RE: YGEN & NCYT Manufacturing agreement29 Apr 2020 23:37
UK Investor Magazine rating a BUY and that was before the 86% increase in revenues which was reported recently.
Add in the covid19 deal and this is well and truly undervalued.
What’s exciting us is the agreement for contract manufacturing services for ‘part’ of a COVID-19 Test. The agreement is with a subsidiary of Novacyt (LON:NCYT) which recently recorded a £131m Mkt Cap as the shares doubled on announcements it’s diagnostic tests kits went into production.
Initially, Ygen are contracted to produce critical components but the agreement could soon be expanded.
In November 2019, Ygen opened its state-of-the-art facility at Citylabs, in the centre Manchester’s £95m genomics campus. This GMP (Good Manufacturing Practice) facility has un-used capacity, which would have been slowly filled by Ygen’s own growing requirements, but it is well prepared to scale-up as it anticipates ramping-up production.
The Citylabs facility is a key part of the ongoing integration of the £8.9m Elucigene acquisition which was completed in April 2019. The consolidation into a single management structure and manufacturing facility is already generating efficiencies. The four strategic priorities are product penetration, geographic and product expansion and acquisitive growth with earning enhancing deals.
One of the factors in the accelerated organic growth at the Interims was the increased product penetration for the flagship non-invasive prenatal tests (NIPT) for Down’s syndrome and other genetic disorders, and an expansion of its oncology and research services activity. The sales footprint has been expanded as it now sells products into over 60 countries worldwide, compared to 30 countries.
The US is a target for expansion and corporate activity can be anticipated. The COVID -19 tests will accelerate utilization of the new capacity and the company’s profitability.
Rating Buy
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