Shares in newly listed DNA sequencing company Oxford Nanopore Technologies (ONT) gained 6% to 577.4p on Tuesday after it won a new contact and upped revenue guidance.
The company, a past favourite of former star fund manager Neil Woodford, has developed a new generation of nanopore-based sensing technology allowing real-time analysis of DNA (deoxyribonucleic acid), a chemical which carries each person’s unique genetic code.
Oxford Nanopore has won a new 36-month contract worth around $68 million to provide devices and consumables to G42 Laboratory, which is providing sequencing operations on a large customer project based in the UAE.
INCREASED GUIDANCE
Given that revenues from the contract are expected after the current December 31 year end, the company maintained current guidance for core LSRT (life science research tools) revenues to grow by between 60% and 70% putting $105 million to $111 million within reach.
The upgraded guidance did not stop at 2021, with the company now anticipating 2022 LSRT revenues of between $135 million and $145 million and within the range of $170 million and $190 million in 2023, a 6% increase on prior expectations.
The company has a unique revenue model whereby it provides customers with the sequencing device for no upfront cost, then charges for the consumables used.
While today’s news is a positive development for the commercialisation of the company’s products, it should be also be noted that G42 Laboratory is a significant shareholder in Oxford Nanopore and holds a 5.4% stake.
STRONG DEBUT
Oxford Nanopore made one of the most successful debuts on the London stock market on 30 September 2021, surging 45% to 616p in early trading as investors piled in to the previously venture capital-backed business. That gave it a near £5 billion market cap.
Had the company opted for a full premium listing, rather than a standard listing, the shares would be on the cusp of entering the FTSE 100 index.
A premium listing means that a company has to comply with the highest UK standards of regulation and corporate governance, while for a standard listing a company only has to comply with minimum EU requirements.
