Investment boosts revenue and profits at Cyprotex

Contract research organisation Cyprotex posted its interim results for the half year to 30 June on Tuesday, with revenues up 26% to £8.73m from £6.93m a year ago.

The AIM-traded firm’s gross margins were 77.5%, up from 76.8%, with operating profit up significantly to £1.49m from £0.36m.

Underlying EBITDA more than doubled to £2.34m, from £1.10m, and the company had cash of £6.82m, improving from £4.13m a year ago and £5.41m at the end of the 2015 calendar year.

Cyprotex’s board reported a significant increase in new customers to 139, from 103, and said Watertown revenues were up almost 70% from the comparative period, benefitting from the general improvement in the investment environment in the East Coast of the US.

Demand for high value drug-drug interaction packages and metabolite identification was strong during the period, and assisted in growing revenues ahead of expectations, it added.

The company’s presence at the Alderley Park BioHub site increased in the half, with the opening of a new bioanalytical laboratory to allow for planned expansion of those services later in the year and the expansion of its toxicology facility.

Proprietary 3D cellular models were also highly successful in revenue generation, Cyprotex said.

The company confirmed that validation of a High Throughput (HT) ADME screening platform at the Watertown site had been completed and is now supporting large scale screening contracts for the US government and other customers.

It also said the upgrading of its toxicology assays at Kalamazoo to provide in-vitro GLP genotoxicity services has already seen positive customer interest.

Revenue from the largest customer accounted for 10.3% of total revenue during the period, up 9.6%, with the board only going as far as saying it represented continuing business with a “major pharmaceutical company”.

“I am delighted to report that the progress made in 2015 has continued into 2016 and, as previously flagged to the market, we are substantially ahead of our expectations,” said chairman Ian Johnson.

“The growth of the business is global and from an increasingly wide range of industries and sectors.

“Investment in all sites, which commenced in 2014, continues and is delivering high quality new services which contributed to the increase in revenue in H1 2016,” Johnson added.

He said Watertown and both UK sites grew revenues and consequently operational profitability.

The Kalamazoo site also received considerable investment to launch a suite of GLP genotoxicity services, which the board expects will drive revenue growth in the second half of the year.

“Of note is the collaboration with Cytocentrics announced in February 2016 where we are developing a full range of ion channel services to meet the expected regulatory changes in cardiac safety testing as a consequence of the CiPA initiative.

“The second half has started well and the board looks forward to the remainder of the year with continued confidence,” Johnson explained.