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nanoporetech.com

Annual Report

and Accounts 2023

Enabling the analysis

of anything, by anyone,

anywhere.

Rounding: Certain numerical

figures included in the Annual

Report have been rounded.

Therefore, discrepancies in

tables between totals and the

sums of amounts listed may

occur due to such rounding.

Percentages in tables have also

been rounded and accordingly

may not add up to 100%.

01 Financial highlights

02 Who we are

06 Our products and customers

08 Our investment case

10 Strategic Report

12 Chair’s statement

14 CEO’s statement

24 Market opportunities

28 Our business model

30 Our strategy

38 Key performance indicators

40 Financial review

48 Our sustainable impact

72 Principal risks evaluation

74 Principal risks and uncertainties

78 Section 172 statement and stakeholder engagement

85 Non-financial information statement

86 Viability statement

88 Corporate Governance

90 Chair’s corporate governance statement

92 Governance at a glance

94 Board of Directors

100 Corporate governance report

108 Nomination Committee report

111 Audit and Risk Committee report

116 Directors’ remuneration report

136 Directors’ report

139 Directors’ responsibilities statement

140 Independent Auditor’s Report

148 Financial Statements

150 Consolidated Statement of Comprehensive Income

151 Consolidated Statement of Financial Position

152 Consolidated Statement of Changes in Equity

153 Consolidated Statement of Cash Flows

154 Notes to the Consolidated Financial Statements

192 Company Statement of Financial Position

193 Company Statement of Changes in Equity

194 Company Statement of Cash Flows

195 Notes to the Company Financial Statements

206 Further information

207 Alternative Performance Measures (APMs)

andother non-statutory measures

209 Glossary

211 Company information

Our vision

To enable the analysis

of anything, by anyone,

anywhere

Oxford Nanopore makes a novel

generation of DNA/RNA sequencing

technology that provides rich data, is fast,

accessible and easy to use. Our goal is to

disrupt the way that biological analyses

are currently performed, and open up

new applications that have a profound,

positive impact on society.

Financial highlights Business highlights

1 Cash, cash equivalents and other liquid investments includes cash and

cash equivalents, treasury deposits andinvestment bonds

Total revenue

£169.7m

(FY22: £198.6m, which includes £51.8m of non-recurring

COVIDtesting revenue)

LSRT revenue

£169.7m

(FY22: £146.8m)

LSRT gross margin

53.3%

(F Y22: 56.3%)

Gross profit

£90.5m

(FY22: £123.8m)

Adjusted EBITDA

£(104.9)m

(FY22: £(78.6)m)

Loss for the year

£(154.5)m

(FY22: £(91.0)m)

Cash, cash equivalents and other

liquid investments

£472.1m

(31 December 22: £558.0m)

• Delivered a net increase of

more than 750 active

customer accounts in the

year, taking total active

accounts in 2023 to more

than 7,600

• Execution of 2023

innovation goals including

higher accuracy chemistry,

PromethION 2 (P2) Solo

launch, direct RNA

upgrades, basecalling

acceleration and expansion

of our informatics products,

further differentiating our

platform and broadening

demand for our technology

• Approximately 2,800

peer-reviewed research

papers published by Oxford

Nanopore customers in

2023, showcasing

breakthrough research

across cancer, human

genetics and infectious

disease and demonstrating

continued opportunity for

growth in the genomics

research market

• New strategic collaborations

added to develop and

access new growth markets

in clinical and industrial

applications, including

collaborations with the

Mayo Clinic to advance

research in cancer and

bioMérieux to develop

products that serve the

infectious disease

diagnostics market

• Strategic investment from

bioMérieux, strengthens

existing collaboration, which

is accelerating expansion of

Oxford Nanopore’s

technology into infectious

disease diagnostics

• Expansion of commercial

teams, including strategic

leadership hires to increase

traction in key markets

across the Americas,

EMEAI and APAC.

Commercial infrastructure is

capable of supporting the

Group’s development over

the coming years to drive

long-term sustainable

growth

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 1

Read more on page 14 Read more on page 40

Applications of our technology

Our technology

Global commercial footprint

Customers

Distributors

Offices or labs

Global offices

Distributors

Commercial team

416

Who we are

Oxford Nanopore

Technologies’ goal is to

enable the analysis of

anything, byanyone,

anywhere. The Company has

developed a new generation

of nanopore-based sensing

technology that is currently

used for real-time, accurate,

accessible, and scalable

analysis of DNA and RNA.

Oxford Nanopore Technologies Annual Report & Accounts 20232

Our purpose

By enabling biological insights,

we strive to improve life on earth

and beyond

Our mission

We empower people to explore

and answer biological questions

with our transformative

technology platform

Health Agriculture Industry Environment Biosecurity Education Consumer

Life science research tools

(LSRT) market

Sequence data is used throughout scientific

research, whether in university, government,

or industrial research groups, to help

biologists answer a range of questions.

The majority of users of Oxford Nanopore’s

sequencing technology are currently

research scientists, working to understand

fundamental science or to develop methods

to utilise genomic data in broader

environments such as clinical and industrial.

Clinical and applied industrial markets

Outside scientific research, DNA/RNA

information can be used to support ‘real

life’ decision making, whether that is in

healthcare, industrial or other

environments. Our goal is to open up new

applications that have a profound,

positive impact on society, by providing a

newgeneration of accessible technology.

This market represents a significant

future additional customer base and

revenue in the medium to long-term.

Read more on page 6 Read more on page 6

Life science research: understanding the biology of any organism

As a foundation for emerging real-world impact

Human genetics Microbial organismsCancer Plants Animals

LSRT revenue breakdown

LSRT revenue performance

Devices & services revenue 26%

Revenue generated from selling and leasing devices.

Also Includes licence, warranty and other revenue

Consumables 74%

Revenue generated from the sale of flow cells and

sample preparation kits for our sequencing devices.

Includes the consumables from starter pack sales

£169.7m

LSRT revenue

39% 5-year LSRT revenue CAGR

20232022202120202019

2018

£50m

£100m

£150m

£200m

£170m

£127m

£66m

£52m

£33m

£147m

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 33Oxford Nanopore Technologies

Key facts

Founded

2005

Employees

>1,200

Active customers

>7,600

Countries served

>125

Publications

>11,000

Active patents

>2,500

1 Active customer accounts in 2023

2 Reported on a cumulative basis - see page 39

Nanopore

sequencing

Sequence any length fragment from short to ultra-long

Richer insights

Highly accurate genomic data captures more types of generic variation

Direct/native DNA/RNA sequencing

Real-time, fast data generation

Faster results

From near sample, real-time workflows that don’t require batching

Scalable formats from small handheld to ultra-high output devices

Cost effective. No capital requirements

Accessible and affordable

With scalability that enables more use cases

Plug-and-play easy-to-use solutions

Oxford Nanopore has innovated and brought to market a

nanopore-based sensing platform. The first application is

DNA/RNA sequencing. The novel features of the technology

means that it provides richer data, faster, and more

accessibly and affordably than legacy technologies. We have

developed a new generation of sensing technology that uses

nanopores – nano-scale holes – embedded in high-tech

electronics, capable of real-time, scalable analysis of

different types of molecules. Our first application is DNA/

RNA sequencing but the platform can be adapted, to analyse

other types of molecules in the future, for example, proteins

or small molecules.

A unique combination of benefits meets unmet customer

needs in genomics, setting a higher standard and higher

expectations in genomics.

Features of nanopore sequencing

Oxford Nanopore Technologies Annual Report & Accounts 20234

Sequence any length fragment from short to ultra-long

Richer insights

Highly accurate genomic data captures more types of generic variation

Direct/native DNA/RNA sequencing

Real-time, fast data generation

Faster results

From near sample, real-time workflows that don’t require batching

Scalable formats from small handheld to ultra-high output devices

Cost effective. No capital requirements

Accessible and affordable

With scalability that enables more use cases

Plug-and-play easy-to-use solutions

How it works

All Oxford Nanopore sequencing devices use flow cells

which contain an array of tiny holes — nanopores —

embedded in an electro-resistant membrane. Each

nanopore corresponds to its own electrode connected to a

channel and sensor chip, which measures the electric

current that flows through the nanopore.

