Good morning, everyone. My name is Brad O'Connor. I'm the Chief Executive of Cogstate. I'm joined this morning by Darren Watson, who's our Chief Financial Officer. I'm gonna take you through the half results for the six months ending 31 December 2022. Today's presentation includes some forward-looking statements, therefore I note our disclaimer, stating that this information is general in nature. Encourage everyone, of course, to consider your own in-investment objectives and also to review in detail our half year financial statements that were lodged with the ASX earlier this morning. Following the presentation, we'll take some questions today. If you do have a question, you have two ways in which you can ask. Firstly, you can type your question in the control panel and it'll be read by the moderator.
Alternatively, you can raise your hand and have your line unmuted to ask a question. Let's get into it, and I'll run fairly quickly through the opening remarks, because I think a lot of people on this call have probably seen this material already. I think it's still important to note that , since our inception in 1999, the Cogstate investment thesis has been focused on an aging population, increasing incidence of Alzheimer's disease, and the need to provide technology solutions that simplify the measurement of cognition for patients, for their doctors, and for the companies developing new and better therapies. And that sort of summarizes into this idea that we believe that brain health is important, and brain health assessments should be easily available to everyone.
What we do at Cogstate provide is combine proven science and technology to make assessment of cognition as simple as measurement of blood pressure. Cogstate was founded more than 20 years ago in Australia, but by and large now we're a U.S. organization. We're a team now that's growing substantially, around 390 people, including around 200 full-time employees and then a number of neuropsychologists who consult to Cogstate from around the globe. Our technology solutions are based on excellent science, and since our inception, we've supported more than 2,000 academic and clinical research studies, and over 2 million Cogstate tests have been administered. Our largest customer base is pharmaceutical and biotech companies who are developing new drugs, and we help those companies determine whether their drug is impacting cognition.
In the coming years with the release, what we hope with the impending release of new therapies for Alzheimer's disease, Cogstate is uniquely positioned to support the identification of cognitive impairment that might be associated with Alzheimer's disease or other indications. Cogstate, of course, works across a range of disease areas, but a majority of our revenue comes from Alzheimer's disease, and we'll talk about that as we get through the presentation. With those financial opening remarks complete, I wanna hand over to Darren Watson, our CFO, to talk through the financial results.
Thanks, Bred. The next chart here outlines our financial results for the first half of 2023. Starting with new clinical trial sales. We executed AUD 27.3 million for the half, which you can see is down 50% on a year ago. A year ago included the single largest contract we've ever executed, which was more than AUD 30 million. The result is consistent with the second half of financial year 2022. We're down 2% from that result, is better than both the first half and second half of 2021. Up 10% in 21 respectively on those periods. A positive performance in light of that. Alzheimer's continues to dominate the sales performance, representing 82% of that first half sales number.
On contracted future revenue has continued to grow. It's up 10% from a year ago to AUD 147 million, continuing to set the business up for future growth. Of the total contract to future revenue, AUD 110 million is in clinical trials, which is up 20% on a year ago. While the remaining AUD 36.7 million is healthcare backlog, which reflects the ongoing recognition of the Eisai global deal. Our group revenue was AUD 19.5 million for the half year, down 15% from a year ago. That's largely a result of slower than expected recruitment of patients in a small number of our larger clinical trials. Approximately AUD 3.3 million of revenue that was under contract at one July, which was expected to be recognized in this half, has been deferred to subsequent periods.
It's important to note that that revenue has not been lost. It is merely being deferred into future periods, which I'll cover a little bit more, in a little bit more detail in a moment. This revenue decline has clearly impacted our clinical trials margin, which you can see for the first half was 46%, down 11 points from a year ago. The clinical trials is largely a labor-based business and therefore are of a fixed nature, meaning that the decline in revenue has directly impacted on our margins. The staffing levels have been maintained in order to deliver on large trials that we are seeking to win in future periods and ensure that we can deliver to those contractual requirements.
