“We have found our first year of listing challenging,” he says candidly, but is confident the antibody specialist is robust enough to bounce back.
“We have great underlying skills and great technologies,” he says.
“Now we have to get that message out there.”
In its defence, Fusion is not the first company to take its eye off the ball while preparing for a float and it won’t be the last.
Kerr says the AIM listing in December a year ago was a huge distraction.
Instead of doing six pharma conferences in 2017/18, for example, Kerr did one.
The £5.5mln of funds raised through the IPO also sparked a heavy investment programme.
That saw an significant upgrade of the group’s premises while staff numbers increased to 40 from 14.
Many of these were senior scientists, while a new business development team was also established.
Absorbing those additional people took a lot of effort and caused a massive hangover from the IPO, he says.
The result was a warning over sales just four months after it floated.
In the six months to September, revenues more than halved to £658,000, while losses rose to £887,000 from £150,000.
Strong start to second half
Even so, Kerr believes that over the full year the company will still be able to grow sales, especially as the second half started strongly with good growth in October and November.
Fusion’s core business is to take antibodies being used for research and make them into drug candidates or therapies.
It is a process known as humanisation.
Once ‘humanised’, the antibodies can then be used for pre-clinical tests in many indications, such as cancer for example.
Fusion’s IP ranges from early stage identification of antibodies for a theoretical therapy through to designing them to improve their ability to bind (affinity).
“Drugs companies make the antibodies elsewhere and patent them, but they want us to humanise them and make them ready to go into people.
“We have probably humanised more rabbit antibodies than anyone else in the world. We are absolute experts in that.”
Some of the drugs it has worked on are going through phase I and II human trials, while another that Fusion contributed to has been patented by Swiss giant Roche.
The reason for the IPO was to provide funds to expand and Fusion has kept to its plans.
A new affinity maturation service is on schedule to launch at the end of the year.
This is not just about taking an antibody and preparing it for the clinic, but improving it in ways like greater binding strength and making it simpler to manufacture.
Fusion will showcase the new service at this year’s Antibody Engineering Forum in San Diego.
Further out, a new antibody discovery library is on track to launch in 2020.
This will open more opportunities to partner with large pharma group rather than just work on a contract basis, Kerr says.
More hires are also planned including a commercial director.
Fusion has some large rivals on AIM. Abcam for example has a catalogue of 120,000 antibodies and market value of £2.35bn.
Abcam has been a customer in the past says Kerr, though it is focused on research sales whereas Fusion guarantees to get a treatment to the clinical phase.
Abzena, recently acquired by private equity giant WCAS for £34mln, is a better comparison, he adds.
A number of the compounds it helped developed made it through to clinical trials.
Abzena also took a stake in the drugs it helped produced and this is something Fusion has started to do with ‘risk-share’ interests in a dozen targets.
In September, there was cash of £2.8mln on the balance sheet, a sum Kerr sees as being sufficient to take it through to the launch of the antibody library in 2020.
At 52.50p, Fusion is valued at £11.6mln compared to a market cap when it listed of £18.1mln but Kerr is optimistic the ground can be recovered.
“We were a profitable business,” he says and “The future is still bright.
“The IPO caused a huge bump but the technology is there.”