STEM Cell Sciences said it had clocked up "significant progress" in developing its business plan over 2006 and predicted strong growth in revenues this year on the back of a string of recent licensing deals.
However, the Edinburgh-based biotechnology group saw pre-tax losses for the year widen to £3.04 million, from £2.66m in 2005, as it bore the brunt of investment in a new automated cell production facility and higher research and development costs.
Over the year to December 31, SCS also saw its overall revenues slip to £742,000, down 12 per cent from the previous year's £847,000.
The dip in fortunes had been flagged, with the AIM-listed company saying in an update six months ago that delays in work to complete its new facility at the Babraham Research Campus in Cambridge would impact on its full-year results. Further contributing to the performance was the late closure of a licensing deal that SCS had inked in with an undisclosed pharmaceutical company, with final revenues coming in at under half the £1.7m turnover that house broker Collins Stewart had initially predicted.
The group's president and chief executive, Peter Mountford, said the state-of-the-art Cambridge complex, which will allow SCS to grow and supply its novel stem cell-based drug screens and assays for the drug industry, was "central to the company's near term revenue flow and longer-term business strategy".
And Mr Mountford remained upbeat. He said: "The company made significant progress in pursuing its strategy, particularly strengthening the infrastructure and business development.
"Importantly, with these solid foundations, and the successful in-licensing of several new products, SCS expects to see revenue growth in the coming year.
"The board continues to be optimistic on the opportunities available to SCS and looks forward to an exciting 2007."
SCS is hoping that Cambridge will offer drug companies a facility for large-scale cell-based screening of experimental drugs, which will help speed up the delivery of new medicines and make the research process more efficient.
The company, which was spun out from the University of Edinburgh in 1994, has signed a number of licensing deals with key players in recent months, including one with US drugs giant Millipore Corporation to develop and market SCS' serum-free media for the growth of human embryonic stem cells.
It has also secured a collaboration deal with the Regenerative Medicine Institute at the National University of Ireland for the pre-clinical testing of neural cells aimed at helping spinal injury.
And last week, SCS - which is aiming to raise around £4m through an additional listing on the Australian Stock Exchange this year - said it has secured "material transfer" and "option to license" agreements to explore the use of L-particles and PREPS technology owned by drug discoverer Henderson Morley.
SCS said it ended its latest financial year with £2.5m in cash reserves, which it said would last until August.
