Instem PLC (AIM:INS), the supplier of IT solutions to the global life sciences market, has announced the renewal of its long-running contract with the National Toxicology Program (NTP), run by the US National Institute of Environmental Health Sciences (NIEHS).
The five-year agreement, which allows for a maximum expenditure of US$16.5mln, includes an expansion of Instem's Provantis preclinical software and for the first time, access to its genetic toxicology and safety pharmacology study management applications.
The first year's order will total around US$2mln, with initial recurring revenue of about US$0.9mln.
The latest deal follows a successful 10-year NTP contract, which began in March 2013 and generated total revenue of around US$10mln.
Phil Reason, CEO of Instem, said: "The longevity of the relationship, continued endorsement from a government agency and potential to evolve further as we broaden our in silico presence over the course of the renewal, underpin significant potential to scale."
The collaboration will provide increased revenue visibility for Instem through additional software as a service (SaaS) revenues and presents opportunities for significant expansion, Instem told investors.
The NTP, a world leader in toxicology research, uses Instem's technology to streamline its preclinical processes, aiding in the collection, management and maintenance of its studies.
The contract also anticipates Instem offering additional solutions, including the use of outsourced in-silico services, which would boost one-off and annual recurring revenue.
In addition, the company aims to continue developing artificial intelligence and predictive analytics-based solutions, creating more touchpoints as this relationship develops.