NEW YORK (GenomeWeb) – UK-based Proteome Sciences is moving towards a more focused business model based on the company's pharmaceutical services offerings, GenomeWeb has learned.
In an interview last week, Jeremy Haigh, who recently appointed Proteome Sciences' CEO, noted that while the company has considerable expertise in a variety of proteomics workflows and a collection of potentially valuable intellectual property, it has struggled to translate these assets into consistent profits.
The goal under his leadership, he said, is to "try to turn a company that has good IP and good technology but that hasn't really been able to commercialize it that well into something that is properly valued and can start to make proper revenues and a profit."
Coming from the world of pharma, Haigh said demand for proteomics services and expertise is growing in drug development, making it an attractive market for Proteome Sciences to target. Prior to joining the company as CEO and as a director in June, Haigh was the European chief operating office for research and development at Amgen. Before that, he held a variety of positions at Merck Research Laboratories.
Former CEO Christopher Pearce remains with the company as chairman.
Since its founding in 1994, Proteome Sciences has established programs ranging from drug and diagnostics development to reagent production to contract research services. Profits have remained elusive, however. For the first six months of 2016, the company posted a loss of £1.49 million ($1.94 million) on revenues of £1.12 million. This compared to a loss of £1.44 million on revenues of £.85 million in the year-ago period.
The company's portfolio includes its widely-used TMT isobaric tagging reagents, which it offers through an exclusive license agreement with Thermo Fisher Scientific; its phosphoproteomic cancer research assay, SysQuant; a variety of protein biomarkers in areas including stroke and Alzheimer's disease; and an Alzheimer's drug development program focused on the use of CK1d inhibitors to block tau phosphorylation.
Such diverse offerings might seem a blessing, but Haigh suggested that a lack of focus has hampered the company's development.
"Small companies that follow the technology can end up in a variety of different places," he said. "If you let the technology lead without necessarily having a commercial understanding, you get to a lot of potentially worthwhile places, but with a spread of activity which is very hard to engage coherently in a single organization."
"We are doing lots of bits and pieces of things, but perhaps it lacks a central theme or core," he added, noting that he believed the company's existing pharma services business could serve as that core.
In large part, this is driven by Haigh's belief that tools like proteomics will become more and more essential to the pharma business where companies require better information both about the targets they are pursuing and the patient populations they are pursuing them in.
"I'm not a protein chemist. I don't know in depth about proteomics," Haigh said. "But what I am interested in, and what brought me into this role, is targeted therapeutics and what has become known as personalized medicine."
"I think the relevance of what we do and the environment that a company like Proteome Sciences inhabits is becoming much more apparent to more people [in pharma]," he added. "Because the customers and clients that we have, the people who want the enabling technologies that we have, are having to come to terms with a very different operating environment than the one they were used to. And that environment is one which demands that they know much more about subsets of patients and the targets they are trying to interdict."
"What my colleagues in the biopharma industry want to be able to do is call upon services that allow them to get to significant go, no-go decisions in drug development and discovery more quickly and more cheaply and, critically, more predictably than they have done in the past," he said. "So they need to be able to understand their target population, they need to understand the drug target they are hoping to work on, and they need to have some assurance there is a biological effect downstream of the interdiction of that biological target, and I think all of those things are things proteomics can help with if appropriately applied."
He suggested that proteomics would in the future become a routine part of drug discovery and development in much the way genomics has.
"We are kind of following the genomics wave," he said.
Such a business plan, Haigh noted, will likely require pruning some portions of Proteome Sciences' current portfolio – its CK1d inhibitor program, for instance.
"Worthy though it may be to have things like CK1d inhibitors, to take molecules like that through a development pathway requires significant investment and quite a lot of skills and capabilities which I don't think are at our core," he said.
Other assets might be better commercialized through licenses, he added, citing as examples the company's TMT reagents, which it licenses to Thermo Scientific, and its stroke biomarkers, which it licenses non-exclusively to Randox.
Proteome Sciences is not alone in seeing services as a potential route to profitability. Last month, for instance, Vermillion announced the first revenues from its service business, Aspira IVD, which it launched to supplement the stagnant sales of its OVA1 ovarian cancer test.
And despite its ongoing diagnostics ambitions, proteomics firm SomaLogic derives the bulk of its revenues from services and installations of its SomaScan assay platform.
But while pharma services can provide a company with a steady income stream, they don't offer the same potential for big profits as drug and diagnostics development efforts. And Haigh acknowledged that moving to a services focus would likely require that some of the company's investors recalibrate their expectations.
"A lot of investors, particularly small time investors of bioscience companies of any sort, are hoping for that silver bullet, that magic moment where suddenly you discover something, usually a drug, but possibly a diagnostic, which leads you to a marvelous place, huge profits, incredible revenues," he said, noting that this appears to be the hope of many of the Proteome Sciences shareholders he has spoken to.
"I come into an organization where many of the existing shareholders have expressed some disappointment to me that expectations of the past have not been met," he added. "And so I think that one of the other things we need to do, other than creating focus, is create a sense of reality. Optimism is hugely important, but you need to temper that with a real dose of what is actually possible."
That said, it remains possible that the company will still in the future branch out into more lucrative lines of business, Haigh noted, suggesting that one such area could be using proteomics for better identification of patient subtypes and targeting of therapies.
"Nirvana, if you will, for a company like ours is the better identification of patients and targeted therapeutics for those patients," he said. " At some point you can embed proteomic capabilities in standard clinical laboratories that will allow better identification of patient subtypes and therefore better diagnoses and better selection of targeted therapeutics. That has to be the ambition for the healthcare sector, and I see us very much as part of the evolving healthcare sector rather than just as a piece of technology that is hugely interesting but confined to the laboratory."