Diaceutics (LSE:DXRX) — Full Year 2023 Results

0:00 Good afternoon, and welcome to the DIACEUTICS PLC full year twenty twenty three results investor presentation. Throughout the recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated at the right hand corner of your screen. Type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses as appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Ryan Keeling, CEO. Good afternoon to you, sir.

0:32 Good afternoon. And thank you, Alessandro. I'm joined today by my colleague and CFO, Nick Roberts. I, as I've 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 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 what are key differentiators and and the the value proposition that that we bring in this investment case. Next, go to drive the slides. So I'll ask you to go to slide three, please. We continue to refine and reflect on the key purpose and mission of this business.

1:26 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 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 locate patients who are eligible for that therapy, engaging with their physician, and ultimately trying to match patients with with what might be and is often a life changing drug for for that patient. We help them in both of those key areas and the clinical trial setting prelaunch.

2:12 We help to speed the recruitment by identifying patients that are meeting that clinical 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 and identifying their physicians 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 wanna talk to our lab network. This is a a network that we've been growing now for eleven years. It's global in nature, and these are clinical laboratories that we partner with. And, we have a a model where we value in a a value for value proposition with the lab.

3:03 And and effectively, in return for some data services, data infrastructure, and, providing data to back to 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 all the data that helps drive this business. That data is inherently challenge challenging to use in its native form. So we do a lot of work to take what is an unstructured data asset and and to standardize it, to bring it into an environment that allows analytics and value to be created from that data.

3:53 You can imagine working with over 900 laboratories globally, all of which adopt a their own perspective and their own slant on how that data should be structured, how it should be labeled. We have to do a lot of work to consolidate and aggregate all that data together to make it meaningful. A lot of the investment 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, not automated, and that has even AI, natural language processing, and some proprietary models that we've built in order to process that data and allow us to derive value from it much more significantly than we have historically and speed the the way we get that to market.

4:49 Such innovations as allowing us to move our primary product, which is called signal, to a daily service instead of weekly. It's driven by that evolution. It also helps us a lot on the the sales and business development front, getting responses to clients very rapidly. Our platform is our delivery scale mechanism. The platform is really, you should think about that in in two ways. There's a data layer that ultimately is how do we transform and transmit that data to our customers. So our data environment in DIACEUTICS is integrated directly with the data environment of our customer.

5:36 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 data feed that comes from DIACEUTICS over to our customers. When you're providing data, that is used 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 by which they get it to be automated, to be secure, and ultimately, just seamless in terms of how things comes over to them. So the platform data integration is key for us. It also allows our clients to use their existing tools, like CRM tools, etcetera, to engage with the data. That is our adoption significantly.

6:28 It also enables the stickiness and longevity once you're plugged in, providing that feed. It's something that we see is it's helping us stay turned on with those clients. We'll talk later to retention rates and and renewal rates of clients. The platform also provides a more typical SaaS type engagement where you can log in to to web. At your phase, you can view all of your data that you are receiving from the lawsuits 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 pharma client to use that data at a at a dashboard level where they want the analytics.

7:20 Remember, one of our primary use cases for this data is our signal product. It's our lead product, and is around 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 a patient in the very recent past, but within the last twenty four, forty eight hours, who was positively diagnosed with a disease that matches the criteria or a clinical trial they're recruiting for, or 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, to educate them about the opportunity for that patient is a key part of what we're trying to enable, with our former clients.

8:21 Next slide, please. We work in precision medicine. We stayed very fearful to this part of the pharma industry since the business was founded by Peter Keeling back in 2005. And 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 and if they didn't swap out for another drug and keep going until they run out of drugs or or or maybe get one that sticks.

9:14 With precision medicine, we we test the patient more upfront. We understand their diagnosis much more intimately than we might have historically. We're on a molecular level is typically where we are in the likes of oncology, Alzheimer's, cardiovascular, really understand what's driving the disease, and then hopefully be able to pair that profile with a drug that's being developed and is, you know, much more likely to, work for that for that patient. The response rates are typically significantly higher. So precision medicine is where we're at. As we go to the next slide, one of the, things that we're in a very, well suited position to understand is what are the gaps that we just we call these the practice gaps.

