REG - Oxford Nanopore Tech - Annual results for the year ended 31 December 2024
04/03/2025 07:15
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RNS Number : 1859Z Oxford Nanopore Technologies plc 04 March 2025
04 March 2025
Oxford Nanopore Technologies plc
Annual results for the year ended 31 December 2024
Guidance achieved on the back of strong and accelerating momentum in H2 24
across all regions; investments made in operational platform position the
Group strongly for 2025
Oxford Nanopore Technologies plc (LSE: ONT) ("Oxford Nanopore" or the
"Group"), the company behind a new generation of molecular sensing technology
based on nanopores, today announces its preliminary results for the year ended
31 December 2024.
Gordon Sanghera, Chief Executive Officer, commented:
"I am pleased to be reporting another year of strong, underlying constant
currency revenue growth of 23%, in line with guidance. We are particularly
encouraged by the increasing momentum delivered across all regions into the
second half of 2024, with overall underlying revenue growth at constant
currency accelerating to 34%. This, together with good cost control, drove an
improvement in our EBITDA loss in H2 and we expect this trend to continue in
2025.
"We have continued to innovate at pace to meet customer needs in our target
markets. We launched four new products in 2024, two of which - GridION Q and
ElysION - are aimed at our regulated customer base to drive adoption in new
Clinical, BioPharma and Applied Industrial markets. We also continued to
demonstrate strong commercial execution, announcing several landmark contracts
and new strategic collaborations during the year, as well as progressing
existing collaborations. These included partnerships with the UK Government,
UK Biobank and Precision Health Research Singapore that will advance
genomics-driven healthcare innovation globally.
"While we expect the macroeconomic and geopolitical backdrop to remain
uncertain, we enter 2025 with strong operational momentum and a growing
opportunity pipeline. Our highly differentiated platform, commercial
capabilities and robust balance sheet continue to position us well to capture
the substantial market opportunity and deliver long-term sustainable above
market growth and attractive returns for our shareholders."
Summary financial performance
£ million FY FY Change Change
Unless otherwise stated 2024 2023 reported CC
Revenue 183.2 169.7 8.0% 11.1%
- EGP 1.8 12.0 (85.1)% (85.1)%
- COVID Sequencing 2.2 8.0 (72.6)% (72.0)%
Underlying revenue 179.2 149.7 19.7% 23.3%
Gross profit 105.4 90.5 16.5%
Gross margin 57.5% 53.3% 420bps
Adjusted EBITDA (116.1) (104.9) (11.2)
Loss for the period (146.2) (154.5) 8.3
Notes:
1. Underlying revenue excludes revenue from COVID sequencing and
revenue from the Emirati Genome Program "EGP"). All references to underlying
growth in this document have been adjusted for COVID sequencing and EGP
revenues. Underlying growth includes currency fluctuations unless explicitly
stated at constant currency ("CC").
2. Constant currency ("CC") applies the same rate to the FY24 and FY23
non-GBP results based on FY23 rates.
3. Certain numerical figures included herein have been rounded.
Therefore, discrepancies between totals and the sums may occur due to such
rounding.
4. Adjusted EBITDA is a non-IFRS measure that may be considered in
addition to, but not as a substitute for, or superior to, information
presented in accordance with IFRS. Adjusted EBITDA is the EBITDA adjusted for
(i) Share-based payment expense on Founder LTIP (ii) Employers' social
security taxes on pre-IPO awards, and (iii) impairment of investment in
associate - see note 22.
Financial highlights
· Revenue of £183.2 million grew by 11.1% on a constant currency
("CC") basis, up 8.0% on a reported basis, in-line with guidance. Revenue
growth was driven by expansion into end-markets outside of Research, namely
Applied Industrial (up 41.8%), BioPharma (up 17.7%) and Clinical (up 12.2%).
· Underlying(( 1 (#_ftn1) )) revenue increased by 23.3% CC,
in-line with guidance.
o Underlying revenue growth delivered in all regions, led by EMEAI (up
31.1%) and APAC (up 22.1%), with AMR up 7.0% for FY24 and 12.9% in H2 as
momentum built during the year.
o Underlying revenue grew fastest across the PromethION product range(( 2
(#_ftn2) )), up 55.8% in the period to £75.9 million. Underlying revenue from
the MinION product range(( 3 (#_ftn3) )) declined by 9.6% to £53.1 million
due to a mix of factors primarily related to product life cycle management, as
previously outlined. Other revenues, representing kits, services revenues and
other devices grew 18.8% on an underlying basis to £50.2 million.
· Gross margin increased by 420 basis points ("bps") to 57.5%
(FY23: 53.3%), slightly above guidance, driven by margin improvements across
the product portfolio, particularly across both PromethION Flow Cells and
devices.
· Adjusted EBITDA loss of £(116.1) million (FY23: £(104.9
million) with the year-on-year increase driven by increasing operational
expenses, primarily the annualised impact of additional headcount as
highlighted at FY23 results. H2 adjusted EBITDA loss of £(54.5) million was
£7.1 million lower than H1, demonstrating good cost control in the period and
increasing focus on late stage development. This improvement in adjusted
EBITDA loss is set to continue into 2025.
· Reduction in reported loss year-on-year to £(146.2) million
(FY23: £(154.5) million) was predominately driven by a Founder LTIP credit of
£6.1 million (FY23: charge of £20.9 million) and a £2.7 million credit
relating to the reversal of historic employers' social security tax charges
(FY23: £0.9 million credit), partly offset by increasing operational expenses
associated with the increase in headcount.
· The Group remains well capitalised with £403.8 million in cash,
cash equivalents and other liquid investments as at 31 December 2024
(FY23: £472.1 million), noting that a £8.3 million R&D tax credit was
received in Q1 2025. During the second half of the year the Group raised gross
proceeds of £80.0 million, which included a new £50.0 million strategic
investment from Novo Holdings A/S ("Novo Holdings").
Operational highlights
· Continued commercial progress: improving utilisation across broad
base of existing customers, and new customer acquisition, driven by the
enlarged and now established commercial infrastructure.
· Key contract wins and expansions: including (i) APAC: landmark
research project with Precision Health Research Singapore (PRECISE), which
selected Oxford Nanopore technology to sequence 10,000 human genomes to gain
deeper insights into Asian genetic diversity, (ii) EMEAI: announced a
groundbreaking research collaboration with UK Biobank to create the world's
first comprehensive, large-scale epigenetic dataset to map epigenetic
modifications across 50,000 samples to advance understanding of epigenetics in
cancer, neurological disease and other common complex diseases and (iii) AMR:
announced a multi-million, multi-year contract expansion with Plasmidsaurus,
an Applied Industrial customer that provides plasmid sequencing services, to
deliver high-accuracy whole plasmid sequencing with fast turnaround times.
· New strategic collaborations: provide access to new growth
markets in BioPharma, Clinical and Applied Industrial applications, including
a collaboration with Lonza to develop a novel test to accelerate analysis of
mRNA products.
· Existing clinical collaborations delivering: including the launch
of the AmplideX® Nanopore Carrier Plus Kit with Asuragen in Q4 2024. A test
for determining antibiotic resistance in tuberculosis is being rolled out as a
research-use only product with BioMérieux in 2025, prior to seeking IVD
approval.
· Delivering on 2024 innovation goals: including (i) Early
Access(( 4 (#_ftn4) )) launch of PromethION 2 Integrated (P2i) and continued
rollout of the PromethION 2 Solo (P2S), with more than 1,900 P2 devices in the
field. (ii) the Early Access launch of the MinION MK1D in Q4 2024 to mark ten
years of MinION, the smallest sequencer on the market and (iii) the launch of
new products from our regulated product pipeline to drive adoption in new
Clinical and Applied Industrial markets, including GridION Q, which delivers a
stable, frozen version of hardware, software and chemistry, and the Early
Access launch of ElysION, our sample-to-answer automated sequencing solution.
· Increase in publications reflects growing momentum and utility of
the Group's platform: Approximately 3,000 peer-reviewed research papers
published by users of Oxford Nanopore technology in 2024, bringing the total
to more than 14,000 to date, showcasing breakthrough research across cancer,
human genetics and infectious disease.
· Continued strengthening of the management team: Nick Keher
appointed as Chief Financial Officer and Board Director in January 2024,
adding significant financial leadership experience and a deep understanding of
global capital markets. In November 2024 Rosemary Sinclair Dokos and Dr Lakmal
Jayasinghe stepped into the roles of Chief Product and Marketing Officer and
Chief Scientific Officer respectively, bringing extensive skills in innovation
and product development. Rosemary and Lakmal succeed Clive Brown, Chief
Officer of Technology, Innovation, and Products.
· Board strengthened to support the business in its next phase of
growth: Dan Mahony, appointed as a Non-Executive Director in October adding
extensive sector experience, with more than 25 years as a global healthcare
investor specialising in biotechnology, medical technology and healthcare
services.
Updates post period end:
· Pricing: Revised pricing model with the aim of increasing
simplicity and transparency for customers whilst improving the sustainability
of Oxford Nanopore as a business. These changes align the Group with industry
peers by offering more conventional capital purchase schemes to customers,
alongside flexibility for leasing as appropriate through financing partners or
direct, whilst maintaining affordable and accessible sequencing through the
Group's range of portable devices.
· Cost control: Restructuring program leading to a reduction in the
overall workforce of approximately 5%, spread evenly across R&D,
Commercial and Corporate functions, alongside other cost control measures of a
similar size. Management expect to take a total cash charge of approximately
£6 million in FY25 in relation to redundancy payments which will be treated
as an adjusting item.
Outlook
FY25 guidance
· Revenue is expected to grow by 20 - 23% on a constant currency
basis, reflecting continued strong demand across the business but taking into
consideration recent updates and risks to US Federal funding, in particular
with the National Institutes of Health ("NIH"), and a tightening of export
control restrictions:
o Federal funding including the NIH: there remains material uncertainty and
risk to US NIH funding levels (and other Federal agencies) to which management
estimate a total Group exposure of between 10-15% of revenues. Given the
situation is still evolving, management have prudently assumed a material
reduction pending further clarity.
· Gross margin is expected to be approximately 59%, driven by
continued operational improvements.
· Adjusted operating expenses: given the recent restructuring and
continued focus on improving efficiencies in the business, overall growth in
adjusted costs in FY25 is expected to be at the low end of the Group's stated
medium-term guidance of 3-8% CAGR between FY24 and FY27.
Medium term guidance reaffirmed
The Group expects to reach adjusted EBITDA breakeven in FY27 and become cash
flow positive in FY28.
· Revenue is expected to grow by more than 30% CC on a compound
annual growth rate ("CAGR") between FY24 and FY27 underpinned by continued
penetration in the Research market and expansion into emerging end-market
opportunities, with a focus across BioPharma, Clinical and Applied Industrial.
Whilst FY25 is expected to be below this range, management remain confident of
a return to above 30% growth in FY26 and FY27.
· Gross margins are expected to continue to improve and exceed 62%
by FY27, supported by continued underlying improvements in manufacturing,
increased volume growth and further penetration of new end-markets.
· Operating expenses are expected to grow at a CAGR of 3-8% between
FY24 and FY27, reflecting a continued focus on financial discipline to
leverage the infrastructure the Group has already built and to modulate
investment relative to the outlook.
