Diaceutics (DXRX) H1 2024 earnings summary

Executive summary

• Achieved 24% year-over-year revenue growth to £12.3m in H1 2024, meeting internal and market expectations, and launched PMx, securing the first commercial contract as a promotional partner in US oncology.

• 55% of revenues are recurring, with a target of 70% by 2025, and the company partners with 17 of the top 20 global pharma, operating in 13 countries and supporting 63 therapeutic brands.

• Continued investment in automation, AI, and platform development, with the investment cycle nearing completion and productivity enhancements expected in 2025.

• Recognized for innovation with multiple analytics and technology awards and maintains a strong ESG profile.

• Expanded lab network, particularly in rare disease and Europe, and increased automation for data extraction and delivery.

Financial highlights

• H1 2024 revenue reached £12.3m, up 24% year-over-year (28% at constant currency), with a three-year revenue CAGR of 27%.

• Gross profit margin at 87% for H1, expected to be around 85% for the full year and future periods.

• Record order book of £27.9m, providing strong visibility for full-year revenue.

• EBITDA loss of £1.3m, up from a £0.2m loss in 2023, in line with the planned investment cycle; profitability expected from H1 2025.

• Cash and equivalents stood at £16.7m, with no debt and a minimum cash holding of £12m maintained.

Outlook and guidance

• Confident in achieving profitability and free cash flow generation in 2025, leveraging recent investments in platform, data, and commercial capabilities.

• PMx launch expected to significantly increase annual revenue per therapeutic brand, with the first deal increasing revenue per brand from £400,000 to around £2m.

• Focused on expanding the number of brands and customers, with a target to grow rare disease revenue to at least 10% by end of next year and 20-30% over time.

• Plans to capture a significant and growing market opportunity as precision medicine adoption accelerates, expanding beyond pharma into biotech, life sciences, and payers.

• Strategic partnerships, such as with KPMG, are expected to expand commercialisation solutions.