TIDMPRM
RNS Number : 7321G
Proteome Sciences PLC
31 March 2022
31 March 2022
Proteome Sciences plc
("Proteome Sciences" or the "Company")
Final results for the year ended 31 December 2021
The Company is pleased to announce its audited results for the
year ended 31 December 2021.
Highlights:
-- Total revenues of GBP5.13m (2020: GBP4.75m)
-- Proteomic (biomarker) services revenues of GBP1.90m (2020: GBP1.44m)
-- TMT(R) sales and royalties of GBP3.23m (2020: GBP3.27m)
-- Total costs of GBP4.72m (2020: GBP4.20m)
-- Adjusted EBITDA* of GBP1.35m (2020: GBP0.72m)
-- Profit after tax of GBP0.07m (2020: GBP0.29m)
-- Cash reserves at 31 December 2020 of GBP2.39m (2020: GBP2.21m)
Post year-end:
Dr. Mariola Soehngen, Chief Executive Officer of Proteome
Sciences plc, commented:
We are pleased to report that our business continued to grow
despite another year under Covid-19 pandemic conditions. In
particular our service business performed well again and we
recorded a small profit and an adjusted EBITDA* of GBP1.36m (2020:
GBP0.73m). We were able to gain a record number of contracts
including a substantial order in excess of GBP1M, which gives us
confidence that our performance and the quality of our proteomics
services is being recognized in the market. Also our TMT revenues
remained strong underlining the USP we have in the proteomics field
with these reagents.
2021 was also used to evaluate our strategic options and which
has led us to focus in the short term on growing our business
further by adding high profile, high value services like Single
Cell Proteomics (SCP) to provide the basis for further
internationalization of the business in the medium term. We are
advanced in setting up SCP which meets a high need in the market
especially in oncology but also other disease areas like central
nervous disorders.
Furthermore, we have made strategic investments in new equipment
and additional staff that have increased our capacity and revenue
generating potential. Based on these investments and with the
strategic approach we have a solid basis for the current and future
years to grow the company.
* - Adjusted EBITDA is a non-GAAP company specific measure which
is considered to be a key performance indicator of the Group's
financial performance. Adjusted EBITDA is calculated as operating
profit before depreciation (including right-to-use assets
amortisation), amortisation, non-recurring costs, and employee
share-based payment.
Report and Accounts and Notice of Annual General Meeting:
Copies of the Annual Report and Accounts together with notice of
the Annual General Meeting ("AGM") will be posted to shareholders
in early April and made available on the Company's website by then
( www.proteomics.com ).
The Annual General Meeting (AGM) of the Company will take place
at 12 noon on Monday 16 May 2021 at Allenby Capital, 5 St Helen's
Place, London, EC3A 6AB . Formal notice of the AGM will be sent to
shareholders which will contain further information and the
resolutions which will be proposed at this meeting.
For further information please contact:
Proteome Sciences plc
Dr Mariola Soehngen, Chief Executive Tel: +44 (0)20 7043 2116
Officer
Dr Ian Pike, Chief Scientific Officer
Richard Dennis, Chief Commercial Officer
Allenby Capital Limited (Nominated Adviser & Broker)
John Depasquale / Jeremy Porter Tel: +44 (0) 20 3328 5656
About Proteome Sciences plc. ( www.proteomics.com )
Proteome Sciences plc is a specialist provider of contract
proteomics services to enable drug discovery, development and
biomarker identification, and employs proprietary workflows for the
optimum analysis of tissues, cells and body fluids. SysQuant(R) and
TMT(R)MS2 are unbiased methods for identifying and contextualising
new targets and defining mechanisms of biological activity, while
analysis using Super-Depletion and TMTcalibrator(TM) provides
access to over 8,500 circulating plasma proteins for the discovery
of disease-related biomarkers. Targeted assay development using
mass spectrometry delivers high sensitivity, interference-free
biomarker analyses in situations where standard ELISA assays are
not available.
The Company has its headquarters in London, UK, with laboratory
facilities in Frankfurt, Germany.
Chief Executive Officer's Statement
Despite a generally improving situation for most of the year,
the COVID-19 pandemic continued to impact international business
including ours. Participation in conferences, visiting clients and
interacting within our organisation remained largely virtual with
some face-to-face conferences possible in the second part of the
year. Whilst recent events in Ukraine are of great concern, they do
not currently affect our business and we do not expect any impact
to our customers' ability to provide samples for analysis. Supply
chain problems however cannot be ruled out (consumables and
instruments). Against these difficulties we have been able to
continue to gain further strong growth in our services business and
TMT(R) revenues remained solid. A record number of contracts were
closed during 2021 including a substantial contract with a major
pharmaceutical company with a value in excess of GBP1m, with the
majority of this revenue expected to be generated in 2022. Group
revenues for the full year increased by 8% to GBP5.13m (2020:
GBP4.75m). Services increased 32% to GBP1.90m (2020: GBP1.44m).
Sales and royalties attributable to TMT(R) and TMTpro(TM) reagents
were GBP3.23m (2020: GBP3.27m).
Having made good progress and turning profitable last year, we
embarked on a wider strategic analysis, invested in new staff, and
instruments to add capacity to our key workflows and awarded
options which resulted in a share based payment charge of GBP0.57m
(2020: Nil). Consequently, total costs rose to GBP4.72m (2020:
GBP4.20m) and this has resulted in an operating profit of GBP0.41m
(2020: GBP0.55m) and a profit after tax of GBP0.07m (2020:
GBP0.29m). Cash reserves at the year-end increased to GBP2.39m
(2020: GBP2.21m). In addition, Adjusted EBITDA (a non-GAAP company
specific measure which is considered to be a key performance
indicator of the Group's financial performance) increased as set
out below:
2021 2020
GBP'000 GBP'000
------------------- ---------------------
Revenue 5,124 4,712
------------------- ---------------------
Gross profit 2,960 2,584
------------------- ---------------------
Administrative expenses (2,334) (1,868)
------------------- ---------------------
EBITDA 626 716
------------------- ---------------------
Other non-cash items and non-recurring costs 729 8
------------------- ---------------------
Adjusted EBITDA 1,355 725
------------------- ---------------------
Adjusted EBITDA increased 87% on prior year due to increased
sales and tight operational cost control.
