Good afternoon, everyone, and welcome to the 2026 JP Morgan Healthcare Conference. My name is Zain Ebrahim. I'm a European Pharma and Life Sciences Analyst here at JP Morgan, and it's my great pleasure to welcome the Oxford Nanopore CEO, Gordon Sanghera, as well as the CFO, Nick Kehoe, who will join Dr. Sanghera for the Q&A, so, as a reminder, this will follow the usual structure: a 20-minute presentation followed by a 20-minute Q&A, where you'll be able to ask questions either in the audience or through the web link. And with that, I'll hand over to Gordon. Thanks for being here.
Thanks, Zain. Afternoon, everybody. Okay, this has been a 20-year journey for me. We set the company up, spun out of Oxford. I was employee number one, often referred to as patient number one. Still here, still going. I am coming to the end of my tenure, the end of this quarter, but our goal 20 years ago was to develop a single molecule electronic sensing platform. The company's vision was to enable the analysis of anything by anyone, anywhere.
It's a work in progress. We've done some amazing things, from having sequencers in space to the Mariana Trench and Antarctic. Not Greenland, I don't think, but maybe we shouldn't talk about Greenland today. Anyway, in that 20 years, we have developed DNA RNA sequencing, and we are now extending the platform to proteomics as well. I'll talk a little bit about that later.
It has the potential as well to measure metabolites and also volatile organic compounds. In 20 years, well, 10 years ago, we launched products, moving forward 10 years. In that time, there have been over 20,000 publications showing the multi-omic genomics that we provide, which is highly differentiated from everybody else. That decade of innovation in the hands of our customers has enabled us to develop new workflows, new areas of NGS applications that are unique to Nanopore, where we deliver this multi-omic workflow.
Our growth over the last five years has been 28% CAGR, so consistent, strong growth with this highly differentiated platform. 2025 was another good growth year. Our estimated revenues are GBP 223-224 million. That is 24% growth on a constant currency basis. In all our regions, we outperform the market significantly with over 20% growth.
To remind you all, 70% of our revenues come from our sequencing consumables, and we have cash equivalents of GBP 300 million, just over GBP 300 million. So we're well capitalized to continue this growth. This publication growth, that exponential growth there, tells you that we still know very little about our human genome, 22 years after it was first mapped, and the more we look, and Jay's in the audience today, the more we look, the more we find it's complicated.
The previous talk was about xenografts and HLA regions. These are regions that Nanopore can read cleanly. So it'll have an impact across many markets. For us, growth came from our four target markets. Now, the lifeblood of this company has been life science research tools workers, and 67% of our revenues come from that segment. We grew 15%. That's a significantly outperforming market.
In our target areas, clinical grew 60%, biopharma 30%, and applied industrial 27%. That today represents a third of our revenues. That shift in the last two to three years has really shown how the platform has matured from an interesting academic life science research translational tool into applied end markets. And that is why we are growing above market conditions with this platform. This platform is highly differentiated, and I wanted to just remind you all what that means.
So we read native DNA directly. We take double-stranded DNA, we singulate it, and we pass it through a sensor. The sensor is a Nanopore, which is an electronic measurement platform. So there are no fluorescence tags, no amplification. We read the native DNA directly, which means we can see modifications.
We also read RNA directly, which was an academic curiosity five years ago. It's really empowering our biopharma franchise today. We pair that with rapid, real-time live streaming of that DNA RNA information, and our platforms are affordable and accessible. Those three pillars underpin this highly differentiated sequencer. The richness of content is all provided in one sequencing realm.
We can see the common SNPs and SNVs, but we can read at any length: short, hundreds of bases; long, tens of thousands of bases; ultra-long, hundreds of thousands of bases. The longest read so far is 4.5 million. We have an ambition at Nanopore that one of our customers will read end-to-end chromosomes in one contiguous, fully loaded, fully omic read. Our RNA is the same. It's read directly. It's not a cDNA copy.
So we can see modifications, and these are increasingly important in understanding the underpinning of our biology here. That richness of content, rapid, real-time, and affordable, accessible is driving the growth. When we look at how we selected the applications and workflows in those applied markets in particular, we did a lot of analysis. It's a $20-25 billion market that can take advantage of this highly differentiated platform.
