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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen thank you for standing by and welcome to the CENTOGENE Q3 2021 Earnings Results. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session.
I would now like to hand the conference over to your speaker today, Lennart Streibel. Please go ahead sir.
Thanks Roberto. Hello and welcome. Thank you for joining us to discuss our third quarter 2021 results, which were reported earlier today. You can view the presentation and the related press release on CENTOGENE's website. For those unable to view the webcast, you can find the corresponding slides at investors.centogene.com.
Referring to slide two, before we being, I would like to remind everyone that statements we make on this conference call will include forward-looking statements within the meaning of the U.S. securities laws, including those regarding our strategic plans, development programs and future financial results. Statements made during this call that are not historical statements may be forward-looking statements, and as such, may be subject to risks and uncertainties, which if they materialize, could materially affect our actual results.
The forward-looking statements in this presentation speak only as of today, November 24, and we undertake no obligation to update or revise any of these statements to reflect future events or developments, except as required by the law. Additional information regarding these statements appears in our SEC filings.
If you turn to slide three, it's my pleasure to introduce you to today's speakers, our Chief Executive Officer, Andrin Oswald; and Rene Just, our Chief Financial Officer. We will first begin with a general business update followed by a summary of our financial results for the last fiscal quarter ending September 30, we will then open up the call to Q&A session before closing remarks. We kindly request already that you ask a maximum of three questions.
I would now like to turn the call over to Andrin. Please turn to slide four. Andrin?
Thank you, Lennart and hello, everyone. Thank you for joining. As Lennart said I will start with a business update on our core business and also some updates on the progress we're making on implementing our strategy has presented at the June Investor Event.
As it relates to our COVID business and the power plan with that one going forward, and also how we plan to restructure the company to be featured for future growth, those two elements Rene will address in the financial review, and then we will end with outlook and of course, the Q&A.
So, Q3. Our Q3 performance reflects progress in our core business execution, making meaningful strides on our strategic priorities, which we outlined as Investor Event. As mentioned, we are continuously expanding our data-driven approach to reinventing where we see drug discovery and development. In this last quarter, we saw solid revenue performance, delivering core business growth for the second consecutive quarter. At the core business, which is our Diagnostics and Pharma segments together grew 13% versus Q3 last year. We are very happy to see that core business is back to growth.
While COVID-19 testing revenues did not continue to contribute to over overall top line, we're seeing a shift in COVID testing landscape and are acting proactively, including our efforts are focused on our core business in Pharma and Diagnostics, which is in line what we have communicated previously. Foremost, we're excited about the deal close of our core diagnostics business segment observed in Q2. In that period we added approximately 22,000 new individuals to our expanding Bio/Databank and continued to demonstrate our commitment to superior diagnostic offerings for rare diseases. This is a steady increase to what's our goal of having 1 million patients in our Bio/Databank in the next couple of years.
I will now discuss a bit more detail the business segments. Please turn to slide six. Here on the graph you can see the mentioned 13% revenue in our core business. More specifically on the Diagnostics segment, in Q3 we reported order intake of 14,770, up 46% over the previous quarter. Within the segment we have seen the business returned to growth, up 43% year-over-year. We have indicated these trends in the last quarters, and it's nice to see the business return, with our fifth consecutive quarter of Diagnostics segment growth. We believe we currently offer the broadest diagnostic testing portfolio for rare diseases globally, covering the widest ranging teams with unique value propositions we've had.
Turning to our Pharma segment. We have seen experiencing attractive recovery as compared to the Diagnostics segment. Pharma business segment revenues down year-over-year. As we have highlighted in the past, it's mostly the results of a delayed of revenues as it relates to the timing issues from signing a new contract with a pharma partner until that contract translate into revenues. However, we have now 67 active collaborations, 16 new ones started in recent quarters and they're all advanced towards revenue generations. And so we are quite confident that the pharma business will return back to growth, starting with Q4. I will share some further details on that later on.
Please turn to slide seven. Here, look at our knowledge repository. The number of sample order intakes in our core business units, Diagnostics and Pharma, is up 12%. This growth was driven primarily by increase in diagnostics business where test requests were 46% versus the same period in 2020, the bulk of Pharma contributed [ph]. Overall, we're making progress on growing our Bio/Databank, which includes samples as well as data and cell lines.
On the graph on the right, you see the number of individuals in our data repository. Over the course of 2021, we added about 70,000 new individuals to our rare disease-centric database. We believe our Bio/Databank will be the core of our differentiation and our basis for revolutionizing the development and eventually the discovery of rare diseases. As we stated in previous quarters, we keep watch an initiative in 2025 [ph] to review and upgrade the Bio/Databank. It's a Bio/Databank that by now has stayed the backs proposed by six years, so you can imagine that what's the right time to look at it cleaned up and strengthened, and its content in a way to the mind the system.
