Full year 2022 results
Full year revenue and EBITDA in line with guidance
Accelerating product development post-COVID-19 to become a leading global clinical diagnostic company in infectious diseases
Paris, France and Eastleigh, UK 27 April 2023 - Novacyt (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in clinical diagnostics, announces its audited results for the year ended 31 December 2022.
Operational highlights
Non-COVID-19 assay development
· Completed the development of genesig™PLEX, a multiplex gastrointestinal bacterial assay, available as a research-use-only test (RUO)
· Developed and relaunched two single analyte transplant viral assay panels for the Epstein-Barr virus and BK virus for use on open instrument platforms
· Augmented product portfolio with the addition of over 40 CE marked in vitro diagnostic (IVD) assays, through a third-party distribution agreement with Clonit srl
· International launch and UK Coronavirus Test Device Approvals (CTDA) approval of genesig™ Real-time PCR SARS-CoV-2 genesig™ Winterplex panel covering RSV, Flu A&B and COVID-19
· Relaunched RUO portfolio globally and developed Monkeypox and Adenovirus F41 RUO assays to support infectious disease monitoring
COVID-19 assay development
· Six UK CTDA approvals in the year (including genesig™ Winterplex multiplex panel), taking the total number of Novacyt products approved by the CTDA to seven, the most of any UK-based company
· CE marked two lyophilised PROmate™ products, enabling deployment of near-patient COVID-19 diagnostic solution without the need for cold-chain shipping
· CE marked PathFlow™ COVID-19 Rapid Antigen Self-Test received, one of the first saliva-based COVID-19 assays to be launched in the EEA and providing diagnosis of symptomatic and asymptomatic individuals in approximately 15 minutes
Workflow and instrumentation development
· Launched and CE marked CO-Prep™ Automated Liquid Handling System and completed validation of a nucleic acid extraction system to enhance post-COVID-19 integrated sample-to-result molecular workflow solution
· Launched two new lateral flow test (LFT) readers for use in conjunction with a broad range of assays within Novacyt's Pathflow™ product portfolio, consisting of 18 non-COVID-19 products across sexually transmitted, gastrointestinal, respiratory and insect-borne infections
Commercialisation
· Partnered with a global fisheries company to develop solutions for testing infectious salmon anaemia virus and bacterial kidney disease
· Signed a contract with a leading global non-governmental organisation (NGO) to support the detection of arboviruses, including dengue, Zika and Chikungunya
· Partnered with leading healthcare company in India to develop and supply both reagents and instrumentation
Post-period highlights
· CE marked both q16 and q32 instruments
· Validation of third-party Respiratory Infection Assays largely completed in Q1 as planned
· Exclusive development agreement with Eluceda Ltd to develop novel biosensor technology in the fields of human and animal in vitro diagnostics, life science research and animal speciation
· Completed the development of several RUO multiplex assays across gastrointestinal, respiratory and insect borne viruses
· Sales to leading global NGO continues to gain momentum covering West Nile Fever, Hepatitis A & E, haemorrhagic fever and arboviruses (CHIK/DENG/ZIKA) with orders in excess of £150k
Financial highlights
· Group revenue for FY2022 was £21.0m, in line with guidance, (FY2021: £92.6m), due to the expected decline in COVID-19 related sales
· Revenue from COVID-19 products in 2022 totalled £14.7m (FY2021: £84.0m)
· Revenue for the non-COVID-19 portfolio in 2022 totalled £6.3m (FY2021: £8.6m). This decline was predominantly driven by lower instrument sales compared to FY2021 which benefited from COVID-19 demand
· Group gross profit totalled £5.7m (27%) in FY2022 (FY2021: £28.2m (30%)). The FY2022 gross profit was reduced as a result of significant stock provisions based on lower forecasted COVID-19 sales in addition to writing-off stock that had not been provided for previously. Excluding the impact of these items, the margin would be in excess of 60%
· Group EBITDA loss in FY2022 is £13.5m before exceptional items (FY2021: £3.1m profit) as a result of the expected decline in revenue and in line with guidance
· Discontinued operations loss of £3.5m in FY2022 (FY2021: £3.7m loss)
· Loss after tax increased to £25.7m in FY2022 (FY2021: £9.7m loss)
· Cash position at 31 December 2022 was £87.0m (2021: £101.7m) and the Company remains debt free
Continuing operations * 2022 2021
£'000 £'000
Revenue 21,040 92,603
Gross profit ** 5,746 28,226
Gross profit % 27% 30%
OPEX (19,286) (25,131)
EBITDA (13,540) 3,095
EBITDA % n.m. 3%
Adjusted EBITDA ** (13,540) 38,865
Recurring operating (loss) / profit *** (15,655) 1,305
Operating loss (23,393) (3,916)
Other financial income and expenses 3,340 (1,744)
Income tax (2,148) (349)
Loss after tax from continuing operations (22,201) (6,009)
Loss from discontinued operations (3,529) (3,719)
Loss after tax attributable to the owners (25,730) (9,728)
* Following the 28 April 2022 announcement where Novacyt notified its intention to close Microgen Bioproducts and Lab21 Healthcare, the net results of the Lab21 Products segment for FY2021 and FY2022 has been reported on a separate line 'Loss from discontinued operations' in accordance with IFRS 5, "Non-current Assets Held for Sale and Discontinued Operations".
** Due to the ongoing commercial dispute with the DHSC, £35.8m exceptional cost of sales were incurred in FY2021 (FY2022: £nil) that were one-off in nature. The two largest items were a £26.1m stock provision, as a result of the Group buying stock to fulfil expected future DHSC orders that did not materialise; and the expensing of £6.9m of stock delivered to the DHSC which has not been paid for as it is now part of the ongoing contract dispute.
*** FY2022 recurring operating loss is stated before £7.7m of non-recurring charges as follows:
1. A £5.2m impairment charge in relation to the goodwill and intangible assets associated with the IT-IS International acquisition.
2. £1.3m restructuring expenses.
3. £0.9m costs in relation to the ongoing DHSC contract dispute.
4. £0.3m of other expenses.
James McCarthy, Acting Group CEO of Novacyt, commented:
"The focus during 2022 has been on expanding our infectious disease product portfolio beyond COVID-19 to sustain the long-term growth of the Company. The distribution agreement with Clonit srl, was an important strategic step, adding over 40 assays focused on our high growth target therapeutic areas of respiratory, gastrointestinal infections, transplant and insect-borne pathogens and also provided access to an additional diagnostic area in sexually transmitted infection (STI). We successfully relaunched our core RUO business, developing important new assays to support infectious disease monitoring and we also strengthened our instrumentation business, which in partnership with our assay development provides customers with a seamless sample-to-result workflow.
"Following a rightsizing of our cost base, Novacyt is well positioned for future growth and value creation as we move past the pandemic and continue our journey to become a leading global clinical diagnostics company focused on both existing and unmet needs in infectious diseases."