Services
Our services business continued to show strong performance over
the year. The COVID-19 pandemic continued to impact on face-to-face
client meetings even though the majority of our clients were back
to full time working in their facilities. We also experienced some
delays in the availability of samples for analysis primarily due to
the pandemic affecting the conduct of on-going clinical trials.
Cold chain shipping availability was also a source of some sample
delay as capacity was prioritised for COVID related samples and
vaccines. Direct marketing in respect to scientific and trade
conferences and exhibitions that we use to promote our services to
new accounts continued to be in virtual format but nevertheless, we
succeeded to develop both new accounts and to win repeat business
from our current and new customers. The strength of our H1
performance continued during the second half of the year, with
record sales invoiced and orders received. In total, we took orders
worth GBP3.75m a 139% increase over the previous year (2020:
GBP1.57m). A particular highlight was the in excess of GBP1m order
received from a major pharmaceutical partner for the analysis of
samples from their pending phase 3 clinical trial.
Our results underline the increasing use of outsourced
proteomics in pharmaceutical and biotechnology research, and we
expect this to continue well into 2022 as companies look to add
more functional value to their genomic data and the general
awareness that the proteome is the more important factor to
consider in drug development. Last year we expanded our activities
in the analysis of clinical research samples to discover new
pharmacodynamic biomarkers, signing up new clients and applying our
TMTcalibrator(TM) combined with abundant protein depletion to
address novel therapeutic areas. We also performed several targeted
assay development programs across a range of matrices. These should
lead to the analysis of larger volume clinical trial samples in the
future and we expect further larger scale clinical trial related
orders to be placed.
Our sales in Europe have continued to grow and order values are
now on a par with what we receive from North America. We were
particularly encouraged to receive multiple repeat orders from
several clients as we establish ourselves as the preferred partner
for mass spectrometry-based proteomic services.
Licences
Revenues from sales of TMT(R) and TMTpro(TM) reagents were our
source of licensing income in 2021 as no further payments relating
to biomarker licenses were received.
Tandem Mass Tags(R)
The overall sales pattern for TMT(R) reagents remained steady
with similar revenue of GBP3.23m compared to 2020 (2020: GBP3.27m)
in spite of the ongoing challenges associated with COVID. On a
constant currency basis this represents growth of 4.2%. Sales of
the 11plex TMT(R) reagents continued to be robust and still account
for around 50% of total value, down from 57% in 2020 as the demand
for the newer generation TMTpro(TM) tags with higher plexing rates
overtook sales of 11plex TMT(R) reagents. In the second half of
this year we saw TMTpro(TM) 18plex tags overtaking standard TMT(R)
accounting for 59% of all sales and we have adapted our
manufacturing and stock levels accordingly. In March this year the
first TMT(R) patent expired in all territories except the USA where
it remains in force until late 2022. We have seen no evidence of
commercial development of competing tags because the cost and lead
time of manufacturing and distribution of complex reagents remain a
significant barrier to entry. We have a total of 8 other TMT(R)
-related patent families stretching out to the mid-2030s which
prevent the manufacture of generic TMT(R) and TMTpro(TM) reagents
by third parties. We expect sales of all TMT(R) products to show
good growth in 2022 and we continue to work closely with our
licensee Thermo Scientific to further develop and expand the market
for TMT(R) products.
Stroke Biomarkers
Inevitably the ongoing COVID-19 pandemic is affecting the
ability of our licensees Randox Laboratories (UK) and Galaxy CCRO
(USA) to further the development and clinical testing of their
stroke diagnostic tests. Randox remain fully committed to
completing their first clinical trial to support Conformité
Européene (CE) marking and this remains open to new patients, but a
firm completion date is not yet available. Galaxy have made good
progress in developing new anti- Glutathione-s-Transferase Pi
(GSTP) antibodies and this has greatly improved performance of the
lateral flow test. In parallel, they have commissioned Proteome
Sciences to develop a 'gold standard' mass spectrometry assay to
quantify GSTP in clinical samples and this work is nearing
completion.
Research
The continued strong growth in biomarker services has restricted
the time available to perform basic research and development
activities though we have retained active links with several
academic groups following completion of the BioCapture and PROMETOV
grants this year. We have also not yet completed an assessment of a
claim under the UK R&D Tax Credit scheme as we clarify the
impact of group profitability on eligibility for the small- and
large-entity components of such a claim. Nevertheless, we are
focusing development into new higher value workflow services that
provide excellent opportunities for future growth.
Single Cell Proteomic Analyses
We have performed an initial assessment of the ability to
deliver single cell proteomics analysis at commercial scale and are
encouraged by the early results. We will be actively pushing this
forward in the first half of 2022 and hope to be able to launch a
new workflow in H2 2022. As the process of single cell preparation
becomes standardised on automated platforms, the potential to
analyse several hundred cells per week is becoming practical and is
of great interest to the pharmaceutical industry as they look to
better understand heterogeneity of disease process and response to
treatment. This is mostly happening in the area of cancer drug
development, but we have also received interest from groups in
other therapeutic areas.
SysQuant analysis of ubiquitin modified proteins
We have also successfully introduced a second SysQuant(R)
workflow for analysis of proteins modified with ubiquitin which
signals them for degradation. Recently, many pharmaceutical
companies have developed methods to selectively target proteins by
recruiting this ubiquitination machinery, and monitoring effects
through mass spectrometry is a significant new market for us. We
have already delivered several projects in this area following our
initial development activities and see this as a major growth
opportunity.