1. The nanopore processes the length of the DNA or RNA

fragment presented to it. The user can control fragment

length through the library preparation protocol utilised,

enabling experiments to characterise anything from

ultra-long fragments of DNA to short fragments

originating from cell-free DNA in blood.

2. An enzyme motor controls the speed at which the DNA

or RNA strand passes through the nanopore. Once the

DNA or RNA has passed through, the motor protein

detaches and the nanopore is ready to accept the next

fragment.

3. Nanopore reader – when a molecule passes through the

nanopore, the current is disrupted. Fluctuations in the

current are decoded using basecalling algorithms to

determine the DNA orRNA sequence in real time.

4. An electrically resistant membrane means all current

must pass through the nanopore.

Watch our video

explaining the process

Features of nanopore sequencing Benefits

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 55Oxford Nanopore Technologies

Our products

and customers

One core technology at any scale

Our nanopore-based sequencing chemistry is integrated into

consumable flow cells which include arrays ranging from tens to

thousands of electronic sensing channels. Users may deploy a range

ofdifferent devices with these flow cells, which are designed to support

any level of sequencing experiment, from go-anywhere, on-demand

small analyses to ultra-high output projects, such as human population-

scale sequencing. All devices can run the same nanopore-based

sequencing chemistries, enabling users to scale their applications

according to their needs

MinION

50Gb

MinION Mk 1D

50Gb

Launching in 2024

GridION

250Gb

PromethION 2

Solo

580Gb

PromethION 2

580Gb

PromethION 24

7Tb

PromethION 48

14Tb

Truly portable, real-time devices

for DNA and RNA sequencing

Compact benchtop

device

Flexible, high-output nanopore

sequencing for every lab

Flexible, large-scale, direct

DNA and RNA sequencing

Flongle

2.8Gb

MinION

50Gb

PromethION

290Gb

Flow cells

Devices

* Output per device refers to the theoretical maximum output

Our products

Oxford Nanopore Technologies Annual Report & Accounts 20236

S3 customer numbers

S3 average revenue per account

(excluding EGP)

~$641,900

S2 customer numbers

1,210

S2 average revenue per account

~$64,000

S1 customer numbers

6,298

S1 average revenue per account

~$5,800

Genomic explorers

<$25,0001

Expanding everyday sequencing

$25,000 to $250,0001

Multi-installation customers

>$250,0001

S2 typical customer profile:

Typically research teams or smaller

departments in university, government

orindustrial research settings. These

accounts may not have access to large

capital budgets but wish to control their

sequencing experiments, having previously

sent samples out to service providers.

S3 typical customer profile:

These customers are typically PromethION

users, with larger, complex or often national

projects. They are predominantly larger

organisations, including universities,

commercial sequencing service

providers, and major production labs with

medium to high-level usage. A key part of

this market is large-scale human

genomics, where thousands of samples are

sequenced for novel insights at scale.

S1 typical customer profile:

These user purchase personal, accessible

products such as MinION and more

recently P2. They tend to purchase our

technology, using our digital resources and

e-commerceplatform and are key to

providing new insights into biology.

LSRT revenue by customer group

S1 £29.4m

S2 £62.3m

S3 £55.3m

Indirect £22.6m

1 Annual revenue per account

£169.7m

LSRT revenue

Overview

We categorise customers into three groups to ensure

efficient but effective commercial attention is given to

different types of customer throughout the sales pipeline,

toclose new business and provide ongoing support for

customer success. The three customer groups are fluid

andmovement between customer groups is possible.

In addition to the S1, S2 and S3 customer groups we

haveindirect sales that come through our distributors.

At31December 2023 we had a total of 22 distributors.

Our customers

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 77Oxford Nanopore Technologies

Our investment case

1. 2. 3.

Significant,

growing market

opportunity

Purpose-driven,

high-impact

business

Disruptive

technology

platform

The global DNA sequencing

equipment and consumables market

is worth $6.2 billion and is expected

to continue growing in the low

double digits, driven by increased

research funding and adoption of

the technology into clinical and

industrial markets. In addition, the

broader life sciences market, of

which sequencing is one part, has

opportunities for disruption.

We believe that in the long term, as

well as furthering scientific research,

future clinical and applied market

opportunities will be enabled by

oursingle platform offering rapid

insights, scalable formats and

comprehensive biological

information. These potential total

addressable markets are expected to

grow significantly, to tens of billions

of US Dollars. Beyond DNA/RNA

analysis, longer term opportunities

include nanopore-based analysis of

other types of molecules including

proteins and small molecules.

It is our belief that our highly

differentiated technology can not

only penetrate these markets, but

reshape and expand them as well

ascreate entirely new markets.

Our purpose is to improve life on

earth and beyond by enabling

biological insights. Accessibility is

central to our business, from

product and pricing design to

logistics and how we serve our

customers. We have broken down

historically high barriers to entry

with our low-cost starter pack

model, plug-and-play scalable

devices and digital ecosystem, to

broaden access togenomics.

Scientists use our products in

more than 125 countries to

address some of the most pressing

biological issues of the day,

including sustainable agriculture,

biodiversity and studying the

effects of climate change on

oceans and glaciers. Our

technology has the potential to

provide a broad positive impact in

diverse areas including human

healthcare, in areas such as

cancer, neurology, genetic disease

and transplantation.

Our electronics-based molecular

sensing platform offers several

advantages over existing

technologies: richer, multi-omic

data, rapid insights and

accessibility and affordability.

These benefits derive from the

platform’s novel range of features

including short to ultra-long reads,

direct, native DNA/RNA

sequencing, real-time, fast data

generation, scalable formats, cost

effective, with no capital

requirements and plug-and-play

easy to use solutions.

We retain our competitive

advantage through constant

innovation to drive product

improvement and the development

of new technologies. Innovation

isprotected by our intellectual

property portfolio, which comprises

more than 2,500 active patents

across more than 350 patent

families, reflecting clear technology

leadership in our field.

>$150bn

long-term market potential

>11,000

scientific publications

>2,500

active patents

Read more on page 22

Oxford Nanopore Technologies Annual Report & Accounts 20238

4. 5. 6.

Infrastructure

built to scale

Track record of

strong, resilient

growth

Experienced,

globalteam

We have built a diversified global

supply chain and significantly

invested in manufacturing specific

innovation and infrastructure,

allowing us to scale rapidly across

geographies to meet volume growth.

In 2019, we opened a high-tech

manufacturing facility in the UK

designed to scale production

capacity. This has enabled a

tenfold increase in capacity since

2016. The manufacturing process

has been designed to allow

incremental, rapid scale-up, with

low capital and personnel cost to

match our growth trajectory.

We continue to focus on building

abest-in-class, resilient supply

chain, optimising manufacturing

processes through innovation to

enable long-term growth and drive

margin expansion.

We have a track record of

consistently delivering robust

underlying revenue growth,

underpinned by our unique

commercial model and diverse

customer base, with >7,600 active

accounts in 2023. We continue to

see strong revenue growth across

all LSRT customers. In the period

from FY20 to FY23 S1, S2, S3 and

indirect revenue grew at a CAGR

of 16%, 38%, 46% and 61%

respectively.

The business is strongly

capitalised, with £472.1 million of

cash, cash equivalents and other

liquid investments at 31 December

2023.

The balance sheet supports

continued, strategic and

disciplined investment in

innovation to fuel growth, with

adequate resources to implement

our business plan to and through

adjusted EBITDA breakeven in

2027 and deliver on the significant

growth opportunity in front of us.

We continue to see strong

momentum across the business

long-term, with growing demand

for our technology platform and its

unique combination of features.

The executive team, led by

DrGordon Sanghera, CEO,

hasextensive experience in the

development, manufacturing and

commercialisation of disruptive

technologies including DNA

sequencing. We have invested in

the core functions needed to scale

production and distribution of our

technology from innovation to

sales, contracts to production.

Since IPO we have more than

doubled our commercial teams,

including strategic leadership hires

to increase traction in key markets

across the Americas, EMEAI and

APAC. Commercial infrastructure

is now capable of supporting the

Group’s development over the

coming years to drive long-term

sustainable growth.

