Biotech knows no geographic bounds – the pandemic has made that clear. But how does chartered accountancy contribute to the global growth of the biotech sector?
Chartered accountancy might seem a long way from diagnostics and genetics testing but pandemic has demonstrated how having the right business and logistics thinking at the heart of the biotech sector enables rapid growth when and how it is needed.
Prenetics is a case in point. It is a Hong Kong-based diagnostics and genetics testing company with over 400 people globally. It has raised over US$60m in capital from large strategic investors such as Alibaba and Apis Partners and ICAEW member Stephen Lo is the Group Chief Financial Officer.
We acquired DNAfit Life Sciences in the UK three years ago to form what is today Prenetics EMEA. With a globally shared vision and the leadership from Avi in the UK, it has now grown from a small part of our overall business to become a very important part of our group, says Lo.
With the outbreak of the pandemic, Prenetics pivoted towards COVID-19 testing in Hong Kong and the UK and today has undertaken more than two million COVID-19 tests. In the UK, something particularly significant was happening: Prenetics started testing individuals associated with large organisations en masse, such as the English Premier League and the English Cricket Board.
The next move in the UK was for Prenetics to establish a research collaboration with Oxford University, creating its own Prenetics Innovation Technology Center for Advanced Molecular Diagnostics. It had already acquired its COVID-19 rapid testing technology from Oxford University and, with that technology, it now operates rapid testing facilities in several airports in the UK, including Heathrow, Luton, Stansted and Manchester.
No small part of this cross-border expansion exercise has relied on understanding the local business and accounting framework. “Accounting is a tool to understand business: through ICAEW membership and access to the Institute’s resources, I feel more connected to my team in the UK,” Lo says.
The Prenetics team comprises chartered accountants from Hong Kong, the UK, Australia and South Africa, where Prenetics also has an office. “As a company becomes global, you may have within it different cultures, different dynamics or different operations worldwide, but there’s one thing that can connect those within the finance function, and that is chartered accountancy,” says Lo. “We speak the same accounting language and we measure the business in the same way. We have the same scorecard. This is what is unique about chartered accountancy worldwide.”
Prenetics is at the beginning of a significant global expansion plan. Hong Kong represents 40-50% of its revenue and the UK represents the rest. “We have global ambitions and we are actively looking for opportunities outside these regions,” says Lo. “At this point, it is really important for us to have the best of the best talents join our company in our next phase of growth. We are currently looking, for example, for accountants in South Africa that can help us with back-end operations and are also growing the team in India.”
The COVID testing technology acquired from Oxford University is being used in an interesting way. Lo points out that, at present, they are testing for positives for pandemic control. However, as more people are vaccinated, testing will remain to make sure everyone around is a confirmed negative case and therefore it is safe to resume normalcy.
“The market for testing for normalcy is actually much bigger than ‘positive testing’,” says Lo. “We realised this very early on when we first started testing.” This is the thinking that prompted the acquisition of the Oxford University technology and is behind a new game-changer: at-home/point-of-care (POC) COVID-19 testing devices that Prenetics is planning in order to “decentralise laboratory testing,” as Lo puts it.
Testing for other infectious diseases, such as influenza, is also on the radar. “We know that genomics technology can be used to detect cancer and this is something we are working on now,” he says. “Think about the lives we may be able to impact if we can detect early-stage cancer, stop metastasis and prolong lives.”
As fabulous as the science is for mankind, Prenetics is still a business and at the core of the business is the thinking that comes with chartered accountancy. What Lo is talking about is getting the business network in place so that, as the science matures and becomes ready to commercialise, Prenetics has a proper global business operation that can deliver and enable the business to reinvest and do more.
What is interesting is that COVID testing started, for Prenetics, as a social venture – to do good – but it became a business opportunity over time. “It’s a unique business case. But the way we think about it is, even for a biotech company like ourselves, at the end of the day is not just the science that matters, because science is just one piece of it. People are looking for end-to-end solutions, not just traditional lab test results,” he says.
“We need a way to make sure that people are safe. You need a user-friendly digital solution that shows that everyone that comes into an office is negative. And you need a strong commercial team to make sure that your solution is what the customer needs. And then you need a strong accounting and finance team to make sure that we are funnelling resources in the right way.”
Lo is emphatic that while science is important to a biotech company, the commercialisation part is vital to make sure it is making an impact. He concludes: “If we do not have a standardised scorecard, it is difficult for business decision-makers to have an accurate view of what’s happening on the ground so they can make informed decisions to drive progress.”
This article was first published by ICAEW at the following URL: https://www.icaew.com/insights/viewpoints-on-the-news/2021/april-2021/chartered-accountancy-as-a-global-network-enabler