10:03 So while in a in a perfect scenario, we are seeing patients getting tested. If those patients are testing positive for particular profile, then they can move forward and and go on to treatment or or go on to a clinical trial. But we consistently see on the data we have, helps us understand not just that last step of, you know, test positivity. We can go back up and say, okay. Patients aren't even getting tested. Maybe there's a lack of awareness. Maybe there's a problem with how we're getting the sample from the patient. Maybe there's a problem with how the the test or treatment's 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.

10:57 And and this is important because while so far on this call, I've talked about our signal product, And we have a whole solution and and suite of services that are absolutely designed, and and our road map is somewhat driven by niche practice gaps in concert with client feedback. We're developing new solutions alongside existing products that we have to really close these gaps and and help increase the flow of patients down, again, to a therapeutic option, which we would hope is potentially key to changing how their health ultimately continues for the better, of course.

11:46 Next slide, please. We're we're not we're not new to this industry. We've been working in precision medicine for nineteen 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. And we have a long track record. We've we've learned a lot along the way from 2005 to 2019. We had a very strong consulting business. We've and that is still the genesis of the business we have today. Since IPO in 2019, we've invested heavily in the lab network, the data, the platform, and 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.

12:53 And and at the same time, trying to improve the quality of the revenues, the forward visibility of the business. So things like order book 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 and what we're doing to improve the quality of that revenue. Next slide. I'm not gonna talk to all of the aspects of this other than I'm gonna focus on the 69 therapeutic brands. There's a key metric for us, and it's it's up significantly on last year.

13:40 You'll see that in a moment. We will continue to grow the the brands that we work on. There's still significant headroom. We estimate around 250 bands that are in market today or or close to market that are our model works really strongly in. K? So that's our near term target. End of twenty three, we're working on on on 69. 250 available to us. That number is increasing by around 15 per year. Some drop off, but but are replaced with more net to 15 increase. So so the end of brands is increasing along with our need to go and win

14:24 additional brands that that we can sell signal to and and ultimately the other services. 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 and and key to that is to go off to those new brands that are often in our 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 the the the bullets here, so the headings of across this, as we think about the overall investment case Wow. For for the Acerdix, I'll talk a little bit about the growing and significant market opportunity, about 69 to two fifty brands.

15:21 Our product road map, I'm gonna talk to you in a moment. The 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's taking eleven years to build. It's just a big part of our competitive moat. We have a very specific strategy there in terms of how we partner with laboratories. It's very unique in in how we do it. It's absolutely part of our secret sauce because what we're ultimately 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 really command a a strong position as it pertains to the availability of the lab data, the diagnostic data for these patients.

16:15 We also have our platform, which is increasing in utilization. We did a lot of work on it to '23, and and they're seeing great successes there. It's effectively how we're gonna scale this business. I talked earlier about the different ways in which we use it, but it's a key differentiator for us, particularly with how open we are to interoperability with our pharma clients 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 our mantra is that we're open to talk to any any type of technology, any type of interface that our client may have to make it as easy as possible to for them to use the data.

17:12 They bought it. We want them to 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 are into their third year with with our products or or some of our newer products. We're getting strong feedback in the ROI. I'll talk to you in a moment. Financial strength, high margin business, 23%, for your revenue CAGR at this stage. We'll talk about, the recurring revenue, and what that looks like later. And then the last piece is the track record. So we've been in business since since 2005. We are absolutely thought leaders and known to be thought leaders in the precision medicine space.

17:57 The team is a team of high expertise, both as it pertains to understanding 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 and when you bring a team who understands the clinical impact of the data alongside team that understands the commercialization journey that pharma needs to go on and marry that with some really smart data engineering, data science, and new tools. It it's a tremendous framework and opportunity for us to build an exciting business on top of. Next slide, please. And so I've talked 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.

18:57 And that's particularly relevant for those brands that are already on market, but increasingly for brands that are preparing for market. They they want to engage on the data side. That might be signal for clinical trials, but it also might be using that signal data, what we call a retrospective view. So it might be the client buys the last three years worth of data to help understand, you know, what's the real world opportunity here for forecasting, market sizing, sales force sizing, things like that. So we do a lot on on that side. It's complemented by a set of other services that typically we add on to the subscription. So we get our clients started with a single subscription, then we we can add on segmentation work such as lab or physician segmentation.

