Novacyt S.A.
("Novacyt", the "Company" or the "Group")
Trading update and progress against strategy for H1 2022
Paris, France and Camberley, UK - 7 July 2022 - Novacyt (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in clinical diagnostics, announces a trading update for the half year ended 30 June 2022 and provides an update on delivery against its strategy as announced at the time of the full year 2021 results on 28 April 2022.
H1 2022 trading update
Group revenue in H1 2022 was £16.5m (£13.0m COVID-19 related) compared to £52.2m (£47.6m COVID-19 related) in H1 2021 (excluding Lab21 Healthcare and Microgen Bioproducts sales, collectively known as Lab21 Products). This shows a 73% decline in COVID-19 related revenues for H1 2022 compared to H1 2021, which is faster than previously anticipated by the Board. H1 2022 revenue for the non-COVID-19 portfolio declined year-on-year by £1.1m to £3.5m, predominantly driven by lower instrument sales compared to a strong H1 2021 which benefited from COVID-19 demand.
As announced at the time of the full year 2021 results, following a strategic review, Novacyt is discontinuing its Lab21 Healthcare and Microgen Bioproducts businesses. Following a further review based on the faster than expected decline in COVID-19 revenue, the Company is taking steps to further rationalise its cost base, targeting an additional reduction in operating costs of £2.4m this year and a one-off cash restructuring charge of circa £0.8m. As a result, the business is now expected to end 2022 with a full year operating cost of £20.6m (excluding exceptional items and Lab21 Products) and an ongoing operating cost run rate of circa £17.0m, compared to a full year 2021 operating cost of £25.1m (£28.4m before restating Lab21 products).
The Company's cash position at 30 June 2022 was £99.6m, compared to £101.7m at 31 December 2021.
Strategy update
The Company continues to invest in R&D and Commercial resources, which represents £10.0m of projected opex spend in 2022, to execute on the vision and strategy announced earlier in the year to develop and commercialise its non-COVID-19 portfolio. The Company has made good progress on delivering against its strategy during H1 2022, which is detailed below.
Portfolio development - clinical diagnostics in human health and instrumentation
Novacyt has advanced the product design of two new polymerase chain reaction (PCR) assays for near-patient testing in infectious diseases. These new assays are focused on gastro-intestinal viruses and bacteria and will run on the Company's q32 instruments. In addition, the Company has developed three single analyte transplant viral panels for use on open instrument platforms. Two of the transplant assays are complete and the final CMV assay has been filed for regulatory approval, in line with product development plans as outlined in 2021 full year results.
Novacyt has also strengthened its position as an integrated reagent and instrument solution provider by signing an agreement with a leading global health provider to supply both instruments and reagents, for the detection of infectious diseases including high risk HPV and HIV, over a three year period.
Lastly, the Company has launched a new lateral flow test (LFT) reader for use in conjunction with a number of key assays within Novacyt's Pathflow® product portfolio. The small, lightweight LFT reader instrument is designed to provide digital test results based on optical imaging technology thereby removing the ambiguity of manually interpreting a positive/negative reading. The result is available in a matter of seconds (~10-12 secs) in a digital form that can be exported to other systems.