Oxford Nanopore Technologies PLC has encountered disruptions to its diagnostics businesses as a result of ongoing trade tensions between the US and China. The company reported slower-than-expected sales growth in certain areas during the second half of 2023. Although revenue from research tools increased by 15% to £169 million, it was approximately 39% higher when excluding the impact of the Covid-19 pandemic and the Emirati Genome program (EGP).
The company attributed the slower sales growth to a delayed ramp-up by some new customers, with expectations that these sales would now materialize in 2024. The growth of Oxford Nanopore’s operations in China and the Middle East was further hampered by recent US trade restrictions on the sale of advanced AI semiconductors.
Additionally, the company reported that revenues from the EGP amounted to £12 million. However, Oxford Nanopore disclosed that the US$68 million contract, set to run until 2026, has been amended. As a result, the company does not anticipate any significant future revenues from the contract, and the purchase commitment has been removed.
Despite these challenges, Oxford Nanopore remains dedicated to its goals of achieving 30% medium-term revenue growth and reaching profitability by 2026. The company’s gross margin target of greater than 65% for that year remains unchanged.
The impact of the US/China trade war, combined with semiconductor restrictions, has placed obstacles in Oxford Nanopore’s path to sustained sales growth. However, the company remains optimistic in its long-term prospects as it strives to overcome these challenges and continue its trajectory toward profitability and innovation.
The source of the article is from the blog enp.gr