The UK's Pharmagene today reported a near-doubling in turnover in the first half of this year, on the back of strong growth in its drug discovery services division which the firm says ratifies its decision to pursue fewer, higher-value deals.
Company chairman David Lee said that profitability for Pharmagene's services division is a realistic though challenging objective, given the current "background of cautious pharmaceutical company spending."
Pharmagene's revenues rose 96 per cent to £2.3 million (€3.3m) in the half, on the back of a series of new deals for the company's drug discovery products, TargetEvaluator (a human gene expression database in diseased and non-diseased human tissues) and Phase ZERO (a lead identification and optimisation tool). The company has also improved gross margins to 56 per cent from 46 per cent, mainly due to operational efficiencies within the TargetEvaluator product area.
Pharmagene has two large-scale TargetEvaluator deals, with Bristol-Myers Squibb and Schering-Plough Research Institute, and added four smaller clients in the first half, and signed up an additional 10 customers for its Phase ZERO service.
Operating expenses increased to £6.1 million from £5.6 million in the first half of 2002, mainly reflecting planned increases in R&D costs relating to Pharmagene's three lead therapeutic programmes, while the net loss stayed stable at £4.4 million.
PGN0052, an inhaled treatment for cystic fibrosis, has completed a Phase I study, while PGN1091 (formerly R1) for irritable bowel syndrome completed lead optimisation and entered preclinical development on schedule. R4 for migraine remains on schedule to complete lead optimisation in the third quarter of this year.At the end of the half, Pharmagene had £21.2 million in cash and short-term investments.