Our global team of >1,200

employees have diverse and

complementary backgrounds,

including electronics, chemistry,

biology, and data science.

Focusing on a clearly defined set

of core values, the workforce is

aligned onthe delivery of

high-impact technology to the

greatest range of users and to the

rapid, sustainable growth of the

business.

>60,000sq ft

manufacturing space

37%

3-year LSRT revenue CAGR

100+

combined years’ experience of

Executive Directors

Read more on page 94

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 99Oxford Nanopore Technologies

Strategic

report

Oxford Nanopore Technologies10 Annual Report & Accounts 2023

10—87

10 Strategic Report

12 Chair’s statement

14 CEO’s statement

24 Market opportunities

28 Our business model

30 Our strategy

38 Key performance indicators

40 Financial review

48 Our sustainable impact

72 Principal risks evaluation

74 Principal risks and uncertainties

78 Section 172 statement and stakeholder engagement

85 Non-financial information

86 Viability statement

Corporate Governance Financial Statements Further InformationStrategic Report

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 11

Chair’s

statement

2023 has been a year

of exciting science and

strong innovation

alongside continued

revenue growth.”

Oxford Nanopore Technologies Annual Report & Accounts 202312

Overview

I am pleased to introduce our 2023 Annual Report. This year marks

my second as Chair of Oxford Nanopore and it has been an exciting

period in the company’s lifecycle to serve in this capacity. Since our

Initial Public Offering (IPO) two years ago, we have demonstrated

determination, resilience and adaptation to supply chain constraints

and other complex market conditions, achieving 39% underlying

growth

in the last year. The Group delivered total revenue of

£169.7million compared to £198.6 million in 2022, which included

£51.8 million from COVID Testing (2023: £nil). We have also enhanced

our platform, improving performance, expanding our end-to-end

workflows and continuing to democratise access to high output

applications with the PromethION 2 (P2) Solo product rollout, leasing

or selling more than 700 P2 Solo’s in FY23. These have supported and

expanded our customer base, now exceeding 7,600 active accounts

as of 31 December 2023 and helped facilitate groundbreaking science

worldwide that has reshaped the market. Whilst we are pleased with

our trajectory, we recognise that we must continue to accelerate

growth and drive towards profitability in the medium term.

In October, we hosted our first Capital Markets Day. This was an

important milestone during which the leadership team announced

plans to build upon our foundational commitment to deliver

exceptional value in the Life Science Research Tools sector by

expanding our long-term focus to address unmet needs within

clinical and applied markets. In the last year, we announced several

significant partnerships to support this focus, and we are well on our

way to creating new markets for sequencing within these sectors.

Our partnership with bioMérieux SA, a world leader in the field of in

vitro diagnostics (IVD), will support the successful development and

deployment of products in our portfolio that serve IVD infectious

disease markets. Meanwhile, a joint development collaboration with

the Mayo Clinic in the US will integrate nanopore sequencing in the

Mayo Clinic’s labs to help develop new clinical tests for human

diseases such as cancer. I am encouraged by the positive early

response we have seen from the clinical and applied markets, and I

believe the opportunity is ours to capture significant value.

2023 marked our second full year as a public company, and I would

like to congratulate Gordon and the rest of the leadership team’s

success in leading the Group through its second full year following

the IPO in challenging capital market conditions and at a time when

innovation, operations and commercial strategies must be

balanced skillfully. In the past year, I have spoken with several of

our largest institutional shareholders, who remain supportive of our

mission and are excited about our future possibilities. I look

forward to the continued engagement in 2024 and beyond.

Financial performance

The Group delivered LSRT revenue of £169.7million, growth of

15.6% on year-on-year and up 15.3% on a constant currency

basis. Underlying LSRT revenue, excluding revenue from COVID-19

sequencing and revenue from the Emirati Genome Program (EGP),

was up 39% on a constant currency basis.

This robust revenue performance against a complex economic

environment reflects the continued increase in global demand for

Oxford Nanopore’s technology across many different areas of

scientific research.

LSRT gross margin was 53.3% for FY23, representing a

declineof300 basis points in the period, reflecting i) the adverse

performance of the EGP, ii) the write off of legacy devices, and

alsoiii) the write off of excess COVID sequencing kits.

Excluding these impacts, we were pleased to see continued

expansion of underlying gross margin, which was 58.8% in FY23,

up 250 basis points in the period, driven by automation,

improvements in manufacturing techniques and the recycling

ofelectronic components in our hardware and consumables.

Corporate governance

The Board believes that robust corporate governance is critical

tothe long-term, sustainable performance and growth of our

business. In 2023, we maintained full compliance with the UK

Corporate Governance Code.

We are committed to diversity, in its widest sense, both at Board

leveland throughout the company. Last year, we made progress

towardsfulfilling our target to reach 40% female representation on the

Board by welcoming Kate Priestman, Dr Sarah Fortune and Dr Heather

Preston as Non-Executive Directors to the Board, who bring diversity

of experience, nationality, technical expertise and strategic experience.

Their appointments to the Board bring our gender diversity to more

than 33% as at 31 December 2023. In 2024, we expect to continue

evolving the board and making progress towards our target.

We were also delighted to welcome Nick Keher as Chief Financial

Officer and Director in January 2024. Nick succeeds Tim Cowper,

who moved into a new role as Chief Operating Officer after having

performed both the role of Chief Financial Officer and fulfilling

most of the responsibilities typically assigned to a Chief Operating

Officer for the past five years.

The Board and I would also like to express our thanks to Sarah Gordon

Wild and Clive Brown for their outstanding support and contribution

during their nine-year and five-year tenure, respectively. Clive remains

in his role as Chief Technology, Innovation and Product Officer and

also continues to serve on the Company’s Operating Committee.

As previously disclosed, Wendy Becker, Tim Cowper and Dr Spike

Willcocks will not stand for re-election at the 2024 AGM. Spike and

Tim will remain in their operational leadership roles at Oxford

Nanopore: Spike as Chief Strategy Officer,and Tim as Chief

Operating Officer. Each will also continue to serve on the

Company’s Operating Committee.

Measuring our sustainable impact

A commitment to sustainable impact is core to Oxford Nanopore’s

mission. Last year, we formalised that commitment by introducing

anew sustainability strategy – product, planet, people – that

encapsulates the consistency of our wider business strategy and

supports our commitments to progress initiatives across

environmental, social, and governance (ESG). We also published

our first-ever Sustainability Report to showcase the impact of our

technology and the customers who use it, while also committing to

build on that progress in the year ahead.

Human health, climate change and food security are defining issues of

our time that Oxford Nanopore can positively impact. We are adapting

to, and mitigating against, climate change risks and impacts, through

commitments to improved efficiencies throughout Oxford Nanopore’s

operations, including in our products, facilities and value chain. Our

products are already designed to minimise packaging and waste, to

dramatically reduce dependencies on cold-chain shipping and to

include recycling of key components into our business processes.

This year we are building on that commitment by publishing our Net

Zero Transition plan, including the targets we have set to ensure

progress is being made to rapidly contain global warming to 1.5oC.

You can find more details about our net zero plan on page 63, in

addition to our findings against the Task Force on Climate-related

Financial Disclosures (TCFD) framework. This includes an overview

of our carbon risks and opportunities. We look forward to publishing

our second detailed Sustainability Report in the first half of the year.

Duncan Tatton-Brown

Chair

18 March 2024

* Underlying revenue excludes revenue from COVID sequencing and revenue from the

Group’s largest customer (the EGP)

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 1313Oxford Nanopore Technologies

In 2023 our technology

was used by more

customers than ever

before, supporting

groundbreaking research

in multiple areas including

cancer, human genetics

and infectious disease.

Ourplatform provides

these customers with a

unique set of features,

producing richer data more

quickly and at unparalleled

accessibility. Our strong

innovation pipeline will

continue to drive our

platform today and

uncover the platform

ofthefuture.”

Chief Executive

Officer’s statement

It has been a defining year for

Oxford Nanopore – our second

as a listed company and

eighteenth in operation.

