CelLBxHealth plc (CLBX.L) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to ANGLE's prelims meeting. I'm absolutely delighted that we're presenting to analysts in person in London for the first time for a few years now. And it's great to be here in person. It's also great to have our loyal shareholder base listening in on the webcast. So welcome to them as well. Usual format, I will present an overview of the company's performance over the last period to 31st of December, and then I will join Ian Griffiths, our CFO, in taking questions from the analysts. And we're looking forward to a very exciting meeting because it's been a tremendous period of time for ANGLE, and we're moving forward at pace. And I'm pleased to report that 2021 was another year of very good progress towards our overall aim of transforming cancer patient care and diagnosis. As I think all of you will know by now, ANGLE has developed a proprietary system for harvesting cancer cells for analysis from a patient blood sample, and this is known as a liquid biopsy. And the reason it's important is because every patient's cancer is different, and it's absolutely essential to monitor the progress of that cancer because it changes. And at the moment, doctors have no access to up-to-date information during the progression of the patient's cancer. They gain information about the cancer from the tissue biopsy presentation, but they can't repeat that tissue biopsy because by that time the cancer is being cut out and there isn't a place to go and get the tissue recovered so that you can analyze cells. So that is a fundamental flaw in the way that cancer is treated at the moment. We're developing an alternative approach whereby a blood test can be taken from the patient and cancer cells recovered from that blood sample, even though it's -- they're very rare. There might be only 1 cancer cell in 1,000 million blood cells. But if you can get those cancer cells out, they're incredibly important because they provide a complete picture of the cancer development. You can look at DNA, RNA, and protein expression, as well as looking at the cells morphologically and cytologically under a microscope. And you cannot do that with any other approach for liquid biopsy. So the critical thing here is the ability to get hold of the best sample for analysis, which is intact living cancer cells that are involved in the spreading of the disease. And therefore, they give you a prospective insight into how the cancer is developing. It's very different from looking at fragments of dead cells where you can only look at something that is retrospective and has already happened. So by developing this proprietary system and working towards getting regulatory clearance, we're seeking to change the way that all cancers are diagnosed and treated. So we need to make the system available to the industry at large and then existing techniques for looking at cells can be deployed. But right now, they can't get ahold of the sales to analyze them in the first place. So the year to 31st of December 2021 was a strong year of progress, and we made progress against all of our key programs. The first -- and there were 4 major areas of development during the year. The first one being the FDA review. I can't overstate the importance of an FDA product clearance for this product. It would be the first ever FDA product clearance for a system to harvest cancer cells from blood for subsequent analysis. And we've been working for a long time, in fact over 6 years, towards this objective. During 2021, we were pleased that the FDA completed their substantive review of the documentation that we've submitted to them in 2020. And they submitted a comprehensive set of questions to us in the form of an additional information request. And we made very good progress in completing all the answers giving a robust response to that, which we announced in June of 2021. So since then, we've been in regular and constructive dialogue with the FDA, and we await their decision. The second major activity in the year was the movement towards establishing a service-based business for ANGLE in addition to our product solution. So we set up 2 clinical laboratories in the year, 1 in the United Kingdom and 1 in the United States. And that enabled us to start and make very strong progress with the new business, the Pharma Services business, where ANGLE offers blood test analysis of patients in cancer drug trials, and I'll explain that in more detail. That was a strong area of development for the business. Thirdly, we're developing our first laboratory developed test in ovarian cancer, the detection of ovarian cancer in high-risk groups. We progressed clinical verification study and completed patient enrollment during the year. Regrettably, there were then some COVID-19 related disruption to supplies of key reagents, which slowed down that ovarian cancer study. However, I'm pleased to say that we're now moving back on track, and I will explain more about that with the expectation we'll have some headline results in the midyear this year. Fourth area of importance is in prostate cancer. And in fact, our investors supported us in the summer of 2021 with some funding, particularly focused on prostate cancer. So we've been developing some and designing studies for the evaluation of prostate cancer using Parsortix, and we're in discussions with a major group of urology clinics in the United States to execute that. So again, that was a strong progress during the year. Finally, of course, it's great to have a vision and an ambition for a company, but you need to have the money to execute. And so we were very pleased that our investors supported us strongly with the fundraise last year, raising a gross proceeds of GBP 20 million. So strong progress on all areas of our key activity in 2021. In terms of our financials, we are still obviously at the stage of establishment revenues. We haven't got into the large-scale revenue activity yet. That's just coming through at the moment with the Pharma Services. Nevertheless, we increased our revenues, excluding grant income by about 33%, which was okay. We'd like to see that growing a lot faster. And obviously, we have seen some constraints on our research use customers through lack of research grants and lack of availability of researchers during the COVID period. The margin of that work is maintained at 70%. So we make a very good contribution on all the sales that we make. Our cash position at the end of the year was the strongest it's ever been. We are now in a good position with, at the year-end, over GBP 30 million in cash with around about GBP 5 million more cash to come in from R&D tax credits. And that puts us in a good position