Oxford Nanopore Technologies Investment Research Report - FY2025 Analysis

Now let me provide you with a comprehensive investment research analysis report on Oxford Nanopore Technologies.

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Oxford Nanopore Technologies achieved approximately 22% revenue growth in FY2025, exceeding market expectations, primarily driven by a sharp rise in demand for clinical applications [1]. The company is strategically transitioning from the traditional research market to the clinical diagnostics field, a transformation that brings significant growth opportunities as well as intense competitive challenges. This report will conduct an in-depth analysis from four dimensions: financial performance, growth sustainability, competitive landscape, and profitability.

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Oxford Nanopore demonstrated strong financial performance in FY2025. According to the company’s disclosed earnings preview, full-year 2025 revenue is expected to reach

, representing approximately 22% year-over-year growth on a reported basis and 24% year-over-year growth on a constant currency basis, slightly exceeding the company’s guidance [1]. This growth features — all major geographic regions achieved over 20% constant currency revenue growth.

Financial Metric	2024	2025	YoY Change
Revenue	£183M	£223-224M	+22%
Gross Margin	58.8%	58.2%	-0.6pp
Adjusted EBITDA Loss	£62M	£48M	22% Loss Narrowing
Cash and Cash Equivalents	~£260M	~£302M	+16%

was particularly notable [2]:

• Clinical Segment
  : Revenue surged
  60%
  year-over-year, becoming the fastest-growing segment, primarily driven by strong demand for antimicrobial resistance (AMR) testing and oncology applications
• BioPharma
  : Grew approximately 30%, reflecting increased recognition of long-read sequencing in drug development
• Applied Industrial
  : Grew approximately 27%, indicating the technology’s penetration in areas such as industrial synthetic biology
• Research
  : Grew approximately 15%, maintaining steady growth despite pressure on research funding

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The company’s high-throughput sequencing platform

performed particularly strongly, with revenue growing over 40% year-over-year [1]. The strong demand for this product validates Oxford Nanopore’s market position in large research institutions and high-throughput sequencing centers.

had a profound impact on the company’s revenue structure. The company shifted its business model from the traditional “reagent rental” model to direct instrument sales or leasing [3]. While this transformation temporarily affected the alignment of customer budget cycles, it brought significant benefits: instrument sales grew 53% year-over-year, and cash flow improved markedly, laying a foundation for long-term profitability.

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Gross margin declined from 58.8% in 2024 to 58.2% in 2025, primarily due to [2]:

• Non-cash one-time inventory write-down (£3.3 million, -315 basis points)
• Product mix changes (-195 basis points)
• Exchange rate fluctuations (-80 basis points)

Notably, excluding one-time factors such as inventory write-downs,

, indicating that the company’s operational efficiency improvements are taking effect. Adjusted EBITDA loss narrowed from £62 million to £48 million, representing a 22% year-over-year improvement, showing that the company is steadily advancing toward its target of [4].

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Oxford Nanopore’s growth in the clinical market has

rather than cyclical characteristics:

The core advantages of nanopore sequencing technology — — give it unique value in clinical applications [5]. For clinical scenarios requiring analysis of complex genomic regions (such as repeat sequences, structural variations), nanopore technology can provide genomic information that short-read technologies cannot obtain.

The strategic collaboration with in April 2025 was an important milestone [6]. This collaboration combines GeneXpert sample preparation with nanopore sequencing, enabling the generation of actionable infectious disease test reports . This turnaround time has significant value for clinical scenarios such as sepsis testing and rapid pathogen identification.

52.9% of the growth in the clinical segment was primarily driven by demand for AMR monitoring [2]. As the global antibiotic resistance crisis becomes increasingly severe, the value of rapid, whole-genome sequencing in pathogen tracking and resistance gene detection is being widely recognized.

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Currently, the research segment still accounts for approximately 68% of revenue, while the clinical segment accounts for 13% [2]. This structure is both a risk and an opportunity:

:

• Uncertainty in U.S. Federal Funding
  : Funding cuts from institutions such as the NIH may affect research market demand
• Tighter Export Controls in China
  : Geopolitical factors may limit growth in the Chinese market
• Clinical Regulatory Threshold
  : IVD certification requires extensive clinical evidence accumulation

:

• Strong growth in emerging markets in the Asia-Pacific region (all major geographic regions achieved over 20% growth)
• Strategic layout in the Indian market (establishment of Centers of Genomic Excellence with BRIC-CDFD and BRIC-NIBMG)
• The clinical market is still in the early stages of penetration, with huge upside potential

