REG - Novacyt S.A. - Trading update

Novacyt SAAnnouncement

25/01/2024 07:00

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RNS Number : 8237A  Novacyt S.A.  25 January 2024

Novacyt S.A.

("Novacyt", the "Company" or the "Group")

 

Full Year Trading update

Integration of Yourgene Health plc ahead of schedule

 

Paris, France, and Eastleigh and Manchester, UK - 25 January 2024 - Novacyt
S.A. (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international molecular
diagnostics company with a broad portfolio of integrated technologies and
services, announces an unaudited trading update for the year ended 31 December
2023. This includes almost four months' trading of Yourgene Health plc
("Yourgene") following its acquisition, which completed on 8 September 2023.

 

Financial Highlights

·    Unaudited Group statutory revenue for FY 2023 expected to be circa
£11.6m in line with management guidance, of which £0.6m relates to COVID (FY
2022*: £21.0m of which £14.7m related to COVID).

·    Unaudited Group statutory revenue for the non-COVID portfolio of
£11.0m represents over 95% of total revenues (FY 2022*: £6.3m).

·    Cash position at 31 December 2023 was £44.1m (H1 2023: £81.7m),
reflecting the cash consideration and associated costs of the acquisition of
Yourgene, and the Group remains debt free.

*excludes any Yourgene revenue as pre-acquisition

 

Unaudited Pro-Forma Group revenue

·     Pro-forma Group revenue for the 12 months ended 31 December 2023 was
£22.9m (2022: £44.3m).

·    Excluding COVID sales, core pro-forma revenue for the 12 months ended
December 2023 was £21.8m compared to £22.9m for the 12 months ended 2022, a
decline of £1.1m or circa 5%.

·     Yourgene non-COVID sales were broadly flat year-over-year

o  Genomic Technologies saw a £0.5m increase driven by strong growth in
Ranger® Technology and Reproductive Health products

o  This was offset by a reduction of £0.6m in Genomic Services, due to the
reduction in volume of a key customer for the APAC business, and a key EMEA
customer moving to in-house testing using Yourgene's non-invasive prenatal
testing ("NIPT") system.

·    The Novacyt non-COVID portfolio had a weaker H2 after strong sales in
H1

o  Primer Design business revenues were £0.5m (11%) lower than prior year

o  IT-IS International instrument sales declined £0.4m (32%) compared to
2022, which is a high comparator given the greater demand for instruments in
H1 2022 due to COVID.

 

Integration of Yourgene Health plc

In September 2023, Novacyt completed the strategic acquisition of Yourgene,
significantly enhancing its global diagnostics capabilities, adding scale and
diversification to accelerate the long-term growth of the Company. Following
the acquisition, the Group has a broader technology portfolio, strengthening
its end-to-end customer offering; enhanced routes to market in Europe, Asia
and the Americas; and expanded skills and expertise in the development and
commercialisation of innovative molecular diagnostics.

 

As part of the ongoing integration process the Company has reorganised the
business, transferring the development and commercialisation of all clinical
products to Yourgene, which will enable Primer Design to focus on its core
flagship offering, developing research use only ("RUO") assays. The IT-IS
business will continue its focus on real-time quantitative PCR instrumentation
and will also add technical and engineering know-how and expertise to support
growth in the Ranger Technology instrumentation range.

 

Following this reorganisation, the Group will be split into the following
business segments:

 

 Clinical           Broad portfolio of human clinical in vitro diagnostic products, workflows and
                    services focused on three therapeutic areas:

                    ·    Reproductive Health: NIPT, Cystic Fibrosis and other rapid aneuploidy
                    tests

                    ·    Precision Medicine: DPYD genotyping assay

                    ·    Infectious Diseases: Winterplex, multiplex winter respiratory PCR
                    panel

 Instrumentation    Portfolio of next generation size selection DNA sample preparation platforms
                    and rapid PCR machines, including:

                    ·    Ranger® Technology: automated DNA sample preparation and target
                    enrichment technology

                    ·    MyGo: real-time quantitative PCR (qPCR) instruments
 Research Use Only  Range of services for the research industry:

                    ·    Design, manufacture, and supply of high-performance qPCR assays and
                    workflows for use in human health, agriculture, veterinary and environmental,
                    to support global health organisations and the research industry

                    ·    Pharmaceutical research services: whole genome sequencing (WGS) /
                    whole exome sequencing (WES)

 

Reduction in cost base

The acquisition business case assumed £5.0m of annualised cost synergies
would be achieved by year three of the integration, with circa £2.5m of
investment required to achieve those savings. The Group is currently tracking
substantially ahead of this target with 80% of the annualised savings realised
at the end of 2023 and the balance set to be delivered by the end of 2024. The
costs of achieving these synergies is also well within the planned £2.5m
investment forecast. The main savings so far have been delivered from the
refocus of the Primer Design business on the RUO market, the elimination of
duplicate corporate functions and streamlining of management.

 

Update on Taiwanese divestment

The divestment of the Taiwanese service laboratory to INEX Innovate Pte Ltd is
still progressing. As previously announced, the necessary government approvals
for the divestment have taken significantly longer to achieve than originally
anticipated. Both parties remain committed to completing the transaction, and
the Group will update the market in due course.

 

Commercial progress

The Group's commercial focus remains on the continued roll-out of key clinical
products in its core markets in Europe and Asia.

 

Obtaining certification for its clinical products under the new EU
requirements of the In Vitro Diagnostic Regulation ("IVDR") remains a key
focus for the Group. In November 2023, the Group's first product, the
Yourgene® DPYD genotyping assay, received IVDR certification. In December
2023, the Company submitted the application for its Cystic Fibrosis
quantitative fluorescence PCR (QF-PCR) test.

