Oxford Nanopore Technologies Plc · LSE:ONT
Oxford Nanopore Technologies — FY2021 Earnings Presentation
36 slides from Oxford Nanopore Technologies's earnings presentation, Mar 22, 2022
Slide 1: Our goal: to enable the analysis of anything, by anyone, anywhere
Our goal: to enable the analysis of anything, by anyone, anywhere THE MINION MK1C: PORTABLE, CONNECTED SEQUENCING + ANALYSIS + SCREEN 22 1 March 2022 | Full Year 2021 Results
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: 2021 Highlights & Business Review
When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind. Lord Kelvin 2021 Highlights & Business Review Gordon Sanghera, CEO
Slide 4: Introduction to Oxford Nanopore Technologies
Introduction to Oxford Nanopore Technologies Single molecule sensing Relentless, 1 platform Building on DNA/RNA to enable agile innovation Delivering continuous improvement 4 the multi-omics world of tomorrow and intellectual property creation Current DNA/RNA investment is poised to Sequencing marke
Slide 5: Journey to today
Journey to today 2021 Revenue: LSRT £127M Investment in foundational IP, platform development and infrastructure 2021 Publications: > 1,000 . Our Growth: 2021 a key year for financial growth, Our Journey mirrored by increase in customer publications 140 3000 Foundational R&D, IP Life Science Researc
Slide 6: Key product releases in 2021 driving performance, usability and range
Key product releases in 2021 driving performance, usability and range Duplex Sample Sequence Low Noise Analyse Upgrade Rapid Q20+ Chemistry Remora Barcoding Bonito methylation Algorithm Kit 96 detection Ultra-long Sequencing Kit 12 EPI2ME Labs P2 workflows Kit open for pre-orders Midnight R10.4 EPI2
Slide 7: High-accuracy nanopore sequence for comprehensive genomes: user data
High-accuracy nanopore sequence for comprehensive genomes: user data 2020/2021: R9.4 already capable of Early Access of Q20+ release (R10.4 & December 2021: Kit 12 & R10.4 for ultra- high-throughput, high accuracy data Kit 12) enables “near perfect assemblies” high accuracy “NIST’s high-confidence t
Slide 8: 2021 highlights
2021 highlights INCREASED PACE OF GROWING USER COMMUNITY STRONG OPERATIONAL & INNOVATION DRIVING SCIENTIFIC IMPACT FINANCIAL PROGRESS Chemistry and Kit upgrades Increasing user base and utilisation Record revenue and revenue growth in Launched Q20+ chemistry, the new “Kit 12” and - >6,300 total acti
Slide 9: Direct single-molecule sensing
Direct single-molecule sensing Read the actual DNA molecule, not a proxy Nanopore sensing reads native DNA or RNA, not a copy or picture The power of native DNA • Retain all the biological information, including methylation • Simplify chemistry and hardware with no labels or optics required • No GC
Slide 10: Scalability: sequencing devices that fit the tech to the biological question
Theoretical maximum output, Gigabases. Assumes system is run for 72 h at 420 TMO bases / second. Actual output varies according to library type, run conditions, Gb* etc. TMO noted may not be available for all applications or all chemistries. Scalability: sequencing devices that fit the tech to the b
Slide 11: More comprehensive genomic insights
More comprehensive genomic insights Today’s SBS technologies vs Oxford Nanopore Nanopore sequencing also enables: 3. Methylation in real time • e.g. fragile x syndrome • DNA methylation patterns are globally disrupted in cancer Today, traditional SBS enables: 4. Structural Variation 1. Single Nucleo
Slide 12: Unravelling the genome
Unravelling the genome Define mechanism of disease & variant associations which is missed by SBS technologies “34% of all disease-causing variation ECONOMICS & SCALE OF GENOMICS is made up of variants that are larger than a single base-pair substitution” “Structural variants contribute more base-pai
