(Alliance News) - Oxford Nanopore Technologies PLC said that the stoppage of Covid testing contracts had taken a toll on its annual earnings, but the company expects several "pioneering project opportunities" to propel growth in 2024 and beyond.
Oxford Nanopore is based in Oxford, England, and specialises in DNA and RNA sequencing technologies.
Oxford Nanopore's pretax loss was GBP149.8 million in 2023, widened 80% from GBP83.4 million a year prior.
Revenue dropped 15% to GBP169.7 million from GBP198.6 million in 2022.
The company attributes this decline to a cessation of Covid testing revenue, which brought in GBP51.8 million in 2022. Oxford Nanopore previously had a lucrative testing contract with the UK Department of Health and Social Care. Loss also resulted from the write-off of excess Covid sequencing kits and devices.
Underlying revenue for 2023, which excludes revenue from Covid sequencing, rose 39% to GBP149.7 million from GBP107.5 million.
Oxford Nanopore posted an adjusted loss before interest, tax, depreciation and amortisation of GBP104.9 million, up 33% from GBP78.6 million in 2022. The company credits this to increased operating and product development expenses.
The loss per share for the year was 19p, up 73% from 11p.
As at December 31, Oxford Nanopore had GBP472.1 million in cash, down from GBP558.0 million a year prior.
Looking ahead to its 2024 results, the company expects revenue growth of 6% to 15%, equating to between GBP180 million and GBP195 million for the full year.
Oxford Nanopore said it had a pipeline of "higher value, pioneering project opportunities", which will accelerate growth to the top end of this guidance. However, it added that such opportunities would be dilutive to its margins in the short term.
Chief Executive Officer Gordon Sanghera said: "As we look forward, our highly differentiated platform and substantial market opportunity, positions us well to deliver long-term, sustainable growth. We are focused on key strategic initiatives to drive value, including disciplined investments in our technology and commercial operations where appropriate to unlock key opportunities in priority markets. We also remain mindful of end-market conditions, with sales cycles lengthening at the same time as we have expanded our commercial and operational infrastructure to support future growth. These factors have led us to revise our forecast for achieving adjusted Ebitda breakeven to the end of 2027 as we continue to focus on delivering against the huge commercial opportunity ahead of us."
Shares in Oxford Nanopore were down 3.0% at 125.00 pence each in London on Wednesday morning.
By Hugh Cameron, Alliance News reporter
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