As most battle-hardened investors know, it’s impossible to entirely insulate oneself from macro events. Even tech-rich life-science firms can be temporarily affected by external headwinds, Oncimmune (ONC) among them.

In today’s H1 2023 results, immunodiagnostics group Oncimmune said that its ImmunoINSIGHTS service had experienced “delays in the delivery of samples from major Pharma contracts”, which would push revenues into the second half.

The good news is that despite the industry softness, conditions are expected to improve over the next six months as biotech investment picks up and economic uncertainty subsides.

Moreover, Oncimmune continues to win new contracts, including $1.25m worth of deals in December 2023 and a multi-year MSA with a new top 10 pharmaceutical group for the provision of clinical laboratory services, which is expected to support multiple autoantibody profiling projects focusing on autoimmune, cardiovascular and prenatal diseases.

Elsewhere, an agreement has also been struck with a leading UK biotech company to collaborate on the discovery of autoantibody biomarkers for the detection of sepsis. Under the terms of the deal, all IP developed will be owned exclusively by Oncimmune, with an option for the customer to commercialise later.

On top of this, Oncimmune has signed a further three deals across Chronic Inflammatory Demyelinating Polyneuropathy and autoimmune. That takes the overall value of ImmunoINSIGHTS' order book stood to €3.5m as of 1st March 2023.

Significant strategic progress has also been made, not least Oncimmune’s recent disposal of its EarlyCDT lung cancer diagnostics unit to US biotech Freenome for £13m, of which  10% or £1.3m would be held in escrow for 12 months and transferring £1.23m of the H1 2023 cost base to the new owner.

With regards to the balance sheet, €7.2m (£6.25m) of the proceeds has been used to reduce the previous IPF debt facility, with the remaining €6.0m balance being refinanced over a 3 year period at an interest rate of 9% pa over 3-month EURIBOR (presently 3.48%).

That leaves £6.7m of cash available (including the £1.3m in escrow) to provide working capital to fund future expansion. That gives it scope to scale its proprietary and highly differentiated ImmunoINSIGHTS platform, which generates 80%+ gross margins and also helps many of the world’s biggest biopharmas target, discover and clinically test new oncology, autoimmune and infectious disease drugs.

Finally, Freenome have also signed a new MSA with a guaranteed commitment to purchase at least €1.14m of services from ImmunoINSIGHTS annually, covering the next two years with an option to extend for a further three.

CEO Adam Hill commented: "Whilst the Pharma services market has softened during the last 12-15 months, there is now an unprecedented wall of therapeutic assets queued to enter clinical trials, which bodes well for ImmunoINSIGHTS into 2024 & beyond. Post the sale of Oncimmune Ltd, our focus is the expansion of ImmunoINSIGHTS with an intention to achieve a cash flow break even in the near term."