to execute on our key milestones. In terms of our overall approach, we are and we have been following a very consistent integrated strategy to the development of our business. It is driven by our leveraged R&D program, and this is where we have put the system into the hands of leading cancer researchers and research centers around the world in order for them to do research with the product and publish. And the publication side of things is very important for demonstrating credibility to the wider world, and it also develops and identifies key applications potential for this technology. And of course, the benefit is it's at the cost of those individual customers and research labs rather than ANGLE's costs. So that's why we call it leveraged R&D. We put the technology out there and other people are developing uses. And those opportunities are now getting quite well developed. So at the year-end, we have 54 peer-reviewed publications. Independent cancer centers, 29 of them, have written and done substantive research and had it published in very well-known journals. And that covers 24 cancer types. So obviously, we're working on our FDA clearance for metastatic breast cancer, but there are, in fact, already now evidence for the use of this technology in 24 different solid tumor cancer types. As those opportunities come out from the leveraged R&D, we seek to develop them in-house via assay development of certain particular uses that we think have got good commercial application and value medically and then validate those clinically with various trials to assess their utility. Once they come out of that phase, we now have our in-house clinical laboratories in the United Kingdom and the United States, where we can actually offer services utilizing these new approaches. And the key thing here is that we're using our clinical labs as an accelerator and demonstrator. So we want to show the outside world what can be achieved. We don't want to do all of it ourselves. We are trying to catalyze the industry to adopt, but we believe that by us first showing some of these tests operating in our own labs is a tremendous benefit in getting that to happen. And it's enabled us to set up the Pharma Services business, which I'll come on to, which is growing fast and very encouraging signs for the future and can generate substantial revenues. And it's our near-term revenue generator, is the Pharma Services business. And finally, that feeds through to leverage commercialization. So just as we have a wide range of third-party cancer research centers doing research, we want clinical laboratories, we want contract research organizations, we want pharma, we want med tech, we want all sorts of large-scale third-party companies to deploy our technology. And that's what we mean by leverage commercialization. Ultimately, we'll be providing a solution which is used by the industry, and the industry will be responsible for selling that and developing new uses. And we can do that. And the reason we believe and have strong confidence that, that will be possible is because we offer the best possible sample for cancer analysis, intact living cancer cells that are in the bloodstream spreading the disease. Remember that over 90% of patients who die of cancer do not die from their primary cancer, the first place it starts, but they die from the metastatic spread. How does it spread? It spreads via the circulating tumor cells in the bloodstream. So those are the cancer cells that we are offering to the industry for analysis, and they can provide extremely good information on how the cancer is developing and obviously, more importantly, what is the appropriate treatment state -- approaches to address that. So the FDA product clearance is seen as the global gold standard for all medical devices. It's exceptionally challenging to secure such a clearance, and we've been working on a sustained basis, the entire company, for over 6 years with that in mind. And there's no company in the world that has got an FDA product clearance for harvesting cancer cells for subsequent analysis. And we're not aware of any who have even started a process with FDA. So it's been a big commitment by ANGLE, and we've had to be very, very dogged to keep pushing that forward. Our submission in September 2020 required us to run 15,000 samples and made 400 technical reports and documents in support of our submission. As I mentioned in the introduction, FDA have done their substantial review of that documentation and came back with an additional information request of the company, which had a whole many pages of very detailed questions, some of which were technically extremely challenging to answer. But we have successfully completed during the year our full response to the AIR, and that actually required us to run another 1,000 analytical samples in our laboratory. And that was received by FDA in early June last year, and since then we've had a constructive and ongoing and regular communication with the FDA. We're very pleased with the process as it's running, and we're awaiting their final regulatory response. And just to repeat, we cannot underestimate the importance of securing such a clearance. It would give us worldwide competitive differentiation. And I believe it would herald the start of a new era in cancer diagnosis and treatment. Switching tack slightly to our clinical labs. So we set up 2 clinical labs. We set out a plan to do that. We achieved that ahead of time. We now have fully operating laboratories in the U.K., based out of Surrey Research Park, where our HQ is covering Europe. And in the United States, out of a place called Plymouth Meeting, which is on the outskirts of Philadelphia on the East Coast of the United States. We've hired some excellent people to lead that activity who are highly experienced in the area, and we have successfully implemented all the necessary quality control systems and staffing and laboratory information management systems and so on in order to be able to offer very high standard clinical services. Now, in terms of the pharmaceutical business, the pharma companies run global trials. So they have a cancer drug trial, they recruit patients from all over the world. So it was critical for us to be able to provide a global solution for their trials. And we have proved out during the year the ability to stabilize blood such that it can be shipped. As long as it's processed within 120 hours, it can give the solutions that we want. That's critical because now pharma have started to buy this service. It's a service they can't otherwise get because it involves multiple time points for the patient. And as I mentioned with the tissue biopsy, you can only cut it out once. You can't go