As we break that down into the segments we're interested in, clinical biopharma research, that's $13-14 billion white space opportunities unique to Nanopore. So that's great, but that's a lot of opportunities. That's a lot of workflows you can think about with a finite amount of cash to do that.
So key to growing strongly and picking the right workflows is our partnerships, both at the front end for sample extraction, sample collection, extraction, targeted enrichment if necessary, and the back end where we have data streaming, secondary analysis tools, and tertiary analysis and customer workflows. All of those come together, and they guide us on what to build and how to build in the target market audience that we're looking for to get the growth.
Focusing a little bit on what partnerships and collaborations look like and picking on clinical, which grew 60%, we have partnerships and collaborations in human genetics research, population scale. Methylation is driving our oncology franchises. In rare disease, with the long reads, we can now pick up 150,000 structural variants. We can see all copy numbers. We can see gene fusions.
In oncology, I forgot to mention, 97% of the methylome is uncovered by Nanopore sequencing. And remember, that is part of the sequencing realm. In infectious disease, rapid, real-time insights in acute and critical care are driving adoption. So I want to spend a few minutes talking about these target areas in research, clinical, and biopharma and give you some examples of how we are either taking market share from existing sequencing or creating whole new workflows.
So starting with research, and this really is our lifeblood. All the end market applications I'm going to talk about in clinical and biopharma shortly all started in research. It all begins in research because we are redefining and rewriting what multi-omics genomics looks like. So our population-scale programs, we've just completed PRECISE, 10,000 genomes in Singapore. We have an active European long-read program, EURIN.
The PRECISE, UK Biobank program is to sequence 50,000 samples to create the first five-base genome. So we will publish the methylome off that data set, and I think that will be as significant as the first human genome as we look at that fifth base. All of these large data sets are not just revenue-generating for big population scale programs.
They create that pillar of innovation that is driven from those data sets. And with the potential of machine learning AI, we can do this at accelerated speeds. So that leads us into exciting new areas. Five years ago, RNA was an academic curiosity. Today, it's driving our biopharma. We're just scratching the surface on understanding RNA. tRNA, epitranscriptomics, codes for proteins.
So understanding mutations in DNA, understanding full-length transcripts directly in RNA and modifications, particularly epitranscriptomics, will really allow us to understand how we're coding and the messenger systems and the synthetic biological process to make the proteins, which will be significantly important in drug discovery. So I'm really excited about that, and you'll hear a lot more about tRNA in the next couple of years.
But there's so much more that happens in the academic space. This was a really hard slide to build because there were so many interesting things. Next-generation antibiotics are being developed by sequencing the soil microbiome, getting nature to tell us how we can do something about these difficult pathogens. So all these research opportunities, today's revenue generators in LSRT are tomorrow's big blockbuster applications that are coming through. In clinical, our most advanced programs are in infectious disease.
Four years ago at Guy's and St Thomas's, they started looking at respiratory metagenomic scanning of patients in ICUs. That now has turned into a program funded by the UK government, the Office of Life Sciences, to roll out this respiratory metagenomic workflow in ICU, in acute and critical care settings, to 30 hospitals. We're in seven now, and what we see is one in three people are on a broad-spectrum antibiotic that is not going to do anything for them.
Turnaround time is two to three hours versus two to three days. We had a delegation of UK KOLs come over to Guy's and St Thomas's, and the Advent Group took away the learnings and set up a pathogen ID workflow and brought it in-house. In their first pilot, they are saving $250,000 per annum. Sequencing is replacing traditional microbiology.
That workflow for Advent is going to be rolled out into 20 hospital groups. Now, one other thing that you get from the respiratory metagenomic scanning, Guy's and St Thomas' very cleverly partnered with the UKHSA, and all of the data is uploaded to the UKHSA. That gives us an early warning on a novel new variant, respiratory variant, and almost certainly the next pandemic will be a respiratory pathogen.
So as we roll out beyond the 30 hospitals into the whole of the NHS, we will have an always-on pandemic radar. That comes for free. First COVID genome in the U.K. was discovered in Brighton in ICU in a patient with a respiratory infection. So we know that's how we're going to prevent the next pandemic. On clinical panels, we have an enabling technology which is adaptive sampling. What is that? That is on-sequencer, intelligent, real-time targeted enrichment.
