Physiomics Plc ($PYC)

Good afternoon, and welcome to the Physiomics Plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll, which I kindly ask you to submit your responses to. I'd now like to hand over to CEO, Peter Sargent. Good afternoon.

Thank you, Jack, and thank you all for joining our IMC presentation today. So as most of you will know, my name is Peter Sargent. I'm the CEO here at Physiomics, and I'm joined here today by Dr. Jim Millen, our Non-Exec Chairman. So the purpose of this short presentation is, firstly, to provide a brief update to the business and then provide some further context around the recent Board requisition and why the current Board does not feel that is in the best interest of the business. We'll be sure to keep the presentation short, so we can spend a big part of this time answering as many questions as we can. I know that there's been quite a few questions already submitted. So we will be sure to kind of work through all of those at the end of the presentation. You will also see that there is the ability to submit any further questions live as we go through the presentation or towards the end. So I please do recommend that you do that. So many of you who have joined this call today will be already aware of the business. But for those of you who are less familiar with us, Physiomics, at its core, is a consultancy company providing highly technical data-driven solutions into biotech and pharma clients, really to help support them accelerate and derisk their drug development programs as well as help them meet their regulatory obligations. These consultancy services can be broken down into 2 main areas: our modeling and simulation service, which is our historic service; and also secondly, our recently launched Biometric service, which incorporates biostatistics and statistical programming. Both these service lines are fee-for-service consultancy plays, whereby we, as a company, leverage our combined expertise from the core operational team, our contractors and Board to identify, develop and deliver consulting solutions to our clients. This highly technical and deep expertise and experience is wide ranging from our in-depth understanding of drug development and regulation, our understanding of disease biology and then the mathematics, data science and pharmacological elements underpinning our service. It is this expertise along with our ability to flex and provide bespoke solutions that is valued the most by our clients in contrast to mainly off-the-shelf solutions provided by many of our competitors. At this point in time, 100% of our company's revenues are derived from these 2 consultancy service lines and will remain the primary focus of the business to ensure kind of growth and eventual profitability. However, as many of you will also be aware, the company is also developing personalized medicine dosing tools. So this is an asset which will be used to support clinicians with dosing decisions around chemotherapy and related conditions called neutropenia. This tool is still in development and is not yet generating revenue. And up until this point, the tool has been historically funded through government grants. Like most service companies operating in our life sciences sector, the last few years has seen the company face significant headwinds. Even though there are signs of optimism within the market, drug developers of all sizes have been under pressure. Life sciences, VCing and capital markets have been significantly impacted since the pandemic with biotechs access to capital being severely restricted. For example, in the U.K. alone, the BIA, so that's the BioIndustry Association, has reported the amount of VC funding for biotechs has almost halved since 2021, with no IPOs occurring since 2022. This has been compounded further by many of the geopolitical pressures we're seeing at the moment, such as recent changes in drug pricing and tariffs having a downward pressure on the drug revenues. Combined, this means a lot of biotechs are struggling to raise money and many pharma companies are having to restructure and move towards more lean pipelines. The last point has certainly been the case for one of Physiomics' long-standing pharma clients where they've recently had to go through a reprioritization of their pipeline. All this has a knock-on effect to services companies such as Physiomics. For example, there's been several BD opportunities over the last few years we have lost because of the biotech company we've been working with hasn't been able to raise cash, enough cash to progress their assets. However, conversely, the 2 areas of drug development Physiomics has made a strategic decision to