The margin was also impacted by a slower software license mix, which at 13% for the half, is lower than our historical range, which has been around the 17%-19% level. The revenue and margin declines had a corresponding impact on EBIT, which you can see for the first half is a small loss of AUD 200K, though down considerably from where we were a year ago, as I mentioned, largely driven by the revenue decline. We do, though, remain very strong from a cash position, with net cash on hand of AUD 27.7 million, an increase from AUD 3.1 million a year ago. Turning to the next chart, just looking at future contracted revenue. Chart just illustrates here the growth in our contracted future revenue over the last several halves.
As I mentioned before, we're now almost at AUD 147 million of revenue under contract. AUD 110 million of that being clinical trials, which has grown from 20% a year ago, and the balance being the Eisai, which is the amortization of that revenue over the period of the Eisai contract. Turning to the next chart, we'll just detail out the runoff of the future contracted revenue. As you can see, for FY 2023, we now have AUD 39.4 million of revenue under contract. Importantly, for FY 2024, the revenue under contract stands at AUD 36.8 million, being AUD 32.6 million in clinical trials and AUD 4.2 million in healthcare. This compares to AUD 30.7 million a year ago and represents 20% growth year-on-year.
It positions us well as we head into financial year 2024. Additionally, you can see that the subsequent years also show strong growth. We continue to build a future contracted revenue position that positions us well for growth in the future. If I turn to the next chart, just to provide a little additional detail around our financial year 2024 backlog position. You can see that at 1 July, which is from our 30 June full year reporting period, our FY 2024 backlog at that point in time was AUD 28.8 million for clinical trials. To that, we've added AUD 3.9 million from the AUD 27.3 million of contracts, new contract sales executed in the first half. As I mentioned before, we've had revenue delays from FY 2023 into FY 2024.
I mentioned AUD 3.3 million in the first half. The full year deferral of that revenue is approximately AUD 5 million, which we see move into FY 2024. However, offsetting that, we have seen revenue delay from FY 2024 and into subsequent periods of approximately AUD 4 million, and this is also associated with the patient enrollment delays that I mentioned have impacted our first half of 2023 revenue. In addition to that, we have had one trial that has concluded, and we have reconciled the final backlog with the client and have removed AUD 1.1 million from our FY 2024 backlog, leaving us with AUD 32.6 million of revenue under contract for the FY 2024, up 13% from where we were a year ago and positioning ourselves for growth going into FY 2024.
This just to provide some context here around how the backlog has moved. As you can see, at 30 June, we reported AUD 139 million of backlog. At 30 December, we're at AUD 146.7 million. The important point to note here is the growth in FY 2024 and certainly FY 2025. The one that stands out is FY 2027, the growth from the prior two reported periods, which is really a reflection of the fact that these studies that have experienced patient enrollment challenges have moved their end dates, if you like, into FY 2027, and therefore we see a number of closeout activities moving into FY 2027 for those trials.
As I mentioned, the important takeaway from here is, we continue to grow our backlog for future years and positioning the company for future growth. With that, I'm gonna hand back to Brad.
Thanks, Darren. What I wanna do now is just to dig into some of the segment results in a little bit more detail, firstly with clinical trials. I think the thing to note here is that, and really this just draws out the detail that Darren provided previously, that we've seen a relatively stable cost base. We have some small increase in costs there, which is the, on the left of screen, the green bars below the line if you like. Fairly constant cost base. We've seen that revenue decline, which has really impacted margins. Then, and then as Darren called out, the software license mix substantially lower in that half. We don't see any, we don't see a recurring nature to that.
That was more just reflective of the contracts we entered into during that half year period. If we drill into that in a little bit more detail, Darren took you through the detail of the total quantum of sales contracts executed during the half year. Probably pretty important to note the degree of Phase III studies that we're now winning work for and that are contributing to sales contracts. That's really reflecting, the fact that more and more Alzheimer's disease treatments are pushing into that Phase III territory. When we look at the clinical trials business, we're , at a high level, we're really working through different dynamics in this business.
