Not so long ago, the benefits of big data were poorly understood. Similarly, precision medicine was so niche that very few pharmaceutical companies understood the potential.
These days, the precision medicine market is worth around $50bn a year, but is expected to almost double in size by 2024, according to research from Absolute Market Insights. There is a good reason for this: precision medicine is likely to save lives.
One company that could be set to benefit from this revolution in precision medicine is AIM-listed Diaceutics (LSE:DXRX).
The Diaceutics CEO Peter Keeling tells a story about how he gave a talk around 13 years ago at a conference on the importance of using data in diagnostic testing. As the talk continued the room slowly emptied, leaving just a handful of people.
Most visionaries can probably tell a similar tale — it’s tough getting people to listen to ideas that are at the pioneering end of business and technology. Fortunately for Keeling, two of the people who sat through his talk to the end, and spoke to him afterwards, were from GSK and AstraZeneca. As this tale illustrates, Diaceutics was there right at the inception of the precision medicine business.
The revolution in data and the pharmaceutical space can probably be dated back to the beginning of the century, when the human genome was first sequenced. The way the cost of genome sequencing has fallen, from $2.7bn in 2003 to less than $1,000 today, is perhaps the most remarkable achievement of the century so far.
The combination of genome sequencing technology with ever faster and more powerful computers, AI, and data generated from wearable devices could transform medicine. It is truly exciting stuff.
A lake of anonymised data
As for Diaceutics, the company is in the business of providing its expertise to the pharmaceutical industry. It owns a proprietary database which it recently expanded with a £1m acquisition of a data lake — 16 million additional patient records a year. The data is anonymised, meaning there are minimal privacy issues.
The company joined the stock market last year when it raised £17m. Since IPO, shares have increased 20%. Recently, Diaceutics revealed a trading update for the year to 31 December. Earnings before interest, tax, depreciation and amortisation (EBIDTA) for the year is projected to be around £13.4m, roughly 30% up on last year. That’s £2.1m ahead of market expectations.
The company has no debt, £11.7m in net cash, and has built up an impressive team of experts.
It’s the company’s expertise in data from precision medicine that excites me, however. It recently released a report claiming that half of eligible cancer patients are not benefiting from potential life-saving precision medicines because they are not receiving appropriate tests. That finding alone shows how enormously important precision medicine will be in the pharmaceutical industry as this decade unfolds.