focus on are still growing with both the modeling and simulation or the model-informed drug development service line and the -- service market projecting to grow at 17.5% and 7.2% compound annual growth rate, respectively. Therefore, we, as a Board, believe there are still the right areas to focus on, and this last 2.5 years has shown that growth can be achieved and maintained. The first year I joined, we ended up that year with record levels of sales, over 60% up from the previous 5-year yearly average. And this then resulted in the following year seeing a 46% increase in year-on-year total income. Looking at this year, as we've reported recently, we've just achieved our best ever first half in the 25-year history of the business, and we are on track for the rest of the year to hit a record year for total income. How we've achieved this growth under these difficult market headwinds? In my view, this growth has been underpinned by strategic review and refreshed operating model rolled out in 2024 and careful investment in key initiatives. Since then, we've moved away from being overly reliant on 1 or 2 key clients as we were historically and expanded our client base significantly, including contracting with clients as far field as South Korea. Through our BDM market efforts, onboarding of new expertise, development of internal capabilities, we've expanded our mid offering, moving beyond our once niche QSP oncology offering into new therapeutic areas and into new areas of drug development. And then more recently, as I mentioned earlier, we've just launched a new biometric service line, which has already seen the delivery of 4 contracts and has a building pipeline. Even though there is more to do, I'm personally very proud of what we've achieved over the last few years. This continued growth and foundation is a testament to all the people we have here at Physiomics. As with all life sciences consultancy companies, even though we have certain proprietary tools at our disposal, we are primarily a people business and rely on the sector of expertise of everyone, core team and Board in the company. We rely on their networks across pharma and biotech and the relationships they've built with clients. As for the future of the company, we are, of course, aiming to build on these foundations and continue to drive growth in our service business. This includes further investment in business development and marketing to build relationships with new clients and in new markets. We're aiming to deepen our relationships with mid-tier and large CROs as well as pharmaceutical clients around our new biometrics offering. And we're aiming to build and evolve our internal processes and systems that underpin this continued expansion of services. Some examples of these capability builds more recently include the launch of our new quality management system that will ultimately enable us to meet the more stringent procurement requirements of many large biotech and pharma clients and then enable us to provide services that are integral to the delivery of clinical trials, working under the principles of good clinical practice, or GCP. We're also taking steps to modernize our data management processes to ensure better alignment with clinical regulations, and we're expanding our use of AI tools to support coding and development of our own bespoke tools to speed up certain elements of data analysis. Outside our service business, we're still focused on progressing our dosing software. We announced early on in the year our expanded collaboration with our U.S. partner, DoseMe. Our innovate-funded clinical trial with Blackpool NHS Hospital is soon coming to an end, providing us with that vital data required to develop the tool further. And then beyond this organic growth, the Board and I have been in discussions with a variety of M&A targets over the last year. We'll have a couple of these engagements developing in the first instance into kind of more strategic partnerships as part of that kind of get to know you process, but with the idea of potentially developing closer ties at the later date. It is this organic growth of our services, along with our further development of the strategic partners and M&A that I believe will enable the company to continue its growth trajectory, reaching cash generation and driving shareholder value. Furthermore, even though there are many macroeconomic and geopolitical pressures that are out of our control, many commentators are projecting green shoots in the life sciences sector with respect to access to capital. If true, this, I hope, will further support Physiomics growth going forward. I'll just pass that over to you then now, Jim.