Presentation of results
Management will host a conference call and webcast today, 4 March, at 9:30am
GMT. For details, and to register, please visit
https://nanoporetech.com/about-us/investors/reports
(https://nanoporetech.com/about-us/investors/reports) . The webcast will be
recorded and a replay will be available via the same link shortly after the
presentation.
For further details please contact ir@nanoporetech.com
(mailto:ir@nanoporetech.com)
-ENDS-
For further information, please contact:
Oxford Nanopore Technologies plc
Investors: ir@nanoporetech.com (mailto:ir@nanoporetech.com)
Media: media@nanoporetech.com
(mailto:media@nanoporetech.com)
Teneo (communications adviser to the Group)
Tom Murray, Olivia Peters
+44 (0) 20 7353 4200
OxfordNanoporeTechnologies@teneo.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 Group 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 125 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.
For more information please visit: www.nanoporetech.com
(http://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, delays or challenges in manufacturing or
delivering of products to our customers, suspensions of large projects and/or
acceleration of large products or accelerated adoption of pathogen
surveillance or applied uses of our products. These or other uncertainties may
cause our actual future results to be materially different than those
expressed in our forward-looking statements.
Notes: In this section, all growth rates are year-on-year unless otherwise
stated. All underlying growth rates referred to in this report have been
adjusted for EGP and COVID sequencing. Underlying revenue includes currency
fluctuations unless explicitly stated at constant currency ("CC"). See
reconciliation in the Financial Review section. Certain numerical figures
included herein have been rounded. Therefore, discrepancies between totals and
the sums may occur due to such rounding.
CEO review
2024 was a year of significant progress for Oxford Nanopore as we continued to
drive innovation, accelerate commercial adoption across new and existing
markets, and deliver on our vision of enabling the analysis of anything, by
anyone, anywhere.
Our unique molecular sensing technology is reshaping genomic ("DNA") and
transcriptomic ("RNA") analyses in life science research by enabling richer,
faster and more accessible insights. This disruptive technology is now
demonstrating an impact in applied life science markets including BioPharma,
Clinical, and Applied Industrial.
In 2024 we made significant progress in advancing our platform's capabilities
and performance, and as we increasingly integrate multi-omic capabilities into
our offerings - including epigenetics and, looking forward, proteomics - our
technological differentiation is increasing, and our addressable market
opportunity is expanding. To ensure we can continue to scale efficiently and
create value for our stakeholders, we focused intensively on operational
excellence across all aspects of the Group in 2024. This led to a reshaping
of our business to align with our target market areas post year end that
positions us well for 2025 and beyond. I would like to thank those members of
the team that have now left Oxford Nanopore for their contributions.
We remain confident in our ability to deliver sustainable growth despite the
macroeconomic and geopolitical uncertainties affecting the markets we
address. The long-term trend toward increasing demand for biological
information is as strong as ever - in fact, we believe artificial intelligence
is starting to accelerate the research and innovation life cycles underpinning
this trend. At Oxford Nanopore, we are privileged to be at the leading edge of
this transformative age of biology.
FY24 financial performance
In 2024, our team delivered revenue of £183.2 million (2023: £169.7
million), an increase of 11.1% year-on-year on a constant currency basis,
in-line with guidance.
Revenue in 2024 came from an increasingly diverse group of customer types
including Research, BioPharma, Clinical and Applied Industrial customers,
accounting for 70%, 8%, 9% and 13% of revenue respectively. We are encouraged
by the positive early traction and strong growth we are seeing in new end
markets, such as such as Applied Industrial (up 41.8%), BioPharma (up 17.7%)
and Clinical (up 12.2%), which represent a significant opportunity for the
Group in the medium to long-term. Research, which accounts for 70% of our
revenue today, grew by 1.9%.
Underlying revenue growth, excluding a £16.0 million combined headwind from
Emirati Genome Program ("EGP") and COVID sequencing, was up 23.3% on a
constant currency basis.
Underlying growth has been strongest across our higher-output PromethION
product range, up 55.8% in 2024, primarily driven by increasing customer flow
cell utilisation. This helped offset softness in the small- format MinION
product range, which declined by 9.6% in the period primarily due to product
life cycle management. Other revenues, representing kits, services revenues
and other devices grew 18.8% on an underlying basis.
On a geographical basis the Group delivered strong underlying revenue growth
in all regions, led by EMEAI and APAC and driven by new product launches, new
and expanded contracts, and increasing sales team productivity.
In EMEAI we delivered significant growth, with revenue of £79.6 million, up
31.1% on an underlying basis. Our engagement with significant projects
including our landmark strategic partnership with the UK government, bringing
together Genomics England, NHS England, and UK Biobank underscores our strong
market presence and strength of our technology.
APAC revenue in 2024 was £40.4 million, up 22.1% on an underlying basis,
driven primarily by the PRECISE contract, as well as increased utilisation
through service providers and expansion of new service providers across South
East Asia in the second half of the year. Growth was moderated in part by
continued export control restrictions in China. Whilst underlying demand
remains strong within China, the Group saw increasing challenges on exporting
product to the region in H2 and expect the environment to remain challenging
in FY25. China represented 8.8% of revenues in FY24.
In the Americas we delivered revenue of £63.1 million, up 7.0% on an
underlying basis, reflecting increasing traction in new markets such as
Applied Industrial and BioPharma alongside increasing sales team productivity,
with 12.9% year-on-year growth in H2 as momentum built during the year.
Gross margin increased by 420 basis points to 57.5% (FY23: 53.3%) driven by
underlying margin improvements particularly across both PromethION Flow Cell
and devices, offsetting product mix and currency headwinds. The increasing
margin in 2024 also reflects the one-off headwinds in 2023 that did not repeat
in 2024, including the adverse performance of the EGP, the write-off of excess
COVID sequencing kits and legacy devices and upgrading the compute on large
PromethION devices.
A novel platform for richer, faster, and more accessible multi-omics
insights
Oxford Nanopore's differentiated technology is driving broad market adoption
by enabling richer biological insights, faster time-to-result, and greater
accessibility. In 2024, we advanced both our platform's capabilities and its
applications, reinforcing its role as the preferred solution for those
tackling complex biological questions.
By sequencing native DNA and RNA without amplification or alterations, our
technology uniquely delivers comprehensive genomic, epigenetic, and
transcriptomic insights. This multi-omic capability, combined with
improvements in system performance and workflow integration, is reducing
complexity and accelerating adoption across research, Clinical, BioPharma, and
Applied Industrial markets.
A highlight of 2024 was the significant increase in utilisation of our
high-output PromethION Flow Cells, with year-on-year underlying growth of
55.8% across the PromethION product range. These advancements reflect our
dedication to pushing the boundaries of accuracy, data output, sample
throughput, and cost-efficiency. For example, our telomere-to-telomere ("T2T")
workflows deliver high quality, fully phased genome assemblies critical to
uncovering previously inaccessible novel variants that drive complex disease
across currently underrepresented populations, in addition to providing richer
insights that are inaccessible to legacy systems. This capability is
supporting areas such as oncology and neurodegenerative disease research,
where the "dark genome" plays a pivotal role. These research-based discoveries
play a foundational role in the development of future, large scale
applications where Oxford Nanopore can characterise novel biological
insights.
As RNA insights become increasingly important, we have enhanced our direct RNA
sequencing chemistry, improving accuracy and output and increasing the
modified base offering to cover five different modifications including
Pseudouridine, which is used extensively in mRNA vaccine development and
production and cannot be detected directly with any other technology. These
advances enable high-throughput applications such as quality control testing
for mRNA vaccines and biomarker discovery. Our teams are in active discussions
with leading BioPharma companies and CDMO partners as we look to reduce
traditional Quality Control (QC) workflows from months to days, underscoring
our platform's ability to accelerate progress towards personalised medicine.
In 2024, we advanced our ability to support regulated applications with the
launch of the GridION Q and progress on the PromethION Q, expected to launch
in 2025, which both deliver a stable, frozen version of hardware, software and
chemistry designed for Clinical and BioPharma environments. Additionally,
ElysION, our fully automated benchtop solution, enables customers to integrate
nanopore sequencing into environments which are new to sequencing such as
Clinical research labs or BioPharma manufacturing QC labs, enhancing
efficiency and reproducibility with a seamless, hands-free process from raw
sample to biological analysis. Our electronics-based molecular sensing
platform already delivers powerful DNA and RNA analysis and can be adapted to
detect other types of molecules, including proteins and small molecules. In
the coming year, we intend to expand into proteomics - opening up a
potentially substantial market opportunity. Through continued investment in
innovation, automation, and strategic partnerships, we are advancing
end-to-end workflows and platform capabilities to deliver unmet biological
insights that only the nanopore platform can provide.
Focusing on core markets and delivering commercial success
Oxford Nanopore's long term vision is to enable the analysis of anything, by
anyone, anywhere - with accessible and versatile technologies that can deliver
a paradigm shift in biological analysis. Our method of driving growth in the
nearer term is to expand in core markets where we have a differentiated value
proposition that reshapes what our customers can achieve. In 2024, we
strengthened our presence in research, BioPharma, Clinical, and Applied
Industrial markets through strategic collaborations and the adoption of our
differentiated sequencing platform through direct commercial activities. The
profile and nature of these collaborations are testament to what we believe we
can achieve in the years to come.
A key example of our work in research is our collaboration with Singapore's
National Precision Medicine ("NPM") Programme, where Oxford Nanopore
sequencing technology is being used to generate the most comprehensive,
high-resolution reference genomes for Singapore's multi-ethnic population.
This initiative is a critical step in advancing precision medicine by
uncovering the unique genetic diversity of Singapore's major ethnic
groups-Chinese, Malay, and Indian-and addressing population-specific disease
biology. By providing richer genomic insights through scalable sequencing, our
technology is building a foundation for and well placed to deliver on more
targeted diagnostics, treatment strategies, and drug discovery efforts that
are tailored to the genetic makeup of diverse communities.
In the UK, we solidified our leadership in genomics innovation through a
landmark strategic partnership with the UK government, bringing together
Genomics England, NHS England, and UK Biobank. This initiative is designed to
integrate Oxford Nanopore's sequencing technology into national healthcare,
accelerating the adoption of real-time, information-rich genomic and
epigenetic insights. As part of this effort, we are working with Genomics
England and NHS England to establish end-to-end workflows for faster, more
precise diagnostics, including in cancer, infectious diseases, and rare
genetic disorders. Simultaneously, Oxford Nanopore technology will be used to
generate the first large-scale epigenetic dataset, analysing 50,000 UK Biobank
samples. This multi-omic dataset aims to uncover molecular drivers of cancer,
dementia, and other complex diseases. These initiatives are transforming how
genomic data is leveraged for early disease detection, personalised
treatments, and long-term health outcomes at an unprecedented scale.
We are also starting to deliver tangible impact in the large and growing
BioPharma and Clinical markets. Our technology is revolutionising the analysis
of plasmids, the building block of protein engineering, an industry being
revolutionised by AI and in need of information-rich data to drive novel
discovery in research and BioPharma. Through our collaboration with
Plasmidsaurus, we are transforming plasmid sequencing by providing a rapid,
cost-effective solution that delivers full-length, high-accuracy plasmid
sequence data in a single read. This advancement is already streamlining
quality control and accelerating innovation in drug development, synthetic
biology, and gene therapy.