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Based on the above analysis, we believe that Oxford Nanopore’s growth trajectory has

, for the following reasons:

1. Low Market Penetration
   : The penetration of nanopore technology in the clinical diagnostics market is still in the early stages
2. Continuous Technological Iteration
   : The company has committed to achieving 60-70% throughput improvement by 2026
3. Optimized Product Portfolio
   : New RNA analysis tools and optimized product lines will support continued growth
4. Geographic Expansion
   : Layout in high-growth regions such as the Asia-Pacific will provide new engines for revenue growth

However, long-term growth sustainability depends on:

• Progress in clinical regulatory certification
• Outcome of direct competition with established players such as Illumina
• Continuous improvement of technical accuracy (currently ~99.9% vs Illumina’s 99.99%)

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The global gene sequencing market is undergoing profound changes. According to industry analysis, the 2025 market exhibits the following characteristics [7][8]:

Company	Market Position	Core Advantages	Key Challenges
Illumina	Leader in short-read market	Large installed base, clinical compliance, brand recognition	Facing price competition from MGI, erosion by long-read technologies
Oxford Nanopore	Innovator in long-read technology	Real-time sequencing, portability, long reads	Accuracy gap, clinical compliance
PacBio	High-precision long-read	HiFi technology, high accuracy	Higher cost, throughput limitations
MGI/BGI	Cost leader	Price competitiveness, Chinese market share	Geopolitical risks, clinical certification
Element/Ultima	Emerging disruptors	Ultra-low cost, innovative architecture	Small installed base, immature ecosystem

shows [7]:

• Illumina still holds approximately 65% share of the short-read NGS market, but is facing erosion from MGI (12%) and emerging competitors
• The long-read market (PacBio + ONT) accounts for approximately 18% and is growing rapidly
• Oxford Nanopore holds an
  absolute leading position
  in the nanopore niche market, with a market share of over 80%

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:

Metric	Oxford Nanopore	Illumina NovaSeq X
Read Length	Ultra-long reads (up to Mb level)	Short reads (50-300bp)
Sequencing Time	Real-time (minute level)	Hour level
Portability	High (MinION is only business card-sized)	Low (requires laboratory environment)
Accuracy	~99.9% (continuously improving)	>99.99%
Cost/ Gb	$25-40	$10-20
Clinical Certification	In progress	Mature system

:

Oxford Nanopore’s

is reflected in [5]:

1. Real-time Sequencing Capability
   : Data can be obtained in real time during sequencing, suitable for time-sensitive clinical scenarios
2. Long-Read Analysis
   : Can fully analyze complex genomic regions, with irreplaceable value for structural variation detection and assembly integrity
3. On-Site Deployment Capability
   : Portable devices can be used in scenarios such as bedside and field settings
4. Cost Structure
   : Unit costs continue to decline with scale effects and learning curve progress

:

1. Accuracy Gap
   : The company continues to invest in chemical iterations, and new versions such as R10.4 have significantly narrowed the gap with Illumina
2. Clinical Compliance
   : The company is actively advancing regulatory certification, and the proportion of clinical revenue will gradually increase from the current 13%

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Changes in the 2025 industry competitive landscape are worth noting [8]:

• Element Biosciences
  : The AVITI instrument priced at $289K offers $200/genome cost, directly challenging Illumina’s mid-tier market
• Ultima Genomics
  : The UG 100 platform achieves the industry’s lowest cost of $80/genome
• Roche
  : Set to enter the clinical sequencing market, posing a potential threat with its clinical expertise

These new entrants target Illumina’s core market (short-read high-throughput sequencing), rather than the long-read segment dominated by Oxford Nanopore. Therefore,

, with its competitive pressure mainly coming from PacBio’s long-read alternatives and technology assimilation trends.

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:

• Nanopore sequencing market: Approximately $379 million in 2025, expected to reach $639 million by 2030, with a CAGR of 11% [6]
• Overall NGS market: Expected to maintain high single-digit growth from 2025-2028

:

1. Translation from Research to Clinical
   : Penetration of the clinical market (potential market size of $100B+) will significantly expand the revenue base
2. Expansion of Application Scenarios
   : New application areas such as infectious disease monitoring, agricultural genomics, and environmental testing
3. Geographic Expansion
   : Growth potential in emerging markets such as Asia-Pacific and Latin America

:

The key path to achieving EBITDA breakeven by 2027 includes:

• Revenue Scale Expansion
  : Scale effects will significantly improve unit cost structure
• Gross Margin Improvement
  : Operational efficiency improvements and product mix optimization (target of 60%+)
• Expense Control
  : Operating expense growth controlled to low single digits (2025 guidance of 3-4% growth)

