Yourgene Health focused on bolstering its core business to fill COVID-testing void

Yourgene labs

Yourgene Health, the Manchester genomic testing specialist, is set to fill its COVID-testing void by stepping up its core offering, linked to further international growth.

However, the business admitted that, as an early stage operation, it is still at least one or two years away from becoming bottom line profitable.

Yourgene, which announced its annual results yesterday (July 27), is focused on providing diagnostic testing in the reproductive health and cancer markets, including NIPT (non-invasive pre-natal testing), and cystic fibrosis testing using either PCR or next generation sequencing.

Throughout the pandemic the business provided invaluable COVID testing services. In the last financial year this accounted for £19m of UK revenues.

However, chief executive Lyn Rees told that this part of the business effectively finished at the end of January, early February this year.

But he said this has enabled Yourgene to once again focus on its core offering: “COVID has pretty much stopped now. We were really busy up until the end of January, February and then it just stopped so our business is back to its core now,” he said.

The business is now repurposing its laboratories to concentrate on its broad range of testing services, particularly its US-based Ranger Technology, which was added in August 2020, as part of the Coastal Genomics Inc acquisition.

Originally aimed at the NIPT market, Mr Rees said the technology can provide a much wider range of services.

He said: “Ranger Tech can be deployed over multiple different market segments. We originally bought it because we were bringing it into our NIPT workflow and when we understood how well it worked and the differentiation it brought us with that product offering we decided to buy the company.

“What we found post the acquisition of that company and that technology is it has much broader applications as well, so we have now taken Ranger into infectious disease testing, into vaccine creation and oncology, so it started as an NIPT play but it has grown arms and legs since then.”

Mr Rees said the financial gains provided by its COVID testing services have helped Yourgene re-set for a post-COVID testing scenario.

“A lot of organisations took the money and ran from their COVID, but we didn’t want to profiteer to that level, so anything we have made we have reinvested back into the footprint of the business.”

He revealed further expansion in its Manchester base, saying: “We have just taken over QIAGEN’s old headquarters on the Manchester Science Park, so we have consolidated our businesses into one physical location and as part of that move we have put a lot of investment into genomic services.

“The reason we did that is because we felt there was significant future opportunity to support testing regimes. We all hear about the delays in cancer screening and testing, so we want to offer services there.”

During the last financial year Yourgene entered into a strategic partnership for NIPT with US business Ambry Genetics, which has been expanded to oncology.

Mr Rees said: “Ambry Genetics are one of the US’s largest providers of genetic cancer screening and cancer testing and we’re bringing those products over from California into Manchester and we will be making those products available to the UK population.”

Over the past year the business has been busy expanding its geographical reach in the Middle East, Africa, Eastern Europe, APAC (Asia Pacific), the Americas and EMEA (Europe, Middle East, Africa).

Lyn Rees

However, Mr Rees revealed the group is likely to scale back its operations at its laboratories in the Taiwan capial of Taipei.

China’s increasingly belligerent attitude to Taiwan is causing alarm, but he said the decision is based more on operational reasons.

“Taiwan has been locked down and inaccessible for us for the last two years. They probably had the most draconian COVID measures of any of the markets we have tried to deal with.

“I personally haven’t been able to visit the team over there for two years and the pandemic happened just after we made quite a big investment into the laboratory and the facilities there, so part of the reason that we announced a strategic review of that business is more to do with the fact that we find it difficult to manage a business we can’t physically meet and spend time with.”

He added: “A lot of APAC did shut down and, I think we have seen a return to form of that APAC businesss. We’re starting to see samples being transported from one geographic location to another, so the Taiwanese business is improving and is returning to the growth rates that we saw pre-pandemic.

“But, also, we lost two years of running a team and supporting the business unit there and there may be better organisations that can do that, so that’s the reason for the strategic review. Obviously we understand the geo-political risk there – I don’t think there’s anything imminent from my perspective – but I think it’s good board governance to keep a close watch on that situation.

“The strategic review is more about our ability to run that business. We also have an office in Singapore where we can get in and out of quite easily and I don’t think we need two offices in that region.”

Announcing its results yesterday, Yourgene revealed record revenues of £37.6m, a 105% improvement on the previous year, and ahead of previously upgraded expectations.

The pre-tax loss of £3.2m was a significant improvement on the £12m deficit the previous year.

However, Yourgene chief financial officer, Barry Hextall warned that the group is still a year or two away from posting pre-tax profits. The last time the group posted a pre-tax profit was the year to March 31, 2019, when it reported a £3.389m surplus.

But Mr Hextall explained: “2019 was the result of a restructure. We managed to convert a lot of debt to equity so there was a one off event.

“We’re still an early stage-ish growth company so we’re heading towards profitability, but we want to do it as a business of scale, so we won’t be bottom line profitable for the next year or two, but that is consistent with the stage of growth that the business is at.”

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