 

The Company has seen strong growth in its cystic fibrosis portfolio in Q4 2023
in Australia following the introduction of a new nationwide reimbursement
pathway by the Australian government that enables all eligible Australians to
receive cystic fibrosis screening either prior to, or early in pregnancy.

 

The Primer Design RUO portfolio is focused on three sectors, agriculture,
human health and animal health, where the business has a key value
proposition, high growth potential and a foundational customer base. The
business has a solid and growing pipeline of opportunities supported by a new
marketing and product management team to drive demand for the RUO portfolio.

 

The Company continues to drive new opportunities for Ranger Technology across
new applications. Instrument sales have been strong in APAC, especially in
China where the technology is under evaluation by multiple organisations. In
November 2023, Yourgene became a compatible partner of PacBio, a leading
developer of high-quality, highly accurate sequencing solutions with a global
customer base. PacBio released a technical note, endorsing the use of
Yourgene's LightBench® instrument (Ranger Technology) with PacBio's HiFi
sequencing system for size selection of long DNA fragments to enable high
yields for HiFi sequencing data. PacBio's customer base spans a broad set of
research areas, including human genome sequencing, plant and animal sciences,
infectious diseases and microbiology, oncology and other emerging
applications, which represents a significant opportunity to expand the use of
Ranger Technology.

 

Strategy

The Company is focused on leveraging its core strength and expertise in
cell-free DNA applications to deliver long-term sustainable growth, by
increasing market penetration and international sales of key products,
expanding its portfolio, and pursuing strategic business development
opportunities to build a global molecular diagnostics business.

 

Commenting James McCarthy, Acting Chief Executive Officer, said: "The
acquisition of Yourgene was a significant milestone for Novacyt, adding scale
and diversification to our product portfolio and wider customer offering, as
well as our sales and R&D teams. The integration process is ahead of
schedule with synergies already being realised, and I believe we are well
placed to execute our growth strategy. We have been encouraged by customer
demand for our products, particularly Ranger Technology and our reproductive
portfolio and remain focused on driving the global sales of our key clinical
and instrumentation products while also rebuilding our RUO business."

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.

 

Contacts

 

 Novacyt SA                                                              https://novacyt.com/investors (https://novacyt.com/investors/)
 James McCarthy, Acting Chief Executive Officer                           Via Walbrook PR
 Steve Gibson, Chief Financial Officer

 SP Angel Corporate Finance LLP (Nominated Adviser and Broker)                                             +44 (0)20 3470 0470
 Matthew Johnson / Charlie Bouverat (Corporate Finance)

 Vadim Alexandre / Rob Rees (Corporate Broking)

 Deutsche Numis (Joint Broker)                                                                             +44 (0)20 7260 1000
 Freddie Barnfield / Duncan Monteith / Michael Palser

 Allegra Finance (French Listing Sponsor)       +33 (1) 42 22 10 10

                                             r.durgetto@allegrafinance.com (mailto:r.durgetto@allegrafinance.com) /
 Rémi Durgetto / Yannick Petit                 y.petit@allegrafinance.com

 Walbrook PR (Financial PR & IR)                                         +44 (0)20 7933 8780 or novacyt@walbrookpr.com

 Stephanie Cuthbert / Paul McManus /                                     +44 (0)7796 794 663 / +44 (0)7980 541 893

 Phillip Marriage / Alice Woodings                                        +44 (0)7867 984 082 / +44 (0)7407 804 654

 

About Novacyt Group (www.novacyt.com (http://www.novacyt.com) )

Novacyt is an international molecular diagnostics company providing a broad
portfolio of integrated technologies and services, primarily focused on the
delivery of genomic medicine. The Company develops, manufactures, and
commercialises a range of molecular assays and instrumentation to deliver
workflows and services that enable seamless end-to-end solutions from sample
to result across multiple sectors including human health, animal health and
environmental.

 

 

The Company is divided into three business segments:

 

 Clinical           Broad portfolio of human clinical in vitro diagnostic products, workflows and
                    services focused on three therapeutic areas:

                    ·    Reproductive Health: NIPT, Cystic Fibrosis and other rapid aneuploidy
                    tests

                    ·    Precision Medicine: DPYD genotyping assay

                    ·    Infectious Diseases: Winterplex, multiplex winter respiratory PCR
                    panel

 Instrumentation    Portfolio of next generation size selection DNA sample preparation platforms
                    and rapid PCR machines, including:

                    ·    Ranger® Technology: automated DNA sample preparation and target
                    enrichment technology

                    MyGo: real-time quantitative PCR (qPCR) instruments

 Research Use Only  Range of services for the research industry:

                    ·    Design, manufacture, and supply of high-performance qPCR assays and
                    workflows for use in human health, agriculture, veterinary and environmental,
                    to support global health organisations and the research industry

                    ·    Pharmaceutical research services: whole genome sequencing (WGS) /
                    whole exome sequencing (WES)

 

Novacyt is headquartered in Vélizy in France with offices in the UK (in
Stokesley, Eastleigh and Manchester), Taipei (divestment pending), Singapore,
the US and Canada and has a commercial presence in over 65 countries. The
Company is listed on the London Stock Exchange's AIM market ("NCYT") and on
the Paris Stock Exchange Euronext Growth ("ALNOV").

 

For more information, please refer to the website: www.novacyt.com
(http://www.novacyt.com)

 

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