P | P | P feat. MeOmics Precision Medicine Ltd. – follow up chat

We had a follow up conversation with Alasdair Pettigrew, CEO at MeOmics, the global provider in Precision Psychiatry.

The purpose of article series ‘Product | People | Potential’ is to feature and showcase the very best UK start-ups with great potential, truly inspiring businesses that are shaking up their sector. We capture and share the stories behind the name. We collate authentic peer to peer real-talk, while celebrating the growth and success thus far and gather a glimpse of what’s ahead.

Jazz @ADLIB: Can you please re-introduce MeOmics and what MeOmics does?

Alasdair: MeOmics is a spin-out of Cardiff Univeristy, we have 5 founders, 2 of which are senior academics at Cardiff Uni who discovered a mechanism for deriving biomarkers for severe mental illness which had previously not been commercialised. These biomarkers will help with drug development, and eventually with precision mental health care. Technology wise, we use simple neural networks, derived from stem cells, which we excite with an MEA machine, from this we can collect signals which we asses for mental illness. We can also apply drug to this neural network, in vitro, to see how that signal changes enabling us to potentially stratify patients into types making it easier to pharma companies to pass drugs through clinical trials, repurpose drugs and develop drugs for severe mental illness. We believe that our biomarker database could be the catalyst for the development of a whole host of new therapies in the severe mental illness space. There hasn’t been a new fundamental drug therapy for schizophrenia, for example, for more than 50 years.

Our focus currently is schizophrenia, but we believe that there will be applications for other severe mental illnesses like bipolar and certain autism conditions, which while not a mental illness in itself, could benefit from our method of stratification.

Jazz @ADLIB: Let’s start with People; last time we spoke you were a very small team, now you have begun scaling and growing your team do you have any top tips you could share with those businesses faced with the same issues?

Alasdair: We have five cofounders, as this is an efficient way of distributing equity in the early development of a company. We must be careful of how people are brought on board and how they are kept on board in order to protect the company. It is very important to share out equity because it is all we’ve got to give at the moment, we don’t have any income and the investment that we have taken is a relatively modest pre-seed round (compared to our forthcoming costs), so none of the founding team are getting paid at the moment. I worry when founders are reluctant to share out equity because I believe that it limits the growth of the company. It’s a simple truism that ‘50% of something is better than 100% of nothing’ so equity is a powerful reward to get people involved in the company.

Now that we have closed our Pre-Seed investment and we have partnered with another organisation the team is growing in that way, we have three people from the partner organisation who are closely involved in the mission and their mission is to make this project a success.

Jazz @ADLIB: Moving to Product, as you have developed as a company how has your approach implementing and understanding product market fit changed?

Alasdair: Really, what we are doing now is assessing product market fit; the science is proven, so we are confident in the concept, and what we now need to do is to further develop a product that fits into the market. What this requires is patient recruitment on a much larger scale, targeting 50 patients, plus controls. These patients must be of the correct clinical type, with diagnosis information. From here we will create stem cells from the blood samples and derive data from the signals. All the data, the neuronal stem cell and assays we create will belong to MeOmics and form part of our product.

Whilst we create this library, we’ll also be engaging with the market (pharma and medical AI companies) to discuss how that product fits with the market demand and establish what access they want. Do they want access to the cells, or the assay or the data?

Jazz @ADLIB: And then Potential, can you share some challenges or barriers you had to overcome to get to this stage?

Alasdair: The main barrier to progress was investment, our project is capital intensive – we are going to spend nearly a quarter of a million pounds just on processing the blood samples. My advice to anyone in this position, to overcome the initial barrier of financing, is to go for grants as vigorously as you go for angel investment but do both at the same time. The angel investors will only be interested if there is a grant alongside their money because it magnifies their investment and minimises their risk. And Innovate UK (who supported us with our initial grant) will only support if you have the additional 30% funding already available*.

*Innovate UK require companies to have 30% of start-up funding already available for them to provide the grant money. Even if the grant application is successful, they won’t release the money without additional funding, and this has to happen within 1 month of them agreeing to support the grant.

And another thing that really helped our progress was partnering with St Andrews Healthcare, a mental health hospital charity, who will help us with patient recruitment and increased our eligibility for the Innovate UK grant.

Jazz @ADLIB: And finally, investment, having received your pre-seed funding, do you have any piece of wisdom you could share around best approach?

Alasdair: My advice would be to prioritise focus on the grant application, the bar is set very high so this application will take a lot of time and effort. My recommendation is to take as much advice as you can but probably try to avoid paying someone to do the grant for you, especially if you have high initial costs like we have.

And secondly, if you get knocked back, don’t take it personally. We failed on our first grant application, then weren’t successful on our second either. It was about a month after our second try was declined that they reversed that decision and accepted us. Of course, engage with angel investors at the same time so that both the grant and the investment are aligned simultaneously. Investment is really a sales process, lots of approaches and pitches with a strong story that aligns with the grant application and the Angel Investors’ needs.

Another top tip for those seeking investment; the HMRC Seed Enterprise Investment Scheme (SEIS) is linked to a valuable tax break, so with the tax year running April-April it is beneficial to link the investment and grant deadlines to the tax year. This can give extra motivation to angel investors to act because they want to meet the tax year deadline.