back and repeat that biopsy. So it's what we call longitudinal monitoring. And from a standing start, we're delighted that during 2021, we have managed to secure 3 pharmaceutical customers for that offering. And I'm pleased to say that since then, in 2022, the momentum has continued. We secured 2 further ones, so we have a total of 5 pharma customers who onboarded and we're working with. Indeed, 2 of -- one of the critical points here is we don't need many customers for this business because these are very big companies that have numerous different cancer drug trials. So once they -- it's a slow and challenging process to persuade them to sign up, but once they've done that, if they get a good service, we've always believed there's an opportunity for them to extend it into multiple trials. And indeed, that has been shown to be the case. So we've got 2 of the original customers who have now got repeat new contracts with us for different trials. So it's beginning to roll out. Every customer that we secure is a potential ongoing annuity for many years, assuming we do a good job, and the team is certainly doing a good job. We are pursuing accreditation for the 2 clinical labs, CLIA accreditation in the United States and equivalent in the U.K. Once that's in place, we will be permitted to offer cancer tests for the patient management. We won't be interacting directly with patients ourselves. We will work through clinics and others who provide the medical advice, but we will be allowed to run blood tests in support of that. We've secured the CLIA registration in the United States, which means that CLIA is satisfied with the quality control systems and the CVs and background of the staff and the way that we've set up the operation. We won't get the actual accreditation until after we've got the first test installed in the laboratory and they have come and done that audit. But we're on track to getting that sorted out later this year, so that's -- it's highly encouraging. Just a little bit more on the Pharma Services to give an idea of scale. This slide talks about PD-L1. Now, PD-L1 is a protein. Just one of hundreds of thousands of proteins, but it happens to be one which is targeted frequently for immunotherapy. But it's a very small subsegment of our market. Our estimate is that the revenue potential available to ANGLE in PD-L1 studies that are already on ClinicalTrials.gov is in excess of $1.6 billion per annum. So we're -- actually not per annum, overall of those trials, which are on the system. And as I mentioned, the reason this is of interest to pharma is because it's possible to do longitudinal monitoring of patients in that trial. They can't do that at the moment. So that means they can do a blood test before the patient has that drug. And that blood can be sent to ANGLE, we can process it, and then we can tell them how many cancer cells are present, what phenotype they are, et cetera. And then we can repeat that when they're having the drug and see whether there's been an impact, has the drug had an impact on reducing the metastatic spread of that disease. And then we can do it again to see whether that response, if there was one, is durable, and that can be multiple times. So in some cases, our customers are looking up to 5 different time points for every single patient in a trial. And we charge a baseline price of $1,000 for that. And that can go up to $2,000 if there's a complicated analysis required in addition to assessing what's present. Now, we've developed an assay development business, too, which means that the pharma can -- and this has been very well received. So 3 of our 5 first customers have requested this. This is where they identify the protein of action for their drug, and we do an in-house development project, which they pay for to develop a methodology of assessing that specific protein. You cannot do that any other way, right? So you can't do with tissue because you can't repeat that. You cannot do it with circulating tumor DNA fragmented dead cells because it's impossible to measure protein on those cells. So we are offering them something that they can't otherwise get. So what are the benefits for them? Well, we're talking about earlier readout of trials because they can be much more efficient and cost effective in identifying likely responders. Assessment of the level of patient response and actually providing quantifiable data to support that. And ultimately, we're not engaged in this yet, but we very much want to be. We can move from being an exploratory objective, which provides background information, which is where we are now to being an absolute core part of the trial and ending up being a companion diagnostic. All of this is expected to be turbocharged with FDA clearance for 2 reasons. One, the pharma companies will then see the credibility of the business as -- and the product as massive, massively increased compared to effectively a relatively young company offering them something new. It will now be something that's FDA cleared. So it's credibility. And the other thing is in terms of companion diagnostics, companion diagnostic is a diagnostic used to determine whether a patient is likely to respond. It's really relevant for new drugs because the new drugs work incredibly well, but only for some patients, maybe as little as 1 in 5 patients. So how do you find out which patient is likely to respond, and at the moment, they struggle? So companion diagnostic would be a blood test, which would then identify which patient should have the drug. And that -- the reason that's relevant is because FDA and other regulatory organizations are not clearing drugs, which only work for a small number of patients. We often hear in the U.K. complaints from people that NICE has not agreed a new cancer drug. Well, the reason is they're usually so expensive and only work for a very small number of patients. But if you could change the paradigm, and so we know which patients it works for or we've got a pretty good idea, then that math changes. And it's much better for patients. And it also saves a whole lot of money being spent on wasted drugs that don't work. In terms of our ovarian cancer test in development, this is a very specific use where women with an abnormal pelvic mass, so growth in the pelvic area, which actually between 5% and 10% of all women have that at some time in their life, some of those women have ovarian cancer. Unfortunately, they will have the same symptoms, so you can't tell which ones. And it makes a big difference to how they should have their surgery and be cared for if they do have ovarian cancer versus if they have a benign condition, which is the majority, about 90% will be benign. And in fact, over 200,000 