Diaceutics PLC (DXRX) Earnings Call Transcript & Summary

Good afternoon, and welcome to Diaceutics PLC Full Year 2023 Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question you received on the meeting itself; however, the company can review all the questions submitted today and publish responses where appropriate to do so. Before we begin, I'd like to flip the following poll. I'd now like to hand you over to Ryan Keeling, CEO. Good afternoon to you, sir.

Good afternoon, and thank you, Alessandro. I'm joined today by my colleague and CFO, Nick Roberts. I -- as has been introduced, I'm the CEO of Diaceutics. And welcome to you all, for those who have followed the business. Thank you. And hopefully, today will serve as a good update to what we're doing here at Diaceutics and the problem that we're solving for the industry. For those who are new to the story, I'll try to guide you through what are our key differentiators and the value proposition that we bring in this investment case. Nick is going to drive the slides, so I'll ask him to go Slide 3, please. We continue to refine and reflect on the key purpose and mission of this business. You'll see a headline on this slide, which talks to a very simple message, which is that we help pharma to find patients. When you think about what a pharmaceutical company does big or small, they are effectively engaged in developing new therapeutics, bringing new drugs to market or indeed, when they get approval, trying to look at patients who are eligible for the therapy engaging with their physician and ultimately trying to match patients with what might be and is often a life-changing drug for that patient. We help them in both of those key areas. And the clinical trial setting and prelaunch, we have to speed their recruitment by identifying patients that are meeting that general trial criteria. And we also help in the post-marketing commercialization of the drug where we are actively engaged in identifying patients who are eligible for the drug and identifying their positions to enable an education and awareness program to kick in. Let me talk to you about the main assets that we have as a business. Starting on the left-hand side, I want to talk to our lab network. This is a network that have been growing now for 11 years. It's global in nature, and these are clinical laboratories that we partner with. And we have a model where we value -- value-for-value proposition with the lab. And effectively, in return for some data services in infrastructure and providing data back those labs, they provide us with a typically daily, automated patient-level feed, which is anonymized, but tokenized. I'll talk more about what that means later. That is effectively the data that helps drive this business. That data is inherently challenging to use in its net of form. So we do a lot of work to take what is an unstructured data assets to standardize it, to bring it into an environment that allows analytics and value to be created from that data. You can imagine working with over 900 laboratories globally, all of which adopt their own perspective and their own slant on how that data should be structured, how it should be enabled. We have to do a lot of work to consolidate and aggregate all that data together to make it meaningful. A lot of the investments in 2023 was around speeding that process up, bringing what was largely a manual process, driven by our clinical team in Belfast, to one that is, for the most part, now automated. And that is AI, natural language processing and some proprietary models that we've built in order to process that data and allow us to drive value from it much more significantly than we have historically and speed the way we get that to market. Such innovation is allowing us to move our primary product, which is called Signal, to a daily service instead of weekly. It was driven by that evolution, and it also helps us a lot on the sales and business development front, getting responses to clients very rapidly. Our platform is our delivery scaled mechanism. The platform is really, you think about that in 2 ways. There's a data layer that ultimately is how we transform and transmit that data to our customers. So our data environment and Diaceutics is integrated directly with the data environment of our customer. That's an integration that we do at the start of any new engagement. It allows us to remain sticky and, obviously, automated in terms of the deal of feed that comes from Diaceutics over to our customers. When you're providing data that is induced in the critical path daily operations of a large pharmaceutical organization, they want that data to be very robust, but they also want the process for which they get it to be automated, to be secure and ultimately just seen this in terms of how it brings -- it goes over to them. So the platform data integration is key for us. It also allows our clients to use their existing tools, CRM tools, et cetera, to engage with the data. That is our adoption significantly. It also enables the stickiness of longevity. Once you're plugged in, providing that fleet. It's something that we see is helping us stay termed on with those clients. We'll talk later to retention rates and renewal rates with clients. The platform also provides a more typical SaaS type engagement where you can log in to web. At Diaceutics, you can mirror all of your data that you are proceeding from Diaceutics as well as some additional services that we'll talk to later. But the key for this is that there's a way for the marketing team or the brand team within a former client to get that data on a dashboard level and where they want the analytics. Remember, one of our primary use cases for this data is our Signal product. It's our lead product and these are about 50% of our revenue in 2023. And Signal's primary purpose is to enable our pharmaceutical customers and partners to understand which physicians had 8 patients in the very recent past, but within the last 24, 48 hours, who was positively diagnosed with a disease that matches the criteria for a clinical trial they're recruiting for or more commonly for us, a drug that's on market and we're trying to match patients with the opportunity to prescribe that drug. So engaging with the physician to build awareness and to edge them about the opportunity for that patient is a key part of what we're trying to enable our former clients. Next slide, please. We work in precision medicine. We stay very faithful to this part of the pharma industry since the business was founded by Peter Keeling back in 2005. It is where our model shines brightest. Precision medicine, by nature, is defined by the diagnostic journey that the patient is on. Really what we're trying to do is understand before we prescribe the drug if that patient is likely to respond or not. Thankfully, we're moving past the days when medicine was practiced by treating a patient with a drug, seeing if they responded, and if they didn't, swap it for another drug and keep going until they run out of drugs or maybe get one that sticks. For precision medicine, we test the patient more upfront. We understand their diagnosis much more intimately than we might have historically. We're at a molecular level is typically where we are in the [indiscernible] oncology, Alzheimer's, cardiovascular, really understand what's driving the disease and then hopefully be able to pair that profile with the drugs being developed and is much more likely to work for that patient. The response rate is typically significantly higher. So precision medicine where we're at. As