SourceBio to expand COVID-19 testing services in US
(SBI ) told investors that it has expanded its US laboratory operations in San Diego, California, to include COVID-19 qPCR testing services.
The Company’s division, which is based in the Torrey Pines Genomics hub of the US, home to the nonprofit medical research facility, Scripps Research Center, is expected to mirror the Group’s lab set up in Nottingham, England, and is expected to be fully operational in 2Q21.
SourceBio’s existing facility in San Diego currently houses Stability Storage Solutions and Genomics business units and the enhanced space is planned to have the added capacity to process up to around 5,000 samples per day with opportunities for continued growth.
The Group, which provides integrated lab services and products internationally, already has a global client base with cGMP (“Current Good Manufacturing Practice”), HPRA (“Health Products Regulatory Authority”) and US FDA accredited facilitates in the UK, Ireland and US.
The increased laboratory capacity of 1,642 square feet will adhere to requirements and be fully compliant with guidelines from the FDA. The Company said it expects to receive the necessary accreditation to begin processing samples within the planned time frame.
The Company told investors that the site is intended to both serve the local community which is ‘rich in healthcare and research talent’ as well as support its own global partners in the US. It said it will employ staff onsite who will be needed to operate a 24/7 service.
Jay LeCoque, Executive Chairman, said, "SourceBio has already processed approaching 1,000,000 COVID-19 antigen RT-PCR tests in the UK for the DHSC and the NHS, Private Hospital Groups and Commercial customers since first offering its service in May 2020.
He added, "This further investment in our San Diego facility increases our overall capacity to increase COVID-19 qPCR testing services by up to an additional 5,000 samples per day and means we can address the clear market demand for COVID-19 testing in the US."
Shares in SourceBio International have increased by over 10% in value since the beginning of the year. The Company has now announced that it is expanding its stability storage and genomics operations in San Diego in California. This move will expand the health-grade capability to process 5,000 PCR tests/day and will enable additional opportunities for further growth. The extra capacity should be fully operational in Q2'21. Shares in SourceBio International were trading 9.39% higher this morning at 196.9p following the news of the lab expansion.
Today’s news follows a string of recent COVID-19 related agreements secured by the Group since the start of 2021. To date, the Group has secured three testing deals already this year. As a result of its COVID-19 testing service capabilities, the Board’s expectation for continued significant earnings growth for 2021 across the Company as a whole remains unchanged.
Investors remain fully aware that COVID testing, even after mass vaccinations, is here for the foreseeable future, with recent reports from Boston Consulting Group suggesting demand for testing will still be in the hundreds of millions by 2024 across Europe and the US. Furthermore, investors will be pleased to see a UK listed Company performing well in the US, the opposite of most small-caps in the market.
SourceBio International is an international provider of laboratory services to clients in the pharmaceutical industry, the NHS and to private healthcare providers. The Group is headquartered in Nottingham, with additional facilities in the UK, Ireland and the US.
The company saw a positive start on its first day of trading on AIM, adding around £8m to its initial £120m market capitalisation while the £35m raised at 162p is intended to be used by it to scale up COVID-19 testing capacity as well as paying off shareholder and bank loans.
“We are delighted by the strong support we’ve received from institutional investors. Our IPO on AIM allows us to significantly increase our COVID-19 testing capacity, accelerate earnings growth in our core business and execute on potential M&A opportunities,” said LeCoque.
He said at the time of the IPO: “It’s an exciting time for our business and we look forward to executing on our ambitious growth plans and delivering value to our shareholders.”
In November 2020, SourceBio unveiled that its funds from its IPO were enabling it to further scale its COVID-19 testing services to deliver against expected increases in future testing.
SourceBio previously forecasted total revenue of around £50m (FY19: £21.2m) and EBITDA of c.£14m (FY19: £3.0m) for the year ending 31 December 2020, with the vast majority of this increase in expected earnings driven by the contribution of COVID-19 testing revenues.
The group said in November 2020 that it had been accepted into the Increasing Capacity Framework Agreement for cancer testing services to NHS England, designed to reduce the significant backlog of elective surgeries impacting the NHS due to the pandemic which is expected to support the growth of the Healthcare Diagnostics business unit in 2021.
SourceBio entered into a strategic commercial partnership with Oxford Nanopore Technologies to offer a COVID-19 testing solution to corporate customers at scale via its own lab facilities. Last month, the group entered into a supply agreement to provide ‘state of the art’ products and lab services to an unnamed high street retail and pharmacy group.
Since December 2020, SourceBio has been supplying COVID-19 antigen RT-PCR testing services to the DHSC. It is currently awaiting a potential formal award under Public Health England's National Microbiology Framework in relation to further COVID-19 testing services.
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