SourceBio bracing for impact of changes to PCR travel testing

The AIM-traded firm said its PCR testing throughput had progressively increased since the first half of the year, with average daily testing volumes in July approaching 7,000, which was more than double the rate in the first half.

Average testing in August exceeded 10,000 per day, and average testing in September to date was at approximately 14,000 per day.

A significant portion of the group's PCR testing volumes and revenues were currently derived from day two, day eight and ‘Fit to Fly’ testing.

SourceBio said day two and day eight testing would be removed under the new travel rules from the end of October for fully-vaccinated travellers and low-risk countries.

The requirements surrounding PCR testing for outbound travel, the ‘Fit to Fly’ scheme, and day two and day eight testing from red list countries did not appear to be impacted by the government’s announcement, and the board said it expected that the newly-announced changes to international travel would likely encourage more people to travel abroad from the UK.

That, it said, should contribute to a rise in ‘Fit to Fly’ outbound testing volumes.

“The group anticipates that a material proportion of travel related demand will switch from PCR technology to lateral flow technology,” the SourceBio directors said in their statement.

“SourceBio has evaluated a number of lateral flow technologies and has signed two commercial distribution agreements for the ongoing supply of lateral flow tests.

“The first agreement is with Excalibur Healthcare Services for the supply of their new lateral flow test, the Excalibur Rapid SARS-COV-2 Antigen Test.”

SourceBio said the test kit was approved for professional use in Europe and the UK, and had demonstrated close to 100% specificity and 100% sensitivity for high viral loads, equivalent to positive PCR values below Ct 28.

“The Excalibur test kit may also be combined with a ‘test to go’ scanning app and travel pack that has been proven to provide a more accurate reading of results than the human eye.

“The second agreement is with Everything Genetic, which also offers a home-use option for lateral flow antigen testing.”

The board said it was continuing to respond to a “fast-moving” Covid-19 testing marketplace in order to maximise business potential.

“As announced in July, first half revenues more than tripled to £37m compared to prior year, with approximately 75% of these revenues derived from Covid-19 testing.

“Adjusted EBITDA of £11.2m was significantly above the £1.7m recorded in the first half of the prior year.”

Full-year revenues and adjusted EBITDA were still expected to show “dramatic growth” compared to the previous year, although the changes to travel PCR testing were expected to impact on the level of that expected material growth

“The company is evaluating the full year 2021 and 2022, and will provide a full trading update as part of its interim results statement which is scheduled to be released on 28 September.”

At 1349 BST, shares in SourceBio International were down 14.92% at 138.25p.