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28 January, 2019 - 13:29 By Tony Quested

Novacyt progresses Cambridge clinical lab sale

Clinical diagnostics specialist Novacyt, which is set to sell its Cambridge based clinical lab, is eyeing increased EBITDA profitability through 2019.

The company, which is dual quoted in the UK and France, owns the Lab21 business in Milton, Cambridge.

Novacyt confirms that year-end revenues from continuing operations will be approximately €13.7 million, giving growth of nine per cent CER on a consolidated basis compared to 2017. 

Continuing operations include the Primerdesign and Lab21 business units as well as €1.0m of Omega Infectious Disease product sales (Omega ID) since the asset acquisition on June 28. The company’s year-end cash balance was approximately €1.1m. 

Excluding the acquisition of Omega ID, core business growth for the year was one per cent CER, which reflects approximately €1m of confirmed tender orders which are now expected to be completed in 2019. 

As a result, Novacyt starts 2019 with an encouraging order book, including additional demand from China for q16 instruments, subject to the availability of supply.

Operationally, the company says it is progressing well, with strong new product sales from the Omega ID unit being won and the manufacturing integration plan is on target to being completed this year.
 
Additional manufacturing space has also been secured at the Southampton site, which the company expects to provide sufficient capacity for the planned molecular sales growth over the next few years. The current launch of the new molecular CE Mark assays BKV and EBV are also expected to drive incremental growth in 2019.

Progress continues to be made with the potential sale of the NOVAprep® business unit with multiple expressions of interest already received. 

The NOVAprep® business unit is excluded from continuing operations and consequently the reported revenue and operating results. The sale of the Clinical Lab business is also making positive progress and the company continues to expect to update shareholders on this sale process during the first quarter of 2019.

Group CEO Graham Mullis (pictured) said: “Overall, I am pleased with the operational progress that the company is making, with a strong order book, the integration progress of the Omega ID business and the new CE Mark molecular assays launched at the end of last year with new molecular CE Mark products planned for 2019. 

“We are confident that the financial performance will significantly improve during 2019, with the completion of the sales of the NOVAprep® and the Clinical Lab businesses. 

“We expect that, on a continuing operations basis, the company will achieve increased EBITDA profitability in 2019. We remain committed to our three strategic pillars of organic, acquisitive and R & D based growth.”

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