19:49 Then we have some very exciting new products that we are only really starting to commercialize now. Our lab engaged and physician engaged, and this is where we're leveraging our existing lab network and and, a physician network that we're we're accessing through 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 we're making that service available to our pharmaceutical customers. So a very common thing we would sell and hope to sell a lot more of going forward would be a signal plus what we call a physician engage, whereby on receipt of a patient signal coming in, k, we have a patient in, you know, 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 field team or a field person to go on and get that position.

20:58 We can use our digital platform solution called Physician Engage to do some digital marketing to that physician and and deliver some content, etcetera. We're getting very high levels of engagement with there because we're doing it in a very timely manner. It's, like, all education, awareness, etcetera. 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 and you can give them some very 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 to our our typically, to an existing signal. Multi year order renewal is the ideal scenario there.

21:49 As of 2023, the stuff on the left accounted for 72% of our revenue. And and as per their model in subscription, 70% of that's recurring. The right hand side is our scientific and advisory services business. This is a crucial part of what we do as a business. This is where a lot of the key understanding of how these patients evolve in their diagnostic journey exists. We do a lot of the wraparound services here where we help our pharma client understand how they should plan for for market launch. We help them build some of that educate educational content around the testing, building the clinical utility story.

22:38 Some of that gets used on the left hand side for engagement products, help them understand any market access issues, and and scientific engagements is exciting growth area for us. We have sold projects here over the last two years, typically larger in nature, where we're helping fix some of the standardization and quality

23:01 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 with other stakeholders to try and improve or prepare the market for something new and novel that's coming. Again, crucial part of our business, and some of the services that are, you know, being being offered by DXRX for a long time are are in this part of our business and continue to be absolutely compelling and important to our customer base. When you bring all these parts together, it's effectively a a very joined up solution that that touches our pharma client needs as they look to bring a precision medicine to market and and also be promoted on our market.

24:00 Talked a bit about platform or IP, and this is one example of where we're building. We feed 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 we're leveraging a tech explosion in terms of data data infrastructure, things that our my data team tell me all the time, we just couldn't have done three years ago. In terms of the size of the data now that we have, we we're able to offer analytics on our data at an individual patient level. No no aggregation needed.

24:52 You're basically querying on the fly and and and getting that getting to those insights really quickly, and the tech has has enabled a lot of that. The labeling that our expert team have done, and again, a lot of that's automated now, is 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 three week process. It's now three hours to get a a point or a you know, how much data do you have for this disease. It's something that our we were very close to our sales guys being able to get directly themselves. Fast forward over to the right hand side. Why are we doing all this?

25:37 Continue to improve the offering, but also to innovate and and bring new products to market. We talked about the launch of our daily signal last year. So that's an upsell opportunity on on what was essentially a a weekly service that we had previously. In some instances where there's maybe significant competitor activity or where the patient you need to get to the patient really quickly due to the severity of their illness. Daily signal is something that's really important to our customers.

26:10 Some customers, big, this tech investment we've made and the ability of our team to bring it together and build a solution has enabled innovations like that, which we were able to convert to revenue for reference sake. A daily signal is about twice the price of a weekly signal and and therefore has significant revenue and order book visibility opportunity for us. Excellent. How does this all come together in terms of an impact for patients?

26:48 And we should talk to that because it's very important for us as a business. We are very much purpose led. We believe that we are making a difference to how patients who might otherwise get missed 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 an give them the their physician the ability to make a more informed decision and and perhaps adhere to what the guidelines typically, etcetera, is something that is key to us.

27:44 There's obviously a commercial aspect to that as well. And on the right hand side of this chart, we show an example of a client who launched therapy at start of twenty twenty three. We switched on our signal in the middle of the year. The dark blue bar is the number of new starts that that that client had for their drug. And when we switched on the pale blue bar, this was the number of new starts or new 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 to a market here. Each each one of these represents a patient, and that's a patient who is potentially gonna have a different trajectory for their disease.