you go to the next slide, one of the things that we're very well sort of positioned to understand is what are the gaps we call the practice gaps. So why in a perfect scenario, we are seeing patients getting tested if those patients are testing positive or take their profile and they can move forward and want the treatment or form the clinical trial, but we consistently see on the data we have, helps us understand not just the last step of test positivity. We can go back up and say patients aren't even getting tested and maybe there's a lack of awareness. Maybe there's a problem with hardware, getting the sample from the patient. Maybe there's a problem of how the test or treatment is being paid for, other delays along the way, all sorts of things that can ultimately get in the way, and our pharma clients are highly motivated to where there may be bottlenecks or opportunities for patients to get lost along the way. And this is important, but so far, let's call it, talk about our Signal product. And we have a whole solution and suite of services that are absolutely designed and our road map is somewhat driven by these practice gaps in concert with client feedback. We're developing new solutions alongside existing products that we have to really close these gaps and help increase the flow of patients time, again, to a therapeutic option, which we would hope is potentially key to changing how their health ultimately continues for the better, of course. Next slide, please. We're not new to this industry. We've been working in precision medicine for 19 years. I'm very proud to say that the team has been part of the launch of almost every single precision medicine that's ever been approved. We have a long track record. We've learned a lot along the way, from 2005 to 2019. We had a very strong consulting business. Another skill, the genesis of the business we have today. Since IPO in 2019, we've invested heavily the lab network, the data of the platform. And we're evolving the business, taking all those key learnings, taking all those customers, knowing how to do this, knowing what data we need to try to build a scalable business, which is fixing a problem and going further into what that fix looks like, trying to bring solutions rather than just insights to the market. And at the same time, trying to improve the quality of the revenues, the forward visibility of the business. So things of like order book of the group, you'll see key metrics. Nick will talk to growing the sales and marketing capability and growing that recurring revenue. Just for this reporting period, we're launching some new metrics like ARR to really help external audience understand how the business is evolving and what we're doing to improve the quality of that revenue. Next slide. I'm not going to talk to all the aspects of this other than I'm going to focus on the 69 therapeutic brands. This is a key metric for us, and it's up significantly on last year. You'll see that in a moment. We will continue to grow the brands that we work on. There's still significant headroom. We estimate around 250 brands on our end market today or close to market that are -- our model works really strongly in, okay? So that's our near-term target, end of '23, we're working on 69, 250 available to us. That number is increasing by around 15% per year, some drop off, but appears with more net to 15% increase. So the other brands is increasing along with our need to go and win additional brands that we can sell Signal to and ultimately [ then launch ] our business. And a key part of our strategy going forward is to build -- continue to build our sales and marketing effort. Right now, that's growing. We need that to grow faster. And key to that is to go after those new brands that are often in our existing client base, but it's about us moving sideways and trying to capture that -- some of that share of market. Next slide. I'll just touch on the products here. So the headings across this, how should we think about the overall investment case for Diaceutics? I talked a little bit about the growing and significant market opportunity, about 69 and 250 brands. Our product road map, I'm going to talk to in a moment, the ability to drive that global solution is really significant for us. We have a strong competitive advantage. The lab network, as I said, it took 11 years to build. It's a big part of our competitive moat. We have a very specific strategy there in terms of how we partner with the Barclays. It's very unique in how we do it. It's obviously part of our secret sauce because what we're openly able to do is bring a patient cohort to our pharma clients, which they cannot get access to elsewhere. This is something that allows us to -- we command a strong position as it pertains to the availability of the lab data, the diagnostic data for these patients. We also have our platform, which is increasing utilization. We get a lot of work on it to '23 and understanding we have great successes there. It's effectively how we're going to scale this business. I talked earlier about the different ways in which we -- but it's a key differentiator for us, particularly with how open we are to a drop ability with our pharma cost environment. We, unlike some other vendors, don't stipulate a need or set of requirements for how our clients engage with our data and our services. We very much have built a solution, which is somewhat agnostic. And really our mantra is that we're open to talk to any type of technology, any type of interface that our client may have to make it as easy as possible to put them to use the data. They bought it; we want them to use it. The value proposition, we feel is compelling. Certainly, the feedback we get from clients and the data we now have, some of our clients into the third year with our products or some of our newer products, we're getting strong feedback in the ROI. I'll talk to in a moment. Financial strength, high-margin business. 23%, 3-year revenue CAGR at this stage. We'll talk about the recurring revenue and what that looks like later. And then last is the track record. So we've been in business since 2005. We are absolutely thought leaders and known to be thought leaders in the precision medicine space. The team is a team of high expertise, both as it pertains to understanding the clinical significance of what we're doing, but also we now have a very strong team as it pertains to data science, data engineering. And when you bring out a team who understands the clinical impact of the data alongside team that understands the commercialization journey that pharma needs to go on and on may end up with some really smart data engineering, data science and new tools. It's a tremendous framework and opportunity for us to build an exciting business on top of. Next slide, please. And I still talk a lot about Signal, and I talk about it as a lead-in because we find increasingly that, that is where our clients might start their journey with us. That's particularly relevant for those brands in the real market, but increasingly for brands that are preparing for market. They want to engage on the data side that might be a Signal for clinical trials. But it also might be easing that Signal data what we call our retrospective view. So it might be the county the last 3 years or for data to help understand what's the real-world opportunity here for forecasting, market sizing, sales force sizing, things like that. So we can do a lot on that side. It's complemented by a set of other services that typically we add on to the subscription. So we get our time started