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Oxford Nanopore Technologies plc

Interim results for the six months ended 30 June 2022

Strong growth in core LSRT business; re-affirming full year guidance

Oxford Nanopore Technologies plc (LSE: ONT) ("Oxford Nanopore" or the "Group"),the company behind a new generation of molecular sensing technology based on nanopores, today announces its interim results^[1] for the six months ended 30 June 2022.

Summary financial performance

£ million Unless otherwise stated	HY 2022	HY 2021	Change reported
Revenue	122.3	59.0	+107%
Life Science Research Tools (LSRT) revenue	70.6	52.6	+34%
Non-recurring COVID-19 testing revenue[2]	51.8	6.4	+709%
Gross profit	78.0	30.2	+158%
Gross margin	63.7%	51.2%	+12.5pts
LSRT Gross margin	54.8%	51.1%	+3.7pts
Adjusted EBITDA[3]	(34.6)	(19.2)	(15.4)
Loss for the period	(30.2)	(44.8)	14.6

 

Financial highlights; strong underlying revenue growth in core business

·     LSRT revenue increased by 34% to £70.6 million, (HY2021: £52.6million), primarily driven by increasing customer numbers, across a breadth of applications and growth in consumables sales, which includes higher than anticipated contribution from COVID-19 sequencing.

·     Excluding the impact of FX, revenue from COVID-19 sequencing and revenue from the Emirati Genome Program (EGP), LSRT revenue grew by approximately 30% year-on-year.

·     Group revenue increased to £122.3 million (HY2021: £59.0 million), reflecting an £18.0 million increase in LSRT revenue and non-recurring revenue of £51.8 million following the conclusion of the Group's COVID-19 testing contract with the Department of Health and Social Care (DHSC), as previously announced.

·     LSRT Gross profit margin increased to 54.8% (HY2021: 51.1%), predominantly driven by automation, recycling of electronic components and improvements in manufacturing techniques.

·     Adjusted EBITDA loss of £(34.6) million (HY2021: £(19.2) million); higher LSRT Gross profit offset by increased operating expenses, reflecting investment in commercial and marketing teams, to support long term sustainable growth.

·     Reduction in Loss for the period to £(30.2) million (HY2021: £(44.8) million), driven by the higher LSRT Gross profit, the settlement of the DHSC contract and the decrease in the provision for employers social security taxes on pre-IPO share awards, partly offset by higher operating expenses.

·     Cash and cash equivalents and Treasury deposits of £602.6 million^[4], compared to £618.2 million as of 31 December 2021.

Business highlights

Continued innovation driving sustainable growth

·     Introduction of "best of both" sequencing chemistry, combining the latest R10.4.1 flow cells with the latest Kit 14 to deliver high-accuracy, high-output sequencing data, achieving 99.6% accurate single molecule raw-read simplex data and 99.92% duplex data, with tunable runs for further flexibility and optimisation.

·     First early access shipments of the palm-sized PromethION 2 (P2) solo device, a high output, low cost nanopore sequencer, designed to make high-throughput sequencing more accessible.

·     Release of Remora, a tool to enable real time, high-accuracy epigenetic insights with nanopore sequencing,making Oxford Nanopore the most comprehensive technology for characterising methylation.

·     Release of Short Fragment Mode to enable nanopore sequencing of fragments as short as 20 bases; only technology on the market capable of directly sequencing short to ultra-long reads in a single technology.

Continued growth in customers and scientific impact

·     Continued increase in the user base and utilisation of nanopore sequencing in life science research; an increase of 990 active customer accounts in the period, taking total active accounts to more than 7,300^[5] at 30 June 2022.

·     More than 3,500 papers published by the Nanopore community to date^[6] (31 December 2021: 2,466), highlighting applications across a number of scientific research areas including human, cancer, animal, plant, pathogen and environmental genomics.

Investment in people to support growth strategy

·     Increased global headcount tomore than 900 (31 December 2021: 803), including key hires in senior sales, marketing and support leadership.

·     Duncan Tatton-Brown appointed as Non-executive Chairman, adding extensive experience as an executive and Non-Executive Director of FTSE companies.

 

Financial guidance

Trading year to date is in line with expectations and the Group continues to expect full year 2022 LSRT revenue to be in the range of £145 million to £160 million, reflecting growth and diversification of the user base.

 

Full year 2022 revenue guidance accounts for an expected tapering of COVID-19 sequencing revenue in the second half of 2022 and expectedEmirati Genome Program (EGP) revenue of £15 million to £20 million, lower than previously anticipated.

 

All other guidance remains unchanged. Further details on page 7.

 

Gordon Sanghera, Chief Executive Officer, commented:

"Oxford Nanopore continues to make significant progress, with another period of strong growth in core revenue. We are seeing increasing demand around the world for our unique offering and are hugely proud of the new ground that our customers are breaking with the aid of our technology, in areas spanning population genomics, viral surveillance, neurological disorders, cancer and environmental conservation.

 

"This breadth underlines the scale of the opportunity we see ahead, as we seek to enable the analysis of anything, by anyone, anywhere. We have a clear strategy to achieve this mission and I'm delighted with what we've achieved over the last six months: we have continued to invest in innovation, further enhancing the performance and accessibility of our technology; we have further scaled our commercial team and manufacturing processes to meet growing demand and are pleased to see our focus on innovative and sustainable manufacturing driving increasing margins.

 

"While we remain mindful of the macroeconomic environment, this progress, coupled with our strong balance sheet, gives us confidence as we look ahead."

 

Presentation of results

Managementwill host a conference call and webcast today at 12:00pm GMT/ 7:00am ET.

For details, and to register, please visit https://nanoporetech.com/about-us/investors/reports. The webcast will be recorded and a replay will be available via the same link shortly after the presentation.

 

For further details please contact [email protected].

 

 

[ENDS]

 

For the full announcement, please click here.