Slide 13: Rapid pathogen sequencing: Proud to provide tools in the fight against COVID-19
Rapid pathogen sequencing: Proud to provide tools in the fight against COVID-19 And building a strong potential pipeline beyond the pandemic RESPIRATORY METAGENOMICS COVID-19 GENOMIC EPIDEMIOLOGY DRUG RESISTANT TUBERCULOSIS PILOT STUDY More than 990,000* SARS- A major global killer with Identify bac
Slide 14: Combining information depth with speed and scale
Combining information depth with speed and scale Identify novel markers for poorly diagnosed diseases SOLVING DIAGNOSTIC ODYSSEYS STANFORD NEJM: SHOWCASING SCALABILITY/REAL TIME BENEFITS, FOR NEUROLOGICAL DISORDERS AND CLINICAL UTILITY IN 12 CRITICAL CARE PATIENTS ‘Often difficult to diagnose due to
Slide 15: Moving from research into the community
Moving from research into the community Roadmap for deployment of genomic healthcare DISCOVERY TRANSLATION TRANSLATION TRANSLATION TRANSLATION SCIENCE TO HUMANS TO PATIENTS INTO PRACTICE TO COMMUNITY Multiple P48 P48 Move to specialist centres Deploy in most hospitals Next generation of healthcare i
Slide 16: 2021 Financial Review
2021 Financial Review Tim Cowper, CFO
Slide 17: A differentiated business model…
A differentiated business model… Instruments: place as many as possible for broad adoption Consumables: key revenue driver “Razor” Customer acquisition: “Razor blade” Typically chassis and compute Starter Packs1 that include Plastic body Power supply initial device usage and initial Sensor and chemi
Slide 18: …with a device-agnostic, customer-centric approach…
…with a device-agnostic, customer-centric approach… Customer Groups Selected Product Offerings Business Dynamics PromethION S3 Typically large scale, multi-year customer projects Somewhat irregular revenue recognition in S3 emergent phase “Strategic” Significant short-term growth opportunity G
Slide 19: …delivering strong top-line growth
…delivering strong top-line growth Revenue +94% All figures in £m LSRT revenue 133.7 6.7 Strong LSRT growth; 94% year-on-year 113.9 48.3 127.0 • Second half expansion in Emirati Genome Program (EGP) • Significant contribution from COVID- 65.5 19 surveillance • Continued robust underlying growth 2016
Slide 20: Drivers of full year LSRT revenue growth
Drivers of full year LSRT revenue growth £45.9m £1.3m £127m m Starter pack revenue increased by 68% in 2021 to £35.1m (2020: £20.8m) £14.3m Consumables revenue increased by 116% in 2021 to £85.4m (2020: £39.5m) £65.5m Other revenue increased by 25% in 2021 to £6.5m (2020: £5.2m) FY 2020 Starter pack
Slide 21: Growth underpinned by customer diversification and increasing revenue per account
Growth underpinned by customer diversification and increasing revenue per account S1 (<$25k) S2 ($25k-$250k) S3 (>$250k) £55.7m LSRT Revenue £38.4m £30.6m EGP revenue £23.7m £23.1m £18.6m £17.8m £16.7m £17.0m £15.8m £3.8m 2019 2020 2021 2019 2020 2021 2019 2020 2021 No. customer accounts 4,267 4,431
Slide 22: Revenue growth: diversified customer geography
Revenue growth: diversified customer geography LSRT revenue by geography All figures in £m 33.3 33.4 2020 31.7 2021 28.5 Strong growth in Americas reflects 23.1 increase in commercial resources 19.7 18.7 UAE growth driven by EGP RoW growth offset by China headwind 4.0 Americas Europe & UK United Ara
Slide 23: Strategic approach to margin mix
Strategic approach to margin mix Starter packs Established consumables Typical gross margin Typical gross margin ~30% >65% Starter packs typically have a lower margin but drive customer adoption PromethION flow cell margins have increased substantially during the first year of full production Group