Oxford Nanopore Technologies Annual Report & Accounts 202314

Last year marked our second as a listed company, and 10 years

since we launched the MinION. Since our IPO two years ago, we

have delivered strong, resilient growth and expanded our customer

base to more than 7,600 active accounts by 31 December 2023.

Last year marked a further milestone for Oxford Nanopore as we

detailed our medium-to-long-term strategy at our first Capital

Markets Day, designed to address unmet needs in clinical and

applied markets, building on our commitment to deliver value in the

Life Science Research Tools (LSRT) sector for the short-to-long term.

Today, the majority of our customers are engaged in research,

which is foundational for the emerging translational and future

clinical and applied uses of our technology. The pace of innovation

on our platform – and developments in system performance,

including accuracy and data output – continue to support our

impact across a variety of research sectors such as human

genetics, cancer research, infectious disease, applied industrial,

plant and animal biology, food and more. The thriving community

ofscientists who are using our technology understand that “what

you’re missing matters” in sequencing, as they leveraged the richer

insights and capabilities unique to nanopore sequencing. We are

proud to enable them to perform breakthrough science such as

native DNA and RNA sequencing, including methylation detection

in every experiment without the need for additional steps, all of

which is now possible at speeds faster than any other sequencing

device. These scientists published 2,800 peer-reviewed papers in

2023 alone, showcasing the versatility and value of our technology

across a spectrum of fields. This brings the total number of

nanopore-based publications to more than 11,000, a testament

tothe robust and engaged nanopore community and the

transformative potential of this technology.

Clinical and applied industrial customers are now building on these

scientific discoveries and are developing emerging applications that

have the potential to drive broad value across health and industrial

markets. Our early partnerships have highlighted the benefits of our

platform to serve a variety of applied contexts, including richer

insights, and real-time results in an accessible and affordable

formfactor. Our strategy in pursuing these applied markets is,

intheshort term, to support our translational customers at the

intersection of research and clinical care or biologics manufacturing.

In the longer term, it is to enable our customers to develop novel

applications, analogous to the ‘apps’ model for mobile phones,

inwhich we share in future revenues as our partners reach

commercialisation. Last year we started to realise meaningful

momentum for this approach, signing on new strategic commercial

partners and collaborators including bioMérieux and the Mayo

Clinic, alongside our growing and vibrant customer base. The

rangeand scope of applications being currently developed is

trulyremarkable, from cancer testing during surgical operations,

tomRNA vaccine manufacturing.

Despite global supply chain constraints, and other challenging

market conditions, we’ve continued to innovate, deliver new

technologies through expanded operations and broaden our

reach.Our user base, spread across more than 125 countries,

demonstrates the global appeal and applicability of our technology,

from traditional laboratory environments to the most remote

locations on Earth. The adoption of our platform in diverse

research areas—from human genetics to environmental

monitoring—underscores the vital role Oxford Nanopore can play

indriving forward scientific discovery and application. As we look

ahead, we are inspired by the achievements of our community

anddedicated to realising our bold vision to serve healthcare

andindustrial markets of the future.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 1515Oxford Nanopore Technologies

Life Science Research Tools (LSRT) revenue

£169.7m

Chief Executive Officer’s statement continued

2023 financial performance

The Group delivered total revenue of £169.7 million (2022:

£198.6million, including £51.8 million of COVID testing revenue),

adecline of 14.6% in the period, reflecting the conclusion of the

Group’s legacy COVID testing contract with the Department of

Health and Social Care (DHSC) in 2022.

Revenue from our core LSRT business grew 15.6% in the year,

15.3% on a constant currency basis. Underlying LSRT revenue

growth, excluding headwinds from the Emirati Genome Program

(EGP) and COVID sequencing, totalling £19.2 million, grew 39.3%

and 39.1% on a constant currency basis.

During the year our global customer base expanded from 6,839

to7,615 active customer accounts; an increase of 11%. We saw

particularly strong revenue growth in our S2 (+20%) and S3

(+19%) customer groups. S2 revenue grew by 42% and S3

by69%, on an underlying basis.

The continued increase in the user base and utilisation of our

technology is reflected in the growth of both consumables and

device, licence, warranty and service revenue during the period,

which grew by 11% and 30% respectively, despite an £18.0 million

headwind from COVID sequencing during the period.

In EMEAI we experienced robust growth, with revenue up 16%

year-on-year and up 50% on an underlying basis excluding

revenue from COVID sequencing and EGP. Our engagement with

significant projects including the NIHR Bioresource and Genomics

England’s ambitious programmes underscores our strong market

presence and technological leadership.

APAC revenue in 2023 was £34.1 million, a 2% decline on 2022

(£34.8 million), reflecting a £4.4 million headwind from the

slowdown of COVID sequencing in 2023. APAC performance was

also impacted in 2023 by the slow down in growth in China and in

the Middle East following issuance of the recent US semiconductor

trade rule further regulating sales of advanced AI semiconductors.

Product development plans within 2024 include updates that are

expected to mitigate this headwind in the second half of 2024.

In the Americas we achieved a 27% increase in revenue, with

underlying growth of 48% reflecting our increased commercial

infrastructure expanding influence in the region.

Building the right team for success

Our people are vital to the success of our business. The

cohesionand longevity of our executive team epitomise our

sharedcommitment. It’s been a lifelong journey for all of us.

Themulti-disciplinary expertise of our team is one of the hallmarks

of our success and in 2023, we continued to build on the diversity

and breadth of the leadership talent needed to expand our

commercial presence and meet our ambitious global growth goals.

In the past year, we grew our leadership team both in size and

talent, strategically enhancing our capabilities to navigate our

global growth trajectory. We attracted seasoned commercial

leaders within the LSRT sector to support our commercial

expansion in the US and globally. In the Americas, we hired

JulieCollens, a formidable commercial leader in genomics,

toheadcommercial operations. In addition, we also brought

on Kathleen Barnes, an established expert in precision medicine,

tojoin our clinical team as SVP of Population Health and Precision

Medicine, a new vertical for us that will be critical to our success

aswe pursue this new market globally, with initial focus on the

Americas. We also convened a comprehensive search for a new

CFO, resulting in the appointment of Nick Keher in January 2024,

replacing Tim Cowper who moved into a new role as Chief

Operating Officer after performing both the role of CFO and

fulfilling most of the responsibilities typically assigned to a COO

forthe past five years.

Finally, we brought on three prestigious new Non-Executive

Directors, Kate Priestman, Dr Sarah Fortune, and Dr Heather

Preston, with expertise in human genetics, infectious disease and

company building, all of whom will support our ambitious growth

incomplementary ways. Post year-end, we also announced the

retirement of Dr James (“Spike”) Willcocks, Clive Brown, and Tim

Cowper from the Board as part of normal Board evolution and in

line with best practice governance. As part of our commitment to

board diversity, this evolution will support our progress towards

fulfilling our goal of reaching 40% female Board representation.

Following the AGM in June 2024, the Board will include two

executive Directors and seven Non-Executive Directors, three of

whom are women. Beyond our leadership team, we supported our

rapid growth in 2023 through significant investments in our global

organisation. Total headcount reached 1,238 (FTE) at the end of

the year, up 22.7% from the prior year end.

Improved onboarding and talent development through initiatives

such as leadership training, mentoring programmes, six-sigma

programmes in production and operations, and challenger sales

training for our commercial teams have helped to ensure that we

are building a solid foundation for the future.

Oxford Nanopore Technologies Annual Report & Accounts 202316

Delivering high accuracy, addressing new market needs

Our relentless pursuit of innovation led to significant advancements

inour kit 14 chemistry and basecalling in 2023, setting new standards

to become among the most accurate sequencing platforms on the

market. Last year we announced further platform improvements to

provide another step in DNA/RNA sequencing performance to drive

scientific research, as well as springboard into clinical and applied

markets seeking richer data, fast turnaround and accessible and

affordable sequencing technology.

