Opyl : Appendix 4D & Half Year Results

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28 February 2021

Opyl Limited - H1 FY2022 Results

Opin's technology acceleration, early sales, and growing patient database sets Opyl on course for scale into the $4.8b global clinical trial recruitment market

• Opin technology stack and global patient database demonstrate on target growth
• Growth in Opin customer acquisition and average recruitment project value
• Commencing multi-language recruitment campaigns
• Higher than expected acquisition of healthy volunteers registering to Opin
• H1 FY2022 operating loss increased to $1.45m, compared to profit of $22k in H1 FY2021
• Revenue decreased by 42% to $290K, with deferred revenue of $488K received for forward projects
• Cash position of $1.24m

Melbourne, Australia - Opyl Limited (ASX:OPL) today released its financial results for the six month period ending 31 December 2021. With the significant revenue growth potential from the Opin platform in focus, during the period Opyl's principal activity has been the continued development of the technology stack advancing new, functionality, data capture and interoperability fundamental to accurately and swiftly matching patients to clinical trials. A priority is the improvement of the Opin user experience for patients, a direct driver in capturing volunteered data and creating scalable value.

The period delivered strong growth in Opin customer acquisition and a significant increase in the average price point of recruitment projects. During the period the company won several contracts demonstrating the platform was able to either assist companies in their recruitment of clinical studies or undertake the entire clinical study. As a result, the company anticipates the second half of the year to have stronger revenue and for it to continue growth off its clinical trial efficiency platforms - Opin and Trial Key.

The focus going forward will be the continued expansion of the number of patients registering to Opin and the acquisition of recruitment customers, primarily targeting contract research organisations (CRO's) in the region.

Opin has succeeded in attracting a large cohort of healthy volunteers, considerably faster and larger than expected, creating an opportunity to open a new revenue stream as the company looks to partner with Phase I clinical trial units in H2 who require healthy volunteers. The global database of patients interested in various therapeutic area is delivering strong week-on-week growth, as the search engine optimisations strategies get traction, and the user experience improves.

"The foundation for Opin's growth is now firmly in place for the business to compete in the rapidly growing AUD$71b global clinical trials market1 and within that, the AUD$4.8b global clinical trial recruitment market2" said Michelle Gallaher CEO.

1. Global Clinical Trials Market Report. May 2021. Research and Markets.
2. Global Clinical Trial Recruitment Services Market Report. June 2021. Root Analysis

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"The greatest value driver for Opyl is the exponential expansion of number of patients registering with Opin and our ability to connect them with further knowledge and options to participate in clinical studies, helping themselves and the researchers undertaking the studies." As our patient data grows, our value proposition to patients and customers strengthens, which translates into successfully and swiftly matching patients to trials, and scalable growth in recruitment revenue and market share for Opyl."

Technology development and growth - Opin and Trial Key

Opyl's technology stack and patient data assets grew considerably during the period. A core goal for Opin is to accumulate a vast data lake of patients registering on the platform with a desire to match to an appropriate clinical trial. The number of patients registering week-on-week is a key metric of success. The company applied additional resources in data functionality, interoperability, as well as development of a customer dashboard through which recruitment customers will be able to view and access quarantined data within the Opin system.

In February 2022, the Opin team kicked off a program of work to upgrade and refine the user experience, primarily to drive greater patient engagement and registrations, but also to deliver value and functionality for customers. Opin is using a new generation artificial intelligence, GPT-3, which has the power to improve search, conversation, and text. GPT-3 is initially being applied to creating copy content on Opin, creating disease/condition pages, creating value for patients, and encouraging registrations as well as significantly optimising search performance for the site.

The consolidated entity also gained greater clarity around intellectual property development across Opin and Trial Key, data security, and ongoing data management.

While the focus is primarily on Opin, research and development also continued on Trial Key (the consolidated entity's clinical trial design and prediction platform) improving functionality and accuracy supported by a Commonwealth Government Innovation Connections Grant collaborating with RMIT University, School of Computational Sciences.

Revenues and services growth - Opin and Social Media Insights and Analytics

The Opin team secured several recruitment customers during the period, with the revenue value of recruitment projects increasing significantly bringing the service into price alignment with competitors as the platform and service offering matures.

During the period the Opin team prepared to commence patient recruitment for a customer project in South America that will be in Spanish and Chinese. Offering recruitment in languages other than English is a significant differentiator for Opin again from like competitors.

The Social Media Insights and Analytics team secured several new biopharma and medtech project customers in Australia and the US, as well as expanding the overall size (revenue and scope) of each project contract. Each project typically extends over a period of three to four months with revenue realised across a series of milestones and interlinked project elements. Master Services Agreements were signed with all the new Insights customers reducing delay in approvals and invoicing for potential future projects. A significant proportion of customer receipts for these projects will be realised in H2.

