Shares in Sensyne Health plummeted after the healthcare technology company run by Paul Drayson, the former UK science and defence minister, said it could run out of money within weeks if it was unable to secure emergency financing.
Shares in the Aim-listed company fell 72% – or 54.5p – to 21p, a record low, and far below the flotation price of 175p in August 2018. Trading was briefly suspended by the London Stock Exchange, for five minutes.
After a turbulent time on the market, Lord Drayson, a Labour peer and engineer who founded the data analytics specialist in 2018, wants to take the business private. He and his wife, Elspeth, the daughter of scientist Brian Bellhouse, are the biggest shareholders in Sensyne with a 22.8% stake.
The Oxford-based company began a formal process to find a buyer in early November after it was approached by Drayson about a management buyout. The company said on Friday it was holding detailed discussions with a number of parties.
It said, however, it could run out of cash before a sale is agreed. Sensyne had £2.8m cash in the bank as of 12 January, and said it was pursuing a “substantial debtor” that owed the company money. It hopes to tap a number of institutional investors for £6.35m (with an additional £5m possibly being provided by mutual consent) to fund the firm over the coming months as it pursues the sale. The funding would be in the form of a loan note.
“Whilst the board believes the financing will proceed to completion in the near term, without it the company is unlikely to be able to continue to trade beyond early February 2022 by which time the formal sale process will not have concluded,” Sensyne said.
The company has been rocked by controversy in recent months. The company was fined £400,000 by the London Stock Exchange in November after failing to disclose bonus payouts of £850,000 to Drayson and £200,000 to then-chief financial officer Lorimer Headley shortly after its stock market debut.
Sensyne uses artificial intelligence algorithms to analyse patient data and help pharmaceutical companies accelerate the development of new medicines. It has developed apps for monitoring blood pressure and diabetes in pregnant women, as well as apps for self-monitoring of coronavirus and blood glucose levels. Through 16 research agreements with NHS trusts and US healthcare systems, it has a database of 48m anonymised patient health records covering diseases including heart failure, stroke and haematological cancers.
NHS trusts own 16.2% of the company. In return for providing anonymised patient data, they were given shares in Sensyne as well as a slice of future royalties from any products developed.
Other shareholders include Gatemore Capital Management, an activist investor that urged Sensyne’s board last July to pursue a secondary listing on Nasdaq, which never materialised.
A spokesperson said that the firm was still at an early stage of development and that it took time for revenues from the partnerships to come through. Sensyne also said it had suffered contract delays as a result of the Covid-19 pandemic.
It added: “Some competitors claim to offer direct access to patient data, which is counter to Sensyne’s ethical model, or access to data that are inferior to the deep, longitudinal data sets that Sensyne has established. Sensyne continues to believe that patient data should never be sold or shared directly with life science companies.”
Drayson has in the past expressed concerns that Google was able to access the NHS’s database for free to develop healthcare apps that it will then roll out around the world.