Oxford Nanopore Technologies Plc · LSE:ONT
Oxford Nanopore Technologies — FY2022 Earnings Presentation
38 slides from Oxford Nanopore Technologies's earnings presentation, Mar 21, 2023
Slide 1: Our vision: to enable the analysis of anything, by anyone, anywhere
Our vision: to enable the analysis of anything, by anyone, anywhere Gordon Sanghera, CEO Tim Cowper, CFO THE P2: AFFORDABLE, HIGH-OUTPUT SEQUENCING FOR EVERY LAB 21 March 2023 | Full Year 2022 Results COMPLETE WITH HIGH END COMPUTE, SCREEN FOR SEQUENCING AND ANALYSIS
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Oxford Nanopore Technologies plc (“Oxford Nanopore”) for information purposes only and does not constitute an offer of, or solicitation to purchase or subscribe for, any securities in which such offer or solicitation is unlawful or to any person to w
Slide 3: Who we are
Who we are SINGLE MOLECULE SENSING AGILE INNOVATION PLATFORM 1 Building on DNA/RNA to enable Delivering continuous improvement and intellectual 4 the multi-omics world of property creation tomorrow Current SUBSTANTIAL MARKET investment is OPPORTUNITY poised to SCALED OPERATIONS 2 5 1 $6.2 billion, g
Slide 4: Continued robust underlying growth in core LSRT business
Continued robust underlying growth in core Life Science Research Tools (LSRT) business Revenue Publications All figures in £m £198.6m Our accessibility and versatility is 3 Year LSRT revenue reflected in an increasingly large, international scientific evidence base2 LSRT CAGR 51.8 £146.8m 10000 +41%
Slide 5: 2022 in numbers
2022 in numbers £146.8m 76% >8,200 56.3% £558M underlying1 growth ~30% +250bps STRONG LSRT CONSUMABLE CUSTOMERS LSRT GROSS STRONG BALANCE REVENUE REVENUE3 SERVED PROFIT MARGIN SHEET4 Total revenue of Our devices Representing our Driven by automation Strong cash position £198.6m, incl: LSRT are sold
Slide 6: Delivering across all areas of our business
Delivering across all areas of our business RESULTS We are delivering strong revenue growth and margin growth PLATFORM EASE OF USE Our platform is highly differentiated We drive utilisation with simple from its scalability to information rich end-to-end workflows INNOVATION COMMERCIAL GROWTH We have
Slide 7: Innovation drives growth: key product releases
Innovation drives growth: key product releases P2solo: HIGH OUTPUT FOR ANY LAB SHORT FRAGMENT MODE PROMETHION UPGRADE solo In early access Select in software to A100 delivering analysis speed Starter packs from: sequence from improvements with methylation onboard $10,455 20 bases – Mbases Seamless U
Slide 8: Innovation drives growth: high accuracy sequencing on nanopore (Q20+)
Innovation drives growth: high accuracy sequencing on nanopore (Q20+) SIMPLEX ACCURACY1 IN FIELD OUTPUT & RELIABILITY DUPLEX ENABLED 160 R10.4.1 runs from high 200 throughput project 100% CDS 80% 150 60% ALL 40% 20% 100 We only need to read 0% 2 strands for Q30 SNV SV INDELS 50 Methylation 0 Raw rea
Slide 9: Innovation drives growth: transforming platform capabilities today and in future
Innovation drives growth: transforming platform capabilities today and in future Q20+ CHEMISTRY IN FIELD UNPARRALELLED SCALABILITY WITH ROOM FOR MORE Price per Price per Price per Price per genome genome genome genome ~$690 ~$345 ~$235 <$200 20,000 Whole human Genomes per year 19,968 15,000 14,976 1
Slide 10: Substantial and growing market opportunity: DNA/RNA sequencing
Substantial and growing market opportunity: DNA/RNA sequencing $6.2 billion1 in 2022, expected CAGR 2022-25 ~15%1 Substantial opportunity to penetrate, reshape and expand Oxford Nanopore is uniquely positioned to unlock long Foundation for term future potential clinical Foundation for CLINICAL Dx/AP
Slide 11: FY22 Financial Review
FY22 Financial Review Tim Cowper, CFO
Slide 12: FY22 key numbers
FY22 key numbers £146.8m 56.3% £198.6m £(78.6)m £558m2 +30% underlying1 growth +250bps FY21: £133.7m FY21: £(57.7)m FY21: £618.2m LSRT LSRT GROSS TOTAL ADJUSTED STRONG BALANCE REVENUE MARGIN REVENUE EBITDA SHEET Growth driven by new Driven by automation £51.8m non-recurring Higher LSRT profit offset
Slide 13: Continued robust underlying growth in LSRT business
