Yourgene Health plc
("Yourgene" or the "Company")
Half-year Report
H1 revenues doubled year-on-year
Full year revenues to exceed already upgraded market expectations
Manchester, UK - 14 December 2021: Yourgene (AIM: YGEN), a leading integrated technologies and service group enabling the delivery of genomic medicine, announces its unaudited half-year report for the six months ended 30 September 2021 ("H1 FY22"). Unless otherwise stated, comparative data shown is for the six-month period ended 30 September 2020 ("H1 FY21").
The first half of the financial year saw record performance as prior investment into clinical service lab capacity started to deliver a substantial return, with significant growth seen in both Genomic Technologies and Genomic Services business segments. The Board is confident that trading for the full year will remain robust and that full year revenues are therefore likely to exceed current market expectations, already upgraded previously in October.
Financial highlights
- Revenues increased by 113% to £17.5m (H1 FY21: £8.2m) with Genomic Services segment up 260% to £10.5m and Genomic Technologies segment up 32% to £6.9m
- Gross profit up 107% to £10.2m (H1 FY21: £4.9m)
- General administrative expenses up 55% to £8.1m (H1 FY21: £5.2m) including growth-focused expenditures on UK COVID-19 testing, continuation of the NIPT transition to IONA® Nx and expansion of strong US commercial personnel
- Adjusted EBITDA* of £2.1m (H1 FY21: loss of £0.3m)
- Cashflow neutral at operating level (H1 FY21: outflow £1.2m)
- Cash and cash equivalents as at 30 September 2021: £4.7m (31 March 2021: £7.0m)
Operational highlights
- IONA® Nx moving from transition phase to pipeline expansion and since year end has been installed as a CE-IVD or technology transfer in labs in the USA, Mexico, Singapore, Switzerland and Italy
- The Illumina-based IONA® Nx workflow has experienced overall good growth but has had to overcome some challenges with supply chain disruption and extended validation phases due to the transitions. These issues have now been fully resolved and confidence in the IONA® Nx workflow is stronger than ever.
- Concerns around COVID's impact on supply chain resulted in customers carrying additional stock into H1
FY22 normalising for this affect shows that NIPT is stable through H1 FY22 - Successful attainment of earn-out milestones for the Coastal Genomics business acquired in H1 FY21, with $2m equity issued. Over performance due to contract wins with two US diagnostic majors of which Labcorp supported digital marketing campaigns with customer webinar in post-period end
- Expansion of geographical reach with indirect distribution channels strengthened in Middle East, Africa and Eastern Europe
- DPYD chemo-toxicity assay revenues doubled as a result of strong domestic and international adoption and on track to be a £1m+ pa product
- COVID-19testing service scaled significantly in the UK through a combination of public contracts and direct to consumer retail channels, generating c. £9m revenue, compared to £0.4m in H1 FY21. Public tender contract award in August 2021 for the UK National Microbiology Framework (COVID-19 testing) which delivered £0.6m revenues in the period, with a further £0.6m post period end. In addition, Clarigene® product sales contribute an additional £1.4m in the period (H1 FY21: £0.2m)
Post period end:
- DPYD adoption recommended in November 2021 by experts in Spain, the fifth such country to recognise the benefits of using a DPYD genotyping test to help identify cancer patients at risk of higher toxicity from DPD deficiency
- Expect to continue provision of COVID-19 testing to all our existing partners, both public and private until the end of Q4
- Further contract secured under National Microbiology Framework for COVID-19 sequencing, details to follow
- Coastal Genomics, acquired in August 2020, rebranded as Yourgene Health Canada as part of corporate integration and embedding the Ranger® technology as a core part of the Group's broadened genomic technologies portfolio
- Commercial team further enhanced with new appointments in key regions including LATAM, Singapore and Taiwan
Genomic Services continues to expand the portfolio to include further tests in reproductive health and DPYD from Genomic Technologies, strengthening the integration between Technologies and Services.
Lyn Rees, Chief Executive Officer of Yourgene, commented:
"The strong performance in this first half is a testament to how we are able to take our core competencies from Genomic Technologies and Genomic Services offerings and react to market demands. The first half has seen this result in very substantial growth in COVID-19 testing where we have quickly mobilised our core lab services and scaled resources to meet this key need, and we have the ability to apply these core skills and capacity to other areas in due course.
