Instem (LON:INS), which provides software used to log clinical trials, said revenue growth had continued as projected, meaning it is confident it will match market expectations.
However, within that broad brush statement covering the first half of the trading year there was a lot of nuance.
While the merger of two of its major customers, WIL Research and Charles River Laboratories, will have a net positive impact, the relationship with the enlarged business has evolved.
Instem now has a single agreement that means all its current licences remain intact; it has an extended support and maintenance contract (running to December 2022) and it will implement two “sizable” projects for its Provantis and submit products.
The revised deal will result in “moderately higher” revenue this year than receivable under the previous, separate contracts, the firm said.
It also means “enhanced cash receipts” this year and next, but a reduced annual fee income from 2017 to 2022 in return for the longer contract duration.
“Opportunities exist to continue to grow this key relationship over the coming years,” Instem said.
“Securing a long-term relationship with Charles River Laboratories, by far the largest pre-clinical CRO [clinical research organisation] in the industry, is expected to help underpin our future growth,” added chief executive Phil Reason.
Looking at the broader trading patterns for the business, the company reported that fewer than expected orders from the early-phase clinical market had been placed; that said, the pipeline remained strong.
Offsetting this, the pre-clinical market was “very active”, it went on.
Remember, pre-clinical is Instem's largest area of activity, generating around 90% of its revenues.
CEO Reason told investors: "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."