(Alliance News) - DeepMatter Group PLC on Wednesday said it expects to see a substantial increase in revenue as it signed a licensing agreement with Germany's Merck KGaA that could become one of its largest deals so far.

Shares in DeepMatter were trading 53% higher at 0.11 pence each in London on Wednesday afternoon.

In a trading update on the first nine months of the year, DeepMatter said it expects to see revenue for the year to be no less than GBP1.5 million, 50% higher than last year's figure of GBP1.0 million.

The Glasgow, Scotland-based digital chemistry data company said it has secured three important collaborations and continues to see a "strengthening of its sales pipeline" following a strong first half.

The collaborations bring future revenue visibility and opportunities to grow the revenue opportunity from existing customers as well as new customers. They include technology access fees, collaboration fees and royalties, the company said.

Chief Executive Officer Mark Warne said: "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."

One of the collaborations signed during the year, also announced on Wednesday, is with Darmstadt, Germany-based Merck. DeepMatter said the collaboration has the potential to "become one of the group's largest to date".

Under the terms of the agreement, DeepMatter will licence proprietary data to Merck's Life Science division for machine learning-based applications.

Merck and Deepmatter will explore ways to identify, acquire, generate and structure sets of chemical reaction data that can be used to enable scientists to develop new molecules faster and more efficiently

Chief Executive Officer Mark Warne said: "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."

By Chris Dorrell; chrisdorrell@alliancenews.com

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