with the signal subscription, then we can add on segmentation work such lab or physician segmentation. Then we have some very exciting new products that we are only really starting to commercialize now or allowing physician to engage. And this is where we're leveraging our existing lab network and our physician network that we're accessing to a partnership whereby not only can we identify where the patients are, but we can also provide a communication channel back to the stakeholders that can make a key difference for that patient, and we're making that service available to our pharmaceutical customers. So a very common thing we will sell a lot more going forward would be a Signal plus what we call a Physician Engage, whereby own receipt of a patient signal coming in, okay? We have a patient in Idaho that is positive for a particular profile that we're interested in as well as providing that data to our pharma client who may engage a fees team or affiliate person to go and engage that physician. We can use our digital platform solution called Physician Engage to do some digital marketing to that position. And that there was some content, et cetera. We didn't very high levels of engagement rate there because we're doing it in a very timely manner. So all education, awareness, et cetera, if you can do it at a time when a patient is in front of the physician, and they're trying to make a decision as to what to do for that patient. And you can give them some great timely information. It's well received and seen as a very valuable service. So all of those things on the left are subscription model and can be added on to our -- typically to an existing Signal. Multiyear, auto-renewal is the ideal scenario there. As of 2023, the stuff on the left, accounted for 72% of our revenue. And as per their model in subscription, 72% is recurring. The right-hand side is our Scientific & Advisory Services business. This is a crucial part of what we do as a business. And this is where a lot of the key understanding of how these patients evolve on the diagnostic journey exists. We do a lot of the wrap around services here where we have our pharma client understand how they should plan for market launch. We help them build some of the educational content around the testing, building the clinical utility story. Some of that gets used on the left-hand side of our engagement products and help them understand any market access issues. And scientific engagement is an exciting growth area for us. We have sold projects here over the last 3 years, typically larger in nature, where we're helping fix some of the standardization and quality potential issues that exist right back to the practice gaps slide I talked about. Some of those practice gaps we can remove through engaging at a scientific level with our lab partners or other stakeholders to try and improve or prepare the market for something new and normal that's coming. A crucial part of our business and some of the services that offer much and does it for a long time are in this part of our business, continue to be absolutely compelling and important to our customer base. When you bring all these parts together, it's effectively a very joined up solution that touches our pharma client needs as they look to bring precision medicine to market and also we promote it on our market. Talk a bit about the platform, our IP. And this is one example of where we're building, we feel, some significant IP. As I said earlier, the data coming into us is challenging data to use, and we add a lot of value to that data through our labeling and through our standardization of that. And we're using some proprietary technology, but also we're leveraging tech exclusion in terms of data infrastructure, things that are -- might [indiscernible] all the time. We just couldn't have done it 3 years ago, turning the size of the data that we have. We're able to offer analytics on our data at an individual is level, no aggregation needed. You're basically querying on the fly and getting that -- getting to those insights really quickly on the tech as a nimble and all of that. The labeling that our expert team have done, and again, a lot of that's automated. Now, it's transforming not just what we give to our end customers, but also our ability to respond to business development requests or new opportunities, used to be a process. It's not triage to get upfront how much data you have for this disease. It's something that are -- we're very close to our sales guys, been able to get directly sales. Fast forward to the right-hand side, why we're doing all this, continue to improve the offering but also to innovate and bringing products to market. We talked about the launch of our Daily Signal last year. So that's an upsell opportunity on what was essentially a weekly service that we had previously in some instances where there's going to be significant competitor activity or where the patient, you need to get the patients really quickly due to the severity of their illness. Daily Signal is something that's really important to our customers, some customers being this tech investment we've made and they -- and those of our team bringing together and build a solution has enabled innovations with that, which we were able to convert to revenue for reference. Daily Signal is about twice the price of a weekly signal and therefore, has significant revenue and order book visibility opportunity for us. Part of this all come together in terms of an impact for patients. And we should talk to that because it's very important for us as a business. We are very much purpose-led. And we believe that we are making a difference to how patients who might otherwise getting us along the way. These are very complex diseases, very complex to diagnose. We often operate in the rare disease or rare oncology space, so it's not that there's a high level of awareness of some of these patients out there. So our ability to bring patients into give them their position, the ability to make a more informed decision and perhaps adhere to what the guidelines that we need, et cetera, is something that is key to us. There's obviously a commercial aspect of that as well. And on the right-hand side on this chart, we show an example of a plan to launch therapy start of 2023. We switched on our Signal in the middle of the year. The dark blue bar is the number of new starts that the client had for their drug. And when we switched on the pale blue bar, this is the number of new starts or new patients on drug that they were able to achieve per week after we switched on. You can see most weeks, we doubled, sometimes more than doubled the number of patients. So we're bringing a lot of additionality to a market here. Each one of these represents a patient and that's a patient who is potentially going to have a different trajectory for their disease. This is lung cancer. So these are patients who are potentially very sick. By the time they get to this point, it's already metastatic disease. So buying them that extra time, which is really what we're still talking about. It's not curative but getting them that extra few months, that extra year is really important. And obviously getting those additional patients helps informs the new company to share in that patient story but also to deliver on the forecast and exceed the forecast as they did in this instance. So it's a great story all around. Next slide, please. And I'm going to pass over to Nick, our CFO, to take it from here. I'll come back on Q&A for those who have submitted questions so far, and I'll talk you shortly.

