Oxford Nanopore just gave investors a big reason to pay attention. The gene-sequencing company's stock jumped 11% in London trading on Thursday, its best day in more than seven months, after new CEO Francis Van Parys laid out an ambitious revenue target.
The British company says it can hit more than $700 million in sales by 2030, with a longer-term goal of reaching $1 billion. To get there, Van Parys is narrowing the company's focus to three specific areas where its technology already shows real promise.
Van Parys, who took over from founder Gordon Sanghera as CEO earlier this year, is steering Oxford Nanopore toward what he calls commercially ready markets. The company will concentrate on mRNA vaccine quality checks, methylation in whole genome sequencing, and leukemia diagnostics.
Methylation sounds technical, but the idea is simple. It refers to the chemical changes that switch genes on or off, and it is becoming a big deal in cancer research. The mRNA vaccine piece matters too, especially as drugmakers pour money into cancer vaccines and need reliable ways to check quality.
The CEO argues the company's technology can replace a whole pile of lab work. He said one Oxford Nanopore run produces the same results that currently take eight separate pathology tests. That kind of efficiency is the core pitch to customers.
Oxford Nanopore announced a licensing agreement with an unnamed global diagnostics company. CFO Nick Keher said most of the money from that agreement should arrive as royalty payments, which tend to be steady revenue once they start flowing.
The company also said it will simplify its product lineup, though it promised not to kill off any existing products. The emphasis will be on smoother workflows for customers rather than new hardware.
The stock spike did not come out of nowhere. Oxford Nanopore reported a smaller loss than analysts expected in its first-half results. The per-share loss, excluding certain items, came to £0.05 ($0.07), which beat the figure that Bloomberg-surveyed analysts had predicted.
That improvement is a big reason Berenberg analyst Sam England said the company is "comfortably on track to achieve breakeven by 2027." For a company that has spent heavily on growth, hitting that milestone would signal the business model is finally maturing.
The pressure to get there is real. Competition in gene-sequencing tools is getting tougher, and the company needs to prove its technology can lock in steady revenue, not just generate buzz.
Van Parys is also trying to change how the company works. He wants to keep the innovation that made Oxford Nanopore a player in gene sequencing while pushing the team to pay closer attention to what customers actually need. That means simpler workflows and better alignment with customer priorities.
The bottom line: Oxford Nanopore is still losing money.
For investors, this is a bet on focus. The company is picking three fights it thinks it can win. The stock market liked the direction. Whether the revenue follows is the question, and it will take a few years to answer.