Capping off a turbulent year, the NextGen Group last week announced it has appointed a new CEO and expanded its services business, which it sees as a “huge opportunity.”
Michael Pisano replaced James Heffernan as CEO of NextGen one year after NextGen acquired Proteomic Research Services, where Pisano had been a co-founder and CEO [See PM 11/09/06].
NextGen also announced it is offering three new protein-biomarker services: assay development and validation; biomarker monitoring from preclinical and clinical samples; and identification of putative biomarkers and proteins of interest.
In an interview with ProteoMonitor this week, Pisano declined to comment on the circumstances of Heffernan’s departure, saying only he resigned in August. Pisano was appointed Heffernan’s replacement in September.
However, he acknowledged that UK-based NextGen has gone through some “difficult times” during the past year as it tries to move into the black by cutting costs and trying to increase sales. The changes resulted in “a few” layoffs and a management shakeup.
“I think we’ve made it through that, and I think we have decided to make some cuts and some changes that would put us in a better cash position so that we can become profitable as soon as we can,” Pisano said.
The company, he added, is moving toward profitability now and no longer has “as much fluff,” allowing it to “get down to what we do best, which is the science.”
The changes could be seen in an interim report released in September in which NextGen reported that net loss for the first six months of the year narrowed around 5 percent to £1.28 million [$2.63 million] from £1.35 million a year ago. It also said that it had no cash or cash equivalents as of June 30, though the company raised £800,000 in July after placing 200 million of its shares.
In addition, revenue during that period surged 128 percent to £1.07 million from £468,799 year over year. Excluding the £271,172 contributed by PRS, revenue solely from NextGen increased 70 percent to £799,818 during the period.
‘Huge Opportunity’
As part of the changes at the company, as of Dec. 1 PRS will adopt the NextGen name and be folded into the NextGen Group’s US division. PRS currently operates as a NextGen Group subsidiary.
In the meantime, the company’s growth strategy is firmly focused on building up its fee-for-services business, which Pisano said is currently evenly split with its equipment business.
“We do see the fee-for-service at this point in time being a huge opportunity,” he said.
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“We see that … outsourcing is huge, and if you can become a sole source provider of lots of different services for a company, then that really puts you in a nice position.” |
In July, to bolster that business, NextGen penned a deal with with Kemp Biotechnologies to co-market each other’s fee-for-service offerings, which for Kemp includes cell culture, protein expression, and protein purification services. Kemp, based in Frederick, Md., will also make available to NextGen its advanced transient mammalian expression technology, “further developing the large range of protein expression systems currently offered by NextGen,” the company said in a statement announcing the agreement.
When NextGen purchased PRS, then-CEO Heffernan told ProteoMonitor that the deal would allow NextGen to raise its profile in North America and give it greater access to the North American drug-discovery market, which he estimated at the time to be between 50 to 70 percent of the global drug-discovery market.
This week, Pisano said that NextGen’s new biomarker services offerings are in step with that strategy. Until now, its fee-for-service business comprised protein-expression work, including gene synthesis and protein-expression screening, and proteomics, including mass spectrometry and differential and quantitative analysis.
During the past three months, PRS, based in Ann Arbor, Mich., installed one Thermo Fisher Scientific Orbitrap mass spec and two Thermo Fisher TSQ Quantum Ultra triple-quadrupole instruments. The company’s biomarker services will continue to be handled here.
PRS had already been offering biomarker services, but NextGen decided to expand them because it said it saw a demand for services after noticing that pharma companies were increasingly outsourcing that kind of work.
“A lot of large pharmas are actually developing groups within the company that are specifically geared toward setting up outsourcing, so you might have a biomarker group that has a guy in charge of it for outsourcing all the biomarker work,” Pisano said. “We see that … outsourcing is huge, and if you can become a sole source provider of lots of different services for a company, then that really puts you in a nice position.”
With proteomics now focused on biomarkers, and funding agencies pushing for research in disease biomarkers, it became obvious which rainbow could hold a pot of gold for NextGen, he said.
Today, NextGen has several “large pharmas” using its biomarker services, though Pisano declined to identify them. Some of the projects are focused on patient stratification for drug trials, he said. Others involve quantitatively monitoring proteins during drug trials.
The company is also doing similar work with animal models, and developing multiple reaction-monitoring assays for protein therapeutics.
In addition to Pisano’s promotion, NextGen last week announced several changes to its board of directors. Klaus Rosenau was appointed chairman, replacing Anthony Rhatigan, who retired. Frank Matthaei replaced Simon Barton as finance director. Barton, who joined the firm in July, is currently CFO of NextGen. Kevin O’Donovan resigned as a non-executive director, and Thomas Borscholte and Joerg Neerman have joined as non-executive directors.