This then improves the setting up good data governance, as well as making sure our approach to growing devices science is truly strategic. At our investor event in June, our CDO and Data Officer Bettina Goerner shared a few insights in how we plan to upgrade our databank. And the run EQ based on that tier, some first updates or insights into the databank.
In the past, we have communicated a number of patients at the summary metric. It's a newly defined by databank, we will share some deeper insights going forward. As of today, November 24th, we have about 650,000 patients -- active patients and samples in our repository. At the end of Q3, we speak about approximately 630,000.
Some of you will remember that we had already communicated the number of about 650,000 previously, however, after the recent review, and reclassification cleanup of the Bio/Databank, and we have now improved, but more robust number, ensuring that what is in there is really of the quality that we needed to have the ability to mine it and come up with insights. Additionally, we are now also going to provide you with some more metrics as it relates to the content and the growth of the Bio/Databank.
Turn to slide eight. You can see some of the metrics we develop that we believe, show more details, what's in the databank and how it's progressing going forward. We have total number of results, of course, as previously discussed. We have the dried blood spots, and that's why it's much data, but the Bio/Databank, so the dried blood samples that is stored in our databanks that allow us also to go back to sample and do further analysis. We have the number of full genome and exome sequence versus data that we just have done gene panel for example.
We also have a percentage of research content that allows us not to use the samples and the data just for diagnostics, and also for food research. And on the discovery pharma side with the potential, of course, to commercialize them.
Then we have our cell lines. This is important position. Cell lines are critical for our future discovery efforts. And, of course, all this is built on an active network of physicians that we engage in and that work with us for getting access to hospitals or future patients. You can see the number here on the slide and also how we've developed in the recent quarter.
With this, we're now also providing more detailed -- details and we plan to do that going forward. We believe this is a way for you to better appreciate the relevance of the value -- of the value databanks going forward.
Please turn to slide nine. Here you can see a closer look, and in terms of there, we have particularly strong data and samples as it relates to these areas. And this is in metabolic segment -- metabolic and neurological diseases. It is also reflected in an increasing number of pharma partners that you have established in that area.
As shown by the revenue contribution, most of our collaborations are relatively small in nature. And, however, we believe it is something that we'll grow in the future. The partnerships may start with a rather small specific research question or a research collaboration that we have, which may be low in initial revenues. Those partnerships, while the research, and the underlying drug discovery progresses, we believe these partnerships will expand and so we'll have revenue.
Please turns just slide 10. We've shown that slide at our June event, but I would like to highlight again, why we think we're uniquely positioned in the rare disease space. Here are some companies that are also in the data driven insights space and we believe we clearly differentiate from them, and add unique competitives. We have complete competitive advantages.
And one side we are a rare disease company. We had 16 years with rare disease and have started collecting samples and insights and has filled brands in the network over 16 years. Some of those other companies have also more recently expressed interest in rare diseases, but they do not have the bandwidth, the brand nor the repository that can do it.
Secondly, I also want to highlight our geographic footprint that makes us unique. Of course, it is highly valuable to have a good, strong presence in the U.S., especially if it relates to commercial revenues from a diagnostic business. However, overall, we believe our geographic global footprint is absolutely critical for rare diseases.
Rare diseases are by nature, a global challenge, and to collect patient data and generate sufficient patient data for the right insight and a global footprint in our mind is required, and that's what we have.
Let's go to slide 11. This is to remind me -- remind you of our business model, our patient centric business model with a Bio/Databank at our core. And using that Bio/Databank, and our omics and AI tools to generate insights for superior clinical diagnostics, for pharma services, for patient identification, clinical trial support, and last but not least, to develop a discovery platform to enable drug discovery, orphan drug discovery in the rare disease space.
So let's go to slide 12. I just want to highlight a few updates along, this is continuing what we have done in the recent quarter. Scientific progress. Our diagnostic footprint, impact we have in pharma and what we find in discovery.
So let's start with slide 13. As you know, and I'm sure you've seen over the recent quarter, and we have tried the leading presents a number of scientific publications in the Red Sea space. I just want to highlight here a recent one in Journal of Medicine.
We give our contribution to better understanding rare diseases at the core of our commitment to rare disease patients around the world. Not all of those, of course, as you are sure, know and we'll need to translate revenues for that we believe that they highlight our scientific expertise, the depth of our Bio/Databank and of course, our attractiveness as a partner in rare disease is covered.
Taking a closer look at these efforts here. And the study we have utilized data presented by Bio/Databank. Our international team, including the Rady Children's Institute for Genomic Medicine, and A*STAR that have analyzed data on a range of families to find -- to create a deeper understanding of syndromic structural birth defects. And paves the way to advanced pharmacological treatment for that unique medical condition.
Now if this method and what has been demonstrated translates into robustness, it offers a unique opportunity for drug developers to capitalize on the insights and with clinical programs, potentially create new approaches to find treatments for what to date are almost 4 million infants every year that are born with such birth defects.
