Biotech business on target with positive first half update

Yourgene Health, the Manchester-based international molecular diagnostics group, is on track to meet expectations, it said in a first half trading update today.

AIM-listed Yourgene was reporting on the six month period to September 30.

It said revenues were £7.8m, up 98% on the equivalent prior year period when it achieved revenues of £3.9m, and in line with management expectations.

International revenues continue to show very strong momentum, with the Elucigene Diagnostics business, acquired on April 26, contributing primarily to UK and European sales growth.

Elucigene, which was named small business of the year at TheBusinessDesk.com North West Masters Awards in March this year, is a leading molecular diagnostics manufacturer and developer.

International revenues include the group’s first US sales as reported in the AGM statement. Organic growth, excluding contributions from the Elucigene acquisition, was 56%.

Revenues from non-invasive prenatal testing (NIPT) products and services grew globally at 34%, despite the UK and Europe being in a period of transition to a product format which is compatible with Illumina’s next-generation sequencing technology.

This new product will be rolled out in European markets during 2020.

Revenues are showing greater diversity with 20% derived from reproductive health products generated by the acquired Elucigene Diagnostics, and 17% derived from the group’s rapidly-growing oncology and research services activities in Asia.

Cash and cash equivalents as at September 30, were £4.1m.

Chief executive Lyn Rees said: “I am delighted with the performance in the first half, both in terms of the organic growth delivered but also the contribution from the Elucigene acquisition and the launch of our American business.

“We are executing on our strategy to broaden our product portfolio and to drive growth across wider international markets.

“We remain on track to hit our ambitious growth targets for the enlarged group and to meet market expectations for the full year.”

When the company reported annual results in July, it revealed revenues for the year of £8.882m, up from £6.146m, and a pre-tax profit of £3.389m, compared with a pre-tax loss of £9.538m the previous year.

Broker and investment bank Stifel maintained its buy call on Yourgene’s stock after today’s update, saying: “Hitting near-term geographical and portfolio expansion targets, which has delivered a strong performance in 1H20, provides further evidence, in our view, of a management team building a reputation and track record for delivering on its stated objectives.

“We therefore reiterate our buy rating and see the current share price as an attractive entry point ahead of a number of data points over the next 12 months that have the potential to drive a re-rating of the stock.”