With the rollout out of Q20+ chemistry achieving completion,

ourinnovation teams are preparing for their next breakthrough

performance in DNA/RNA nanopore sequencing. At our NCM

conference the team demonstrated raw read DNA sequencing

accuracy – reaching a record of Q28 (99.8%) in simplex single

molecule accuracy – powered by machine learning-guided enzyme

engineering and improved models. The longest Q30 (99.9%) read

in the dataset was 1.1 Megabases. The team also detailed a novel

method to overcome errors in homopolymer regions that, when

combined with other platform updates, pushed human consensus

accuracy up to approximately Q50 and indel f1 accuracy to 99%.

Throughout the year, customers joined us at various community

events to showcase how comprehensive mapping of the human

genome, telomere-to-telomere (T2T), is now possible using only

nanopore sequencing, having previously been assembled with

multiple sequencing technologies.

In response to increasing demand for RNA sequencing, we

announced additional platform improvements in direct RNA to

support the emergence of RNA-based therapies, introducing a new

flow cell and kit for direct RNA sequencing that increased accuracy

and output. Since the launch of this flow cell at London Calling, it is

already enabling significant advancements in the RNA research

market alongside novel applications of direct single molecule

sensing such as mRNA vaccine research.

With our platform consistently performing at a high level, our

focushas now shifted towards refining end-to-end workflows,

atestament to our commitment to addressing the evolving needs

ofgrowing customer base alongside newer applied and clinical

market customers.

We announced several partnerships with tertiary analysis providers

for comprehensive interpretation of nanopore sequencing to

support the push-button analysis of nanopore sequencing data

and enable end-to-end workflows. We believe this will significantly

help drive adoption, in particular by those customers new to

running their own sequencing systems.

We also announced Project TurBOT, our benchtop solution

designed to offer integrated and automated extraction, library

preparation, sequencing, basecalling, and data analysis for

multiplesamples, all within a single device. This device will

enableusers to perform a hands-free, simplified workflow from

rawsample to analysis though an intuitive interface, eliminating

manual interventions and enhancing efficiency, reducing errors,

and significantly accelerating the workflow. This will not only

increase throughput but also ensure reproducible and reliable

results, as well as expand the appeal to particular customer

typesin need of rapid, easy, sample-to-answer systems.

Finally, we established dedicated teams for regulated product

development to deliver our ‘Q line’ platform that will accelerate

nanopore sequencing adoption in regulated applied markets such

asclinical labs and biopharma QC/QA labs. These products will be

released throughout 2024.

In 2023 we delivered breakthroughs in our

platform performance, achieving record

accuracy, expanded end-to-end workflows

and increased access to high output

applications with the P2 product rollout, with

more than 700 P2 Solos sold or leased

through starter packs in the year.”

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 17

Chief Executive Officer’s statement continued

Breakthrough community science highlights the evolution

from bench to bedside

In 2023, we saw further growth in foundational research in human

genetics, cancer research and infectious disease, alongside

‘translational’ method development to take research discoveries

from the bench into distributed applied testing markets.

Our thesis continues to be that the benefits of the nanopore

platform – real-time, fast, information-rich, affordable and

accessible sequencing – will address unmet needs in healthcare

aswell as industrial sectors such as agriculture, food and

environmental applications.

Human genetics: In September, the NIH Centre for Alzheimer’s

andRelated Dementias (CARD) showcased a pioneering

nanopore-based sequencing approach in Nature, with

comprehensive, high accuracy in SNP, structural variant,

andmethylation calls. Notably, this method proved to be both

cost-effective and scalable for extensive projects, making

asignificant stride in large-scale, native DNA sequencing.

The protocol is being used to sequence thousands of human

genomes as part of the NIH CARD initiative, which aims to

unravelthe mysteries underlying Alzheimer’s disease and

relateddementias. Its emphasis on base modification analysis

reveals highconcordance in methylation calls, offering reliable,

haplotype-resolved methylation data during the standard

sequencing run itself, without the need for a separate process.

Cancer: Characterisation of cell-free DNA (cfDNA) is an emerging

approach for identifying many diseases. In May, a team from

Stanford University published research focusing on methylation

profiling of cell-free DNA and its potential for monitoring cancer

during treatment. They chose nanopore sequencing because of

itsability to detect methylation directly. The approach involved

single-molecule sequencing to profile the methylomes of cell-free

DNA samples collected from patients with cancer. For one sample,

the technique generated as many as 200 million reads, which the

scientists note was “an order of magnitude improvement over

existing nanopore sequencing methods.” Such an analysis could

also be useful in drug discovery efforts focused on methylation

biomarkers, as well as in drug development where noninvasive

sample collection can be important to maximise data gathered

inaclinical trial.

Researchers also applied nanopore-based sequencing

towardPersonalised Oncogenomics to show the potential for

nanopore-based sequencing to resolve complexities in the cancer

genome, supporting more effective strategies for personalised

treatment and care. At our London Calling conference in May,

DrJanessa Laskin at the University of British Columbia in

Vancouver spoke about how her team is using nanopore

sequencing to integrate whole-genome and transcriptome analysis

into the clinical care of people with advanced cancers in British

Columbia. Her team recently published a preprint highlighting the

results of a study showing how nanopore sequencing is addressing

limitations noted with traditional short-read methods.

Infectious disease: Nanopore-based sequencing, which can be

used to measure long or short fragments of DNA or RNA as

needed, can also produce data very quickly. In a pilot project at the

Guy’s and St. Thomas’ Hospital NHS Foundation Trust in London, a

clinical laboratory team evaluated nanopore sequencing to support

a rapid respiratory metagenomics workflow. They tested nearly

130samples from more than 85 individuals with lower respiratory

infections, setting detection thresholds equivalent to culture-based

testing to avoid reporting microbes that were unlikely to be

clinically relevant. For most samples, results were reported to

theclinical care team on the same day the sample was collected.

Interestingly, nearly half of the results led to shifts in antimicrobial

selection (in some cases escalating and in others de-escalating the

initial treatment choice). Several unexpected organisms and cases

of co-infections were reported; these would not have been found

with conventional tests. The results highlighted the value of

metagenomic testing in ICU settings – a process uniquely suited

forthe features of the nanopore platform.

mRNA manufacturing QC: Beyond clinical applications, research

published this year from the University of Queensland demonstrated

the utility of nanopore sequencing in biomanufacturing contexts,

harnessing the latest platform improvements to analyse mRNA

vaccines and therapies. The researchers showed how nanopore

sequencing can accurately assess the quality of mRNA vaccines

and therapies by directly analysing each individual mRNA vaccine

molecule as it passes through a protein nanopore, providing

areal-time measurement of the mRNA sequence identity and

integrity. Researchers noted that approach could also provide a

useful research tool to better understand how mRNA vaccines work

by studying how they behave within cells. Crucially, the impact of

this technology could result in the real-time analysis of mRNA

vaccines during production, providing testing within hours of mRNA

manufacture so quality control issues could be quickly detected.

Such rapid analysis is critical during the rapid manufacture of

mRNA vaccines needed during a pandemic — or to support the

future development of personalised therapies.

We continue to build on our strengths in the

genomics research market, supporting a

39% increase in underlying revenues, and I

am pleased with the progress we are making

in emerging clinical and applied industrial

markets, with significant new strategic

collaborations signed and poised to deliver.”

Oxford Nanopore Technologies Annual Report & Accounts 202318

Glossary

AGM – Annual General Meeting

APAC – Asia Pacific region

CARD – Centre for Alzheimer’s and

Related Dementias

cfDNA – cell-free DNA

CFO – Chief Financial Officer

COO – Chief Operating Officer

DNA – Deoxyribonucleic acid

EGP – Emirati Genome project

FTE – Full-time equivalent

EMEAI – Europe, the Middle East, Africa,

and India.

ICU – intensive care unit

IPO – initial public offering

IVD – In vitro diagnostics

LSRT – Life Science Research Tools

mRNA – Messenger Ribonucleic acid

NCM – Nanopore community meeting

QA – Quality assurance

QC – Quality control

R&D – Research & Development

RNA – Ribonucleic acid

SNP – Single-nucleotide polymorphism

SVP – Senior Vice President

T2T – Telomere-to-telomere

Embracing clinical and applied markets

This year marked a strategic expansion towards clinical and

applied markets (>$150 billion in 2032), building on our strong

foundation in Life Sciences Research Tools (a market valued at

$6.2 billion). Our ongoing product development efforts, particularly

with Q-Line, alongside the expansion of our regulatory team,

further underscore our commitment to meeting the evolving

needsof clinical and applied customers.

