Instem Life Science Systems, provider of IT applications to the global early development healthcare market, warned today that turnover in the year to 31 December 2011 was only slightly ahead of last year and profits will be ‘materially below market expectations’. Given the contribution from BioWisdom - which was acquired in March 2011 and is ‘exceeding expectations’ – organic revenue must have continued to decline (see also Instem fails to stem organic revenue decline).
Instem blames the conservative investment plans of contract research organisations for delaying orders that should have completed in December into 2012. In its traditional market of Early Development Safety Assessment the company believes it continues to win most of the contracts placed worldwide. It’s a fragmented marketplace though and further acquisitions will be key to Instem’s future success. Instem is still on the lookout for complementary businesses to acquire but only on ‘the right terms’. If all goes to plan, investment in China and new products should also drive growth in the coming years – more on that when we see the detail in Instem’s results at the end of March.