Oxford Nanopore Technologies PLC reported that its diagnostics businesses have experienced disruption due to the ongoing trade war between the US and China. The company, known for its innovative research tools, saw slower-than-expected sales growth in certain areas during the second half of 2023.
While the overall revenue from research tools increased by 15% to £169 million over the year, this figure rose to a significant 39% when excluding the impact of Covid and the Emirati Genome program (EGP).
However, the company revealed that underlying revenues in the second half of the year grew by approximately 32%, but were hindered by the slower-than-anticipated ramp-up by some new customers. These sales, which were initially expected to materialize in 2023, are now projected to come through in 2024.
In addition to the internal challenges, Oxford Nanopore Technologies also faced obstacles in its growth markets, specifically China and the Middle East, due to the recent US trade rule imposing further restrictions on the sales of advanced AI semiconductors.
Furthermore, the company disclosed that revenues from the EGP amounted to £12 million. However, the £68 million contract, originally scheduled to run until 2026, has been amended, resulting in no substantial future revenues. The amendment also eliminated the purchase commitment previously associated with the contract.
Despite these setbacks, Oxford Nanopore Technologies remains optimistic about its long-term prospects. The company is on track to achieve a medium-term revenue growth rate of 30% and aims to break even by 2026. Additionally, its gross margin target of greater than 65% in 2026 remains unchanged. Oxford Nanopore Technologies is actively working to navigate the challenges posed by the trade war and continue its growth trajectory in the years to come.
The source of the article is from the blog enp.gr