Proteome Sciences plc (LON:PRM) Chief Executive Officer Jeremy Haigh caught up with DirectorsTalk for an exclusive interview to discuss their preliminary results out, the key drivers behind the 46% increase in revenues, their twin-prong strategy, personalised medicine and expectations for the rest of the year
Q1: You announced your 2016 results this morning and delivered a 46% jump in revenues last year, Jeremy, what were the key drivers behind this?
A1: As you say, significant growth last year and we’re obviously pleased about that. I think there’s a couple of things, the first is the biomarker services business grew 57% which is encouraging and I think both SysQuant and TMTcalibrator platforms were contributing strongly to that, which is good. I think an important issue for us is that revenue growth has actually come from fewer individual contracts so the average project value is increasing and that’s really part of our ambition to win larger, more durable contracts from bigger clients so that’s positive. The second driver is TMT revenues which, actually coincidently, are also up 57%, it’s clearly an important number for us this year so there the revenue growth is a mixture of sales increase and royalty payment from our exclusive partner Thermo Scientific. Now, proteomics is obviously becoming better established, we’re very encouraged to see growth here, driven both by our existing users and also by some key opinion leaders who are using it in academic research projects and I think that’s going to lead to greater adoption. So, there’s still considerable scope for further growth in this market because a lot of proteomic analysis is still done what they call ‘label-free’, without the tags that we provide so we’re making sure that we can supply the increase in demand that we’re looking for in 2017 and beyond because of the synthetic pathways for these tags, which is very long, is as much about planning and scheduling as it is about capacity and capability. We’re ready for it and it’s looking very positive.
Q2: Could you explain a little bit more about your twin-prong growth strategy in proteomics and in bioinformatics?
A2: So, the proteomics piece, this is really biomarker services, and what we’re looking to do here is to take advantage of an increasing demand for proteomic and indeed other -omic data from, principally, pharmaceutical clients who don’t necessarily want to own the technology platform themselves at the moment. I think a lot of companies are trying to de-risk their portfolios, they’re outsourcing core technologies to specialist providers like ourselves, reducing internal investments and promoting strategic collaborations, and I think Proteome Sciences can certainly benefit from that environment. Despite increasing competition in this space, and there’s clearly that, there’s plenty of scope to accommodate multiple providers as long as we can deliver a high-quality service to time and to budget so we’re very optimistic that the biomarkers services business is a growth opportunity for us.
In terms of bioinformatics, I think that really stems from our belief that, in the end, it’s data analysis and interpretation, what we call ‘insight’, that inherently more valuable than data generation which however difficult it is initially, eventually can become commoditised. So, if you want to stay ahead, if you want to stay in a leadership position, competency in bioinformatics becomes pivotal in areas where data are abundant and complex. Again, this is a very competitive area with advances in artificial intelligence and machine learning and things like that, so obviously, we’ve got to resource that capability but that is, again, for us a really important growth area.
Q3: Now, one theme that we hear a lot about these days is personalised medicine and their increased use, how do you expect Proteome Sciences to benefit from this trend?
A3: I should say, I’ve been a big advocate of what I call precision medicine for many years, I think it’s potentially the biggest chance to the prevision of healthcare that we’ve seen in decades and I think if you look at recent data from the FDA, about a quarter of the new medicines that were approved last year actually had reference to a specific biomarker in the label so that’s personalisation of medicine. So, clearly this is a growth area and as healthcare changes, as demand for medicines is increasingly controlled by payers who want a couple of things, they want a rational basis for estimating value, they want predictable outcomes in terms of benefit and risk, it’s only really targeted therapeutics that are going to stand a chance of being able to deliver those things. If you’re interested in developing targeted therapeutics, most pharmaceutic companies now are, you need a much greater understanding about patient sub-types, about biomarkers of disease and about the consequences of interdicting particular drug targets. With proteomics, what we do is a dynamic enabling technology with the capacity, I think, to inform us about all of those things and I don’t for a minute believe it’s the only solution but I certainly think it has a very significant role to play in patient identification in target validation. Indeed, it’s worth restating that one of the reasons that I joined Proteome Sciences was because of my belief in growth of precision medicine and the role that a company like us can play within that space.
Q4: What are your expectations for the rest of the year for Proteome Sciences?
A4: Well, 2017 is a big year for us, it’s clearly a transitional year, a transformational year I hope and we’ve got a few really important things coming up in the next couple of months. For example, next week Richard Dennis, our new Chief Commercial Officer, is going to join us, that’s a huge step for us in terms of our commercialisation strategy. We’re pursuing the laboratory consolidation, that I’ve talked about before, in Frankfurt which we hope to have completed by the beginning of May, that’ll enable us to be more efficient in terms of our resource utilisation and we’re also going to be moving our headquarters into the centre of London. As the year progresses, we’re looking to get compliance accreditation which will be really important for selling our services and hopefully as well with our partner, Randox, getting a CE mark for a stroke diagnostic that we’ve talked much about in the past.
So, there’s a lot of things going on but at the base of all of this we will be building our biomarker services business, that has to be the focus for the rest of the year, establishing new customers, focusing on things like contract conversion, winning business, client retention, these are all going to be key metrics for Proteome Sciences. It is an increasingly competitive environment, that’s a good thing, you want to be in a competitive environment but I think with the right people doing the right things in the right locations, I’m really optimistic about the ability that we have as a company to move forwards and to be successful. So, this is a key year, we know it, we started well and there’s a lot to be done.
