist in early detection of cognitive decline that could be related to a range of factors, including head injury, neurodegenerative disease or side effects following pharmacological treatments. The most significant opportunity for Cognigram is the dementia market. Cognigram has achieved regulatory clearance, allowing us to market the product in multiple jurisdictions, including the FDA in the U.S. and CE mark in Europe and Australian clearance by the TGA. In mid-2018, Cogstate made a decision to cease independent direct marketing of Cognigram. And instead, we had sought to distribute the technology through strategic partners. A year ago, almost to the day, on 28th of August, 2019, Cogstate announced that we'd entered into an agreement with the Japanese Pharmaceutical Company Eisai to license our technology to them exclusively for the health care market in Japan. The goal of the partnership strategy was to find partners, such as Eisai, who seek to drive the adoption of cognitive testing as part of a broader ecosystem of solutions, which would include therapeutic treatment, designed to address, more broadly, dementia in society. The change in the strategy has resulted in a decrease in direct cost for Cogstate and has also provided opportunities for expansion in new markets, such as Japan. The 2020 financial year was the first positive contribution ever recorded by the Healthcare segment. This graph shows that the cost structure of the Healthcare segment changed completely as a result of that strategy change in mid-2018. During the 2020 financial year, the Healthcare segment recorded gross margins of more than 95%. Both the first and second half of the year now more closely resemble the margins that you would expect from a pure software sale. So let's try and put all that back together. Cogstate Clinical Trials business suffered a major shock in mid-2018, when a number of Alzheimer's disease clinical trials were canceled, and there was a resulting flow-on effect of the decrease in Alzheimer's disease and R&D throughout the 2019 financial year. Through 2019, Cogstate [indiscernible] revenue pool, and therefore, we recorded losses. In mid-2018, at that time, in reaction to that loss of trials and loss of revenue, Cogstate did 2 things: We focused [indiscernible] into therapy areas outside of Alzheimer's disease, while still continuing to invest in our solutions in Alzheimer's disease; and we made a decision to change the strategy and business model for the Healthcare segment. So now some 2 years later, we're in a position to reap the benefit from those hard decisions made 2 years ago. Since undertaking the restructure of operations in 2019 financial year, Cogstate has maintained that lower cost base, which positions the company to show earnings improvement as the current record level of sales in Clinical Trials translates into revenue. All of this, combined with the ongoing support from our shareholders to recapitalize the company over the past year, positions Cogstate for further growth and improved financial results in the coming periods. Having seen how the Clinical Trials revenue can improve earnings, I wanted to have a look at our starting position now for the 2021 financial year. Just as a recap, in the Clinical Trials division, Cogstate entered into sales contracts with pharmaceutical and biotech companies for the provision of our technology and services. The contact value will differ for each clinical trial, depending on the scope of the technology and the service we provide. An increase in the total value of sales contracts executed will increase revenue backlog and will, over time, result in increase in revenue. Revenue from sales contracts is recognized over the life of the contract, and that can vary for a Phase I study for a few months up to 4 or 5 years for a Phase III study. Revenues recognized upon achievement of predetermined milestones. So during each period, Cogstate might recognize revenue from either contracts in the backlog at the beginning of the period as well as sales contracts executed during the period. And usually, there's a time lag between an increase or decrease in the level of sales and the corresponding change to recognized revenue. The value associated with executed sales contracts that has not been recognized as revenue at the end of any period is referred to as contracted future revenue. And I've shown this information before, but let's recap the 2020 sales result. For the year to 30 June, 2020, Cogstate executed $46 million of Clinical Trials sales contracts. That result was an improvement of over 150% on the 2019 year and over 28% on the record set previously in the 2018 financial year. In Alzheimer's disease and the related dementias, growing awareness of Cogstate proprietary digital assessments, combined with our scientific and operational excellence needed to support our quality services, has led to an increase in awarded contracts in this area. Additionally, if we look at the broader market, recent positive trial data and the potential upcoming release of the first disease-modifying therapy for patients with Alzheimer's disease has led to improved sentiment among Cogstate customers and increased R&D investment in dementia-related diseases. [indiscernible] Cogstate has seen an increase in awarded contracts in other therapeutic areas as well, including diseases where cognition is measured as a safety endpoint. These factors have combined to deliver our best Clinical Trial sales result ever. In that Clinical Trials business, the revenue model gives us great visibility and predictability of revenue. At 30 June, 2020, Cogstate had over $39 million of contracted revenue to be recognized in future periods. Of that amount, $15 million is expected to be recognized in the 2021 financial year, that's an increase of more than 40% on the same time last year. For the 2021 financial year, that $15 million that we're starting with compares to $11 million that we started with the same time last year. So we're in a really strong position there to grow revenue in the 2021 