Fluid biomarker Discovery
Our expertise in fluid biomarker discovery using
TMTcalibrator(TM) has been recognised by many of our clients who
are using this to support their drug development programs in
pre-clinical research and clinical trials, particularly in the
neurology field and we are actively pursuing new grant-funded
research with academic partners. We were also able to present the
results of a TMTcalibrator(TM) project performed for INmuneBIO to
identify response biomarkers in a Phase 1 trial of XPro1595, a
novel sTNF agonist. Our CSO Dr. Ian Pike presented the results at
the recent Clinical Trials on Alzheimer's Disease (CTAD) meeting
held virtually in November 2021. The proteomics data generated,
allowed a number of protein and phospho-peptide biomarkers to be
identified that supported the proposed therapeutic effect of
XPro1595, including re-activation of myelination, regulation of
neuroinflammation and reduction of tau phosphorylation. Further
aspects of the research were presented at the AD/PD congress being
held in Barcelona in March 2022.
Operating Environment
The COVID-19 vaccination programs have led to very different
vaccination levels internationally. Even in our main markets (US,
EU, UK) this did not lead to an alleviation of various restrictions
in travel, customer contacts, home working regulations etc. We were
also strongly affected by the delayed arrival of samples from our
clients whether directly pandemic related or not. We started the
year with a strong order book which partly helped to compensate for
such delays.
We continued to perform the majority of our sales and marketing
activities in a virtual manner as the normal mix of on-site
meetings and trade shows was severely affected. Based on our
experience during the year, we have identified several trade shows
and conferences where the virtual format is effective and virtual
booths led to strong customer interest. In addition, we have
developed an effective virtual marketing activity through directed
e-marketing and we expect this to remain part of the mix of
activities for at least the first half of 2022.
Overall, the strong level of interest in our services and number
of project proposals written reflects the continued high demand for
outsourced proteomics services as shown in the further growth of
revenues achieved in 2021. We performed a very thorough review of
strategic options accessible to us based on the analysis of growth
areas where the company has deep expertise already or where such
areas are a logical expansion of our current business. We have
reached out to the international markets (primarily the USA) to
evaluate our options. Based on the outcome of this review we have
devised a plan to, in the short term, develop Proteome Sciences
organically by adding the high need, high value services that we
identified (like single cell proteomics see Research Section above)
to our portfolio and expanding our capacity to meet the continued
growth in demand for high level proteomics services. Building from
this new base the company will be in a stronger position in the
medium term to establish further internationalisation of the
business.
Volatility in foreign exchanges during the year affected
non-sterling denominated revenues as well as costs associated with
the Frankfurt laboratory, the overall effect on operating profit
was slightly negative.
In this again most challenging year, we are extremely grateful
to the dedication and hard work of all staff who have remained
focused on delivering the highest volume and value of customer
projects in our history. We have managed to sustain the positive
progress of 2020 with good growth in our service revenue. Bolstered
by the continued growth of revenues from TMT(R) /TMTpro(TM) the
business is well set for further growth.
Outlook
As we start the transition towards a sustained relaxation of
COVID-related restrictions, we expect the pace of business to
accelerate throughout 2022. We successfully managed ongoing
relationships in 2021 and also attracted a solid group of new
customers undertaking pilot studies with good potential for
expansion in the coming year. The high demand for services in the
fourth quarter, combined with the record value of orders carried
into 2022 required us to make strategic investments in new
equipment and additional staff that have increased our capacity and
revenue generating potential.
We have also seen the value of repeat projects increasing, and
we received a significant order worth over GBP1m for analysis of
clinical trials samples that will be performed over the coming 12
months. We are also working on a substantial commercial opportunity
from single cell proteomics where automated sample preparation
combined with TMTpro(TM) can deliver high throughput analysis. We
are also seeing that the return to on-site working in academia and
the pharmaceutical industry is driving sales of TMTpro(TM) reagents
and we have ensured we have sufficient stocks on hand to meet this
growing demand.
The Board is confident that the progress over the last three
years has created an excellent platform for the further development
of the company. The strong order book and cash position in early
2022 provide a strong starting point. Proteome Sciences is well set
following the strategic investments we are and have been making to
achieve a step-change in growth and revenue and gives the Board
increased confidence that the business can grow the profit in
2022.
We would like to thank our shareholders and employees for their
continuing support and we look forward to communicating further
progress during 2022.
Dr. Mariola Söhngen
Chief Executive Officer
31 March 2022
Strategic Report
Review of the Business
The principal activities of the Group involve protein biomarker
research and development. As a leader in applied proteomics, we use
high sensitivity proprietary techniques to detect and characterise
differentially expressed proteins in biological samples for
diagnostic, prognostic and therapeutic applications. In addition,
we invented and developed the technology for TMT(R) and TMTpro(TM),
and manufacture these small, protein-reactive chemical reagents
which are sold for multiplex quantitative proteomics under
exclusive license by Thermo Scientific.
Proteome Sciences is a major provider of contract research
services for the identification, validation and application of
protein biomarkers. Our clients are predominantly pharmaceutical
and biotechnology companies, but we also perform services for other
sectors including academic research. While we have several
well-established workflows that meet the needs of many customers,
we retain our science-led business focus wherever possible,
developing new analytical methods and data analysis tools to
provide greater flexibility in the types of studies we can deliver.
Our contract service offering remains centred on mass
spectrometry-based proteomics, and this is becoming more widely
implemented in drug development projects as the pharmaceutical
industry seeks to expand biological knowledge beyond genomics.
These services are fully aligned with the drug development process,
can be used in support of clinical trials and in vitro diagnostics,
and include proprietary bioinformatics capabilities.
Progress during 2021
Growing Our Services Business
The use of outsourcing to specialist service laboratories within
the biopharmaceutical sector continues to grow in value,
particularly in the area of proteomics. To ensure we can offer our
clients the best service, we continue to invest significantly in
direct sales activities with intensive virtual meetings
e-marketing, participation in virtual conferences and trade shows
to attract clients to our offerings.
The competitive landscape for proteomics services has grown
considerably through this year, and there has been significant
funding invested in companies providing new products for proteomic
analysis. Initial public offerings have triggered interest in
financial markets. This reflects the growing recognition of the
importance of protein biomarkers in precision healthcare. Our
services are well positioned in the proteomics spectrum and we are
exploring ways to leverage our experience and reputation in the
service sector to build synergies with emerging technologies and
maximising value for existing shareholders.
