logo-loader
viewInstem PLC

Instem makes earnings-enhancing US$4.6mln US acquisition

It is buying Leadscope, which has developed a suite of products that use sophisticated artificial intelligence and machine-learning algorithms to predict drug side effects

Instem PLC -
The acquisition builds on the firm’s small but rapidly growing informatics operation

Instem PLC (LON:INS) is moving into safety assessment software with a US$4.6mln, earnings-enhancing US acquisition.

It is buying Leadscope, which has developed a suite of products that use sophisticated artificial intelligence and machine-learning algorithms to predict potentially harmful drug side effects.

Users either subscribe to the various platforms or access them on a one-off, pay-per-use basis.

Instem is handing over a mix of cash and shares for the Columbus, Ohio-based firm, with US$3.35mln paid on the deal’s completion. This will be followed by a deferred US$750,000 and a US$500,000 “earn-out”.

Informatics growth 

The acquisition builds on the firm’s small but rapidly growing informatics operation.

Informatics is a natural extension for Instem, whose software is used by pharma companies making drug submissions.

By processing and storing data it has garnered, the company has been able to develop gene- or drug-specific target safety assessments (TSAs).

TSAs are used to assess unintended adverse consequences of potential treatments before expensive investment is made and, crucially, long before they are administered to people. In other words, it helps identify the ‘failures’ early.

Currently, this process is costly, particularly for small and mid-sized firms, which have to outsource it.

In silico approach

Instem’s ‘in silico’ (computer-based) methodology is cheaper than the traditional, lab-based approach and brings with it an element of standardisation lacking currently.

“We run a technology-enabled service where we deliver a report on the safety of a gene,” Gordon Smith Baxter, Instem’s chief scientific officer told Proactive recently.

Instem's chief executive Phil Reason said Leadscope “aligns perfectly” with its strategy of expanding organically and acquisitively into “adjacent market areas”.

“We have been in regular dialogue with Glenn [Myatt, CEO of Leadscope] and the team for over 10 years, looking for the right opportunity and timing to partner or acquire,” Reason explained.

“They have built a deep relationship with the regulatory authorities, a fantastic client base and a profitable recurring revenue stream. We are looking forward to delivering the next stage of growth across the enlarged business and helping our clients to achieve a material reduction in the time taken to bring their life-changing products to market."

Quick facts: Instem PLC

Price: 373 GBX

AIM:INS
Market: AIM
Market Cap: £61.65 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Instem PLC named herein, including the promotion by the Company of Instem PLC in any Content on the Site, the Company receives from said issuer...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Investor Update: CentralNic Group looks to acquire website provider Team...

Headlines from the Proactive UK newsroom. CentralNic Group (LON:CNIC) has confirmed advanced discussions are underway to acquire website provider Team Internet. The AIM-listed domain name specialist said further announcements will be made in due course. Life sciences group Instem (LON:INS)...

3 weeks, 4 days ago

2 min read