financial year. But ultimately, the amount of revenue recognized during the year will depend on the level of sales contracts that we execute during this year. The concern that we have in respect to the 2021 sales contracts is lingering doubt caused by the impact of the coronavirus pandemic and the impact that may or may not have on R&D decision-making within pharmaceutical companies. Therefore, the next thing I want to do is examine how we've started the 2021 financial year. And so far, we've started the year really strongly. The pandemic and the associated lockdown orders impacted the conduct of ongoing clinical trials from around about March 2020. We saw at that time a decrease in activities associated with new trial initiation. However, since mid-June, we've seen an uptick in sales activity. And I'm really pleased to announce that Cogstate has executed $6.5 million of sales contracts in just over 7 weeks since the 1st of July. Last month, we announced that we partnered with ERT to deploy our computerized assessments on their technology platform. Our partnership with ERT provides potential significant sales channels for Cogstate computerized assessment. ERT is a large provider in the global clinical trial service industry. And in 2019, 75% of all FDA-approved drugs came from studies supported by ERT. So ERT provides Cogstate with line of sight for hundreds of studies outside of central nervous system diseases, and they are studies that Cogstate team would not normally encounter. Part of this relationship, Cogstate will leverage the significant business development resources of ERT to access a much larger clinical trials market that we're just not seeing at the moment. So we really think this is a significant commercial relationship for us. And then finally, we're seeing a significant market shift to remote assessment in clinical trials, largely caused by the pandemic, and this provides enhanced opportunities for digital assessments, such as Cogstate's. We've successfully pitched to multiple pharma companies to explore remote assessment opportunities, and it's expected that this analysis and problem-solving that we're providing to these customers will create additional sales opportunities for us in the future. I want to now turn our attention to the growth prospects within the Healthcare segment. On 20th August last year, Cogstate announced an [indiscernible] agreement with pharmaceutical company Eisai to distribute cognitive testing in Japan. Under the exclusive licensing agreement, Eisai is marketing Cogstate technology as a digital cognitive assessment tool in Japanese markets. Under the terms of that agreement, it provides -- Eisai is providing -- oh, sorry, has provided an upfront royalty repayment to Cogstate of USD 1 million. They've invested approximately $2 million in Cogstate shares. Eisai also funding necessary product development activities to further tailor our Cogstate solutions for the Japanese user base and are also funding a commercialization team in Japan. Under the deal, Cogstate and Eisai will share profits equally after taking into account the associated costs of sales of the product in Japan. The agreement has an initial term of 10 years with performance criteria to maintain exclusivity at both years 5 and year 8. On the 31st of March of this year, so just a few months ago, Eisai launched the NouKNOW product, which is a digital tool for self-assessment of brain health based upon the Cogstate technology. NouKNOW, which translates to know your brain, has been initially targeted at municipalities, providing health services to local residents; and corporations who are providing health checks for their employees. NouKNOW provides feedback to the user, including meaningful interventions, such as diet, exercise and physician consultation. In addition to the launch of NouKNOW, about 4 weeks ago, on the 28th of July, Eisai announced that it's launched a comprehensive brain performance application called Easiit. The Easiit application will be widely distributed consumer application that will leverage the [indiscernible] marketing expertise within both Eisai and also within a company called DeNA, which is a listed Japanese e-commerce provider. The goal of Easiit application is to create awareness and understanding that decline in brain health may be mitigated through readjustments to lifestyle, such as regular exercise, a well-balanced diet and social interaction. The scientific evidence supports the claims that lifestyle improvements can result in better brain health. Cogstate technologies being utilized in a number of worldwide studies demonstrate that lifestyle changes can result in improved cognition. The Easiit app will provide advice, such as proposing a customized menu, analyzing calorie and nutrient intake and measure and provide data reporting on good lifestyle habits. The goal of the Easiit application is to deliver benefits to consumers from a digital ecosystem that will include a wide range of partner organizations from health care providers to insurance companies. That ecosystem will include Cogstate assessments with plans to link Cogstate technology to the Easiit application next month. Through the Easiit application, Cogstate technology will be marketed direct to Japanese consumers. And we think that's a significant opportunity for us. The work being undertaken by Eisai and the considerable investment that has been made is evidence of their commitment to Alzheimer's disease patients and to the partnership with Cogstate. We're really happy with how this is going. Also relevant to the Healthcare segment is the potential launch of the first disease-modifying therapy for Alzheimer's disease. Eisai and their development partner, Biogen, announced on the seventh of August that the FDA has granted a 6-month priority review for the Alzheimer's drug, aducanumab, which means that the FDA decision on whether or not to approve that drug is due by the 7th of March 2021 or earlier. While there's a high level of uncertainty surrounding the potential approval of the drug, if approved, we