Despite the significant restrictions on travel throughout the
year, we have further improved our methods of virtual engagement
and secured the highest level of orders with a record GBP2.5m of
value carried over into 2022.
Proteomics is becoming the defining technology for enabling drug
development
In 2020 we saw a sizeable shift of focus from genomics towards
proteomics in the activities of pharmaceutical research and
development groups. In part this reflects the mature nature of
genomics research and the dawning realization that the lack of
predictability from gene sequencing studies requires a more
granular approach. In accordance with this realization, the demand
for both total protein expression and more importantly for deep
quantification of specific post-translational modifications has
grown substantially through the last year.
Virtually all processes within cells that keep us healthy, and
which are disrupted in disease are the result of a complex set of
protein functions and interactions. Proteins provide the scaffold
to allow cells to form specific shapes, and to change their
morphology when needed, e.g., extended neurons, or for immune cells
to squeeze between tissue layers to get to the site of disease.
Other proteins convert sugar and other nutrients to provide energy,
whilst others regulate how fast or slow processes run and guide the
maintenance and replication of DNA to ensure accurate copies of
cells are formed on division. How these proteins interact is
affected by the addition and removal of modifying chemicals such as
phosphates, nitrates, small organic groups and occasionally other
proteins. Drug developers now realize that understanding each
target in this context of complex post-translational modifications
(PTMs) is essential to improve productivity and maximal responses
to treatment.
Fluid biomarker discovery
We were already well established in the deep profiling of
changes in protein phosphorylation in cells and tissues and have
previously extended this to analysis of cerebrospinal fluid in
neurodegenerative disease. This year, we have demonstrated the
utility of TMTcalibrator(TM) phosphoproteomic analysis in blood
plasma and serum, making this a key technology for the discovery of
biomarkers in other diseases including cancer, inflammatory and
metabolic disorders. We have also expanded our capability to
monitor other PTMs relevant to fibrotic disorders and have
delivered several biomarker studies in this emerging therapeutic
area.
SysQuant for the detection of ubiquitylated proteins
This year we launched new services for analysis of
ubiquitylation, a PTM that signals proteins for degradation. This
is particularly useful for assessing the performance of a new class
of drugs called proteolysis-targeting chimera (PROTAC, or molecular
glues) that enhance ubiquitylation of specific target proteins that
are causing disease. Once ubiquitylated, these proteins are
destroyed and their disease-causing activity is reduced and in some
cases fully removed.
Whilst there are other options for monitoring PTMs than our mass
spectrometry methods, most suffer from a lack of specificity and/or
sensitivity. Only mass spectrometry is able to perform a
proteome-wide assessment of these complex protein modifiers at a
scale and specificity required for drug development applications
and we will continue to invest in adding additional capacity and
workflows to our service business to meet this growing demand.
Single Cell Proteomics
As with last year, we have prioritized commercial project
delivery and the level of internal research has been relatively
low. Nevertheless, we have initiated a project to evaluate the
current feasibility of performing single cell proteomics at scale.
This has the potential to deliver strong revenues and is an area of
intense interest to both academic and commercial scientists with
significant barriers to entry. Critical to the success of
quantitative single cell proteomics is the use of TMTpro(TM)
reagents as the benefits of mixing tiny amounts of protein from 16
individual cells allows greater sensitivity and more protein
identifications. We have performed preliminary analysis of the
technology for single cell preparation and obtained promising
results with quantification of approximately 750 to 1,000 proteins.
We have now installed a new mass spectrometer (Thermo Exploris 480)
which we expect to improve performance, as well as increasing
throughput and overall capacity.
Status of the Tandem Mass Tag(R) Product Portfolio
Sales of TMT(R) and TMTpro(TM) reagents stood up well to the
ongoing challenges for researchers operating under COVID
restrictions during the year. Total revenues were GBP3.23m (2020
GBP3.27m) (4.2% increase on constant currency basis). It has also
to be taken into account that some 2021 TMT(R) and TMTpro(TM)
orders were placed in late 2020 which artificially reduces the
revenues in 2021. Whilst there was a continued market demand for
increased plexing rates enabling higher-throughput experiments and
more reproducible data, sales of the 11plex TMT(R) reagents
remained strong in the first half of the year before dropping in
the second period that reflected the launch of the final pair of
TMTpro(TM) tags (completing the 18plex set), and we expect to see a
continued upward shift in use of the higher plexing tags now
available.
In March 2022 we saw the first of the TMT(R) patent families
expiring in all territories except the United States, where it
remains in force until the second half of 2022. We are not aware of
any competing products having been launched in the last 9 months
and will retain a watching brief with our licensee Thermo
Scientific. Other patents in the TMT(R) portfolio that cover
several alternate tag designs as well as our TMT(R) and TMTpro(TM)
products remain in full effect with the TMTpro(TM) patents
extending out to the mid-2030s.
We continue to monitor the commercial use of TMT(R) and
TMTpro(TM) by third-party Contract Research Organisations and work
closely with our colleagues at Thermo Scientific to maximise the
licensing of these entities, which brings us additional revenues
through their activities.
Stroke biomarkers
Unfortunately, the rate of patient recruitment in the clinical
trial of Randox's stroke diagnostic test continues to be extremely
affected by COVID. Randox is also deeply involved in COVID test
manufacture and provision of testing services and this will
inevitably be impacting on resources available for stroke test
development. However, they remain committed to concluding the trial
and we expect more news in the first half of 2022. Similarly,
Galaxy CCRO (USA) has experienced delays in initiating a trial of
its GSTP Lateral Flow Device. They are working with their first
trial site to resolve these issues and in the meantime have been
able to improve the sensitivity and linearity of the test having
developed new proprietary antibodies which will be used in all new
product development. In addition to this activity, Galaxy has
contracted Proteome Sciences to develop a target mass spectrometry
assay for GSTP to serve as a gold-standard method for accurate
quantification of trial samples, an important benchmark for
clinical trial interpretation. This work is proceeding well and a
final test format is expected to be available in H1 2022.
