The AIM company owns a virtual tumour software which is used to predict the effect of cancer drugs that in turn helps improve R&D success rates.
Already in 2019, it has signed a strategic collaboration with the Medicines Discovery Catapult (MDC) – a UK organisation charged with supporting innovation in the drugs sector.
As part of the tie-up with the MDC, the company will be introduced to “selected potential clients and in return will receive a small commission on the value of any service contracts arising from such introductions”.
“This is another excellent arena for Physiomics to showcase its predictive bio-simulation capabilities in both pre-clinical and clinical settings,” said research house Hybridan.
Merck renews lucrative contract
It follows closely on from a lucrative deal Physiomics signed with long-term partner Merck in December.
To clarify, this is not the US pharma supermajor Merck but an unrelated German firm also known as Merck Serono.
The two companies have entered into contracts worth £435,000 for projects that are due to be completed in 2019.
This latest agreement is an extension of a long-standing partnership, with the pair having agreed a similar deal last year.
‘Merck association validates technology’
Not only does the deal generate a significant amount of revenue, but interestingly, Merck Serono also allowed its name to be linked with the contract.
In the secretive world of pharma/biotech drug development that is unusual, says Jim Millen, Physiomics’ chief executive, who sees it as a clear validation of the progress made by the company since he took charge two years ago.
The German company had been working with Physiomics for some time, but the contract was a significant step-up in scale and the association with such a big name has helped Physiomics to land other deals.
Since the Merck Serono deal, Physiomics has also picked up contracts from several UK and European pharma groups, some big, some small, though none of these have been named.
Cancer simulation technology
As the name implies, Virtual Tumour is a simulation programme. The software predicts the effect of different combinations of drugs on whatever type of cancer a pharma might be researching.
Millen says Virtual Tumour helps pharma companies decide the optimum combinations of drugs for a specific cancer along with other important elements such as dose sizes and how it should be administered.
It gives a head start when designing development programmes and helps to avoid costly failures especially in clinical trials.
As new cancer drugs can cost up to US$1bn, involve ten years of work and still fail right at the end of the process, anything developers can do to increase the probability of success is worth something, he says.
VT very adaptable
So far, Virtual Tumour has been used to model 40-50 types of the disease but its adaptability means it has the potential to be used across all areas of oncology, says Millen.
Innovate UK, the government-backed tech innovation body, is helping Physiomics to fulfil this potential and has awarded the company almost £200,000 through a couple of grants over the past two years.
The first grant was for £131,000 while a further £68,000 was recently awarded as part of a programme researching prostate cancer chemotherapy dosing.
Millen says Physiomics’ sweet spot is in pre-clinical in vivo work (animals primarily) and phase I and II early-stage clinical trials.
Depending on their size, early-stage clinical trials can cost £1mln for a phase I and up to £15mln for a phase II.
Phase III trials can cost hundreds of millions, so it is important the pharma companies get it right in the early stages, says Millen.
Innovate UK’s grants were for studies in personalised medicine, which involves treating individuals or groups in a specific way rather than a one-size fits all approach.
“Doctors typically prescribe medicine irrespective of who you are, your genetic make up, your age and what other conditions you might have had.
“Personalised treatments take these into account and give a treatment optimised to give the best outcome for an individual.
“Virtual Tumour can help predict the effect of cancer drugs on subsets of patients, which makes it very well positioned to help develop personalised treatments.”
Millen admits the work with Innovate has more of a ‘blue sky’ element than its standard core service but he believes there is a lot of future potential.
Revenues soared last year
In the meantime, the contracts won last year, particularly the one with Merck, helped revenues almost double last year.
Total income jumped 90% to £513,000 in the 12 months ended 30 June, compared with £270,500 in the same period a year earlier.
The growth translated to the bottom line, with the loss after tax more than halving to £183,341 (2017: £400,500).
At a price of 3.7p, the company is valued at just shy of £3mln, although this is still several times more than what it was worth only a couple of years ago.
“Momentum is building and we are establishing a history of delivering what we say,” he told Proactive.