Chief Executive Review

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2019 was another formative year for Diaceutics on its way to provide the pharma industry with a comprehensive and global diagnostic commercialisation capability.� Across 2019, 36 pharma companies utilised our services in over 41 different countries.� We provided data analytics and implementation services to 53 therapy brands which is essential for patients seeking timely access to precision therapy.� In addition to delivering strong growth and profitability in 2019.

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Diaceutics raised its first external equity through an IPO on AIM in March 2019.� Despite the backdrop of Brexit deadlines, we were delighted with the interest and support we received from our investing employees and new institutional investors.� Through an oversubscribed share placing we raised a gross �17m which allows us to complete the Nexus product roadmap to market and continue to lead the global diagnostic commercialisation space.

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Specifically our IPO was seen as essential in achieving three major goals:

1.��� To provide sufficient capital to grow the business in line with the increasing demands from its pharma clients identified at the time including further expansion to key markets in Asia

2.��� To increase the quantity of patient testing information flowing into its global real world evidence datalake

3.��� To integrate its method, data, laboratory and pharma relationships into our Software as a Service platform with the working title of Nexus

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Prior to IPO in March of 2019, Diaceutics had invested some �20m over the previous 13 years on the foundations for a successful healthcare platform - building the essential datalake, databasing 2,500+ global laboratories, building our laboratory liaison team in all the top launch markets, and becoming a trusted supplier to 26 pharma companies.�

How did we perform against our IPO goals?

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Growing the business

Our operational planning has been designed to address the long term building blocks required to scale in step with the needs of the highly complex precision diagnostic commercialisation marketplace. Whilst the Diaceutics offering has matured over the previous 14 years, 2019 saw the yield of our investment strengthening specific building blocks which will carry the Company towards a comprehensive global diagnostic commercialisation solution.� This is at a time when the regulators are increasing the requirement for diagnostic testing and the marketplace is accelerating the adoption of precision medicine.� Specifically, these include:

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� In 2019 we added new project management and business development teams to support greater scale, brought recruitment in house, developed a 15 strong senior leadership forum from across all the disciplines to ensure seamless operational communication as we grow.� In addition, we rolled out a two-week intensive onboarding program to accelerate operational impact and a comprehensive performance management framework to support the development and retention of our people.

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� Operationally we added the experience of a further 149 projects during 2019, with 95 in data and analytics and 34 in implementation services, working with 53 therapy brands (19% increase in projects over 2018) bringing our track record in precision testing services to over 650 projects.� We boosted our ranks to 111 passionate professionals to help our clients scale and engineer around the failures of the diagnostic ecosystem.

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� We expanded our laboratory liaison team who are now working with the leading cancer labs across 30 countries including all 15 of the "first launch" markets for the pharma industry.

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� Our Asia team has expanded from 1 to 11 now covering China, South Korea, Japan, Singapore and India.

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Increased the power of our Real World Data-Lake

We have continued to expand our real world data and analytics to provide global insights for global therapy brands.� Of particular note over the past 12 months has been the further development of some 37 Diagnostic Deductive Pathways^TM (DDPs). These are based on clinical best practice and guidelines, from our datalake and provide deep diagnostic disease level insight in key cancers, allowing us to develop future smart data products.

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As Diaceutics moves towards a comprehensive global diagnostic commercialisation solution for its pharma clients, it will be enabled by the increasing depth and breadth of its real world patient testing data lake.� At the end of 2019 Diaceutics had amalgamated over 227 million real world patient records from multiple sources and key precision testing markets into the data lake, providing visibility over some 298 different diseases and real world testing trends from 35 countries.

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From this reservoir of global data our analytics team over the past 12 months had leveraged proprietary algorithms to further develop a series of diagnostic pathways for some 37 of the key cancers.� Additionally, the use of machine learning to complete data gaps enables high confidence ratio analyses and algorithm based projections about disease progression at a granular level.

