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Teather & Greenwood's pharmaceutical analyst Howard Miller reckons contract research provider Biofocus remains a strong buy at 120p. This is despite the fact that 'the increased regulatory pressure on pharmaceutical majors is likely to lead to a near-term shift in R&D away from early-stage drug discovery to focus on late-stage projects.' Consequently, those providing outsourced services, such as BioFocus, might suffer. This worry has placed the stock at a 'significant discount to the market' and prompts Miller's appraisal. Another Teather-advised company attracting his attention is gold conjugate testing concern BBI. The group's interims were in line with expectations. Revenue growth, up 47.7 per cent in the first half, should continue to be strong over the coming year.

Miller's colleague Adam Lawson, who focuses on software and computer services, highlights Touchstone. The group, which provides a range of business software products, is valued at less than last year's sales. Teathers has reduced its forecast for the current year following interim comments that customers are taking longer to make decisions on purchasing software. This will affect margins. Lawson retains a buy recommendation though, on hopes that recent acquisitions and joint ventures will pay off next year.

Fellow software concern Morse has also had its full year forecasts chopped by Lawson, after a weaker-than-expected first quarter update. The stock remains a hold, despite the company being a 'frustrating business to forecast owing to a distinct lack of visibility and management's reluctance to disclose indications of profit performance alongside sales updates.'