Thanks, Pete. Can you hear me okay, Pete?

Yes.

Wonderful. Yes. Thank you for that, Pete. So as everyone knows, we've received a requisition request from Mr. Whitlow and a number of his colleagues. And the effect of that request would be to replace the entire existing Board of the company with 3 individuals, Mr. Whitlow and 2 associates. As Pete said, we do believe that this would not be in the best interest of the company and do recommend that you vote against. But before I go into the reasons for that, I wanted to say just a couple of things upfront. Firstly, just to acknowledge that recent share price performance has been poor. We're not trying to disguise that. Nothing that follows in this presentation is an attempt to excuse that, although as you did hear from Pete, the entire industry has had a difficult time since 2021 when capital markets started to become very difficult in the life sciences space. We do, however, feel that we've reached a positive inflection point and have a plan to accelerate the recent good performance of the company and therefore, create shareholder value. Second thing I wanted to just say briefly was that neither I nor my fellow directors are fighting this requisition request out of any sense of ego or petty-mindedness. If I thought it would genuinely be in the best interest of the company to step down, I would do it in a heartbeat. But sometimes, you have to fight for what you believe in, even if the odds are against you, and I and my fellow directors honestly believe that this is one of those times. So just to step through a few of the bullets on this slide. They kind of echo the sentiment that was expressed in our GM notice last week. So I won't labor them too much, and we'll try to move on to the questions reasonably quickly. Firstly, it was that we felt like the requisition request was rushed and poorly thought through. We were in active negotiations with Mr. Whitlow when he presented us with a sort of an ultimatum to immediately agree to some changes or face the requisition request. We simply don't believe that's the right way to approach the total change of control of a public company. I think it's a good example of where you have the right to do something, which we absolutely don't dispute, but that doesn't necessarily mean it's the right thing to do at that time. I think further evidence of the rush nature of the request was the fact that Mr. Martin Gouldstone was initially included in that request, having been contacted, I think, really at the last hour before the request was sent to us, followed by his subsequent withdrawal. I won't comment on the reasons for that withdrawal that they are his reasons, although I think there's been some insinuation on the part of Mr. Whitlow that the company had something to do with scaring him off sometime, and I would absolutely refute that. Second thing is that having negotiated with the requisitioners, we came to the conclusion that we felt that all shareholders should be given a say in who runs the company and on what terms. So a number of shareholders have written to both myself and Pete urging us to negotiate with Mr. Whitlow to try and find some sort of compromise. And we were and we are very willing to do that. We went as far as to propose a deal whereby we would offer half of the Board seats to the requisitioning parties in return for the resignation of a corresponding number of existing nonexecutive directors. In fact, we even started a mandated onboarding process, which I believe that Ian Bagnall and Nick Tulloch completed successfully. So no objections from that perspective whatsoever. However, there were a number of points of disagreement during these negotiations. And in particular, we did not feel able to grant the remuneration packages that were proposed for the incoming directors. They comprised the cash element as well as shares and options. But the cash payments alone between the 3 individuals who are named in the requisition request would have imposed over GBP 70,000 additional cash burden on the company compared with what we would save by losing the existing 2 nonexecutive directors. And in addition, there were also proposed a package of shares and options representing around about 3% of the company's capital for each of the 2 incoming directors. Now it may be that shareholders consider that an appropriate remuneration package given the acknowledge and experience of these individuals. However, none of the directors felt that we were in a position to simply waive that through. And therefore, I think the general meeting is the shareholders' opportunity to approve whatever it is that the incoming directors propose in terms of their packages. The third point is that we honestly don't see the right mix of experience in the proposed requisition team. As Pete said very eloquently, we're a very, very specialized scientific consultancy business in the life science space. Our company needs directors with relevant experience who can actively contribute towards the success of the business. We have no objection in principle to any of the individuals in the requisition. We respect their historical business experience and entrepreneurial activities. But we simply don't believe that they have sufficient sector-specific experience that relates to our business to warrant a complete takeover of the Board. Mr. Whitlow has informed us that he has a number of other potential more experienced life science directors in mind, and we look forward to being told who they are. But why weren't those individuals approached prior to the original requisition request having been issued. There was no urgent hurry as far as we can see. And it's hard to see how the new proposed directors would be in a position to judge the suitability of someone who would be coming in to lead the company or act as its Chair, given that they have relatively little knowledge of the company itself as far as we understand it. The company has interviewed a number of promising CEO candidates. But of course, these candidates are on hold currently pending the resolution of this process. So the Board is willing to embrace change. I think even in the questions that have started to come in during this presentation, people have once again suggested that we should consider that. We have done. We are prepared to continue to do so, but not at absolutely any cost and under any conditions. The fourth bullet here relates to continuity and planning, and it's a straightforward one really. Even if we were replacing the current Board with a Board which had significant experience in our business area to do that all at once with no transition period doesn't seem to us to be the most appropriate way forward. You've heard directly from Pete an outline of the current Board's plans for the company, how it intends to grow the business and thus create shareholder value. We haven't received any similar plan from the proposed new Board. Therefore, we simply don't know what they'd be thinking about doing. I'd also like to stress at this point that both Pete and I have spoken on multiple occasions with the staff of the company and encourage them to keep delivering the great work that they have been and to continue this regardless of the outcome of this process. At the end of the day, in this type of business, it's the staff who are the main assets, and we want to make sure that they are retained come what may. Finally, we believe that the company has reached a positive inflection point. Again, as you heard from Pete a little bit earlier. Just for a little bit of additional personal context, I looked back at the figures for the company prior to my involvement in the year before I joined, the company's annual revenue was around GBP 235,000. And over the 10 years, over the decade prior to my joining, the annual revenues had been an average of under GBP 200,000. When I joined, the company has a single active client and really no pipeline at all. And as a direct result of mine and more recently, Pete's leadership, market expectations this year are for revenues of GBP 1 million, the first time the company would ever have achieved that figure. We've worked over the course of the year on 23 projects across 13 clients, including 4 in the new biometric service line. We have a pipeline of 19 potential projects whose total value, if they were all signed and delivered, obviously, is around GBP 1.4 million. I've always firmly believed that shareholder value follows company performance. And despite the headwinds of recent years, I'm convinced that the company is at a turning point with significant potential for acceleration through both organic and inorganic growth. So just to conclude before we move on to the Q&A section. Mr. Whitlow has said that I have condemned myself and my fellow directors to a harrowing public event, and that may be true. But we believe that it's our duty to stand up for what we believe is right and what is in the best interest of the company and its shareholders regardless of the odds. We urge you to vote against the resolutions in favor of thoughtful managed change and reject the sort of cliff edge approach, which we believe would be a leap into the unknown.