28:39 This is lung cancer, so these are patients who are

28:43 potentially very, very sick. By the time they get to this point, this will be 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 is really important. And and, obviously, getting those additional patients helps the pharmaceutical 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 it's a great story all around. Next slide, please. I'm to pass over to Nick, our CFO, to take it from here.

29:34 I'll come back on at q and a. Thank you for those who have submitted questions so far, and I'll talk to you shortly. Yeah. Thanks, Ryan. And, yes, just to Ryan's point there, please feel free to raise questions. We we definitely encourage it. I'll start with this slide, and then I'll move into some of the strategy involvement and and financials. This slide's really interesting to me. It it talks to our purpose as a business, which is getting more patients tested so that they can be identified and put onto the right treatment. Ryan, 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.

30:20 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 on to a life saving drug. By the end of the year, it was just over five hundred thousand patients identified. Each of those blue dots on the map is a physician with at least one potential eligible patient to go on to a client's therapy. So hopefully, that illustrates the impact we're having in North America and something that we want to replicate in in Europe

30:58 as a priority over the next twelve months. The the next slide here really talks to our our people, our team. We've we've made a a big investment in not just these these great people here, but in the whole team, and across DIACEUTICS. A slide earlier showed we have a 184 a 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 our customers. And thank you to everyone at at DIACEUTICS.

31:40 I'll just pick up on this slide to touch on our our strategy, and let me just put that into context. So we are in line on 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 the medium and longer term, and and we're achieving that. Parts 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 cash, sorry, a free cash outflow of £7,000,000, but we wouldn't go below 12,000,000 as a minimum cash holding. That's our our headroom, and and we are, as I said, we are in line and on track to deliver

32:43 on that. So the investment's going to plan and with and it's within all the financial parameters we laid out. It is to deliver against these four key areas, and I think Ryan's touched on a majority of the a majority of these through the presentation so far. So I won't spend too much on them just to say, you know, enriching the data and the platform products has 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 is key. That is our data supply chain. And more so now, it is becoming the the the partners that we're helping to engage with pharma to really move the needle on testing.

33:29 We invest in a platform scale and capability. Ryan talked about AI there. That was, you know, a a really amazing job. The the team have done of deploying that and seeing, you know, a real change in our ability to scale this business in the future. And finally, transforming our customer experience and service. We know that the pharma are 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.

34:06 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 our high margins, so 83 gross profit margin in 2023. We have a three year revenue CAGR of 23%. Just to remind everyone on the call here, that's all organic growth as well. That that hasn't been augmented by any any acquisitions today. 52% of our revenues are now recurring, and that is a significant change in 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.

35:07 And just to finish off on on this on this slide, enterprise wide engagements with our blue chip pharma customers. We work with 17 of the top 20 global pharma companies. We have six enterprise engagements, and they are with top 10 global pharma. And we announced the addition of two additional enterprise engagements last week. Why is enterprise important to us? It really demonstrates hopefully to to you and other stakeholders in the business that we are valued by pharma, by our pharma customers. We are trusted, and we are 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.

35:58 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 is around about £380,000. Again, that's significant and increasing year on year. And finally, strong balance sheet. In this climate, really important to state, we have no debt, and we are well funded with cash of 16,700,000 as of 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 and and look to do bolt on acquisitions as of when they they might occur.

36:46 So onto some of the key financial results for 2023, and and, again, really, really pleasing year. We'd already pretrialed quite a bit of this as part of the trading update in January, so forgive me if I go over old grounds, but I think it's an important message. Revenue up to 23,700,000. That's 22% growth in the year, 19% on a constant currency basis. The reason we stay constant currency, a lot of our revenue is in US dollars, giving our giving our customer base is focused in The US. 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 we saw some mergers and and in that space, and and that has a knock on effect on some of the budgetary spends and just some general uncertainty around things like the

37:47 the cost cost inflation, the cost reduction act in The US, and just some general concerns there for pharma. So pleasing top line growth. Recurring revenue, I mentioned up to 52%. Our ARR, which is a new KPI for us, is 13,700,000 as of December 31. What we mean by ARR is annual recurring revenue. So that is the annualized value of our subscription revenue, assuming, a 100% renewal rate. Although we haven't 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 consider we'll we'll look to bring that metric in and solidify it in in future future presentations.