We think that research highlights why CENTOGENE and Bio/Databank can be a huge partner, not just for the academic institutions, but also for pharmaceutical organizations to collaborate, to actually translate, find such findings and translate them into drug development.
Slide 14 in our Clinical Diagnostics business, we have signed an exciting partnership with Twist Bioscience that we had recently announced. Together you will develop and commercialize custom assay kits for rare disease, genetic diagnostics. The product offering will combine our rare disease expertise, powered by our databank, with the manufacturing estimates and cost and sequence of teams of Twist Bioscience to deliver multiple assays.
We are excited to have kicked off this collaboration, and the next major milestone will be progress on FTD development, followed by a commercial launch together with the plan for next year.
This collaboration enables us to address the ongoing trends of decentralization the testing area. It is our belief that offering decentralized solutions will play a pivotal role in making genetic testing more accessible, and with the help of partner laboratories to deliver rapid and reliable top quality genetic diagnostic for rare disease patients. We expect some announcements around our efforts there related also on the progress of our CentoCloud product offering in the coming months.
Now let's look at our Pharma progress in slide 15. I had mentioned that the Pharma revenue recovery is really taking more time than Diagnostics side, but that we are confident that with recent partnerships and we are on track to get there. So, I want to highlight here is the partnership you have with Alector. We signed that deal early in 2021, and we have announced that. We have now started patient enrollment just a couple of weeks ago for that large scale 3,000 to 4,000 patients study. And it's an exciting study that I think highlights a few things from our side.
First of all, of course, that it takes time and from signing the contract to actually start seeing the enrollment of patients and mostly the revenues that are associated with that. But those are highlights that finding rare disease patients with the right rare diseases patients, the key competitive advantage that CENTOGENE team has that the customers have a high interest in, and also highlights that our business model -- while we do such collaborations actually allows us to accelerate our Bio/Databank. And this partnership here, for example, will help us to build up unique cohort or frontal temporal dementia patients in our Bio/Databank, similar to what we had rolled with Denali and sort of things that can be through the mind and for the insights can be generated for future customers who are working with us in the neurological disease space.
And overall, we have signed quite a number of new contracts to date in the next year. And actually when we look at the accumulated value of these contracts, it's a multiple of what the company was able to sign in 2022. So that's a large volume of new contracts that we had signed, not just Alector to keep you some confidence, for sure these results that started in Q4, we think that pharma basis, we'll also be back on the growth track.
Please return to slide 16. Just a short update on our discovery efforts and how we plan to use our Bio/Databank for discovery partnerships going forward. I would like to focus on the development of our rare diseases and avatars. And we have mentioned to you, these efforts in our June event and I think our aspiration and for us to be able to enable the cure the rare diseases in the coming years.
So, with Patrice, we have made quite some progress to accelerate that work and make sure that team has fully developed and on boards to accelerate the work we do in that regard. What exactly is the disease avatar? You may have heard the term digital swing [ph] digital swing potential works with copy of a typical body the structure that physicians can use. For example, to train a surgery or as a module, have a certain that treatment and the impacts that the anatomy of the patient, so the disease avatar is the digital platform on a whole disease and by which we have an aspiration to actually virtually model that the whole disease such that we can be used by researchers to mind that data, to come up with hypothesis on how the disease can be better diagnosed or potentially treated, and then test those apart in the actual model. We believe that we need at least a hundred rare disease patients to be able and to develop such an avatar.
We, of course, won't stop when we have a hundred and that we think once we are above a hundred, we have enough diversity and data to start with the avatars to really generate value. And as you know, on some diseases, we have already clearly exceeded that milestone. And the disease avatar also linked to a cell models. And we think at least 10, up to maybe 20 patients derived the cell models and will be part of the avatar who actually make the disease model complete.
At the forefront of this initiative is Patrice Denefle, our Chief Scientific Officer, who we were introduced to, on our last earnings call. And I would like to pass on his excitement around our disease avatar and how we enable and recapitulate the humans using this, generate the insights from hypothesis and validating this by a real patient like cell models ultimately leads to better understanding of practice and psychology and enables us to take hands on approach on testing drug candidates in the rare disease models to date we could never have done before.
And with these initiatives in place, our threes, as current strength and the focus on our three key priority avatars, Gaucher and Niemann-Pick and genetic Parkinson's to accelerate progress we make on those three in the coming quarters. All -- three will be insignificant opportunity for CENTOGENE to drive a short-term value and potentially partner those avatars with pharmaceutical partners. We will, of course, not stop there. And on the success of those three, we have a range of prioritize the diseases that we planned and to work on and to accelerate in the next few years to come.
With that overall update on our core business and the progress we make on our strategy, I would like to hand over to Rene.
Thank you. Andrin. Please turn through slide 18. Our overall Q3 revenues declined by 17% year-over-year to €30.2 million. This development was mainly driven by COVID-19 testing, generating only €20.2 million in revenue in Q3, 2021, versus €27.4 million in Q3, 2020. This reflects the decreasing importance of the non-core COVID-19 business. And on the other side, the increasing importance of the core business. I will highlight the COVID business separately in a moment.
