REG - Yourgene Health PLC - Half-year Trading update

Yourgene HealthAnnouncement

26/10/2020 07:00

RNS Number : 1252D
  
Yourgene Health PLC
  
26 October 2020
  
 

 
Yourgene Health plc
("Yourgene" or the "Company")
 
Half-year Trading update
H1 year-on-year growth demonstrating the resilience of the Company
 
Manchester, UK - 26 October 2020: Yourgene (AIM: YGEN), a leading international molecular diagnostics group, announces a trading update for the half-year ended 30 September 2020 ("H1 2020").
 
Revenues for the half-year ended 30 September 2020 were £8.2m (H1 2019: £7.8m), up 5% compared to the previous year, with strong European revenues offsetting the headwinds from COVID-19 on international sales. Revenues from the Company's UK COVID-19 testing services and international Clarigene® SARS-CoV-2 diagnostic product started to build in the latter part of H1 and are showing strong growth in the early part of the second half of the financial year.
 
Revenues by region
Strong UK and European growth helped offset the impacts of the pandemic on some of our core international markets. European growth mainly reflects the acquisition of the Company's French distribution business in March 2020, where test volumes were up by over 70%, plus growing sales of DPYD in Germany and an increasing contribution from Covid-related products and services.  International markets were particularly affected by the enforced COVID-19 lockdowns, which inhibited cross-border shipments and in-country non-COVID-19 testing, especially in Japan and India amongst others. Delays in launching new customer sites in key new international markets such as the USA and Japan have recently been resolved and strong momentum has been established in the early part of the second half of the financial year.  UK growth was primarily driven by COVID-19 related products and services, supported by increasing DPYD revenues and with underlying NIPT and reproductive health testing levels resilient despite the national lockdown.
 



Regional segments


6 months to
30 Sept 2020
£m


6 months to
30 Sept 2019
£m








UK


1.5


1.1


+40%




Europe


2.9


1.6


+80%




International


3.8


5.1


-25%




Total


8.2


7.8


+5%



 
Revenues by product
Non-invasive prenatal testing (NIPT) was affected by the diversion of laboratory testing capacity towards COVID-19 testing in many of the Company's core markets, especially in the first quarter. The second quarter saw a return to more normal trading patterns with strong momentum entering the second half. Sales of other reproductive health products proved more resilient due to our end customers being focused in the UK and in public hospitals in Europe, which were somewhat insulated from the diversion to COVID-19 testing, for example due to the Lighthouse Labs network established in the UK using a range of facilities from outside primary healthcare.   
 
Molecular Genetics sales comprise a portfolio of products, services and technologies in the oncology, research and now infectious disease market segments. Greater penetration of the DPYD product and growth in Yourgene Genomic Services delivered 37% organic growth despite the COVID-19 impact on oncology testing and the deferral of research projects around the world. COVID-19 testing volumes in the Company's UK laboratory are increasing very rapidly and helped drive the additional growth for the Molecular Genetics segment.  
 



Product segments


6 months to
30 Sept 2020
£m


6 months to
30 Sept 2019
£m








NIPT


4.2


4.8


-13%




Reproductive Health


1.7


1.6


+2%




Molecular Genetics


2.4


1.4


+75%




Total


8.2


7.8


+5%



 
During the period we completed a £15 million (net) fundraise in order to fund the acquisition of Coastal Genomics, Inc., a sample preparation technology company based in Vancouver, Canada, enabling the Company to extend its offering and IP portfolio in the DNA sample preparation sector.  The acquisition increased Yourgene's geographical penetration into the US and Canada, supplementing existing coverage in the UK, Europe, MEA and Asia.  Whilst still early in the integration phase, the Board is encouraged by progress to date.  Funds from the raise were also used to accelerate the Company's commercial activities, including new products and services such as the IONA® Nx NIPT workflow and our COVID-19 testing capacity. Reflecting this investment, cash and cash equivalents as at 30 September 2020 were £11.9m (as at 30 September 2019: £4.1m).
 
