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Novacyt sees 1H21 revenue jump by over 50%

10:21, 18th August 2021
Francesca Morgan
Vox Newswire
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In an update for the six months to 30 June 2021, Novacyt (NCYT FOLLOW) said it expects to witness continued strong growth in private testing as markets and travel re-open across the world. 

The Group, an international specialist in clinical diagnostics, reported a revenue increase of over 50% for 1H21 to £94.7 million, compared to £63.3 million for the first half of 2020. 

Of this total revenue, £54m came from a mixture of overseas sales as well as ‘a growing UK private testing market,’ leading to non-DHSC revenue growing 20% year-on-year, it said. 

Overall, UK private market sales, which currently includes COVID-19 testing in film, media, travel and corporate industries, increased significantly in 2Q21 compared to 1Q21. Novacyt believes it is ‘well placed’ to continue to support this growth during the second half of the year. 

As part of its expansion in private testing, Novacyt has also signed a supply contract initially for genesig® COVID-19 products with Excalibur Healthcare Services, who have invested in new laboratory services in Cambridge, UK, to support COVID-19 testing of private clients. 

A key product expected to support 2H21 growth in private testing will be the Company’s PROmate® COVID-19 2G (2 gene) test which can identify the SARS-CoV-2 ORF1ab gene.  

Due to an emerging need in some countries, the Company launched a second CE-IVD PROmate® COVID-19 test to identify both the SARS-CoV-2 ORF1ab gene and nsp16 gene. 

Novacyt said its wholly owned subsidiary, Primerdesign has won a new contract valued at up to £4.7m which will last until March 2022 under the PHE National Microbiology Framework, effective immediately, for the supply of PROmate® COVID-19 tests to the NHS.  

The PROmate® COVID-19 tests have been developed to run on the Company's q16 and q32 PCR instrument platforms. The q16 and q32 near patient PCR instrument platforms using the PROmate® COVID-19 test have been validated and can be used at select NHS hospitals. 

Novacyt, which said NHS testing demand has remained its “key priority” during the pandemic, said it views the framework as “a testament to its continued commitment.” 

Meanwhile, Novacyt entered into a two-year Long-Term Agreement (LTA) with the World Health Organization (WHO) for the supply of the Company’s genesig® COVID-19 tests.  

In addition, its existing LTA with UNICEF has been extended by 12 months to July 2022. To date, it has shipped orders to eight countries under the UNICEF LTA since September 2020. 

Shares in Novacyt were trading 11.18% higher this morning at 334.4p following the update. 

NCYT price chart

Looking ahead, the Company told investors that it expects continued strong growth in private testing as markets and travel reopen and, as the Northern Hemisphere heads into winter, the potential for higher infection rates will increase the need for COVID-19 testing. 

Since the start of 2020, Novacyt has launched 16 new CE-IVD products and expects to launch a further 10 by the end of 2022. As a result of its trading, Novacyt has reiterated its revenue guidance of £100m for FY21, excluding DHSC revenues, as announced in June. 

CEO, Graham Mullis, commented: "Novacyt is continuing to address COVID-19 testing for both current and future demand. We continue to ensure that innovation is at the centre of our strategy and that our growing portfolio of COVID-19 tests are available to customers in both private and public health settings to expand existing, and support new, partnerships.” 

He added, “We believe our long-term strategy also supports the growth of Novacyt post-COVID-19. In particular, our progress and growth potential in the private sector will not only help us maximize the COVID-19 testing opportunity but also ensure we are well placed, with both technologies and partners, for sustainable growth beyond COVID-19. We therefore believe Novacyt is well positioned to continue to build on its business transformation." 

Back in June 2021, Novacyt described the full year ended 31 December 2020 as “a year of transformation” as the Company saw revenue increase by over twenty times from 2020. 

The clinical diagnostics specialist reported a more-than-twentyfold increase in consolidated revenue to £277.2m as the group’s gross margin rose to 76.3% in FY20 from 64% in FY19.  

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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