Cyprotex broadens its scope

17/03/2010 Robert Tyerman

Bid candidate Cyprotex is moving its drug discovery services into toxicology after pre-tax profits down 15 per cent to £460,413.

The Macclesfield-based company, which is still considering a ‘highly preliminary and unsolicited approach’ two weeks ago from an unnamed party, saw turnover slip by £180,000 to £5 million last year, as some of the client discovery companies using Cyprotex assays cut their outsourcing budgets. Three in particular were diverted by merger activities and revenues from the company’s largest customer fell by £600,000.

But AIM-quoted Cyprotex, steered by chief executive officer Dr. Anthony Baxter, fought back, doubling its ‘strategic’ customers, generating revenues of more than £250,000 each, to six, forming a strategic alliance with medicinal and computational chemistry services provider Sygnature and winning a key new customer. The company’s year-end cash rose 31 per cent to £2 million, some of which will go to developing new assays, and directors are scouting for acquisitions, provided vendors moderate their price expectations.

Financier and Tory donor Michael Spencer holds 15 per cent of Cyprotex, which specialises in absorption, distribution, metabolism and excretion (ADME) data. The company is moving into in vitro toxicology, a field which the very success of ADME work is bringing to the fore by enabling more stable molecules to remain in patients’ bodies for longer.

Cyprotex, which currently derives half of its revenue from central Europe, is also beefing up its US sales team. Floated at 29p eight years ago, the shares are now only 3.88p, where they value the company at £6.9 million and offer speculative appeal.