Patent Applications and Proprietary Rights
Patents and intellectual property rights underpin several key
aspects of our business and we received allowance of 10 patents
during the year, including cases covering several biomarker panels
relating to Alzheimer's disease, the tryptophan
metabolite assay and our TMTcalibrator(TM) workflow. The costs
of prosecution and maintenance of our portfolio remains closely
controlled and was in line with expectations.
Strategic evaluation
We performed a very thorough review of strategic options
accessible to us based on the analysis of growth areas where the
company has deep expertise already or where such areas are a
logical expansion of our current business. We have reached out to
the international markets to evaluate our options. Based on the
outcome of the review, we have concluded that initially the best
way to develop Proteome Sciences is to build organically by adding
high need services (like single cell proteomics) to our portfolio
and expanding capacity to meet the continued growth in demand and
this process has already begun. In the mid-term we plan to evaluate
further options to internationalise our business.
Financial Review
Results and Dividends
Key Performance Indicators (KPI's)
-- The directors consider that revenue, Adjusted EBITDA, and
profit before/after tax are important in measuring Group
performance. The performance of the Group is set out in the Chief
Executive Officer's Statement.
-- The directors believe that the Group's rate of cash
expenditure and its effect on Group cash resources are important.
Net cash inflows from operating activities for 2021 were GBP0.79m
(2020: GBP1.59m). The costs in 2021 were higher when compared to
2020 due to the investment in our strategic process, building
internal capacity, investment in new instrumentation and share
option awards resulting in a share based payment charge. We
achieved strong growth in biomarker services revenues with TMT(R)
revenues remaining broadly in line with 2020. We did not require
draw down from the arranged loan from Vulpes. Cash at 31 December
is GBP2.39m (2020: GBP2.21m).
-- Contract revenues from our proteomics (biomarker) services
should increase both in absolute terms and as a proportion of total
Group revenues; in 2021 we increased service income by 32% to
GBP1.90m (2020: GBP1.44m). As a proportion of total group revenue
service income in 2021 was 37% compared to 30% in 2020.
Financial Performance
For the twelve-month period ended 31 December 2021 revenue
increased 8% to GBP5.13m (2020: GBP4.75m).
-- Licences, sales and services revenue increased 9% to GBP5.12m
(2020: GBP4.71m). This is comprised of two revenue streams: TMT(R)
-related revenue and Proteomic (Biomarker) Services. Sterling
values of our sales and royalties received for TMT(R) tags
decreased by 1% to GBP3.23m (2020 GBP3.27m)
-- Grant income was GBP0.01m (2020: GBP0.04m).
-- Adjusted EBITDA increased to GBP1.35m (2020: GBP0.72m)
-- The profit after tax was GBP0.07m (2020: GBP0.29m).
Taxation
Owing to the changing nature of our services business, with a
stronger focus on commercial activities, we have not fully assessed
our available R&D tax credit for 2021, and such amounts are
only recognised when reasonably assured.
Costs and Available Cash
-- The Group maintained a positive cash balance in 2021 and
continues to seek improved cash flows from commercial income
streams. Our operating costs have remained stable which enabled
positive cash flows throughout the year. Administrative expenses in
2021 were GBP 2.55m (2020: GBP2.04m).
-- Staff costs for the year were GBP2.99m (2020: GBP2.15m) of
which GBP0.57m was a share based payment charge (2020:
GBP0.01m)
-- Property costs without charges on rent of GBP 0.17m were slightly below previous years
-- Other administrative costs remained stable at GBP0.14m (2020:
GBP0.14m) mainly due to lower travel expenses due to COVID-19
restrictions.
-- Finance costs relate to interest due on loans from two major
investors in the Company and lease interest. Costs of GBP0.29m were
lower than the prior year (2020: GBP0.30m).
-- Loans from related parties were GBP10.83m (2020: GBP10.55m)
which includes interest
-- Trade and other payables were GBP0.60m (2020: GBP0.77m)
-- Trade and other receivables were GBP0.60m (2020:
GBP0.79m)
-- Profit after tax for 2021 was GBP0 .07m (2020: GBP0.29m).
Adjusted EBITDA for the year was GBP1.35m (2020: GBP0.72m).
-- Adjusted EBITDA conversion to operating cash inflows before
working capital movements was 86% (2020: 100%)
-- The net cash inflow from operating activities was GBP0.79m (2020: GBP1.59m).
-- Cash at the year-end was GBP2.39m (2020: GBP2.21m).
Principal Risks and Uncertainties
Commercialisation Activities
It is uncertain whether our range of contract proteomic services
will generate sufficient revenues for the Group ultimately to be
successful in an increasingly competitive commercial market which
generally favours companies with a broader technology platform than
our own. Progress in 2021 was encouraging as both interest and
orders increased substantially when compared to the previous year.
This reflects the growing recognition that proteomics requires a
high level of expertise only generally available in specialised
service providers.
Management of Risk: The Group has sought to manage this risk by
broadening its proteomic services offering by increasing the
coverage of unbiased discovery experiments and broadening
capabilities for analysis of very small samples including single
cells, investing in our own sales by dedicating more staff time to
direct business development activities in our principal commercial
territories and adopting conventional service-based metrics
directed at speed, cost and quality.
Adding new services bears the risk that competitors are already
more advanced and it will be difficult to find and retain new
customers.
Management of risk: We believe the technology we are developing
for single cell proteomics has a high demand in the market and
hence we believe there is sufficient room for many players to
satisfy the demand. Moreover, Proteome Sciences has a USP as we are
the owner of TMT(R) which gives us a number of advantages
(including cost control) vis a vis competitors.
Dependence on Key Personnel
The Group depends on its ability to retain a limited number of
highly qualified scientific, commercial and managerial personnel,
the competition for whom is strong. While the Group has entered
into conventional employment arrangements with key personnel and
staff turnover is low, their retention cannot be guaranteed as
evidenced by 1 resignation during 2021.
Management of Risk: The Group has a policy of organising its
work so that projects are not dependent on any one individual, and
we have strong managerial oversight and support for our
laboratory-based staff. Retention is also sought through annual,
role-based reviews of remuneration packages, performance related
bonus payments, and the opportunity for share option grants.