38:40 Order book was up 57% to 26,500,000. Again, part of that shift to the recurring revenue model is the multi year 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 one to two percentage points either 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.

39:26 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 and l. I think that makes that a lot cleaner, a lot clearer for investors to understand our ongoing cost base. Our adjusted EBITDA was 2,400,000, so that's an EBITDA margin of 9%. Again, down on the 3,600,000 and eighteen percent 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.

40:15 Part of the the pressure on the costs in the year, you might have seen from the r and s, was we had a a one off US sales tax cost of £600,000 in the year. Just to be really clear, that is a one off. We made a voluntary disclosure after discovering that that noncompliance in what is very complex state by state tax tax rules. And so there are no penalties associated with that. It's a straight up payment of the back taxes plus interest due. Our cash from operations was positive £600,000. Of free cash outflow after investing in intangibles, the key element of which was the data, which I think Ryan talked to its importance earlier.

41:03 That was a free cash outflow of 3,700,000. But as I said, I'll speak to what the future shape of the business looks like in just a in a few slides time. So just going to I'm not gonna 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 continuous continuing to develop our our growth strategy and relationship with our customers. Ryan talked to the 69 therapeutic brands we work with. We have six enterprise wide engagements as of today. Two 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 and our growth across their brands.

41:59 One element we don't talk to on this slide was announced after the 2023. We see KPMG strategic alliance. That that was really important for us. KPMG, a household name with a great reputation and a very stellar reputation in the precision medicine space. They share a lot of common customers with us, and they're although they operate in the precision medicine space like we do, their their offering is very differentiated. They do a lot of strategy work, m and a, tax accountancy, advisory, restructuring, all areas that, not we're not looking to get involved with at all, but certainly are 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, for what our customers are looking for.

43:02 I'll just finish off. Like, I said, I'd talk about what the future shape of the business is, and I think this is the right slide to do so. So in the r and s, we detailed our q one 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 q one twenty twenty three versus q one twenty twenty four. That's very supportive of where we think we'll be on a 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 RMS that our, our current recurring revenue model has moved from 3% in 2021.

43:52 It's 52% in, 2023. We anticipate we'll be 70% by 2025, and we're on target to deliver that. And, ultimately, we'll be near 80%, for adoption probably from 2028 and onwards. The two year accelerated investment strategy, was 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, two important metrics, I think, to highlight here. Obviously, took a step 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.

44:47 And just one last point to finish on before I hand back to Ryan. I mentioned that we'd be keeping 12,000,000 of cash headroom available. That's important for our pharma customers to understand that they we will be around the 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 as it goes through our desk. And we're also looking to augment our growth through potential partnerships like that that you saw with the KPMG alliance, and we'll be sure to announce any of those as soon as they become firmed up. Thank you. Over to you, Ryan. Used to be closed out thirty seconds, and then we'll move to q and a. And thank you all for those who have put in questions so far.

45:39 Still time to add if you wish. Hopefully, you've seen us present here is good progress against our plan. I'm sure there's some predictability. They were executing against that the the plan that we laid out. We feel we present here a highly scalable business that is at the start of a journey. We we've built, as I say, scaling the model. We have got a very robust and supportive supply chains and lab network that we we need to reach significantly. And we're excited about the future. We have a very compelling return on investment case for our customers.

46:26 We we are absolutely thought leaders in this space. We're synonymous with precision medicine. We have opportunity to go into new markets. There's significant headroom in terms of the brands that we're working on versus those we're going after. And I I remind our team that that we're at this point in our journey with minimal marketing, with minimal sales presence in in what is a large industry and most huge industry players that we work for. We've a client list to die for in in terms of large, blue chip, former global organizations. And and what we need to do as a business is to get out there and tell our story on a bigger stage, project bigger, market the business better.