women every year in the United States have surgery for pelvic mass. All of these are targets for a blood test, which we're developing to determine the risk of them having ovarian cancer. We've done 2 significant clinical studies already in this space, and we've shown the ability to detect the presence of ovarian cancer and also the ability to correctly identify those who do not have it. That's important. That's called specificity, and competing tests have very low specificity. It means they have a lot of false positives. So in pursuit of that, we're running a clinical verification study with a leading U.S. cancer center. And that completed its patient enrollment during last year. As I mentioned, regrettably, the analysis of those samples got held up because of COVID-19 supply disruptions. What basically happened is we needed -- we had ordered from a very good supplier some reagents that we needed for the analysis of the cells. And those reagents didn't turn up mainly because the U.S. government not allowing the supply of the reagents because they're the same reagents that are used for COVID-19 PCR test. So that was annoying. Good news is that we now have taken -- just recently taken delivery of the said reagents, and we've developed the chips that we need, which are now in verification. So we're checking basically that the specifications of the reagents are up to standard. And assuming that is the case, which we expect it will be, then we'll be able to move into the analysis of this ovarian cancer patient samples, which have already been processed by Parsortix and they're waiting to be analyzed with a molecular downstream platform that we have. So that puts us in the position of being relatively confident that we will have headline results in the midyear, and that this is a potential test to slot into our clinical labs to essentially a blood test to detect the presence or absence of ovarian cancer in people with a known abnormal pelvic mass. And the scale of the ovarian opportunity is very significant. So in the United States alone, we estimate it's up to $1.3 billion per annum. And the reason for that is the core use is the pelvic mass surgery triage. So women with an identified pelvic mass that's having surgery, should they go down the surgery path that is indicated for ovarian cancer or should they -- can they have a noninvasive keyhole surgery for a benign condition. So that's the first element. But there's actually 2 other key elements which come through. There's a larger number of women, over 500,000 women a year, in the United States, who are actually diagnosed with pelvic mass, but told you don't need surgery at the moment. Every single 1 of those women has got in the back of her mind, maybe I've got ovarian cancer, and this is the wrong decision. So we believe that a blood test, a non-invasive blood test, could be very well received by that group. And then the third group is patients who have been unlucky enough to have had ovarian cancer, but at the moment are in remission, and this is the same with all kinds of patients in remission. Their #1 concern is, is it going to come back. And by just monitoring on a regular basis the blood, we think that there's potential to just guard against any potential relapse. And if the cells come back out, it doesn't mean that they have relapsed. It means there's a possibility they're going to relapse. So something can be done about it. So that's why we see this as a large market opportunity. It's also a very difficult cancer to diagnose, so it's a good one for demonstrating our capability. So apologies for this horrible photograph on the top right. This is the male equivalent, prostate cancer. This is a picture of a patient having a transrectal ultrasound-guided prostate cancer tissue biopsy. So it's not a very nice-looking procedure, clearly. And in fact, this is indicated most usually by a PSA blood test. So PSA is a protein, free floating in the blood, but it's very unspecific, huge number of false positives. In fact, 75% of positives are actually false. So you can be certain if you ever -- if you're a man who's unlucky enough to have this procedure, the statistics tell you 75% of the time it was an unnecessary procedure. Nevertheless, it is associated with not just discomfort, but there can actually be significant adverse consequences caused from this procedure. So it would be far better if you could have a blood test instead. And that's what we are seeking to develop with our prostate cancer test, something to give a better guidance as to whether or not the patient should have the tissue biopsy. We're not saying that this tissue biopsy approach will be stopped. It's absolutely appropriate if there's a high risk of cancer. But the problem is there's not a pretest that gives you a good indication whether there's a high risk of cancer. So a blood test with Parsortix could give you guidance as to whether or not this procedure is needed and reduce unnecessary tissue biopsies. Critically, of course, what Parsortix is doing is assessing cancer cells present in the blood circulation system. And those are directly linked with metastatic spread of the disease. And, therefore, the more such cancer cells are present, the higher the likelihood that this is a progressive cancer, and therefore, clinically significant. So our objective is not just the detection of cancer, but the detection of clinically significant cancer that needs intervention. In this case, in prostate cancer, actually, the statistics show that 60% of prostate cancers are so-called indolent cancers, not fast-growing. Only 40% of them are fast-growing and spreading. Nevertheless, most men under the age of 80 will elect to have a radical prostatectomy surgery if they are shown to have prostate cancer. Why? Because they know that there's a chance they're in the 40% category, and they may die, therefore, they would rather get rid of their prostate gland. Unfortunately, that leads to incompetence, urinary incompetence and impotence. So it has a significant major lifelong impact on the man who takes that decision, completely understandable decision because of the risk of death through cancer. But if you could have a blood test that says this is clinically significant prostate cancer or this appears not to be clinically significant, such a decision could be held off. So rather than having surgery straight away, you could say, well, I'll tell you what, I'll have another blood test in 3 months or another blood test in 6 months. And keep monitoring it because the moment it showed that it was beginning to spread then you could still have the surgery, but you might well find that you didn't need the surgery or at least it's held off for quite a long time. And