Yes. Thanks, Ryan. And yes, just to Ryan's point there, please feel free to raise questions. We definitely encourage it. I'll start with this slide, and then I'll move into some of the strategy involvement and financials. This slide is really interesting to me. It talks to our purpose as a business, which is getting more patients tested so that they can be identified and put on to the right treatment. Ryan talked about our Signal product and how important that is. This was just a snapshot taken at the end of last year, around about October, November time, and you can see the bottom left number there at that point in time, 461,000 potential patients have been identified in North America, and that is just we've paid for client signals that we are delivering on. These are all potential patients that could go into a life-saving drug. By the end of the year, it was just over 500,000 patients identified, each of those blue dots on the map is a physician with at least one potential eligible patient to go into a client's therapy. So hopefully, that is a straight impact we're having in North America and something that we want to replicate in Europe as a priority over the next 12 months. The next slide here really talks to our people, our team. We've made a big investment in not just these great people here, but in the whole team and across Diaceutics. A slide earlier showed we have 184 people in the business as at the end of December. That's up to 200 now, and they are really the brains behind our technology, our offering and our commercial traction with our customers, and thank you to everyone at Diaceutics. I'll just pick up on this slide to touch on our strategy. And let me just put that into context. So we are in line and on track to deliver on our accelerated investment strategy that we outlined in January 2023. So what does that mean financially and in terms of actual delivery? So financially, we said that the investment would help us secure 25% top line growth for the medium and longer term, and we're achieving that. Part of the investment would see us stay EBITDA profitable but at a slightly lower level than in 2022, and I'll explain that in a bit more detail in a moment. And over 2023 and 2024, we detailed that we see a free -- sorry, a free cash outflow of GBP 7 million, but we wouldn't go below GBP 12 million as a minimum cash holding. That's our headroom. And we are -- as I said, we are in line and on track to deliver on that. So the investments go into plan and within all the financial parameters we laid out. It is to deliver against these 4 key areas. And I think Ryan has touched on a majority of these through the presentation so far. So I won't spend too much on them just to say enriching the data and our platform products has gone really well in 2023. We mentioned European Signal rollout, Daily Signal launch in North America, accelerating the growth and engagement of our lab network is key. That is our data supply chain. And more so now it is becoming the partners that we're helping to engage with pharma to really move to new testing. We invest in the platform scale and capability. Ryan talked about AI there. That was a really amazing job. The team have done in deploying that and seeing a real change in our ability to scale this business in the future. And finally, transforming our customer experience and service. We know that pharma is a demanding customer and rightly so, and we have built account teams around pharma, around our pharma customers to help understand their needs and requirements and offer them the best solutions back to them. Our financial strength, again, just to outline this, and then I'll get into a bit more detail on the financials. But I think some of the key strengths in our investment case has been around our high margins, 83% gross profit margin in 2023. We have a 3-year revenue CAGR of 23%. Just to remind everyone on the call here, that's all organic growth as well. That hasn't been augmented by any acquisitions today. 52% of our revenues are now recurring and that is a significant change in the business. In 2021, 3% of our revenues were recurring in nature. Ryan talked to that product slide earlier. You can see that on the left-hand side, all of those insight engagement solutions are migrating or have already migrated to a recurring revenue model, and that continues. I'll talk to the ARR metric in the next slide. And just to finish up on this slide, enterprise-wide engagements from our blue-chip pharma customers. We work with 17 of the top 20 global pharma companies. We have 6 enterprise engagements, and they are with top 10 global pharma. And we announced the addition of 2 additional enterprise engagements last week. Why is enterprise important to us? It really demonstrates, hopefully, to you and other stakeholders in the business that we are valued by pharma, by our pharma customers. We are trusted, and we are delivering on our growth strategy, which is to grow the number of brands we work with and also grow the average revenue that we are able to generate from each of those brands. Ryan said earlier, we now work with 69 pharma brands. That's individual drug assets. And the average revenue we're generating per brand is around about GBP 380,000. Again, that's significant and increasing year-on-year. And finally, strong balance sheet. In this climate, really important to say we have no debt, and we are well funded with cash of GBP 16.7 million as at the end of the year. Again, that gives us headroom to invest in our organic growth strategy. It also allows us to potentially assess and look to do bolt-on acquisitions as and when they might occur. So on to some of the key financial results for 2023. And again, really, really pleasing year. We'd already pre-trialed quite a bit of this as part of the trading update in January. So forgive me if I go over old ground. But I think it's an important message. Revenue up to GBP 23.7 million. That's a 22% growth in the year, 19% on a constant currency basis. The reason we stay constant currency, a lot of our revenue is in U.S. dollars, given our customer base is focused in the U.S. And that 22% growth on the background of, I think, what was in 2023, a challenging macroeconomic environment, but