Preliminary results for the year ended 31 December 2021, guidance update
A year of exceptional technical, commercial and financial progress; increase in 2022 and 2023 revenue guidance
Oxford Nanopore Technologies plc (the "Group"), the company behind a new generation of nanopore-based sensing technology, today announces its preliminary results for the year ended 31 December 2021.
Summary performance
| 2021 | 2020 | |
|---|---|---|
| £m | £m | |
| Revenue[1] | £133.7 | £113.9 |
| Life Science Research Tools (LSRT) revenue | £127.0 | £65.5 |
| COVID-19 testing revenue | £6.7 | £48.3 |
| Gross Profit Margin | 54.8% | 41.2% |
| Adjusted Operating Loss[2] | (£82.9) | (£73.1) |
| Adjusted EBITDA[3] | (£57.7) | (£55.2) |
| Loss for the year | (£167.6) | (£61.2) |
Full Year 2021 Financial highlights; record revenue growth in core business
• LSRT revenue of £127.0 million, compared to £65.5 million for 2020; a 94% increase during the period, reflecting growth across all customer groups.
• Total revenue of £133.7 million, compared to £113.9 million for 2020; £61.5 million increase in LSRT revenue partially offset by a £41.6 million4 expected decrease in revenue from COVID-19 testing.
• Gross margin of 54.8%, compared to 41.2% for 2020; reflecting greater proportion of consumables revenue and higher margins on PromethION flow cells.
• Adjusted operating loss of £82.9 million, compared to an adjusted operating loss of £73.1 million for 2020; increase primarily due to continued investment in the business to support sustainable long term growth.
• Adjusted EBITDA of negative £57.7 million, compared to negative £55.2 million in 2020.
• Net loss of £167.6 million, compared to a net loss of £61.2 million for 2020, driven by the share based payment charge and IPO costs.
• Cash and cash equivalents and treasury deposits of £618.2 million as of 31 December 2021, which includes net proceeds of £407.1 million from the Group’s IPO in October 2021.
2021 Strategic and operational highlights; continued innovation and operational expansion driving growth
Key technology highlights:
• Innovation drove performance enhancements across the nanopore sequencing platform, including:
- The launch of new technology updates (“Q20+” chemistry; the new “Kit 12” and R10.4 Flow Cells, in combination with new basecalling techniques) delivering >Q20 (>99%) raw read accuracy and approximately Q30 (>99.9%) accuracy using “Duplex” approach.
- Continued investment in machine learning; launch of new basecaller Bonito, delivering algorithm improvements and increased accuracy.
• Initial release of Remora , a tool to enable high-accuracy, real time methylation analysis with nanopore sequencing, a key platform differentiator that supports multiple applications including cancer and human genetics.
• Continuous improvement of sequencing devices; announced the development of the palm-sized PromethION 2 (P2), expected to launch in 2022 in certain markets, as the most accessible low-cost, high-output nanopore sequencer.
• New kits to support specific uses of nanopore sequencing, including:
- Rapid barcoding for low cost multi-sample analysis across a breadth of application areas
- ARTIC Midnight kit for rapid, high-performance COVID-19 sequencing
- Ultra-long sequencing kit to support the sequencing of high volumes of ultra-long DNA fragments, providing rich data across a breadth of application areas
Key user community highlights:
• Substantial increase in the user base and utilisation of nanopore sequencing in life science research; over 1,400 new accounts added in 2021, taking total active accounts to over 6,300 across all products.
• Growth in scientific impact of nanopore sequencing; more than 1,000 papers published by the Nanopore community in 2021, highlighting applications across a number of scientific research areas including human, cancer, animal, plant, pathogen and environmental genomics.
• In human genomics, scaleup of ultra-high throughput sequencing operations for the Emirati Genome Program and multiple large scale human genome pilots, such as: Genomics England in cancer, NIH in neurodegenerative disease.
• In pathogen genomics, extensive use of nanopore sequencing for rapid COVID-19 surveillance and sequencing of a range of other pathogens including TB, drug-resistant bacteria, and African Swine Fever.
