As part of the ShareBuyers’ going for growth series, we take a look into the growth prospects of Fusion Antibodies (LON: FAB) – one of the most talked about AIM-listed science stocks on the market right now.
The established, twenty-year old Belfast-based biotech Company – which was founded in the labs of Queen’s University in 2001 – specialises in Antibody therapies for cancers and other conditions and has recently made waves on AIM by developing SARS-CoV-2 antigens (the key element of a virus that tests search for) that mimics Coronavirus.
In this article, Fusion Antibodies’ Chief Executive Officer, Dr. Paul Kerr, talks about antibody engineering; why he is confident that the business is ready for yet even more success and how he would pitch the business to legendary investor Warren Buffett….
Firstly, could you please tell us a bit about Fusion Antibodies and its value proposition?
Fusion is a Belfast based contract research organisation (CRO) providing a range of antibody engineering services for the development of antibodies for both therapeutic drug and diagnostic applications.
Our growth strategy is based on combining the latest technological advances with cutting edge science to deliver new platforms that will enable Pharma and Biotechs get to the clinic faster, with the optimal drug candidate and ultimately speed up the drug development process.
“Our extensive antigen manufacturing capabilities means that we have been able to express high-purity antigens on a commercially viable scale for the development of diagnostic tests. We are now offering these antigens on a commercial basis to companies and researchers worldwide. Unlike the PCR tests that are currently being used to identify the presence of COVID-19, our antigens are able to confirm recent past infections and determine levels of antibodies to COVID-19.“Dr. Paul Kerr, CEO of Fusion Antibodies
We continue to innovate to develop new services. The most significant project under way is the development of a Mammalian Antibody Library platform. This will reduce the number of development steps in the discovery of a new antibody drug by allowing the screening of new targets against a panel of whole antibodies that are already human in nature removing the need for animal hosts. Furthermore, it also removes the limitations of the major alternative approaches, which is restricted to the use of non-mammalian cells. This restriction can lead to the selection of antibodies which perform poorly when transferred to a mammalian system.
Proof-of-concept development of our Library platform is ongoing in FY2021. We expect further development of the Library during FY2022 alongside customers projects, to greatly expand the discovery service we can offer to organisations in this current market. The development of the Library is expected to increase our directly addressable market to $2.0bn in FY2023 through custom products and licencing activities.
The current climate is presenting challenge and opportunity – how has this applied to FAB?
The COVID-19 pandemic has had an unprecedented effect on the entire pharmaceutical industry. The Coronavirus antigens we have recently developed means they can be used by scientists to develop COVID-19 treatments, triggering antibodies that kill the virus, without having to handle the live virus itself.
Our extensive antigen manufacturing capabilities means that we have been able to express high-purity antigens on a commercially viable scale for the development of diagnostic tests. We are now offering these antigens on a commercial basis to companies and researchers worldwide. Unlike the PCR tests that are currently being used to identify the presence of COVID-19, our antigens are able to confirm recent past infections and determine levels of antibodies to COVID-19. This could be invaluable for disease modelling and public health policy, as it will assist in the determination of true transmission rates and case fatality rates.
Our proof-of-concept work on the Mammalian Antibody Library Discovery Platform continues to progress very well. We have made progress on the design, expression and validation of SARS-CoV-2 proteins, commonly known as Coronavirus spike proteins. These antigens have been tested by external partners against patient blood samples and show a 100% correlation with results from a leading certified benchmark test.
This news almost immediately caused the shares to surge on 18 September by more than 150% to 182.5p – and therefore almost doubled its market value to £46.4million.
Growth catalysts are crucial to business growth – what do you believe yours are?
Strategically the business is organised in three core service areas to meet our customer needs:
- Discovery: the creation, screening and sequencing of novel monoclonal antibodies for therapeutic and diagnostic applications;
- Engineering: maximising the performance of an antibody drug including CDRxTM humanisation, ADDTM and RAMPTM; and
- Supply: the production of material for clinical production or further research, including cGMP ready stable cell line development and transient expression
Growth throughout the year was strong as we continued to deliver on the foundations laid out previously. Following the year end in March 2020, trading has been in line with expectations.
“The market is actively growing and the Mammalian Antibody Library will give access to a growing market projected to reached $6.5bn by 2030 (Roots Analysis, ‘Antibody Discovery; services and platforms market 2020-2030) once it is fully developed. Outputs of the library, potentially for COVID-19 but the library can also used for multiple purposes and antibody discovery against a range of diseases.“Dr. Paul Kerr, CEO of Fusion Antibodies
There are many untreatable conditions and antibodies can form a part of the solution to most of these conditions. Our customers are pharmaceutical, biotech and diagnostic companies seeking to develop antibody based therapeutic drugs and diagnostics and we provide a multi-service offering from antibody discovery and development to clinical supply.
What are the biggest headwinds you foresee to achieving growth in the coming months and year? How will you tackle them?
As we enter a world where the ‘new normal’ is virtual meetings and online events, we must look at new ways of doing business and new ways of reaching our potential customers. It is also about our customers adjusting to a different way of doing business.
Trying to find a new way to expand our customer base may be a challenge as everything transfers to online. As working environments change, it can affect decision times from customers and delay processes.
Imagine you find yourself in a lift with Warren Buffett. What would be your ‘elevator pitch’ to summarise why he should invest in your business?
Antibodies are proteins that act as ‘record cards’ of previous infections encountered by the body, enabling the immune system to quickly recognise and destroy the virus upon reinfection. They occur naturally in the body and are produced by the immune system to neutralise pathogens such as bacteria and viruses circulating in the blood stream or to remove other foreign bodies. People who have recovered from infection with SARS-CoV-2, the virus which causes COVID-19, usually develop antibodies. These new tests would help to determine the extent to which these antibodies can prevent reinfection and how long that protection might last.
Fusion Antibodies is a CRO specialising in pre-clinical antibody discovery, engineering and supply for both therapeutic drug and diagnostic applications and is well placed to grow in the future and for that reason you should consider buying the stock or at least putting them on your watchlist.
Why Fusion Antibodies now?
- Offers clients’ reduced cost, reduced timelines, increased flexibility and unrivalled customer service
- Open and flexible approach to business and project planning
- Proven, reliable biologics manufacturing services (antibodies and non-antibody proteins)
- Regulatory support
- State-of-the-art facilities with complete project isolation
- Suite of supporting services including early stage developability assessment, protein engineering, affinity maturation and humanisation
Please note: this discussion with Dr. Paul Kerr of Fusion Antibodies forms part of the ShareBuyers’ going for growth series – helping companies with high growth potential to share their story. It is not a recommendation to buy or sell shares in FAB.
Article originally published on sharebuyers.co.uk