Proteome Sciences shares rocket after strong third quarter

Proteome Sciences announced on Thursday that its services platform had continued to strengthen through the third quarter, during which a record number of 43 quotes for new business were issued.

The AIM-traded firm said for the year-to-date, 116 customer proposals had been prepared, compared with 56 in the whole of 2018, and while not all of those would necessarily generate purchase orders, the current conversion rate of 40% was described as “comparable” with industry standards.

Customer interest in the services platform had “never been greater”, the board said, with purchase orders with a value of more than £1m been secured so far in the second half for delivery over the coming 12 months.

Proteome said those should drive full-year service revenues “significantly ahead” of 2018, and provide a strong start to 2020.

The board said the previously-communicated appointment of a dedicated European sales manager in August was a “direct response” to the growing market opportunity in the region, and should also inspire confidence in further revenue growth.

For the longer term, Proteome said customer requests involving clinical trial samples were also becoming more prevalent.

It said that for example, a ‘TMTcalibrator’ study was recently completed for Cognition Therapeutics (CogRx), analysing cerebrospinal fluid (CSF) phosphoproteomics from a phase 1b/2a trial of the experimental Alzheimer's disease drug, ‘Elayta’.

The results supported improved synaptic health in Elayta-treated individuals with a reduction in the phosphorylation levels at a majority of the 36 sites analysed on tau protein.

CogRx included that data in recent presentations at the 20th Alzheimer's Drug Development Foundation International Conference and the Society for Neuroscience Annual Meeting, and extended the relationship by contracting Proteome to perform TMTcalibrator analyses of CSF and plasma samples from their ongoing phase 2 study of Elayta, with the first results expected early in 2020.

Additionally, the firm said it was “confident” that its unique approach could “easily be applied” to phosphoproteomic studies in other diseases and clinical trial settings.

‘TMT’ revenues were continuing to grow, with the official launch of ‘TMTpro’ at the Human Proteome Organisation (HUPO) in Adelaide during September said to have been well received, reportedly generating further demand for those reagents and expanding the current market.

Ordering for TMT in the third quarter was in line with expectations, and the fourth quarter has started strongly, with Proteome saying re-stocking would take place in 2020.

Cost control remained important, the board added, with spending said to be within budget.

Cash reserves were “comparable” to those reported with the interim results, and the company anticipated a reduced operating loss compared with 2018, as it continued to invest in its services platform.

On the macroeconomic front, Proteome said uncertainty resulting from the continuing Brexit debate had not helped the trading environment and as a result, it had been working to mitigate the potential consequences of a no-deal exit from the European Union.

The board noted the importance of its “significant” laboratory capabilities in Frankfurt, as well as the strength of its customer base in the United States, given prevailing exchange rates.

Finally, Proteome announced that Dr Jeremy Haigh would be stepping down from the board and his position as chief executive officer on 31 December.

A search for his successor was set to begin “immediately”, with Dr Ian Pike assuming the role of CEO in an interim capacity from 1 January 2020, in addition to his current responsibilities as chief scientific officer.

“Jeremy was brought in at a critical time for Proteome Sciences and has been instrumental in restructuring the company, reducing expenditure and pursuing a clear commercial strategy,” said chairman Christopher Pearce.

“With the transition to a proteomic services business now completed, the board has agreed with Jeremy that after more than three years as our CEO it is time for a new leader to take the company through its next phase of development.

“The board is highly appreciative of the key role that Jeremy has played in this evolution and would like to pass on its sincere thanks on behalf of shareholders.”

Pearce said the company would continue to focus on building its services platform and developing new partnerships and collaborations, through which the value of proteomics in drug discovery and development could be realised.

“We look forward, in due course, to announcing the appointment of a new CEO.”

As at 1357 GMT, shares in Proteome Sciences were up 16.86% at 2.98p.