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Novacyt Posts 4 Percent Drop in 2019 Revenues

NEW YORK — Novacyt reported on Thursday a four percent drop in revenues for 2019, alongside a 40 percent jump in its total net loss for the year. The French diagnostics firm downplayed the impact of the results, however, citing surging demand for its SARS-CoV-2 test.

That qPCR-based test was launched in late January and sales, orders, and commitments for its purchase have "significantly exceeded expectations," Novacyt said. As a result, 2019's financial results "do not have a material bearing on the current business."

For the 12-month period ended Dec. 31, Novacyt's revenues fell to €13.1 million ($14.1 million) from €13.7 million the year before, in line with previous guidance

Excluding Novacyt's clinical lab business, which was divested to Cambridge Pathology in July for about £400,000, revenues for 2019 were down 2 percent. Revenues from the firm's Primerdesign PCR unit were up about 2 percent in 2019 to €6.3 million from €6.2 million year over year, while revenues from its Lab21 protein diagnostics business dropped 9 percent to €6.8 million from €7.5 million.

Novacyt attributed the overall revenue decline to supply chain issues, primarily relating to Lab21, as well as working capital constraints.

The company's net loss for 2019 grew to €6.6 million, or €.14 per share, from €4.7 million, or €.13 per share, in 2018. The loss per share increase was partially offset by an increase in the average number of Novacyt shares outstanding.

R&D spending for 2019 rose 11 percent to €451,000 from €406,000, while SG&A expenses increased 7 percent to €9.2 million from €8.6 million.

At the end of 2019, Novacyt had cash and cash equivalents totaling €1.8 million.

Looking ahead, Novacyt said that it expects demand for its SARS-CoV-2 test to continue through 2020 and that it expects to begin producing more than 10 million tests per month beginning in June. The firm added that it recently signed a contract to supply 288,000 tests a week to the UK Department of Health and Social Care.

"We expect 2020 to be transformational for the business in almost every way based upon visibility of current sales and continued significant demand for the [SARS-CoV-2] test," Novacyt CEO Graham Mullis said in a statement.