On the morning of our first-ever Capital Market Day in October

weannounced two significant developments that demonstrated

our readiness to capture the vast opportunities in these emerging

sectors. bioMérieux SA, a world leader in the field of in vitro

diagnostics (IVD), announced a strategic investment in Oxford

Nanopore to support development for infectious disease testing

products in our portfolio that serve IVD markets in conjunction with

bioMérieux’s commitment to advancing global public health. Through

this partnership and investment, the two companies intend to

leverage our groundbreaking IVD solution and bioMérieux’s IVD

expertise in R&D, regulatory, medical, and market access.

Meanwhile, a joint development collaboration with the Mayo Clinic

in the US involves integrating nanopore sequencing in the Mayo’s

labs to help develop new clinical tests for human diseases, starting

with breast cancer. Also in cancer, we signed an agreement with

Swiss company 4bases to permit them to employ nanopore

sequencing devices with 4bases kits per their self-certification

tosupport rapid, high-accuracy analyses in human and cancer

genetics in Italy and Switzerland, with a first target of same-day

BRCA1 and BRCA2 analysis.

In the applied markets, we announced a partnership with BASE

touse the latest and improved nanopore-based sequencing

technology to optimise performance and reduce the time needed

to measure mRNA vaccine quality attributes. Researchers at the

University of Queensland have developed a faster way to put

mRNA vaccines through quality control testing using nanopore

technology. The BASE team at UQ’s Australian Institute for

Bioengineering and Nanotechnology is recognised as the biggest

supplier of research-use mRNA in Australia. In September, they

showcased a new protocol in Nature to expedite the quality

controlprocesses, enabling rapid detection of issues during

manufacturing, which is particularly useful in pandemic scenarios.

We also signed a collaboration with Pathoquest to co-develop the

first sequencing-based QC test solutions targeting the biopharma

genetic characterisation and safety market.

Outlook

As we look forward, our highly differentiated platform and

substantial market opportunity position us well to deliver long-term,

sustainable growth. We are focused on key strategic initiatives to

drive value, including disciplined investments in our technology

andcommercial operations where appropriate to unlock key

opportunities in priority markets. We also remain mindful of

end-market conditions, with sales cycles lengthening at the same

time as we have expanded our commercial and operational

infrastructure to support future growth. These factors have led us

to revise our forecast for achieving adjusted EBITDA breakeven to

the end of 2027 as we continue to focus on delivering against the

huge commercial opportunity ahead of us.

Over the long-term we see significant opportunities ahead,

reflected both in the progress we have made in the current

research market and in the preparations that we are making to

address many potential uses for our technology in applied markets,

from infectious disease to agricultural optimisation. We have

established our platforms globally and our long-term strategy is

toenable our customers to develop novel applications, analogous

to the ‘apps’ model for mobile phones. Enabling our customers to

develop on the platform will propel us toward a world of real-time,

distributed access to DNA/RNA information. As we begin to

understand and measure the biological world around us and use

that information to make decisions with positive impacts from

health to the environment, we are on the cusp of creating the

‘Internet of Living Things’.

Dr Gordon Sanghera

Chief Executive Officer

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 19

Market drivers

Market driver

A need to solve society’s most

urgent challenges

Broader communities are

affected. They can and will be

involved in solutions

The impact

Ageing populations and environments that foster

communicable diseases are creating a need to identify and

characterise diseases earlier and more effectively, whether

in cancer, human genetics, or infectious diseases including

potential future pandemics. Climate change and habitat loss

are creating crises in oceans, biodiversity, and food security.

National and international strategies are forming to address

these challenges, including fostering innovative solutions.

Life sciences can offer a profound contribution to solutions

by using scientific insights to understand the problems and

to develop solutions to them. This may include real-time

surveillance of pathogens, food supply chains, environments,

or in healthcare – screening programmes, integrated clinical

applications or diagnostic tests. Scientific research is the

foundation for development of these applications.

Our response

Oxford Nanopore provides a unique platform for research, and

its formats and strategy support a continuum to clinical and

applied markets.

The impact

A decade ago, only a small number of well-funded research

institutions were able to conduct the majority of genomics

research, setting scientific agendas that could not support

all communities. However, these societal challenges affect

all people in all countries, and as technology becomes

increasingly accessible, there is an imperative to enable

broader communities to innovate. This includes enabling

scientific research to be done by broader and varied

researchers, not just in centralised laboratories, and in

emerging economies.

Our response

Oxford Nanopore has developed an electronics-based platform

that is both accessible and affordable, and available in formats

that can be used in distributed networks, rather than being

limited to only the best-funded locations. This has already

reshaped the market and is driving the development of high-

impact applications for broad communities.

Market driver

Parallel industries of AI and

Silicon are driving data analysis

and innovation capabilities

Customer expectations in life

sciences are rising

The impact

The dramatic developments in data analysis capabilities

enable the analysis of data sets at unprecedented scale.

This is enabling genomics researchers to make new

discoveries across human, cancer and pathogen genomics,

transcriptomics and epigenetics, as well as in plant and animal

science; and to translate those discoveries into applications

that may have previously been limited bysample set sizes.

Our response

Oxford Nanopore harnesses the latest industry developments

in machine-learning, AI and accelerated compute to drive our

innovation pipeline and deliver unparalleled compute capacity

to our users.

Oxford Nanopore incorporates NVIDIA GPUs for onboard

analysis of high output sequencers and pairs with new Apple

silicon M chips to deliver highly distributed sequencing on

MinION.

The innovation teams at Oxford Nanopore deploy the latest in

machine learning guided protein engineering to accelerate R&D

pipelines that deliver improved accuracy and output.

The impact

As molecular analysis technology innovation continues,

customers’ expectations are rising. Increasingly, scientists and

programmes expect and prefer to be able to generate richer

and more comprehensive data across the spectrum of omics,

whether genomic, transcriptomic, or epigenetic data. Faster

availability of data and generation of insights are also possible

and desirable.

Our response

Oxford Nanopore is driving this trend and meeting these

customer expectations with its unique combination of richer

and faster data on its platform.

Oxford Nanopore Technologies Annual Report & Accounts 202320

Current and future markets for nanopore-based sensing

Oxford Nanopore has developed an electronics-based sensing technology, based on nanopores, that is designed for the

analysis of multiple types of molecule. The first application is DNA/RNA sequencing but the technology can be adapted in

future for the analysis of other types of molecule including proteins, small molecules, and polymers.

Characterising DNA/RNA Characterising proteins or

other large molecules

Identifying small biological molecules,

metabolites, or inorganic molecules

Current Future: protein analysis Future: small molecules

DNA/RNA sequencing

Current market

~$6.2bn

Protein analysis

Current market

~$21.1bn

Small molecule/metabolite

Current market

~$3.1bn

Measuring current disruption provides information about molecules

Sources: DeciBio Next Generation Sequencing

Market Report 2022, Proteomics Market Report

by Allied Markets Research and Metabolics

Global Market Report 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 21

Oxford Nanopore is changing the way that DNA and RNA information is

used in scientific research, as a foundation for emerging clinical and

applied industrial uses.

Research

• Biomedical research

• Non-human research

Clinical & applied

• Clinical research

• Clinical labs, industrial

Diagnostic & applied industrial

• More regulated

DNA/RNA sequencing:

Substantial and growing market opportunity

Foundation for

Our market position: a true disruptor

1 Source:DeciBio 2022 global DNA sequencing equipment and consumables

market report.

Life Science Research Tools LSRT Clinical Diagnostics and Applied

$3.1bn

Majority of customers today

$3.1bn

Rapidly emerging: huge potential for growth

PHOTO TO COME

Oxford Nanopore Technologies Annual Report & Accounts 202322

DNA/RNA sequencing:

Substantial and growing market opportunity

Oxford Nanopore offers technology that provides richer

data, faster, and more accessibly and affordably. It is therefore

positioned to penetrate, reshape and expand the market.

