Caution and contract delays amongst Epistem's (EHP) pharmaceutical customers, combined with investment spend, explains the half-year loss at the personalised medicine and diagnostics group. Still, the development of its Genedrive diagnostics product holds promise - that will soon generate its first milestone payment, of $1m (£0.66m) from partner Beckton Dickinson, and is on track to gain regulatory approval in India in July for a tuberculosis test.
Management reckons that Genedrive can provide a more accurate test result, and far more quickly, than the current comparative tests - 45 minutes compared with four weeks. By end-2012, it should be generating its first, modest, revenues, but sales should pick up quickly next year. Moreover, Beckton Dickinson - which holds global rights outside of India - will pay further milestones over the next six to 12 months. Following the tuberculosis product, there are plans for malaria and hepatitis C assays. Epistem's preclinical services and biomarkers operations, meanwhile, remain relatively low-risk cash generators that are helping to fund development. Pre-clinical sales shrank to £1.3m from £1.4m a year earlier as pharmaceutical clients became more cautious about research & development spending. But the biomarkers unit continued to make progress, thanks to deals with GlaxoSmithKline and Sanofi-Aventis.