expect that the launch of the therapy will result in increasing demand for cognitive assessment within the community. For a low-cost, noninvasive and easily deployed assessment such as Cogstate, the target market could be all individuals in the at-risk group, which includes most adults over the age of 65. Again, a significant potential opportunity. It's worth noting that the release of the Alzheimer's therapy is expected to increase R&D investment by pharmaceutical companies in Alzheimer's disease. And we see this in other indications all the time where the release of the therapy can encourage investment by proving a mechanism of action that derisks R&D spending decisions. It's really common that pharma companies would invest to identify a similar therapy that can provide a better outcome. Before finishing, I wanted to update in respect of some new areas of innovation and development. As previously announced, Cogstate is developing a smartphone, voice-based, self-assessment tool that has already been proven to be sensitive to early Alzheimer's disease. The smartphone app, which will be branded Lila, a name that is taken from the fact that it's a list learning assessment. The app is being developed with the support of the funding provided by the Alzheimer's Drug Discovery Foundation's Diagnostic Accelerator program, and that included funding from Gates Ventures as well as [indiscernible]. The app will provide real-time feedback to the physician or participant and is expected to begin scientific validation towards the end of the 2020 calendar year. The technology's based on Cogstate's International Shopping List Test, which is Cogstate proprietary version of a list learning assessment and has extremely well validated and shown to be sensitive to changes associated with Alzheimer's disease. The smartphone version, the test has been adapted for self-administration to deliver a voice-based cognitive assessment on all iOS and Android devices. Cogstate is constantly looking to gather data through research collaborations that may ultimately support the use of Cogstate technology in the community. Here I'll provide couple of topical demonstrations of Cogstate involvement in research studies that are assessing the possible post-infection neurological implications of COVID-19. On this slide are referenced 2 research studies that we are supporting through our academic research support program. So it's important to note that these are not revenue-generating opportunities for Cogstate at the moment. The studies, one based in Europe and the other in Australia, will both follow patients for a year post recovery from COVID-19 to assess whether there have been any lasting neurocognitive effects of the infection. As potential central nervous system implications of COVID-19 infections become clearer, we expect to see more such studies, but it's unclear at this stage whether those will result in commercial applications for Cogstate. I want to now turn to the business and financial outlook. Start by looking at the Clinical Trials segment. As we outlined earlier, Clinical Trials revenue is a function of revenue from contract secured in prior periods that have milestones in the 2021 financial year as well as revenue recognized from new sales contracts executed throughout this 2021 financial year. At the start of the year, we had over $39 million of Clinical Trials revenue secured by customer contracts. And of that, $15 million is expected to be recognized in the 2021 year. Our ability to secure new clinical trial contracts will be somewhat dependent on the ongoing impact of the global coronavirus pandemic and the impact that it may or may not have on the initiation of new clinical trials. As I said, in the first 7 weeks of the year, we've executed $6.5 million of clinical trial sales contracts. However, the full impact of the pandemic on our business and our revenue is far from clear, and there can be no certainties that sales will continue at the same rate as they had through the first 7 weeks of the year. That said, I do want to reiterate that currently, we're seeing really good demand for Cogstate technology in the clinical trials market. And we're hopeful that our relationship with ERT will provide additional sales opportunities in the future. Revenue from the Healthcare segment is a little more unpredictable. During the 2021 financial year, Cogstate, in conjunction with our commercial partner Eisai will continue commercialization of Cogstate technology in the Healthcare segment in Japan. Based on our current forecast, Cogstate did not expect to receive a profit distribution from the Japanese deployment in this 2021 financial year. And that's due to the fact that sales and marketing costs, which are being borne by Eisai, are expected to exceed gross revenue from technology sales in this first year. However, Cogstate will seek to expand commercial opportunities in other geographies outside of Japan, but there can be no guarantee that such opportunities will be secured this year. The potential commercial opportunities are expected to involve strategic relationships with distribution partners, similar in structure to the relationship with Eisai in Japan. But at this stage, we're not in a position to be more specific in respect of expectations for the Healthcare segment. Looking ahead and subject, again, to the uncertainty related to the pandemic, which does temper our expectations in respect to Clinical Trials revenue and therefore, provides uncertainty in relation to future earnings, having said that, we are well positioned to show revenue and earnings growth. Obviously, we'll know more in time. But at present, our customers are continuing to make R&D investment decisions, and the business is tracking really well. And if such conditions continue, then Cogstate can expect to grow Clinical Trials revenue. We've shown in the 2020 financial year that as Clinical Trials revenue increased, that led to an improved earnings performance. With that, I want to pause and open the lines for questions. [Operator Instructions]

