Microsaic Systems PLC (LON:MSYS) Chief Executive Officer Glenn Tracey caught up with DirectorsTalk for an exclusive interview to discuss their interim results and what we can expect from the company for the rest of 2018.
Q1: You released your interim results this morning, progress looks to be heading in the right direction. Can you give us a little bit more detail around that?
A1: I’m very pleased with the headline results, obviously revenues are up 96% on this time last year and gross margin expansion is over 40% so I think that alone shows we’re making progress. Really, there are two key factors underlying that:
First is we said we’d introduce our new product which is the 4500, we’ve done that, launched it and actually that’s done rather better than we’d first anticipated.
The second is I said we would increase the mix of partners that we had in small molecule, we’ve done that, we’ve signed over six now this year. What that is, more importantly to me, is it represents a much wider scientific community across a much wider set of geographies than we had last year. If you cast your mind back to last year, we had really only one partner selling into a very narrow application space.
So, some good traction on our business development.
Q2: This marks the anniversary of you being appointed CEO, can you tell us what you’ve done in the past year to change the direction of Microsaic Systems PLC?
A2: So, the first priority was getting people right and we’re very fortunate to have a fantastic management team around me with lots of experience. I’ve been incubating a strategy for a while actually, before being appointed, that was more relevant to life sciences, in particular the manufacturer of biologics. When I was appointed, I saw the opportunity to really put that strategy into motion so really the first action was the implementation.
The first thing to realise about MSYS is that we are a technology innovation company and we always have been. Our technology can absolutely reach high-growth markets and increase the company’s value in the longer term but what we’ve got to ensure is that we don’t get distracted from investing in our core technology and advancing that. In line with that, one of the tasks I put to the company was to really look at areas of the business that were adding value like innovation and those that really were detracting value, weren’t accretive, we looked to move those into a different space. So, in terms of manufacturing, we’re outsourcing that manufacturing and refocussing the personnel that we had there to research and development, building a longer-term R&D pipeline. So, that’s on track, we should be fully outsourced this year and as I say, that will allow us to focus in on our R&D.
The second pillar really this year, as I just mentioned, was the increase in sales so although we are a technology company focussed on the long-term. I recognise that we’ve got to show some movement in the short-term, that’s our small molecule business, and a much stronger focus on business development in companies really across the world in small molecules has proven dividends. We’ve signed six and that momentum will continue this year.
Also, once we’ve got them signed up, I’m really focussed on better sales execution so that means time signing a partner up to actually making sales is a lot shorter and then making sure that those sales are sustainable in a much shorter period of time is also important.
Q3: You mentioned earlier about changing your strategy to move more into life sciences, how is that going?
A3: It’s going well, first thing to say is that we do benefit from well-invested technology, there are over 60 patents in our point-of-need mass spectrometry and we really are a technology that can be taken out the lab, we’re not shackled to a centralised lab, we can be put into say manufacturing facilities.
Not only, that we punch above our weight in terms of the molecules we can measure so we can look at very very large molecules such as biologics that are being made in therapeutics, in biopharma. If you combine our size and the fact that we can measure these molecules, even now we are a very competitive choice for any company looking to invest in their biological analysis.
At the back end of 2017, as I say, I really did want to ensure that we focussed on building that momentum for the future, I did put a compelling collaboration development plan over 5 years to the Board which was accepted.
In terms of our key collaboration with our partner in bioprocessing, we’re doing very very well, we’re hitting all the key milestones as we said we would do and we’re looking to be on target to complete this phase, which is the integration, in Q4 this year. Not only that, but we’ve entered in some very interesting collaborations with top institutions in biologics and these collaborations give us the freedom to showcase our technology wider than our key collaboration.
It is a ground-breaking analysis to what we’ve got, we can measure both biologics themselves and we can monitor small molecule metabolites and actually, I think the results we’ve had with these institutions, the quality of the data has even surprised us so really good progress there.
Q4: Just looking forward, what can we expect from Microsaic Systems PLC for the remainder of 2018?
A4: So, the momentum in business development in small molecule is continuing, even now we’re having some very good quality discussions with other partners, so I hope to be driving business development to completion with other partners this year.
In terms of sales, I said at the beginning of the year, this wasn’t going to be a massive year for sales, it’s going to be a modest uptick on last year but really, what we’re doing with business development this year positions us well for growth in 2019.
Following the successful raise in June, and thanks to our investors for that again, we also continue to invest heavily in our new product development. So, you’ll start to see product developments coming off the line, actually, one modest product development this year in our tool-less front-end technology but certainly 2019 and beyond you’ll see some larger output in terms of our refocussed activities in product development.