"Whilst growth across non-COVID areas of the business is subdued, we are seeing reassuring signs of a return to growth across a number of our Genomic Technologies and Genomic Services portfolios, particularly following growing access for our sales teams in Europe and North America. We remain confident in the recovery of non-COVID- 19 revenue streams to underpin longer-term growth prospects.
"It was a great pleasure to again be able to visit the USA and Canada recently, and I am as optimistic as ever about our prospects in the North American market. As we fill out our global footprint into Latin America and refresh our presence in the Middle East and Asia, we can truly say that Yourgene is now a globally integrated provider of leading genomic technologies and services."
A presentation on the financial results and business outlook will be delivered by Lyn Rees, CEO, and Barry Hextall, CFO and via the Investor Meet Company platform and there will be an opportunity for investors to submit questions. Investors can sign up to Investor Meet Company for free and register for the Yourgene Health meeting via: https://www.investormeetcompany.com/yourgene-health-plc/register-investor
- Adjusted EBITDA is the operating profit/(loss) before interest, tax, depreciation, amortisation, and expenses shown separately disclosed on the face of the Income Statement
This announcement contains inside information for the purposes of the UK Market Abuse Regulation.
The Directors of the Company take responsibility for this announcement.
Yourgene Health plc | Tel: +44 (0)161 669 8122 | |
Lyn Rees, Chief Executive Officer | 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 | ||
Singer Capital Markets (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 Applegarth / Alice Woodings | Mob: 07980 541 893 / 07584 391 303 | / 07407 804 654 |
About Yourgene Health
Yourgene Health is an international molecular diagnostics group which develops and commercialises integrated genomic technologies and services enabling genomic medicine in over 60 territories. The group works in partnership with global leaders in DNA technology to advance diagnostic science and support precision medicine.
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.
Yourgene has a range of innovative DNA sample preparation platforms, and launched Yourgene Genomic Services in 2020, which has enabled Yourgene to offer a global laboratory service network equipped to provide high quality genetic testing and bioinformatics solutions and serve as 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-19 testing service. These capabilities [are also being/will begin to be / will be] made available for Non-COVID health testing.
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.comand follow us on twitter @Yourgene_Health.
BUSINESS REVIEW
As announced in the October 2021 trading update, the first half of the financial year has delivered a significant uplift in revenues to more than double those of the comparative period last year, with substantial growth in both our Genomic Technologies and Genomic Services business segments. COVID-19 related products and services have driven a substantial proportion of this growth and the funds generated are allowing us to continue to invest in our broader portfolio of services and products in line with our longer-term growth strategy, against which we continue to make progress both in terms of the diversification of our customer offer and our international footprint.
Strategy
Our strategy remains to build a globally integrated molecular diagnostics business through the deployment of scientific advances to enable the delivery of genomic services through Yourgene's own clinical laboratories in Manchester, UK, Taipei and Taiwan, and the provision of genomic technologies to laboratory customers across the world. As shown below, substantial revenue growth has been driven by sustained UK-basedCOVID-19 testing as the world attempts to return to some form of normality. Over time, we expect to re-deploy the capabilities and capacity acquired from the rapid scale-up and deployment of COVID-19 related services into genomic testing in other health areas such as oncology and reproductive health. This will enable us to capitalise fully on recent investments and maximise the return from the interplay between our proprietary technologies and delivered services in the growing field of molecular diagnostics and other precision medicine applications.
Unaudited | |||
6 months to | Unaudited | Audited | |
Group revenue | 30 September | 6 months to | 12 months to |
by territory | 2021 | 30 September 2020 | 31 Mar 2021 |
£'000 | £'000 | £'000 | |
UK | 12,450 | 1,521 | 5,440 |
Europe | 2,436 | 2,877 | 5,462 |
International | 2,564 | 3,783 | 7,386 |
17,450 | 8,181 | 18,288 |
Genomic Services
Launched as Yourgene Genomic Services ("YGS") in September 2020, the Company has established an international laboratory network which leverages proprietary and third-party products, automation and software to process human samples as a full life-cycle partner for clinical, research and pharmaceutical organisations. YGS now offers non-invasive prenatal testing ("NIPT"), high throughput COVID-19 testing services and a range of clinical and research services to prestigious partner organisations.