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Building Nexus as an Integrated Platform

In October 2019 we published our sixth Pharmaceutical Readiness Report.� This report highlights the increasing dependency that pharma pipelines have on an efficient precision testing market and the need to bring forward better solutions to ensure test and therapy commercialisation remain in step.� The report was widely read by our pharma clients, laboratory partners and other diagnostic companies and set out the rationale for an integrated platform to solve the increasingly complex precision testing ecosystem. It is this provision of an integrated platform to bring together key stakeholders to improve the precision testing ecosystem which is at the heart of our Nexus product development.� Significant progress has been made since IPO to ensure Nexus stage one launch by Q4 2020.� Specifically, a dedicated 17 person software and innovation team are, at year end, solely focused on the Nexus platform build with 44% of stage one completed as of 31 December 2019.� Key components of the platform deployed internally, supporting the improved gross margin, were already introduced in Q4 2019.

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Once launched, Nexus is expected to enable real time access to the Diagnostic Deductive Pathways� for our pharma clients to directly mine, interrogate, analyse and project the diagnostic pathway placing them in a better position to introduce the right therapy to the right patient at the right time. Furthermore, Nexus is expected to interact with our 2500+ global laboratory database and 21 strong laboratory liaison team in 15 countries allowing us to service increasing numbers of test roll outs simultaneously delivering the scale demanded by a market reaching its tipping point.

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Delivering Strong Financial Performance

Diaceutics delivered strong financial performance during 2019 with year on year growth in revenue and gross profit percentage.� Revenue for 2019 increased 30% to �13.4m (2018: �10.4m).� Client engagement increased at a global level and country level to 36 clients (2018: 26) and drug brand growth increased by 51% to 53 brands contracted in 2019.� As announced on 13 January 2020, trading for the year was ahead of market expectations as compared with IPO guidance. The Group has a strong balance sheet following the IPO with net cash of �11.7m as at 31 December 2019.

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In addition, our associated investment in artificial intelligence and machine learning, as part of Nexus, has resulted in an increased efficiency in the use of data, allowing us to delay the phasing of its acquisition and so improving net cash inflow.� Outsourcing of non-core elements of the Nexus build has added to the cash position and as a result the company improved the expected closing cash position by �3m.

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Client repeat business is an important metric for the Group. The Group uses a digital service to capture high level customer feedback on client engagements. The data is used to inform our continuous improvement programme, which is designed to meet and often exceed customer expectations on every engagement. The Group has recently appointed a Head of Strategic Alliances to ensure a high level of supplier relationship and retention. Underpinning this activity is the Group's desire to maintain a reputation for high standards and business conduct as we transact with some of the most demanding clients globally. A key reason for IPO was the increased transparency that comes with the public market for our clients and key stakeholders and this is underpinned by the need to act fairly between stakeholders of the company.

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Building the right team for the mission�

From the outset over 14 years ago, Diaceutics defined success of its mission not by its location but by the quality of the globally based precision testing skills it could attract from across the formative disciplines and stakeholders shaping precision medicine.� I am pleased to say that this model has served Diaceutics well.� In 2019 we added a further 49 people growing the team to 111 as of 31 December.� Over 14 years we have carefully chosen a team of experts from all the critical stakeholder groups, including pharma, laboratory, diagnostic technology, data analytics, health economics and� from all the key regions - US, EU, Asia and Brazil - many with� advanced science and business degrees and most with deep domain knowledge of their area.� Our use of a suite of seamless pan company communication tools (e.g. TEAMS 360) helps us unlock the global thinking required to address the complex precision testing space and mobilise our staff rapidly in 19 markets and supporting consultants in non-core markets. The virtual nature of the business and use of communication tools limits the environmental impact of operations and the core business output is that more patients receive better testing and treatment pathways. The positive patient impact of what we do resonates with all employees within our business.

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Today Diaceutics can claim a globally based team of precision medicine domain experts with the sole mission of unlocking the power of precision testing to deliver on the promise of personalised medicine. We believe that the future success of the organisation is dependent upon the capability of the people working in the Group. Our accredited leadership program seeks to develop managers into future leaders. In addition we provide a comprehensive range of benefits for employees, such as Private Health Insurance and life Insurance. The Group operates a Share Incentive Plan for all staff.

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It is recognised that culture is crucial to the ability of the Group to achieve its corporate objectives.� Culture is a real emphasis from day one of onboarding and permeates throughout the organisation.� We have ensured that everybody is invested in and benefits from the Diaceutics vision.� Specific ongoing development training is aligned to these cultural behaviours and there are regular initiatives to maintain, reinforce and continuously develop the Diaceutics Culture.