So with that said, I think we will move on to the questions. We actually received a large number of questions prior to the meeting starting, I think, around 30 or so. Some of them did overlap, and we've condensed those together. And I can see we've also received a number of additional questions over the course of the first 20 minutes of this meeting. So with no further ado, I will work through the questions. We tried to group them together in a sensible way. Some I will answer, some Pete will answer. And then depending on the time at the end, we'll also attempt to go through any additional questions that have come through over the course of the meeting. I can see some of these questions are clearly from Mr. Whitlow, and that's absolutely fine. The first question here is, can we confirm whether additional funding was offered? I assume that means by Mr. Whitlow and decline during the fundraise process. So I can confirm that during the fundraise process, Mr. Whitlow communicated to us that he could potentially help us to raise a certain amount of capital, I think, at 0.4p plus warrants or a slightly lower price without. Mr. Whitlow suggested that this offer was "underwritten," but the Board did not feel like there was sufficient certainty around this offer to want to proceed with it. In the end, obviously, we did manage to raise money at 0.4p and without any associated warrants. So that's the response that I would give to that question. The next couple of questions relate to the negotiations that ensued and which I mentioned earlier. The first one says, can we confirm or deny that the Board of Physiomics kind of killed the negotiations by issuing an ultimatum? Well, that's certainly not the way that we see it. We entered into good faith negotiations. We offered 2 full Board seats, half the Board of the company as well as giving Mr. Whitlow the right to propose additional further director. There were a number of points of disagreement. I won't hide that. And the Board felt that there was only so far it could go in awarding significant remuneration packages without shareholder approval, and I won't repeat everything I've already said in the earlier part of the presentation. But initially, we offered to retain the new directors on the same terms as the existing ones. The requisitions came back with requests, which I outlined earlier. We then responded again with a counter offer. And at that point, Mr. Whitlow said that he didn't feel that further negotiation would be productive. I guess that's how negotiations work. Both sides had their red lines, and we didn't manage to find enough common ground to want to proceed, which brings me on to the next question. Are the Board willing to restart talks with major shareholders? This individual, I unfortunately did not note their name or code, but they said they would prefer us to reach an agreed solution rather than go with either of the alternatives. That was certainly our feeling when we started off negotiations. We are open to further discussions, although as I've already outlined, it feels like we are quite far apart on some elements, but we're always happy to talk. There's a question about why we failed to give a coherent future plan and why we submitted personal attacks on shareholders as part of our GM notice response to the requisition. So to take that in 2 parts, I do feel like both today and in previous presentations, the Board has provided a plan for how it wants to grow the company. And by contrast, as I mentioned already, that we have not received any plan from the requisition, so we do not know what the plan would be. In terms of attacks on the individuals who are named in the requisition request, we don't believe that we have attacked them in any way. In fact, I think we acknowledge their business experience and their professional qualifications. In Mr. Whitlow's case, his entrepreneurial background, and I always have great respect for entrepreneurs. We simply don't believe that, firstly, they have sufficient relevant experience in our business. And secondly, as mentioned already, we don't believe that it's appropriate to have a sort of a cliff edge replacement of the whole Board. There is a further question about legal fees. I know there's been a lot of chat about that on the socials. And I guess the open response to that is that, yes, we did incur some legal fees at the beginning of the requisition process. It's a very tightly defined and legally complex process. We were absolutely required to ensure that the request was valid, and we did what we have to do that. And that arose out of the fact that the request was made at all in the first place. We have at all stages attempted to minimize such costs and confirm that between now and the general meeting, we don't anticipate incurring any further legal costs at all. A further question about Mike having industry support as he puts it. And I think this comes back to Martin Gouldstone's withdrawal and the fact that Mr. Whitlow states that he has other potential candidates in the wings. So we do not deny that Mr. Whitlow has a deep Rolodex and probably has within it the numbers of a number of life science executives, but that's really not a substitute for running a formal recruitment process, interviewing a number of appropriately qualified candidates and having them meet the team prior to their appointment and all of that being done by a group of people who understand the needs of the company. So no, we're not denying that Mr. Whitlow has contacts in the life science industry. We just don't think this is the right way to appoint senior people. There's a question from a shareholder saying why won't the Board buy into the company? I mean the Board has individual members of the Board have bought in and participated in placings in the past. Unfortunately, none of the Board members are highly wealthy individuals. And in addition, I don't believe that any of the Board members have ever sold and therefore, profited from any share purchases in PYC that they've made. So we're coming on to a few questions, which are more in Pete's ballpark. So the first one here is, with total income for the first half of the year 51% higher, would Dr. Peter Sargent not be better suited to lead the PYC business than Dr. Millen? Why let him go? Are there plans to persuade him to stay? So Pete, maybe you want to take that one first?

