Oxford Nanopore Technologies PLC on Monday said it is on-track for financial breakeven in 2027, as it expects to report better-than-expected margins in 2024 alongside a solid jump in revenue.
The Oxford-based DNA and RNA sequencing specialist said commercial performance accelerated in the second half of calendar 2024, in line with guidance.
Full year performance also was in line with guidance, with revenue estimated around £183 million, up 11% on a constant currency basis, or 8% on a reported basis, from £169.7 million in 2023.
In response, shares in Oxford Nanopore leapt 16% to 152.19 pence each on Monday morning in London, setting an earlier high of 164.30p. The company has a market value of £1.48 billion and last month was promoted to the FTSE 250 index.
Growth was driven by expansion into end-markets outside of Research, such as Applied Industrial, BioPharma and Clinical, Oxford Nanopore said.
The figure includes an around £16 million combined headwind from Covid sequencing and the Emirati Genome Program, slightly less than previously expected. Underlying revenue growth at constant currency excluding these headwinds was around 23%, the firm said.
Underlying growth was strongest across the PromethION product range, up around 55% in 2024, primarily driven by increasing customer flow cell utilisation. This helped offset softness in the MinION product range, which declined in the period due to a mix of factors primarily related to product life cycle management, as previously outlined, that continued into the second half.
On a geographical basis the group delivered strong underlying revenue growth in all regions, led by Europe, the Middle East and Africa and Asia-Pacific.
Gross margin for the full year is expected to be slightly above financial 2024 guidance of around 57%.
Oxford Nanopore reiterated medium-term guidance, predicting improving top line momentum and further gross margin expansion. This will help deliver adjusted earnings before interest, tax, depreciation and amortisation breakeven in 2027, the company said.
Oxford Nanopore expects revenue to grow at a compound annual growth rate of more than 30% at constant currency between 2024 and 2207, underpinned by continued penetration in existing markets and expansion into emerging end-market opportunities, in particular across BioPharma, Clinical and Applied Industrial.
Gross margin is expected to continue to improve and exceed 62% by 2027, supported by continued manufacturing efficiencies, increased volume growth and further penetration of new end-markets.
Oxford Nanopore expects to reach adjusted Ebitda breakeven in 2027 and become cash flow positive in 2028.
Chief Executive Officer Gordon Sanghera said he was ‘pleased’ with the performance in 2024. ‘We are particularly encouraged by the increasing momentum delivered across all regions into the second half of 2024.’
This ‘alongside our growing opportunity pipeline gives us confidence as we enter 2025,’ Sanghera said.
Looking ahead, Sanghera said ‘strengthened commercial and operational capabilities combined with a strong balance sheet, position us well to deliver long-term, sustainable, above-market growth.’
Oxford Nanopore will announce its results for the twelve months to December 31 on March 4.
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