• Research demonstrating potential clinical uses of nanopore sequencing for rapid profiling of central nervous system tumours, rapid characterisation of rare or neurological diseases, and rapid identification of pathogens in infectious disease samples.
• Launched the Org.one programme in April 2021 to support the sequencing of critically endangered species and address biodiversity loss; 30 whole genomes of critically endangered species completed by March 2022.
Key operational highlights:
• Increased global headcount to over 800, including key hires in senior sales, marketing and support leadership, consistent with the Group’s commitment to scale up rapidly and serve the global market for sequencing products.
• Strengthened Board of Directors with the appointments of Wendy Becker and Adrian Hennah as independent non-executive directors.
• Established an Oxford Nanopore Diagnostics team, to focus on future potential diagnostic uses of nanopore sequencing.
Guidance:
The Group expects full year 2022 LSRT revenue to be in the range of £145 million to £160 million and full year 2023 LSRT revenue to be in the range of £190 million to £220 million. Revenue guidance accounts for an expected significant decline in COVID-19 sequencing revenue in 2022 and the recognition of revenue from the Group’s largest customer in the fourth quarter of 2021, previously expected in the first quarter of 2022.
As disclosed on 9 November 2021, the Group was previously targeting LSRT revenue in the range of £135 million to £145 million for full year 2022 and LSRT revenue in the range of £170 million to £190 million for full year 2023.
All other prior guidance remains unchanged.
Please note that, beginning next year, the Group plans to provide forward revenue guidance only for the then-fiscal year.
Gordon Sanghera, Chief Executive Officer, commented:
“We are proud of all that we achieved in 2021. We saw a significant increase in both existing and new research customers using our technology to address some of the world’s biggest problems, from cancer and human genomics to public health and environmental genomics. The growing scientific impact of nanopore sequencing is reflected in the increase in scientific publications citing our technology, a 29% increase in active direct customer accounts and the near doubling in our core Life Science Research Tools revenue.
“We continued to expand and enhance our technology offering, which now enables even more comprehensive genomic insights, and breadth of application, while – crucially – remaining accessible in order to maximise potential benefits to society. We also continued to invest in growing our commercial capabilities to support our ambitious global growth goals.
“We see extraordinary opportunities ahead, reflected both in the progress we have made in the current research market and in the preparations that we are making to address many potential uses for our technology in applied markets, from infectious disease to agricultural optimisation. We remain focused on our mission to bring the widest benefits to society through the analysis of anything, by anyone, anywhere. The progress we have made over the last year, combined with the new capital raised in our IPO, puts us in a strong position to achieve this goal.”
Presentation details
Management will host a virtual presentation today, 22 March, at 9:30am GMT, followed by a Q&A session, accessible via conference call or webcast. To view the webcast and accompanying slide presentation please register here.
For details of the conference call please contact oxfordnanoporetechnologies@tulchangroup.com.
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 company 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 120 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.
Oxford Nanopore devices sequence DNA and RNA directly and sequence short to ultra-long fragments of DNA, for a truly comprehensive picture of the genome. Data is streamed in real-time and can enable rapid insights. The technology is fully scalable — from pocket-sized to ultra-high throughput devices.
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, the COVID-19 pandemic, delays in our receipt of components or our delivery of products to our customers, suspensions of large projects and/or acceleration of large products or accelerated adoption of pathogen surveillance. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.
Please visit our regulatory news page for the full preliminary results announcement, including the CEO and CFO statements and financial statements.
[1] Certain numerical figures included herein have been rounded. Therefore, discrepancies in between totals and the sums may occur due to such rounding.
[2] Before adjusting items of £81.7m (FY20: £nil). See note 5 for alternative performance measures. These APMs are not defined within IFRS and are not considered to be a substitute for, or superior to, IFRS measures.
[3] Adjusting items total £82.9m and relate to the IPO costs (£4.8m); Founder LTIP awards (£37.6m) and Employer social security taxes on pre-IPO share awards (£39.3m) and impairment of investment in associate (£1.2m). See note 5 for alternative performance measures.