Applied DNA Sciences, Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, today provided a preliminary estimated revenue range for the fiscal second quarter ended March 31, 2021 and a business update. The Company expects revenues for its fiscal second quarter to be in the range of $2.5 million to $2.7 million. This compares to revenues of $1.6 million in the fiscal first quarter of 2021 and $552 thousand in the fiscal second quarter of 2020. The sequential growth in quarterly revenues was driven principally by demand for safeCircle™, the Company’s pooled COVID-19 surveillance testing program, and from sales of its Linea™ COVID-19 Assay Kit (the “Assay Kit”).
Concurrently, the Company announced that it had received notification during the fiscal quarter that a loan of approximately $847 thousand received in May 2020 under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act was fully forgiven. As a result of the full forgiveness of the loan, the Company is debt-free.
These preliminary unaudited results are based on management’s initial analysis of operations for the second fiscal quarter of 2021 ended March 31, 2021 and are subject to review and revision. The Company expects to issue full financial results for the second fiscal quarter of 2021 in mid-May 2021.
Dr. James A. Hayward, president and CEO, stated, “We are pleased to preliminarily report a second consecutive quarter of revenue growth that was driven primarily by the continued adoption of safeCircle as the surveillance testing component of clients’ COVID-19 ‘normalization’ strategies. The high sensitivity of our Assay Kit that powers safeCircle and its resultant ability to detect asymptomatic infections, coupled with the favorable economics of pooled testing, offers compelling value to communities that continue to see significant transmission alongside expanding vaccine eligibility. As such, under-vaccinated populations and organizations implementing reopening compliance strategies are target market segments for us and we are evolving our sales strategy to match.
“Our diagnostics business model has been made more resilient through product diversification and service improvements to develop adjacent revenue streams. In particular, the launch of our Selective Genomic Surveillance™ (SGS™) Mutation Panel (SGS Panel) is coincident with the rising need for tools to supplement and strengthen the nation’s genomic sequencing capacity. Our SGS Panel can quickly and cost-effectively identify COVID-19 mutations and potentially influence vaccine/booster or therapeutics design. We also continued to demonstrate the potential for our LinearDNA platform as an alternative to plasmids to produce nucleic acid-based therapies, notably reporting compelling positive preliminary Phase I results for our LinearDNA COVID-19 vaccine candidate in felines,” concluded Dr. Hayward.
Applied DNA Clinical Labs, LLC (ADCL)
- Resubmitted for and completed a re-inspection of its facility by the New York State Department of Health (DoH) Clinical Laboratory Evaluation Program (CLEP) as a requisite for Clinical Laboratory Improvement Amendments (CLIA) certification. If granted, CLIA certification would enable ADCL to serve as a diagnostic laboratory that would allow for it to conduct diagnostic COVID-19 testing utilizing its Assay Kit. The Company offers no timeline to a CLIA determination by the DoH. CLIA certification would also potentially allow ADCL to develop an additional revenue stream through the development and commercialization of a broad-array of diagnostic tests, including laboratory-developed tests (LDTs), that once approved by the applicable regulatory authority, could be offered by ADCL;
- Secured an LSL (Limited Service Laboratory) registration from DoH to conduct COVID-19 diagnostic testing using third-party EUA-authorized, CLIA-waived COVID-19 testing platforms. The LSL enables ADCL to offer faster turnaround times on confirmatory diagnostic tests to safeCircle clients and capture testing revenues for diagnostic tests currently being conducted by third-party clinical labs.
- Nearing completion of an upgrade of space and equipment within the Company’s Stony Brook, NY facility intended for diagnostic testing and cGMP (current Good Manufacturing Practice standards and procedures) capacity for LinearDNA production and processing.
- Continued execution on a phased approach towards higher standards of cGMP, including upgrades in space and equipment noted above to support human therapeutic trials, veterinary therapeutics, and the subsidiary’s biotherapeutic CRO customers seeking to move into human clinical trials using LinearDNA.
ADCL’s pooled surveillance testing program, known as safeCircle, utilizes frequent, high-sensitivity pooled testing to help prevent virus spread by quickly identifying infections within a community, school, or workplace. safeCircle provides 24-hour results using real-time PCR (RT-PCR) testing.