Thanks so much for the presentation, Brad. And I really appreciate all that you shared. And we do have several questions that have been submitted, and I see a couple of people with their hands raised. So please go ahead and type any questions you have, and we will get to as many as we can and also get some of those raised hands as well. So to start off, speaking of the ERT partnership, are you hoping to partner with other organizations in the near term as well?

It's an excellent question. And I think there are opportunities to do that other similar service providers such as ERT. And that's something we will consider as opportunities arise. So there is a possibility of that, yes, certainly.

Great. And then building off of that, how has the initial communication with ERT gone? And how engaged are they? Do you expect to announce the first successful trial wins using this collaboration?

So absolutely -- I'll answer the second part of that question first. We will absolutely announce successful trial wins. We don't have one as yet, but ERT have been great. Their business development and marketing teams have been highly engaged. And we've run a number of sessions with their business development team, training them on the Cogstate system and key messages, and those have gone really well, and we're very impressed with the relationship so far.

Fantastic. We go to one of our raised hands, [ Dennis Hume ]. I see you have a hand raised. I'm going to go ahead and unmute you and you can ask your question. Can I -- just one moment. All right. [ Dennis ], you're unmuted. Would you want to ask a question?

Two questions. Firstly, also in relation to ERT. Have you received any leads for potential proposal for new clinical trials from ERT at this stage? And secondly, just in relation to proposals. So you mentioned that you had a high number of proposals submitted in June, can you talk about whether you're seeing a current -- similar level of proposals currently? How it compares to June and, I guess, to July last year?

Thanks, [ Dennis ]. So in terms of ERT, we -- at this stage, we haven't identified specific leads that we're following up just as yet. It's more been around getting those teams trained in the messaging round. So probably a little early to comment on that just yet. In terms of the level of proposals out there, yes, so we saw a great level of activity in the month of July. We haven't finished August yet. So -- but similar levels of activity in August. And as a general statement, our sales pipeline and the level of opportunities looks really good. So -- and that's what gives us the confidence to say that we do feel confident about the prospects for sales contracts in the Clinical Trials business. But as all of us in Melbourne have learned painfully over the last few months, we don't underestimate this virus and the potential impact it may have in the weeks and months to come. But at this stage, everything looks great.

Taking a little bit of a turn, Brad. Could you speak to the current bookings split between Alzheimer's disease and rare disease and how it compares to a year ago?

Sure. That's a good question. So certainly -- so we've seen expansion in both of those disease areas, Alzheimer's disease and rare disease. Of course, through 2019, we saw the level of Alzheimer's disease R&D activity really drop away, and we've seen that increase substantially over the last 12 months. So it's certainly a big part of our growth. But at the same time, the level of activity in rare disease has really picked up for us. And we see that as a very nice growth area for us that 3 years ago, was coming off essentially a 0 base. And we've been able to grow that to the extent that it represents in the order of sort of 20% to 25% of bookings. So it's pretty substantial coming off that small base.

