In the midst of reporting that preliminary results for full-year 2006 indicate losses had widened by 11.8 percent, Proteome Sciences last week said CEO Christopher Pearce had increased a personal loan facility he is making available to the company to £6 million ($12.1 million) from £4 million ($8 million).
In a statement, the company said that the loan facility was increased to give it additional working capital and allow it to continue on its business plan to license out its TMT isobaric mass-labeling technology and its biomarkers, and to continue marketing its ProteoShop proteomics workflow.
While it’s unusual for a company’s chief executive to make a loan facility available for the company employing him, Pearce disputed the notion that last week’s announcement is a sign of trouble for Proteome Sciences.
“All it does do is provide the ability for us to complete the processes of commercialization for our tandem mass tag technology, which we think is a really important piece of technology,” Pearce told ProteoMonitor this week
Addtionally, he said, the facility, which he originally made available last summer, is convertible to equity. While a loan can be seen as a liability because it would need to be repaid “in this case, it could be very much the opposite,” said Pearce. “If it is converted to equity, what may be perceived as a liability will actually be converted to an asset.”
Terms of the new agreement are identical to the original, with an interest rate of 2.5 percent above the base rate of Barclays Bank.
Cobham, UK-based Proteome Sciences’ patent application for its TMT1 technology and method was approved and granted by the European Patent Office last month, following similar approvals in Australia, New Zealand, and Canada.
Pearce said the company expects the US Patent and Trademark Office to approve the application in the “very near future.”
With its patents beginning to line up in a row, the company plans to license out the TMT technology. In addition, the company now expects to receive payments from users of the technology.
“It means anybody basically who is either manufacturing and/or using any type of isobaric mass tag, we can hopefully look to seek for some license payments, back-license payments, product sales, and royalties coming through from that area,” Pearce said.
Pearce could not put a firm figure on how much revenue would be generated, but said it would be “substantial. Clearly the market perception is the field is going to be a very big one for isobaric tandem mass tags.”
Currently, the two leading players in the isobaric mass-tag market are Applied Biosystems with its iTRAQ reagent and PerkinElmer with its ExacTag mass tags.
The company expects to have TMT products on the market before the end of the year, it said.
Proteome Sciences also said it expects its net loss for 2006 to rise to £4.66 million from £4.17 million year over year. Revenues for the year increased to about $140,000 from $32,700 a year ago, Pearce said. Acknowledging that the amount is “nominal,” he said that results for this year promise to be drastically different.
“From our perspective, we are a little bit slower in the path than we expected, but the science has clearly moved radically forward for us. We now can tangibly start seeing this revenue stream coming through.”
In addition to revenues from its TMT technology, Pearce said that “the considerably increased marketing that we put into [ProteoShop] during 2006 [and] the strong levels of interest that we had [in the product] … will be reflected in revenues for the first half of 2007,” which should be released in late-September.
In a statement issued last week to the company’s shareholders, Steve Harris, Proteome Sciences’ chairman, echoed those expectations, adding: “We expect that the additional interest generated will convert into further ProteoShop strategic alliances and contracts.”
The company had £304,225 in cash as of Dec. 31, 2006.
In April, Proteome Sciences announced a deal to characterize prostate and colon cancer antibodies developed by Onconome. As part of the collaboration, Proteome Sciences will look for biomarkers associated with the disease using its high-throughput 2D gel electrophoresis platform and its isobaric TMT technology for gel-free analyses [See PM 04/19/2007].
The company also licenses out biomarkers it has discovered. In September, it said it had licensed biomarkers for stroke to an undisclosed “leading global diagnostics company” for evaluation. It has similar deals with three other top-20 diagnostic firms, Pearce said. Proteome Sciences expects those research licenses to eventually convert into full commercial licenses, giving the company “substantial” signing fees and royalty payments, which it will get in perpetuity.
“So our mission … in the last 18 months was really to build sustainable and growing revenue streams from the three different legs of our business,” Pearce said. “From our perspective, we are a little bit slower in the path than we expected, but the science has clearly moved radically forward for us. We now can tangibly start seeing this revenue stream coming through.”