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Promising Outlook

Diaceutics' research has identified over 3,000 Phase 2/3 clinical trials supporting approximately 1,000 drug brands which could include a biomarker in their therapy label if they achieve approval.� This contrasts with only 173 FDA approved precision medicine drugs on the market as at December 2018 and foretells of a precision medicine tipping point sometime in 2021 to 2025 timeframe as the FDA approves more therapies dependent upon a biomarker than not.� Consequently, all key areas served by Diaceutics, namely precision medicine, oncology, data analytics and laboratory testing are benefitting from a period of substantial growth.� Yet despite this transformation many pharma companies require external expert support for their companion diagnostic commercialisation strategies upon which their drug brands are dependent.

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Whilst Diaceutics fills this gap for an increasing number of pharma companies and therapy brands today, in 2015 we anticipated the tipping point and recognised the challenges and responsibilities which scaling our business model would require.� Our successful fund raising has helped us accelerate our market preparedness with deeper data and implementation capabilities to support global therapy brands.

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Our investments across 2019 to improve our analytics and implementation services are strategically aligned with the development roadmap for the Group's products.� As the patient journey becomes more complicated and the pharma business model transforms to precision medicine, we are positioned to capture significant market share.

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We look forward to enabling more patients access the right therapy through better testing in 2020 as well as to introducing Nexus to provide the scale needed for better therapy access for all.

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Financial Review

This Financial Review covers the main highlights of the Group's financial performance and position for the year ended 31 December 2019. It is our first Financial Review following our listing on the AIM market of the London Stock Exchange on 21 March 2019.� The gross �17.0m raised provided the stepping stone to building the future scale demanded of a group operating in a hypergrowth market. Furthermore, our investments this year have deepened the operational and strategic moat around our business setting us up for continued business growth.� A focus has been placed on expanding our key account management and sales teams to manage and support business development over an expanding geographical reach.� Furthermore, the raising of finance has resulted in the elimination of the Group's debt resulting in a strong balance sheet at the end of 2019 with a cash balance of �11.7m.

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Financial performance

Diaceutics delivered solid financial growth during 2019 delivering significant year on year growth in revenue and gross profit margin. The associated investment in artificial intelligence and machine learning, underpinned as part of the investment in Nexus platform, has had a positive impact on our delivery of products and efficiencies within cost of sales. The continued expansion of our global footprint, through 2019, increased our breadth and depth of product offering and client reach, engaging 53 drug brands for clients and supporting those client deliverables in 41 countries. We also delivered strong operating profit before exceptional items of �2.1m (2018: �1.4m) and improved PBT via operational efficiencies. Cash management improved due to efficient phasing of intangible asset acquisition, lower capital development and working capital movements.

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A summary of the key financial indicators for the financial year ended 31 December 2019 are outlined in the table below:

* Adjusted EBITDA is stated before exceptional costs

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Revenue

During 2019 we delivered revenue of �13.4m (2018: �10.4m) which represents 30% year on year growth.� This was underpinned by increasing our client base to 36 clients (2018: 26). The increase in the breadth of client base in conjunction with revenue growth within key clients represents an increased spread of client revenue. Only two clients had greater than 10% of revenue (2018: three clients greater than 10% revenue).

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Our improved product offering and increase in global operations has resulted in improved drug brand engagement with 53 brands contracted in 2019 (2018: 35). Brand engagement is an important forward indicator of revenue as more than 50% of revenue is based on brand revenue stickiness over multiple years.

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Of particular note too was the year on year growth of our revenues in all three core regions, with US revenue growth of 15%, EU revenue growth of 29% and Asia revenue growth of 105%.

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Gross Margin

Gross margin has increased to 77% from 66% in 2018. Several key drivers impacted this positive variance. The first was the investment and build of the Nexus platform which supported advancing efficiencies in our data products which represented 72% of total revenue for 2019. Further efficiencies were made through improved data cost as a result of the mix of work permitting delayed phasing of its acquisition. Staff utilisation increased as a result of a continued focus on staff efficiency and standardisation of product delivery.

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Expenses

Administration costs comprising operational support, sales and marketing and administration expenses totalled �8.4m (2018: �5.5m), increased by 52% and reflects the investment in global expansion. We are now delivering for our clients in 41 countries globally and the expansion costs associated with this growth include finance, legal and regulatory, and employment. In addition, increased investment in expanding our business development teams at a global and country level continues to build opportunities for future client engagement.

