26th Mar 2014 15:04
LONDON (Alliance News) - Instem PLC Wednesday expressed confidence for 2014, benefiting from full-year contributions from recent acquisitions, as it saw pretax profit decline in 2013.
The company provides information technology products to the early development healthcare market.
The company posted a pretax profit of GBP698,000 in 2013, down from a pretax profit of GBP1.3 million in 2012, as revenue rose to GBP11.4 million from GBP10.7 million, although this was partly offset by higher operating expenses, and non-recurring costs of GBP1.5 million relating to two acquisitions during the year.
Instem acquired Logos Technologies in May 2013, and re-branded it Instem Clinical. The new business is fully integrated and performing strongly, Instem said. It also acquired Perceptive Instruments Ltd in November 2013, as entry into the in-vitro research and development market.
The company saw revenue from its Software as a Service business rise to GBP1.5 million from GBP1.1 million, as it signed deals with two pharmaceutical companies, and a ten-year deal with a US government body, the National Institute of Environmental Health Sciences.
Instem noted a shift in the pharmaceutical industry towards early-stage development work, as pharmaceutical companies seek to renew their maturing pipeline. As a a result, Instem is beginning to see an improvement in end markets, as it targets earlier stages of drug development.
The company also expects a boost from the US Food and Drug Administration's Standard for the Exchange of Non-Clinical Data, which specifies a certain format to present non-clinical data. A drive towards submitting data electronically is a potential area of growth for Instem.
Instem is particularly interested in the early phase clinical market because there's a drive for organisations to automate the process.
"There's light penetration of IT in those organisations there's a real clamour for those organisations to think about automating what they're doing," Chief Executive Philip Reason told Alliance News.
Reason said that growth may also be driven by a mandate from the FDA for the SEND standard, which it says is inevitable.
"For us a key thing will be keeping our eye on the improving sentiment and activity levels of the contract research organisations in pre-clinical assessment and how we turn that increased activity into revenue for Instem," Reason said. Depending on what happens with the SEND Standard, another focus for Instem in 2014 will be scaling up to capture a share of that market, Reason added.
The company said it won't pay a dividend for 2013.
Shares in Instem were trading up 5.3% at 180.00 pence Wednesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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