In Clinical markets, our partnership with Wasatch Biolabs is driving the
adoption of Oxford Nanopore-based methylation analysis for Clinical
applications. By enabling Oxford Nanopore's unique direct whole methylome
analysis workflow for Clinical customers spanning cancer and human genetics,
this collaboration is designed to move towards routine Clinical
implementation.
Through strategic execution and a relentless focus on delivering value to our
partners, Oxford Nanopore is not only addressing critical challenges in core
markets but also shaping the future of genomics-driven healthcare.
Substantial market opportunity - looking ahead
While the research market has presented challenges for all life science
companies in 2024, we have made meaningful progress in expanding our presence
and enabling new biological discovery that is possible only with our platform
and drives the creation of future opportunities in applied markets for Oxford
Nanopore. Uncertainties remain in the academic research landscape, and while
we do not expect this to shift significantly in the near term, we remain
highly confident in our medium-term growth trajectory, underpinned by our
differentiated technology and strong opportunities in adjacent and emerging
markets.
Strategic partnerships continue to play a key role in expanding our impact.
Our collaboration with Bio-Techne's Asuragen has introduced nanopore
sequencing to carrier screening research, enabling the analysis of complex
genes that were previously difficult to resolve with legacy technologies. In
the fourth quarter of 2024 the AmplideX® Nanopore Carrier Plus Kit was
launched.
Similarly, our partnership with bioMérieux is advancing infectious disease
applications, leveraging real-time sequencing for pathogen detection and
antimicrobial resistance profiling. These collaborations reinforce the growing
demand for nanopore sequencing in Clinical and BioPharma settings, broadening
our reach into regulated and applied markets. A test for determining
antibiotic resistance in tuberculosis is being rolled out as a research-use
only product with BioMérieux in 2025, prior to seeking IVD approvals.
In addition, the Applied Industrial sector presents an untapped market with
vast potential. With growing adoption in areas such as food safety,
environmental monitoring, and synthetic biology, we anticipate an acceleration
of interest in Oxford Nanopore sequencing applications. Our commitment to
reducing barriers to entry through automation, workflow integration, and
regulatory approvals will play a pivotal role in capturing this opportunity.
As we look ahead, we remain steadfast in our mission to empower people to
explore and answer biological questions with our transformative technology
platform. While research remains a fundamental pillar of our business, our
ability to successfully navigate and expand into new markets will be a key
driver of sustained growth in the years to come.
A strategic focus on people for organisational effectiveness
A company is only as strong as its people, and in 2024, we made significant
strides in strengthening our organisation through disciplined execution and
strategic investments in talent.
At the beginning of 2024 we strengthened our leadership team with the
appointment of Nick Keher as Chief Financial Officer. With extensive
experience of financial leadership of complex scientific businesses in the
life sciences and pharmaceutical sectors, alongside a deep understanding of
capital markets he brings financial and strategic expertise that will support
the Group's continued growth and operational efficiency. Nick succeeds Tim
Cowper, who transitioned into the role of Chief Operating Officer, to lead the
development of Oxford Nanopore's expanding international footprint and
operations.
The knowledge base of Oxford Nanopore is a critical asset, and we have always
invested in the development of our own next generation of talent and
leadership to drive our effectiveness and continue to be at the driving edge
of scientific and technological progress.
In 2024, Oxford Nanopore's Rosemary Sinclair Dokos and Lakmal Jayasinghe were
appointed Chief Product & Marketing Officer and Chief Scientific Officer
respectively, succeeding Clive Brown, Chief Officer of Technology, Innovation,
and Products. Rosemary and Lakmal's experience and expertise will be
invaluable as we continue to drive our technology forward, expand our product
offerings, and accelerate our impact across multiple markets.
We extend our deep gratitude to Clive Brown for his invaluable contribution to
the development of the technology and the growth of the business over the past
16 years. His leadership and pioneering work in nanopore sequencing have been
instrumental in shaping the Group's success, and we are grateful for his
dedication to advancing our mission.
With a strengthened team, a disciplined approach to resource management, and a
clear vision for the future, we are confident in our ability to navigate
challenges and seize new opportunities for growth. Our ability to scale
efficiently has been a defining characteristic of our success, and we are now
starting to see the benefits of these efforts in sales productivity. We have
focused on aligning our commercial and operational teams to ensure that we
continue to drive value for our customers while maintaining a lean and
high-performing organisation.
Preparing for the future
In 2024, we enhanced our strategic planning process to better align our
resource commitments with our innovation, commercial and operational
objectives. This process incorporates a variety of perspectives from inside
and outside the Group, ensuring we can prioritise the opportunities that best
leverage our differentiated technology to create value for our stakeholders.
As we continue to grow and adapt to changing market conditions, this
capability is critical.
As we transition into 2025, we are integrating these data-driven strategic
planning tools into many aspects of the Group's decision making. We are
undertaking this work in collaboration with our Board of Directors, and we
look forward to articulating the outcomes of this work in our next report.
Events after the year end
Roche recently revealed a nanopore-based sequencing platform and its
accompanying sample preparation station to prepare its sequencing by expansion
("SBX") chemistry. The preliminary specifications describe a sequencing system
that delivers short-reads and high throughputs, making this product a primary
competitor for the legacy high throughput short-read sequencing by synthesis
("SBS") systems. Oxford Nanopore remains committed to its strategy of driving
growth into target end markets and driven by its platform's unique features
and benefits.
The Roche product, as described, is similar to legacy SBS systems in that it
provides only limited read lengths and does not offer direct native sequencing
of DNA or RNA. As such, it does not provide direct identification of
epigenetic modifications such as methylation, which are key to many aspects of
biology, including cancer. These features, which are crucial to driving
improved insights into the human genome, are inherent in Oxford Nanopore's
platform and are a key differentiator, alongside the unique ability for our
accessible platform to scale from portable to high-output devices. Oxford
Nanopore is uniquely able to sequence short to ultra-long fragments of native
DNA and RNA, capturing more genetic variation and epigenetic information that
is showing higher diagnostic yields in human disease, including complex
genetic conditions and cancer.
Oxford Nanopore, the pioneer of single molecule nanopore sensing, has worked
diligently to build a strong patent portfolio covering nanopore-sensing
related technologies that is also broader than its current product portfolio.
As previously stated, Oxford Nanopore will enforce its IP position when in its
stakeholders' interests, and we will continue to look closely at competitor
products as they become available.
Outlook
While we expect the macroeconomic and geopolitical backdrop to remain
uncertain in 2025, we start the year with strong operational momentum and a
growing opportunity pipeline. Our highly differentiated platform, commercial
capabilities and robust balance sheet continue to position us well to capture
a growing share of the substantial market opportunity and deliver sustainable,
above market growth, and attractive medium-term returns for our
shareholders.
Progressing towards profitability is a key focus in the medium-term and we
continue to expect to reach adjusted EBITDA breakeven in FY27. This will be
delivered by three components. Firstly, continued strong revenue growth,
secondly margin improvement and lastly, a disciplined approach to expenditure.
In January 2025, Oxford Nanopore concluded a targeted restructuring programme
aimed at resource optimisation and improving operational effectiveness,
leading to a reduction in the overall workforce of approximately 5%, alongside
other cost control measures. While we continue to drive efficiency and focus
on disciplined cost management, we fully recognise the importance of our
people in driving sustainable growth and remain committed to supporting teams
as we implement these changes. I would like to take this opportunity to thank
those employees that have now left Oxford Nanopore for their contributions.
Over the long-term we see significant 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 have established our platforms globally and our long-term
strategy is to enable our customers to develop novel applications, analogous
to the 'apps' model for mobile phones. Enabling our customers to develop on
the platform will propel us toward a world of real-time, distributed access to
DNA/RNA information. As we begin to understand and measure the biological
world around us and use that information to make decisions with positive
impacts from health to the environment, we are on the cusp of creating the
'Internet of Living Things'.
Financial review
2024 performance
The Group delivered revenue of £183.2 million (2023: £169.7 million), an
increase of 11.1% year-on-year on a constant currency basis and 8.0% on a
reported basis, including foreign exchange headwinds. Revenue growth was
driven by expansion into end-markets outside of Research, namely Applied
Industrial, BioPharma and Clinical.
Underlying revenue growth, excluding the Emirati Genome Program ("EGP") and
COVID sequencing (combined headwind of £16.0 million), was up 23.3% on a
constant currency basis and up 19.7% on a reported basis. Underlying growth
has been strongest across the PromethION product range, up 55.8% 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, with
the discontinuation of the Mk1C device and delayed launch of the Mk1D.
On a geographical basis the Group delivered strong underlying revenue growth
in all regions, led by EMEAI and APAC and driven by new product launches, new
and expanded contracts, and increasing sales team productivity. The strong and
broad-based acceleration across the business in H2 was moderated in part by
export control restrictions to China.
Growth across the AMR region was slower than that of EMEAI and APAC, but the
anticipated acceleration in H2 for the AMR region started as expected. Whilst
our confidence that this will continue to accelerate in 2025 is underpinned by
our growing commercial pipeline across both our existing customer base and new
opportunities, we expect this growth to be somewhat impacted by changes to
Federal funding in the US for institutions such as the NIH, albeit the
materiality of this impact is still uncertain as the situation is still
evolving. Management estimated that the Group had a maximum exposure of 10-15%
of revenues in 2024 to the NIH.
Gross profit increased to £105.4 million (FY23: £90.5 million) in the year
up 16.5% on 2023. Gross margin increased by 420 basis points ("bps") to 57.5%
(2023: 53.3%) driven by margin improvements (up 410bps), particularly across
both PromethION Flow Cell and devices, offsetting product mix (down 420bps)
and currency headwinds (down 120bps). This also reflects the fact that 2023
gross margin was impacted by a number of one-off issues that did not repeat in
2024 (550bps improvement in 2024), including the adverse performance of the
EGP, the write-off of excess COVID sequencing kits and legacy devices
and upgrading the compute on large PromethION devices.
Group operating loss reduced to £152.3 million (2023: £168.6 million),
reflecting the increase in revenue and gross profit and a credit to the
Founder LTIP in the year.
Adjusted EBITDA loss of £(116.1) million (2023: £(104.9) million; driven by
increasing operational expenses, primarily the annualised impact of additional
headcount as highlighted at 2023 results. Adjusted operating costs were up 12%
compared to 2023 and H2 2024 was up 4% against H1 2024, demonstrating good
cost control and the H2 2024 EBITDA loss of £(54.5) million is £7.1 million
lower than H1 2024 of £(61.6) million. We anticipate this improvement in
Adjusted EBITDA to continue into the coming years.
The reduction in reported loss year-on-year to £(146.2) million (2023:
£(154.5) million) was predominately driven by a Founder LTIP credit of £6.1
million (2023: charge of £20.9 million) and a £2.7 million credit relating
to the reversal of historic employers' social security tax charges (2023:
£0.9 million credit), partly offset by increasing operating expenses
associated with the increase in headcount.
