Novacyt to dispose of non-core Cambridge business
Clinical diagnostics company Novacyt is selling off a small part of the Lab21 business based in Cambridge as part of a review of non-core assets announced in August.
Having completed the strategic review process, the board has reaffirmed its commitment to its core strengths of in vitro diagnostics product development, commercialisation and contract manufacturing and will focus on driving value from its already profitable business units of Primerdesign and Lab21 Products.
The company has concluded that its clinical laboratory unit (the Clinical Lab), a small part of the Lab21 business based in Cambridge – which specialises in clinical pathology testing services in oncology and virology – is non-core and not integral to its in vitro diagnostic products focus. Through appointed advisors, the group has been running a formal sale process and received multiple expressions of interest.
For the financial year 2017, the Clinical Lab reported revenue of €0.8m and a €0.1m loss at an EBITDA level. The Clinical Lab formed part of the original business of Lab21 and provides specific molecular testing services to the UK and Middle East markets.
The board has also decided that the sale of NOVAprep® business unit assets has the potential to maximise shareholder value. This has been prompted in part by an unsolicited proposal to acquire the business.
Advisers have now been appointed and and initiated a formal open-market sales process of the NOVAprep® business unit. This may result in the sale of the entire business unit either as a single entity or as separate assets to multiple parties.
Novacyt CEO Graham Mullis (pictured) said: “The potential sales of NOVAprep® and the Clinical Lab represent key steps in streamlining the group to focus on diagnostic products and product development services.
“We remain committed to our three strategic pillars of organic, acquisitive and R & D based growth. By focusing further on our core strengths and taking a more targeted investment approach, we expect to continue to improve efficiency and profitability across the group and improve shareholder returns.
“I look forward to updating shareholders with the progress of the sale processes during the first quarter of 2019.”
In a separate development, Novacyt has received another substantial order for subsidiary company Primerdesign’s q16 molecular instruments from a new customer within the fast growing Chinese market.
The order for 100 molecular diagnostic instruments has been paid in advance and takes the number of q16 instruments sold into the Asia Pacific region to over 230 units. The companies are declining to disclose the worth of the deal.
The genesig® q16 is Primerdesign’s proprietary molecular testing instrument designed to make DNA testing affordable and easy to use.
The latest order comes from a new distributor recently appointed by Novacyt and the instruments will be used in clinical diagnostic markets. This new customer provides Novacyt with a potential opportunity for further significant instrument, and genesig® reagent sales in 2019.