Great. Again, kind of taking another turn. If Biogen's drug is rejected by the FDA, do you expect other AD trials from other companies, they might be canceled as well?

I don't. No, it's a good question. But I don't necessarily see that. I think -- and mainly, I say that because of the complexities that surround Biogen's trial. The fact that there was -- that it failed, its futility analysis was canceled and then they resubmitted the data -- well, they submitted the data, I should say, following the analysis -- after that futility analysis. So it's a complex situation. And I think there's a prospect that, that complexity may weigh on any FDA decision. So I think it's probably pretty hard to take a no decision with respect to the FDA and then apply that to other ongoing studies or planned studies because I expect the reason that would be given in that situation would be to do with the trial conduct. So I think there's just some peculiarities around that particular study, and therefore, this particular drug that aren't necessarily transferable to other studies.

Sticking with the Alzheimer's drug theme. In China, there is an Alzheimer's drug approved, albeit with some controversy. Do you see increasing interest in health care products like Cogstate's because of that?

Yes, certainly. So the -- so that was the Green Valley Pharma drug that was -- that has been approved in China. They are running those studies in the United States and elsewhere in respect of that drug currently. But as a general statement, I would say that interest in brain health generally from a global perspective is on the rise. And then as we appear to be getting closer to potential therapies, certainly, that is exacerbating that increase in interest in brain health. So yes, I think -- and so as a general statement, I think Cogstate is really well positioned when you consider that we're talking about digital tools that can be delivered remotely that are easy to administer, low-cost. In an environment of an aging population and increasing interest in brain health, business is really well positioned.

And sticking with the Healthcare theme as well. In the past, the use of Cognigram with respect to diagnosis of clinical delirium was seen as a potential near-term market opportunity. Is this still something that's being explored?

Yes, it is. So we pulled back on exploring that opportunity when we made the decision to do away with our direct marketing activities. So that's been something we haven't been able to aggressively pursue because we changed our strategy there. We do think though that there is good opportunity there to pursue that market. And once we have technology on market that's supported through the partnership strategy that we're pursuing, I think we have the opportunity to explore opportunities outside of Alzheimer's disease and look at things like post-operative cognitive decline. And we do see that as a good potential market.

Thanks, Brad. And just taking a look at the time, we're going to go ahead and just do one final question here, and this is about Lila. Was wondering if you could comment more about its potential uses in the community and also potentially in clinical trials? And what [indiscernible] could be, yes, for both community and clinical trial use?

Yes. So we really like the idea of this technology -- working from home, [indiscernible]. We really like the opportunity with this technology because it provides a way of really sensitive measure of cognition that can be delivered by a voice and can be delivered by a smartphone and we -- and in pursuing this, we're conscious of the fact that for an older population, sometimes, interaction with that computer can be difficult. And therefore, we believe that a voice-based assessment really has a role to play in that. It's a very brief assessment. So it doesn't take a lot of time, and it's proven to be really sensitive. So we think that has application in the areas of community screening, identification of patients who may be appropriate to go on to a therapy. But also within clinical trials, that technology has been used as an inclusion or exclusion from our criteria for clinical trials, that is, that pharma companies have made a decision as to who to enroll in this study based on the foundational test that supports the Lila application. So it's already proven they have demand for the technology or demand for the test within that clinical trials market. And what we're talking about here is an easier-to-deliver version of that assessment. So we see really good application for this in both of our businesses.

Fantastic. Great to hear. And Brad, with that, I just wanted to -- did you want to say any closing words this evening -- or this morning, excuse me?

So I just want to thank everyone for their attendance. I want to specifically also thank the Cogstate marketing team; and Ruth, who's been our moderator here, who, as you can tell, is based in the United States, and so it's getting quite late there; and thank the team for putting together the materials that we logged with the ASX today and this presentation. And I think it reflects really well on Cogstate and the quality of the individuals we have here. I thank all shareholders for your attention, and welcome you to contact me if you have further questions. Thanks for your time.