also a challenging time for pharma as well. We saw some mergers in that space, and that has a knock-on effect on some of the budgetary spend and just some general uncertainty around things like the cost inflation, the cost reduction act in the U.S. and just some general concerns at the pharma. So pleasing top line growth. Recurring revenue, I mentioned up to 52%. Our ARR, which is a new KPI for us, is GBP 13.7 million as of 31st of December. What we mean by ARR is annual recurring revenue. So that is the annualized value of our subscription revenue, assuming 100% renewal rate. Although we have a stated renewal rates in the presentation, we believe that to be in the mid- to high 90%. So it's a very strong renewal rate. And again, we'll look to bring that metric in and solidify in future presentations. Order book was up 57% to GBP 26.5 million. Again, part of that shift to the recurring revenue model is the multiyear nature of the contracts. And again, that gives us much more confidence and visibility in our future revenue. Some key metrics not on this slide, but I will touch on gross margin, 83%, down from 86% in 2022, but within what we believe to be the normal gross margin range, which is 1 to 2 percentage points to the side of 85%. Some of that slight reduction in gross margin just being the reduced amount of platform costs that we are capitalizing during the year. And that is just part of a conscious effort as the platform and technology starts to reach maturity, we capitalize less of it and that cost goes through the P&L. I think that makes that a lot cleaner, a lot purer for investors to understand our ongoing cost base. Our adjusted EBITDA was GBP 2.4 million, so that's an EBITDA margin of 9%, going down on the GBP 3.6 million and 18% in 2022, but absolutely in line with our expectations and the parameters that we set out as part of the accelerated investment strategy. I'll talk a little bit about the future shape of the business in a few slides. But ultimately, we're not a 9% EBITDA business. We think it will be higher than that. Part of the depress on the costs in the year, you might have seen from the RNS was we had a one-off U.S. sales tax cost of GBP 600,000 in the year. Just to be really clear, that is a one-off we made a voluntary disclosure after discovering that noncompliance in what is a very complex state-by-state tax rules. And so there are no penalties associated with that. It's straight out payment of the back taxes plus interest fee. Our cash from operations was a positive GBP 600,000. Our free cash outflow after investing in intangibles, the key element of which was the data, which Ryan talked to, it's important earlier. That was a free cash outflow of GBP 3.7 million. But as I said, I'll speak to what the future shape of the business looks like in just in a few slides time. So just going -- I'm not going to talk to all of these, I think, some really important operational KPIs here that I just wanted to draw your attention to. We talked about the people and the account teams that is really important for continuing to develop our growth strategy and relationship with our customers. Ryan talked to the 69 therapeutic brands we work with. We have 6 enterprise-wide engagements as of today, 2 of those were announced, pleased to announce last week and we continue to build on those. As I mentioned, enterprise-wide really shows our importance to our customers and our growth across their brands. One element we don't talk to on this slide was announced after the 2023 year, we see KPMG strategic alliance. That was really important for us, KPMG, a household name and a great reputation and a very stellar reputation in the precision medicine space. They share a lot of common customers with us. And there -- although they operate in the precision medicine space like we do, their offering is very differentiated. They do a lot of strategy work, M&A, tax accountancy advisory, restructuring, all areas that -- we're not looking to get involved with it all, but certainly a very value-add to our customers. So while we can offer the precision medicine data engagement solutions and advisory as a joint proposition to our customers, they offer something completely different and a lot more holistic for what our customers are looking for. I'll just finish off. Like I said, I'll talked about what the future shape of the business is, and I think this is the right slide to do so. So in the RNS, we detailed our Q1 trading for 2024. Obviously, going a bit later in the year, we're able to do that. So very pleased with the 25% revenue growth Q1 2023 versus Q1 2024. That's very supportive of where we think we'll be on our longer-term growth rate and certainly what the consensus market analysts have our growth rate at. It's also important that we continue to move towards a recurring revenue model. We detailed in our RNS that our current recurring revenue model has moved from 3% in 2021, it's 52% in 2023. We anticipate it will be 70% by 2025, and we're on target to deliver that. And ultimately, we'll be near 80% full adoption, probably from 2028 and onwards. The 2-year accelerated investment strategy was time-bound. So by 2025, what we'll see and what we're on plan to deliver is a return to profitability like we saw in 2022 and a return to cash flow generation. So again, 2 important metrics, I think, to highlight here, obviously, to the set back from both of those as we invest in the business, but that's really important to demonstrate how we can continue to scale the investment we have made in the business over these last couple of years. And just one last point to finish on before I hand back to Ryan. I mentioned that we'll be keeping GBP 12 million of cash headroom available. That's important for our pharma customers to understand that we will be around longer term. We have the cash to be a going concern. But it also allows us the flexibility to consider smaller bolt-on acquisitions, which Ryan and I are continuously having a look at across from our desk. And we're also looking to augment our growth through potential partnerships like that, that you saw with a KPMG alliance, and we'll be sure to announce any of those as soon as they become turned up. Thank you. Over to you, Ryan?

