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Annual results for the year ended 31 December 2024

Guidance achieved on the back of strong and accelerating momentum in H2 24 across all regions; investments made in operational platform position the Group strongly for 2025

Oxford Nanopore Technologies plc (LSE: ONT) ("Oxford Nanopore" or the "Group"), the company behind a new generation of molecular sensing technology based on nanopores, today announces its preliminary results for the year ended 31 December 2024.

Gordon Sanghera, Chief Executive Officer, commented:

"I am pleased to be reporting another year of strong, underlying constant currency revenue growth of 23%, in line with guidance. We are particularly encouraged by the increasing momentum delivered across all regions into the second half of 2024, with overall underlying revenue growth at constant currency accelerating to 34%. This, together with good cost control, drove an improvement in our EBITDA loss in H2 and we expect this trend to continue in 2025.

"We have continued to innovate at pace to meet customer needs in our target markets. We launched four new products in 2024, two of which - GridION Q and ElysION - are aimed at our regulated customer base to drive adoption in new Clinical, BioPharma and Applied Industrial markets. We also continued to demonstrate strong commercial execution, announcing several landmark contracts and new strategic collaborations during the year, as well as progressing existing collaborations. These included partnerships with the UK Government, UK Biobank and Precision Health Research Singapore that will advance genomics-driven healthcare innovation globally.

"While we expect the macroeconomic and geopolitical backdrop to remain uncertain, we enter 2025 with strong operational momentum and a growing opportunity pipeline. Our highly differentiated platform, commercial capabilities and robust balance sheet continue to position us well to capture the substantial market opportunity and deliver long-term sustainable above market growth and attractive returns for our shareholders."

 

Summary financial performance

£ million Unless otherwise stated	FY 2024	FY 2023	Change reported	Change CC
Revenue	183.2	169.7	8.0%	11.1%
-EGP	1.8	12.0	(85.1)%	(85.1)%
-COVID Sequencing	2.2	8.0	(72.6)%	(72.0)%
Underlying revenue	179.2	149.7	19.7%	23.3%
Gross profit	105.4	90.5	16.5%
Gross margin	57.5%	53.3%	420bps
Adjusted EBITDA	(116.1)	(104.9)	(11.2)
Loss for the period	(146.2)	(154.5)	8.3

Notes:

1.     Underlying revenue excludes revenue from COVID sequencing and revenue from the Emirati Genome Program "EGP"). All references to underlying growth in this document have been adjusted for COVID sequencing and EGP revenues. Underlying growth includes currency fluctuations unless explicitly stated at constant currency ("CC").

2.     Constant currency ("CC") applies the same rate to the FY24 and FY23 non-GBP results based on FY23 rates.

3.     Certain numerical figures included herein have been rounded. Therefore, discrepancies between totals and the sums may occur due to such rounding.

4.     Adjusted EBITDA is a non-IFRS measure that may be considered in addition to, but not as a substitute for, or superior to, information presented in accordance with IFRS. Adjusted EBITDA is the EBITDA adjusted for (i) Share-based payment expense on Founder LTIP (ii) Employers' social security taxes on pre-IPO awards, and (iii) impairment of investment in associate - see note 22.

 

Financial highlights

·      Revenue of £183.2 million grew by 11.1% on a constant currency ("CC") basis, up 8.0% on a reported basis, in-line with guidance. Revenue growth was driven by expansion into end-markets outside of Research, namely Applied Industrial (up 41.8%), BioPharma (up 17.7%) and Clinical (up 12.2%). 

·      Underlying^[1] revenue increased by 23.3% CC, in-line with guidance.

o  Underlying revenue growth delivered in all regions, led by EMEAI (up 31.1%) and APAC (up 22.1%), with AMR up 7.0% for FY24 and 12.9% in H2 as momentum built during the year.

o  Underlying revenue grew fastest across the PromethION product range^[2], up 55.8% in the period to £75.9 million. Underlying revenue from the MinION product range^[3] declined by 9.6% to £53.1 million due to a mix of factors primarily related to product life cycle management, as previously outlined. Other revenues, representing kits, services revenues and other devices grew 18.8% on an underlying basis to £50.2 million.

·      Gross margin increased by 420 basis points ("bps") to 57.5% (FY23: 53.3%), slightly above guidance, driven by margin improvements across the product portfolio, particularly across both PromethION Flow Cells and devices.