Click through to learn more about how safeCircle can help your community, school, and workplace: safeCircle
About the Linea™COVID-19 Assay Kit and Pooled Surveillance Testing
The Linea™COVID-19 Assay Kit is authorized by FDA EUA for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens, including anterior nasal swabs, self-collected at a healthcare location or collected by a healthcare worker, and nasopharyngeal and oropharyngeal swabs, mid-turbinate nasal swabs, nasopharyngeal washes/aspirates or nasal aspirates, and bronchoalveolar lavage (BAL) specimens collected by a healthcare worker from individuals who are suspected of COVID-19 by their healthcare provider. The scope of the LineaCOVID-19 Assay Kit EUA, as amended, is expressly limited to use consistent with the Instructions for Use by authorized laboratories, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform high complexity tests. The EUA will be effective until the declaration that circumstances exist justifying the authorization of the emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 is terminated or until the EUA’s prior termination or revocation. The diagnostic kit has not been FDA cleared or approved, and the EUA’s limited authorization is only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens.
The Company is offering surveillance testing in compliance with current CDC, FDA, and CMS guidances. The use of saliva and pooled sampling for surveillance testing, which has been internally validated by the Company in compliance with current surveillance testing guidances, is not included in the Company’s EUA authorization for the LineaCOVID-19 Assay Kit. The Selective Genomic Surveillance (SGS) Mutation Panel (the “SGS Panel”) is for Research Use Only (RUO) and shall not be used for clinical diagnostic purposes. The SGS Panel has not been approved or authorized to diagnose, ameliorate and/or detect any disease by any U.S. or international regulatory authority.
About Applied DNA Sciences
Applied DNA is commercializing LinearDNA™, its proprietary, large-scale polymerase chain reaction (“PCR”)-based manufacturing platform that allows for the large-scale production of specific DNA sequences.
The LinearDNA platform has utility in the nucleic acid-based in vitro diagnostics and preclinical nucleic acid-based drug development and manufacturing market. The platform is used to manufacture DNA for customers as components of in vitro diagnostic tests and for preclinical nucleic acid-based drug development in the fields of adoptive cell therapies (CAR T and TCR therapies), DNA vaccines (anti-viral and cancer), RNA therapies, clustered regularly interspaced short palindromic repeats (CRISPR) based therapies, and gene therapies. Applied DNA has also established a COVID-19 diagnostic and testing offering that is in the early stages of commercialization and is grounded in the Company’s deep expertise in DNA.
The LinearDNA platform also has non-biologic applications, such as supply chain security, anti-counterfeiting and anti-theft technology. Key end-markets include textiles, pharmaceuticals and nutraceuticals, and cannabis, among others.
The Company’s common stock is listed on NASDAQ under ticker symbol ‘APDN,’ and its publicly traded warrants are listed on OTC under ticker symbol ‘APPDW.’
Applied DNA is a member of the Russell Microcap® Index.
Preliminary Financial Information
The preliminary information and estimates in respect of the Company’s second fiscal quarter of 2021 performance set forth herein constitute forward-looking statements, upon which you should not place undue reliance because they may prove to be materially inaccurate. The preliminary information and estimates have not been compiled or examined by the Company’s independent auditors and they are subject to revision as the Company prepares its quarterly financial statements, and as the Company’s auditors conduct their review thereof. While the Company believes that such preliminary information and estimates are based on reasonable assumptions, actual results may vary, and such variations may be material. Factors that could cause our preliminary information and estimates to differ from the information and estimates presented herein include but are not limited to: (i) additional adjustments in the calculation of, or application of accounting principles for, the financial results for the second fiscal quarter of 2021, and (ii) discovery of new information that impacts these results.
The statements made by Applied DNA in this press release may be “forward-looking” in nature within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe Applied DNA’s future plans, projections, strategies, and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Applied DNA. Actual results could differ materially from those projected due to its history of net losses, limited financial resources, limited market acceptance, the possibility that the assay kit could become obsolete or have its utility diminished, the uncertainties inherent in research and development, future clinical data and analysis, including whether any of Applied DNA’s or its partner’s diagnostic or therapeutic candidates will advance further in the preclinical research or clinical trial process, including receiving clearance from the U.S. Food and Drug Administration (U.S. FDA) or equivalent foreign regulatory agencies to conduct clinical trials and whether and when, if at all, they will receive final approval from the U.S. FDA or equivalent foreign regulatory agencies, the unknown outcome of any applications or requests to U.S. FDA, equivalent foreign regulatory agencies and/or the New York State Department of Health, the unknown limited duration of any Emergency Use Authorization (EUA) approval from U.S. FDA, changes in guidances promulgated by the CDC, U.S. FDA and/or CMS relating to COVID-19 surveillance and diagnostic testing, disruptions in the supply of raw materials and supplies, the fact that there has never been a commercial drug product utilizing PCR-produced DNA technology approved for therapeutic use, and various other factors detailed from time to time in Applied DNA’s SEC reports and filings, including our Annual Report on Form 10-K filed on December 17, 2020, and Form 10-Q filed on February 11, 2021 and other reports we file with the SEC, which are available at www.sec.gov. Applied DNA undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless otherwise required by law.