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The consolidated entity still services a cohort of biopharma retainer customers, many of whom are legacy customers that have been with the consolidated entity for some years, ensuring a consistent cash flow and the opportunity to upsell recruitment or insights projects.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $1,465,626 (31 December 2020: profit of $21,658).

The cash position at the end of the half year was $1.24M and in addition to trade and other receivables of $483K that are expected to be collected through Q3 FY 2022. Whilst revenues were lower in the half, management expectations are that revenue for the FY2022 will close stronger based on year to date committed engagements as a comparative to the prior financial year.

Based on the strategic shift that the business has undertaken over the past eighteen months more towards creating AI solutions to improve clinical trials, the increase in salaries and wages to enable the strategic shift, coupled with the additional spend on R&D during the period, was in line with management expectations for the financial half-year ended 31 December 2021.

The operating loss for the period was primarily the result of:

• Recognised revenue of $290K that was $197K (40%) lower compared to the same period last year, largely as a result of changes to the structure of our engagements that resulted in recognition of $488K in deferred revenue for projects in progress that will be recognised during Q3 FY2022.
• The consolidated entity has expensed $147K in R&D (prior period: nil) as the criteria for recognition of an intangible asset was not met.
• Increase in planned employee expenditure of $295K, providing data science, engineering and business development resources predominantly aligned to assist with the ongoing expansion of Opin.
• The positive impact on income in the prior comparable period from the Jobkeeper and Cash Boost incentives received (prior period: $206K).
• An unfavourable timing difference of $249K relating to the R&D tax incentive that in the prior period was received in December 2020. This year's incentive, anticipated to be at least 25% higher, is expected in the second half of FY2022.

The Social Media Insights team secured several new biopharma and medtech project customers in Australia and the US, as well as expanding the overall size (revenue and scope) of each project contract. Each project typically extends over a period of three to four months with revenue realised across a series of milestones and interlinked project elements. Master Services Agreements were signed with all the new Insights customers reducing delay in approvals and invoicing for potential future projects.

The growth in the Opin and Social Media Insights offering has resulted in the early scaling of two primary growth drivers - clinical trial recruitment and social media insights. Based on early revenue and customer feedback and response, the consolidated entity determined that the most significant growth potential is in Opin and clinical trial recruitment revenue, hence the alignment of more resources into the Opin team and platform development strategy.

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With the realisation of early Opin revenues, the consolidated entity invested in expanding the team, adding data science, software, and business development resources to accelerate the expansion of the platforms to increase the consolidated entity's market share in the AUD$71b clinical trials global market.

Opyl has continued to invest in Opin, developing the platform to achieve global scale, automation, data asset accumulation and revenue potential. Opyl's second AI platform, Trial Key continued to achieve its development milestones. Trial Key is a clinical trial prediction/protocol design platform with several novel predictive functionalities that offer a unique competitive advantage for Opin, setting it apart from competitors.

Opin's technology stack and patient data assets grew considerably during the period. A core goal for Opin is to accumulate a vast data lake of patients registering on the platform with a desire to match to an appropriate clinical trial. The number of patients registering week-on-week is a key metric of success.

The patient data asset that Opin is accumulating is growing week-on-week, is amassing considerable value. The Opin growth team achieved several data accumulation milestones in the period as the search engine optimisation on the platform steadily improved and the cost per acquisition of patients and customers from digital advertising delivered considerable improvements over time and continues to do so.

During the period, Opyl began recruiting for several key roles relating to the expansion of the technology team (Snr Data Scientist, Principal Developer), as well as global sales and partnering, which is supporting Opin's planned expansion in the APAC and US clinical trials markets. All four roles have been successfully filled and are scheduled to commence in Q3 FY 2022 along with an additional resource into the retainer team, freeing up more senior staff to move to the Opin development team.

The work to date on the Opin platform and strategic business shift to support the development and scale of the platform, has resulted in positive focus on the primary revenue driver for the business and the greatest growth potential, being clinical trial recruitment. The resulting impact on implementing improvements to the conversion of customer projects and further automation of key aspects of the customer enquiry, proposal process and fast commencement of projects will have a positive benefit to future revenue and scalable capacity.

The Board has authorised this announcement for release to the ASX.

	-ENDS-
For media enquiries: Laura Blue	[phone]
For investor enquiries: [e-mail]
www.opyl.ai

Opyl is a new generation Australian company that provides leading biopharma and health organisations access to emerging AI-assisted technologies and real-world data insights to understand and improve healthcare design, development, and delivery.

Opyl works at the intersection of clinical trials, artificial intelligence, and social media.

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Our key offering for biopharma, medtech, government and healthcare organisations:

• clinical trial recruitment solutions
• clinical trial predictive analytics and protocol design
• deep social media insights and analysis

Our vision is to improve health and wellness by optimising data assets and digital activation to advance technologies for life.

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