Instem Plc (LON:INS) said the performance of its clinical arm had further deteriorated since it last updated and will fall “materially short” of its financial targets.
The remainder of the business, which provides analytical software to drug developers, has seen “increased momentum”.
“In particular, the US Food & Drug Administration mandated Standard for the Exchange of Non-clinical Data has, as expected, seen increased activity, with Instem winning the majority of new business that has arisen,” it added.
“Despite the strength of this performance, the overall outturn for the year remains dependent on the signing of certain contracts and decisions on a small number of these contracts, totalling around £1.2mln, may be deferred into 2017.”
As a result there are a “range of possible outcomes” for the year, Instem told investors. The outlook for 2017 remains “encouraging”, it added.
The company’s broker N+1 Singer said: “These delays are certainly disappointing and a short-term setback, but we do not believe they are anything other than timing issues.
“The outlook for the group as whole remains strong, particularly around the SEND initiative, where momentum is building and Instem continues to dominate the market.”