Proteome Sciences PLC Interim Results and Directorate Change

RNS Number : 0372E

Proteome Sciences PLC

13 September 2024

 

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation.

13 September 2024

                                                                                                                                                             

Proteome Sciences plc

("Proteome Sciences" or the "Company")

 

Interim results for the six months ended 30 June 2024

and Directorate Change

 

Proteome Sciences announces its unaudited interim results for the six months ended 30 June 2024 ("H1 2024").

 

Financial highlights:

·    Total revenues £2.22m (H1 2023: £3.21m)

·    TMT^® reagent sales and royalties £1.85m (H1 2023: £2.20m)

·    Proteomics services revenues £0.37m (H1 2023: £1.01m)

·    Gross profit £0.20m (H1 2023: £1.77m)

·    Cost of sale and administrative costs £3.92m (H1 2023: £3.37m)

·    Adjusted EBITDA** (Loss £1.24m) (H1 2023: £0.27m)

 

Commenting on these results, Dr. Mariola Soehngen, Chief Executive Officer of Proteome Sciences, said:

 

 

"During H1 2024, the TMT business was affected by the challenging background to the biotech market with reduced R&D budgets and postponement of projects which had continued from 2023. TMT revenues were down 16% compared to the same period last year. We believe that customers mainly held off placing orders while waiting for the launch and availability of the new TMTpro 35plex tags post the ASMS (American Society for Mass Spectrometry) meeting in June. This has resulted in a significant increase in orders during Q3 2024 and it is expected to continue during Q4 2024. The Company expects that the improved orders should lead to higher sales for the full year results and a return to long term growth.

 

Following the recent development and excellent performance of our innovative plexDIA tags, licensing discussions have started to select a major distribution partner. This will generate new sources of revenue for our reagents business including tag sales, royalties and additional proteomics services. The Company expects to make further announcements in due course.

 

Interest in our proteomic services is healthy with a good order book but the translation into revenue was delayed and reduced in the first half of the year. In April 2024, the Company secured a contract with a US biopharmaceutical company using Proteome Sciences' mass spectrometry services for the analysis of samples for an on-going clinical trial. This project is utilising the Good Clinical Laboratory Practice ("GCLP") accreditation obtained by Proteome Sciences specifically for this type of project. The contract value is in excess of £500,000.

 

In addition, the US lab in San Diego, has delivered its first projects with good results. It uses the latest generation Orbitrap Ascend Tribrid mass spectrometry and automated sample preparation platforms that will extend the range of services offered to customers. The challenging economic climate has required that we currently hold back the scale of our US operation pending receipt of several more significant projects currently under discussion.

 

We believe that the biotech downturn last year  bottomed out in the first half of 2024 following the significant increases in orders that we have received for TMT and proteomics services  in Q2 and Q3 and that the slowdown in the market is now behind us.

 

The Company considers that the commercialisation of the new plexDIA tags, the addition of regular and multiplexed DIA services together with the return to growth in TMT and from our traditional service business will underpin the company's recovery and return the business back to growth across its proteomics activities."

 

**Adjusted EBITDA (a non-GAAP company specific measure which is considered to be a key performance indicator of the Group's financial performance).

                                                                                                                                               

Directorate Change:

 

The Company announces that Dr Mariola Soehngen has notified the Company of her intention to step down as Chief Executive Officer ("CEO") and as a director of the Company after four years of service at the end of January 2025. The process to appoint a successor has been initiated.

 

For further information:

Proteome Sciences plc
Dr Mariola Soehngen, Chief Executive Officer	Tel: [phone]
Dr Ian Pike, Chief Scientific Officer
Richard Dennis, Chief Commercial Officer Abdelghani Omari, Chief Financial Officer
Allenby Capital Limited (AIM Nominated Adviser & Broker)
John Depasquale / Lauren Wright (Corporate Finance) Tony Quirke / Stefano Aquilino (Equity Sales & Corporate Broking)	Tel: [phone]

 

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^® and TMT^®MS2 are unbiased methods for identifying and contextualising new targets and defining mechanisms of biological activity, while analysis using Super-Depletion and TMTcalibrator™ 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 Cobham, UK, with laboratory facilities in Frankfurt, Germany and San Diego, US.

 

 

Chief Executive Officer's Report

Services

Revenues from the proteomics services business decreased 63% in the first half of 2024 to £0.37m (H1 2023: £1.01m).  As reported in our 2023 Annual Report, this reflects the significant slowdown in orders placed with the company in H2 2023 which resulted in a smaller order book and received samples being carried over to the start of 2024.  

 

In April 2024 we announced a substantial GCLP based contract with a US biopharma company.  We are now regularly receiving clinical samples from their trial centres with service revenue to be recorded in both 2024 and 2025.  This order made a significant impact to the orders received in H1 2024, overall we received 75% more orders and 2.8x greater value compared to the same period in 2023.  We are working on several other assay development contracts with the same biopharma company which are anticipated to lead to further contracts for GCLP analysis early in 2025.

