Shares of Oxford Nanopore Technologies Plc plunged more than 14% on Monday, sinking to levels not seen since April 7, 2025, after the sequencing specialist revealed first-half revenue that fell short of management's expectations and narrowed the implied pace of its full-year underlying growth.
For the six months ended June 30, the company said it expects revenue of approximately 6.5 million, representing 11% reported growth and 12% growth on a constant currency basis. The company described trading during the period as "below management expectations."
Management said the principal contributors to the shortfall were regional headwinds. In China, revenue fell by about 16% amid changes to the group's commercial operations. The Middle East also saw a material decline - revenue there decreased by roughly 14% and was described as being disrupted. The company further cited the timing of customer orders and contract wins in the Americas as a factor limiting performance in the first half.
Regional performance otherwise varied. Europe, the Middle East, Africa and India recorded the strongest expansion, with revenue up approximately 20%, a rebound the company attributed to momentum in clinical and biopharma markets. The Americas grew about 12% at constant currency. Asia Pacific revenue contracted by approximately 8% at constant currency, a decline the firm linked to the weakness in China and the completion of a program named PRECISE II.
By end market, Applied Markets - Oxford Nanopore's commercial category that includes clinical and biopharma customers - posted around 22% revenue growth. That comprised clinical growth of approximately 35% and BioPharma growth of roughly 25%. Research market revenue expanded by about 5%.
On liquidity, the company reported cash, cash equivalents and other liquid investments of approximately 34 million.
For the full year, Oxford Nanopore kept its constant-currency revenue growth guidance unchanged in an existing range of 21% to 25%. Management said that range incorporates additional collaboration and licensing revenue opportunities anticipated in the second half, some of which may be non-recurring. Excluding those opportunities, the company now expects constant-currency growth of approximately 16% to 25%, explicitly citing continued China weakness, Middle East disruption and first-half order timing effects in the Americas as the principal reasons for the narrower underlying pace.
Gross margin guidance for the year remained at about 62%. The company reiterated its expectation to reach adjusted EBITDA breakeven during the first half of 2027.
Chief Executive Francis Van Parys acknowledged the revenue shortfall but pointed to progress on operations, saying: "While first half revenue growth was below our expectations, we have continued to make good operational progress in the period, delivering further improvements in gross margin and disciplined cost control, keeping us on track to achieve adjusted EBITDA breakeven during FY27."
He added that the business continues "to see encouraging momentum across our strategic growth markets" and that management looks "forward to discussing our first half performance and strategic priorities in more detail" when it reports interim results in August.
Context and implications
The update highlights divergent regional dynamics within Oxford Nanopore's revenue mix: robust growth in certain EMEA and applied market segments contrasted with notable weakness in China and parts of the Middle East. Management's retention of its headline guidance band, while narrowing the underlying pace when excluding anticipated non-recurring collaboration revenues, signals an attempt to balance near-term trading realities with later-stage revenue opportunities set to materialize in the second half.
Investors will be watching the interim results in August for more granular detail on the timing and character of the collaboration and licensing revenues referenced, and for any further commentary on the steps the company is taking to address the commercial changes in China and the disruptions in the Middle East.