A flotilla of fishing boats by the Gateshead Millennium Bridge in Newcastle, in a protest, organised by Campaign for an Independent Britain and Fishing for Leave, against the deal that will see the UK obeying the EU Common Fisheries Policy for the transition period of Brexit. PRESS ASSOCIATION Photo. Picture date: Sunday April 8, 2018. Photo credit should read: Owen Humphreys/PA Wire
Northern England is home to a £13.6bn life science industry © PA

Northern England has long been a hotspot for life science companies. The region, with eight research intensive universities, is home to a £13.6bn industry and 21 per cent of the total UK life science sector workforce, according to the Northern Health Science Alliance. The workforce grew almost a tenth to 50,000 between 2012 and 2017. But investors have not always prospered, as some of the region’s listed companies have failed to match their early promise. Some are now showing signs of health.

Shield Therapeutics

After a grim 2018, when negative drug trial data pushed Shield Therapeutics’ share price into the doldrums, this year is proving more positive for the pharmaceuticals company behind iron deficiency drug Feraccru.

Subsequent further analysis of the data showed Feraccru had after all been effective.

Shield’s share price has risen nearly 300 per cent over the past 52 weeks. The shares this month passed the 100p mark but are still well short of 150p, the float price in early 2016.

The critical date now for Shield is July 27, the deadline by which the US Food and Drug Administration must decide whether to give approval to Feraccru’s sale in the US. “This is the next leg up for us,” says Carl Sterritt, founder and chief executive of Shield, which is based in Gateshead and London.

Feraccru, made in Northumberland, is approved in the EU for adults. US approval would enlarge the potential global market to £2.5bn.

Most of Shield’s £11.9m turnover in 2018 comprised upfront payment from its licensing deal with Norgine, which markets Feraccru in Europe. Shield made a £2.3m adjusted pre-tax loss. Its next product, PT20, an iron-based phosphate binder for treatment of a complication of advanced renal disease, is preparing for patients stage trials.

Yourgene

The Manchester business, previously called Premaitha, offers a non-invasive way of checking whether children have the genes that cause Downs syndrome after just 10 weeks of pregnancy.

Premaitha tried to sell the test with a genetic sequencing machine provided by Thermo Fisher. In 2015 Illumina, a rival maker, sued Premaitha for patent infringement. After a protracted legal battle Lyn Rees joined as boss in July last year and declared a ceasefire. He struck a deal to license Illumina technology, opening up 60 per cent of the global market.

Thermo Fisher swapped £13m of debt for a 9 per cent stake in the business.

Mr Rees’s company now pays Ilumina for each test. The pugnacious Welshman says the deal also opens up Illumina’s platforms to more tests from Yourgene.

In April he bought fellow Manchester start-up Elucigene, which has a cystic fibrosis test. It paid £9.2m, funding through a £10m share issue at 10.25p. The stock has ticked up above 11p since.

Yourgene has also moved into cancer testing in Taiwan and Mr Rees believes it can become a large provider of genetic screening and reproductive health services to a growing global middle class.

An unaudited trading update for the year to March 31 showed revenues up 45 per cent to £8.9m from more than 30 countries. The adjusted pre-tax loss fell to £5.2m from £6.7m.

Analysts forecast a profit in the second half of 2020 and a 19p share price. “The handcuffs are off,” Mr Rees said.

Genedrive

Another Manchester business that changed its name after a tough start in life, Genedrive (formerly Epistem) has developed the first portable device to diagnose Hepatitis C. This means health professionals can run testing programmes in remote communities without needing to bring people to clinics.

It also sells a portable detector for biological weapons to the US Department of Defense. Next year it expects to release tests for antibiotic induced hearing loss and tuberculosis.

Epistem listed in 2007, mainly as a contract research business, and by 2013 the shares were worth 581p. They have fallen dramatically since and remain at an all-time low of 21p despite recent encouraging news.

The company is starting to wean itself off grant income and produce commercial revenue. Results for the second half of 2018 showed that income rose to £1.5m from £1.3m in the same period the year before. Heavy R&D spend led to a pre-tax loss of £1.7m (£2.3m) but it had plenty of cash (£5.8m) after a £6m fundraising, £3.5m in equity and a £2.5m convertible loan.

Within weeks $900,000 should arrive from the US Department of Defense for a first commercial order. The World Health Organisation is reviewing whether to give its Hepatitis C kit pre-qualified status, which would boost demand. It is approved in 11 countries.

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