With that, I would like to focus on the core business, which includes our Diagnostics and Pharma segments. The core business expanded by 13% in Q3, 2021 year-over-year to €10 million compared to €8.9 million for the same quarter of 2020. This growth was mainly driven by the strong uptake of the Clinical Diagnostics business, which recorded €7.3 million in Q3, 2021, representing 43% growth compared to the same quarter in 2020.
Pharma revenue decreased year-over-year from €3.8 million to €2.7 million in Q3, 2021, reflecting a decrease of 28% compared to the previous year. The decrease was primarily due to the impact of the COVID-19 pandemic, which unfortunately slowed the clinical studies of our pharmaceutical partners.
In principle, we believe that recovery in pharma takes longer due to the generally longer sales cycles. However, the value of our pharma contract signed in the first nine months of 2021 already exceeds the value of deal signed for the full year of 2020. So, we continue to see an acceleration in the Pharma revenues in the fourth quarter.
We will now be looking at COVID before going into more detailed review of the core business performance. Please turn to slide 19. I would like to take a few minutes to discuss our COVID business. In summary, Q3, 2021 represents fourth quarter in a row where our portion of revenues generated by the core business increased and the portion from COVID decreased, a trend we foresee continuing. We have consistently spoken about the COVID-19 business as a non-core business, which has in the past contributed revenue and cast to CENTOGENE to drive the strategic execution in our core business.
Looking at the EBITDA contribution from COVID-19, which has turned negative, we have made the executive determination to begin phasing out the business segment to focus on areas where contribution margin is anticipated to continue in order to optimize our cash spend. Very specifically this means that we will phase out most COVID-related projects by the end of the year and some specific airports centers will follow in the first quarter of 2022.
We have informed CENTOGENE staff internally of this decision and related measures, which will undoubtedly be impactful as we had approximately 230 colleagues working on COVID-19 activities, which are now expected to ramp down through termination, attrition and non-replacement of plant departures.
We have agreed on an accelerated depreciation and amortization schedule for COVID-19 related assets and have carefully examined related inventory. As in previous quarters, the cost of the segment are mainly allocated to cost of goods sold, which resulted in the unusual picture of a negative gross margin overall.
To give some specific details, the cost of sales incurred by our COVID-19 segment for the three months ended September 30th, 2021 represent 143% of the revenues from the segment. This was primarily due to the reduction of COVID-19 revenues. The initial steps in phasing out of the COVID business led to accelerated depreciation and amortization expenses of COVID-19 related assets, committed fixed overhead costs as well as cost related to the shutdown of our Hamburg lab and unprofitable testing sites.
Examples of fixed costs include cost of premises, including unprofitable sites that we have since shutdown, IT costs and temporary wages at unprofitable sites, which have now been restructured. We also consolidating our operations to only operate at sites that are still generating positive returns and streamlined our laboratory costs by shutting down the Hamburg lab and increasing the test outputs and efficiencies at our other labs in Rostock, Frankfurt and Munich to ensure our cost going forward is streamlined to the needs of the segment, which will allow us to generate a positive EBITDA.
As we phase out the COVID segment, we have reassessed the useful life of all COVID related long live assets in according to our accounting policy, which resulted in a significant write down of 3.2 million in form of accelerated depreciation and amortization. We have also recorded 0.6 million write down in COVID related inventories in the quarter. In summary, we will diligently manage the phase out of the business, as the management team are highly focused on executing on the core business.
With that, please turn to slide 20. Pharma revenue recovery continued to be affected by the COVID-19 pandemic in the last quarter. We see in the graph that Pharma revenue decreased to €9.2 million in the first nine months of 2021 compared to €12.3 million in the same period 2020. The main drivers of Pharma revenues are patient identification and clinical trials report partnership. The decline in 2021 year-to-date is mainly due to the successful completion of contracts by the end of 2020 and the slower rebound due to longer sales cycles and building contract backlog.
Andrin discussed earlier the increase of signed contract value we have seen in 2021, which is significantly above the full year 2020. So, we remain confident in the acceleration of the Pharma revenues in Q4.
During the first nine months of 2021, we ended into 16 new collaborations and successfully completed 25 collaborations, resulting in a total of 57 active collaborations as of September 30th, 2021. Revenues from our new collaboration totaled €2.1 million for the three months ended September 30th, 2021, with no upfront payments.
I previously mentioned the 57 active collaborations on the pharma side. If you take a look at the pie chart and in the bottom of the right corner, you will see that we currently have one large patient identification collaboration, which reflect the disease fields where commercial state products are already available. In this case, our contract with Takeda. Most of our collaborations continue to be in the clinical development stage with clinical trial support. All of these are based upon the setup we already have. Clinical development stage collaborations can be used to support clinical trials or clinical studies like we do with our Denali collaboration. All the collaboration with Agios and Denali highlighted in recent press releases announcements.
