- DeepMatter announces licencing agreement with Merck
- The company now expects revenue for the year to be 50% above 2021
- DeepMatter shares surged 67% Wednesday
DeepMatter’s (LON: DMTR) share price jumped Wednesday, trading up more than 67% after the company announced it has signed a multi-year licence agreement with Merck and, in a trading update, raised revenue guidance for the year.
The increase in guidance is a result of the agreement with Merck. The AIM-listed company said it will licence certain proprietary data for machine learning-based applications to Merck’s Life Science business sector.
In addition, Merck and DeepMatter said they will also examine ways to identify and structure sets of chemical reaction data that can be used to help scientists develop new molecules faster and more efficiently. This could also mean the use of DeepMatter’s SmartChemistry capabilities.
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“We are delighted to announce an important licensing agreement with Merck, one of the leading companies using digitalisation in healthcare and life sciences to deliver our vision to provide the data that enables all medicines to be made in the best possible way,” commented Mark Warne, CEO of DeepMatter.
As a result of the deal, which the company said could become one of its largest collaborations to date, DeepMatter stated it now expects revenue for the current financial year to be no less than £1.5 million, a rise of over 50% year on year from £1 million in 2021.
So far, during its current financial year, DeepMatter has secured three multi-year collaborations and said it continues to see a strengthening of its sales pipeline following a strong first half.
In further positive news for the business, ChemIntelligence, which it acquired in June, has been chosen by Bayer CropScience, a large agrochemical company, to provide its capabilities in Bayer’s LifeHub Lyon in La Dargoire Research Centre.
“After a solid H1, we are now on course to increase our year-on-year revenues by some 50% and importantly are seeing increasing customer interest and the potential for recurring royalty revenues. These revenues which are recognised over the life of contracts, providing us with growing visibility,” added Warne. “With our strengthening relations with Merck and other international blue chip organisations plus our investment programme, we are leading the digitalisation of chemistry space and driving the market shift.”
Deepmatter had cash balances of £0.7 million at September 30, with the company stating that costs remained in line with those reported in its H1 results.
At the time of writing, DeepMatter shares are up 67% at 0.1256p. However, they have fallen significantly in the last 12 months.