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Given that Oxford Nanopore is still in a loss-making state but is rapidly approaching profitability, we use

and for analysis:

Valuation Method	Key Assumptions	Implied Valuation Range
Price-to-Sales Ratio	8-10x 2025E PS (referencing comparable companies)	£1.78-2.23B
DCF Method	EBITDA breakeven in 2027, long-term growth rate of 8%	£2.0-2.5B
Scenario Analysis	Clinical business exceeds expectations/conservative scenario	£1.5-3.0B

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:

1. Structural Growth Opportunities
   : Penetration of the clinical diagnostics market provides a long-term driver for revenue growth
2. Technological Leadership
   : The only commercial leader in nanopore sequencing, with first-mover advantage
3. Clear Profitability Path
   : The management’s target of EBITDA breakeven by 2027 is credible
4. Healthy Financial Position
   : £302M cash reserves provide sufficient capital for development
5. Attractive Valuation
   : Current valuation has upside potential compared to growth prospects

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:

Risk Category	Specific Risk	Potential Impact
Competition Risk	Price war or technological breakthrough by Illumina	Loss of market share, gross margin pressure
Technology Risk	Accuracy improvements fall short of expectations	Hindered clinical market expansion
Regulatory Risk	Delays in clinical certification	Unmet growth expectations
Geopolitical Risk	Restrictions in the Chinese market	Slower revenue growth
Financing Risk	Sustained losses deplete cash	Future financing needs

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: Oxford Nanopore is in a critical period of strategic transition from research-oriented to clinical-oriented. The 22% revenue growth and 60% clinical business growth rate indicate that the transformation strategy is working. The company’s technological leadership in nanopore sequencing and clear, executable profitability path provide support for long-term investment.

: Medium-High (mainly from competitive pressure and regulatory uncertainty)
: High (based on growth potential)

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Oxford Nanopore Technologies has shown strong momentum in its transition from the research market to the clinical market. The 22% revenue growth and 60% clinical business growth rate validate the effectiveness of its strategic direction. The company’s differentiated technological advantages in nanopore sequencing (long reads, real-time sequencing, portability) have established unique competitive barriers in the clinical diagnostics market.

: We believe that short-to-medium-term growth has strong support, but long-term sustainability depends on continuous improvement of technical accuracy and progress in clinical regulatory certification.

: Oxford Nanopore holds a leading position in the nanopore niche market, and competition with Illumina is mainly between different technical paths (long-read vs short-read). As the value of long-read sequencing in structural variation detection and assembly integrity is widely recognized, Oxford Nanopore is expected to capture a larger share of the overall sequencing market.

: The target of EBITDA breakeven by 2027 is reasonable and executable. Revenue scale expansion, gross margin improvement, and expense control will be the key drivers to achieve this target.

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[1] TipRanks - “Oxford Nanopore Beats Revenue Guidance on Broad-Based 2025 Growth” (https://www.tipranks.com/news/company-announcements/oxford-nanopore-beats-revenue-guidance-on-broad-based-2025-growth)

[2] Oxford Nanopore Interim Results 2025 (PDF) (https://a.storyblok.com/f/196663/x/ae7313cac5/ont-interim-results-2025-final.pdf)

[3] LinkedIn - Raymond Tecotzky, “Oxford Nanopore’s bold pricing pivot boosts revenue” (https://www.linkedin.com/posts/raymond-tecotzky_biotech-genomics-sequencing-activity-7368786825957531648-ChEh)

[4] Yahoo Finance - Oxford Nanopore H1 FY2025 Earnings Call Transcript (https://finance.yahoo.com/quote/ONTL.XC/earnings/ONTL.XC-H1-2025-earnings_call-352618.html)

[5] CPGR - “Oxford Nanopore Technology: Revolutionizing Genomic Sequencing” (https://www.cpgr.org.za/oxford-nanopore-technology-revolutionizing-genomic-sequencing/)

[6] Mordor Intelligence - “Nanopore Sequencing Market Size & Share Outlook to 2030” (https://www.mordorintelligence.com/industry-reports/nanopore-sequencing-market)

[7] Decibio - “2025 NGS Manufacturer Market Size, Growth and Trends” (https://www.decibio.com/product/next-generation-sequencing-ngs-market-assessment-report)

[8] Porter’s Five Forces Analysis - “Competitive Landscape of Illumina Company” (https://portersfiveforce.com/blogs/competitors/illumina)