Investment Limitations
Sales and royalties from TMT(R) have historically been key to
revenue and working capital for the group to invest in the
business. Over the last 3 years the development and compound growth
in proteomics services revenues are starting to generate additional
working capital for further investment through internationalisation
and expansion of the business activities. Despite remaining cash
positive, making a small profit and seeing strong growth in our
proteomics services revenues in 2021 we are still currently reliant
on TMT(R) sales and royalties for the majority of our revenues and
working capital to invest in growing the business remains
limited.
Management of Risk: In addition to previous cost reduction and
ongoing containment measures which have significantly
changed the cost profile of the business over the last three
years, we also actively engage with our major creditors to manage
the Company's debt.
Competition and Technology
The international bioscience sector is subject to rapid and
substantial technological change. There can be no assurance that
developments by others will not render the Group's service
offerings and research activities obsolete or otherwise
uncompetitive. Proteomics remains a growth area where increasing
demand from the pharmaceutical industry remains ahead of the growth
in service provider capacities.
Management of Risk: The Group employs highly experienced
research scientists and senior managerial staff who monitor
developments in technology that might affect the viability of its
service business or research capability. This is achieved through
access to scientific publications, attendance at conferences and
collaboration with other organisations.
Licensing Arrangements
The Group intends to continue sub-licensing new discoveries and
products to third parties, but there can be no assurance that such
licensing arrangements will be successful.
Management of Risk: The Group manages this risk by a thorough
assessment of the scientific and commercial feasibility of proposed
research projects which is conducted by an experienced management
team. Risk has also been reduced by decreasing the overall number
of research projects and re-distributing available resources.
Patent Applications and Proprietary Rights
The Group seeks patent protection for identified protein
biomarkers which may be of diagnostic, prognostic or therapeutic
value, for its chemical mass tags, and for its other proprietary
technologies. The successful commercialisation of such biomarkers,
chemical tags and proteomic workflows is likely to depend on the
establishment of such patent protection. However, there is no
assurance that the Group's pending applications will result in the
grant of patents, that the scope of protection offered by any
patents will be as intended, or whether any such patents will
ultimately be upheld by a court of competent jurisdiction as valid
in the event of a legal challenge. If the Group fails to obtain
patents for its technology and is required to rely on unpatented
proprietary technology, no assurance can be given that the Group
can meaningfully protect its rights. All patents have a limited
period of validity and competing products may be sold by third
parties on expiry in each territory. We have seen expiry of the
first patents covering TMT(R) in most territories in the last year,
although in the US the main patent is valid until mid-September
2022.
Management of Risk: The Group retains limited but experienced
patent capability in house, supplemented by external advice, which
has established controls to avoid the release of patentable
material before it has filed patent applications. Maintenance of
the existing patent portfolio is subject to biannual review
ensuring that its ongoing cost is proportional to its perceived
value. We seek to prolong the value of our proprietary technologies
by patenting improved chemical tags and superior biomarker panels
when we are able to do so, and we monitor the impact of patent
expiry by monitoring of market share of licensed products such as
TMT(R) and TMTpro(TM).
Coronavirus (COVID-19) Pandemic
The world in general is learning to live with COVID and high
vaccination rates and availability of new drugs are dramatically
reducing burdens on healthcare systems allowing society to re-open.
We continue to support staff with the provision of a safe working
environment through the use of safety measures according to
national regulations and control of visitors. Whilst we still have
contingency planning in case of further temporary restrictions, we
are expecting all aspects of our business to continue getting back
to pre-pandemic modalities.
Management of Risk: We have implemented social distancing and
enhanced cleaning measures for our laboratories and implemented
home working for all UK staff and those capable of doing so in
Frankfurt. Site visits were restricted to only essential visitors,
distancing measures were in place and the compulsory wearing of
personal protective equipment.
Section 172 statement
The Board recognises the importance of the Group's wider
stakeholders when performing their duties under Section 172(1) of
the Companies Act and their duties to act in the way they consider,
in good faith, would be most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so
have regard (amongst other matters) to:
(a) the likely consequences of any decision in the long
term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with
suppliers, customers and others,
(d) the impact of the company's operations on the community and
the environment,
(e) the desirability of the company maintaining a reputation for
high standards of business conduct, and
(f) the need to act fairly as between members of the
company.
The Board considers that all their decisions are taken with the
long-term in mind, understanding that these decisions need to
regard the interests of the company's employees, its relationships
with suppliers, customers, the communities and the environment in
which it operates. I t is the view of the Board that these
requirements are addressed in the Corporate Governance Statement,
which can also be found on the company's website www.proteomics.com
.
For the purpose of this statement detailed descriptions of the
decisions taken are limited to those of strategic importance. The
Board believes that three decisions taken during the year fall into
this category and were made with full consideration of both
internal and external stakeholders as follows:
-- Annual General Meeting
The Board encourages engagement with the Group's shareholders
but as in 2020 the Board took the difficult decision that the
Annual General Meeting would be held as a closed meeting to comply
with the COVID-19 regulations and in the best interests of
shareholders and employees.
-- Vulpes Investment Management Loan Agreement Amendment to
enable conversion into ordinary shares
The Board made the decision to agree to an amendment to the Loan
Agreement with Vulpes Investment Management on the 18 June 2021 to
enable conversion of the loan into ordinary shares. The Board
considered that by doing so it would promote the success of the
Company for the benefit of the members as a whole.
-- Investment in new instruments
The Board made the decision during 2021 to invest in new
instruments which included a new Mass Spectrometer. The Board
considered that this was necessary to maintain the Group's
competitive advantage would improve performance, by increasing
throughput and overall capacity in the interests of its
customers.
