22nd Mar 2022 16:44
(Alliance News) - In spite of a widened loss for 2021, Oxford Nanopore Technologies PLC raised its outlook for 2022 going forwards, on the back of revenue exceeding management expectations and rising gross margins.
For 2021, the nanopore sequencing products developer posted a widened pretax loss to GBP166.0 million from GBP73.2 million the year before, driven by a sharp rise in general and administrative expenses, as well as research & development costs.
"We think that there is little reason to pay significant attention to the higher-than expected net loss as a few one-offs are baked in and do not signify much if non-cash expenses are excluded," said Odysseas Manesiotis of Berenberg.
The group's gross margin expanded significantly to 54.8% from 41.2% in 2020, reflecting a greater proportion of reflecting a greater proportion of consumables revenue and higher margins on PromethION flow cells.
However, revenue grew 17% year-on-year to GBP133.7 million from GBP113.9 million, with the Life Science Research Tools business posting 94% growth to GBP127.0 million. This more than offset a 86% slump from Covid-19 testing revenue to GBP6.7 million, in line with expectations.
"Oxford Nanopore witnessed a substantial increase in its customer accounts and instrument utilisation, taking total active accounts to over 6,300 (+1,400 versus 2020) and revenue per LSRT customer up an impressive 50%, as large scale sequencing projects begin to take a higher share of sales. Publications also witnessed a notable jump of more than 1,000 in 2021, taking the total studies that validate the use of Oxford Nanopore's sequencers in a variety of applications to more than 2,450," Manesiotis added.
Looking ahead,the company expects Life Science Research Tools revenue between GBP145 million and GBP160 million, at best, up by over a quarter from 2021. This is tipped to rise further to between GBP190 million to GBP220 million in 2023.
The company had previously forecast revenue between GBP135 million to GBP145 million for 2022 and GBP170 million and GBP190 million for 2023.
"While Oxford Nanopore expects a significant decline in Covid sequencing revenue, the company has nevertheless improved their FY22 outlook. Investors will be paying close attention to the continued customer base growth, potential for additional population genomics studies, continued accuracy and cost improvements, and the establishment of Oxford Nanopore's Diagnostics team in an effort to bring this technology closer to the patient," said Sebastian Skeet of Third Bridge.
Shares in Oxford Nanopore were down 5.0% at 419.74 pence just before Tuesday's close in London.
By Dayo Laniyan; [email protected]
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