So we don't have to do an enrichment step prior to putting it on the sequencer. As the DNA goes through the hole at 400 bases per second, in the first second or two, the sequencer will decide whether it's a gene of interest. So when we think about our hereditary cancer panel, there are 258 genes. You literally program them in. Add your sample. You don't have to spend time, cost, and complexity enriching, and it will read those 258 genes.
And because it's full-length, it closes all the gaps you have as well. We see this as a real accelerator of our clinical applications into the panel space. Similar story with our partnership with Asuragen. They have 11 challenging medical - I knew I was going to get that wrong - 11 genes that have a lot of wrong long-read issues, copy number, gene fusion.
We can read those cleanly, which gives us a comprehensive panel with one workflow for those 11 genes versus multiple assays that they have to do today to look at carrier screening. So we're excited about unraveling these challenging areas. Okay. This slide should have a lot of partners on it, but every single one of our biopharma partners said we can't talk about what we're doing with them.
What I can tell you is in these three pillars, in discovery, in biomanufacturing, QA/QC, and ultimately fee-for-service providers, we have lots of partnerships. It's almost easier to think about who is not on this list, but we can't talk about that. What I can tell you, and if I pick a couple of examples, if you look at mRNA, modifications drive both potency and stability.
We take a workflow that takes six to eight orthogonal analytical measurements, and it takes a month to characterize the DNA and the modified RNA, sorry. We can do that overnight in one run, so that's radically transforming the discovery cycle for individual RNAs. It's three months. A month of it is characterization and testing. At the same time, once we have made that RNA, we can then manufacture it and look at the QA/QC.
And ultimately, some of these workflows are bleeding into fee-for-service CRO providers. The second one I want to talk about is adventitious agent viral testing, so viral contamination. Again, same story. It takes two to three weeks, and it's six to eight orthogonal measurements. It's not real-time, and we can do this in real-time, and we have early access customers evaluating. We have customers who are looking to put it into routine testing.
ViruSure has launched the fee-for-service CRO AVA workflow. One of our service providers, Eurofins, did some sterility testing for a biopharma and saved a batch early warning and saved a $15 million recall. This just shows you the power. The biopharma community are conservative. They're highly regulated, so it takes time, but you can see glimpses, and that strong growth at 30% is coming from these groundbreaking, unique-to-Nanopore workflows.
It's not just about putting a lot of very smart sample-to-answer end-to-end workflows together. We continue to understand that we will create further new novel applications with these multi-omic genomes. Our frontier innovations continue to drive sales in the research segment. We're looking at modifications beyond methylation. We're up to four on DNA. I talked about adaptive sampling. I think that is going to be a game changer in panels.
Our direct RNA is going really well for biopharma, but tRNA is coming next, and that'll be exciting as that biology is better understood. We are closer to proteomics, one step closer. We can now measure 20-30 peptides in a row. So we believe there's an application there, unique peptide measurement. And our amino acid callers are coming along, so we're making good progress on pure sequencing of proteins as well.
Our product platforms, we launched P2i, which is driving strong PromethION adoption. It's a two-channel PromethION. Mark 1D, which replaces the MinION Classic. If you have one of these, keep it. It will be worth a lot of money one day. We continue to improve outputs and accuracy. We are already the most accurate sequencer on the planet.
Yes, we started our journey 10 years ago with something that was barely sufficient with regard to accuracy, but that's the way disruptive technologies come into the marketplace. Think digital photography, think early mobile phones, think nanopore. Today, we provide the most comprehensive, the most accurate, the most complete genome. But there's more to come. We're at Q30. I'm pretty confident Q50 will be enabled, particularly catalyzed by the machine learning AI models that are coming at us at light speed.
That really will be transformative. End-to-end workflows drive these applied market applications, which give us sticky revenues, incredibly important for us. So looking at the time, 2026, what am I excited about? We're currently, typically, for the last couple of years, on PromethION. Our output has been around one human genome per flow cell. We're in early access, two genomes per flow cell.
The headroom in this platform is four genomes per flow cell. That gets you into a couple of hundred dollar fully loaded genome, so that's coming. There's still lots more headroom. End-to-end workflows paired with our regulated platforms are driving the clinical and biopharma markets. And for us, for me, I'm really excited about proteomics. We don't need to go to full protein sequencing.