During 2024, we continued to invest in research and development to drive both
continuous improvement in the performance and usability of our technology, and
to deliver new products and technologies that address a broader range of
applications and users' needs. Given the advanced stage of development of our
product portfolio the proportion now capitalised has increased versus 2023
with this trend to continue in 2025. Commercial and marketing headcount was
489 employees at 31 December 2024, up by 18% on prior year.
Post year-end, the Group entered into a targeted restructuring program,
leading to a reduction in the overall workforce of around 5%, spread broadly
evenly across R&D, Commercial and Corporate areas. Alongside other cost
control measures of a similar size and continued focus on improving
efficiencies in the business this is expected to ensure overall growth in
costs in 2025 remain at the low end of the Group's stated medium-term guidance
of 3-8% CAGR between 2024 and 2027. Management expect to take a total cash
charge of around £6 million in 2025 in relation to redundancy payments which
will be treated as an adjusting item.
The Group remains well capitalised with £403.8 million in cash, cash
equivalents and other liquid investments as at 31 December 2024
(2023: £472.1 million), noting that a £8.3 million R&D tax credit was
received in Q1 2025. During the second half of the year the Group raised gross
proceeds of £80.0 million, which included a new £50.0 million strategic
investment from Novo Holdings.
In the second half of the year the Group entered into a new arrangement with a
third-party firm to provide customers with financing options to fund capex
purchases in certain markets, which could potentially help alleviate the
financial burden on Oxford Nanopore from leasing devices directly. Alongside
this initiative, the Group released an update to its business and pricing
model in February 2025 with the aim of increasing simplicity and transparency
for customers whilst improving the sustainability of Oxford Nanopore
Technology as a business.
This new pricing model aims to bring the company in-line with industry peers
as it relates to the fleet of larger devices it markets (GridION, P2
Integrated and P24 models) through offering more conventional capital purchase
schemes to customers, whilst continuing to allow the flexibility for leasing
as appropriate. This new approach will continue to allow for affordable and
accessible sequencing for Oxford Nanopore Technology customers across the
portfolio, but in particular through the range of smaller devices it markets
(MinION and P2 Solo) and through Grant funding for Academics.
In December 2023, the original EGP agreement was revised to provide greater
flexibility to achieve the programme objectives and reflected both parties
desire to refocus on Clinical uses of the platform, that can utilize the
platform's unique benefits of richer and faster data. EGP revenue in 2024 was
£1.8m and going forward is not expected to be a material portion of revenue.
As such, the Group will cease reporting EGP revenue separately following these
results. Revenue related to the EGP in 2023 (under the original and revised
agreement) was £12.0 million.
Alternative performance measures
The Group has identified Alternative Performance Measures ("APM"s) that it
believes provide additional useful information on the performance of the
Group. These APMs are not defined within International Financial Reporting
Standards (IFRS) and are not considered to be a substitute for, or superior
to, IFRS measures. These APMs may not be necessarily comparable to similarly
titled measures used by other companies. All adjusted measures are reconciled
to the most directly comparable measure prepared in accordance with IFRS in
note 22 to the consolidated financial statements.
Directors and management use these APMs alongside IFRS measures when budgeting
and planning, and when reviewing business performance.
Results at a glance
Year ended 31 December: FY24 FY23 Change
£m £m reported
Total revenue 183.2 169.7 8.0%
Gross profit 105.4 90.5 16.5%
Gross margin (%) 57.5% 53.3% +420bps
Operating loss (152.3) (168.6) 9.7%
Adjusted EBITDA(1) (116.1) (104.9) (11.2)
Loss for the year (146.2) (154.5) 8.3
Cash, cash equivalents and other liquid investments(1) 403.8 472.1 (14.5)%
(1) based on Alternative Performance Measures (see note 22).
Underlying revenue by product range
Underlying growth has been strongest across the PromethION product range,
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, with
the discontinuation of the Mk1C device and delayed launch of the Mk1D.
Revenue from the PromethION product range, representing all devices and flow
cell sales from the PromethION range, grew 55.8% to £75.9 million in 2024
(2023: £48.8 million) when stripping out the impact of EGP. The increase is
driven by strong growth across both PromethION Flow Cell and device revenues.
Growth across the PromethION range was supported by increasing demand from
customers such as Plasmidsaurus in AMR and PRECISE in APAC and increased
utilisation. The utilisation rate for PromethION devices was up 13% in 2024
compared to 2023 for our larger devices. Excluding the impact of EGP,
utilisation was up 52%. P2 Solo Flow Cell and device revenue was up 23% in
2024 compared to 2023.
Revenues from the MinION product range, representing all sales of MinION Flow
Cells and devices that run MinION Flow Cells (including GridION and MinION)
reduced 9.6% to £53.1 million in 2024 (2023: £58.8 million) when stripping
out the impact of COVID sequencing. Growth in GridION device sales is offset
by the reduction from the Mk1C MinION device and lower flow cell revenues.
Utilisation rates across the MinION range of devices remained broadly
consistent year on year, in spite of the headwind from COVID.
On an underlying basis, other revenues, representing kits, services revenues
and other devices grew 18.8% to £50.2 million (2023: £42.2 million) when
stripping out the impact of EGP and COVID sequencing.
FY24 FY23 % change
actual
(£m) (£m)
PromethION product range 77.3 59.2 30.6%
Less EGP (1.4) (10.4)
Underlying PromethION product range 75.9 48.8 55.8%
MinION product range 55.0 63.4 (13.2)%
Less COVID sequencing (1.9) (4.6)
Underlying MinION product range 53.1 58.8 (9.6)%
Other 50.9 47.1 8.0%
Less EGP (0.4) (1.5)
Less COVID sequencing (0.3) (3.3)
Underlying other 50.2 42.2 18.8%
Total revenue 183.2 169.7 8.0%
Less EGP (1.8) (12.0)
Less COVID sequencing (2.2) (8.0)
Total underlying revenue 179.2 149.7 19.7%
Geographical trends
The Group aims to make its technology available to a broad range of scientific
users, and currently supports users in more than 125 countries. In some
territories the Group works with distributors to achieve or enhance its own
commercial presence.
The Group delivered strong underlying revenue growth in all regions, led by
EMEAI and APAC and driven by new product launches, new and expanded contracts,
and increasing sales team productivity. The strong and broad-based
acceleration across the business in H2 was moderated in part by export control
restrictions to China. Growth across the AMR region was lower than that of
EMEAI and APAC, but the anticipated acceleration in H2 for the AMR region
started as expected. Whilst our confidence that this will continue to
accelerate in 2025 is underpinned by our growing commercial pipeline across
both our existing customer base and new opportunities, we expect this growth
to be somewhat impacted by changes to Federal funding in the US for
institutions such as the NIH, albeit the materiality of this impact is still
uncertain as the situation is still evolving. In 2024 management estimated
that the Group had a maximum exposure of 10-15% of revenues to the NIH.
Underlying AMR revenue grew 7.0% to £62.5 million in 2024 (2023: £58.4
million) when stripping out the impact of COVID sequencing. Underlying growth
in AMR was driven primarily by growth in the US partly offset by lower
revenues in Canada.
Underlying APAC revenue grew 22.1% to £40.2 million in 2024 (2023: £32.9
million) when stripping out the impact of COVID sequencing. Underlying growth
in APAC was driven by large population genomics programmes in Singapore,
Japan, Hong Kong and Indonesia, and increased revenue in China.
Underlying EMEAI revenue grew 31.1% to £76.6 million (2023: £58.4 million)
when stripping out the impact of EGP and COVID sequencing. Underlying Growth
in EMEAI was driven by new and expanded contracts delivering strong growth in
the particularly in the UK and Central Europe.
Reported revenue is up on 2023 in all regions with strongest growth in EMEAI
and APAC despite the £16 million headwind from the reduction in EGP and COVID
sequencing revenue in 2024.
Reconciliation of reported revenue to underlying revenue by geographical
region:
Revenue by region (%)
FY24 FY23 %
change
(£m) (£m)
AMR 63.1 61.5 2.6%
Less COVID sequencing (0.7) (3.1)
Underlying AMR revenue 62.5 58.4 7.0%
APAC 40.4 34.1 18.6%
Less COVID sequencing (0.3) (1.2)
Underlying APAC revenue 40.2 32.9 22.1%
EMEAI 79.6 74.0 7.5%
Less EGP (1.8) (12.0)
Less COVID sequencing (1.2) (3.6)
Underlying EMEAI Revenue 76.6 58.4 31.1%
Total revenue 183.2 169.7 8.0%
Total underlying revenue 179.2 149.7 19.7%
Revenue by customer type
FY24 FY23 %
change
(£m) (£m)
Applied Industrial 23.5 16.6 41.8%
Clinical 17.3 15.4 12.2%
BioPharma 14.9 12.6 17.7%
Research 127.5 125.1 1.9%
Total revenue 183.2 169.7 8.0%
Our 2024 revenues by customer end market (i.e. the end market of the customer
or company buying our products) is as follows:
· 70% came from Research customers who are funded to research novel
science such as academic research institutes, this category includes
Government, public health, grant funding and Distributors. Revenue of £127.5
million is 1.9% above 2023 of £125.1 million.
· 13% came from Applied Industrial customers, who are utilising
sequencing for application in industrial or service setting e.g. outsourced
Synthetic Biology. Revenue of £23.5 million is 41.8% above 2023 of £16.6
million).
· 9% from Clinical customers where data may have diagnostic,
prognostic or therapeutic value. Revenue of £17.3 million is 12.2% above 2023
of £15.4 million.
· 8% from BioPharma customers funded to develop, make, and sell
pharmaceuticals. Revenue of £14.9 million is 17.7% above 2023 of £12.6
million.
Gross margin
Year ended 31 December FY24 FY23 Change
Gross margin (%) 57.5% 53.3% 420 bps
Gross margin improved by 420 bps to 57.5% in 2024 from 53.3% in 2023. This
margin expansion was predominantly driven by underlying margin improvements
(up 410bps) mainly across PromethION Flow Cells and devices, offsetting
headwinds from mix (420bps), and currency (120bps). The gross margin in 2023
was negatively impacted by a number of one-offs including the adverse
performance of the EGP, the write-off of excess COVID sequencing kits and
legacy devices and upgrading the compute on large PromethION devices
(550bps).
We remain committed to continual margin improvement across all products and
will continue to invest in manufacturing innovation, to deliver this goal.
Impact of headcount
Average headcount (FTEs) FY24 FY23 Change
(%)
Research and development 512 464 10.3%
Manufacturing 158 156 1.3%
Selling, general & administration 645 513 25.7%
Total 1,315 1,133 16.1%
In 2024, the average number of employees across all functions increased by
16.1%. This increase was predominantly across research and development and in
the commercial and marketing teams. The Research and Development headcount
increased 10.3% as the Group invested in bringing onboard new research and
development staff to support the later stage development activities across its
disruptive platform.
In 2024, the Group's manufacturing headcount has increased by 1.3% from 2023.
This follows the significant expansion of the team in 2021, when staff
covering all manufacturing stages and processes expansion were recruited to
cater for increased demand from a growing client base.
The largest increase in the Group's average headcount took place in the
selling, general and administration functions including legal functions and
corporate executives, with an increase of 25.7%. The significant expansion of
the commercial teams in key geographic regions supports the Group's business
growth objectives globally. In addition, the investment in in-field and
customer support teams was necessary to maintain and increase customer loyalty
and customer retention.
