York, U.K. 28 February 2023: Abingdon Health plc (AIM: ABDX), a leading international lateral flow contract development and manufacturing organisation (CDMO), provides its half-year trading update for the six months ended 31 December 2022.
Highlights
· The Company has successfully transitioned its activities away from COVID-19 and is now operating as a fully integrated CDMO maintaining its full focus on lateral flow testing.
· Strong revenue traction from a diverse range of customers across all aspects of Abingdon’s fully integrated CDMO solution, including contract development; technical transfer; manufacturing; and regulatory, quality assurance and commercial support.
· Following Company restructuring and right-sizing, the commercial operations are now benefitting from improved activity with a significant increase in the number of contracts signed across R&D, technical transfer and regulatory support.
· Revenue of £1.1m for the 6 months to December 2022 (H1 2021: £1.7m) expected to be significantly improved in H2 2023 and FY 2023 revenues are expected to be materially higher than FY 2022 revenues of £2.8m.
· The Company is currently working with a number of new customers across 11 different contract service projects in multiple areas (vs 3 as at 1 July 2022).
· At 31 December 2022, the Company had £4.4m cash. Current cash is in line with the Board’s expectations. The primary objective of the Board is to move the Company to a breakeven and cash flow positive position which it forecasts will be achieved in FY 2024.
· The Company’s opportunity pipeline is currently robust and the Board believes Abingdon’s lateral flow CDMO proposition will continue to yield further contract service opportunities over the course of 2023 and beyond.
Contract services
In December 2022, Abingdon commenced an additional two new technical transfer projects, three new R&D projects, and two new regulatory projects. In addition, the pipeline of commercial opportunities remains robust, and the Board strongly believe the Company’s CDMO proposition will continue to yield further contract service opportunities over the course of the calendar year. All of the commercial opportunities currently being worked on are in non-COVID-19 sectors and the business has been successfully transitioned during the second half of calendar 2022 towards what the Directors believe is a much more sustainable long-term business model. Abingdon’s automated Yorkshire-based manufacturing facilities are ideally placed to provide scale as the Company moves products through development, technical transfer and into routine production. The Directors’ believe the lateral flow market will grow significantly across a range of sectors, including clinical testing, animal health, plant health and environmental testing, as the benefits of self-testing – highlighted by COVID-19 – are extended into a range of other applications.
Abingdon Simply Test
The Abingdon Simply Test range of self-test products was launched online in July 2022. The product range has recently expanded to include a Strep A test and a Flu/Covid combination test. Abingdon is also in the process of broadening the distribution of its self-tests into other channels with the range launched in a major pharmacy chain in Ireland in February 2023. Further distribution channels have been established in H1 2023, including a number of country-specific distribution agreements. The Company is aiming to add additional self-tests, including those developed through its contract service activities, over the rest of FY 2023. Abingdon anticipates launching one of its CDMO customers’ tests, the Salignostics SalistickTM saliva pregnancy test, on the Abingdon Simply Test site, in due course and the Directors believe that offering a route to market for self-tests for the Company’s contract services customers is another ‘added-value’ service.
Financial update
Revenues for H1 2022/3 were £1.1m (H1 2021/2: £1.7m). The Company started the second half of the financial year strongly as new contracts have started to generate revenues, and anticipates a significantly improved second half of the financial year. As at 1 July 2022 the Company had three live contract service contracts and by 28 February 2023 this had expanded to eleven with a number of additional opportunities in the pipeline. Cash as of 31 December 2022 was £4.4m which was in line with the Board’s expectations. The Board believes the Company will deliver strong revenue growth in FY 2023 compared to FY 2022 revenues of £2.8m. Based on the reduced headcount following the restructuring in 2022, the Board anticipates that the Company’s cash burn will reduce significantly, with the objective of achieving cash flow breakeven during FY 2024. The Board remains confident the Group has the financial resources in place to deliver its strategic plan.
Chris Yates, CEO of Abingdon Health plc, commented:
“We have successfully transitioned our business to a CDMO model focused on the lateral flow market. We are pleased with the commercial traction we are seeing and believe this model will provide a sustainable revenue platform. Our focus remains on revenue growth and achieving cash flow breakeven, and we believe we have the financial resources in place to achieve this.”
Dr Chris Hand, Non-Executive Chairman of Abingdon Health plc, said:
“Following the action taken by the Board in the wake of COVID-19 we have maintained the robust status of the business. We have established a great team and a strong platform able to offer lateral flow development and automated manufacturing services to an expanding base of loyal and new customers. We look forward to the next phase of growth for the business towards the achievement of a cash flow positive position. On behalf of the Board of Abingdon Health plc, I would like to thank our colleagues, customers and shareholders for their continued support.”
Enquiries
Abingdon Health plc
www.abingdonhealth.com/investors/
Chris Yates, Chief Executive Officer
Via Walbrook PR
Melanie Ross , Chief Financial Officer
Chris Hand, Non-Executive Chairman