we know this for a fact because there's been studies of autopsies of men who died for cancer -- for any reason other than cancer. And what you find is a significant proportion of those, possibly up to 50% of them when they're in their 70s, have got prostate cancer undiagnosed. So that means they've got no symptoms, didn't affect their life. And by the way, even down to the age of 30, around 10% of men have undiagnosed prostate cancer, but it didn't affect them. They had no symptoms, didn't affect their life. So if you can avoid having that surgery that would be very valuable. So how are we seeking to implement that? We spent a good proportion of time in the second half of 2021 working with a large chain of urology clinics in the United States. They're one of the leading clinics with thousands of patients who are going through these kinds of situations. We hope -- we designed a study, which they're reviewing in ethics the moment. We hope we'll be able to sign a deal with them where we jointly undertake some clinical studies to prove the efficacy of the approach I just described. And that will fast track the clinical study because they have access to patients. So they can consent their patients, draw blood, provide that to ANGLE, we can then analyze it, make a prediction. And then later on, they can work out what actually happened with those patients. So that's our fast tracking of the clinical studies side of things. Assuming those studies are successful, then obviously, they're the first route to market because they literally have thousands of patients who would like to buy such a blood test. So that's one for the future and one that we're currently working on very hard at the moment. And it's a big opportunity. I probably said enough about it, but you can see $6.7 billion market opportunity in the United States alone. And the key here is the fact that it's a noninvasive blood test and the fact that it can be repeated. So it's not like it's a onetime decision and you don't get a chance to revisit it. You can revisit it as often as you want. Just to recap on the growing body of evidence to support the product, so it was 17 peer review publications in this year alone from third-party independent cancer centers. And 26,000 samples were processed on the Parsortix system. And as I mentioned, there's over 29 independent cancer centers. Every single one of those is published, and you can read them on our website, positive peer-reviewed publications of work using the Parsortix system and identifying the benefits of so doing. So just to recap, what are we aiming to do? We want to enable the entire industry. We do not want to retain this technology and hold it and nobody else is allowed access to it. Quite the reverse, we want to make this available to everybody. And we expect that our discussions with many large companies will accelerate post our FDA clearance, as we will be the only FDA-cleared solution for intact cell liquid biopsy. And that's the way to get the complete picture of the cancer. So that is what will enable large med-tech companies to expand their revenue capability from the current tissue cell analysis into repeat blood test analysis. And just to repeat again the critical point, cancer changes over time. What happens is doctors have information on how to treat the cancer from the original tissue biopsy. That becomes legacy, out of date, and quite literally in late-stage cancer, doctors are flying blind. They do not know how to treat the cancer. It will change completely when you can do repeat biopsies with cancer cells. Secondly, the pharma companies I've already mentioned, we can make their trials much more efficient, more cost-effective and quicker. We can also give them the ability to have companion diagnostics to determine which patients will respond to their drugs, and that will enable them to get clearances in different cancers, which they haven't currently got. Thirdly, there are very large-scale clinical laboratories and contract research organizations that offer a whole variety of different cancer-related tests. We want to get this technology in their hands so they can start to develop and offer tests based on actual intact cancer cell analysis that comes from a blood test. And finally, there's a variety of companies who've been the darlings of the investors -- investor base in the United States, raising huge amounts of money for the detection of cancer in asymptomatic individuals. Those technologies are all based on fragments of dead cells. They can be much more effective if they're based on intact living cancer cells spreading the disease. And that way you can get actually the answers of what I think is the proper question, which is not the question that's being answered at the moment, which is can I detect cancer early. It should be, can I detect clinically significant cancer early that needs intervention. That's a much more detailed question. So all of these companies could benefit from utilizing our technology. So as I say, our aim is not to compete with everybody else. Our aim is to provide a new way of doing things so that we can become the de facto standard for how you get the sample for analysis. And that's put us into a very strong position for many near-term milestones as we're in a very fast-growing phase of the business. We've got the Pharma Services business now up and running, 5 customers in place, and that's increasing. And we expect to see that to continue to grow. And we're developing new assays that we can offer these pharma companies all the time. Secondly, we're awaiting the FDA response, and we believe that will be a game-changer for our business and indeed for the industry as a whole. Thirdly, the ovarian cancer test, we expect to have back on track very shortly with the aim of getting results announced in the midyear. Fourthly, we're working on our lab accreditation, so we'll have clinically regulated and approved laboratories that can start off a test. Fifthly, we've got multiple partnerships under discussion, and we expect to see that accelerate greatly once we've got the FDA clearance. Sixthly, we've got many peer-reviewed publications, as I mentioned, 17 in the last year. That's continued, and we've had multiple publications already this year, and we expect to see that continuing on an ongoing basis. And then last, but very much not least, we've got a new area of development in prostate cancer with hopefully soon-to-be-announced partner that we're progressing that with. So I think that gives us a -- hopefully a reasonable overview of strong progress that's been going on in 2021. And I'm going to sit down now and take questions together with Ian Griffiths from the assembled analysts. Thank you very much.