Post year-end, the Group entered into a targeted restructuring program,
leading to a reduction in the overall workforce of around 5%, spread broadly
evenly across R&D, Commercial and Corporate areas. Alongside this
reduction in headcount management have also targeted non-headcount related
savings of around 5%. Management expect to take a total cash charge of around
£6 million in 2025 in relation to redundancy payments which will be treated
as an adjusting item.
Research and development expenses
The Group's research and development expenditure is recognised as an expense
in the year as it is incurred, except for development costs that meet the
criteria for capitalisation as set out in IAS 38 ("Intangible assets").
Capitalised development costs principally comprise qualifying costs incurred
in developing the Group's core technology platform.
FY24 FY23 Change %
(£m) (£m)
Research and development expenses 98.9 103.8 4.7%
Adjusting items:
Employer's social security taxes on pre-IPO share awards 0.5 0.6
24.7%
Adjusted R&D expenses 99.4 104.4 4.9%
Amortisation of capitalised (23.7) (18.4)
development costs
(28.7)%
Capitalised development costs 34.7 19.5 77.7%
Total R&D expenses and capitalised development costs 110.4 105.5
(4.6)%
The Group's adjusted research and development expenses reduced by £5.0
million to £99.4 million in 2024 (2023: £104.4 million). This was
principally due to:
· a 77.7% increase in capitalised development costs to £34.7
million. This included £18.8 million of staff costs and £15.9 million of
third-party costs. This is partly offset by £5.3 million higher amortisation
costs of £23.7 million for the year. The increase in capitalised development
costs reflects projects reaching an advanced stage of development and
reflecting improvements and expansion to the suite of products offered.
· a 10.3% increase in average headcount leading to a £7.1 million
increase in payroll costs and a £1.2 million increase in materials and other
costs, partly offset by a £3.7 million increase in the research and
development tax credit.
· There was a further £1.2 million benefit from lower share-based
payments and associated costs.
Overall investment in research and development was £110.4 million (2023:
£105.5 million); an increase of £4.9 million.
Selling, general and administration expenses
FY24 FY23 Change %
(£m) (£m)
Selling, general and administration expenses 158.8 155.2
(2.3%)
Adjusting items:
Share-based payment expense on Founder Long Term Incentive Plan (LTIP) 6.1 (20.9)
N/A
Employer's social security taxes on Founder LTIP and pre-IPO share awards 2.3 0.3
N/A
Adjusted selling, general and administration expenses 167.2 134.6
(24.2%)
The Group's selling, general and administrative expenses increased by £3.6
million to £158.8 million in 2024 (2023: £155.2 million).
On an adjusted basis selling, general and administrative expenses in 2024
increased by £32.6 million to £167.2 million (2023: £134.6 million).
The main changes were:
· The total increase in the average headcount in selling, general
and administrative of 25.7%, this was primarily driven by our planned increase
in headcount in the commercial teams (34.4% increase in average headcount
compared to 2023). Coupled with inflationary pressures of salaries, this
resulted in a £21.3 million increase in payroll costs.
· An increase in depreciation of £0.2 million to £13.1 million in
2024 from £12.9 million in 2023.
The total share-based payment charge included in selling, general and
administrative expenses decreased by £29.8 million in 2024 to £0.5 million.
The reduction was primarily driven by a decrease in the Founder LTIP charge
(from £20.9 million in 2023 to a credit of £6.1 million in 2024).
Adjusted EBITDA
FY24 FY23
(£m) (£m)
Loss for the year (146.2) (154.5)
Reconciling items:
Taxation 6.2 4.7
Finance income (14.8) (18.9)
Interest expense - -
Interest on lease 3.6 2.2
Depreciation and amortisation 43.3 41.6
EBITDA (108.0) (124.8)
Adjusting items:
Share-based payments on Founder LTIP (6.1) 20.9
Employer taxes on pre-IPO share awards (2.7) (0.9)
Impairment of investment in associate 0.7 (0.1)
Adjusted EBITDA (116.1) (104.9)
Adjusted EBITDA losses increased from £104.9 million to £116.1 million. This
was primarily driven by increasing operational expenses associated with the
increase in headcount partly offset by a Founder LTIP credit and a credit
relating to the employers social security tax.
Balance sheet
FY24 FY23
(£m) (£m)
Property, plant and equipment 66.3 49.9
Intangible assets 43.8 32.9
Right-of-use assets 34.9 32.5
Net deferred tax asset 2.6 5.5
Working capital 59.8 84.6
Other assets and liabilities 28.3 21.0
Provisions (7.2) (13.0)
Cash and cash equivalents and other liquid investments 403.8 472.1
Lease Liabilities (46.0) (41.7)
Net assets 586.3 643.9
Key elements of change in the balance sheet during the year included the
following:
Property, plant and equipment
The net book value of property, plant and equipment was £66.3 million at 31
December 2024, an increase of £16.4 million over 31 December 2023. This has
been driven primarily by the net book value of assets subject to operating
leases of £34.7 million, an increase of £7.0 million over 31 December 2023
which includes the purchase of NVIDIA's A-series on new PromethION devices;
Intangible assets
Intangible assets of £43.8 million at 31 December 2024 has increased by
£10.9 million from £32.9 million at 31 December 2023 as a result of
additional projects having passed through the capitalisation criteria in the
year;
Right-of-use assets
During the year, right-of-use asset additions were £8.6 million (2023: £12.0
million), resulting in a net book value at 31 December 2024 of £34.9 million
(2023: £32.5 million). As at 31 December 2024, the outstanding balance sheet
liability in respect of the right-of-use assets was £46.0 million (2023:
£41.7 million).
Working capital
The working capital balance of £59.8 million (2023: £84.6 million)
predominantly reflects inventory of £99.5 million (2023: £101.5 million),
trade and other receivables of £62.7 million (2023: £61.5 million) and trade
and other payables of £102.3 million (2023: £78.4 million).
The reduction in working capital was due primarily to increased trade and
other payables due to higher accruals up £12.6 million, higher contract
liabilities up £5.5 million, and higher trade payables up £6.1 million.
Inventory of £99.5 million at 31 December 2024 has reduced by £2.0 million
from £101.5 million at 31 December 2023. This has been driven primarily by a
reduction in MinION Flow Cell, Kits and GridION inventory, partly offset by an
increase in PromethION Flow Cell inventory.
Provisions
Provisions of £7.2 million at 31 December 2024 (2023: £13.0 million),
primarily relates to a provision for employer social security taxes on share
awards of £4.7 million (2023: £9.9 million). The provision is estimated at
each reporting period with reference to both the expected number of awards
vesting and their expected value, using the share price at the reporting date.
The release of the provision during the year is reflective of the reduction in
share price from £2.08 at 31 December 2023 to £1.29 at 31 December 2024.
Cash flow
Cash, cash equivalents and other liquid investments were £403.8 million at 31
December 2024, a decrease of £68.3 million since 31 December 2023 (see note
22). This is comprised of cash and cash equivalents of £199.5 million and
Investment Bonds less fair value gains of £204.3 million.
There was a net cash outflow of £109.9 million from operations (2023: outflow
of £137.3 million). The main reasons for this were as follows:
· Increase in working capital of £1.8 million includes an increase
in inventory and assets subject to operating leases of £21.2 million and a
increase in receivables of £1.8 million, partly offset by a increase in
payables of £21.2 million. Excluding assets subject to operating leases,
working capital would have decreased £18.7 million.
· In the second half of the year the Group entered into a new
arrangement with a third-party firm to provide customers with financing
options to fund capex purchases in certain markets, which could potentially
help alleviate the financial burden on Oxford Nanopore from leasing devices
directly. Alongside this initiative, the Group released an update to its
business and pricing model in February 2025 with the aim of increasing
simplicity and transparency for customers whilst improving the sustainability
of Oxford Nanopore as a business.
· These changes align the Group with industry peers by offering
more conventional capital purchase schemes to customers, alongside flexibility
for leasing as appropriate through financing partners or direct, whilst
maintaining affordable and accessible sequencing through its range of portable
devices.
· Adoption of this service or if Oxford Nanopore customers choose
to purchase devices direct (rather than lease) could benefit future cash flows
through reducing the investment required in placing assets with customers
(£20.6 million in 2024).
Alongside this, the Group remains in active discussions with third party firms
over the potential sale and leaseback of Oxford Nanopore owned assets at
customers to release invested capital to the Group as and when required.
Net Cash inflows from investing activities of £15.0 million (2023: outflow of
£61.8 million) includes:
· The proceeds from the sale of other financial assets of £54.2
million.
· Interest received of £9.5 million.
Partly offset by:
· The purchase of property, plant & machinery of £13.9
million.
· The spend on capitalised development costs of £34.7 million.
Net Cash inflows from financing activities of £73.6 million (2023: £64.7
million) includes:
· Net proceeds from the issue of shares of £80.9 million mainly
relating to the £80.0 million equity placing,
Partly offset by:
· Lease and interest payments of £7.3 million.
Outlook
2025 has started well and in-line with guidance. Whilst the uncertainty caused
by geopolitical instability remains high the demand for our products remains
strong as customers within both established and new end-markets see the
intrinsic value of the Oxford Nanopore Technologies sensing platform within
their own workflows.
Alongside strong top line growth we see the opportunity for further gross
margin improvement and continued focus on cost discipline that is set to
continue over the medium term and deliver significant operational leverage.