Andrin spoke about our R&D efforts on building the disease avatars earlier. So through leveraging our Bio/Databank for unique data-driven insights, we expect to sign more collaborations in the R&D space in the future. As discussed at our Investor Event in June in detail, this is an area where we will expand and expect to have the first value share deal added over the course of 2022. Those collaboration would generally include a value share for CENTOGENE when historically these may have been small contracts only for testing research questions.
Please move to slide 21. While the ramp up in revenue in the Pharma segment appears protected, we are extremely pleased to see the strong growth in our Diagnostics business in Q3. Revenues from our Diagnostics segment were €7.3 million for Q3, 2021, an increase of €2.2 million or 43% from €5.1 million Q3, 2020. We received an order intake of approximately 14,770 in our Diagnostics segment in Q3, 2021, representing an increase of approximately 46% as compared to approximately 10,150 order intakes received in Q3, 2020.
The increase in revenue was primarily related to an increase in test requests for panel testing, as well as whole exome sequencing and whole genome sequencing during the three months ended September 30th, 2021. Total revenues from panel testing, whole exome sequencing and whole genome sequencing amounted to €5.2 million, representing an increase of 46% as compared to Q3, 2020. Panel testing, whole exome sequencing and whole genome sequencing account for approximately 50% of the number of test requests in the Diagnostics segment 2021 year-to-date supported by a project win in Middle East.
Please turn to slide 22 for a look at our segment adjusted EBITDA. Here we see the segment adjusted EBITDA, which includes the contribution from the Pharma, the Dx, the COVID-19 segments. We report a segment adjusted EBITDA loss of €2.5 million in Q3, 2021 compared to positive €9.2 million for the same quarter last year. Same as for revenue, segment adjusted EBITDA was driven mainly by the decline in the COVID-19 business as discussed. Total core business segment adjusted EBITDA grew €1.4 million up from negative €0.4 million in Q3, 2020, reflecting the strong uptake in the Diagnostics business after COVID-19 hit in 2020.
The picture for our two core business segment is mixed. Adjusted EBITDA for the Diagnostics turn from minus €1.2 million in Q3 2020 into a positive adjusted EBITDA of €1.1 million. Adjusted EBITDA of our Pharma segment was €0.3 million compared to €0.9 million in Q3 2020. The decrease was primarily attributable to lower revenues, as well as product mix.
Looking at profitability. I would also comment on our organizational alignment in the core business. We will leverage the changes through the phase out of COVID to also optimize our overall organizational footprint related to the core business to free up resources for investment into our core business. This streamlining is associated with the overall smaller employee base going forward, but also based on an in-depth review by the new management team to ensure a focus on improving processes and efficiency, as well as streamlining our project portfolios.
We expect the results to be saving of up to €15 million annualized, excluding restructuring costs, consisting mainly of personnel related and operational expenditures and a smaller contribution from CapEx. We expect a portion of the savings to be reinvested in the core business execution. Overall, you should therefore expect to see G&A expenses decreasing and overtime R&D expenses increasing. Correspondingly, we expect to record restructuring charges of below €2 million in the fourth quarter related to the core business realignment.
Please turn to slide 23 for view of the P&L. Looking at our income statement. The slide shows Q3 results on the left as well as year-to-date results on the right. And we will focus on the quarterly results for the purpose of this discussion and compare year-over-year. We have already discussed the revenue development in the quarter and highlighted the dynamic of core business versus COVID-19.
I do want to spend some time on the gross profit development, as this requires some explanation. On gross profit, we reported a loss of €5.4 million in Q3, 2021, which compares to a gross profit of €10.2 million in Q3. 2020. A negative gross profit is, of course, unusual. And the reason behind this is again, the impact of the COVID-19 business as previously discussed.
Our expenses, including other operating income, increased by €1 million for the quarter compared to Q3 last year. Let me comment on the biggest factors that grow the increase in expenses. Firstly, general and administrative expenses increased by approximately €2 million. The increase is principally due to the increased personnel cost, administrative cost and additional expenditure on IT support and data centers. Additionally, the COVID expenses included share-based compensation expenses of €1.9 million, an increase of €0.7 million versus the prior year quarter.
Second, our R&D expenses for the quarter were approximately €1 million lower than Q3, 2020. This decrease was mainly represents streamlining of personnel cost, IT related development cost, and then a change in the capitalization of costs last year, which led to an additional expense in the P&L.
Thirdly, our sales and marketing expenses for the quarter increased approximately €0.9 million, mainly reflecting an increase in personnel expenses, online service expenses, as well as travel expenses due to the easing of travel restrictions from COVID-19 pandemic. In total, our operating loss was €21.3 million, a decrease of €16.6 million compared to a loss of €4.7 million in Q3, 2020. As previously discussed, the main change driven by the negative gross profit in the COVID business.