Sam's got a microphone.

Yes, there's a microphone coming around. You can take the first one, Ian.

Thank you very much for the presentation, Andrew. So a quick one on your 2 new Pharma Services contracts. So are these still looking at PD-L1 expression? Or are you looking at something more exploratory here?

No, they're not actually frankly enough. There are some customers who are interested in that, but we haven't yet signed them up. We've got a variety of different trials. We've got -- the biggest one we've got is a Phase III trial in prostate cancer, and that is not looking at a particular protein. It's actually just examining the presence of different types of cells over different time points. Of the 5, we've actually got 3 of the customers who've asked for our bespoke assay development. So we're in the development phase where we're -- they've given us a particular target proteins they're interested in. So for example, one of them is in DNA damage repair, and we are showing that we can -- we're developing essentially antibody staining so that we can do immunofluorescence of the cells and identify the presence of these particular proteins or absence. So those are the main areas.

And the follow-up on that, is the staining done after you extract cell? And in the platform, are you planning to sort of automate this? I remember this was something you were planning. Is it still on the cards?

Yes. So most of the work at the moment is involved in immunofluorescence imaging of the cells. And that -- what we're doing is we are standardizing the process for the staining so that we do every single time exactly the same. And we've got a new approach, which we call Portrait Plus, where we've essentially optimized the antibodies that we use, the exact concentrations, the exact process for protocols for doing that. And soon, we intend to package that and sell it as a kit to our product-based customers. So where we see growth, by the way, is beyond imaging into molecular. So we're working on various sequencing assays that we'll be able to offer to the pharma as well.

