14 January 2021
(“Instem” or “the Company”)
Instem plc (AIM: INS), a leading provider of IT solutions to the global life sciences market, is pleased to announce a trading update for the year ended 31 December 2020.
The performance during the period highlights the resilience of the Company’s business model – with continued strong cash generation and growth in profits, with revenue growth in excess of 11% over the year. Importantly, recurring revenues grew strongly, underpinned by the ongoing transition to SaaS based contracts. Despite the wider market impact of COVID-19, the Company traded in line with the Board’s expectations.
Net cash as of 31 December 2020 was £26.7m – reflecting both operating cash generation and the impact of the oversubscribed placing in July 2020, which raised £15.0m for the Company net of expenses. This enables the Company to build on its strong organic performance by accelerating its acquisition strategy.
All three areas of the business, Study Management, Regulatory Solutions and Informatics performed well, with an excellent first full-year contribution to the Informatics area from the November 2019 acquisition of Leadscope. New business revenue came from a balanced blend of new and existing clients. The $1m study management contract win with new South-Korean client Biotoxtech, announced in June 2020, further expanded the Company’s footprint in the important Asia-Pacific region. In addition, the recently announced £2.2m new business award by one of the Company’s existing clients was extended post period end with a $0.8m order for further funded product development. This order is scheduled for 2021 delivery and is focussed on reducing the time to produce SEND (Standard for the Exchange of Non-clinical Data) information for submission to the US Food & Drug Administration. These orders highlight the growing number of cross-selling and up-selling opportunities, while further increasing recurring revenues and visibility.
The Company’s proven platform and continued strong growth trajectory underpins management’s confidence in the current year. Organic growth opportunities remain, especially within SEND exploitation, as customers look to leverage their valuable historic studies for more efficient and effective research. This is evidenced by the £0.7m contract from a top 30 pharmaceutical company for conversion of historical studies to the SEND format won during the period. Additionally, growing market demand for Artificial Intelligence solutions provides a strong backdrop for Informatics to cross-sell to existing clients and to widen the Company’s customer base.
The Company is in active dialogue and making good progress with a number of acquisition targets and remains well-placed to drive further value this year from this source.
Phil Reason, CEO of Instem plc, commented:
“We are extremely pleased with the Company’s performance – especially given the backdrop of COVID-19. The strong visibility afforded to us by a buoyant life sciences R&D market and our established business model means that we are well-positioned going forward. Our continued focus remains on organic revenue growth, further margin improvement and accretive M&A, where we are making good progress in negotiations with certain targets.”
For further information, please contact:
|Phil Reason, CEO||Via Walbrook|
|Nigel Goldsmith, CFO|
|N+1 Singer (Nominated Adviser & Broker)||+44 (0) 20 7496 3000|
|Wallbrook Financial PR||Tel: +44 (0) 20 7933 8780|
Instem is a leading provider of IT solutions & services to the life sciences market delivering compelling solutions for Study Management and Data Collection; Regulatory Solutions for Submissions and Compliance; and Informatics-based Insight Generation.
Instem solutions are in use by over 500 customers worldwide, including all the largest 25 pharmaceutical companies, enabling clients to bring life enhancing products to market faster. 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 products and services address aspects of the entire drug development value chain, from discovery through to market launch. Management estimate that over 50% of all drugs on the market have been through some part of Instem's platform at some stage of their development.
To learn more about Instem solutions and its mission, please visit instem.com.