On so we close out 30 seconds, and then we'll move to Q&A. I thank you all for those questions so far. Still time to add if you wish. And hopefully, what you've seen us present here is good progress against our plan. Hopefully, there's some predictability that we're executing against the plan that we laid out. We feel we present here a highly scalable business that is at the start of a journey. We've built, as I said, scaled the model. We have got a very robust and supportive supply chains, a large network that we reach significantly, and we're excited about the future. We have a very compelling return on investment case for our customers. We are absolutely thought leaders in the space were synonymous with precision medicine. We have opportunity to grow into new markets, add a significant headroom in terms of the brands that we're working on versus those who were going to after. I remind our team that we're at this point in our journey with minimal marketing, with minimal sales presence in what is a large industry and was so huge industry players that we work for. We have a client list to die for in terms of large blue chip pharma global organizations. And what we need to do as a business is to get out there and tell our story on a bigger stage, to get bigger, market the business better. The thing is built to a large extent. We now need to go out there and shout about it, handing those customers and ultimately the patients who we serve and deliver on the purpose and promise that this business can actually be returned, all that's underpinned by a team who are determined and ready for driving this business through the next digi call. I want to pass the mic to Q&A. Alessandro, if you'd like to come back in and help us with that.

We have received a number of questions. I'll start with the Q&A session, I'll put this one here which reads as follows. In the process of scaling up operations, is a merger possibility on the horizon?

