SourceBio International (SBI ) said it has been successful with its tender for a framework agreement with Public Health England to provide its clinical lab diagnostic testing services.
The Group, which provides integrated lab services and products internationally, said PHE's national microbiology framework is appointing suppliers to framework agreements in four lots. It will cover an initial two years with the option to extend by up to a further two years.
SourceBio has been included in Lot 4 of the agreement which will cover clinical lab diagnostic testing services using new and existing techniques ‘to ensure that there are consistent and affordable provision of high quality, safe and compliant testing services which should be delivered efficiently and effectively to support wider clinical services.’
The company said that under the national microbiology framework, participating public health authorities across the UK can use any of the 50 qualifying companies of Lot 4 to call-off contracts to procure goods and testing services. This includes SourceBio, however this agreement is not exclusive to SourceBio and does not guarantee orders, the firm outlined.
SourceBio said it continues to invest into its capacity in order to meet the current requirements for centralised testing and that it is ‘well placed’ to react to new strains of the virus and to respond with speed, utilising its experience working with the Department of Health and Social Care for surge testing and in operating mobile testing laboratories.
Jay LeCoque, Executive Chairman, SourceBio International, said: "We are very encouraged with the successful tender award under Lot 4 of the Microbiology Framework and welcome the opportunity to work with PHE and its sister organisations across the NHS and DHSC in Wales, Scotland and Northern Ireland.”
The company told investors that it will continue to contribute its services to help contain Covid-19 in the near-term and to create “a robust testing infrastructure” post-pandemic.
Separately, SourceBio has been added to the UK Government's approved list as a private provider of day two and day eight ("D2/D8") coronavirus testing for all international arrivals for both SARS-CoV-2 PCR testing and SARS-CoV 2 genome sequencing testing services.
The company highlighted that its COVID-19 testing services have been shown to meet the DHSC's 15 minimum standards and have been reviewed by UKAS, a national accreditation body recognised by the UK Government to assess against internationally agreed standards.
“We are pleased to be supporting the COVID-19 testing efforts. This DHSC approval with regards to day two and day eight testing further confirms the competency of our services and positions SourceBio International as a leading player in the market,” added LeCoque.
View from Vox
Today, SourceBio said it has been successfully accepted by Public Health England's £15bn 2-year framework agreement and that it is “well placed to react to new strains of the virus”.
It has also been added to the UK Government's approved list of Day 2 & Day 8 coronavirus screening for all international arrivals for both PCR testing & genome sequencing.
Thus push the clock forward to 2025 and the base business alone could be generating £9m EBITDA on £40m of sales. Which assuming a 14x multiple, would be worth £126m (vs £110m mrkcap incl £8.4m net cash) – implying for investors the Covid testing arm is effectively in for free. Shares in SourceBio are trading 3.77% higher today at 165p following the news.
SourceBio International is an international provider of laboratory services to clients in the pharmaceutical industry, the NHS and to private healthcare providers. The Group is headquartered in Nottingham, with additional facilities in the UK, Ireland and the US.
The company saw a positive start on its first day of trading on AIM, adding around £8m to its initial £120m market capitalisation while the £35m raised at 162p is intended to be used by it to scale up COVID-19 testing capacity as well as paying off shareholder and bank loans.
“We are delighted by the strong support we’ve received from institutional investors. Our IPO on AIM allows us to significantly increase our COVID-19 testing capacity, accelerate earnings growth in our core business and execute on potential M&A opportunities,” said LeCoque.
He said at the time of the IPO: “It’s an exciting time for our business and we look forward to executing on our ambitious growth plans and delivering value to our shareholders.”
In November 2020, SourceBio unveiled that its funds from its IPO were enabling it to further scale its COVID-19 testing services to deliver against expected increases in future testing.
SourceBio previously forecasted total revenue of around £50m (FY19: £21.2m) and EBITDA of c.£14m (FY19: £3.0m) for the year ending 31 December 2020, with the vast majority of this increase in expected earnings driven by the contribution of COVID-19 testing revenues.
The group said in November 2020 that it had been accepted into the Increasing Capacity Framework Agreement for cancer testing services to NHS England, designed to reduce the significant backlog of elective surgeries impacting the NHS due to the pandemic which is expected to support the growth of the Healthcare Diagnostics business unit in 2021.
SourceBio entered into a strategic commercial partnership with Oxford Nanopore Technologies to offer a COVID-19 testing solution to corporate customers at scale via its own lab facilities. Last month, the group entered into a supply agreement to provide ‘state of the art’ products and lab services to an unnamed high street retail and pharmacy group.
Since December 2020, SourceBio has been supplying COVID-19 antigen RT-PCR testing services to the DHSC. It is currently awaiting a potential formal award under Public Health England's National Microbiology Framework in relation to further COVID-19 testing services.
For more news and updates on SourceBio International: