24 Aug 2016 07:00
Instem plc
("Instem" or "the Company")
Trading Update and Notice of Half-Year Results
Instem (AIM: INS.L), a leading provider of IT solutions to the global early development healthcare market, provides its trading update for the six-month period to 30 June 2016.
The encouraging market dynamics in early drug development, including the new regulatory requirements driven by the Standard for the Exchange of Non-clinical Data ("SEND"), has supported year-on-year revenue growth in the first half of 2016, with overall trading providing confidence that results for the full-year to 31 December 2016 will be in line with market expectations.
Instem's portfolio of solutions and services to satisfy SEND, which is mandated by the FDA, has been in particular demand as the initial December 2016 regulatory compliance milestone approaches. Instem is continuing to invest to maximise its share of this developing market over the coming years.
The implications of the acquisition of WIL Research ("WIL") by Charles River Laboratories ("CRL"), both significant Instem clients, have now been clarified. The Company is pleased to report that a single agreement has been negotiated covering the provision of Instem products and services at all current CRL and former WIL sites. This new agreement includes the continuation of all current licenses, an extended support and maintenance contract, running through to 31st December 2022, and the integration of two sizable Provantis® and submit™ implementation projects. The revised agreement will result in moderately higher revenue in 2016 than receivable under the previous, separate WIL and CRL contracts, together with enhanced cash receipts in 2016 and 2017 and reduced annual fee income from CRL for 2017 to 2022 in return for the longer contract duration. Opportunities exist to continue to grow this key relationship over the coming years.
Following the record order intake in 2015, fewer orders were placed in the early phase clinical market than had been expected, although the pipeline for the next 12 months remains strong. Offsetting this, the pre-clinical market remains very active; this is Instem's largest area of activity, generating around 90% of the Company's revenues.
In February 2016, following strong support from our new and existing investors, Instem raised £4.7m net of expenses, to fund acquisitions and working capital. We announced the acquisition of Samarind Limited, on 31 May 2016. This acquisition is expected to be accretive to earnings in 2016 and beyond and extends Instem's software portfolio, as well as offering additional opportunities for the provision of out-sourced regulatory services. The integration of Samarind is progressing well.
Notice of Half-Year Results
Instem will announce its Half Year Results on Monday 19 September 2016 and management will be hosting a presentation for analysts on the day at 9.30am at the offices of Walbrook PR, 4 Lombard Street, London, EC3V 9HD. Analysts wishing to attend the presentation should register their interest by emailing instem@walbrookpr.com or by telephoning 020 7933 8780.
Phil Reason, CEO of Instem plc, commented: "The first half of 2016 has continued the momentum of 2015, as early phase life sciences research and development has continued to flourish. Securing a long-term relationship with Charles River Laboratories, by far the largest pre-clinical CRO in the industry, is expected to help underpin our future growth. Our long-term leadership in the SEND market has been reinforced and our acquisition of Samarind has enhanced our existing lines of business while extending our addressable market. We continue to see positive trends across our target markets and Management remains confident it can continue to deliver further growth over the remainder of the year."
For further information, please contact:
Instem plc | Tel: +44 (0) 1785 825 600 |
Phil Reason, CEO | www.instem.com |
Nigel Goldsmith, CFO |
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N+1 Singer (Nominated Adviser & Broker) | Tel: +44 (0) 20 7496 3000 |
Richard Lindley |
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Nick Owen |
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Walbrook PR Ltd | Tel: +44 (0) 20 7933 8780 or |
Paul Cornelius | instem@walbrookpr.com |
Helen Cresswell |
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Sam Allen |
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About Instem
Instem is a leading supplier of IT applications and services to the early development healthcare market delivering compelling solutions for data collection, analysis and regulatory submissions management. Instem solutions are in use by customers worldwide, meeting the rapidly expanding needs of life science and healthcare organisations for data-driven decision making leading to safer, more effective products.
Instem's portfolio of software solutions increases client productivity by automating study-related processes while offering the unique ability to generate new knowledge through the extraction and harmonisation of actionable scientific information.
Instem supports over 500 clients through offices in the United States, United Kingdom, Japan, China and India.
To learn more about Instem solutions and its mission, please visit www.instem.com