We're seeing a huge increase in opportunity in the marketplace, but we're also trying to deal with these short-term revenue delays that we're seeing, and we're trying to manage both of those things. Where are the sales opportunities coming from? Certainly we're seeing an increase in Alzheimer's disease R&D across the whole industry. We're seeing a move to more decentralized clinical trials, and we believe that Cogstate providing key technology and scientific support in respect of those trial designs. We're seeking to secure sales contracts in indications outside of Alzheimer's disease. We're very conscious of the revenue concentration that we have around Alzheimer's disease, and we're seeking to leverage our scientific credibility and our technical validation and push into other indications such as depression and mood disorders.
From a cost-based point of view, we've certainly seen some small increases in costs, both in terms of the direct costs of delivering clinical trials and then the direct costs associated with selling activities. As we've moved to more decentralized clinical trials and supporting those trials, it's been necessary to add clinicians to our employee base to deliver essentially what are telehealth style assessments in the conduct of clinical trials. Similarly, as we're seeking to grow and to capitalize on the market opportunities, we've added increased scientific support. Think, technical sales support to our business development teams. In terms of the sales contracts executed through the first half of the year, 82% in Alzheimer's disease, 6% in depression, which is really encouraging.
Approximately 13% of the sales contracts through channel partners. Only around 5% of the sales contracts, and again, this is all by value, were in respect of decentralized clinical trials. I think really important to note, there's multiple pilots underway, where we have pharma companies validating decentralized approaches, and we anticipate that will lead to further contracts in the future. $110 million of clinical trials contract revenue, as Darren mentioned. Important to note, 87% of that relates to Alzheimer's disease. Turning our attention to the healthcare business. Just as a refresher, our reported numbers in healthcare are really the amortization of the Eisai agreement.
We've entered into a global license agreement with Eisai to take our technology to market in what we call the healthcare segment, which is physicians, as well as direct to consumer. Under those agreements, so the two agreements, one for Japan and one for the rest of the world, we've received already total upfront payments of $16 million. We will receive royalty payments from the use of our technology over the course of 10 years. Those royalty payments cannot be less than $30 million across that 10-year period. Eisai are funding all development activities, all regulatory and all commercial activities, and all data is jointly owned by Cogstate.
When we look at the financial performance of the healthcare sector, we see that that's very consistent with the prior periods, as we'd expect, 'cause that's as I said, just really the amortization of that contracted revenue. Looking at what's happening in the business, we're seeing Eisai continuing their rollout, particularly through the Asian region. We've launched a direct-to-consumer product in both Thailand and Korea inside the last six months. In terms of the U.S. activities and preparation for the potential impending launch of Eisai's Alzheimer's therapeutic, we're working on a memory-specific instance of Cognigram. We think that that's really important to provide a very usable tool, and the simplicity of that tool and the ease of use will be important factors in terms of adoption of the technology.
The existing Cognigram product was established as a general cognitive screener. What we're seeking to do now is develop a shorter version of that focuses only on the memory impairment and the memory assessments, which are obviously critical in the assessment of Alzheimer's disease. It's important to note that Eisai are funding that development work, and we expect to have that work complete this calendar year. You know, and certainly ahead of the potential launch of their therapeutic. Let's turn our attention to the Alzheimer's disease market and what's happening there. What I wanted to do to start with is to spend some time talking about the drivers of growth in Alzheimer's R&D spend that we're seeing now, and which, to be honest, we've seen over the last few years.
Obviously, there's a huge unmet need for new treatments for Alzheimer's disease that slow progression of that terrible disease rather than just treating the symptoms. Over the last 10 years, the development of biomarkers such as PET imaging that's enabled us to measure accurately the buildup of amyloid plaques in the brains of people with Alzheimer's disease, has enabled us to measure how advanced the disease is and whether treatments are reducing those plaques. Which is similar to, in concept to how we measure tumor size in oncology.
