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Instem enjoys strong second half; bags £1.7mln contract from CRO

Revenue increases and expense reductions have delivered a strong increase in full-year profit and the sales order pipeline has once again strengthened
Phil Reason, Instem
Instem believes this is the largest outsourced SEND services contract ever awarded

Instem Plc (LON:INS) has won a new two-year SEND (Standard for the Exchange of Nonclinical Data) outsourced services contract.

The contract has been awarded by an unnamed top five global nonclinical contract research organisation (CRO) and is worth in excess of £1.7mln over an initial two-year period.

READ: Instem boss says firm is better positioned for profitable growth than ever before

Revenue of at least £0.7mln is expected to be generated in the current year.

"For several years, we have been presenting an anticipated substantial 2018 uplift in SEND study volume following the December 2017 FDA mandate, which is now materialising,” said Instem’s chief executive officer, Phil Reason.

The US Food and Drug Administration (FDA) announced in December 2017 that the next major milestone in its adoption of the SEND was now in force, mandating that earlier stage drug approval submissions now fall under the requirement to include SEND data packages.

“With SEND data sets now on the critical path in the new drug development timeline, the industry will only work with partners that can quickly deliver to an exceptionally high quality, which puts Instem's people and technology in very high demand. This new CRO award, combined with commitments to other clients, means we are already contracted to deliver in 2018 over five times the number of SEND assignments completed in 2017," he added.

"Winning what we believe to be the largest outsourced SEND services contract ever awarded is clearly a huge endorsement of Instem and our SEND credentials,” Reason asserted.

2017 results

In a separate announcement, Instem said results for 2017 are expected to be in line with market expectations.

Instem successfully delivered around £0.75mln of cost savings anticipated in its mid-2017 restructuring and ended the year with net cash of around £3.1mln.

All areas of the business made a positive contribution to the full-year financial performance, with many new client wins, as well as existing customers extending their use of Instem's products and services, the company said.

"After slower than anticipated growth in H1 2017 the second half of 2017 has been much stronger. Revenue increases and expense reductions have delivered a strong increase in full-year profit and the sales order pipeline has once again strengthened,” Reason said, adding that the current period has started well.

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