By Order of the Board
5 Dashwood Lang Road
Bourne Business Park
Addlestone, Surrey KT15 2HJ
V Birse
Company Secretary
31 March 2022
Consolidated income statement
For the year ended 31 December 2021
Note Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Revenue
Licences, sales and services 5,124 4,712
Grant services 5 41
-------------------------------------- ------------- -------------
Revenue- total 5,129 4,753
Cost of sales (2,169) (2,168)
-------------------------------------- ------------- -------------
Gross profit 2,960 2,585
Administrative expenses (2,548) (2,036)
-------------------------------------- ------------- -------------
Operating profit 412 549
Finance costs (294) (304)
-------------------------------------- ------------- -------------
Profit before taxation 118 245
Tax (charge)/credit (46) 50
-------------------------------------- ------------- -------------
Profit for the year 72 295
-------------------------------------- ------------- -------------
Profit per share
Basic 3 0.02p 0.10p
Diluted 0.02p 0.10p
------------- -------------
Consolidated statement of comprehensive income
For the year ended 31 December 2021
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Profit for the year 72 295
-------------------------------------------- ------------- -------------------
Other comprehensive income for the
year
Items that will or may be reclassified
to profit or loss:
Exchange differences on translation of
foreign operations (37) 18
Re-measurement of Defined Benefit Pension
Scheme (22) (27)
Profit and total comprehensive income
for the year 13 286
-------------------------------------------- ------------- -------------------
Owners of parent 13 286
-------------------------------------------- ------------- -------------------
Consolidated balance sheet
As at 31 December 2021
2021 2020
GBP'000 GBP'000
Non-current assets
Goodwill 4,218 4,218
Property, plant and equipment 219 58
Right-of-use asset 1,050 484
-------------------------------- ------------- --------------
5,487 4,760
------------------------------- ------------- --------------
Current assets
Inventories 1,088 878
Trade and other receivables 604 788
Contract assets 479 457
Cash and cash equivalents 2,387 2,210
-------------------------------- ------------- --------------
4,558 4,333
------------------------------- ------------- --------------
Total assets 10,045 9,093
-------------------------------- ------------- --------------
Current liabilities
Trade and other payables (599) (768)
Contract liabilities (35) (153)
Borrowings (10,825) (10,547)
Lease liabilities (206) (491)
-------------------------------- ------------- --------------
(11,719) (11,959)
------------------------------- ------------- --------------
Net current liabilities (7,161) (7,626)
-------------------------------- ------------- --------------
Non-current liabilities
Lease liabilities (602) (359)
-------------------------------- ------------- --------------
Pension provisions (499) (492)
-------------------------------- ------------- --------------
Total non-current liabilities (1,101) (851)
-------------------------------- ------------- --------------
Total liabilities (12,820) (12,451)
-------------------------------- ------------- --------------
Net liabilities (2,775) (3,358)
-------------------------------- ------------- --------------
Equity
Share capital 2,952 2,952
Share premium 51,466 51,466
Share-based payment reserve 4,193 3,623
Merger reserve 10,755 10,755
Translation reserve and other
reserve (128) (91)
Retained loss (72,013) (72,063)
-------------------------------- ------------- --------------
Total equity (deficit) (2,775) (3,358)
-------------------------------- ------------- --------------
Consolidated statement of changes in equity
For the year ended 31 December 2021
Share Share Equity
Share premium based attributable Total
capital account payment Translation Merger Retained to owners (deficit)
reserve reserve reserve loss of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2020 2,952 51,466 3,615 (109) 10,755 (72,331) (3,652) (3,652)
Profit for
the
year - - - - - 295 295 295
Exchange
differences
on translation
of foreign
operations - - - 18 - - 18 18
Re-measurement
of Defined
Benefit
Pension
Schemes - - - - - (27) (27) (27)
Profit and
total
comprehensive
expense
for the year - - - 18 - 268 268 268
---------------- ---------- --------- ---------- ------------- ---------- ---------- ------------- -----------
Credit to
equity
for
share-based
payment - - 8 - - - 8 8
At 31 December
2020 2,952 51,466 3,623 (91) 10,755 (72,063) (3,358) (3,358)
---------------- ---------- --------- ---------- ------------- ---------- ---------- ------------- -----------
Consolidated statement of changes in equity
For the year ended 31 December 2021
Share Share Equity
Share premium based attributable Total
capital account payment Translation Merger Retained to owners (deficit)
reserve reserve reserve loss of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2021 2,952 51,466 3,623 (91) 10,755 (72,063) (3,358) (3,358)
Profit for the
year - - - - - 72 72 72
Exchange
differences
on translation
of foreign
operations - - - (37) - - (37) (37)
Re-measurement
of Defined
Benefit
Pension
Schemes -- - - - - (22) (22) (22)
---------------- ---------- --------- ---------- ------------- ---------- ---------- ------------- -----------
Profit and
total
comprehensive
income
for the year - - - (37) - 50 (13) (13)
---------------- ---------- --------- ---------- ------------- ---------- ---------- ------------- -----------
Credit to
equity
for
share-based
payment - - 570 - - - 570 570
At 31 December
2021 2,952 51,466 4,193 (128) 10,755 (72,013) (2,775) (2,775)
---------------- ---------- --------- ---------- ------------- ---------- ---------- ------------- -----------
Consolidated cash flow statement
For the year ended 31 December 2021
Group Group
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Profit/(loss) after tax 72 295
Adjustments for:
Finance costs 294 304
Depreciation of property, plant
and equipment 213 165
Revaluation of lease (28) -
Tax charge/(credit) 46 (50)
Share-based payment expense 570 8
---------------------------------------- -------------------------- -----------------------------
Operating cash flows before movements
in Working capital 1,168 722
Increase in inventories (211) (6)
Decrease in receivables 163 571
(Decrease)/Increase in payables (288) 158
Increase in provisions 7 88
Cash generated from operations (840) (1,533)
Tax (paid)/received (46) 50
Net cash inflow from operating
activities 793 1,583
Cash flows from investing activities
Purchases of property, plant
and equipment (204) (13)
Loans advanced to subsidiary - -
undertakings)
Net cash (outflow)/inflow from
investing activities (204) (13)
---------------------------------------- -------------------------- -----------------------------
Financing activities
Lease payments (400) (146)
---------------------------------------- -------------------------- -----------------------------
Net cash outflow from financing
activities (400) (146)
---------------------------------------- -------------------------- -----------------------------
Net increase in cash and cash
equivalents 189 1,424
Cash and cash equivalents at
beginning of year 2,210 799
Effect of foreign exchange rate
changes (12) (13)
Cash and cash equivalents at
end of year 2,387 2,210
Notes to the Financial Information
1. Basis of Preparation
The financial information set out in this document does not
constitute the Company's statutory accounts for the years ended 31
December 2021 or 2020 within the meaning of Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2021, which were approved by the directors on 31 March
2022, have been reported on by the Independent Auditors. The
Independent Auditor's reports on the Annual Report and Financial
Statements for years ended 31 December 2021 and 2020 were
unqualified and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2020 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2021 will be delivered to the Registrar
of Companies in due course and will be posted to shareholders
shortly, and thereafter will be available from the Company's
registered office at 5 Dashwood Lang Road, Bourne Business Park,
Addlestone, Surrey, KT15 2HJ and from the Company's website
http://www.proteomics.com/investors .
