TIDMONT
RNS Number : 0754Z
Oxford Nanopore Technologies plc
09 January 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Oxford Nanopore Technologies plc
FY23 trading update
09 January 2024
Oxford Nanopore Technologies plc (LSE: ONT) ("Oxford Nanopore"
or the "Group"), the company delivering a new generation of
nanopore-based molecular sensing technology, today provides a
trading update ahead of reporting its full-year 2023 results on 6
March.
FY23 financial performance
The Group expects to report LSRT revenue for the 12 months ended
31 December 2023 of approximately GBP169 million (FY22: GBP146.8
million), representing year-on-year growth of approximately 15% on
a reported basis and 15% on a constant currency basis. Underlying
LSRT revenue growth, excluding revenue from Emirati Genome Program
("EGP") and COVID-19 sequencing, is expected to be approximately
39% on a constant currency basis. Strong performance across the
broader customer base in FY23 was driven by consumables [1] sales,
which accounted for approximately 75% of revenue.
Underlying revenue growth in the second half is expected to be
approximately 32%, impacted by slower than expected ramp up of
certain new S3 customers. Expected revenue from these customers in
FY23 will now fall into FY24. In addition, there was some slow-down
in growth in China and in the Middle East following issuance of the
recent US semiconductor trade rule further regulating sales of
advanced AI semiconductors. Product development plans within 2024
include updates that are expected to mitigate this headwind.
In addition to financial reporting, there was other evidence of
market traction and disruption. For example, the Group leased or
sold more than 700 PromethION 2 Solos (P2 Solo) in FY23; Oxford
Nanopore's most recently launched product represents a new market
area of affordable, accessible and high output sequencing. Material
associated revenue is anticipated to pull through with consumables
sales in FY24 and future periods.
Emirati Genome Program update
The Group has signed an agreement to replace and supersede the
existing purchase agreement it has with G42 Laboratories LLC
("G42") in support of the EGP. The new agreement will provide
greater flexibility to achieve the programme objectives and
reflects the parties' desire to refocus on clinical uses of the
platform, that can utilise the platform's unique benefits of richer
and faster data. G42 and Oxford Nanopore have agreed to collaborate
to leverage the richer data and speed of Oxford Nanopore's
technology in areas of unmet clinical need such as developmental
disorders, rare human genetic diseases and neonatal intensive
care.
The EGP contract, originally announced on 9 November 2021 with a
total value of approximately $68 million over a three-year period,
has generated revenues of approximately $43.5 million to date,
including amounts payable in relation to the amended contract. The
new agreement will remove the outstanding purchase commitment from
the original agreement and extends the expiration date until 31
December 2026. EGP revenue in 2024 and beyond is not anticipated to
be a material portion of revenue and as such, the Group will cease
reporting EGP revenue separately following FY23 results.
Revenue related to the EGP in 2023 (under the original and
revised agreement) was approximately GBP12 million, in-line with
guidance.
Excluding EGP, the Group's gross margin in FY23 would have been
expected to be more than 57%, in-line with guidance. However, as a
result of the agreement with G42, the Group's FY23 gross margin is
expected to be in the range 53 to 55%. Gross margin in future
periods is not expected to be affected by this amendment.
Medium-term Outlook
All medium-term (FY26) targets are unchanged:
The Group continues to expect underlying revenue growth of more
than 30% per annum on a constant currency basis, consistent with
the Group's recent performance.
The Group's medium-term gross margin target of greater than 65%
for FY26 is also unchanged. Margin expansion is expected to be
driven primarily by operational improvements already underway
and/or planned including improved manufacturing processes,
recycling of electrical components and automation.
The Group continues to target adjusted EBITDA breakeven by the
end of 2026. This will be achieved through revenue growth and
margin expansion, detailed above, and disciplined operating
expenditure.
[ENDS]
This announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU no. 596/2014),
which forms part of English law by virtue of the European Union
(Withdrawal) Act 2018. The person responsible for arranging the
release of this announcement on behalf of the Company is Hannah
Coote, Company Secretary of Oxford Nanopore Technologies plc.
For further information, please contact:
Oxford Nanopore Technologies plc
Investors: ir@nanoporetech.com
Media: media@nanoporetech.com
Teneo (communications adviser to the Company)
Tom Murray, Olivia Peters
+44 (0) 20 7353 4200
OxfordNanoporeTechnologies@teneo.com
About Oxford Nanopore Technologies plc:
Oxford Nanopore Technologies' goal is to bring the widest
benefits to society through enabling the analysis of anything, by
anyone, anywhere. The company has developed a new generation of
nanopore-based sensing technology that is currently used for
real-time, high-performance, accessible, and scalable analysis of
DNA and RNA. The technology is used in more than 120 countries, to
understand the biology of humans, plants, animals, bacteria,
viruses and environments as well as to understand diseases such as
cancer. Oxford Nanopore's technology also has the potential to
provide broad, high impact, rapid insights in a number of areas
including healthcare, food and agriculture.
For more information please visit: www.nanoporetech.com
Forward-looking statements
This announcement contains certain forward-looking statements.
For example, statements regarding expected revenue growth and
profit margins are forward-looking statements. Phrases such as
"aim", "plan", "expect", "intend", "anticipate", "believe",
"estimate", "target", and similar expressions of a future or
forward-looking nature should also be considered forward-looking
statements. Forward-looking statements address our expected future
business and financial performance and financial condition, and by
definition address matters that are, to different degrees,
uncertain. Our results could be affected by macroeconomic
conditions, the COVID-19 pandemic, delays in our receipt of
components or our delivery of products to our customers,
suspensions of large projects and/or acceleration of large products
or accelerated adoption of pathogen surveillance. These or other
uncertainties may cause our actual future results to be materially
different than those expressed in our forward-looking
statements.
[1] Consumables revenue includes the consumables included in
starter pack revenue
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