The pharma companies have identified that the addressable market is really large, and especially when we consider the earlier stage of disease. As the successful conduct of trials in really early stage disease, such as the NIH-funded A4 trial, as those have been completed, they've provided confidence to the pharma companies that such trials can be run commercially.
Whilst the accelerated approval of Biogen's Aducanumab was not a commercial success, it did demonstrate for pharma companies that the regulator was willing to work with the pharma companies to find an avenue for their drugs to market. That was really important in providing confidence to the pharma companies. As we look forward, should Eisai's drug Lecanemab receive approval, that will confirm that re-regulatory pathway exists. Further, if Eisai can secure Medicare reimbursement of their drug, that will provide additional confidence in relation to the commercial opportunity. Thereafter, the goal will be to provide improved options for treatment for patients such as oral treatment or subcutaneous injection as an improvement to an infusion and attending an infusion center.
Finally, we think that there will be an expectation that combination therapies will provide further improved health outcomes in the future. When we look at what's happening at the moment in terms of potential drugs coming to market, really focusing around the development of two companies, Eisai and Eli Lilly. Eisai's drug Lecanemab, which will be branded Leqembi in the United States. Positive data was released just before the end of 2022 calendar year showing 27% slowing of cognitive decline in that Phase III study. That drug has now received accelerated approval by the FDA, which doesn't mean much from a commercial point of view. They have lodged their application for full approval in the United States. They've received priority review status in Japan. They submitted their marketing authorization application in Europe.
Only minutes ago they announced that they'd received priority review status in China as well. US pricing has been announced at $26,500 per annum per patient. That's a substantial reduction on the pricing that was announced by Biogen in respect of their drug Aducanumab. And I note there that again, this is a monoclonal antibody that requires an infusion, and so patients need to attend an infusion center to receive that treatment. But this-- But they're ongoing a subcutaneous trial at the moment. Just moving now to the some other thoughts in relation to Alzheimer's disease. Perhaps this is self-evident, but the different administrations are moving to a subcutaneous injection means additional trials, and so it means additional work for companies such as Cogstate.
I think that's important for investors to understand in terms of the work that we're doing with our partners, and how that is, how that work is progressing. As they move into, new treatment options for these drugs, that it provides, additional trial opportunities for Cogstate. The other thing that's really important to understand is that, once these drugs get approval, there's gonna be other studies that are required, of the pharma companies. You know, that will, include real-world evidence studies where we move out of clinical trials and advanced Alzheimer's disease research centers, and we move into the community.
When we do that, we're gonna need to think about different ways of measuring cognition, and we think that the Cogstate technology is really well-placed to leverage into those opportunities. I wanna talk briefly now about the announcement today of a share buyback. We've announced that Cogstate will buy back up to AUD 13 million of Cogstate ordinary shares. This really reflects the board position that the future commercial prospects that we see in the business aren't really reflected in our share price as it sits today. It obviously also reflects our strong capital position and, supports the board's ambition to improve returns for shareholders. We'll initiate that buyback over the coming weeks.
There's some forms and some regulatory waiting periods that we need to go through before we launch that program. That will kick off from the 20th of March, and we hope that that improve returns for shareholders. Finally, I wanna talk to the financial guidance that we've provided the market. This was provided on Friday of last week. We note that the second half revenue is expected to increase over that was re-recorded for the first half of 2023. Noting that the full year revenue to June 2023 is expected to be approximately 6%-9% below those FY22 levels.
Contribution margin for clinical trials, I should say, in the second half of 2023 expected to be in the range of 52%-55% and for the full year in the range of 48%-52%. Our healthcare business is expected to be consistent with the first half of 2022. From an earnings perspective, for the full year, we expect EBITDA to be in the range of 12%-15% of revenue. We expect EBIT will be in the range of 6%-8% of revenue. We expect to be cash flow positive from an operating perspective for the second half of 2023. With that, I wanna open up to questions. I will remind everybody again that there's 2 ways you can ask a question.
You can type it into the section there, or you can raise your hand and your line will become unmuted.
