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(Alliance News) - Shares in Genedrive PLC fell Tuesday after the company warned that it will miss market expectations for 2020 financial year revenue due to slower than expected uptake of the Genedrive HCV ID kit.
Shares in the molecular diagnostics firm were trading 16% to 18.00 pence in morning trade.
Genedrive said it has so far completed just 12 of the targeted 30 country registrations for its financial year to June 30. The company said it has found it difficult to complete an independent clinical test of the HCV ID kit, which tests for hepatitis C, due to "a lack of low viral load samples for analysis" and has therefore not been able to qualify the kit with the World Health Organisation.
"We are confident of completing the trial in the short term as more samples become available. We remain confident of WHO qualification and expect to be able to update the market on the result of the qualification during autumn 2019. We are optimistic about the long-term opportunity that HCV presents and expect commercial uptake to occur during the financial year to 30 June 2020," said Genedrive.
The company added that given the slowed registration rate and lack of WHO approval, its short-term growth has been harmed and it does not expect to meet revenue market expectations for year to June 30, 2020, though does still expect to maintain "double digit revenue growth".
Diagnostic revenue for the year ended June 30, 2019, is expected to total GBP2.4 million, up from GBP1.9 million in financial 2018 and "broadly in line with market expectations". Cash was ahead of market expectations at GBP5.2 million, having been GBP5.8 million on December 31.
For the same 2019 year, commercial sales to the US Department of Defense for biohazard identification totalled GBP900,000, down from GBP1.6 million, which include development income. A GBP300,000 order from the DoD was delayed past the end of Genedrive's year as a result of "a supplier issue" which is currently being resolved. Genedrive said it was "confident of additional orders" to be fulfilled in its 2020 financial year.
Genedrive's GBP600,000 NHS grant for developing a screening test for antibiotic-induced hearing loss has gone better than expected, with "more rapid test results than originally envisioned" and ls set to begin in the autumn.
Work under grant funded projects totalled GBP1.4 million in the year, multiplying from GBP200,000 in 2018.
Genedrive Chief Executive David Budd said: "The commercialisation of our HCV ID kit is progressing more slowly than we would have hoped. However, we continue to progress WHO pre-qualified status and the registration of the product in our target countries and so reasonably expect an upturn in demand in the future. The level of dedicated HCV testing funding has not yet flowed to meet WHO testing targets, leaving the current potential market underfunded.
"Our supply of Genedrive to the US DoD and its contribution to the year and the outlook for 2019/20 continues to grow; we expect further orders for both assays and units during the forthcoming year. The grant funded projects have performed well and we are excited about the opportunities these provide, especially the hearing loss assay with its potential in European and North American hospital settings," Budd added.