So we're considering all possibilities. As I said, I think a smaller acquisition or a partnership might be more appropriate. But if the right sort of possibility around a merger came along, then we'd certainly have a look at it and consider it. So we're not going to roll anything hard in or hard out. I think we should consider all the opportunities to best be able to grow and scale this business.

How has the market response to the recent launch of Signal in the U.K. and EU?

Yes. I would say the market has formed well to it. We are piloting it with a number of customers learnings along the way as we anticipated. And some of those learnings are understanding the market opportunity for our customer. Obviously, the way therapies are commercialized in Europe, different market to market, very different from the U.S. in terms of the ROI for the pharma company, but also we're very new to this market. Let me rephrase that. Unlike the U.S., where there are other vendors selling set similar types of data and there's a model that all exists. We are, we feel, one of the very few and very earliest. Some of these have data in Europe. So we're -- while we have a very solid model as it pertains to GDPR and patient privacy, et cetera, we're taking those steps cautiously and slowly with our clients to build confidence. So we're happy with where we are. It's to plan, but it's on a journey. We're on a journey there. And I think that's okay. But then as part of the overall build of our European business as we move forward.

Next question here. You had a great year in the U.S. and overall but revenues still in the U.K., Europe and Asia. How should investors view those declines?

Yes. I think it's predictable, and I think it's deliberate. We see absolutely the biggest opportunity for Diaceutics in the U.S. market. And we've gone after that. We actually significantly reduced our operation in Asia, which we have built, started to build, but we paused and under tracked. We felt that it is a step too much too quickly, given the opportunity that exists in the U.S. So that was a deliberate move by us to capture market share. And I think it's proved dividend -- proved dividends on that. In Europe, our business historically has been a global one, and we will continue to push that. So there -- the data supply is now at an increasingly mature level in Europe that enables us to do things like Signal we just talked about, but some of our other services, look, our landscape and others are key for us to drive forward in Europe this year. So we'll see that starting to come back a bit. But our business, we feel will always be led by the U.S. It's where the model shines brightest. It's where the biggest ROI is and it's where it really resonates for our customers and albeit, we will go on to the opportunity in Europe as it presents itself to us.

Next question here. Are you exhibiting or presenting ASCO or any other conferences to increase your exposure to clinicians and pharma companies?

We are, and thank you for asking that question. We have a very significant presence at ASCO every year. We're sending I'd say, close to 30 people this year in 2 weeks' time. And we have a poster presentation. So that's a big deal to get an accepted poster at ASCO. So we're presenting that, but it's also a big opportunity to walk the floor there, get our story out. We don't do a booth because really that's a nonstarter at ASCO, given the size, but we do work that meeting and we have, for instance, dinner reception with our new partner, KPMG, that we're hosting on the Friday night. So ASCO, ESMO, AACR, a host of other meetings are really critical for us in the year, and actually drive a lot of the revenue pattern that we would historically see in the business. There's a bump from ASCO that we expect to enjoy again this year.

Turning to the next question. Are there any changes that can be made in the U.S. insurance system that would improve take-up of your offering?

We're walking into the specifics of what the change might look historically does which has always benefited when there has been changes when there is maybe a coverage determination of rules, a diagnostic [indiscernible] where there is a change to prior authorization for our therapeutic, et cetera. These are some of the things that we've managed in the past. Effectively, our clients need to understand better. They need to understand better how it's going to eat with getting patients on to drug and ultimately, the story with insurance in the U.S. is that we are able to enable a more informed decision about what could be a good outcome for that patient. And as we move to the era of value-based care, which we're tracking very closely and is absolutely synergistic growth or precision medicine and the thing we do. We see that coming to our model, and we're absolutely there ready to capitalize on that.

Another question here. Are all enterprise-wide engagements with a single customer, i.e., with growth in the value of enterprise-wide engagements be expressed by a wider number of therapies being included under a single agreement? Or might there be multiple agreements with each individual customer?

Yes. It's a really good question. So firstly, one enterprise engagement is with one customer. So when we talk about 6 enterprise-wide engagements, we're working with 6 customers but across multiple brands that, that customer owns. So if you were to pick any one of the world's top 10 pharma companies, AstraZeneca is an example, they have tens and tens of drugs within the asset portfolio. We work with all of those, but we will work for a proportion. Where we're working with 3 or more of their assets, we would classify that as an enterprise-wide engagement. Contractually, that could be constructed in a few different ways. It could be one contract agreement across multiple brands and multiple products. But typically, the way that we tend to grow to enterprise and certainly the way that it's happened for the last 2 is that we worked for these customers for many, many years. We're pretty solid within 2 of their brands and what happens if we then expanded in started contracting additional services with another 1 -- another 1 or 2 of those brands, and that's what's picked over to enterprise. I might just take the opportunity to say that we broaden the definition of enterprise, both in the RNS last week and this week to include a customer whereby we would deploy a majority of our services, and you saw that product slide earlier. So where we would deploy a majority of those to 1 pharma -- sorry, therapeutic brand we could classify that as enterprise. We don't yet avail that definition. But it would allow us to add, for example, a biotech with maybe 1 or 2 assets in its portfolio. smaller than a mentor pharmaceutical company but where we're a commercial or promotional partner for them, and we're deploying all of our products and services to one of our assets that could potentially be caught by engagement definition going forward. We'll, of course, announce any of those as and when they come up across.

