investment case8 Jul 2018 13:56
Physiomics ready to build on Merck Serono landmark
14 May 2018
Physiomics' share price surged on a �500,000 contract for its virtual tumour software with Merck KgaA.
cancer
* Virtual Tumour can be adapted for all forms of cancer
A 90-degree spike on a share price graph is rare and almost always indicates very good news.
For Physiomics Plc its share price surge was sparked by a �500,000 contract for its virtual tumour software with Merck KgaA.
* Physiomics PLC: Personalised medicines will build on momentum from recent pharma deals
To clarify, this is not the US pharma supermajor Merck but an unrelated German firm also known as Merck Serono.
* This Merck though still has 50,000 staff, a net worth in the billions and is also a cancer drug developer so it�s not hard to spot why investors were so enthusiastic.
Merck Serono a big name
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 might herald further even deals not only with Merck Serono but other pharmas.
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 the pharma 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 10 years of work and still fail right at the end of the process, anything a pharma 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.
Since the Merck KgaA deal, Physiomics has also picked up contracts from two more major pharma groups and a smaller UK biotech, though none of these have been named.
A second grant has also been made to the company from the government-backed tech innovation body Innovate UK.
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