Yes. No, sure. So look, as you all -- well, most of you will be aware, late last year, I made the decision to leave the business which the company announced in December. I'm not going to go into detail here in a public forum and why I decided to leave, but just to say it was a personal decision. And my decision was prior to this requisition process, so there is no way connected nor is it connected to any of the current Board members. Look, I have approximately 7 weeks left in the business. And my focus is on the day-to-day running of the business, managing and reassuring our staff and clients. We're trying to kind of push to win new additional contracts and ensuring that we continue delivering against our existing contracts at the quality our clients expect. But also in addition, with that 7 weeks ahead of me, I'm also conscious of trying to also transition many of my responsibilities both to the team and to Jim to ensure that we do manage business continuity and have that managed departure from me.

Thank you, Pete. There follows a rather long question. I won't read the whole thing out, but essentially, it's saying that a PYC shareholder attempted to make contact with Pete in the last year by e-mail and didn't get a response. He apparently sent us a list of suggestions for the business and was relatively well known. Can we just comment on why we haven't reacted to that? So Pete, maybe you want to take that one since apparently it was addressed to you.

Yes, completely. Look, firstly, I can only apologize if I didn't reply to this e-mail. I can honestly say that I never saw such an e-mail, which I know is not an excuse. But as I hope other shareholders can testify on my behalf, I do try and reply and I have tried to reply to every e-mail as soon as possible. On this occasion, I really don't know what happened, whether it got caught in the firewall or slipped to the net. I do appreciate that it's probably a bit too late. But if whoever kind of posted this question or this comment is able or willing to forward on that e-mail to me or get in touch with me, I'll be very keen to apologize in person to the send of that initial e-mail and also look at why we missed it. I can go through -- back through our firewall system to try and find that. I guess with regards to answering questions on the IMC platform, again, I apologize if we have missed out answering any of your questions. Whenever I've presented through this platform, we've always tried to answer as many questions as possible in the time allotted. Those either submitted before the event or those submitted live. Sometimes, as Jim mentioned, we do try and combine questions together when they follow the same theme. So maybe there are certain instances where we've perhaps misinterpreted questions. And again, apologies for this.