 

The substantial increase in both the number of orders and their overall value gives management confidence that the slowdown experienced in H2 2023 and H1 2024 has bottomed out and the business is on track to return to growth.   

 

TMT^®

 

First half-year revenue from the TMT license with Thermo Scientific declined to £1.85m (2023: £2.20m). We believe this largely resulted from customers holding off their orders for TMT tags in anticipation of the release of the new generation TMT 32plex and TMT pro 35plex tags at the ASMS meeting in June.  After very positive feedback and the tags available thereafter, there has been a strong resurgence in TMT orders and revenues in the second half of the year that should result in full year expectations for revenues to be considerably higher than in 2023. We continuously monitor our stock levels of all TMT^® and TMTpro™ reagents to ensure we can meet forecast demands for the foreseeable future.

 

plexDIA

 

Strong progress has been made with the development of an innovative range of new tags in multiplexed DIA analysis (plexDIA). The tags have excellent labelling efficiency and overall performance importantly matching peptide and protein identification rates very closely to single DIA and TMTpro™ experiments. We have made an initial 6plex set of tags, doubling the capacity over other plexDIA tags, and we plan to extend this with at least 20 variants from the same structure. These will be commercialised with two different revenue streams, one by outlicensing the plexDIA tags with a major distribution partner and the other by way of services revenue from our services business. This provides a strategic market opportunity and licensing discussions have been initiated with patents filed recently.

 

Outlook

 

Over the last two years we invested substantially to expand our business by establishing the facility in San Diego, developing new ranges of TMT^®, plex DIA tags and Single Cell Proteomics (SCP) to address the future growing global demand for proteomics applications.

 

Despite the lower service revenues in H1 2024, we have experienced increased customer engagement and orders for proteomics services in Q2 and Q3 2024 and we now believe that the slowdown in the market is behind us.

 

For our tag business we expect the recent introduction of the TMTpro™ 35plex tags to generate strong revenues in the coming years. Licensing discussions have been initiated for our plexDIA tags from which new and additional revenue streams will be generated.

 

 

In summary, with improved background to trading in the second half of the year, we expect the investments that we have made combined with the new products and services we have introduced should return the business back to growth across its proteomics activities.

 

After 4 years as CEO this September I wanted to announce that I intend to leave Proteome Sciences at the end of January 2025 and consequently the process to appoint a successor has been initiated. I have much enjoyed overseeing the development of the business over that time and wish it every success in the future.

 

Dr. Mariola Soehngen

Chief Executive Officer

12 September 2024

 

Chief Financial Officer's Report

Revenues in the first half of 2024 were 31% lower at £2.22m compared to the equivalent period in 2023 (H1 2023: £3.21m), TMT^® and TMTpro™ sales were 7% below prior year and amounted to £1.35m (H1 2023: £1.45m) and TMT^® royalties were £0.50m in H1 2024 compared to £0.75m in H1 2023.  Proteomics service revenues decreased 63% to £0.37m (H1 2023: £1.01m).  

 

Cost of sales and administrative expenses increased by 16% to £3.92m (H1 2023: £3.37m). Major cost drivers included spend on the laboratory in the U.S. Financing costs for the first half increased to £0.44m in comparison with £0.38m in the previous period due to higher cost of debt.

 

Adjusted EBITDA** decreased to a loss of £1.24m (H1 2023: profit of £0.27m), which is primarily attributable to lower revenues and higher costs.   

 

The cash flow from operating activities was (£0.45m) in H1 2024. As at 30 June 2024 the Group had cash resources of £1.21m (31 December 2023: £2.03m).

 

 

Six months ended 30 June 2024 (unaudited) £'000

Six months ended 30 June 2023 (unaudited) £'000

                                                                                                                                               

Revenue	2,217		3,210
Gross Profit	205		1,767
Administrative Expenses *	(1,911)		(1,930)
Operating loss	(1,706)		(163)
Depreciation	430		289
EBITDA	(1,276)		126
Non-cash item: share based payment expenses	39		143
Adjusted EBITDA **	(1,237)		269

 

* Administrative expenses include depreciation

**Adjusted EBITDA (a non-GAAP company specific measure which is considered to be a key performance indicator of the Group's financial performance).

