RADNOR, Pa. - Certara, Inc. (NASDAQ:CERT), known for its model-informed drug development tools, has announced the completion of its acquisition of Chemaxon, a company specializing in scientific informatics software. This move is set to bolster Certara's biosimulation capabilities and provide life sciences companies with advanced tools for drug discovery and development.
The integration of Chemaxon’s technology with Certara’s solutions aims to offer more precise insights throughout the drug discovery and development process. According to Certara’s CEO, William Feehery, the merger will enhance productivity and scientific innovation success rates for their clients.
Certara's near-term goals include the integration of precision chemistry structures and calculators into its D360 scientific informatics applications and Simcyp PBPK Simulator. The company's long-term plans involve incorporating Certara.AI’s specialized capabilities into the drug discovery process and Chemaxon’s products, such as Design Hub and JChem Engines.
Chemaxon’s CEO, Richard Jones, expressed enthusiasm about the acquisition, highlighting the importance of accurate scientific predictions and biosimulation in the era of precision medicine therapies.
Certara anticipates that Chemaxon will contribute software revenue exceeding $20 million in 2024. The company plans to update its financial guidance to reflect Chemaxon's contributions when it reports third-quarter earnings in November.
This strategic acquisition is expected to significantly impact drug discovery and development practices, particularly as the industry shifts towards precision medicine. The combined expertise of Certara and Chemaxon is poised to offer life sciences companies improved decision-making tools from the early stages of discovery through to commercialization.
The information reported is based on a press release statement. Certara, with a client base of over 2,400 biopharmaceutical companies, academic institutions, and regulatory agencies across 66 countries, accelerates medicines using biosimulation software, technology, and services. Chemaxon provides platforms and solutions for handling chemical entities in various research industries.
In other recent news, Certara Inc . has had a number of developments. UBS has upgraded Certara's stock from Neutral to Buy, setting a new price target of $16.00, citing the company's potential to expand the use of biosimulation in drug development. The firm also anticipates that Certara's related software cross-selling will restore double-digit sales growth.
Certara has launched a new version of its Phoenix software, aimed at enhancing pharmacokinetic and pharmacodynamic modeling in drug development. Additionally, the company is in the process of acquiring Chemaxon, a cheminformatics software provider, in a strategic move to expand its reach into the preclinical space.
In terms of financial performance, Certara reported mixed results for Q2 2024, with a 3% revenue increase to $93.3 million, despite a downturn in its services segment and a net loss of $12.6 million. Looking ahead, Certara anticipates an adjusted earnings per share ranging from $0.41 to $0.46 and expects improvements in its adjusted EBITDA margin. The company also projects a pick-up in Tier 1 customer activity in the fourth quarter.
InvestingPro Insights
Certara's recent acquisition of Chemaxon aligns with its growth strategy, as reflected in the InvestingPro data. The company's market capitalization stands at $1.82 billion, indicating its significant presence in the biosimulation software industry. Despite a challenging year with a year-to-date price return of -35.47%, Certara has shown resilience with a notable 8.51% return over the last week, suggesting potential market optimism following the Chemaxon acquisition announcement.
The company's revenue growth of 3.26% over the last twelve months, coupled with a healthy gross profit margin of 59.01%, underscores its ability to generate value from its operations. This financial performance provides a solid foundation for integrating Chemaxon's capabilities and potentially realizing the projected $20 million in additional software revenue for 2024.
InvestingPro Tips highlight that Certara operates with a moderate level of debt and has liquid assets exceeding short-term obligations. These factors could be crucial in supporting the company's expansion plans and the successful integration of Chemaxon's technologies. Additionally, analysts predict that Certara will be profitable this year, which aligns with the company's growth trajectory and the expected benefits from the recent acquisition.
For investors seeking a deeper understanding of Certara's financial health and growth prospects, InvestingPro offers 10 additional tips, providing a comprehensive analysis to inform investment decisions.
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