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Exceptional Expenses

Exceptional IPO related costs of �1.3m (2018: �0.2m) were reflected in the profit and loss account. These costs relate to corporate restructuring, legal and associated broker fees for the execution of the IPO. An additional �1.0m of IPO costs (2018: �Nil) were offset against the share premium account in the balance sheet.

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Tax

The consolidated income tax charge for the period of �0.1m represents the provision for corporate income taxes due in the Republic of Ireland (�0.2m) and the United States of America (�0.1m) net of adjustments with respect to prior periods of �0.2m. The corporate income tax charges are calculated after R&D tax incentives which are expected to be available in the UK and the Republic of Ireland.

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The adjustments with respect to prior periods arose due to prudent assumptions relating to the deductibility of certain costs being taken in the prior period and the Group finalising calculations of R&D tax incentives after the financial statements were finalised.

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The Group has a net deferred tax credit of �0.1m which is primarily comprised of a credit in the UK of �0.4m net of a charge in the USA of �0.3m. These movements were mostly driven by the recognition of tax losses in the UK and the utilisation of tax losses in the USA.

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Deferred tax assets and liabilities have been recognised as they arise with the exception of a potential asset of �0.1m (2018: �0.1m) which has not been recognised in a subsidiary company. The Group estimates that tax losses of �3.4m will be available for future utilisation in the UK and Singapore, resulting in deferred tax asset of �0.6m. A deferred tax liability of �0.5m arises due to the Group capitalising certain R&D costs which remain deductible in the current period for corporate income tax purposes.

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Finance Costs

Interest costs of �0.2m (2018: �0.3m) relate to a director loan, external loans and banking facilities, all of which were repaid during the first half of 2019.� Included in this is a �0.1m (2018: �Nil) charge related to the early retirement of the Whiterock loan facility.

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EBITDA and Adjusted EBITDA and PBT

Our focus on managing efficiencies at a gross profit level and costs overall has contributed to a strong adjusted EBITDA, excluding exceptional costs, of �2.4m (2018 �1.5m).

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The PBT for the year was �0.5m (2018: �0.9m); whilst the Adjusted PBT, excluding exceptional costs, improved to �1.8m (2018: �1.1m).

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Balance Sheet

At 31 December 2019, the Group has a strong balance sheet reflecting net assets of �20.1m (2018: �2.6m).

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Intangible assets

To support the development of our Diagnostic Deductive Pathways�, Nexus platform and new enterprise resource planning system (ERP), we invested �2.8m.

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Investment of �0.85m in specific biomarker data in the period supported the data expansion in the number of patients in the data lake to 227m patient test records. Global real world data is becoming a core ingredient in the pharma models as they seek greater return on investment within their R&D pipelines.

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Capital development expenditure incurred in the period was �1.7m (2018: �0.6m) and relates to capitalised development hours supporting the build of Nexus and the completion of key milestones.� The commercial launch of Nexus is set for Q4 2020, as planned.

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Net cash

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Loans and banking facilities were extinguished during the year - �1.1m was repaid to Whiterock Capital Partners and �2.1m was repaid to Silicon Valley Bank (SVB). A �2.5m working capital facility from SVB was unused at 31 December 2019.�

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Other financial liabilities, not included above, relate to convertible loan notes and the change in fair value of embedded derivatives.� These are not expected to have a cash impact in the future.

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Cash flows

Net cash outflow from operations reduced by 34% to �0.6m (2018 �1.0m) driven by efficiency of working capital from improved debtor collection and receipt. �Excluding exceptional costs, net cash from operations for 2019 is positive �0.7m as compared to an outflow of �1.0m for 2018.� Investment in intangible assets totalled �2.8m (2018: �1.0m).

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Profit per share

Basic earnings per share is 0.62 pence (2018: 1.41 pence).

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Basic adjusted earnings per share is 2.46 pence (2018: 1.86 pence).

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Dividend

In line with the statement set out in the Company's IPO Admission Document, no dividend has been proposed for the year ended 31 December 2019 (2018: Nil).

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Group Profit and Loss Account��������������������������������������������������������������������������������������������������������������������������������������������������������������������

for the year ended 31 December 2019

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All results relate to continuing operations.

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Group Statement of Comprehensive Income

for the year ended 31 December 2019

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Earnings per share

for the year ended 31 December 2019

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