Okay. Thanks, Peter. We'll move on in the interest of time. So there's a question here about the expanded partnership with DoseMe, what's happening on that front? I'll just take that one very briefly. That partnership is still active. They have had a recent change in management, but we're in touch with the new management. We're waiting the results of the PREDICT-ONC trial, and there's a question on that coming up now. So I won't go into further detail on that. However, we do feel that the results of that trial may help us to develop the dosing tool to a point where it's commercializable depending on what those results show. So Pete, maybe we'll just move straight on to that question and how is that trial going? And when might we see some provisional results?

Yes. So the actual funding through the Innovate UK of that trial is finished already. It ended at the end of March, so last month. So this means that Blackpool NHS Trust, the hospital we have been partnering on this clinical trial has been continuing to recruit patients up until the end of March, so just last week. We've already received a large proportion of the data from kind of those previously recruited patients, and we hope to receive the kind of the final data from the more recent recruited patients over the coming couple of months. We actually have our kind of main interim kind of readout meeting with Innovate UK and our partners at the end of April, coincidentally on the same day as the general meeting. So I'll be rushing off to that in the afternoon after the general meeting.

Thanks, Pete. Next question, has any decision been reached regarding the advertised CEO position? I think I spoke to this earlier. We have been actively engaged in a search since the beginning of the calendar year. We've interviewed a number of candidates who seem well qualified. There is one in particular who seems interested and we are interested in, but that process is obviously paused at this point due to the requisition. Then there are a number of questions about company performance and contracts, which I will leave Pete to talk to, but they include -- it's been a while since there have been any contract announcements, what's the state of the pipeline, a question about the aggregate value of contracts and about repeat business revenue streams, which have renewed from 1 year to the next. Pete, I wonder if you'd like to address those.

Yes, sure. So I think the last contract announcement was mid-February. Since then, we have signed a number of smaller contracts and extensions. However, based on the kind of the size of these contracts, we don't typically announce these. Saying that, though, this is no negative reflection on the pipeline. We hope to have some new contracts we can announce very soon. And the team has been very busy delivering current contracts. Hence, the revenues have been so far very strong this year. I guess regarding the other points, I think whether there's -- I think one of the questions was around 10 contracts, there's actually been 14 contracts won this year so far, which is a combination of some -- within combination with some long-running contracts, our contribution and kind of the strong revenues we're seeing this year. With respect to the revenue streams, as I mentioned in the presentation, we have 2 main revenue streams to the business. So our modeling and biometrics service line. For each service line, we are servicing a variety of different clients. The majority of these come back for follow-on work, whether this is an extension to an existing contract or a completely new project. In actual fact, I think approximately around 40%, 42% of our clients come back more than once and 18% come back to us multiple times. But as typically with consultancy, one of the hardest things to do is to win those new clients and get their foot in the door. And this is something we've recently been doing quite well at. And over the last couple of years, we've actually won contracts with 9 new clients with many of those actually following on with repeat contracts. A couple of those clients recently, we supported them in their kind of preclinical phases where the initial kind of contract value was quite small, but they are coming back and wanting our support in kind of later clinical phases where those contract values are much higher. I did see one question actually coming live about our conversion rate of our pipeline. So just to say this does vary depending on where the opportunity is in the pipeline. Obviously, as it gets further up the pipeline more towards negotiation on contract, the probability goes up. But just to kind of give you an idea that over the last couple of years, our conversion from -- of all opportunities into contracts is running at around about 40%, which I think is quite typical for a company of our size and our nature.

Thanks, Pete. There's a further question here about profitability of contracts. So are all contracts profitable after servicing costs?

A short answer to that is yes, all projects are profitable. Over the last couple of years, we have put in a number of systems and processes to enable us to better manage our projects to time and to budget. Whilst at the same time, we have also kind of pushed our rates up over those couple of years by approximately, I think, 20%, 21% increase in our rates over that period. But we also still feel that we're very competitive in the market, certainly when we are comparing ourselves to some of our U.S. competitors. So I think there's potentially more we can push there.

