Diaceutics PLC's (LON:DXRX) ticker symbol tells you all you need to know about the business.
DX is the industry abbreviation for testing and RX the shorthand for treatment and bringing the two together is what Diaceutics is about.
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Diaceutics tests patients for precision medicines (or therapies), a class of drug tailored to individual patient groups dependent on molecular or genetic factors of the individual.
The need for testing reflects the fact while some drugs can have significant positive clinical results in some patients, for others, it might not work or be dangerous.
Identifying individual biomakers or biological indicators is therefore critical in the precise diagnosis of a patient's disease and treatment.
'Those drugs only work in certain patient types and you find those patients through genetic testing.'
Oncology/cancer testing is a core market alongside multiple sclerosis and rheumatoid arthritis.
To build a dataset, Diaceutics acquires data directly from the front line of patient testing in laboratories and layers insurance and claims data on top.
No one dataset ever gives all the answers, it adds, and it is this layering that gives the key information for a drug developer.
Deep data lake
Diaceutics has over 51mln patients in its US database and results from over 53mln testing events outside the US, which makes for a ‘deep data lake’.
Data protection rules are strict in both the US and Europe, but the pharma industry itself has a zero tolerance for mistakes in data handling and Diaceutics is keenly aware of its need for security.
Formed in 2005
The company has been around since 2005 but March’s AIM listing marked a step-up in ambition and scale.
A placing ahead of the listing raised £17mln in new money, cash that has been earmarked for more data in other diseases and in different parts of the world.
Diaceutics will put in infrastructure on the ground for a push into Asia and Latin America.
A new software platform, Nexus, that does everything quicker and more efficiently is also under development.
50% sales growth
Sales growth has been 40-50% a year over the past five years and the company hopes that the investments made with the placing money will continue that trend.
Revenues last year (2018) jumped to £10.4mln from £7.4mln, with profits rising 82% on an underlying basis to £1.9mln.
The business has been profitable from the first day it was established.
Global ambition
Diaceutics’ ambition is to be the global market leader in patient test data for precision drugs, a market it sees growing rapidly.
Today, precision medicine is all focused on the drug, but the amount of value in improving patient testing is at least the equivalent to the introduction of a new drug, it says.
That is a revolutionary thought in an industry where everyone talks about $1bn -$2bn value of a new drug, says Peter Keeling, chief executive, but he wants to highlight the value ‘in the first half of the equation’.
That will mean showing just how much money can be released to the healthcare system or pharma or clinical value added just by fixing the testing ecosystem.
Pharma clients are really good at launching the drugs but are more at sea about how they manage the testing ecosystem underneath, he adds.
If Diaceutics can achieve its goals, the rewards will be substantial.
Big pharma spending
Big Pharma currently spend around US$1bn annually testing patients, but Diaceutics believes this total will at least double to over the next 4- 5 years.
That makes a big target and with the funds from the placing, which was around three times oversubscribed, Diaceutics has the firepower to scale up to meet this demand.
At 99p, up 30% on the day, the company is valued at £69mln.