DeepMatter Group PLC Shares Rocket on Licensing Deal with Merck, Expects Revenue Growth

DeepMatter Group PLC (AIM:DMTR), the digital chemistry data and software company, saw its shares more than double in value after announcing a multi-year database licensing agreement with Merck & Co Inc (NYSE:MRK ) and forecast strong revenue growth for the current fiscal year.

DeepMatter shares climbed 113.33% to 0.16p in early trading on Wednesday.

As part of this collaboration, DeepMatter will license certain proprietary data for machine learning-based applications to Merck’s life sciences business.

DeepMatter said the Merck collaboration has the potential to become one of the group’s largest to date and added that after the signing of this “hardware deal” and a “strong” first half performance, it is growing. expects revenue for 2022 to be no less than £1.5m, up 50% from the £1.0m reported last year.

“We are thrilled to announce an important licensing agreement with Merck, one of the leading companies using digitization in healthcare and life sciences to realize our vision of providing the data that makes every medicine possible. in the best possible way,” said Mark Warne. , CEO of DeepMatter in a statement.

Commenting on the trading, Warne said: “After a strong first half, we are now on track to grow our year-on-year revenue by around 50% and, importantly, we are seeing growing interest from clients. and the potential for recurring royalty income, which is recognized over the term of the contracts, giving us increasing visibility.

DeepMatter and Merck will also explore ways to identify, acquire, generate and structure chemical reaction datasets that can be used to enable scientists to develop new molecules faster and more efficiently, which could encompass the using DeepMatter’s SmartChemistry capabilities.

The company said it entered into three strategically important multi-year collaborations in the current fiscal year and continues to see a strengthening of its sales pipeline after a strong first half.

The company’s cash balances stood at £0.7m at September 30, 2022, with costs remaining in line with those reported at the time of the group’s first half results.