·      Adjusted EBITDA loss of £(116.1) million (FY23: £(104.9 million) with the year-on-year increase driven by increasing operational expenses, primarily the annualised impact of additional headcount as highlighted at FY23 results. H2 adjusted EBITDA loss of £(54.5) million was £7.1 million lower than H1, demonstrating good cost control in the period and increasing focus on late stage development. This improvement in adjusted EBITDA loss is set to continue into 2025.

·      Reduction in reported loss year-on-year to £(146.2) million (FY23: £(154.5) million) was predominately driven by a Founder LTIP credit of £6.1 million (FY23: charge of £20.9 million) and a £2.7 million credit relating to the reversal of historic employers' social security tax charges (FY23: £0.9 million credit), partly offset by increasing operational expenses associated with the increase in headcount.

·      The Group remains well capitalised with £403.8 million in cash, cash equivalents and other liquid investments as at 31 December 2024 (FY23: £472.1 million), noting that a £8.3 million R&D tax credit was received in Q1 2025. During the second half of the year the Group raised gross proceeds of £80.0 million, which included a new £50.0 million strategic investment from Novo Holdings A/S ("Novo Holdings").

 

Operational highlights

·      Continued commercial progress: improving utilisation across broad base of existing customers, and new customer acquisition, driven by the enlarged and now established commercial infrastructure. 

 

·      Key contract wins and expansions: including (i) APAC: landmark research project with Precision Health Research Singapore (PRECISE), which selected Oxford Nanopore technology to sequence 10,000 human genomes to gain deeper insights into Asian genetic diversity, (ii) EMEAI: announced a groundbreaking research collaboration with UK Biobank to create the world's first comprehensive, large-scale epigenetic dataset to map epigenetic modifications across 50,000 samples to advance understanding of epigenetics in cancer, neurological disease and other common complex diseases and (iii) AMR: announced a multi-million, multi-year contract expansion with Plasmidsaurus, an Applied Industrial customer that provides plasmid sequencing services, to deliver high-accuracy whole plasmid sequencing with fast turnaround times.

·      New strategic collaborations: provide access to new growth markets in BioPharma, Clinical and Applied Industrial applications, including a collaboration with Lonza to develop a novel test to accelerate analysis of mRNA products.

·      Existing clinical collaborations delivering: including the launch of the AmplideX® Nanopore Carrier Plus Kit with Asuragen in Q4 2024. A test for determining antibiotic resistance in tuberculosis is being rolled out as a research-use only product with BioMérieux in 2025, prior to seeking IVD approval.

·      Delivering on 2024 innovation goals: including (i) Early Access^[4] launch of PromethION 2 Integrated (P2i) and continued rollout of the PromethION 2 Solo (P2S), with more than 1,900 P2 devices in the field. (ii) the Early Access launch of the MinION MK1D in Q4 2024 to mark ten years of MinION, the smallest sequencer on the market and (iii) the launch of new products from our regulated product pipeline to drive adoption in new Clinical and Applied Industrial markets, including GridION Q, which delivers a stable, frozen version of hardware, software and chemistry, and the Early Access launch of ElysION, our sample-to-answer automated sequencing solution.

·      Increase in publications reflects growing momentum and utility of the Group's platform: Approximately 3,000 peer-reviewed research papers published by users of Oxford Nanopore technology in 2024, bringing the total to more than 14,000 to date, showcasing breakthrough research across cancer, human genetics and infectious disease.  

·      Continued strengthening of the management team: Nick Keher appointed as Chief Financial Officer and Board Director in January 2024, adding significant financial leadership experience and a deep understanding of global capital markets. In November 2024 Rosemary Sinclair Dokos and Dr Lakmal Jayasinghe stepped into the roles of Chief Product and Marketing Officer and Chief Scientific Officer respectively, bringing extensive skills in innovation and product development. Rosemary and Lakmal succeed Clive Brown, Chief Officer of Technology, Innovation, and Products.

 

·      Board strengthened to support the business in its next phase of growth: Dan Mahony, appointed as a Non-Executive Director in October adding extensive sector experience, with more than 25 years as a global healthcare investor specialising in biotechnology, medical technology and healthcare services.

 

Updates post period end:

·      Pricing: Revised pricing model with the aim of increasing simplicity and transparency for customers whilst improving the sustainability of Oxford Nanopore as a business. These changes align the Group with industry peers by offering more conventional capital purchase schemes to customers, alongside flexibility for leasing as appropriate through financing partners or direct, whilst maintaining affordable and accessible sequencing through the Group's range of portable devices.