Full year outlook
Core laboratory customers are now returning to more normal patterns of testing which, if sustained, we expect to restore the previous growth trends in NIPT, reproductive health, oncology and research markets. In addition, Yourgene's UK COVID-19 testing service is expanding rapidly and from the beginning of October 2020 is now operating at its full capacity of 10,000 tests per month. Capacity is being further expanded to 20,000 tests per month which is due to come on stream in the third quarter.  This will increase COVID-19 testing revenue potential to approximately £1m per month and there is potential for further expansion in line with anticipated demand.  This in-house testing uses Yourgene's own Clarigene® Sars-CoV-2 product, which is also being sold internationally through our distribution network in our channel markets and through our growing direct sales force.  Regulatory submissions for Clarigene® are underway to access additional key regions and enable further geographical penetration. 
 
Lyn Rees, Chief Executive Officer of Yourgene, commented: "I am pleased to report continued year-on-year growth in the first half in the most challenging of circumstances, and it goes to show the core resilience that Yourgene has developed through its greater geographic and business diversity.  With the US and Japan now reopening for business, I expect to see International revenues growing rapidly around our core products and we are busy recruiting commercial resource to support the growth in activity from existing customers and to drive the on-boarding of new ones. In our UK service laboratory we have successfully achieved our initial capacity objective of 10,000 COVID-19 tests per month and are now focussed on delivering 20,000 tests per month, which we hope to have in place by January 2021. Furthermore, our acquisition of Coastal Genomics in this period demonstrates our continued ability to execute on select, highly attractive inorganic growth opportunities.  Our full year outlook remains in line with management expectations and we look forward to updating investors again when we publish our half-year results in December."
 
 
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
 



Yourgene Health plc
Lyn Rees, Chief Executive Officer


Tel: +44 (0)161 669 8122
investors@yourgene-health.com 




Barry Hextall, Chief Financial Officer








Joanne Cross, Director of Marketing


















Cairn Financial Advisers LLP (NOMAD)


Tel: +44 (0)20 7213 0880




Liam Murray / James Caithie / Ludovico Lazzaretti


















N+1 Singer (Joint Corporate Broker)


Tel: +44 (0)20 7496 3000




Aubrey Powell / Tom Salvesen / George Tzimas


















Stifel Nicolaus Europe Limited (Joint Corporate Broker)


Tel: +44 (0)20 7710 7600




Nicholas Moore / Matthew Blawat / Ben Maddison


















Walbrook PR Ltd (Media and Investor Relations)


Tel: +44 (0)20 7933 8780 or yourgene@walbrookpr.com




Paul McManus / Lianne Cawthorne 


Mob: 07980 541 893 / Mob: 07584 391 303  








 
 
About Yourgene Health
 
Yourgene Health is an international molecular diagnostics group which develops and commercialises genetic products and services. The group works in partnership with global leaders in DNA technology to advance diagnostic science.  
 
Yourgene primarily develops, manufactures, and commercialises simple and accurate molecular diagnostic solutions, for reproductive health, precision medicine and now infectious diseases. The Group's flagship products include non-invasive prenatal tests (NIPT) for Down's Syndrome and other genetic disorders, Cystic Fibrosis screening tests, invasive rapid aneuploidy tests, and a recent extension into the oncology space with DPYD genotyping. 
 
The launch of Yourgene Genomic Services has enabled Yourgene to offer a global laboratory service network equipped to be a full life-cycle partner for clinical, research and pharmaceutical organisations to support partners at the preclinical, clinical, and post-market stages to develop, manufacture, obtain regulatory approval and commercialise new products and services. In addition, Yourgene Genomic Services offers an NIPT and high throughput COVID testing service. 
 
In August 2020, Yourgene acquired Coastal Genomics, Inc., a sample preparation technology company based in Vancouver, Canada, enabling the Company to extend its offering and IP portfolio in the DNA sample preparation sector. The acquisition increased Yourgene's geographical penetration into the US and Canada, supplementing existing coverage in the UK, Europe, MEA and Asia.
 
Yourgene Health is headquartered in Manchester, UK with offices in Taipei, Singapore, the US and Canada, and is listed on the London Stock Exchange's AIM market under the ticker "YGEN". For more information visit www.yourgene-health.com and follow us on twitter @Yourgene_Health.
 
 
Forward-Looking Statements
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.
 

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