DeepMatter Group PLC (AIM:DMTR), the digital chemistry data and software company, saw its shares more than double in value after it announced a multi-year database licence agreement with Merck & Co Inc (NYSE:MRK) and forecast strong revenue growth for the current financial year.
The DeepMatter shares soared 113.33% higher to 0.16p in early trade on Wednesday.
Under the collaboration, DeepMatter will license certain proprietary data for machine learning-based applications to Merck’s life science business.
DeepMatter said the Merck collaboration has the potential to become one of the group's largest to date and added that, after signing this “material agreement” and a "solid" performance in the first half, it expects revenue for 2022 to be no less than £1.5mln, up 50% on the £1.0mln reported last year.
"We are delighted to announce an important licensing agreement with Merck, one of the leading companies using digitalisation in healthcare and life sciences to deliver our vision to provide the data that enables all medicines to be made in the best possible way," said Mark Warne, CEO of DeepMatter in a statement.
Commenting on trading, Warne said: "After a solid H1, we are now on course to increase our year-on-year revenues by some 50% and importantly are seeing increasing customer interest and the potential for recurring royalty revenues. These revenues which are recognised over the life of contracts, providing us with growing visibility.”
DeepMatter and Merck will also explore ways to identify, acquire, generate and structure sets of chemical reaction data that can be used to enable scientists to develop new molecules faster and more efficiently, which could encompass use of DeepMatter's SmartChemistry capabilities.
The company said it has secured three strategically important multi-year collaborations during the current financial year and continues to see a strengthening of its sales pipeline following a strong first half.
The company’s cash balances stood at £0.7mln as of 30 September 2022, with costs remaining in line with those reported at the time of group's first-half results.