You all know there are a lot of peptide drugs out there. We can now characterize those at the single molecule level. We can see modifications on those. That's a really exciting space for us as we move into next year. In summary, GBP 223 million, GBP 224 million, GBP 250 million. I never thought I'd be standing here saying that. It's like just still pinch me.
24% growth on a constant currency basis, GBP 300 million in the bank to continue our ambitious growth. We're moving to the next stage. I will be stepping down in March. We're bringing in Francis Van Parys. Comes from a bigger company. We've laid the foundations. He was at Cytiva, so biopharma experience.
He was running Radiometer, several billion-dollar company, so clinical experience. We've laid the foundations on our innovation engine in the hands of our customers in our life science research tools business. We now really want to scale these businesses in the applied markets. I'm looking forward to handing the baton on. I think we're in good shape, and I'm excited about that.
I want to leave you with this David Bowie quote because a lot of people have asked, "What am I going to do next?" And what he said when I asked that, "I don't know what I'm going to be doing next, but I can assure you it will not be boring." Thank you.
Now we move into the Q&A portion of the session. If you would like to ask a question, raise your hand, and we can get a mic to you. Also, you can ask questions through the portal. Maybe I'll start off with a question whilst we wait for the audience. Gordon, maybe let's start there in terms of. It's been an incredible tenure, 20 years as CEO, launched groundbreaking technology in Nanopore sequencing in terms of pioneering it and then bringing it to market with MinION over a decade ago. Bringing Oxford Nanopore as a company publicly about five years ago now. So how do you reflect on your journey in terms of your key thoughts and takeaways, and what are you most excited about for the next chapter?
First of all, I must thank JPM. 15 years ago, we started coming here to showcase and talk to you guys. It's been brilliant. What I'm excited about, I think we've just laid the foundations of this platform. I would like to see this become as ubiquitous as a telescope or a microscope, and I think it can. You've seen some of those use cases. I see in less than five years, all infectious disease will be run through Nanopore sequencing.
And it's been a tough five years in the public domain, but this conference feels like the green shoots of recovery are coming back. I'm excited about that. The only thing I'll be disappointed about is the share price is going to go up just as I leave. But I'll take some credit for that. So I think we're kind of coming out of the post-COVID hangover. I mean, I expected a two or three-year hangover. It's now year five, and it's still there. But I think I'm optimistic for the sector and for us.
Building on those green shoots, I mean, we've seen that from some of your peers, but you also reported overnight, as you said, this morning UK time, as you said, overnight at San Francisco with a strong set of numbers in terms of 3% beyond versus consensus and revenues ahead of where you initially set the guide. Can you talk through what were the key areas of strength that drove the outperformance versus the guide and made versus consensus in your view?
Sure. I'll take that, Nick. Yeah, yeah, absolutely. We're very happy with the performance that we delivered in 2025, and I think it's full credit to the team, essentially, that kind of very focused during the year. The areas of outperformance, when we set the guide of 20%-23%, it's because we were at this conference last year.
We just delivered 34% constant currency growth in the second half, and we were very excited about going to the new year, and then clearly, we had quite a few upsets in terms of NIH funding that kind of impacted the whole economy. We saw that as a key risk, so we set out some prudent guidance at the beginning of the year, said 20%-23%. We've delivered 24%.
We think we've taken share in the Americas, in particular in the research space, but we also kind of refocused in terms of those applied market opportunities and delivered quite substantial growth, so as Gordon's talked to, planting those kind of seeds, and they've kind of grown up now, and the clinical market growing 60%, biopharma 30% with a lot more room to grow, and in applied, growing 27%. We're very pleased with how that's kind of performed overall.
Clearly, we didn't do as we set cautious expectations for the Americas, in particular with the U.S. research space. And if anything, what we saw was actually we took share overall with a collectively across a lot of customers, essentially. We just saw more orders, smaller orders essentially going through, which speaks to the value of the platform as well.
And maybe building on that in terms of the NIH exposed segment, is that where you saw the smaller orders? Was that within academic institutes mainly, and how did you see the government channel perform in the year?