Thanks so much, Brad and Darren. We appreciate getting to hear the updates here. My name is Ruth. I am on the marketing team here at Cogstate, and I will be moderating our Q&A section. We have a bunch of questions that have come in, so we're gonna dive right in. Brad, you were speaking of the potential for larger AD trials in the coming years. To what extent does enrollment become a limiting factor to growth? Is there an opportunity for Cogstate to provide solutions to improve the recruitment process?
That's a really good question. I think it's important to note when we're talking about and obviously through our announcements over the last week, we've talked quite a bit about enrollment delays. It's important to understand the types of studies where we're seeing those delays, and those are studies of preclinical Alzheimer's disease. These are patients who have presence of amyloid on their brain, but they're not yet suffering cognitive impairment that would be associated with a clinical classification of dementia. Those patients are really hard to find. By definition, they're not sick, and so they're not at the doctor. I think it's important to note that at this stage we're not seeing recruitment issues or at least issues, we haven't seen a change in issues in respect of recruitment into early Alzheimer's disease studies.
These are, the studies of people with dementia. Now into the future, when drugs come on market, will we see competition for patients between those who are on drug versus, or, being prescribed drug from their neurologist or their family doctor versus those who are going to be enrolled in clinical trials? I think that's a fair question. Certainly that's, that's been an issue that's been seen in other indications when you've seen first line treatments come onto market. That's something that the whole industry is going to have to deal with. We're going to have to get better at identifying patients.
I think also what happens is that once there is a disease modifying treatment on market, people test themselves more. This is sort of fundamental to our investment hypothesis, is that the release of Alzheimer's drugs means that people are more interested in understanding whether they're suffering from cognitive decline because they understand that there's something that can be done about that decline. That's really important. As we're identifying more people who are suffering from cognitive decline, because we know it's underreported in the community, there'll be more opportunities to recruit those people into trials.
Brad, thank you. That's really helpful. And we do have some follow-up questions or let's see, exploring other elements of the recruitment delays. One of them is, at the AGM, most recent, the large Phase III trial recruitment was expected to speed up after the tau supply issue was solved. What challenges emerged that continue to make that recruitment slow? To that, did the Leqembi approval and the CMS reimbursement policy play any positive or negative role in the recruitment delay and other new contract execution delays? I'm gonna ask one more on this: is there a chance that the continued patient recruitment delay could mean a cancellation of the study?
Let's deal with the last part of that question first and let's come back to the, work back around. In terms of the risk of the study, I think it's really important to note that these are critically important studies for the pharma companies that are running them. Certainly, the market cap of those companies reflects , has an element of potential approval embedded within their valuation. Therefore, we think it very unlikely that the pharma companies would essentially give up on these drugs. We think that there's just too much at risk and too much has already been invested to do that.
In terms of what we presented at the AGM and how that has changed, I think it's really important to note that we are seeing improvement on a month-to-month basis in terms of the patients that are being re-recruited into the study. The numbers are getting better. They're just not getting better as fast as we might have thought or might have hoped. We're seeing about a 20% month-on-month increase in the number of patients that have been recruited into those studies. We are getting there, as I said, just not getting there as fast as we might have thought.
In terms of, potential approval of Leqembi, and CMS decisions, I think the biggest thing that, potentially has an impact for the Cogstate business is, in the statement that was released by CMS in the United States referencing reimbursement of drug. I suppose I hedge my comments here and the fact that it's, I'm talking about a one-page release. Obviously we haven't had a lot of time to analyze the impact of this. I think it does potentially open up the need to run registry trials, and push patients who are on drug into those registry trials. I actually think from a Cogstate perspective that provides additional revenue opportunities for us.
You know, so net-net, that's probably positive for Cogstate. You know, I hedge those comments, as I said, around the fact that, we're talking about a release that's, somewhat vague, and we haven't had time to really dig into what that means in detail.
Thanks, Brad. The next question, I'm going to go ahead. We have a hand raised from Claude Walker. Claude, I'm gonna go ahead and unmute you. I am doing that now. Okay, Claude, you are now unmuted. You might also have to hit unmute on your side if you don't mind going ahead and asking that question.