Slide 24: Improving margins from our core LSRT business
Improving margins from our core LSRT business LSRT gross profit & profit margin All figures in £m 53.8% 143% growth in LSRT gross profit to £68.3m 68.3 LSRT gross profit margin increased in 2021 due primarily to: 42.9% • higher margins from PromethION flow cells • greater proportion of consumables v
Slide 25: Summary income statement
Summary income statement 2021 2020 £m £m Revenue 133.7 113.9 Cost of Sales (60.5) (67.0) Gross Profit 73.2 46.9 Gross margin % 54.8% 41.2% Operating expenses Research and development expenses (76.0) (48.6) Selling, general & administrative expenses (161.8) (71.4) Loss From Operations (164.5) (73.1)
Slide 26: Adjusted EBITDA
Adjusted EBITDA 2021 2020 £m £m Loss before tax (166.0) (73.2) Depreciation 15.6 12.5 Amortisation 9.1 4.8 Other 0.7 0.7 EBITDA (140.6) (55.2) Founder LTIP 39.3 0.0 Employers Social Security on pre IPO Share Awards 37.6 0.0 IPO Costs 4.8 0.0 Other 1.2 1.5 Adjusted EBITDA (57.7) (55.2) 26
Slide 27: Growing investment in R&D to underpin delivery of continuous innovation
Growing investment in R&D to underpin delivery of continuous innovation 2021 R&D spend focused on PromethION chip development and scale up R&D expenses R&D expenses by type All figures in £m All figures in £m Average 235 291 % sales: 52% 51% headcount: 85.3 76.0m 9.3 26.4m 59.3 48.6m 10.7 3.1m 24.2m
Slide 28: Selling, General & Administrative expenses
Selling, General & Administrative expenses S,G&A expenses All figures in £m 161.8 4.8 75.3 IPO Related Costs 2021 includes share-based payments of £75.3m Share based Payments Depreciation on PPE & S,G&A expenses, excluding founder LTIP share 71.4 3.7 15.6 Amortisation based payments, employers socia
Slide 29: Capex spend
Capex spend Capex All figures in £m % sales: 14% 16% Key areas of investment: 21.5 Purchase of PP&E • 2021 focus on enhancing laboratories to assist R&D 15.7 efficiency, and manufacturing automation. 12.7 8.8 Assets under Lease (PromethIONs and GridIONs at customers) 6.9 8.8 • Driving future growth
Slide 30: Balance sheet
Balance sheet 2021 2020 £m £m Non-current assets 91.3 78.1 Inventory has increased due to our long-term Current assets agreements with key suppliers focused on Inventory 63.1 35.6 electric components Debtors 69.1 86.6 Other financial assets 130.6 Cash and cash equivalents 487.8 80.9 Cash, cash equiv
Slide 31: Updated financial guidance
Updated financial guidance LSRT Revenue: £127m FY 2021 vs. >£120m guidance Actual Gross margin: 54.8% vs. approx 55% guidance FY22 revenue guidance accounts for an expected significant decline in COVID FY 2022 LSRT revenue: £145m to £160m testing revenue in 2022 and the recognition Guidance Previous
Slide 32: Summary & outlook
Our goal is to enable the analysis of anything, by anyone, anywhere Summary & outlook Gordon Sanghera, CEO
Slide 33: Innovation strategy for long term growth
Innovation strategy for long term growth Data digitisation Customer Tech industry Innovation innovation Human health Cloud connectivity Pathogens Compute acceleration Mixed mode electronics Food sustainability Algorithms, ML, AI Environmental Directed evolution Oxford Nanopore © 2022 Oxford Nanopore
Slide 34: Q&A
Q&A Gordon Sanghera, CEO Tim Cowper, CFO
Slide 35: 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 36: Full year cash flow
Full year cash flow 2021 2020 £m £m Cash absorbed by operations reflects operating losses made in the year. Net cash outflow from operating activities (53.8) (63.8) Net cash used in investing activities Net cash used in investing activities (162.0) (26.9) includes: - £9.3m of capitalised development
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