Supplier of human tissue-based services Asterand (LSE: ATD) said in an interim management statement that, as previously announced, trading was slow at the start of the year but has showed some signs of improvement more recently.
Before taking into consideration the acquisition of BioSeek, for the three months ended 31 March 2010, sales for Asterand's base business - excluding the one-off contract with Baylor-, fell marginally over the same period in 2009, whilst costs remained flat.
The performance is encouraging in light of generally difficult market conditions in the global pharmaceutical market, Asterand said. It continues to be cautious in the near term but is increasingly optimistic for the medium to long term as pharmaceutical customers become more active.
In March, Asterand had its Royston, UK, facility accepted as a member of the UK Good Laboratory Practice (GLP) Compliance Monitoring Programme allowing it to offer GLP compliant preclinical services to pharmaceutical and biotech clients. In April 2010, Asterand held its inaugural human tissue conference in Washington DC.
Asterand continues to maintain strong cash resources. Cash as at March 31 2010 was £3.9 million, compared with £4.2 million at the end of December 2009. The group currently has no long-term debt.
In February 2010, Asterand announced the completion of its acquisition of BioSeek Inc. The response from Asterand's customer base to the acquisition has been encouraging and excellent progress has been made in integrating BioSeek into the group. Asterand remains optimistic of an increasing contribution from this new platform.
Asterand has recently announced two new BioSeek agreements, with the Japanese pharmaceutical companies Ono Pharmaceutical Co Ltd. and Eisai Co Ltd. These are examples of a new breed of collaboration agreement that Asterand will be pursuing, where Asterand's platform is embedded within the customer's drug discovery process, and where in addition to fee for service, Asterand will potentially gain upside in the form of preclinical and, in some instances, clinical success milestones as and when compounds progress.
CEO Martyn Coombs commented: "Despite the sector's challenging headwinds, we are encouraged with progress and believe we are well positioned to benefit from improving conditions in due course. We are delighted to have seen the immediate benefits, in the form of important pharmaceutical collaboration agreements, from the BioSeek acquisition."