Thanks. Then there's a question about how much we pay on external consultants, why can't we employ more team members? And is the reliance on external contractors to service contract wins changed? Or will it change going into the second half of -- sorry, between the first and the second half of this financial year?

Yes. So last year, we found ourselves in a bit of a challenging situation due to the departure of a couple of our permanent modelers. During that period, we did have to lean a bit more on our contractors until new permanent hires could be recruited and onboarded. We are now in a more balanced position with our resourcing. However, I must point that this is not to say that we will no longer be using contractors as they do play an important role in helping us kind of flex our delivery capability when needed, whilst also providing us with certain expertise for specific clients. I guess regarding the question about kind of more directly about the cost using contractors, even though contractors are typically more expensive than permanent team members, if you were to kind of calculate a comparable day rate, their benefit is that they do allow consultancy companies of our size where contract wins and resource needs can ebb and flow through the year to meet these dynamic needs without kind of committing to long-term costs. And in actual fact, this model of resource is not only typically using kind of consultancy companies of our size, even some of the larger CROs and consultancies I have worked in the past, utilize banks or contractors to kind of manage changes of demand and obtain specific expertise in short bursts. I guess where it can become challenging and costly though is when contractors are being used continually for a long period of time, where at that point, it would be prudent for the company to actually look to replace that person with -- or to fill that resource need with a permanent hire. I guess just to add to that, just having the contractors is not just about having kind of the right kind of headcount to deliver a project, expertise plays a key role, whether we use a contractor or not. Consultancy projects are often very varied and sometimes requires unique expertise. So for example, a client may be working in the unique therapeutic area or have a very specific question they're trying to answer. And sometimes we can use contractors as subject matter experts to come in for those specific questions.