47:16 The the the the the thing is built to a large extent. We now need to get out there and and shout about it and bring those customers and ultimately the patients who we serve deliver on the purpose and promise that this business can can actually deliver to you. All that's underpinned by a team who are determined and ready for driving this business to to the next stage of growth. I'm gonna pass now to q and a. Alessandro, if you'd like to come back in and and help us with that. Yes. Great. Ryan, Nick, thank you very much for your presentation. We have received a number of questions. I'll start the q and a session off with this one here, which reads as follows.

48:04 In the process of scaling up operations, is a merger possibility on the horizon? So it it we're considering all possibilities. As I said, I think a 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 gonna rule anything hard in or hard out. I think we should consider all the opportunities to best be able to grow and scale this business. Yeah. Perfect. Thank you very much, Nick. How has the market responded to the recent launch of Signal in The UK and EU? Yep. I would say the market responded well to it. We are piloting it with a number of customers.

48:56 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 differs market to market, very different from The US in terms of the ROI for the pharma company. But also, we're we're we're very new to this market. Let me rephrase that. Unlike The US where there are other vendors selling similar types of data and there's a model that already exists, we are we feel one of the very few and very earliest selling this type of data in in Europe.

49:44 So we're while we have a very solid model as it pertains to GDPR and and patient privacy, etcetera, we're we're taking those steps cautiously and slowly with our clients to build confidence. So we're happy with where we are. It's a two plan, but it's it's it's on a journey. We're on a journey there, and I think that that's okay. But then it's part of the overall build of our European business as as we move forward. Perfect. Thank you very much for that, Ryan. Next question here. You had a great year in The US and overall, but revenues fell in The UK, Europe, and Asia. How should investors view those declines? Yeah. I I think I think it's predictable, and I think it's deliberate.

50:34 You know, we see absolutely the biggest opportunity for DIACEUTICS in The US market, and we've gone after that. We we actually significantly reduced our operation in Asia, which we have built. Started the build, but but we paused and and retracted. We felt there was just a step too much too quickly given the opportunity that exists in The US. So that was a deliberate move by us to to capture market share, and I think it's proved dividend proved dividends on that. In Europe, you know, our business historically has been a global one, and and we will continue to push that. So whether the the data supply is now at a increasingly mature level in Europe that enables us to do things like signal we just talked about, but some of our other services, like our our landscape and others, are 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 US. It's where the model shines brightest. It's where the biggest ROI is, and it's it's where it really resonates for our customers.

51:50 Albeit, we'll we'll go after the opportunity in Europe as it presents itself to us. Perfect. Thank you very much. Next question here. Are you exhibiting or presenting at ASCO or any other conferences to increase your exposure to clinicians and pharma companies? We are. And thank you for asking that question. We we have a very significant presence at ASCO every year. We're sending, I think, close to 30 people this year in two 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 work 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 but we do work that meeting.

52:44 And we have, for instance, a dinner drinks reception with our new partner, KPMG, that we're hosting on a Friday night. So ASCO, ESMO, AACR, 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 there's a bump from ASCO that that we expect to enjoy in this year. Perfect. Turning to the next question. Are there any changes that can be made in The US insurance system that would improve take up of your offering? We're working into the specifics of what a change might look like. Historically, DXRX has always benefited when there has been changes, when there is, you know, maybe a coverage determination that rules a diagnostic in our rights where there is a a change to prior authorization for a therapeutic, etcetera. These are some of the things that we've we've managed in the past.

53:49 Effectively, our clients need to understand better. They need to understand better how it's going to aid with getting patients on to a drug. And and ultimately, the story with insurance in The US is that we are able to, enable a more informed decision about what what could be a good outcome for that patient. And as we move to the an era of value based care, which we're tracking very closely and is absolutely synergistic with precision medicine and everything we do, we see that coming to our model, and and we're we're absolutely there and ready to capitalize on that.

54:37 Perfect. Another question here. Are all enterprise wide engagements with a single customer? I would growth in the value of enterprise wise 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? Yeah. No. It's a really good question. So firstly, one enterprise engagement is with one customer. So when we talk about six enterprise wide engagements, we're working with six customers, but across multiple brands that that customer owns. So if you were to pick any one of the, you know, world's top 10 pharma companies of AstraZeneca as an example, they have tens and tens of of drugs within their asset portfolio.