The next question is really around Signal, and I'll ask if you can share how much Signal contributes in terms of percentage of revenue.

Yes, it's predominantly all of the recurring revenue for 2023. Just to remind people, recurring revenue was 52% of our overall revenue in 2023. So a majority of that will be Signal. It's around about 50%, but we're seeing more and more of our IES insight and engagement solutions to move to the subscription recurring revenue model.

The next question ask if you'd consider listing on NASDAQ.

Yes, I'll take that one. We have a saying on a way that we make decisions at Diaceutics, which is we always ask ourselves what's right for Diaceutics, what's right for shareholder value, and we feel it's our responsibility to bring that shareholder value for the business. And if that's on the NASDAQ, if it's a different model, we will explore it. What I can say with confidence is we feel very well supported by the investor base we have here in the U.K. We're seeing some green shoots in terms of where the market is going. That is helped somewhat by our share prices increased a bit over the last few days, I must admit. But where we are right now is focus on building a business, said we have a great set of investors who are long-term builders for the most part, very supportive on enabling. And that's where we -- what we need right now. Where the future goes, TBD. But right now, for the near term, anyway, we're in the U.K. market and happy to be here and build the business for some billion and the budget will come.

Just coming up to the hour, so maybe time for maybe 2 more. The next question, how much is Diaceutics embedded within the PM market? How mission-critical is it?

Yes, I'll talk to the mission critical piece. I think it's really clear now that our business is on the critical path of our pharma clients. Today, okay, we're at 17:30, we're 30 minutes into the start of a working day on the West Coast of the U.S. There are pharmacist feed teams who are long in this morning to their CRM platform to understand who they're calling on today, which physicians to call on that have a patient who's like eligible for their treatment. That's our data. Okay? We missed that. If we -- that data goes in, that person doesn't have anything -- has no list of people to call on that day in terms of promoting the drug, building the awareness for those physicians, I feel that's pretty mission-critical. I have provided the beating heart, bring it up a level for trying to recruit patients on the clinical trial, very high profile, critical part of pharma's business to get right. We're right in there. We're integrated. We're measured. By that, we have service level agreements with [indiscernible], how quickly we have to respond and RD, et cetera. Thankfully, it's very stable, and we deliver consistently plus the high levels of repeat business and renewal. So and that's always been the case. I think it's a really valid question. But we are critical to them today. And that continues as they look at how our data, enabling them to maybe we reconstruct their sales process and maybe that might result in less fee base, the more things that can be driven by a data signal, data trigger. And that tells us that we're making a difference to our pharma think approach to the go-to-market model.

And the final question we've got here asked, can you provide some detail regarding the statement that for every $1 invested via Diaceutics can generate $100 in additional therapy revenue?

Yes. No, absolutely. I think this is really a metric that we brought in more recently to help investors understand the impact and the value we have with our pharma customers. Historically, this has been something very hard for us to pin down. But actually, through the data, Ryan talked about the tokenization of the data. So through the ability to link our lab data, so our ability to highlight eligible patients, potential patients for pharma to put on to drug, link that with prescription data. And again, this is entirely possible in the U.S. and something that we will build in the EU, we're able to see was there an eligible -- potentially eligible patient and then ultimately, did they go onto drug. So we have the potential patient and then the conversion rate. Signal data and Signal has enabled us to track this metric. You saw on the Signal slide earlier in the deck, the return on investment there, and that was an extreme case was $350 for every one investor with us, that's not the case for every single brand and every single signal, but it is significant, and we feel confident that a level of 100 to 1, in some cases, it might be -- in some industries might be quite difficult to see how a company could do that. But certainly, we have the data to back up that return on investment and our ability to help pharma find more patients and get them converted onto their eligible therapy.

Ryan, Nick, I'd just like to thank you for the presentation and for being so generous in your time in answering those questions. We are just past the hour. So going to please ask investors not to close this session as you know, be automatically redirected to provide your feedback in the hope that management teams can better understand your views and expectations. They will take a few moments to complete. Your time will be greatly valued by the company. On behalf of the management of Diaceutics PLC, I would like to thank you for attending today's presentation, and good afternoon to you all.

Thank you.

Thank you, everyone.