Very interesting. And last one, on your 2 extensions with existing customers, are these regarding the same drug as it advances through the trial? Or are they sort of another drug on the same client's pipeline?

Yes, completely different drug, which is what's really good because it can take us on average 9 months to sign up a customer once they've expressed interest because there's a whole load of due diligence they need to do, and there's a lot of detail about the shipping of samples and ethic, all the sorts of different detail. But once we've proven all that out to them, it's much easier. The next one is a few hours.

And that's the point of targeting these larger customers. They are running multiple trials. And therefore, we hope to expand out.

Just on the prostate cancer trial. Will this be entirely funded by you, or will it be shared with the urology clinics? What learnings have you taken from the ovarian cancer test? And what will be taking into this development?

Yes, on the prostate, we'll be funding that fully ourselves. And obviously, that gives us retention of right to knowledge, all that kind of stuff as well. But they give us the access to the patients. So it's a more cost-effective way for us to do that. And so that's the cost one. There are other areas that could be developed with outside of this in the prostate that may bring in grant funding or other sources of funding back to the leveraged R&D. That core project we're funding and taking forward.

And with regards to the timing of starting that, can you give any guidance? Or is that likely to depend on other milestones you're waiting to achieve this year?

It's not dependent on other milestones, so we're progressing that, and hopefully, it will be in the not-too-distant future, that we'll be able to provide an update on that.

And the process of discussion with the urology clinics is also encompassing the ethics side and the detail of sort of consent forms and things like that. So we're not anticipating a big delay after we've -- after we signed the deal.

Okay. And then just 1 last one from me. With regards to the lab accreditation, obviously, potentially that could be the test unique, could be the ovarian cancer, but I believe you're developing another one in parallel. Is it a case of waiting to see whether the ovarian cancer data comes through? Or could it be that the other tests come through first and you get accreditation first?

Yes. So technically, for each category of tests that we offer, we have to put them through the CLIA process, and there are 2 major categories. One is imaging, which I was just describing about the immunofluorescence, and the other is molecular. The ovarian is in molecular, but the imaging assay that we're already offering pharma is obviously in imaging. So both of those are being finalized for submission. And it's kind of like 2 horses coming towards the finishing line. Not sure which one will go through first or whether they go through as a dead heat.

Yes. And also with regard to the second side of things, it's that ability to recycle our R&D team. So once they've done one, we can then progress onto the next one. But it's also associated with what Andrew said about locking down the kits, making everything consistent because that's absolutely critical for consistency of processing, and therefore, the accuracy and the quality of the output.

You asked about learnings from the ovarian study to the prostate one, and there are similarities in the approach. I would say we've also had a lot of learnings from initial pilot work that was done by Barts Cancer Institute in prostate. So they've already demonstrated good results in their lab. That's not the same as our standardizing and being able to completely run exactly the same things, so it doesn't mean for certain we'll get a good result, but we're quietly confident.

Charles Weston from RBC. First of all, on the revenue ramp that you might expect on the Pharma Services side. It sounds like it can be quite slow to start with, with perhaps one early-stage trial, perhaps even a bespoke test that needs to be developed, an assay that needs to be developed first. So how long might it be until we start to see a sort of more meaningful revenue ramp even given the new business development contracts you're signing now?

Yes. So what we're expecting, it will build up for exactly those reasons. Typically, you are going to go through the assay development and then Phase I, Ia/b, then II, into III, and then hopefully, the end game is to get into companion diagnostic. So that's the sort of the overall process. Obviously, last year, we announced that one of the customers actually got straight into a Phase III, which slightly surprised us on that. That's coming back to that sort of need for this. It is an exploratory endpoint. So we -- that does give us thinking that we'll be able to get into a few sort of later-stage projects. But again, we've got to engage with the customers to bring that through. So -- but the core process as we're going further as well as you go through each phase, quite often the Phase II/IIIs are multiyear projects as well. So that will spread the revenue. So even though we've got a large contract that we may announce, the revenue will be spread over 3, 4, 5 years for that Phase III type contract. So it's that whole thing if we have to accumulate it up, but then it will ramp as we go through. So it will take a few years to build that up into a sizable quantum.

Which means that we're going to move from a position where we are now, where each year we have to generate the revenue that we get to knowing that we've got nailed on x amount of revenue for the next few years. And I sort of see that as layers. We have 1 layer, then we get another layer, another layer, another layer, like steps.

