Applied DNA Sciences (NASDAQ: APDN) reported Q1 EPS of ($0.88), $0.34 worse than the analyst estimate of ($0.54). Revenue for the quarter came in at $1.6 million versus the consensus estimate of $1.36 million.

“The first quarter marked a very strong start to the fiscal year, reflecting burgeoning demand for our COVID-19 diagnostics and surveillance testing offerings (cumulatively “our COVID-19 testing business”). Our revenue performance was driven primarily by new client acquisitions for safeCircle™, our pooled surveillance testing service, the full benefit of which we believe will be evident in our March 31, 2021 quarter. We also began to deliver quantities of our Linea™ COVID-19 Assay Kit (the “Assay Kit”) and from which we anticipate recurring orders under the existing contract,” said Dr. James A. Hayward, president and CEO, Applied DNA Sciences. “Our emphasis remains on client acquisition, and, to that end, safeCircle business momentum has continued into the March quarter both organically and through CLEARED4, our channel partner, with whom we now enjoy a fourth joint customer. From a COVID-19 testing capacity perspective, we believe we can capably manage demand for safeCircle we see on the horizon and are prepared to deploy additional equipment and further automation beyond that.

“We also began to develop genomic surveillance as a third application of our Assay Kit to potentially expand our COVID-19 testing business. Whereas safeCircle tests within populations for SARS-CoV-2 positivity generally, genomic surveillance seeks to monitor positivity specifically for certain SARS-CoV-2 variants to inform public health decisions. We recently confirmed via in silico analysis and in the field that the unique design of our Assay Kit gives it the ability to discriminate positive virus infections for the presence of certain SARS-CoV-2 variants, some of which that have increased transmissibility. Given the limited gene sequencing capacity available nationally with which to confirm the presence of a variant, variant spread can go, and likely is going, undetected. We have discussions underway with the Departments of Health of multiple States on how our Assay Kit can be utilized to help them implement broader genomic surveillance while variants are less prevalent in the national population and action can be taken against them. We have already received several, initial orders for genomic surveillance from certified laboratories.

“Our Assay Kit’s ability to discriminate for certain variants is also relevant to our safeCircle service that seeks to keep safe and healthy an under-vaccinated populace now also being beset by variants. With a unique test and service offering, an evolving virological threat to which we can help public health officials craft a response, and upon CLEP-CLIA-certification of our diagnostic laboratory, which we continue to progress, we believe we are primed for continued growth in our COVID-19 testing business.”

Continued Dr. Hayward, “Looking beyond the pandemic, we continue to advance our long-term strategy to establish our LinearDNA™ manufacturing platform as a potentially disruptive alternative to plasmid DNA that is used in the manufacture of all nucleic acid-based therapies. We are in the early stages of the assessment of a cGMP (Current Good Manufacturing Practice) production capacity and capability within our LinearRx subsidiary that directly speaks to the maturation of our preclinical CRO (contract research organization) pipeline. Our customers have made clear their expectation for us to support them as a CMO (contract manufacturing organization) and under cGMP conditions for when they initiate animal trials of their therapeutic candidates. The expected initiation of our linear DNA veterinary COVID-19 vaccine trial is in furtherance of our long-term strategy and sets a path to having a therapeutic in the market with an animal health partner.”

Concluded Dr. Hayward, “Our supply chain security business is beginning to show early signs of a recovery. COVID-19 has made companies more focused on the need to secure their supply chains and made consumers and brand builders more aware of their exposure to counterfeiting and diversion. We believe that the year lost to the pandemic has created a backlog of demand for our CertainT™ platform across several end-markets, including textiles, nutraceuticals, and cannabis.”

For earnings history and earnings-related data on Applied DNA Sciences (APDN) click here.