Now please turn to slide 24 for the cash flow and balance sheet highlights. As of September 30th, 2021, we had €25.7 million of cash and cash equivalents on our balance sheet. In regards to our outstanding debt, I would like to remind you that as of the end of September, this includes approximately €19 million of lease liabilities.
Looking at the movements. Cash flow from operating activities improved compared to last year. The main drivers were the cash generated through our COVID-19 testing business segment in the first half of the year. Having said that, we do recognize the impact of the earlier discussed decrease in the COVID-19 business and negative gross profit leading to fading contribution from the segment compared to previous quarters. As discussed before, we are managing that business on a cash basis to a phase out.
In 2021 year-to-date, the cash flow used in investing activities was €5.4 million as compared to cash flow of €11 million in the nine months 2020. Consistent with our aforementioned attention to the COVID business, the decrease is mainly due to a reduction in COVID-19 related investments.
Cash flow from financing activities decrease compared to 2021, mainly reflecting the follow-on equity offering, which contributed with €22 million in Q3, 2020. Based upon this cash development, we have in our 6-K also disclosed a going concern issue.
With that, let me hand it back to Andrin for our 2021 guidance and closing summary. Please turn to page -- slide 25.
Thank you, Rene. So to round off today's call, let me touch on the financial guidance. We've seen that on the core business, we have good recovery of our Diagnostics business, and we are also quite confidence based on the contract values that we signed on the pharma side, that business will return to an attractive Q4. We, of course, are declining and also significant contributions we see from our COVID business, and accordingly overall, we'll adjust our top line guidance and expect growth revenue for 2021 to be between 30% to 40% versus prior year. This is mainly driven by COVID-19. However, we also expect our core business for the full year to be back to growth and up mid to high single digit after a decline of 20% in 2020. Overall, with exiting the COVID business, we plan to be fully focused on our rare disease business strengthening execution, building the activity and attracting the require capital to strengthen our leading position in this rare disease space to create long-term value for our shareholders and stakeholders.
With that, just a few summary points on slide 27. Core business recovery of 30%, 43% growth in Diagnostics in the quarter. As mentioned, we plan to exit our COVID-19 testing business, and we have started to implement a program to reduce cash in our core business. Overall, we remain confidence on the step-by-step recovery we make on our core business where the overall strategic priorities have not changed, accelerating our growth in Clinical Diagnostics and Pharma services by leveraging our unique Bio/Databank and strengthen our research capabilities [indiscernible] understanding and treatment of rare diseases starting Gaucher and Niemann-Pick [ph] and on genetic Parkinson's diseases./
So in closing, I would just like to express our partners, our employees and of course, our shareholders, as we continue tirelessly in this program pursuit to cure rare diseases. We remain committed to delivering the best business performance for our shareholders while we are adapting and capitalizing on that testing emergency drug discovery landscape and inevitability continues to [indiscernible].
With that, I would like to hand it back to the operator for Q&A.
Ladies and gentlemen, we now begin the question-and-answer session. [Operator Instructions]
Our first question is from Puneet Souda from SVB Leerink. Please go ahead. Your line is open.
Yeah. Hi, Andrin and Rene. A couple of questions, given the quarter, obviously. So, first on gross margin, you pointed out your cost grow significantly as outlined due to COVID testing. I mean, I appreciate that you're shutting down your COVID testing operations in the first quarter. I don't think we were expecting your gross margin to be negative. So, it appears to us that that would continue into the fourth quarter. But could you elaborate for us, as we look at 2022, when do you think your gross margin can return to be positive? So that's my first question.
And then, secondly, on cash runway, can you elaborate sort of given the current expensive R&D increase, how long do -- in terms of the cash runway, how long do you have before further potential capital raises. Thank you.
Maybe I can comment on the first one. The reason you are seeing this drop in the gross profit that twofold in -- or seeing the negative gross profit in the COVID business, mainly due to the development in the COVID business. Our core business, this is very important, is actually developing very positively compared to last year. So, you see an increase in the quarter compared to last year and the gross profit in our core business from €840,000 to €3.2 million quarter versus quarter and year-to-date, the core has improved from €8.1 million in gross profit last year to €9.9 million this year. So, the underlying business of our core activity is actually improving.
Having said that, it's, of course, correct, as the gross profit in total is negative. And that is mainly coming from the negative gross profit in COVID with €8.6 million. And this is -- there are two reasons for that. The -- as we have told you about the -- how should I put it the decreased level of activity as you have also seen in the presentation, has basically decreased from Q4 2020 into Q1 Q2 in 2021 and this has also continued in Q3. In Q3, we have then initiated, if I may put it like that, the ramp down of the activity and reducing the employer cost and so on.
Here, we have not reacted fast enough compared to the revenue decline. But due to the revenue decline in Q3, we have then made the decision that we will ramp down the COVID business in full until year-end for the major part of the activities, except two airports that will continue into Q1 2022.