Yeah. So I mean, it was still a very tough year. Academic institutes, we actually saw about teens growth in the first half, and we're looking at the full detail still now. But for the full year overall in the Americas, when we look at combined with the distributors piece as well, our research and government market actually saw small growth. It's like single digit, nearly high single digit against the rest of the market where we think the rest of the peers will be down.
We think that just speaks to the fact that we've actually captured share in this market environment. So we're very happy with that. And it's also worth just calling out as well that regionally, we're doing very well in the Americas with the second half performance of a 30% growth. When we look at EMEA, it delivered very strong growth yet again, very consistent on a three and five-year view. We'll continue to take market share.
Then APAC, even in spite of a very large contract rolling off in the second half, we still delivered over 20% constant currency growth. So that's a key thing to take away. This is not just one thing, one market. This is all markets, all product lines. We saw growth.
And you shifted business models as well early last year with the shift to CAPEX model versus previously the OPEX model. Seems customer reception to that has been positive. So can you talk through that in terms of customer's reactions and how much of a tailwind that was to growth in 2025? And what we should expect in 2026?
Yeah, absolutely. I mean, I don't think we'd necessarily say that this has been over the moon with the change that we put forward, but we have seen adoption happen. So why did we do it? So, essentially, we had a business model with the MinION, which clearly mass produce with that, get it to as many hands as possible, get people sequencing, make perfect sense. With the large devices where we've got the GPUs inside, placing the instrument with customers, it was the right thing to do.
We've now shifted that to actually match what essentially our competitors do in the market of selling the device upfront. It's better for our cash flow. It's more consistent with what customers expect with how they treat with our competitors, and it makes communication easier with them as well, so it's great for transparency, easier by region, and while we caught people out in terms of timing because of the budget cycles, which is what we saw, as we go into next year, we are looking at the fundamental, the bottom-up approach of our budgeting.
We can see that the volume growth is coming back as well. So we saw a good Q4 for volumes overall for devices. We're looking at that kind of continuing now into next year. And as we think about the fact that we now charge for the device upfront, we think we've actually still got a bit of a tailwind to come.
So we talked about the fact in the first half that we delivered about over 500 basis points improvement in our gross margin, which I know we'll come to. And for the first half, we said that about 3 to 400 basis points of that was related to the kind of pricing benefit that we saw as well. And that is not temporary. That is structural.
And then from a cash perspective, we've improved our cash flow by about GBP 20 million a year as well from changing the business model approach, which thankfully the customers have adopted as well. We're still here. So we didn't get too much of a bad response from people. But clearly, we're very pleased and happy with how the customers have responded to this change.
And beyond the CAPEX model in terms of 2026, thinking about what the key moving parts are, could you contextualize that for us?
Yeah. So when you introduce something like this, clearly, we're not going to make everybody buy a device upfront, particularly if they had a quote order in the system or even at that quote stage, sorry. So we've honored everything in there.
So if you imagine at the beginning of the year when we introduced it, we were still seeing the majority of our sales with that kind of OpEx approach, kind of like a lease model. That's essentially dwindled down to the point now at the exit, we're more like 100% CapEx. So as we go into next year, we're going to get the full year cycle benefit now, plus the volume aspect as well. So that's the kind of key moving part to it.
Makes sense. And thinking about overall revenue growth in 2026 in terms of the key puts and takes, what would you say they are? These sounds like UK Biobank could be quite a strong contract for you. NIH funding pressure will maybe one to think about, but any other factors that we should be thinking about?
Yeah. Last year, about 13% of our revenues exposed to the federal funding in the U.S. That's a big swing factor. China, which is now less than 8% of revenue, is another one. Continued restrictions on trading was an issue we even saw this year. Then it's about the UK Biobank on the more positive side. That'll help with the fact that we've got some other contracts in the EMEA region kind of rolling off. It's about those new market opportunities that Gordon's talked about. It's also about the developments of the platform.
When we think about throughput, the flow cell, and the improvements we've got coming through there, that's just going to open up a bigger opportunity for us overall. We think about adaptive sampling and the adoption that's seeing.
We think about the infectious disease market, and importantly, the biopharma market as well. We have a lot of opportunities coming through. Timing of this is difficult. And I think it's fair to say that this year, we delivered 24% constant currency growth just gone. We were hoping for higher as well. And I think there is part of this where, yes, the market's been difficult and things take longer than expected.