Great. Thanks, Pete. So the next question relates to M&A. So why doesn't the company seek complementary acquisitions? I think Pete did actually touch on this during his presentation. Obviously, it is something that we think about on an ongoing basis. We have actively been seeking such opportunities. There's been one which started as a potential M&A deal, which has transitioned into a strategic collaboration initially, but could still transform into M&A further down the line. And there's another one that could actually have formed part of the recent fundraise process, but regrettably didn't quite come to fruition for reasons to do with -- personal reasons to do with the founder that, that's gone away for a period of time but may yet come back. Also just to mention, we do get approaches around reverse takeovers from time to time. In general, we remain cautious about these because often the companies that are trying to execute these are companies that have failed to be able to do primary listings and for one reason or another. And the RTO process is both very expensive and time consuming, but just to include that. There's a question about the IP that was licensed to Dr. Christophe Chassagnole at the time of his departure from Physiomics. I do believe that we have answered this before, but just to reiterate, it was licensed to him on a nonexclusive basis. So the company can still use it. The IP itself related to some very old legacy code that was developed by the company many, many years even before my involvement with the company. It was never commercialized by the company, to my knowledge. And it's certainly never been commercialized by the company during the time of my involvement and the company had no plans to exploit it. It doesn't relate in any way either to Virtual Tumor or to our personalized medicine tool, dosing tool. So we didn't attribute any specific value to it at the time it was licensed. So I think that answers that question. So I'm going to skip ahead just in the interest of time. Okay. So here's one. Why did the company not mention anything about creating shareholder value in the CEO job advert? A couple of shareholders wrote to me directly about that one. Yes, I mean, shareholder value is obviously at the forefront of our minds when we're looking to bring new people into the company. I guess if it wasn't specifically mentioned in the job advert, it's because we focused on growing the company's performance and ultimately making it profitable. And we've always believed that shareholder value follows company performance, setting aside inorganic growth opportunities such as M&A. And also, I would emphasize that in discussions that we've held directly with candidates, we've been very clear that a primary part of that responsibility would be to external shareholders and in creating the value that they expect. There's a further question on the dosing tool application around why we haven't put a value on it yet. So that's hard to do until we know what it's going to look like in its final form. I think we've said already that we're awaiting the data from the PREDICT-ONC trial in order to be able to understand whether we can further develop the tool to predict the utility of an expensive drug called GCSF. If we can do that, then we think that the tool will have a material commercial value that we can perhaps start to talk externally about, but we first need to analyze that data and do the further development work. There's a question here about our earnings multiple, actually not earnings, someone has suggested that service companies should be valued at least 10x income. I mean in my experience, that would be a very, very high ratio. I don't know if that's intended to mean earnings. Certainly, most consulting businesses, which is essentially what we are, do not approach 10x income as a valuation benchmark. And then the final question that came through prior to the meeting was, will Pete and Jim confirm that they will continue to act in the best interest of long-term shareholders and all shareholders up until the meeting and the vote at the end of April? So of course, we do confirm this. We do believe we're acting in the best interest of the company, even though I know Mr. Whitlow and his colleagues believe the opposite. It would be much easier and more pleasant for me personally simply to step back at this point, but we feel that all shareholders, not just Mr. Whitlow and his associates, should have the right to vote at the general meeting on the very material changes to the governance of the company that could impact on its entire future. I think I've mentioned already that we are maintaining very close contact with staff and encouraging them to continue to do the great work that they're doing irrespective of what happens within the boardroom. We're absolutely committed to doing what we can to continue to foster success in the company, either under a mandate from shareholders or if the opposite happens, then by facilitating a smooth transition to a new Board. So I think that concludes all of the questions that came in prior to the meeting. I will just quickly scan the ones that came in during the meeting. So here's one specific examples of the value that Board members have added in these processes. Well, I can give you one very significant example, which is, actually goes back to my tenure as CEO. So I directly negotiated on behalf of the company, the deal that we have with Merck, which has brought in, I think, around about GBP 3.5 million worth of revenue over the time that it's been in existence. I know that Pete also gets directly involved in discussions with certain clients in order to manage them and to maximize their value in terms of both initial and repeat business. Other Board members have contributed in different ways depending on their skill sets, but that's just one example. So there's another question here, which says, if we have the best interest of shareholders in mind, why do we not welcome new ideas, new money and new people? Well, again, we have attempted to negotiate and we've gone as far as we think we can go in potentially even giving way for half of the Board members to the requisitioners. But for the reasons I've already outlined, we didn't feel that we could meet all of their requests. And therefore, we feel it's for the shareholders to make that decision now. Conversion rate question, I think Pete addressed already. There's a repeat of some of the other questions that were already responded to in the presentation that came prior to the presentation. Several of those -- so there's another question around the involvement of the Board in new business presentations. So I think I have responded to that. Individual Board members do get involved depending on their particular area of expertise and the type of projects that we're looking at. I guess, in particular, on the M&A side that there are more opportunities for some of the nonexecutive Board members to get involved just as there would be if people like Nick Tulloch or Ian Bagnall came on board because of their skills and background. There's a question about profitability of contracts, which I think Pete addressed. So we believe that all of our contracts do make a contribution to profit, but obviously, the company has a significant fixed cost base, which partly results from its -- the fact that it's a listed entity, quoted entity.

I guess just to add to that, Jim, and going back to the original question about contractors. I just wanted to point out that even the projects where we use contractors are still profitable. So even though they are typically at a higher cost, resourcing cost to the business, we price our contracts, so they are profitable.

Absolutely. And then I see that there's a final question here also about -- basically about our costs in the last 4 years. I think that's from Ian Bagnall. And yes, I mean, as we've said already that the last 4 years have been difficult, not only for us, but for all companies in this space. Therefore, the revenues have not been what we have been aiming for. But I think looking at this current year, then that is turning around. And in addition, in terms of the mix of consulting, external consultants versus in-house people, we have taken concrete steps to address that, but we will still want to maintain some flexibility to use external consultants from time to time in order to flex when demand requires it. So listen, I think in the interest of time, we will leave it there. I think we've answered the majority of questions. We answered fully all of the questions that came in prior to the meeting and quite a good selection of those that came in during. We very much appreciate your attention and look forward to continued dialogue. Thank you.

Great. Thank you, guys, once again. Ladies and gentlemen, can I ask that you don't close the session just yet as you'll now be automatically redirected to a page to give your feedback, which helps the company better understand your views and expectations. On behalf of the management team, we'd like to thank you for attending today's presentation. Good afternoon to you all.