Having said that, then you can say, of course, will the negative gross profit development continue due to these accelerated amortization and depreciation. And then, it's a little bit difficult for me to answer exactly, but I can tell you, in the month of October, we have seen an increased activity in the COVID business. So, we are actually very cash positive and EBITDA positive in the month of October. So -- and we expect this to continue for the Q4 in 2020 based upon the development in the infection rates and so on. You see, first of all, of course, in Germany, but also around the world. So, we expect that this will be very cash positive in Q4.
So, no, I would not -- I mean this -- how should I put this negative gross profit development you have seen, we do not expect that to continue on a cash basis if I'm going to put it like that in the Q4 and the Q1 of 2022.
I believe that was the answer to your first question. And then the second question was, how long do you expect that our cash will last. If I may put it like that, first of all, I have to say that we have disclosed a going concern issue. This means that currently our cash position cannot cover the burn rate for the coming year based upon the current activities. Therefore, we have also started streamlining project, as I explained, where we will reduce the cost with -- approximately €15 million. And this has also been ticked off today. This will be implemented right now and then over the Q4 and Q1 next year. So, we do plan to reduce the burn rate significantly with €15 million.
Having said that, then we also have €26 million in cash. So that should not be any issues. I mean, the €26 million will not cover another full year, but at least it will cover far into the 2022 based upon the current burn rate.
Finally, it's also important to say due to our reduced cash position, which is also typically a normal for a biotech company like ours, we have, of course, also look into to different, what do you call it, hunting opportunities, that we have, and we are currently in discussing with various strategic potential partners. We are in discussions with minority investors and maybe also some other potential investors. It could either be in terms of additional equity or in terms of issuing some debt. So, we are -- how should I put it on top of this -- and as soon as we have more information, we will, of course, disclose this to you.
Got it. Thanks Rene. On the Databank, you reported, I believe 600 -- somewhere around 630, 632,000 patients in the database. That appears to be a step-down from the 650,000 in the quarter. And I recall Andrin talking about this database should continue to increase. Obviously, this is the core part of your offering. Can you just elaborate on exactly what -- why this decline happened? And also on pharma, could you -- I totally appreciate that COVID is ongoing and that is impacting the recovery in that business, but obviously that's a core business development activity for you. Maybe just walk us through that. What are some of the parts there that are impacting on the ground level and when do you expect realistically for that Pharma business to improve because obviously that declined sequentially as well?
Yeah. Puneet, so the first one, the collateral product that new data coming into the Bio/Databank is increasing. So in Q3, again, I mean, as it significant [Technical Difficulty] on that exact number. On slide eight, we added another 22,000 patients to the Databank in Q3 alone. So the trend is robot. It’s increasing quarter-over-quarter. The reason for us that step down that you highlighted, lab and story nature. And we have with our new Chief Data Officer, started really as an overhaul of the Databank, to not just take historical samples for granted, but really validate, what we have in key count, that we think is no longer of value. So that has led to a reset of the baseline by 40,000 patients. Nothing good will be from this year. I mean, this is -- from a historic theme of samples of patients that have been in that bank coming from [Technical Difficulty].
On the -- so the -- just to summarize, the growth of the Bio/Databank samples being very strong and we expect it to accelerate. The trend is such remain absolutely robot and it’s also not the secret that, of course, samples that come in today, are much more valuable than samples that we had that maybe are already 10 years, or we have much the research content at 80% level. And, of course, we are also in a position today to do genomic analysis. You can also see that that percentage of whole genomes, the exome sequence with the patients that come in more recent time, of course, is much higher than we have a couple of weeks ago. So, overall, the Bio/Databank remains on track to be strengthened quarter-over-quarter.
And for the Pharma, at this point in time that the recovery is not affected by the pandemic, at least not significantly. It's really -- as we told of the fact that in 2020 the company has focused its whole [Technical Difficulty] and commercial strength on COVID and such close to more new partnerships had been signed in 2020. And then, we refocused on the core business starting when I came on board, we start in progress and signed the first contract and as highlighted a contract signed in Q1. And given that it is not counted when you sign the contract, but mostly then we start recruiting the patients and you will see the revenue there to keep wining in store. But when I look -- as we have emphasized and all the contracts we had signed already this year, we feel very good that first of all quality is real. I mean, the year's not over, but you're very encouraged by what we see now by November the 24th, that we will have a good Q4 for Pharma and with the contracts that we have signed to date, we also believe that that will continue into next year.
Okay. Thanks. I'll let others to hop in.
Thank you for your question. The next question is from Catherine Schulte from Baird. Please go ahead. Your line is open.
Hey, guys. Thanks for the questions. I guess, first, there have been some additional COVID lockdowns or restrictions lately across the world as cases start to rise again. How do you view that impacting your fourth quarter, both in terms of core diagnostics and then clinical trial work for pharma?
