Demand disappoints Cyprotex

20/11/2009 Robert Tyerman

Drug screening concern Cyprotex expects 2009 turnover in line with 2008 after lower than expected fourth quarter demand.

In a cautious trading statement Macclesfield-based Cyprotex, which provides drug discovery companies with information and services, says conditions in the contract research market remain ‘challenging’. The AIM-quoted company, which made £542,000 pre-tax profits last year on £5.2 million turnover and increased 2009 interim profits nearly threefold to £157,000, on £2.4 million turnover, says the fourth quarter, usually its strongest, has not delivered expected demand, from the market in general and from its largest customer in particular.

Chief executive Tony Baxter, the founder of Argenta Discovery who took the helm last year in a boardroom upheaval, says Cyprotex is ‘disappointed not to have delivered stronger growth this year’, but argues the company has put in a ‘resilient’ performance’ in difficult circumstances. Cyprotex expects to derive additional revenues next year from several new services, including ‘Cloe Gateway’, a portal to bring its predictive CloePK products, six new assays which have generated more than £400,000 of extra revenues and new assays, all of which should swell 2010’s turnover.

Cyprotex says it has succeeded in increasing its ’strategic’ customers from three to five and has ’continuing discussions’ with other ‘potentially significant’ customers. The company plans to spend £300,000 in the first quarter of next year on new laboratories.

Floated seven years ago at 29p, Cyprotex shares hit a low of 23p within the past year. They now trade at 3.63p, valuing the company at £6.5 million.