Paris, France and Camberley, UK – 9 April 2021 – Novacyt (EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in clinical diagnostics, announces an update on its supply contract with the UK Department of Health and Social Care (DHSC) and provides an unaudited trading update for the three months ended 31 March 2021.
On 29 September 2020, Novacyt announced a second supply contract with the DHSC for exsig®COVID-19 Direct kits and other products. In the full year trading update announced on 29 January 2021, Novacyt explained it was in active discussions with the DHSC regarding an extension of the supply contract. Unfortunately, an extension has not been agreed, although the Company supplied PROmate™ in Q1 2021 in accordance with DHSC demand. Regrettably, the parties are now in dispute regarding the contract, which may have a material impact on Q4 2020 revenues. However, the Company has taken legal advice and believes it has strong grounds to assert its contractual rights.
Q1 trading update and 2021 outlook
Novacyt delivered revenue for Q1 2021 of €83.0 million (£72.6 million). Approximately 50% of Q1 revenue was driven by sales to the DHSC, predominately PROmate™. The remaining c.50% of Q1 revenue was driven by continued growth of international sales and expansion of the Company’s private sector testing operations.
Given the ever-changing nature of the COVID-19 pandemic and diagnostic testing demands, the Company continues to have limited visibility over future sales. Whilst the Directors are confident new contract wins will continue as Novacyt expands international sales and into private sector testing, they believe revenue and profit for 2021 may be lower than current market expectations due to the absence of the DHSC contract extension.
Novacyt expects PROmate™ to continue to be rolled out in hospitals, private sector settings and international markets for the foreseeable future, although the Company believes that Q1 PROmate™ sales may be sufficient to support the NHS current roll out plans for the remainder of 2021.
The Company is encouraged by demand for its mobile processing laboratories and SNPsig® portfolio, both launched in Q1 2021, for private sector testing and detection of COVID-19 variants, respectively. New COVID-19 lateral flow products are also under development, to expand the Company’s ability to meet evolving COVID-19 testing demands.
The Directors believe the Company remains well-positioned to capitalise on future growth opportunities as it continues to expand its product portfolio and service offering.
The information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the publication of this Announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
PROmate™ is designed to improve the efficiency of COVID-19 testing by repackaging some reagents and reducing the number of consumables and number of steps required. This decreases operator complexity and improves cycle times. The PROmate™ assay in combination with the Company’s q16 and q32 instrument platforms is CE-Mark approved and has been independently validated by the UK’s Technology Validation Group (TVG).1 The TVG accreditation supports the use of the q16/q32 and PROmate™ system in a near patient setting. PROmate™ is the only direct-to-PCR assay with TVG validation. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957995/TVG_Report-PROmate.pdf
About Novacyt Group
The Novacyt Group is an international diagnostics business generating an increasing portfolio of in vitro and molecular diagnostic tests. Its core strengths lie in diagnostics product development, commercialisation, contract design and manufacturing. The Company’s lead business units comprise of Primerdesign and Lab21 Products, supplying an extensive range of high-quality assays and reagents worldwide. The Group directly serves microbiology, haematology and serology markets as do its global partners, which include major corporates.
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