The financial information set out in these results has been
prepared using the recognition and measurement principles of UK
adopted international accounting standards in conformity with the
requirements of the Companies Act 2006. The accounting policies
adopted in these results have been consistently applied to all the
years presented and are consistent with the policies used in the
preparation of the financial statements for the year ended 31
December 2020, except for those that relate to new standards and
interpretations effective for the first time for periods beginning
on (or after) 1 January 2021. Other new standards, amendments and
interpretations to existing standards, which have been adopted by
the Group have not been listed, since they have no material impact
on the financial statements.
2. Liquidity and Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chief Executive Officer's Statement and
Strategic Report.
These financial statements have been prepared on the going
concern basis which remains reliant on the Group achieving an
adequate level of sales in order to maintain sufficient working
capital to support its activities. The directors have reviewed the
Company's and the Group's going concern position, taking account of
current business activities, budgeted performance and the factors
likely to affect its future development, as set out in the Annual
report, and including the Group's objectives, policies and
processes for managing its working capital, its financial risk
management objectives and its exposure to credit and liquidity
risks.
Despite the continuing effects of COVID-19, Group revenues for
the year ended 31 December 2021 increased by 8% to GBP5.13m (2020:
GBP4.75m). Proteomics services increased 32% to GBP1.90m (2020:
GBP1.44m). Sales and royalties attributable to TMT(R) and
TMTpro(TM) reagents were GBP3.23m (2020: GBP3.27m). Total costs
were GBP4.72m (2020: GBP4.20m) and resulted in Operating Profits
decreasing by 25% to GBP0.41m (2020: GBP0.55m) and a profit after
tax of GBP0.07m (2020: GBP0.29m). Adjusted EBITDA increased to
GBP1.35m (2020: GBP0.72m). Cash reserves at the year-end increased
to GBP2.39m (2020: GBP2.21m).
The Group is also dependent on the unsecured loan facility
provided by the Chairman of the Group, which under the terms of the
facility, is repayable on demand. The amount owed as of 31 December
2021, including interest, was GBP10,054k (2020: GBP9,795k). Further
details of this facility are set out in note 18(b) to the financial
statements.
The directors have received a legally binding written
confirmation from the Chairman that he has no intention of seeking
its repayment, with the facility continuing to be made available to
the Group, on the existing terms, for at least 15 months from the
date of approval of these financial statements or until at least 30
June 2023.
On 29 March 2021, the loan facility with Vulpes Investment
Management Private Limited ("VIM") (the "Loan") was amended such
that the Loan and all accrued interest is now repayable on 1 May
2022 (previously 1 May 2021). On the 17 June 2021 the Loan
Agreement was amended to allow for conversion into ordinary shares
such that until 30 April 2022, VIM may convert part (being not less
than GBP50,000 or a multiple thereof) or all of the Drawn Loan and
accrued interest to 31 December 2020 (being GBP51,538) into new
ordinary shares of the Company. The conversion price is 7.16p per
share, which is the average of the closing middle market price for
the ordinary shares of the Company during the five consecutive
trading days immediately prior to entering into the Loan Amendment.
The amount owed as of 31 December 2021, including interest, was
GBP771k (2020: GBP751k). The directors have received a legally
binding written confirmation from VIM that they will not seek
repayment for at least 15 months from the date of approval of these
financial statements or until at least 30 June 2023. On 30 March
2022, the Company signed the Third Amendment to the VIM Loan
Agreement which extended the term of the loan to 30 June 2023.
Following a detailed review of forecasts, budgets, sales order
book and with the knowledge of how the Group has traded in the
first year post the global pandemic, the directors have a
reasonable expectation the Group as a whole, has adequate financial
and other resources to continue in operational existence for the
period of at least twelve months post approval of these financial
statements. For this reason, the Directors continue to adopt the
going concern basis in preparing the Financial Statements.
3. Profit per Share from Continuing Operations
The calculations of basic and diluted loss per ordinary share
are based on the following losses and numbers of shares.
2021 2020
GBP'000 GBP'000
Profit for the financial year 72 295
2021 2020
Number of Number of
shares shares
Weighted average number of ordinary shares
for the purposes of calculating basic and
diluted earnings per share: 295,182,056 295,182,056
Weighted average number of ordinary shares
and outstanding options for the purposes
of calculating diluted earnings per share: 301,850,775 295,182,056
The profit attributable to ordinary shareholders and weighted
average number of ordinary shares for the purpose of calculating
the diluted earnings per ordinary share are not identical to those
used for basic earnings per ordinary share. This is because the
options are in the money from the vesting date of the 15 September
2021 onwards and are therefore dilutive as of 31 December 2021.
4. Cautionary Statement on Forward-looking Statements
Proteome Sciences ('the Group') has made forward-looking
statements in this preliminary announcement. The Group considers
any statements that are not historical facts as "forward-looking
statements". They relate to events and trends that are subject to
risk and uncertainty that may cause actual results and the
financial performance of the Group to differ materially from those
contained in any forward-looking statement. These statements are
made in good faith based on information available to them and such
statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying any such forward-looking information.
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END
FR JBMATMTIJMAT
(END) Dow Jones Newswires
March 31, 2022 02:09 ET (06:09 GMT)
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