Other Major Customers
Other key pharmaceutical customers for CCS include AstraZeneca (nine instruments purchased), Bristol Myers Squibb (two instruments) and pharmaceutical services company Thermo Fisher Pharma Services. This marks the 14th instrument sold into this market. Notably, Novo Nordisk has elected to buy the instrument for evaluation purposes rather than lease or trial.

Cashflow and Revenue Model
CCS was cash-flow positive in the March quarter and narrowly missed that target in the June quarter due to the timing of payments. CEO Brent Barnes is aiming for the business to be cash-flow positive on a half-year basis from here forward. The company’s revenue streams are:

• Instrument sales

• Software license fees of approximately US $50,000 per year (when the instrument is used for both contact and settle plates)

• Service fees between US $20,000 and US $30,000 per year

Ongoing Evaluations and Validation
A fifth major customer is currently evaluating the technology. Next month, CCS will complete internal validation for use with contact plates (settle-plate validation has already been completed). This dual-function capability is expected to attract additional evaluations from new potential customers, as primary validation by CCS on various commercial media plates simplifies secondary evaluation for end users.

Summary
CCS is capitalized at US $57 million.

Bioshares recommendation: Speculative Hold Class B

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