TIDMINS
RNS Number : 3363Z
Instem plc
15 May 2023
Instem plc
("Instem", or the "Company")
Transfer of ToxHub Platform and launch of Centrus(R)
Significant commercialisation opportunities
Instem plc (AIM: INS), a leading p rovider of IT solutions to
the global life sciences market, announces that the Company has
been granted exclusive rights to transition the ToxHub Platform
(the "Platform") from eTRANSAFE.
The Platform, which has benefited from c.EUR41m investment to
date and has been designed to speed up the development of
medicines, will be commercialised by Instem following integration
into the Company's unique in silico suite, which it has rebranded
as Centrus(R).
ToxHub will sit alongside the Company's existing, data sharing,
predictive modelling and insight generation solutions; areas where
Instem already processes complex data using advanced technologies
such as artificial intelligence ("AI") and natural language
processing.
The Company has also received the first Software-as-a-Service
("SaaS") subscription order for the Platform from Bayer AG, one of
13 international life sciences companies involved in the eTRANSAFE
consortium www.eTRANSAFE.eu (the "Consortium"). Bayer AG's Head of
Investigational Toxicology commented: "ToxHub, a powerful suite of
predictive tools and visualization software for translational data
analyses, offers a valuable and innovative addition to enhance
safety assessment for our drug development programs."
Building on Strong Foundations
The Consortium commenced work in 2017 and spent over five years
and c.EUR41m specifying, designing and developing the Platform,
with funding from the Innovative Medicines Initiative (IMI),
Europe's largest public-private initiative aiming to speed up the
development of better and safer medicines for patients. Recognising
the accelerated investment that Instem will be making to
commercialise the Platform and the commitment to continue to work
with several of the key technology partners in the Consortium,
there is no initial capital outlay for the Company associated with
the transition of the Platform.
Grant funding was provided to eTRANSAFE by the IMI2 Joint
Undertaking, which receives support from the European Union and the
European Federation of Pharmaceutical Industries and Associations
(EFPIA). A key objective of the Consortium, and a significant
justification for funding, was to reduce the number of animals used
in the development of new drugs and chemicals.
Centrus, a powerful technology and data sharing suite, provides
a range of translational science solutions designed to strengthen
translation of data and insight between the discovery, nonclinical
and clinical phases of research and development, increasing
confidence, efficiency and velocity, materially reducing the cost
of life sciences R&D and helping Instem's clients bring their
life changing products to market faster.
The Consortium members have addressed the technically and
operationally challenging aspiration to share much of their
proprietary historical data for mutual benefit, while also enabling
them to securely incorporate their still private data into the
system. The Consortium members had already contributed data from
approximately 10,000 non-clinical studies and a small number of
clinical studies, creating a significant repository of valuable
data, most of which had not previously been shared. Having received
the Bayer AG contract, approximately 1,000 of their non-clinical
studies are now available in Centrus . As other Consortium members
place Centrus subscription orders with Instem, their data will be
added into the Platform. The Company will also provide a service to
continually add studies from new and existing subscribers.
Growth Opportunity
As the eTRANSAFE project approached the end of its IMI2 grant
funding, it was proposed that Instem assumes ownership of and
commercialises the ToxHub platform, integrating it with Instem's
existing in silico solution portfolio, to create compelling new
capabilities, expand the user-base and ensure continuity in the
exceptional data collaboration and innovation achieved already by
the Consortium. Already a long-term supplier to all 13
pharmaceutical and chemical companies in the Consortium, Instem was
quickly recognised as an obvious, trustworthy custodian for the
valuable data (or "honest broker" as defined by the Consortium),
and a company capable of establishing a secure, global
collaborative translational science platform.
Modelling, simulation and data exploration solutions, frequently
incorporating artificial intelligence capabilities, are the fastest
growing areas of software investment in life sciences R&D. With
a current total addressable market of over GBP600m, a serviceable
addressable market of c.GBP 150m and multiple opportunities to grow
its new Centrus solution suite and market share in a rapidly
evolving environment, Instem believes it is well positioned to
accelerate growth organically and acquisitively.
While the Platform and data assets are being transferred to
Instem without the Company incurring a capital outlay, there will
be essential ongoing investment in the Instem team that will
continue to develop, support and commercialise the solution. Third
party expenses will be incurred by Instem with several of the
Consortium technology partners, either as technology
subcontractors, or through royalty payments for a small number of
Platform components. Instem will also incur initial expenses for
the Amazon Web Services technology platform through which the
solution is deployed, with some incremental cost as client and data
volume grows.
Instem expects to expense c.GBP2.5 million of start-up costs in
the first 12 months of the project, during which the Board expects
that SaaS subscription revenues will build steadily as the Company
focuses on on-boarding the Consortium members, other interested
life sciences companies and influential research institutions.
Following an initial period of investment, the Company believes
there is potential for significant revenue growth and EBITDA
contribution from 2025 onwards - building from a modest base in
calendar year 2024.
In addition to the IP ownership of core elements of the
Platform, the Company will also benefit from access to open-source
technology and the perpetual right to use data from many of the
studies that have been contributed already by the Consortium.
Strengthening the whole Portfolio
The addition of the Platform, technology and data will
complement Instem's existing in silico solutions and the proven
mechanism for data sharing is expected to accelerate the potential
for additional data sharing from Instem's workflow software
solutions, which have been used over several decades to collect and
analyse data from many thousands of non-clinical and clinical
studies.