 

Abdelghani Omari

Chief Financial Officer

12 September 2024

 

 

Consolidated income statement

For the six months ended 30 June 2024

 

                                               

 

Note

Six months ended 30 June 2024 (unaudited) £'000

Six months ended 30 June 2023 (unaudited) £'000

                                                                                                                                               

Continuing operations
Revenue
Licences, sales & services	2,217		3,210
Cost of sales	(2,012)		(1,443)
Gross profit	205		1,767
Administrative expenses	(1,911)		(1,930)
Operating loss	(1,706)		(163)
Finance costs	(442)		(384)
Loss before taxation	(2,148)		(547)
Tax	(65)		(31)
Loss for the period	(2,213)		(578)
Loss per share	2
Basic	(0.75p)		(0.20p)
Diluted	(0.75p)		(0.20p)

 

 

Consolidated statement of comprehensive income

For the six months ended 30 June 2024

 

 

Six months ended 30 June 2024 (unaudited) £'000

Six months ended 30 June 2023 (unaudited) £'000

 

Loss for the period	(2,213)		(578)
Other comprehensive income for the period Exchange differences on translation of foreign operations	(26)		(103)
Loss and total comprehensive expense for the period	(2,239)		(681)

 

 

Consolidated balance sheet

As at 30 June 2024

					30 June 2024 (unaudited) £'000			31 December 2023 (audited) £'000
	Non-current assets
	Goodwill						4,218			4,218
	Property, plant and equipment						492			551
	Right-of-use asset						2,137			2,525
							6,847			7,294
	Current assets
	Inventories						772			837
	Trade and other receivables						380			955
	Contract assets						247			345
	Cash and cash equivalents						1,208			2,027
							2,607			4,164
	Total assets						9,454			11,458
	Current liabilities
	Trade and other payables						(675)			(629)
	Contract liabilities						-			(1)
	Borrowings						(11,678)			(11,235)
	Lease Liabilities						(870)			(609)
							(13,223)			(12,474)
	Net current liabilities						(10,616)			(8,310)
	Non-current liabilities
	Lease liabilities						(1,073)			(1,631)
	Pension Provisions						(424)			(419)
	Total non-current liabilities						(1,497)			(2,050)
	Total liabilities						(14,718)			(14,524)
	Net liabilities						(5,266)			(3,066)
	Equity
	Share capital						2,952			2,952
	Share premium account						51,466			51,466
	Share-based payment reserve						4,753			4,713
	Merger reserve						10,755			10,755
	Translation and others reserve						(37)			(10)
	Retained loss						(75,155)			(72,942)
	Total shareholders deficit						(5,266)			(3,066)

 

 

Consolidated cash flow statement

 For the six months to 30 June 2024

 

			Six months ended 30 June 2024 (unaudited) £'000			Six months ended 30 June 2023 (unaudited) £'000
Loss after tax				(2,213)		(578)
Adjustments for:
Net finance costs				442		384
Depreciation of property, plant and equipment and right of use assets Tax charge				430   65		288   31
Share-based payment expense				39		143
Operating cash flows before movements in working capital				(1,237)		268
Decrease/(Increase) in inventories				64		(11)
Decrease in receivables				675		879
Decrease/(increase) in payables				44		(188)
Increase in provisions				5		3
Cash (outflow)/inflow from operations				(449)		951
Tax paid				(65)		(31)
Net cash (outflow)/inflow from operating activities				(514)		920
Cash flows from investing activities
Purchases of property, plant and equipment				(9)		(27)
Net cash outflow from investing activities				(9)		(27)
Financing activities
Lease payments				(297)		(173)
Loan repayment				-		(824)
Net cash outflow from financing activities				(297)		(997)
Net (Decrease) in cash and cash equivalents				(820)		(104)
Cash and cash equivalents at beginning of period				2,027		3,994
Effect of foreign exchange rate changes				1		(103)
Cash and cash equivalents at end of period				1,208		3,787

 

Notes

 

For the six months to 30 June 2024

 

1        Basis of preparation and accounting policies

          These interim consolidated financial statements have been prepared using accounting policies based on UK adopted International Accounting Standards and Interpretations in conformity with the requirements of the Companies Act 2006. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31 December 2023 Annual Report. The financial information for the half years ended 30 June 2023 and 30 June 2024 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.

 

          The annual financial statements of Proteome Sciences plc ('the Group') are prepared in accordance with UK adopted International Accounting Standards and Interpretations in conformity with the requirements of the Companies Act 2006. The comparative financial information included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2023 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 December 2023 was unqualified. 

 

The directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future.

         

          Proteome Sciences plc has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2023 annual financial statements.

 

There have been no new standards adopted since the presentation of the financial statements for 2023. 

 

The Board of Directors approved this interim report on 12 September 2024.

 

2.       Loss per share from continuing operations

 

			Six months ended 30 June 2024 (unaudited)				Six months ended 30 June 2023 (unaudited)
Loss per share
	Loss for the purpose of basic profit/loss per share being net profit/loss attributable to equity holders of the parent (£'000)			(2,213)							(578)
Number of shares
Weighted average number of ordinary shares for the purpose of basic loss per share				295,182,056					295,182,056
Weighted average number of ordinary shares for the purpose of diluted loss per share				308,629,335					309,593,135

 

 

 

3.         Cautionary statement

 

          This document contains certain forward-looking statements relating to Proteome Sciences plc ('the Group'). 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 by the directors 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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