With a strong balance sheet, further enhanced by the £80.0 million placement
in 2024 and recent changes to our pricing model, alongside continued focus on
working capital, we are well funded to deliver against our medium-term targets
of adjusted EBITDA breakeven in 2027 and cash flow breakeven in 2028.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Revenue 4 183,191 169,668
Cost of sales (77,796) (79,187)
Gross profit 105,395 90,481
Research and development expenses (98,921) (103,842)
Selling, general and administrative expenses (158,807) (155,248)
Loss from operations (152,333) (168,609)
Finance income 14,841 18,853
Finance expense (3,565) (2,206)
Other gains and losses 8 1,838 2,278
Share of loss in associate (18) (228)
(Impairment)/write-back of investment in associate (724) 144
Loss before tax 6 (139,961) (149,768)
Taxation 9 (6,227) (4,739)
Loss for the year (146,188) (154,507)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Unrealised fair value gains on investment bonds 8 4,577 4,177
Reclassification to profit or loss on disposal of investment bonds 8 (1,989) (153)
Fair value movements on investment bonds 8 2,588 4,024
Exchange losses arising on translation of foreign operations (469) (3,880)
Tax on items that may be reclassified subsequently to profit or loss 9 (647) (1,240)
Other comprehensive income/(expense) for the year, net of tax 1,472 (1,096)
Total comprehensive loss (144,716) (155,603)
Note 2024 2023
Pence Pence
Loss per share 7 (16) (19)
Consolidated Statement of Financial Position
as at 31 December 2024
Note 2024 2023
£000 £000
Assets
Non‑current assets
Property, plant and equipment 11 66,331 49,890
Intangible assets 10 43,815 32,910
Investment in associate - 742
Right‑of‑use assets 12 34,859 32,526
Other financial assets 15 74,314 208,325
Deferred tax assets 2,636 5,486
221,955 329,879
Current assets
Inventory 13 99,453 101,548
Trade and other receivables 14 62,708 61,475
Current tax assets 1,199 1,030
R&D tax credit recoverable 18,365 12,819
Other financial assets 15 138,853 49,514
Derivative financial assets - 261
Cash and cash equivalents 20 199,517 220,536
520,095 447,183
Total assets 742,050 777,062
Liabilities
Non‑current liabilities
Lease liabilities 18 40,606 37,333
Share‑based payment liabilities 177 141
Provisions 17 3,439 6,538
44,222 44,012
Current liabilities
Trade and other payables 16 102,316 78,447
Lease liabilities 18 5,358 4,322
Derivative financial liabilities 10 -
Provisions 17 3,806 6,430
111,490 89,199
Total liabilities 155,712 133,211
Net assets 586,338 643,851
Issued capital and reserves attributable to owners of the parent
Share capital 96 86
Share premium reserve 779,697 698,553
Share‑based payment reserve 19 209,149 203,099
Translation reserve (642) (173)
Accumulated deficit (401,962) (257,714)
Total equity 586,338 643,851
Consolidated Statement of Changes in Equity
as at 31 December 2024
Share capital Share premium Share-based payment reserve Translation reserve Accumulated deficit Total equity
£000 £000 £000 £000 £000 £000
At 1 January 2023 83 627,557 168,200 3,707 (105,991) 693,556
Loss for the year - - - - (154,507) (154,507)
Other comprehensive income/(expense) - - - (3,880) 2,784 (1,096)
Comprehensive loss for the year - - - (3,880) (151,723) (155,603)
Issue of share capital 3 71,562 - - - 71,565
Cost of share issue - (566) - - - (566)
Employee share‑based payments - - 34,995 - - 34,995
Tax in relation to share‑based payments - - (96) - - (96)
Total contributions by and distributions to owners 3 70,996 34,899 - - 105,898
At 31 December 2023 86 698,553 203,099 (173) (257,714) 643,851
Loss for the year - - - - (146,188) (146,188)
Other comprehensive income/(expense) - - - (469) 1,940 1,471
Comprehensive loss for the year - - - (469) (144,248) (144,717)
Issue of share capital 10 83,466 - - - 83,476
Cost of share issue - (2,322) - - - (2,322)
Employee share‑based payments - - 6,029 - - 6,029
Tax in relation to share‑based payments - - 21 - - 21
Total contributions by and distributions to owners 10 81,144 6,050 - - 87,204
At 31 December 2024 96 779,697 209,149 (642) (401,962) 586,338
Note 19
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Net cash outflow from operating activities 20 (109,885) (137,302)
Investing activities
Purchase of property, plant and equipment (13,943) (5,906)
Development costs capitalised 10 (34,693) (19,522)
Purchases of IP licences - (1,862)
Investment in associate - (3,000)
Interest received 9,507 13,898
Purchase of other financial assets - (150,000)
Proceeds from sale of other financial assets 54,156 104,598
Net cash inflow/(outflow) from investing activities 15,027 (61,794)
Financing activities
Proceeds from issue of shares 83,233 71,597
Costs of share issue (2,322) (366)
Principal elements of lease payments (4,685) (4,291)
Interest paid (3) (1)
Interest paid on leases (2,642) (2,205)
Net cash inflow from financing activities 73,581 64,734
Net decrease in cash and cash equivalents before foreign exchange movements (21,277) (134,362)
Effect of foreign exchange rate movements 258 (1,880)
Cash and cash equivalents at beginning of year 220,536 356,778
Cash and cash equivalents at end of year 20 199,517 220,536
Notes to the Consolidated Financial Statements
for the year ended 31 December 2024
1. General information
Oxford Nanopore Technologies plc (the Company) is a public limited company
incorporated in the United Kingdom under the Companies Act 2006 and is
registered in England and Wales. The Company's registered office is at Gosling
Building, Edmund Halley Road, Oxford Science Park, Oxford, Oxfordshire, OX4
4DQ. These consolidated financial statements comprise the Company and its
subsidiaries (collectively the Group and individually Group companies). The
Group is primarily involved in researching, developing, manufacturing and
commercialising a novel generation of deoxyribonucleic acid (DNA) or
ribonucleic acid (RNA) sequencing technology that provides rich data, is fast,
accessible and easy to use, and which allows the real-time analysis of DNA or
RNA. This enables our customers to perform scientific/biomedical research in a
range of areas, including human genetics, cancer research, outbreak
surveillance, environmental analysis, pathogens/antimicrobial resistance,
microbiome analysis and crop science. These emerging uses may include
applications in healthcare, agriculture, BioPharma production, food/water
supply chain surveillance, and education or consumer markets; anywhere where
DNA information can tell a user about a sample: for example, its identity,
whether it is changing, healthy or diseased.
The Company is the ultimate parent company of the Group.
The unaudited preliminary financial information, which does not constitute
statutory accounts of the Group within the meaning of sections 434(3) and
435(3) of the Companies Act 2006, comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet,
consolidated statement of changes in equity, consolidated cash flow statement
and extracts from the notes to the financial statements for the year ended 31
December 2024. These have been prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting
Standards Board and adopted by the UK. The unaudited preliminary financial
information should be read in conjunction with the Annual Report for 2023,
which has been prepared in accordance with International Accounting Standards,
in conformity with the Companies Act 2006.
The unaudited preliminary financial information has been presented in Pounds
Sterling because that is the currency of the primary economic environment in
which the Group operates, and are rounded to the nearest thousand pounds.
Foreign operations are included in accordance with the policies set out in the
accounting policies as per the 2023 Annual Report.
2. Going concern
As at 31 December 2024, the Group held £403.8 million in cash, cash
equivalents and other liquid investments (note 22).
In order to satisfy the going concern assumption, the Directors review the
budget periodically. It is revisited and revised as appropriate in response to
evolving market conditions. Specifically for these financial statements, the
Directors have considered the budget and forecast prepared through to the end
of March 2026, the going concern assessment period, and the impact of a range
of severe, but plausible, scenarios on revenue, profit and cash flow. The
principal issues and risks considered were:
· supply chain issues driven by demand, logistics interruptions and
heightened global geopolitical tension;
· the impact on revenue due to customer, regulatory and research and
development (R&D) delays; and
· increased costs due to supply chain restrictions, rising utilities costs,
rising wages & salary costs, additional R&D requirements and rising
costs of component parts.
Under all scenarios, the Group had sufficient funds to maintain trading before
taking into account any mitigating actions that the Directors could take.
Accordingly, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operation for the foreseeable future and at
least one year from the date of approval of the financial statements. On the
basis of these reviews, the Directors consider it remains appropriate for the
going concern basis to be adopted in preparing these financial statements.
3. Critical accounting judgements and sources of estimation
uncertainty
In applying the Group's accounting policies, the Directors are required to
make judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements and estimates that the Directors
have made in the process of applying the Group's accounting policies and that
have the most significant effect on the amounts recognised in the financial
statements.
Judgements
i) Internally generated intangible assets research and development
expenditure (R&D)
Critical judgements are required in determining whether development spend
meets the criteria for capitalisation of such costs as laid out in IAS 38,
"Intangible Assets," in particular whether any future economic benefit will be
derived from the costs and flow to the Group. The Directors believe that the
criteria for capitalisation as per IAS 38 paragraph 57 for specific projects
were met during the year and accordingly all amounts in relation to the
development phase of those projects have been capitalised as an intangible
asset. All other spend on R&D projects has been recognised within R&D
expenses in the income statement during the year.
Estimates
Key sources of estimation uncertainty
i) Inventory
The Group holds inventory across a number of locations for the purposes of
fulfilling sales orders and contractual obligations. Additionally, certain
components of inventory are held for use within research and development. Net
inventory at 31 December 2024 was £99.5 million (2023: £101.5 million). In
line with the requirements of IAS 2, "Inventories", inventory is stated at the
lower of cost and net realisable value.
Management is required to make a number of estimates around the net realisable
value of inventory, which represents the estimated selling price less all
estimated costs of completion. In cases where the net realisable value is
below cost, management records a provision such that inventory is held at the
lower of cost and net realisable value.
To estimate the inventory provision, management uses inputs based on the
location and status of inventory held by the Group. This includes the intended
use of the inventory, including whether it is expected to be sold or used for
research and development purposes.
Management makes assumptions around the net realisable value of each category
of inventory, including considering any excess inventory. These estimates are
then applied to the inventory balance, based on its cost, location and
intended use, to record a provision in cases where the net realisable value is
below cost.
If the provisioning estimate had decreased by 6%, then the net realisable
value of inventory would have increased by £3.0 million and the revised
inventory value would have been £102.4 million (31 December 2023: £2.7
million and £104.3 million respectively). If the provisioning against
inventory had increased by a further 3%, then the net realisable value of
inventory would have decreased by £3.2 million and the revised inventory
value would have been £96.3 million (31 December 2023: £3.4 million and
£98.1 million respectively).
ii) Share-based payments
In June 2021, awards were granted to the Executive Directors of the Company
under the Oxford Nanopore Technologies Limited Long Term Incentive Plan 2021
(Founder LTIP). Half of the awards are subject to a non‑market revenue
performance condition which drives number of awards expected to vest depending
on when certain revenue targets are met. At each reporting date, management
makes an estimate as to the extent to which the revenue condition is expected
to be achieved by the end of each future reporting period. This is driven by
revenue forecasts. Whilst management may make an appropriate estimate of the
annual revenue target on grant date, this estimate might change in future
periods. If actual sales were 10% less than forecast, the Group recognised
total expenses of £6.0 million relating to equity settled share-based
payment transactions would decrease by £6.4 million and become a credit of
£0.4 million.
In addition, the Founder LTIP awards in issue give rise to an associated
employer's social security liability. Management updates the estimate for this
liability at each reporting period with reference to both the expected number
of awards vesting and their expected value, using the share price at the
period end date. Half of the Founder LTIP awards are linked to a share price
condition, which is a market-based performance condition incorporated into the
fair value calculation and to which no subsequent adjustments can be made from
a share-based payment charge perspective. However, management has estimated
the proportion likely to vest for the purposes of assessing the employer's
social security contributions to accrue at each period end using a Monte Carlo
simulation model which calculates the average expected vesting based on a
large number of randomly generated projections of the Company's future share
price. At 31 December 2024, the expected vesting of the share price linked
awards was estimated at 48.1% (2023: 50.8%).
Other sources of estimation uncertainty
iii) Internally generated intangible assets research and development
expenditure (R&D)
Management does not have a formal timesheet process for monitoring time spent
by employees on projects in their development stage. Instead, management
consults with the relevant project leaders on a regular basis to understand
and estimate the time spent on projects in their development stage. When a
percentage allocation has been agreed, in line with the estimation process
described below, this is then applied to other, non-employee related
development costs to ensure that costs are consistently and appropriately
capitalised. The net book value of internally generated capitalised assets at
31 December 2024 was £41.8 million (2023: £30.8 million).
Development costs capitalised in 2024 amounted to £34.7 million (2023: £19.5
million). If the estimated time spent on these projects had varied by up to
5% then the development costs capitalised in 2024 would have been in the range
of £33.0 million to £36.4 million (2023: £18.5 million to £20.5 million).
iv) Non-standard customer contracts
As noted in the revenue recognition accounting policy, revenue contracts for
the sale of bundled goods and services require the allocation of the total
contract price to individual performance obligations based on their
stand-alone selling prices. The Group occasionally enters into larger bespoke
contracts which might include a clause linked to the performance of the
products and options on the total units of certain consumables to be purchased
under the contract. This requires management to estimate the number of items
likely to be delivered under the contract.