Centrus utilises US Food & Drug Administration mandated
standards S (Standard for the Exchange of Nonclinical Data) and
clinical equivalent SDTM (Study Data Tabulation Model) as preferred
formats to ingest new data. Instem's deep understanding of, and its
market leading technology solutions that create and use, S and
SDTM, makes the transition of our customers' operational data into
Centrus a logical progression and opportunity to unlock further
value from their investments.
With the recent growth of Instem's portfolio, the breadth of
customer data that the Company now works with stretches from the
earliest days of drug discovery to the latest stages of Clinical
development. This unparalleled reach is now matched with a Centrus
platform that offers customers a single repository from which to
unlock new knowledge through the application and deployment of
cutting-edge algorithms that draw on this unique, enterprise-wide
resource.
Positioned for Growth
In the near term, the Company will invest in onboarding the
Platform, ramping up the commercial and technical teams,
establishing the technology environment and continuing the highest
priority functional enhancements, with an additional cost of sale
associated with each new client subscription. To facilitate this,
there will be a reallocation of internal resource to reflect the
increasing emphasis on data, AI and insight generation.
Centrus will further build out and then accelerate the Company's
in silico presence from its current base, with management focused
on increasing exposure to this segment of the market, which
provides higher margin opportunities and increased revenue
visibility. This will enable the Company to establish a blended
growth strategy, building on the relationships and fundamentals of
its established business.
Dr Thomas Steger-Hartman, Head of Investigational Toxicology and
Vice President at Bayer AG commented: " ToxHub, now part of
Centrus, is a unique platform for accessing and analysing our own
nonclinical data head-to-head with unpublished data from other
pharmaceutical companies. The incorporation of clinical databases
makes Centrus the first tool to approach translational questions in
a seamless way."
Phil Reason, Instem CEO, commented: " We are delighted that our
long-standing history as a market leading technology provider and
trusted partner to most of the world's leading life sciences
R&D organizations has enabled us to take ownership of ToxHub.
We will benefit from over EUR40m spent on the Platform by eTRANSAFE
since 2017 and their substantial data contributions. The Consortium
members (and wider industry) will benefit from our accelerated
investment in the commercialisation of the platform, integration
into our new Centrus in silico solution suite and an ever-expanding
repository of usable data.
"We have had tremendous support from the Instem team, clients
and investors over the last 10 years as we have grown our solution
portfolio, domain expertise and client base organically and
acquisitively. We have been resolute in our belief in the potential
to leverage our access to and understanding of large volumes of
complex chemistry and biology data from early discovery to
late-stage clinical trials to radically reduce the cost and time of
drug development and we believe the launch of Centrus provides a
transformational growth opportunity for Instem.
"Instem's capabilities, client necessity, emerging technology
and regulatory authority acceptance are coinciding to enable
rapidly developing industry collaboration and innovation. This has
the potential to deliver new life changing products at
unprecedented pace to address unmet societal needs. A large
repository of current and historical data together with a broad
suite of SaaS solutions and the potential to leverage these assets
through a rich set of technology enabled services will ensure that
we remain a key player in a rapidly developing new era for life
sciences R&D. It is hugely exciting and rewarding to be
intimately involved in this work and we look forward to sharing
further progress as additional clients deploy our current and
expanding Centrus in silico solutions."
For further information, please contact:
Instem plc Via Walbrook
Phil Reason, CEO
Nigel Goldsmith, CFO
Singer Capital Markets (Nominated
Adviser & Broker) +44 (0) 20 7496 3000
Peter Steel
Alex Bond
Stifel Nicolaus Europe Limited (Joint
Broker) +44 (0) 20 7710 7600
Ben Maddison
Richard Short
Walbrook Financial PR +44 (0) 20 7933 8780
Tom Cooper instem@walbrookpr.com
Nick Rome
Joe Walker
About Instem
Instem is a leading provider of IT solutions & services to
the life sciences market delivering compelling solutions for Study
Management, Regulatory Submissions, Clinical Trial Acceleration,
and Informatics-based Insight Generation.
Instem solutions are in use by over 700 customers worldwide,
including all of the largest 25 pharmaceutical companies, enabling
clients to bring life enhancing products to market faster. Instem's
portfolio of software solutions increases client productivity by
automating study-related processes while offering the unique
ability to generate new knowledge through the extraction and
harmonisation of actionable scientific information.
Instem products and services address aspects of the entire drug
development value chain, from discovery through to market launch.
Management estimate that over 50% of all drugs on the market have
been through some part of Instem's platform during their
development.
To learn more about Instem solutions and its mission, please visit www.instem.com
About eTRANSAFE
The "Enhancing TRANslational SAFEty Assessment through
Integrative Knowledge Management (eTRANSAFE)" project develops an
integrative data infrastructure and innovative computational
methods and tools that aim to drastically improve the feasibility
and reliability of translational safety assessment during the drug
development process. This infrastructure will be underpinned by
development of open standards and robust policies widely accepted
by stakeholders, including regulatory agencies and international
organisations.
The eTRANSAFE is a 5.5-year project, started on 1st September of
2017, funded by the Innovative Medicines Initiative 2 Joint
Undertaking (IMI 2) together with the pharmaceutical industry, that
aims to develop an advanced data integration infrastructure
together with innovative computational methods to improve the
security in drug development process.
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