Diaceutics plc takes the notion of tailoring individual treatment using molecular diagnostics very seriously. That was the case for starting the Belfast, Northern Ireland-based company even more than a decade ago when there were only a handful of marketed medicines that were tied to a molecular test.
Now, there are almost a couple of hundred drugs that require specific molecular or genetic biomarker testing. The startup works with 20 out of the top 30 pharmas to analyze deidentified patient data and ensure that labs, payers, hospitals and physicians are all implementing that testing in an optimal way.
To further advance its efforts, Diaceutics has listed on AIM, a sub-market of the London Stock Exchange, in an IPO that raised £17 million (US$22.2 million) through the sale of 22.4 million shares at 90 pence each. Selling shareholders sold an additional 4.9 million shares. In the first day of trading on March 21, shares (LSE:DXRX) climbed to 95 pence, an increase of 6 percent, to give the company a valuation of £66 million (US$86.2 million).
Dream to reality
"We support the pharmaceutical industry as they are launching a whole range of new precision, personalized medicine drugs. All of those drugs have a common need, which is to make sure that the patients are tested in advance of getting those drugs. While our pharma clients are pretty adept at launching drugs, they are much more varied in their response and their understanding of the diagnostic and testing ecosystem. So about 12 years ago, we basically defined our business as that solving that problem," Diaceutics CEO Peter Keeling told BioWorld MedTech.
"To solve that problem, we've got two core services for our business: one is data analytics and the second is implementation," he added. "We use the data to illustrate where the gaps are in clinical testing, that's everyday testing not clinical trials. Then we use our implementation service to reach out to laboratories across the globe and support them in adoption of a brand new test."
Keeling offered an example with the major immuno-oncology target PD-L1. When drugs such as Roche's Tecentriq and others started to get approved, it became clear that labs weren't using a standardized approach to testing. Some labs were buying a kit, some were developing their own test, while some labs were using a single antibody and others were using one of four other antibodies. That resulted in a lot of confusion that Diaceutics could help manage by working with the labs to ensure a more standardized approach.
In another case, a pharma client was looking to launch a new lung drug that requires a molecular test in five European markets – but fewer than 5 percent of labs there were prepared to run the test, Diaceutics found. So, the company approached 150 labs and trained them to run the new test, which it believes helped the client's drug to launch at $200 million in revenue higher over the first 18 months than the company's forecast. The test currently has 80 percent use – and Diaceutics said adoption took about half of the time it otherwise might have.
By the numbers
"We started Diaceutics when there were five or six drugs in cancer and there was one in multiple sclerosis that had a biomarker play with it. I can remember at the time people saying: Why the heck did you start a company focused on five therapies? But if you could read what the R&D teams were doing at research institutions and within the pharmaceutical industry, you could see that the R&D teams were looking towards the use of targeted methods to find ever greater clinical outcomes and greater clinical impact," said Keeling.
"In 2016, 20 percent of what the FDA approved needed a test. In 2017, 30 percent of what the FDA approved needed a test. In 2018, 40 percent of what the FDA approved needed a test. So you can see where this is going," he continued. "According to the Personalized Medicine Coalition, and we think this is a conservative estimate here, 75 percent of all oncology drugs in future will need to test and 40 percent in general medicine."
Keeling noted that there are 800 to 900 drugs at late-stage clinical trial, most of them in cancer, which will require a test. There are 173 drugs on the market today that have a test. If even half of the late stage drugs make it to market, that figure will double or triple over the next few years.
Diaceutics and its databases are obviously concentrated in oncology, the home of personalized medicine, but it is also expanding into tracking patients with autoimmune, cardiovascular and infectious diseases and central nervous system disorders, such as hepatitis and Alzheimer's disease.
The company has amassed data focused on the U.S. that it is working to further expand globally. It brings together large amounts of laboratory, patient, claims and payer data. The patient information is anonymized and aggregated and, yet, it also has longitudinal data tracking the journey from diagnosis through treatment for 3.5 million patients. It also has data from 2,500 laboratories that includes 58 million testing events globally and insurance claims data for 50 million patients.
To better manage and connect all that data, Diaceutics is working to incorporate machine learning-based algorithms. Keeling anticipates that artificial intelligence will enable the company to predict which patients will benefit from early molecular testing based on matching them with the data and experience of other, similar patients. Part of the IPO financing will be dedicated to support that, as well as a universal portal for partners and clients to access data.
Bootstrapped from the beginning, Diaceutics hasn't taken any venture capital and has been consistently profitable, Keeling said. It had 2018 revenues of just over $14 million, that was up 50 percent from the prior year. And 2017 had been up 15 percent from 2016. Diaceutics has profits of around 19 percent to 20 percent.
Summed up Keeling, "The move to AIM and the additional funding will allow us to continue our growth trajectory by developing our product and services offering, which is focused on better testing and better treatment in the global pharmaceutical industry."