4. Revenue
The Group derives revenue from the transfer of goods and services over time
and at a point in time in the following categories and geographical regions:
2024 2023
£000 £000
Geographical region
AMR 63,143 61,542
EMEAI 79,608 74,037
APAC 40,440 34,089
Total revenue 183,191 169,668
2024 2023
£000 £000
Category
Sale of goods 154,095 141,907
Rendering of services 18,981 17,445
Lease income 10,115 10,316
Total revenue 183,191 169,668
2024 2023
£000 £000
Timing of revenue recognition
At a point in time 155,687 141,907
Over time 27,504 27,761
Total revenue 183,191 169,668
Notes 14 and 16 disclose assets and liabilities the Group has recognised in
relation to contracts with customers.
Revenue recognised in relation to contract liabilities:
2024 2023
£000 £000
Revenue recognised that was included in the contract liability balance at the 12,849 15,848
beginning of the year
5. Segment information
The Group's senior management team is considered to be the chief operating
decision maker (CODM) for the purposes of resource allocation and assessment
of segment performance, as defined under IFRS 8, "Operating Segments". The
CODM considers that the only Group reportable segment is revenue generation
from providing products and services for research use, including research and
development expenditure and corporate expenditure.
There were no individual customers representing more than 10% of the Group's
total revenue in either the current or prior year.
Geographical regions
Revenue by geographical region is shown in note 4. The Group's non‑current
assets by geographical location, excluding other financial assets and deferred
tax assets, are detailed below:
2024 2023
£000 £000
AMR 15,733 13,130
EMEAI 126,963 101,883
APAC 2,309 1,055
145,005 116,068
6. Loss before tax
2024 2023
£000 £000
This is after charging/(crediting):
Amortisation of intangible assets 23,955 18,491
Depreciation of property, plant and equipment 13,449 18,105
Depreciation of right‑of‑use assets 5,880 5,031
Loss on disposal of property, plant and equipment 7,513 3,663
Cost of inventory 61,286 49,162
Write‑down of inventory 805 9,839
Short-term lease costs 971 928
Impairment/(write-back) of investment in associate 724 (144)
Net foreign exchange gain (504) (1,385)
All amounts relate to continuing operations.
7. Loss per share
2024 2023
Pence Pence
Basic and diluted loss per share
Total basic and diluted loss per share attributable to the ordinary equity (16) (19)
holders of the Group from continuing operations
2024 2023
£000 £000
Reconciliation of earnings used in calculating earnings per share
Loss attributable to the ordinary equity holders of the Group used in (146,188) (154,507)
calculating basic and diluted loss per share from continuing operations
2024 2023
Number Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares and potential ordinary shares used 897,796,423 833,960,358
as the denominator in calculating basic and diluted earnings per share
Options
Options granted to employees under the Oxford Nanopore Technologies Share
Option Scheme and the Oxford Nanopore Technologies Limited Share Option Plan
2018 are considered to be potential ordinary shares. These options have not
been included in the determination of the basic and diluted loss per share as
shown above, because they are anti-dilutive for the years ended 31 December
2024 and 31 December 2023. These options could potentially dilute basic
earnings per share in the future. Details relating to share options are set
out in note 19.
8. Other gains and losses
2024 2023
£000 £000
Gain on investment bonds 1,989 153
(Loss)/gain on derivative financial instruments (151) 2,125
1,838 2,278
2024 2023
£000 £000
Unrealised fair value gains on investment bonds 4,577 4,177
Reclassification to profit or loss on disposal (1,989) (153)
Total - fair value movements on investment bonds (included in other 2,588 4,024
comprehensive income)
9. Taxation
Income tax recognised in statement of comprehensive income
Income tax recognised in profit and loss
2024 2023
£000 £000
Current tax
Notional tax on R&D expenditure credit 3,343 2,446
Prior year adjustment in respect of notional tax on R&D expenditure credit 117 (48)
Prior year adjustment in respect of current tax 196 (822)
Tax payable on foreign subsidiaries 331 2,949
Total current tax 3,987 4,525
Deferred tax
Origination and reversal of temporary differences 2,240 214
Total deferred tax 2,240 214
Total tax 6,227 4,739
Income tax recognised in OCI
2024 2023
£000 £000
Deferred tax on investment bonds 647 1,240
Total tax 647 1,240
Current tax balances have been calculated at the rates enacted for the period.
The effective rate of Corporation Tax is -4.45% (2023: -3.16%) of the loss
before tax for the Group.
The reasons for the difference between the actual tax charge for the year and
the standard rate of Corporation Tax in the United Kingdom applied to losses
for the year are as follows:
2024 2023
£000 £000
Loss for the year (146,188) (154,507)
Income tax expense 6,227 4,739
Loss before income taxes (139,961) (149,768)
Tax rate in the UK for period as a percentage of losses at 25.0% (2023: 23.5%) (34,990) (35,196)
R&D incentives 3,147 2,067
Adjustment in respect of overseas tax rates 124 410
Adjustments to tax charge in respect of prior years 295 133
Impact of share options (2,789) 6,634
Movement on unrecognised deferred tax 39,380 29,775
Other timing differences (366) (1,160)
Expenses not deductible for tax purposes 1,426 2,076
Total tax expense 6,227 4,739
10. Intangible assets
Capitalised development costs Patents and licences Total
£000 £000 £000
Cost
At 1 January 2023 57,663 446 58,109
Additions 19,522 1,862 21,384
Foreign exchange movements (22) - (22)
At 31 December 2023 77,163 2,308 79,471
Additions 34,693 239 34,932
Foreign exchange movements - (77) (77)
At 31 December 2024 111,856 2,470 114,326
Accumulated amortisation and impairment
At 1 January 2023 27,970 100 28,070
Charge for the year 18,419 72 18,491
At 31 December 2023 46,389 172 46,561
Charge for the year 23,699 256 23,955
Foreign exchange movements - (5) (5)
At 31 December 2024 70,088 423 70,511
Net book value
At 31 December 2023 30,774 2,136 32,910
At 31 December 2024 41,768 2,047 43,815
Development costs have been capitalised in accordance with IAS 38, "Intangible
Assets" and are therefore not treated as a realised loss until recognised as
an amortisation or impairment charge in the statement of comprehensive income.
In line with IAS 36, "Impairment of Assets", the Directors have considered
whether there are indicators, either internal or external, of impairment. No
such indicators were identified in the current or prior year.
11. Property, plant and equipment
Leasehold improvements Plant and machinery Assets under construction Assets subject to operating leases Equipment Total
£000 £000 £000 £000 £000 £000
Cost or valuation
At 1 January 2023 10,493 22,597 2,832 39,845 16,265 92,032
Additions 161 679 4,828 25,600 3,583 34,851
Disposals - (63) - (9,785) (4) (9,852)
Transfers between classes 1,106 4,982 (6,162) - 74 -
Foreign exchange movements (27) (26) - (902) (88) (1,043)
At 31 December 2023 11,733 28,169 1,498 54,758 19,830 115,988
Additions - 104 13,738 20,566 2,801 37,209
Disposals - - - (13,615) - (13,615)
Transfers between classes 430 3,641 (4,715) - 644 -
Foreign exchange movements 4 1 2 353 31 391
At 31 December 2024 12,167 31,915 10,523 62,062 23,306 139,973
Accumulated depreciation and impairment
At 1 January 2023 4,608 14,314 - 23,504 12,312 54,738
Charge for the year 1,609 3,477 - 10,213 2,806 18,105
Disposals - (63) - (6,122) (4) (6,189)
Foreign exchange movements (8) (22) - (462) (64) (556)
At 31 December 2023 6,209 17,706 - 27,133 15,050 66,098
Charge for the year 1,381 3,002 - 6,210 2,856 13,449
Disposals - - - (6,103) - (6,103)
Foreign exchange movements 5 4 - 165 24 198
At 31 December 2024 7,595 20,712 - 27,405 17,930 73,642
Net book value
At 31 December 2023 5,524 10,463 1,498 27,625 4,780 49,890
At 31 December 2024 4,572 11,203 10,523 34,657 5,376 66,331
The Group leases some of its devices to customers. Lease payments in relation
to these devices are received in full either in advance or on shipping of the
device, meaning that there are no undiscounted future lease payments expected
to be received on these devices.
12. Right-of-use assets
Total
£000
Cost
At 1 January 2023 35,419
Additions 12,024
Disposals (1,336)
Foreign exchange movements (332)
At 31 December 2023 45,775
Additions 8,596
Disposals (2,456)
Foreign exchange movements 84
At 31 December 2024 51,999
Accumulated depreciation
At 1 January 2023 9,513
Charge for the year 5,031
Disposals (1,142)
Foreign exchange movements (153)
At 31 December 2023 13,249
Charge for the year 5,880
Disposals (2,060)
Foreign exchange movements 71
At 31 December 2024 17,140
Net book value
At 31 December 2023 32,526
At 31 December 2024 34,859
13. Inventory
2024 2023
£000 £000
Raw materials 37,631 50,888
Work in progress 45,637 39,154
Finished goods 16,185 11,506
99,453 101,548
The carrying amount of inventory was not materially different from its
replacement cost.
The cost of inventory recognised as an expense includes £0.8 million (2023:
£9.8 million) in respect of write-downs of inventory to net realisable value.
There were no reversals of write-downs in either year.
14. Trade and other receivables
2024 2023
£000 £000
Trade receivables 37,255 33,626
Contract assets 282 204
Accrued income and other debtors 6,429 7,750
Accrued interest 597 746
Other taxes 5,223 6,351
Prepayments 12,922 12,798
62,708 61,475
Contract assets relate to the Group's rights to consideration for goods and
services provided but not billed at the reporting date for goods and services
provided. They are transferred to receivables when the rights become
unconditional. This usually occurs when an invoice is issued to the customer.
Certain items within accrued income could also be considered as contract
assets.
The ageing of trade receivables and the loss allowance calculated using the
Group's provision matrix was as follows:
Not past due 30‑60 days 61‑90 days 91+ days Total
£000 £000 £000 £000 £000
At 31 December 2024 30,237 2,772 1,848 4,478 39,335
Loss allowance (397) (141) (125) (1,417) (2,080)
29,840 2,631 1,723 3,061 37,255
At 31 December 2023 28,495 2,238 1,036 2,804 34,573
Loss allowance (227) (87) (55) (578) (947)
28,268 2,151 981 2,226 33,626
The following table shows the movement in lifetime Expected Credit Loss that
has been recognised for trade receivables in accordance with the simplified
approach set out in IFRS 9:
£000
At 1 January 2023 2,614
Net charges and releases to statement of comprehensive income (1,425)
Foreign exchange movement (242)
At 31 December 2023 947
Net charges and releases to statement of comprehensive income 1,132
Foreign exchange movement 1
At 31 December 2024 2,080
15. Other financial assets
2024 2023
£000 £000
Investment bonds 211,838 256,534
Other financial assets 1,329 1,305
213,167 257,839
These items were analysed as follows:
2024 2023
£000 £000
Current 138,853 49,514
Non-current 74,314 208,325
213,167 257,839
Investment bonds are classified as financial assets at fair value through
other comprehensive income (FVOCI).
