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Novacyt 2020 Revenues Surge on Strong Demand for SARS-CoV-2 Testing Products

NEW YORK — Novacyt on Tuesday posted a year-over-year surge in revenues for 2020 on strong sales of its SARS-CoV-2 testing products.

For the 12-month period ended Dec. 31, 2020, Novacyt's revenues rose to £277.2 million ($384.81 million) from £11.5 million the year before, in line with the preliminary figures the French company released in January.

Contributing to the revenue increase were sales of various products for SARS-CoV-2 testing including its Primerdesign COVID-19 Genesig Real-Time PCR assay, which received Emergency Use Authorization from the US Food and Drug Administration in early 2020, as well as sample prep products. The firm said that it has, to date, launched over 28 new COVID-19-related products since the beginning of last year.

Novacyt cited its October acquisition of IT-IS International, which had been exclusively making its q16 and q32 rapid PCR instruments, as key to its efforts to boost its manufacturing volumes.

Novacyt reported a net profit of £132.4 million, or £1.94 per share, for 2020 versus a net loss of £5.7 million, or £.13 per share, a year earlier.

Its R&D spending in 2020 climbed 312 percent to £1.6 million from £395,000 the year before as Novacyt expanded its COVID-19 product portfolio. Meanwhile, SG&A costs grew 57 percent to £35.0 million from £8.1 million, in part reflecting an increase in headcount from 110 at the end of 2019 to 237 at the end of 2020 and the impact of a long-term incentive plan for executives that is tied to the company's share price performance.

At the end of 2020, Novacyt had £91.8 million in cash and cash equivalents.

"As the COVID-19 testing market has continued to evolve in 2021, we have continued to strengthen our core capabilities and apply our bioinformatics and design expertise to expand our product offering," Novacyt CEO Graham Mullis said in a statement. "We therefore expect to see Novacyt continue to play a major role in COVID-19 testing and, specifically, we expect to see strong revenue growth in private testing as markets and international travel reopens."

Novacyt also provided an update on a dispute over its SARS-CoV-2 test supply contract with the UK Department of Health and Social Care first disclosed in April. According to the company, the conflict primarily relates to £129.1 million in revenue tied to a specific product supplied to the DHSC.

Novacyt said that DHSC is seeking a refund for the product in question. However, the company said that it believes it can replace the product.