Continued robust underlying growth in LSRT business +16% YoY +10% CC1 £146.8m COVID sequencing: £26.1m £127.0m COVID sequencing: £17.5m EGP: £13.2m EGP: £30.6m Underlying2 revenue +36% +30% CC Underlying LSRT: £107.5m Underlying LSRT: £78.9m FY21 2021 FY22 2022 1CC= constant currency, which applies
Slide 14: FY22 LSRT revenue driven by consumables revenue
FY22 LSRT revenue driven by consumables revenue £146.8m £8.0m 23% growth in ‘service and other’ £127.0m +23% revenue driven by service and license £6.5m fees reflecting increased installed base £95.7m 43% growth in consumables excluding £85.4m +12% decline in EGP consumables spend Starter pack reven
Slide 15: FY22 LSRT revenue driven by strong growth across all customer groups
FY22 LSRT revenue driven by strong growth across all customer groups S1 (<$25k) S2 ($25k-$250k) S3 (>$250k) Indirect +29% +36% +33%1 +86% (16)% £55.7m £52.3m £46.7m £38.4m £30.6m £13.2 £29.8m £23.1m £18.1m £33.5m £25.1m £9.7m FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 EGP revenue LSRT Revenue (excl. EG
Slide 16: FY22 LSRT revenue driven by customer acquisition
FY22 LSRT revenue driven by customer acquisition FY22 FY21 Change S1 (<$25k) Number of active customer accounts 7,210 5,501 +31% Avg. revenue per customer account ($000s) 5.2 5.8 (10)% >8,200 S2 ($25k-$250k) active customers2 Number of customer accounts 989 782 +26% Avg. revenue per customer account
Slide 17: Balanced and global customer base
Balanced and global customer base RoW £39.8m Americas £48.3m Strong growth in Americas and Europe +45% YoY; +32% CC +40% YoY; +33% CC reflects increased commercial resource 27% 33% RoW growth driven by strong growth in China (+£8m or 66% CC) 10% UAE impacted by 57% decline in EGP 30% revenue UAE £15
Slide 18: Strong FY22 LSRT gross margin expansion despite supply chain headwinds
Strong FY22 LSRT gross margin expansion despite supply chain headwinds LSRT gross profit • Delivered +250 bps increase despite +250 bps significant global supply chain challenges • Margin expansion predominantly driven by 56.3% operational improvements, including: automation, recycling of electronic
Slide 19: Continued investment in innovation and commercial infrastructure in FY22
Continued investment in innovation and commercial infrastructure in FY22 £93.9m1 £116.0m1 total adjusted R&D expenses Adjusted S,G&A expenses Principally due to a 31% increase in R&D headcount Principally due to a 48% +39% and an increase in capitalised development +18% increase in the commercial te
Slide 20: Adjusted EBITDA
Adjusted EBITDA FY22 FY21 £m £m Loss before tax (83.4) (166.0) Depreciation & Amortisation 31.9 24.7 Other (4.3) 0.7 EBITDA (55.9) (140.6) Founder LTIP 53.2 37.6 Employers Social Security on pre-IPO Share Awards (21.6) 39.3 Gain on sale of property (18.6) - Settlement of DHSC Covid Testing contract
Slide 21: FY23 and medium-term financial guidance
FY23 and medium-term financial guidance FY23 Medium-term targets targets >30% underlying revenue growth LSRT revenue >30% underlying revenue growth 16-30% constant currency LSRT gross margin >60% >65% Targeting breakeven Adjusted EBITDA by FY261 Underlying revenue = LSRT revenue minus foreign exchan
Slide 22: Summary
Summary Core business is doing well. 2022 was a year of customer acquisition which will drive consumables 1 growth in 2023. 2 Delivered strong gross margin progress in 2022 despite significant global supply chain challenges. Operational improvements made in 2022 will drive margin expansion in 2023 a
Slide 23: Emerging uses of Oxford Nanopore sequencing
Emerging uses of Oxford Nanopore sequencing Gordon Sanghera, CEO
Slide 24: Executing on DNA/RNA sequencing collaborations
Executing on DNA/RNA sequencing collaborations With strong future innovation pipeline GSTT FIND Protein sequencing • See the whole genome • Read any read length • At speed TRANSLATIONAL, HEALTH • At any scale • Affordable • Accessible SmidgION Stanford Exeter NHS LIFE SCIENCE APPLIED RESEARCH MARKET
Slide 25: Scientific discoveries are the foundation for real-world use
Scientific discoveries are the foundation for real-world use Large scale research Cancer 2.0 data-rich Resolving hard-to- Rapid Whole Genome in neurodegenerative cancer genomes, at diagnose disease, faster Sequencing (WGS) in conditions speed than ever before translational setting NIH Centre for Alz
