Oxford Nanopore shares up over 4%, snapping five-session slide after loss narrows

Oxford Nanopore Technologies' shares surged over 4% on Wednesday, marking an end to a five-day decline, following a narrowing of its first-half net loss and surpassing analysts' expectations on profitability. The sequencing company reported a loss of £48.0 million, down significantly from £71.8 million a year earlier, and better than the pre-results consensus loss of around £63 million.

Despite revenue increasing by 10.5% to £116.7 million, it lagged behind the consensus of roughly £119.6 million. The primary driver behind the improvement was a sharp reduction in gross margins, which climbed to 62.2% from 58.2%, and a more than halving of adjusted EBITDA losses, which dropped to £22.1 million from £48.3 million.

Oxford Nanopore attributed this improvement to yield enhancements, wider adoption of its new pricing model, and more stringent cost control measures. The company's commercial opportunities, particularly in its clinical and BioPharma segments, saw a significant boost, with revenue up 35.4% and 25% respectively, compared to a more modest 5.4% growth in its research business.

Oxford Nanopore reaffirmed its FY26 revenue growth target of 16%-20% on a constant-currency basis and its adjusted EBITDA breakeven goal for FY27. The firm also adjusted its outlook for operating costs, projecting a 2% to flat year-over-year decline, down from the earlier expectation of a growth range of 0%-5%. Additionally, Oxford Nanopore set lofty targets for the future, aiming to achieve over £700 million in revenue by 2030, with growth anticipated to be more heavily weighted towards Clinical and BioPharma sectors, and a target for an adjusted EBITDA margin above 15%.