By Steven Bell

DUNDEE-BASED in-vitro diagnostics company Axis-Shield yesterday announced preliminary results reflecting an “excellent year of progress.”

The figures, for the year ending December 31, 2004, showed turnover had increased to £52.3 million compared with £50.3 million during the previous 12 months.

The loss for the year was “substantially reduced” from £6.7 million to £1.2 million, in line with expectations and reflecting a decline in external research and development expenditure.

Revenues were up 4%, while there was also an improvement in gross margins, partly as a result of centralisation of laboratory operations in Dundee.

The company confirmed yesterday that it was in the process of recruiting a number of new researchers for its operations in the city.

Commenting on the results, Nigel Keen, chairman of Axis-Shield, said, “2004 has been an excellent year of progress.

“It has seen Axis-Shield firmly established as a supplier of innovative and large-volume markers to the laboratory testing market and as a major player in the growing demand for effective diagnosis at the point of care.”

The year saw the launch of the AFINION point of care system, and its further roll-out in the coming months is expected to significantly augment future sales.

The “successful” launch of BNP B-type natriuretic peptide for diagnosis of heart failure on Abbott’s AxSYM platform generated revenues of £1.8 million in 2004.

Homocysteine sales were affected by patent disputes in the first half of the year, but recovered growth during the following six months.

Mr Keen described the launch of the AFINION system as a “significant milestone” in the evolution of the company.

“It gives us a sophisticated instrument system to meet customer needs in the important primary health care sector, which complements our established NycoCard platform,” he said.

“Our financial performance has improved substantially and I look forward to a period of sustained and profitable growth.”

The chairman pointed out that a key difference between Axis-Shield and other emerging healthcare companies was a strong cash flow from commercial operations.

This was mostly derived from successful products that they had taken to market and which came from their own research and development.

As a result, the company has been able to fund a “substantial” research and development programme without repeated recourse to the capital markets.

Axis-Shield is an international diagnostics company, headquartered in Dundee with research and development and manufacturing bases in the city and Oslo.

The group specialises in the development, manufacture and marketing of innovative proprietary diagnostics kits in areas of clinical need, including cardiovascular and neurological diseases, rheumatoid arthritis, alcohol abuse and diabetes.

Axis-Shield also yesterday announced the appointment of Mr Bay Green as non-executive director. Mr Green is a fellow of the Institute of Chartered Accountants and a member of the Securities Institute, with over 30 years’ experience in corporate finance.

Mr Keen said, “We welcome Bay to the board. His wide experience in corporate affairs at senior board level will be an asset to Axis-Shield as new product launches bring us growth and sustainable profitability.”

Axis-Shield shares closed 10p ahead yesterday at 242.5p.