Yeah. So thanks for the question. On COVID, we do see an uptake in testing volume. We expect Q4 to be stronger than Q3. It's a little bit early to tell how strong it will be, given the -- a lot depends, of course, on December. I mean, last year we had the tremendous uptake during the traveling season and will holiday season as a lot of travel, will that happened this year or not? I mean, this will really depend on how strong the potential lockdown would or would not be in Germany. If traveling continues, I think we will see growth and relate to the cash generation, showed the lockdown leads to very strong travel restrictions. And normally the testing volume would go down again. But as said, I think the -- we are on track and we will execute the overall ramp down of the COVID business that it might well be -- if the testing volumes continue to be high that during the ramp down, we generate some additional cash.
As for the second question, which was -- you have to remind me, unfortunately.
Yeah. It's more on the non-COVID side of the business -- core diagnostics for the pharma.
Correct. Up to now, we haven't seen any impact. In Europe, I think that now it's somewhat center of the current pandemic, but that may change in a month from now. And even here, we don't see an impact right now. Should -- it get worse that's hospitals start to get significantly overcrowded. So they would be prioritized the more standard testing work that they do be made as some impact or some slowdown on our -- in our testing or clinical trial. But that's pure speculation. We haven't seen any to date. We also don't expect it to be in any way near it happened compared to how you got last year. I mean, we do have a global business and if we're not over presented in one region and given that there is different phases of the dynamic in different regions and we overall do not expect to see a substantial impact even if in Europe we were to see a smaller slowed down in the months to come.
Okay. Got it. And can you just talk a little bit more about what you're doing with request? When will those custom kits be available and how do you think they'll improve or differentiate your diagnostics?
Yeah. So, I cannot to offer them to say we expect it to be rolled out next year, in terms of exact what quarter and what -- when I think -- given that this is in a collaboration with [indiscernible] we cannot share too much before we have alignment with them. But the teams are working on that and we expect rapid progress. And as highlighted we expect to have a further announcement on our CentoCloud deal this year that we will give you also their more insights into how we plan to accelerate the rollout of our decentralized testing solution.
Great. Thank you.
Thank you for your question. We have the next question for Sung Ji Nam from BTIG. Please go ahead. Your line is open.
Hi. Thanks for taking the questions. Just out of curiosity, of the new pharma contracts that you've signed this year, year-to-date, or even the last, I would say, 12 to 18 months or even two years, do you have a sense of roughly what percentage is coming from the existing 30 plus customers versus percentage is coming from new customers?
Yeah. So, how you look at it in terms of number of contracts, the majority are from new customers. In terms of value, some of the existing contracts, of course, have a significant size, but some of the new ones are more from buying the companies and hence are smaller. And if you're asked for a value split, roughly, I would say about half past.
Okay. Gotcha. And for the ones that have not -- that have completed their projects and have not signed on for new projects, just out of curiously, what are the main drivers? Or do you have a sense if they're expecting? Yeah, go ahead.
Some of them are buying companies specifically working on the rare disease with a certain scientific approach. And then if that fails, then, of course, the program stops, right? Then the company, given that it will be focused on one specific project, of course, most likely either needs to exist or it needs to have other priorities, then you need to be starting the next collaboration with us. And -- but overall, I would say that it's relatively rare. I mean, we have a lot of repeat customers. And I think, all the larger partnerships that we have, I think it needs to date -- I can of course not make a forward-looking statement, but to date these partnerships, they by and large tends to continue.
Gotcha. And then just on the diagnostic side, on the core diagnostic business side, do you have infrastructure in place currently in your view to be able to achieve kind of your long-term growth rate target? Or are there kind of further efforts in place or that are underway to be able to continue to drive growth there?
Infrastructure, again, it depends what you need. I mean, as it relates to our laboratory capacity, I think we have what it takes at least two different terms. If we look at our CentoCloud, which is, call it, infrastructure as it relates to working with decentralized labs, I mean that we are building up and we'll share as I mentioned in a couple of months and where we stand and what you can expect. The investments there are not significant that, but still, I think it's an important project for us.
And when you look at the commercial infrastructure, I would say we have highlighted that in the past where we do have the gap and it's in the U.S. and we do have a presence in the U.S., but we consider it not to be developed at the stage that we would like. And that's also why we are exploring partnership opportunities in the U.S., because of course, one option always is strengthened ourselves that I see a potential there maybe partner with someone who has that footprint already in the U.S. and is interested to help our value proposition [Technical Difficulty] commercialization partnerships.
Great. Thank you for taking the questions.
All right. Before we are a little bit over here about four minutes. Should we take one more?
There are no further questions, sir. Do you like to end the conference?
Even better.
All Right. I think then Lennart, we can close the call.
Yeah. Thanks very much for joining us and talk to you during the next quarter and investor events as well. Thank you and goodbye.
Bye-Bye everyone. Thanks for calling.