Potential market opportunities

Oxford Nanopore is uniquely positioned to unlock long-term

future potential clinical and applied market opportunities

>$150bn by 2032

Clinical opportunities

Eg. Human genetics, cancer,

infectious diseases

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 23

Applied industrial

Eg. Agriculture, food,

bioprocessing, environment

>$11bn TAM>$4bn TAM>$15bn TAM

Food and

environment

Biopharma QCVet and

agriculture

>$8bn TAM>$18bn TAM>$100bn TAM

Infectious

disease

Human

genetics

Oncology

Opportunity

Oxford Nanopore value

proposition/examples Market opportunity

Current markets

Basic research in life sciences – for example the

structure and function of DNA and RNA. A greater

fundamental understanding of the sciences of

genomics, transcriptomics and epigenetics, providing

a foundation for further biological discovery.

Richer and more comprehensive data, including

epigenetic information, are available, as a result of the

ability to sequence longer fragments of native DNA/

RNA. This can be scaled to any research user from

small to large through a variety of platforms from small

to large.

$6.2 billion spent on

sequencing in 2022

Specific research to understand in more detail the

biology of specific organisms or systems; e.g., human,

cancer, animal, plants, pathogens/microbiomes.

This work is typically performed by scientific

researchers in universities, government, charitable or

industrial institutions.

Accessible and affordable technology means that

richer insights can be deployed across broad areas of

scientific research, from large-scale human genomics

to in-field environmental analysis. This creates broad

opportunities to identify future clinical and applied

uses of the technology.

Translational research aims to understand and pilot

how omics information could positively impact

outcomes in health, industry and the environment, for

example by piloting and evaluating the integration of

genomic insights into clinical workflows or industrial

processes.

This work may be performed in settings such as

research hospitals or industrial development labs.

In addition to the benefits of the technology, Oxford

Nanopore is providing ‘locked down’ versions that

enable users to perform translational research and

prepare for more routine future clinical and applied

uses, with onwards pathways to regulated markets.

Market opportunities

Oxford Nanopore Technologies Annual Report & Accounts 202324

Opportunity

Oxford Nanopore value

proposition/examples Market opportunity

Emerging markets: Oxford Nanopore is in the foothills

of entering clinical and applied markets

Clinical

Cancer: Cancer is identified too late; rapid,

information-rich, near-patient insights promise

improvement in care whether tumour sequencing or

liquid biopsy for cancer detection and

characterization, whether early or during treatment.

Early detection is a key feature of many national

cancer strategies.

Richer insights: highly accurate genomic data capture

more types of genetic variation. In particular,

methylation data provided in real time and at no extra

cost on the nanopore platform, are of interest in

cancer detection and characterisation. Faster insights

hold potential for earlier intervention, and accessibility

and affordability support a future of near-patient

technology for speed and to reduce health disparities.

>$100 billion TAM

in 2032

Human genetics: Patients with genetic disease

typically experience a long diagnostic odyssey. Richer

insights than traditional short reads, delivered rapidly

and near the patient, promise improved care for more

people.

Richer insights, delivered faster and accessibly and

affordably, have the potential to improve multiple

human genetics applications, for example tissue

typing for transplantation or the characterisation of

human genetic disease, experienced by millions of

people worldwide.

>$18 billion TAM

in 2032

Infectious disease: Antimicrobial resistance is rising

and emerging infections threaten public health.

Rapid, distributed insights offer new standards of care

and pandemic preparedness at national and

international levels.

Richer insights, delivered faster and accessibly and

affordably, have the potential to provide rapid

pathogen surveillance in broad systems such as

healthcare and agriculture, as well as rapid diagnostic

and characterisation of pathogens such as

Tuberculosis, where drug resistance is an urgent

challenge.

>$8 billion TAM

in 2032

Applied markets

The McKinsey BioReport 2020 notes that there is an expected $1 trillion direct economic impact from

biological technologies on Agricultural, Food, and consumer products and services 2030-2040.

Vet and Agriculture: Across multiple industries, omic

data has utility to generate valued insights. These

include: Livestock and companion animal Veterinary,

Breeding, and Crop pathogen protection.

Similar to human health, information-rich data,

provided quickly and accessibly have the potential to

support productivity and safety in Veterinary

environments. Example test: PRRS virus detection in

distributed veterinary diagnostic labs.

>$15 billion TAM

in 2032

Biopharma QC: Life sciences industries that are

researching and developing solutions, such as

therapeutics or vaccines, are driven by the ability to

understand biology in R&D and production of their

products. These may include: Cell Line Authentication

& Characterisation, Vector and construct

characterisation and QC and Biomanufacturing Safety

Testing.

Richer insights, delivered faster and accessibly and

affordably, have the potential to improve efficiency of

outcomes of life sciences development processes by

identifying problems early, or enabling dynamic

iteration. Example: Oxford Nanopore is collaborating

with Lonza to develop a Current Good Manufacturing

Practice (cGMP) validated test to enable advanced

and innovative analysis for multiple critical quality

attributes of mRNA products.

>$4 billion TAM

in 2032

Food and environment testing: Food and

environmental supply chains and systems benefit from

rapid, biological insights in order to drive efficiency

and safety. These include: Food Safety Testing, Food

Authenticity Testing, Food Spoilage, Wastewater

testing, eDNA biodiversity assessment.

Richer insights, delivered faster and accessibly and

affordably, have the potential to improve productivity

and safety in food industries; as an example, Oxford

Nanopore is partnering with WeNou in the

development of food authenticity testing, as well as

quickest time to result Salmonella serotyping testing.

>$11 million TAM

in 2032

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 25

Optimising the

opportunity in

clinical markets

An interview with Dr Emma Stanton, SVP Clinical

Dr Emma Stanton

SVP Clinical

What is the opportunity for

nanopore sequencing in clinical

applications? What motivates you

personally?

What motivates me personally, every single day, is the

extraordinary opportunity we have for Oxford

Nanopore’s technology to impact multiple clinical

applications globally across the diverse fields of

oncology, infectious disease and genetic disorders.

Today, many customers globally are using our existing

life science research tools for clinical and translational

research through pioneering applications such as for

pharmacogenomics and rare and undiagnosed genetic

disorders.

For example, within one year, 58% of the population

will be prescribed a drug that has an actionable

gene-drug interaction, creating new opportunities for

sequencing to support standard clinical practice in the

future. Oxford Nanopore also has a compelling

opportunity on the existing panel market globally.

As a doctor, my goal here at Oxford Nanopore is not

just to demonstrate what nanopore sequencing can

technically do in the world of research, but to work with

our internal teams and growing number of external

collaborators and partners, to ensure that we are on a

path to use this technology platform to meaningfully

improve the lives of patients and their families.

The opportunity we have ahead of us is bigger than

displacing existing sequencing applications. We have

the ability to completely shift paradigms of health and

care, using nanopore-based sequencing.

How do you see the relationship

between Oxford Nanopore’s main

current customer base – life

science researchers – and clinical

opportunities?

Today, all of our nanopore platforms are available for

research purposes. A growing proportion of nanopore

sequencing publications and customers are clinician

scientists and from leading academic health science

centres, straddling the worlds of both science and

healthcare.

Our life science research customer base today is

demonstrating and paving the way for wider clinical

adoption. This growing global customer base is

identifying where we can play and where nanopore

sequencing will win. We are most interested in

identifying the specific clinical pathways where the

long-read, rapid turnaround time and other

differentiated features of nanopore sequencing can

have the most impact in improving patient outcomes.

Q+A

The opportunity we have ahead

of us is bigger than displacing

existing sequencing applications.

We have the ability to completely

shift paradigms of care, using

nanopore sequencing.”

Interview

Oxford Nanopore Technologies Annual Report & Accounts 202326

What is the competitor landscape in

sequencing clinical opportunities?

For sequencing in clinical care, Oxford Nanopore has

unique features that position us to not only take market

share but also create new market opportunities. Our

benefits – speed, richer data, accessibility and

affordability – will open new market opportunities that

cannot currently be served by conventional technology.

