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Novacyt Posts 4 Percent Drop in Preliminary 2019 Revenues

NEW YORK — Novacyt said on Tuesday that it expects its to report a roughly 4 percent drop in revenues from continuing operations for the full year 2019.

For the year ended Dec. 31, the French diagnostics firm posted preliminary revenues of around €13.1 million ($14.4 million) versus year-ago revenues of €13.7 million. Excluding Novacyt's clinical lab business, which was divested to Cambridge Pathology in July for about £400,000, preliminary revenues for 2019 slipped 2 percent.

Novacyt attributed the revenue decline in part to working capital restraints and long manufacturing lead times. Following the signing of a €5.0 million loan agreement in November, the company said it has begun to invest in the recovery of its supply chain, adding that it will take most of the first half of this year to fully restore its manufacturing output and stock levels.

Novacyt said that it expects to report a 3 percent year-over-year increase in core reagent sales, driven in part by an 8 percent increase in revenues from its Primerdesign PCR unit. Primerdesign, Novacyt noted, is currently finishing work on a coronavirus molecular diagnostic test that is expected to be released for research use only, although it did not provide exact timing on the product's launch.

The company's Lab21 protein diagnostics business, meantime, saw a 13 percent uptick in 2019 preliminary sales to the UK and Ireland and an 8 percent increase in the Middle East sales for the year.

Novacyt's Novaprep cytology business — sold off in December — generated expected sales of €1.3 million, which was excluded from the company's consolidated revenue numbers.

Novacyt said it ended 2019 with €1.8 million in cash and cash equivalents.

The company's final 2019 financial report will be released in April.

"I am encouraged that last year we completed the disposal of the two non-core businesses and also completed a major restructure of the balance sheet to provide much needed working capital," Novacyt CEO Graham Mullis said in a statement. "Despite working capital constraints, which impacted most of 2019, we demonstrated significant levels of growth in key parts of the business and continue to see increasing demand for our products."