Cyprotex figures hit by US delays

Macclesfield-based drug analysis specialist, Cyprotex, has warned delays to the launch of a new service in the US will hit full year figures.

It made the announcement as it posted interim results which show research activity, the cost of an acquisition, and investment in a new base at Alderley Park have pushed the business to a pre-tax loss.

The group said revenues grew by 19% to £5.4m in the six months to the end of June, but it made a pre-tax loss of £428,300, down from a profit of £271,800 last time.

This was down to depreciation charges, increased research and development activity and one-off costs associated with £650,000 January acquisition of US-based CeeTox which carries out toxicology tests on cosmetics and other personal care products. Underlying earnings before interest, tax, depreciation and amortisation were £41,000.

Cyprotex said it had spent £620,000 preparing a drug screening service at its US base which it had hoped to launch in the first half but this process proved “more challenging than expected”. The delays, it said, were “likely to impact the performance of the year as a whole. Nevertheless we expect the various investment programmes to start to yield significant benefits later in H2 and through 2015”.

The company secured 111 new customers during the period, 28 at CeeTox and 83 using its existing services. It also started two strategic deals with “major pharmaceutical” companies and expects new business with from a Japanese firm in the second half.

Chairman Ian Johnson said: “Much has been achieved in the first half of 2014 to expand the company’s service offering and build scale in the business. The acquisition of CeeTox is proceeding well with the new business adding to the markets we serve.

“We have initiated a wide ranging investment in new instrumentation and screening service capabilities across the whole business which is expected to enhance revenues and profits within the next 12 months. Notwithstanding the good progress made to date, unforeseen delays to certain development work will impact the company’s performance for the year as a whole. With additional investment in sales and marketing resources, the board remains confident of achieving further growth and building scale across a wider range of business sectors.”