 

·      Cost control: Restructuring program leading to a reduction in the overall workforce of approximately 5%, spread evenly across R&D, Commercial and Corporate functions, alongside other cost control measures of a similar size. Management expect to take a total cash charge of approximately £6 million in FY25 in relation to redundancy payments which will be treated as an adjusting item.

 

Outlook

FY25 guidance

·      Revenue is expected to grow by 20 - 23% on a constant currency basis, reflecting continued strong demand across the business but taking into consideration recent updates and risks to US Federal funding, in particular with the National Institutes of Health ("NIH"), and a tightening of export control restrictions:

o  Federal funding including the NIH: there remains material uncertainty and risk to US NIH funding levels (and other Federal agencies) to which management estimate a total Group exposure of between 10-15% of revenues. Given the situation is still evolving, management have prudently assumed a material reduction pending further clarity.

·      Gross margin is expected to be approximately 59%, driven by continued operational improvements.

·      Adjusted operating expenses: given the recent restructuring and continued focus on improving efficiencies in the business, overall growth in adjusted costs in FY25 is expected to be at the low end of the Group's stated medium-term guidance of 3-8% CAGR between FY24 and FY27.

 

Medium term guidance reaffirmed

The Group expects to reach adjusted EBITDA breakeven in FY27 and become cash flow positive in FY28.

·      Revenue is expected to grow by more than 30% CC on a compound annual growth rate ("CAGR") between FY24 and FY27 underpinned by continued penetration in the Research market and expansion into emerging end-market opportunities, with a focus across BioPharma, Clinical and Applied Industrial. Whilst FY25 is expected to be below this range, management remain confident of a return to above 30% growth in FY26 and FY27.

·      Gross margins are expected to continue to improve and exceed 62% by FY27, supported by continued underlying improvements in manufacturing, increased volume growth and further penetration of new end-markets.

·      Operating expenses are expected to grow at a CAGR of 3-8% between FY24 and FY27, reflecting a continued focus on financial discipline to leverage the infrastructure the Group has already built and to modulate investment relative to the outlook.

 

 

Presentation of results

Management will host a conference call and webcast today, 4 March, at 9:30am GMT. For details, and to register, please visit https://nanoporetech.com/about-us/investors/reports. The webcast will be recorded and a replay will be available via the same link shortly after the presentation.

 

For further details please contact [email protected]

 

-ENDS-

For further information, please contact:

Oxford Nanopore Technologies plc

Investors:         [email protected]

Media:              [email protected]

 

Teneo (communications adviser to the Group)

Tom Murray, Olivia Peters

+44 (0) 20 7353 4200

[email protected]

About Oxford Nanopore Technologies plc:

Oxford Nanopore Technologies' goal is to bring the widest benefits to society through enabling the analysis of anything, by anyone, anywhere. The Group has developed a new generation of nanopore-based sensing technology that is currently used for real-time, high-performance, accessible, and scalable analysis of DNA and RNA. The technology is used in more than 125 countries, to understand the biology of humans, plants, animals, bacteria, viruses and environments as well as to understand diseases such as cancer.  Oxford Nanopore's technology also has the potential to provide broad, high impact, rapid insights in a number of areas including healthcare, food and agriculture. 

For more information please visit: www.nanoporetech.com

 

Forward-looking statements

This announcement contains certain forward-looking statements. For example, statements regarding expected revenue growth and profit margins are forward-looking statements. Phrases such as "aim", "plan", "expect", "intend", "anticipate", "believe", "estimate", "target", and similar expressions of a future or forward-looking nature should also be considered forward-looking statements. Forward-looking statements address our expected future business and financial performance and financial condition, and by definition address matters that are, to different degrees, uncertain. Our results could be affected by macroeconomic conditions, delays or challenges in manufacturing or delivering of products to our customers, suspensions of large projects and/or acceleration of large products or accelerated adoption of pathogen surveillance or applied uses of our products. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.

 

 

Notes: In this section, all growth rates are year-on-year unless otherwise stated. All underlying growth rates referred to in this report have been adjusted for EGP and COVID sequencing. Underlying revenue includes currency fluctuations unless explicitly stated at constant currency ("CC"). See reconciliation in the Financial Review section. Certain numerical figures included herein have been rounded. Therefore, discrepancies between totals and the sums may occur due to such rounding.