Hi there, Brad. Thanks for taking my question. I just wanted to take you back to Monday, the 21st of February, when the takeover discussions had already ended.
Yes.
The Cogstate share price started crashing on quite high volume after having been bid up previously on unusually high volume. At that point, on the Monday, you must have realized that clearly there was information asymmetry in the market. You have some of your shareholders, no idea what's going on. Other of your shareholders are selling because they know this takeover has gone through. Why didn't, on Monday, the company, go into trading halt and/or, and announce what had happened, given that was clearly having an impact on the share price? You know, some people would have been buying at, for example, AUD 2 without knowing that there'd been sort of a takeover falling through, which was clearly market sensitive because it was moving the share price. Why did the company itself not announce this information?
Why did you wait until the ASX put you into a trading halt?
Claude, I'm not sure exactly. Thankfully for your question, and thank you for your interest, firstly. I'm not sure exactly of my legal standing in terms of what I'm able to and not able to comment on. Let me say this, that we were in discussions with the ASX from early Monday morning. The ASX were aware of exactly what was going on. We gave them full visibility in relation to those in relation to those discussions that had ceased. It was the ASX advice that we that essentially, we take a watching brief in relation to how the stock performed. Could we or should we have done things differently with the benefit of hindsight? I think that's, I think your...
What you did frame it as a criticism. I thank you for that, I think the point that you've made, is a really relevant one. You know, I think through that process, we've been guided by the ASX and their view on how that should be handled.
Thanks, Brad. Claude, if you have a follow-up, feel free to enter in the chat as well. Moving into another question we have. Is 13% of bookings through channel partners typical? Where could this percent go to over time?
No. Thank you again for that question. No. The 13% through channel partners is an improvement on what we've seen in prior periods, which is why we noted it. We've noted over the last, the last couple of presentations like this that we've done, our desire to increase sales through channel partners. We saw that as an opportunity where we've embedded our technology within those partners' offering, and we've sought to increase sales by leveraging their sales team. We're cautiously optimistic in terms of how that is tracking, how those activities are tracking. We were pleased with 13%. In terms of over time, I'd like to see that as a much larger percentage of total bookings. I think there is really that opportunity.
It certainly takes time to embed our technology, and to educate, both sales teams on how to take that to market. We see that as a significant opportunity.
Thanks, Brad. Next we've got, how much of bookings in the half were related to additional Lecanemab trials post-readout?
Look, I've got to be careful there in terms of breaching confidentiality. What I would say is it's not a substantial portion in terms of bookings for the December half year.
Great. Next question we have is, you achieved the lower end of clinical trial revenue given at AGM, 12% lower than PCP. Why did the segment margin drop further to 46.5%, which is well down from the 48% lower end margin guidance? Your fixed cost base clearly is higher now. At what group revenue and clinical trial revenue level could we expect EBIT % back to at least 20%?
Yeah. Look, I think, we guided to, as you suggest there, 48% margin for the clinical trial segment. The actual result was 46%, so you're talking a few hundred thousand dollars of difference there. You know, again, referencing those additional costs that we've incurred in the clinical trials area, and really that's around making sure that our business is set up for growth. As I said earlier, we're trying to manage two streams here that from a sales and opportunity perspective, we see substantial growth and upside, but we're managing, revenue that's just not coming through as fast as we would have thought. As you correctly state, we ended at the bottom end of the revenue range.
You know, we would have liked to have been, towards the upper end of the revenue range. In terms of, in terms of getting margins back, EBIT margins of about 20%. Look, we believe, there's substantial revenue growth built into the fiscal 2024 year already. We're looking at some sizable sales opportunities that we're seeking to execute in the June half year. Should we be able to do that, then I think that sets us up for some really good revenue growth in fiscal 2024.
