Oxford Nanopore Technologies PLC on Tuesday said it expects an annual jump in revenue despite a slowdown in growth in some areas of the company.
Shares in Oxford Nanopore fell 8.3% to 185.30 pence each in London on Tuesday morning.
The Oxford, England-based company, which develops and sells nanopore sequencing products, said it expects Life Science Research Tools revenue for 2023 of £169.9 million, up 16% from £146.8 million the year before.
Underlying revenue grew 32% in the second half of 2023, but was impacted by ‘slower than expected ramp up of certain new S3 customers,’ Oxford Nanopore said, adding that expected revenue from these customers in 2023 will fall into 2024.
Growth in the Middle East and China also slowed in the second half after the recently issued US semiconductor trade rule to regulate sales of advanced artificial intelligence semiconductors.
Product development plans for 2024 include updates that are expected to mitigate this headwind, the firm noted.
Oxford Nanopore added that its Emirati Genome Programme, which was first announced in 2021, has generated revenue of $43.5 million to date, and was approximately £12 million in 2023, in line with guidance.
However, the firm said that EGP revenue in 2024 and beyond ‘is not anticipated to be a material portion of revenue and as such, the group will cease reporting EGP revenue separately following [2023] results.’
Looking ahead, Oxford Nanopore said it continues to expect underlying revenue growth of more than 30% per annum on a constant currency basis, and said it would maintain its medium-term gross margin target of greater than 65% for 2026.
‘Margin expansion is expected to be driven primarily by operational improvements already underway and/or planned, including improved manufacturing processes, recycling of electrical components and automation,’ the firm said.
It added: ‘The group continues to target adjusted [earnings before interest, tax, depreciation and amortisation] breakeven by the end of 2026. This will be achieved through revenue growth and margin expansion, detailed above, and disciplined operating expenditure.
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