COVID-19 testing services in the UK were the major driver of growth, recording unaudited revenues of £9.0m in the first half (H1 2021: £0.4m). Sustained demand has seen testing volumes steadily increase over the period, with record volumes processed in September 2021. Whilst travel PCR testing was an early contributor to growth, market channels have been expanded into non-travel related testing, particularly through the National Microbiology Framework with the Department of Health and Social Care plus other third-party channels.
NIPT services have seen some repositioning towards private sector clinics as the NHS England national hub strategy has come into force. Other non-COVID-19 services in the fields of research and clinical genome testing offered from Yourgene's UK laboratory also delivered double digit growth and the YGS laboratory in Taiwan continues to rebound from a challenging FY21.
Unaudited | Unaudited | ||
6 months to | 6 months to | Audited | |
30 September | 30 September | 12 months to | |
2021 | 2020 | 31 Mar 2021 | |
£'000 | £'000 | £'000 | |
Genomic Services Revenue | |||
NIPT services | 879 | 969 | 1,833 |
Covid-19 services | 9,045 | 392 | 1,730 |
Other services | 624 | 1,576 | 2,819 |
10,548 | 2,937 | 6,382 | |
Genomic Technologies
The Genomic Technologies business stream provides an integrated portfolio of instruments, reagents, consumables and software, all aimed at supporting laboratory customers around the world. Flagship screening and diagnostic products include NIPT, Cystic Fibrosis, DPYD genotyping and Clarigene™ SARS-CoV-2. DNA handling platforms include the LightBench with Ranger® Technology, acquired as part of Coastal Genomics, for size selection in cell- free DNA applications such as NIPT, oncology and liquid biopsy. This capability supports longer sequencing reads and is a key attraction to customers seeking efficiency and accuracy gains. The Ranger® Technology also provides innovative sample preparation and removes barriers to and enhances utilisation of sequencing using Yourgene's Genomic Technologies.
The Company's Clarigene® SARS-CoV-2 PCR product to third-party testing providers contributed revenues of £1.4m in the period (H1 FY21: £0.2m) after routes to market had been partly established in the second half of the last financial year.
Non-COVID-19 product and technology sales delivered growth of 9% to £5.5m (H1 FY21: £5.0m) with strong growth in the acquired Ranger® technology platform plus a doubling of DPYD revenues, couple with robust reproductive health PCR revenues more than offsetting declines in NIPT revenues. These declines were partly cyclical as a very strong H2 FY22 created an inventory overhang in countries such as France which then experienced new pandemic waves. Transitional issues on IONA® Nx were also a factor as supply chain challenges required free of charge reagents and consumed commercial and aftersales energy which we would have preferred to have used for installing new workflows. These issues have been fully diagnosed and the IONA® Nx system has a number of optimisations rolling out in the second half of the financial year which will give us the high-performance platform to return NIPT to growth. Indeed, new installations of CE-IVD IONA® Nx workflows, and equivalent technology transfers have been completed in the USA, Mexico, Singapore, Switzerland and Italy.
Revenues from the differentiated Ranger® Technology have exceeded $1m for the first time in the six-month period, more than double the equivalent period prior to its acquisition in August 2020 and, before further anticipated inflection points as recently won new contracts start to go live in the coming months.
Unaudited | Unaudited | ||
6 months to | 6 months to | Audited | |
30 September | 30 September | 12 months to | |
2021 | 2020 | 31 Mar 2021 | |
£'000 | £'000 | £'000 | |
Genomic Technologies Revenue | |||
NIPT | 2,570 | 3,160 | 5,925 |
Reproductive health | 1,776 | 1,666 | 3,602 |
Covid-19 related | 1,413 | 200 | 1,437 |
Ranger and other technologies | 1,143 | 218 | 942 |
6,902 | 5,244 | 11,906 |
FINANCIAL REVIEW
The Group's results for the six months to 30 September 2021 are presented in the financial statements below and show gross profits having more than doubled to £10.2m (H1 FY21: £4.9m), on the back of similar levels of revenue growth.
Gross margins slipped back slightly to 58% (H1 FY21: 60%) due to increased IONA Nx manufacturing costs arising from a temporary supplier issue which has since been resolved, and a heavier usage of third-party consumables in the provision of COVID-19 testing services to the DHSC.
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Yourgene Health plc published this content on 14 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 December 2021 10:58:05 UTC.