We would be seeking to get our clinical trials contribution margin back into that sort of, if you look over the last three half year periods, before this current period, then , clinical trials margins in the range of 57%-61%. We'd be seeking to get those margins back into that area. I think provided we can do that, we should be able to get those EBIT margins back to sort of that sort of 20%, 20% EBIT margin range.
Great. Going back to a previous topic, would you be able to comment on why the company entered into a potential sales process when the future seems very bright at the moment?
That's a good question. Look, I think the answer to that is that, everything and every company is for sale at the right price. You know, it's our job as an executive team and our job as a board to try and maximize returns for shareholders. That means that we're not for sale at any price. You know, and ultimately, I think the transaction didn't occur because we couldn't get agreement, in terms of, what represents fair value for the risk, associated with that growth that we, that we see there, but of course, is not guaranteed.
There's a price at which, for the Cogstate shareholders, the board would view that the upfront premium or multiple from where we're trading today, would be a good return for shareholders, notwithstanding the fact that, there's great growth prospects for the business. Those things are never guaranteed in time. It's about trading that off. You know, we'll be unapologetic about seeking to maximize returns for our shareholders. If that means at some point, selling the business to a strategic buyer, we would consider that. It's gonna be, it's gonna be a reference to, as you suggest, our growth, and the price or the premium that's being offered.
Thanks so much, Brad. We're gonna take just a couple more questions here, everyone. One of them is how many major channel partners do you have? However we choose to define major.
Major by current activity or major by desire and potential, I think, are two different things. Look, I think at the moment, we would suggest that we probably have three major channel partners that we're seeking to sell through. They're substantial companies with substantial market penetration in that clinical trials market. You know, and as I said earlier, we think there's a really significant opportunity for us to leverage off the market penetration that those companies already have, and to offer an additional service that is the cognitive assessment that links into their existing offering.
Great. We'll go ahead and go into this last question, which goes a little bit more into beyond the here and now. What does Cogstate need to be doing now to prepare for the future of cognitive testing in five or 10 years?
That's an excellent question. What I can talk about is some of the things we are doing. The first is that we're continuing to invest in new versions or, new generation of cognitive assessment. We understand that taking cognitive assessment out of out of highly skilled Alzheimer's disease research centers or neurologist offices is important. Putting that cognitive assessment in the hands of general practitioner clinicians or even in the hands of individuals themselves is critical. To do that, we need to be able to move to smartphone technology. We've been investing in that substantially. You know, we've got a, our second generation of our voice-based list learning test currently going through scientific validation. We've got high hopes for that.
It's about developing not just well validated scientifically, cognitive assessments, but just making sure that those are easy to use and they're easy to access without a need for any special equipment. It's about continuing to work on the scientific validation of those assessments. We've been investing heavily in building out a data lake, which enables us to ingest, analyze, and report data in a much more efficient and a much more robust manner. We need to be thinking about analyzing that data to show improved sensitivity of our assessments. We believe that as we get out into the community and we're assessing a much larger number of people, we'll have the ability to analyze that large data set and hopefully show improved sensitivity of those assessments.
Then I think just, being able to really push our assessments into onto other technology platforms, and, is really critical to the future. You know, know and being able to link those assessments with other health biomarkers, whether they be active or passive, health biomarkers, I think are some of the critical aspects that we wanna focus on over the, over the coming years.
Thanks so much, Brad. Many things to come. Thank you all for the questions that were submitted. We appreciate the participation. With that, I'll turn the time back. Brad, Darren, any final words you'd like to say to attendees?
I'd just like to thank everybody for your continuing interest in Cogstate. I think, just to close out in terms of the potential transaction, the potential control transaction that we announced to the market last week. I think the takeaway for me, in respect of that is there is a substantial desire from a number of participants in our industry to move into central nervous system diseases. I think Cogstate is really well placed to facilitate that. The market opportunity is growing. I think we're well-positioned, but we wanna make sure we maximize our returns for shareholders into the future. I'd just like to thank everyone again for your attendance of this session and your interest in the company.
Thanks so much, everyone. Have a great day.