55:25 We wouldn't work with all of those, but we would work work with proportion. Where we're working with three 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 two is that we've worked for these customers for many, many years. Pretty we're pretty solid within two of their brands. And what happens is we then expanded and started contracting additional services with another one for another one or two of those brands, and that's what's tipped it over to enterprise.

56:14 I might just take the opportunity to say that we've broadened 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 of our services, and you saw that product slide earlier. So where we would deploy a majority of those to one pharma pharm sorry, therapeutic brand, we could classify that as enterprise. We don't yet avail of that of that definition, but it would allow us to add, for example, a biotech with maybe one or two assets in its portfolio. So smaller than a than a mainstream pharmaceutical company, but where we're a commercial or promotional partner for them, and we're deploying, you know, all of our products and services to one of our assets, that could potentially be caught on the product engagement, definition going forward.

57:11 We'll, of course, announce any of those as and when they they come under contract. Perfect. The next question is really around Signal and 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 majority of that will be signal. It's around about 50%, but we're seeing more and more of our, IES, our insight and engagement solutions move to the, subscription recurring revenue model. Perfect. Thanks for that, Nick. The next question asks if you'd consider listing on Nasdaq.

57:59 Yeah. I'll take that one. You know, we we have a saying and a a way that we make decisions at DIACEUTICS, which is we always ask ourselves what's what's right for DIACEUTICS, what's right for for shareholder value, and and and and we feel it's our responsibility to bring that shareholder value for the business. If if that's on a a on the Nasdaq, if it's a different model, we will explore it. What what I can say with confidence is we feel very well supported by the investor base we have here in The UK, and we're seeing some green shoots in terms of, you know, where where the market's going. That is helped somewhat by a share price that's increased a bit over the last few days, I must admit.

58:49 But but where we are right now is focused on building a business, said we have a great set of investors who are are long term holders for the most part, very supportive and enabling. And and and that's where we what we need right now. Where the future goes, TBD. But but right now, for for the near term anyway, we're we're on The UK market and happy happy to be here and build the business, focus on building it. And the value will come. Perfect. We're just coming up to the hour, so maybe time for maybe two more. The next question, how much is DIACEUTICS embedded within the PM market? How mission critical is it? Yeah. I'll talk to the mission critical piece. Well, I think it's really clear now that our business is on the critical path of of our pharma clients.

59:45 Today, okay, we're at seventeen thirty. We're we're thirty minutes into the start of a working day on the West Coast Of The US. There are, pharma based field teams who are logging in this morning to their CRM platform to understand who they're calling on today, which positions to call on, that that have a patient who's likely eligible for their treatment. That's our data. K? We make if we miss that, if we that data goes in, that person doesn't have any has no list of people to call on that day in terms of the the promoting the drug, building the awareness for the for those physicians. I feel that's pretty mission critical. We're right at the beating heart, bringing up a level for for trying to recruit patients on their clinical trial.

1:00:36 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 which dictate how quickly we have to respond to any data outage, etcetera. Thankfully, it's very stable, and we we deliver consistently, plus the high levels of, repeat business and renewal. So and that's not always been the case, and I think it's a really valid question. But but we are critical to them today, and and that continues as they look at how our data is enabling them to maybe re reconstruct their sales process, and and maybe that might result in, you know, less less field based, but more things that can be driven by a a data signal, data trigger.

1:01:27 And that tells us that we're making a difference to our pharma think about their go to market model. Perfect. And the final question we've got here asks, can you provide some detail regarding the statement that for every $1 invested via DIACEUTICS can generate $100 in additional therapy revenue. Yeah. No. Absolutely. I think this is 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 the data, and, Brian 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 US and something we'll have been filled out in in the in EU. We're able to see, was there an eligible potentially eligible patient? And then ultimately, did they go onto drugs? So we have the potential patient and then the conversion rate.

1:02:41 SIG our data and signal has enabled us to track this metric. You saw on the on the signal slide earlier in the deck, the 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 a 100 to one is you know, in some cases, it might be and and 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.

1:03:26 Perfect. 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 So can I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order management team can better understand your views and expectations? This won't take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of DIACEUTICS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you. Thank you, everyone.