AUS
NZ
UK
CA
USA
IND
On Tuesday, Oxford Nanopore Technologies (LSE:ONT) reported a steady performance for the first half of the year, despite facing challenging market conditions. For the six months ending June 30, the London-listed company's revenue reached £84.1 million. This figure was largely unchanged at constant currency and reflected a 2.2% decrease on a reported basis, aligning with expectations.
Excluding the impact of £8.9 million from Covid-19 sequencing and the Emirati Genome Programme (EGP), underlying revenue grew by 12.4% at constant currency. The company saw substantial growth in its PromethION product range, with revenue increasing by 39% to £31.9 million. However, this growth was counterbalanced by a 10.8% decline in the MinION product range, attributed primarily to currency fluctuations and specific market factors.
Gross margins improved by 120 basis points to 58.8%, supported by better margins on PromethION products, although challenges from product mix and currency fluctuations persisted. The firm reported an adjusted EBITDA loss of £61.6 million, up from the previous year, due to higher operational expenses related to increased headcount. The net loss also widened to £74.7 million, compared to £70.1 million in the same period last year.
Strategically, Oxford Nanopore made significant strides, securing new contracts and expanding existing ones for its PromethION devices. Noteworthy agreements included a partnership with Precision Health Research Singapore to sequence 10,000 human genomes and a multi-year contract expansion with Plasmidsaurus for plasmid sequencing.
The company also introduced new products, such as the PromethION 2 Integrated (P2i) and the GridION Q-Line, and advanced collaborations, including a tuberculosis test with bioMérieux. Looking ahead, Oxford Nanopore reaffirmed its full-year guidance, anticipating underlying revenue growth of 20% to 30% at constant currency. The company also reiterated its medium-term goal of achieving over 30% compound annual revenue growth through 2027 and reaching adjusted EBITDA breakeven by the 2027 financial year, with a positive cash flow projected by 2028.
Chief Executive Officer Gordon Sanghera expressed confidence in the company's performance, noting that the financial and operational results for the first half of the year were solid and aligned with expectations. He highlighted the robust underlying revenue growth and margin expansion achieved during the period. Sanghera emphasized the continued pace of innovation and the delivery of new products tailored to the needs of regulated customers, particularly in clinical and applied industrial markets.
As of 0841 BST, shares in Oxford Nanopore Technologies were up 2.65% at 124.72p, reflecting positive market sentiment in response to the company's performance and future outlook.
