Microsaic Systems plc (AIM: MSYS), the developer of chip-based mass spectrometry (“MS”) instruments, designed to improve the efficiency of pharmaceutical (“Pharma”) R&D, announces a trading update as it approaches its year end.

Overview

It is expected that EBITDA and pre-tax profit for 2016 will be broadly in line with market expectations at the time of the August fundraising and an improvement over 2015. The Company has reshaped its business strategy to focus on the Pharma market where clear opportunities exist for the Company’s products and this has strengthened our customer relationships. Despite progress on many fronts, the business has encountered challenging trading conditions in a particular market sector, especially in the second half of 2016, which are expected to influence our rate of growth in 2017.

Operations

Sales in 2016 are ahead of those in 2015 by approximately 8%, and are expected to be substantially ahead of this in 2017. As part of our communicated strategy, we continue to work on specific analytical methodologies with prospective OEM partners towards the development of innovative and integrated analytical systems designed to improve the Pharma decision-making process. We are confident that the continuing development of our MS instrument will enable our current and potential OEM partners to explore new application areas. To that end, different functional aspects of the instrument are currently being evaluated by our existing and prospective OEM partners.

The manufacture of core components of our MS instruments continues to be streamlined in-house and the transfer of external manufacturing to a new contract manufacturer for non-core components has been successful.

Finance

Total sales of over £0.8 million are expected for 2016, 8% above 2015.

It is expected that EBITDA and pre-tax profit for 2016 will be broadly in line with market expectations at the time of the August fundraising.

The Company’s cash position is forecast to be approximately £5.7 million at 31 December 2016, which is in line with expectations provided in August 2016.

Corporate

As announced on 28 September 2016, our Chairman Colin Nicholl will be retiring from the Board at the end of January 2017. We would like to reiterate our thanks to Colin for his support and leadership since his appointment as Chairman in July 2013. The Company is undertaking a process to find a successor and will update shareholders on our progress in due course.

Jim Ramage, CEO, commented:

“2016 was a year of change, refocusing the strategy and getting the finances under control, which included undertaking a successful financing. Despite slower than anticipated revenue growth I am pleased to say that EBITDA and pre-tax profit in 2016 are forecast to improve over 2015 results and to be broadly in line with market expectations. The Company continues to focus on signing up one additional OEM each year to grow our business, increase sales and move forwards towards profitability. As we stated in August, our strategy is now focused on the pharma sector and we will continue to refine this strategy through 2017. The Company would like to take this opportunity to thank its employees for their commitment and hard work during the year and to shareholders both old and new for their support in ensuring the Company has the funding to fully implement its strategy.”

About Microsaic Systems

Microsaic Systems plc is a high technology company developing chip-based, bench-top mass spectrometry (“MS”) instruments that are designed to improve the efficiency of Pharma R&D.  MS is an analytical technique of choice for biochemists across many industry sectors.

Microsaic aims to bring routine MS analysis to the pharmaceutical scientist, providing powerful methods of analysis to enable earlier decision making relating to product identification, purity and bioactivity.

The Company is working with established global companies in preparative and purification science with expertise in Pharma and life sciences to co-develop new, integrated and optimised, application-specific, solutions to improve productivity in the development of small molecule and novel biologic (peptides, antibodies) medicines.

The Microsaic 4000 MiD®, single quadrupole, is the world’s smallest MS system, retaining the functionality of larger conventional MS systems, is easier to use by non-specialists, consumes less energy and has lower running costs. The Company is also developing new MS systems, based on its patented chip technologies, to address further areas of emerging need in Pharma R&D.

Microsaic Systems was established in 2001 by a team including founders from Imperial College London, and was admitted to AIM in 2011 (ticker: MSYS).