Proteome Sciences plc (LON:PRM) Chief Executive Officer Jeremy Haigh caught up with DirectorsTalk for an exclusive interview to discuss their interim results for the 6 months to 30 June 2017
Q1: Proteome Sciences has delivered a strong rise in revenues for the first half of 2017, Jeremy what has driven this?
A1: Revenue is up over 20% versus the first half of 2016 so I think a couple of things to pick out. First, the increase in TMT sales, TMT stands for Tandem Mass Tag, the chemical tags we make under exclusive license for Thermo Scientific and the revenues there are up 40% year-on-year so that’s very encouraging.
I think the other milestone that I’d pick out is the payment that we received from Randox, now Randox is a diagnostics company in Northern Ireland which licensed some IP from us, in the form of biomarkers, to create a diagnostic for stroke patients. Last month, we had the first results from a prospective trial using an early version of that diagnostic performed very well so that’s extremely encouraging. Those results were sufficient to trigger a pre-determined milestone but more importantly than that, I think they confirmed the potential that such biomarkers have in improving patient management and clinical diagnosis and as everybody knows who’ve been talking about that for quite some time so that was good news.
Q2: Now, as you mentioned, TMT reagent sales continue to push ahead, would you expect this to continue?
A2: Yes, I would, all the indications that we get from Thermo Scientific are, as I say, our exclusive licensee, is that the market for the tags is growing. Now, obviously, we are entirely reliant on them for commercialisation of the tags but Thermo is a big company, it sells lots of mass spectrometers, lots of kit, they see a shift towards analysis using these tags, particularly among key opinion leaders and TMT happens to be the dominant product in the field. So, I do.
The other thing that’s probably worth saying is that the overwhelming majority of protein and peptide analysis is actually still preformed with tags, so-called ‘label-free’. So, there’s a large market opportunity still and I think that’s going to grow again when we introduce novel tags in the future.
Q3: You have incurred exceptional items of £140,000 in the first half, are you now happy with the current structure of the company?
A3: Yes, I’m not sure I’m ever happy about anything but we’re certainly in a great deal better shape than we were. We’ve consolidated our laboratories capabilities into a single high-quality facility in Frankfurt, that will enable us greater resource efficiency and productivity and it also allows us to pursue the compliance accreditation that we’re going to need to complete for clinical stage contracts. So, that’s done and we’ve moved our head office into what’s known as the ‘knowledge quarter’ of London and that’s extremely important for our visibility and connectivity within the UK bioscience ecosystem so it’s going to be easier for us to do business.
Now, these changes always, of course, cause some disruption, incur some costs, I think we were prepared for all of that, managed to transition on schedule and have been as frugal as we can be. Clearly, moving mass spectrometers between countries, unfortunately making some staff redundant, creating compliance within the organisation, these drive exceptional spending. What I would say is that I think we now have the right people in the right locations, doing the right jobs with the appropriate equipment and that is a big step forward.
Q4: The arrival, in April, of a new Chief Commercial Officer in Richard Dennis is a positive step forward, what impact has he had?
A4: Richard’s had a big impact in a short time and I knew he would. He’s got very deep sector experience, he’s technically astute and he’s worked for some significant companies who are selling into this space. So, actually to attract him to Proteome Sciences, I think, sends a strong message of support for what we are trying to do and how we’re trying to do. Clearly, commercialisation hasn’t been our Strength in the past and Richard’s brought a fresh approach to selling our services, he believes passionately about face-to-face selling, being in front of customers.
So, in his first three months, he’s visited a lot of people in a number of different countries, many of them new customers to us and he’s created a number of new business opportunities, that energy, that engagement is really important. He’s got a new idea about a sales model in the US that doesn’t rely on us employing dedicated sales staff which is good and creative, he’s been strengthening our marketing capability and actually just last week, led our delegation to an Alzheimer’s association conference in London, just making sure people know who we are and what we do.
I think more than anything, he provides the company with some commercial balance. So, in partnership with Ian Pike, our Chief Scientific Officer, I really feel that for the first time, we can be both scientifically and commercially credible, we can present a compelling business case, if you like.
Q5: How do you view the rest of the year for Proteome Sciences?
A5: It’s really all about growing our service business, our service-based revenues, it’s as simple as that. The focus is on customer engagement in Europe and the US, obviously, but we’re not going to ignore other parts of the world where the opportunity is big. We need to do some other things as well, we need to complete our compliance accreditation, we need to work on our TMT reagent strategy with Thermo Scientific, we have to continue to contain cost but our focus is very clear and I think we’re actually quite well placed now to peruse our business strategy more aggressively.
So, we’ve come out of a solid first half, historically the business is stronger in the second half and I expect it to be the same in 2017. We are, I think now, convinced that our long-term commitment to proteomics combined with a renewed focus on the speed cost and quality of our service delivery will enable us to remain competitive in what we know to be an increasingly dynamic market.