And I think we've also got to reflect in we've got things to work on internally as well in terms of execution that could essentially drive the platform even quicker.
And your 2027 midterm target, how are you feeling about that in terms of confidence level on the back of the strong numbers we've just seen?
So the key thing here is 2027, we will deliver EBITDA break-even. And that's the key message that we've kind of been going across since day one when we put the guide out, that we are modeling this business and driving it towards break-even, which we think will help from not just opening up more investors to as valuation support, but also takes control of the company going forward so that we can invest in the things we need to.
When we set that guidance, we said that we're aiming for over 30% growth a year. Clearly, things have got in the way since then in terms of market as well, as well as on our side looking at execution as well. We're working on all of those things, but also gross margin. So we said that we'd be over 62% gross margin in 2027.
In the half year just gone, adding back for an underlying write-off that we took, we're at 61%, so we're actually moving quicker on things like gross margin. When we look at the cost space, we've gone through two restructurings this year, and essentially to kind of refocus capital, reallocate it towards higher growth opportunities, and really focus what we're doing,
so there are lots of moving parts to this that's more nuanced, and it has to be because nobody can control what's going on in the end market environment, and so we actually have to manage this business as we go through, so yes, there's lots of things that can push us over that 30% CAGR rate, but we've got to be cognizant of the fact that some of these things are outside of our control. And so we're going to manage it, and we're still going to deliver that break-even in 2027.
And one of the elements you called out as interesting is the share gains that you're seeing in the U.S. in research as well. So in your view, what's driving those share gains? How do you see the sustainability of those share gains?
Let me answer that first. There you go. We have a brilliant head of sales. Got me. Who we poached from Illumina about two years ago. She's sitting over there. She knows where all the bodies are buried. It's been brilliant. In fact, all of our three regional heads all have 10 years plus experience in their regions. And all three of them have worked together, grew up together at Illumina. So bringing in that leadership group has been phenomenal.
And the competitive positioning has been evolving. It's been evolving for the last few years. This year, we may see a launch from Roche in terms of their SBX technology, so how are you feeling about your competitive positioning and the moat that you've built around Nanopore,
and I see Element are also launching a high-throughput sequencer, so they're all the other guys. So Roche, the only similarity is the sensing element. Then you immediately diverge away from each other. They're all a form of sequencing by synthesis.
They take that beautiful high definition, all those mods, all that biology, and completely pummel it to a black and white picture, and so you get your SNPs and your SNVs, and that's it, and so they're over there, so they're all the other guys, and we're clearly differentiated, and we wish to remain like that.
Paul, Gordon, so first of all, I wanted to—
You've got a mic. Be alright.
I'm going to play it to you. Sure. First of all, I wanted to be one amongst the audience to salute your 20 years of oversight of extraordinary innovation and you've brought to humanity a technology that just goes on forever. The capabilities that you outlined today are astonishing for someone like me in the life science and diagnostics industry.
So thank you. I wanted to ask either or both of you to elaborate a little bit on the manufacturing ramp. You mentioned in the slide that you've got scale to handle your growth through five years. We all on the customer side are really interested in manufacturing, scale, yield, ability to fulfill, all those things that come with the success of building the company to this size and with this growth. So if you could elaborate on the state of play of the manufacturing and its ability to meet the demand that would come?
We opened the factory in 2018, and we did some projections of greater than 30% growth, by the way. And we wanted it to be viable in 2030. And there are factors in there, automation, which also drives margin, but reuse, which has come along much quicker than I thought it would. So we have the scalability for the consumable, which is what we manufacture in-house. So there is plenty of headroom there. But there's also scalability on chip. I talked about we can get to two genomes now, 200 gigs. Actually, the capacity is 400. So there's still a lot of progress to come from that.
So you're scaling it in two dimensions, and that then provides us with the confidence that we have enough there. One of the disciplines that Francis will bring, having been in regulated point of care business, Radiometer, clinical.
That factory is pretty close to being a highly regulated FDA auditable facility as it is today, but we'll be sharpening our pencils in that area as well as we see that ever-increasing growth in the regulated platform market.
I think with that, we've come to the end of the session. Thank you very much, Gordon, for your time and to Nick as well. Congratulations, obviously, on the 20 years and building quite a successful story.