Shares of Manchester-based molecular diagnostics firm Yourgene Health plc fell about 7% on Monday after it issued an update on current trading for the second half of the financial year to March 31, 2021.
“Whilst the stronger trading patterns being observed in H2 compared to the first 6 months of the financial year (H1) mean that double-digit revenue growth is expected for the full year, the ongoing impact of COVID-19 on ordering patterns in UK and international commerce is expected to result in full year revenue being below consensus market estimates,” said Yourgene.
“A number of factors associated with the pandemic have continued to impact customer activity levels and created considerable variability in the timing of revenues, such that full year revenues are now expected to be in the range of £18-20m, lower than previous guidance but representing solid year-on-year growth of the order of 10-20%.
“This growth has been driven by the group’s European-focused product lines in testing for Cystic Fibrosis, prenatal aneuploidies and DPD deficiency which are performing strongly, along with European sales of NIPT.
“However, this has not been enough to offset the ongoing impact of significant pandemic-related headwinds on international markets for non-invasive prenatal testing (NIPT) outside Europe, as reported in our half-year results on 17 December 2020.
“The more recently introduced restrictions on domestic and international travel have had an impact on the company’s ability to convert new accounts, grow new product sales and commence new initiatives, which would otherwise have been expected to benefit full year revenue and offset headwinds elsewhere.”
Yourgene CEO Lyn Rees said: “Whilst achieving double-digit growth during this pandemic is welcome, it is still a disappointment to report delivery below our original expectations which we had revised upward at the time of our AGM in September 2020, in response to the short-lived reopening of UK and international markets.
“Our COVID-19 and core business streams have proved more sensitive than expected to the severe mobility restrictions imposed globally since Christmas, particularly in response to the new virus strains.
“However, we have continued to expand our capabilities and, along with our partners, we expect to capitalise on a number of upcoming opportunities as and when these restrictions are lifted.
“In our core business, the anticipated US contracts which are currently in advanced stages of negotiation, our strengthened commercial footprint in the US and Europe, and our pipeline of growth opportunities have not been lost, but deferred into the next financial year.
“Yourgene remains well positioned to benefit as domestic and international travel markets re-open, which will enable us to drive our core business and continue to broaden our geographic reach.
“Our prospects beyond the current financial year remain very exciting and, whilst cognisant of short-term delays and the challenges of forecasting revenue timing due to the pandemic, the board remains highly confident about the longer-term future of the company.”