Yes. And the bit that's less clear is because obviously we're seeking to meet a market need here by actually getting the FDA clearance, which is back to this whole thing. If you look at the pharma, their problem is if they take the drug through and they haven't got a companion diagnostic that's cleared, it's a big challenge for them. So that's one of the elements that we believe will allow us to accelerate how that revenue develops.

And then on the ovarian cancer side, first of all, is there any risk that the samples may be proved too old because you've had this delay. So is there's any risk there? And once it is -- once you've got the results, what is the process after that from a regulatory, reimbursement, commercialization perspective?

So the first one, we've done stability testing on the past audit samples that have been held in freeze, and we're not concerned about. I mean, that's technically possible, though it's not expected. So the second one, once we get positive results, the idea is to feed this into our CLIA accreditation process so that we can offer the test as a laboratory developed test from our own labs.

But there is a process. Obviously, there are some existing reimbursement codes and where we can and we'll seek to leverage, but we'll also be going through the process of applying for our own reimbursement code because we think with the higher overall performance we should be able to justify on the health economics for a much larger reimbursement code than currently exists. The existing sort of test is about $900. This is the core reimbursement level we'll be seeking to be more than double that given the significantly improved specificity that we anticipate will come out. Obviously, we've had the earlier study results, but we've got to see that come through in the headline results here. Once you got the reimbursement code, that will help get the adoption by the other clinics more quickly, but we still then have to get reimbursement, get payers involved. There's a whole process. So initially, when it's offered from our lab developed tests, it is to private payers. And then we go through the process of adding the payer coverage.

And just to clarify, so assuming no change in reimbursement, what's the timeline do you think for actually launching and starting to commercialize?

The earliest launch will be at the end of this year. So by the end of this year, beginning of next year, assuming everything goes well.

But what we come back to is, again, it's that core component of what the clinical labs are offering. So we said accelerators and demonstrators. This is the accelerator bit. By having a lab developed test, we can progress the reimbursement code that will allow us then as we develop the kits here, then other clinics can offer that test as well, and there's an established reimbursement code. So that's the accelerator. If we have to wait -- if you wait until you got all the product ready, then there's going to be another sort of 2-, 3-year gap before we get the reimbursement code in place. So this is all about the plan of accelerating that commercialization.

And last one from me, please. Just in terms of the discussions that you're having with the FDA. I've never been part of 1 of these processes. So after you've given them the huge amount of documentation that you had to give them the second time around, is it just a matter of clarifying different things as they work through it? What was the sort of nature of a discussion of that sort of stage after what 9 months of having given them the big data package -- the second big data package?

Yes. So as you rightly pointed out, they had to review a huge packet of data with a substantive review. Then they had a lot of questions. We gave them a big set of responses in that to review that. We've been through a few questions about our responses. But now we're just basically -- they're running their process. I mean, it's quite complicated with the de novo because they have to set up an entirely new medical device classification. They have to then write legally what that covers. And then they also have to think about things that's nothing to do with Parsortix. But what is the law of unintended consequence? They set up a new medical device category with somebody else use it for something else they didn't expect, et cetera. They then need to think about, well, how -- what information do they want to publish about the Parsortix and that kind of thing. And then they've got a lot of internal processes, which says they've got to -- which we don't know about, but they have to write up all kinds of things and get lots of people in their different teams to sign off on different aspects. So we are in a sort of basically ongoing and pretty much constant updates with them and following their status. So it is moving. We think it's moving forward in a good way, and we're awaiting a decision.

Yes, I mean, obviously there's been some well-publicized impacts on FDA resourcing from COVID breakthrough designation and tests overload and all that kind of stuff. So it has taken a bit longer than anticipated, but it's outside of our control. What I would do is add to your other point is that having gone through the first process here, and this is a platform clearance for metastatic breast cancer. We've got a huge amount of learnings in terms of processes, standard operating -- working procedures, all that kind of stuff, that for subsequent assays that we develop we're going to have some building blocks that we can use. Clearly, we're still going to have to do some new clinical studies, and there'll probably be some associated analytical type work, but having this -- having gone through this process, subsequent clearances are going to be much easier. And obviously, we can use our own de novo as a predicate, so we can go down the 510(k) route, which should make it much faster, more cost effective to add those subsequent clearances.

Any more questions?

Okay. Well, thank you very much, everybody. We're 10 minutes ahead of the full hour. So I guess that's a win. Thanks very much for your attention. We look forward to many exciting things in the future.