16. Trade and other payables
2024 2023
£000 £000
Trade payables 31,300 25,184
Share-based payments 169 504
Payroll taxation and social security 4,474 4,507
Accruals 45,707 33,096
Contract liabilities 20,666 15,156
102,316 78,447
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases by the Group is 54 days (2023: 50 days).
The Group has financial risk management policies in place to ensure that all
payables are paid within the pre-agreed credit terms.
The Directors consider that the carrying amount of trade payables approximates
their fair value.
Contract liabilities primarily relate to performance obligations on customer
contracts which were not satisfied at 31 December. In 2024 they increased by
£5.5 million (2023: decrease of £5.1 million). Management expects that most
of the transaction price allocated to unsatisfied performance obligations as
at 31 December 2024 will be recognised as revenue during the following year.
17. Provisions
Dilapidation provisions Employer Other Total provisions
taxes
£000
£000 £000
£000
At 31 December 2023 2,384 9,913 671 12,968
Movement in provision for the year 56 (1,973) 854 (1,063)
Payments - (3,275) (1,381) (4,656)
Foreign exchange movements 4 1 (9) (4)
At 31 December 2024 2,444 4,666 135 7,245
Current - 3,671 135 3,806
Non‑current 2,444 995 - 3,439
At 31 December 2024 2,444 4,666 135 7,245
Current - 5,759 671 6,430
Non‑current 2,384 4,154 - 6,538
At 31 December 2023 2,384 9,913 671 12,968
The dilapidation provisions relate to leased properties, representing an
obligation to restore the premises to their original condition at the time the
Group vacates them. The provision is non-current and expected to be utilised
in less than 30 years.
Employer taxes relate to the expected employer social security taxes on
share-based payments. This is expected to be utilised between one and ten
years. The provision is based on the best estimate of the liability, which is
reviewed and updated at each reporting period. The provision is accrued over
the vesting period to build up to the required liability at the point it is
ultimately due.
18. Lease liabilities
2024 2023
£000 £000
Current 5,358 4,322
Non‑current 40,606 37,333
Lease liabilities included in the statement of financial position 45,964 41,655
2024 2023
£000 £000
Maturity analysis ‑ contractual undiscounted cash flows
Up to one year 8,314 6,865
Two to five years 33,065 28,057
Greater than five years 20,536 21,358
Total undiscounted lease liabilities at 31 December 61,915 56,280
Information on the associated right-of-use assets is included in note 12.
19. Share-based payment reserve
2024 2023
£000 £000
At 1 January 203,099 168,200
Equity settled share‑based payment transactions 6,029 34,995
Tax in relation to share‑based payment transactions 21 (96)
At 31 December 209,149 203,099
Share-based payment transactions
2024 2023
£000 £000
Expense arising from share‑based payment transactions:
Included in research & development expenses 4,633 5,897
Included in selling, general & administrative expenses 1,259 29,179
5,892 35,076
Equity settled share‑based payment transactions 6,029 34,995
Cash settled share‑based payment transactions (137) 81
5,892 35,076
20. Notes to the cash flow statements
2024 2023
£000 £000
Cash and cash equivalents 199,517 220,536
Cash and cash equivalents comprised cash held at banks. The carrying amount of
this asset was approximately equal to its fair value.
2024 2023
£000 £000
Loss before tax (139,961) (149,768)
Depreciation on property, plant and equipment 13,449 18,105
Depreciation on right‑of‑use assets 5,880 5,031
Amortisation on intangible assets 23,955 18,491
Loss on disposal of property, plant and equipment and right-of-use assets 7,513 3,854
Research and development expenditure credit (13,863) (10,157)
Foreign exchange movements (1,405) (519)
Interest on leases 3,562 2,205
Interest income (14,838) (18,852)
Movements on investment bonds (1,491) 337
Movements on derivatives 271 836
Impairment/(write-back) of investment 724 (144)
Share of losses in associate 18 228
Employee share benefit costs including employer's social security 3,919 34,908
taxes
Operating cash flows before movements in working capital (112,267) (95,445)
(Increase)/decrease in receivables (1,825) 118
Increase in inventory and assets subject to operating leases (21,176) (43,060)
Increase in payables 21,171 1,502
Cash used in operations (114,097) (136,885)
Research and development expenditure credit received 4,857 4,088
Foreign tax paid (645) (4,505)
Net cash outflow from operating activities (109,885) (137,302)
21. Events after the reporting date
In January 2025, the Group concluded a targeted restructuring programme aimed
at resource optimisation and improving operational effectiveness, leading to a
reduction in the overall workforce of approximately 5%, alongside other cost
control measures. Management expect to take a total cash charge of
approximately £6 million in FY25 in relation to redundancy payments which
will be treated as an adjusting item.
22. Alternative performance measures
The Group's performance is assessed using a number of financial measures which
are not defined under IFRS and which therefore comprise alternative (non-GAAP)
performance measures. Alternative performance measures are used by the
Directors and management to monitor business performance internally and
exclude certain items which they believe are not reflective of the normal
day-to-day operating activities of the Group. The Directors believe that
disclosing such non-IFRS measures enables a reader to isolate and evaluate the
impact of such items on results and allows for a fuller understanding of
performance from year to year. alternative performance measures may not be
directly comparable with other similarly titled measures used by other
companies. These are as follows:
Underlying revenue growth: revenue growth excluding EGP and COVID sequencing
revenue - in order to understand ongoing performance of the core business,
management considers it appropriate to exclude revenues from certain contracts
that are not expected to recur. We also report underlying revenue performance
within each of our customer groups and product range;
Underlying revenue growth on a constant currency basis: revenue growth
excluding EGP and COVID sequencing revenue, on a constant currency basis;
namely by the adjusting of current year revenues to prior year foreign
exchange rates;
Underlying gross margin: gross margin excluding EGP, write-off of COVID
sequencing kits and legacy devices, and impact of the compute upgrade on large
PromethION devices;
Adjusted research and development expenses: research and development expenses
after adjusting for employer's social security taxes on pre-IPO share awards;
Adjusted R&D expenses and capitalised development costs: adjusted research
and development expenses, excluding amortisation and adding capitalised of
development costs;
Adjusted selling, general and administrative expenses: selling, general and
administrative expenses after adjusting for share-based payments expense
(Founder LTIP) and employer's social security taxes on Founder LTIP and
pre-IPO share awards;
EBITDA: loss for the year before income tax, finance income, loan interest,
interest on leases, depreciation and amortisation;
Adjusted EBITDA: EBITDA adjusted for events which are non-recurring or
intermittent, which do not relate to the ongoing operational performance that
underpins long-term value generation;
Cash, cash equivalents and other liquid investments: cash and cash equivalents
comprise cash in hand and deposits held at call, plus other short-term highly
liquid investments with a maturity of three months or less at the date of
acquisition; other liquid investments comprise investment bonds in which a
fixed sum is invested in an asset-backed fund.
The following table presents the adjusted underlying revenue growth:
H1 2024 H2 2024 2024 H1 2023 H2 2023 2023
£000
£000
£000
£000
£000
£000
Revenue 84,082 99,109 183,191 86,002 83,666 169,668
Adjusting Items:
EGP revenue (304) (1,474) (1,778) (4,911) (7,045) (11,956)
COVID sequencing revenue (1,163) (1,016) (2,179) (5,454) (2,512) (7,966)
Underlying revenue 82,615 96,619 179,234 75,637 74,109 149,746
Underlying growth +9.2% +30.4% +19.7% +53.1% +27.5% +39.3%
Impact of foreign exchange 2,416 2,913 5,329 (3,371) 3,231 (140)
Underlying revenue on a constant currency basis 85,031 99,532 184,563 72,265 77,341 149,606
Underlying growth on a constant currency basis +12.4% +34.3% +23.3% +46.3% +33.0% +39.1%
The following table presents the adjusted underlying gross margin:
2024 2023
Gross margin 57.5% 53.3%
Adjusting Items:
EGP contract - 2.3%
Write off of COVID sequencing kits and legacy devices - 2.3%
Impact of compute upgrade on large PromethION devices - 0.9%
Underlying gross margin 57.5% 58.8%
The following table presents the adjusted research and development expenses:
2024 2023
£000 £000
Research and development expenses 98,921 103,842
Adjusting Items:
Employer's social security taxes on pre-IPO share awards 455 604
Adjusted research and development expenses 99,376 104,446
Amortisation of capitalised development costs (23,699) (18,419)
Capitalised development costs 34,693 19,522
Adjusted R&D expenses and capitalised development costs 110,370 105,549
The following table presents the adjusted selling, general and administrative
expenses:
2024 2023
£000 £000
Selling, general and administrative expenses 158,807 155,248
Adjusting Items:
Share-based payment expense on Founder Long Term Incentive Plan (LTIP) 6,146 (20,886)
Employer's social security taxes on Founder LTIP and pre‑IPO share awards 2,275 285
Adjusted selling, general and administrative expenses 167,228 134,647
The following table presents the Group's EBITDA and Adjusted EBITDA, together
with a reconciliation to loss for the period:
H1 2024 H2 2024 2024 H1 2023 H2 2023 2023
£000
£000
£000
£000
£000 £000
Loss for the period (74,652) (71,536) (146,188) (70,099) (84,408) (154,507)
Taxation 3,296 2,931 6,227 3,540 1,199 4,739
Finance income (7,666) (7,175) (14,841) (7,239) (11,614) (18,853)
Interest expense 0 3 3 0 1 1
Interest on lease 1,948 1,614 3,562 1,069 1,136 2,205
Depreciation and amortisation 19,782 23,502 43,284 19,869 21,758 41,627
EBITDA (57,292) (50,661) (107,953) (52,860) (71,928) (124,788)
Share-based payments (Founder LTIP) 1,037 (7,183) (6,146) 14,908 5,978 20,886
Employer's social security credit on Founder LTIP and pre-IPO share-based (5,507) 2,777 (2,730) (1,277) 389 (888)
awards
Write-back of investment in associate 145 579 724 (144) 0 (144)
Adjusted EBITDA (61,617) (54,488) (116,105) (39,373) (65,561) (104,934)
The following table presents cash, cash equivalents and other liquid
investments:
2024 2023
£000 £000
Cash and cash equivalents 199,517 220,536
Investment bonds 211,838 256,534
Less: fair value movements on investment bonds (7,548) (4,960)
Cash, cash equivalents and other liquid investments 403,807 472,110
1 (#_ftnref1) Underlying revenue growth in 2024 excludes a £16.0 million
year-on-year headwind from COVID sequencing and EGP.
2 (#_ftnref2) The PromethION product range includes all PromethION devices
(P2S, P2i, P24 and P48) and PromethION Flow Cells.
3 (#_ftnref3) The MinION product range includes all MinION and GridION
devices and MinION Flow Cells.
4 (#_ftnref4) Early Access: Products are available to order in the main or
private store. Products are subject to availability and regular changes.
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