Slide 26: Developing a unified approach to infectious disease and public health
Developing a unified approach to infectious disease and public health Routine, rapid, global Rapid response to Pneumonia: rapid Tuberculosis: rapid genomic surveillance: public health alert: analysis in ICU, ID identification and from COVID, Avian flu StrepA antibiotic resistance and antibiotic resi
Slide 27: Liquid biopsy: cancer recurrence monitoring
Liquid biopsy: cancer recurrence monitoring Translating research discoveries to real world benefits The challenge: The vision: Our unique advantage: Recurrent disease after initial Non-invasive, highly accurate method CyclomicsSeq is minimally- remission is a leading cause of of detecting molecules
Slide 28: Human genetics; breast/ovarian cancer
Human genetics; breast/ovarian cancer Translating research discoveries to real world benefits The challenge: The vision: Our unique advantage: Tests for BRCA1 & BRCA21 are Reducing delay and improving Our collaborator has developed well defined but slow accuracy in human genetics and rapid, cost eff
Slide 29: Carrier screening; uncovering the dark genome
Carrier screening; uncovering the dark genome Translating research discoveries to real world benefits Challenge: The vision: Our unique advantage: Today’s carrier screening methods More confident carrier screening, Our collaborator has developed cannot see all potential risks driven by comprehensive
Slide 30: Pharma/biotech: an emerging customer segment
Pharma/biotech: an emerging customer segment Meeting unmet needs across the value chain EARLY DISCOVERY PROOF OF CONCEPT CLINICAL TRIALS POST-APPROVAL INDUSTRIAL OPERATIONS More accurate and faster Supporting quality during High sample throughput using Potential to scale Supporting quality during ge
Slide 31: Improving biotherapeutic discovery and manufacturing
Improving biotherapeutic discovery and manufacturing Moving into the applied markets The challenge: The vision: Our unique advantage: Biotherapeutic discovery and Rapid screening for discovery and Rapid, comprehensive assays for manufacturing needs better, faster GMP-grade testing for manufacturing
Slide 32: 2023 outlook
2023 outlook CONTINUOUS PLATFORM CUSTOMER OPERATIONAL COMMERCIAL INNOVATION PERFORMANCE FOCUS EXCELLENCE EXECUTION Execute on our new Drive exceptional Continue to make products Drive high performance Deliver on our product introductions as accuracy, output and our customers love and into our custom
Slide 33: Thank you
Thank you The content in this presentation should not be reproduced without permission of the speaker. Oxford Nanopore Technologies, the Wheel icon, EPI2ME, Flongle, GridION, Metrichor, MinION, MinKNOW, Plongle, PromethION, SmidgION, Ubik, and VolTRAX are registered trademarks of Oxford Nanopore Tec
Slide 34: Strong balance sheet
Strong balance sheet FY22 FY21 £m £m Non-current assets 185.9 91.3 Increase in inventory reflects higher stock Current assets levels of core components to manage global Inventory 87.7 63.1 supply chain risk Trade and other receivables 62.9 54.8 R&D tax credit recoverable 9.1 14.3 Cash and cash equiv
Slide 35: Summary income statement
Summary income statement FY22 FY21 £m £m Revenue 198.6 133.7 Cost of Sales (74.8) (60.5) Gross Profit 123.8 73.2 Gross margin % 62.3% 54.8% £93.9m1 +39% total adjusted R&D expenses Operating expenses Research and development expenses (64.8) (76.0) £116.0m1 +18% Selling, general & administrative expe
Slide 36: Continued investment in innovation and commercial infrastructure
Continued investment in innovation and commercial infrastructure FY22 FY21 £m £m Research and Development expenses 64.8 76.0 Adjusting Items: Employer’s social security taxes on pre-IPO share awards 9.9 (17.7) Adjusted Research and Development expenses 74.7 58.3 Capitalised development costs 19.2 9.
Slide 37: Capex
Capex % of LSRT 17% 16% sales £23.1m £21.5m £10.5m £8.8m £12.7m £12.6m FY21 FY22 GridION and PromethION Purchase of PP&E 37
Slide 38: LSRT revenue by currency
LSRT revenue by currency 4% 11% 15% 53% 16% USD EUR GBP CNY JPY 38
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