For example, the work we are doing with Guys and St

Thomas' Hospital NHS Foundation Trust in London,

UK, is demonstrating how we can identify – in a matter

of hours -what the underlying pathogens are that cause

pneumonia for patients in intensive care settings. This

information enables the clinical team to prescribe

appropriate antibiotics, rather than the same “blanket”

multi-spectrum antibiotic approach used today. This

personalised approach improves outcomes and has the

potential to save money, through shortening length of

stay in intensive care settings. It also supports efforts

to combat antimicrobial resistance. This particular

example is now being replicated across NHS sites and

internationally.

I recall too often as a junior doctor waiting days for the

results of blood culture to be returned. By which time,

the patient had either got better – or not – almost

irrespective of what you had prescribed. If indeed, a

result came back at all. Blood culture, as an approach,

was established in the mid-19th century so is overdue

for an upgrade.

For example, every three seconds – someone in the

world dies from sepsis. This is a serious condition that

happens when the body’s immune system has an

extreme response to an infection. We are collaborating

with Day Zero Diagnostics, USA, to explore if nanopore

sequencing can revolutionize how we identify and treat

people with sepsis. This is the kind of game changing

clinical application that the rapid speed and rich data

generated by nanopore sequencing will unlock.

What’s your partnership strategy

for penetrating key clinical markets

– and your focus areas?

Oxford Nanopore’s core competencies lie in the innovation

of the platform technology itself. To be successful in

clinical markets, we will go further faster if we partner

with orginisations that bring specialist expertise for the

clinical markets that we are seeking to enter, whether

oncology, infectious disease, rare disease or others.

One example is for the field of HLA-sequencing. The HLA

locus is one of the most complex regions in the human

genome. Recent improvements in nanopore sequencing

technology have enabled superior results to our

competitors. In this field, we have partnered with Omixon

and GenDx. These global transplantation diagnostics

companies have developed products that use nanopore

sequencing to match donor organs to recipients. This

method enables high-resolution HLA typing in under six

hours, resulting in better, faster donor organ matching

leading to improved outcomes for patients.

As we look ahead, the largest clinical opportunity for

nanopore sequencing is in the field of oncology. One

example of this is with a European-based partner,

4bases, to evaluate the impact of having results from a

rapid, decentralised BRCA1 and BRCA2 panel.

Infectious disease represents another area of

significant opportunity. Our first nanopore-based

diagnostic application will be for tuberculosis (TB) drug

resistance, which continues to emerge and spread

despite TB being both preventable and curable. The

World Health Organisation estimated that there were

about half a million new cases of drug-resistant TB in

2018, with less than 40% of the esimated burden being

notified

. Globally in 2022, TB caused an estimated

1.30 million deaths

. Our nanopore-based solution will

address an unmet global health need.

Healthcare is a highly regulated industry, and we are

addressing this by developing platforms with a more

locked-down chemistry. We are working with

bioMérieux for the global distribution and

commercialisation of ONT’s TB drug resistance test

(Ampore: TB), which will be released as a research-use

only (RUO) protocol later this year and offers a fast,

decentralised and affordable alternative to

conventional testing methods.

While the test paves the way for other future clinical

and diagnostic applications, this partnership represents

a distinct customer base from the current life science

research tools market we are currently serving. It’s

another example of why we are optimistic about our

partnership approach – by extending access to our

platform globally, we will enable more people and

patients to benefit from genomic information that will

improve their care and outcomes.

World Health Organisation, “WHO consolidated guidelines on

tuberculosis, 2022 update”, pg xiii: https://www.who.int/

publications/i/item/9789240063129

World Health Organisation, “Global Tuberculosis Report 2023”:

https://www.who.int/teams/global-tuberculosis-programme/

tb-reports/global-tuberculosis-report-2023

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 27

Our business model

Our vision

To enable the

analysis of anything,

by anyone,

anywhere.

Our people and culture

Attracting, developing and

retaining high-calibre employees

is important. We strive to build a

purpose-driven culture based on

our values and shared vision

Read more on page 58

Research & development

Innovation is at the heart of

everything we do and it delivers

highly differentiated products and

drives continuous improvement to

deliver value to our users

Intellectual property

Innovation is protected by our IP

portfolio, which comprises more

than 2,500 active patents across

more than 350 patent families

The Nanopore Community

We drive open innovation

together with the user

community, who develop novel

applications for our technology

every day

Suppliers

We have a diverse, global supply

chain. Our suppliers contribute

to innovative processes by

developing their own products

and services

Manufacturing

State-of-the-art in-house

manufacturing increases

resilience, speed to market, and

minimises leakage of know-how

Sales & marketing

We support our customers in

more than 125 countries. Our

commercial teams are highly

specialised, with an in-depth

knowledge across the full range

of products and applications

Balance sheet

We have a strong balance sheet

enabling us to continue to invest

strategically in R&D, people,

and infrastructure to drive future

growth

Our core activities

How we create valueKey strengths

Oxford Nanopore Technologies Annual Report & Accounts 202328

1. Innovation

Our R&D team pushes the boundaries of sensing technology to create products

with both novel properties and high performance, designed to penetrate, reshape

and expand markets. This includes fundamental research, pipeline programmes

to develop new technologies and programmes to improve the performance of the

existing platform.

Read more on page 14

How we create value Value created and shared

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 2929Oxford Nanopore Technologies

Our strategy

We are focused on delivering sustainable, long-term growth by making sequencing more

valuable and more accessible to genomics researchers worldwide. Our long-term growth

strategy is based on three pillars: disruptive innovation, commercial execution, and

operational excellence. These strategic priorities are designed to create sustainable

long-term growth, by expanding our market share, growing existing markets and by

creating entirely new markets.

Our

strategy

Commercial

execution

Operational

excellence

Innovation

ProductPlanet

Our strategy is underpinned by our sustainability pillars

People

Oxford Nanopore Technologies Annual Report & Accounts 202330

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 3131Oxford Nanopore Technologies

Our strategy continued

Performance in 2023

• Q20+ accuracy: We completed the roll out of our

R10nanopore and Kit 14 chemistry enabling users

toachieve raw read (simplex) accuracies over 99%

and delivering highly accurate variant and methylation

detection from a single nanopore experiment. Users

have been routinely achieving outputs above 100 Gb

per PromethION Flow Cell when running our

end-to-end workflows.

• Machine learning (ML) algorithm software

acceleration: We invested heavily in optimising our

algorithms to enable users to basecall data over

99% accuracy fully onboard nanopore hardware,

without the need for additional compute thus

increasing their sequencing capacity. This update

has been coupled with the roll out of A-series

compute on the larger PromethION devices.

• Secondary data analysis simplification: Investing

inour EPI2ME platform to deliver simple analysis

workflows for small genomes, human variation,

single cell and more, giving users easy sample to

answer workflows and accelerating their research.

Inaddition to delivering secondary analysis,

development is underway of tertiary analysis

integrations to enable users to seamlessly

processtheir data with their partner of choice.

• PromethION 2 Solo launch: Democratising the

access to human genomes, transcriptomes and other

high output nanopore applications. With more than

700 sold in 2023, this new device represents a

brand-new growth opportunity for Oxford Nanopore.

• Direct RNA upgrade: With the launch of RNA004

chemistry for higher accuracy and output Direct

RNAsequencing, users are increasing their

utilisation of this application that is unique to

nanopore-based sequencing.

• A bright future: With latest ML approaches to protein

engineering and basecalling, our research teams

demonstrated continued improvement in our raw read

accuracy at our NCM Houston event paving the way

to 99.9% accuracies from simplex nanopore reads.

Innovation

Our commitment to continuous innovation is central toour strategy for

growth. Our R&D team pushes the boundaries of sensing technology to

create highly differentiated products and drive performance to deliver novel

insights, designed to expand and reshape markets. Innovation includes

fundamental research, pipeline programmes to develop new technologies

and programmes to improve the performance of the existing platform. It

additionally extends to novel manufacturing processes and partners with

our highly differentiated commercial model.

Links to KPIs

• LSRT revenue

• LSRT gross margin

• Adjusted EBITDA

• Publications

Biggest improvement

inaccuracy I have seen

inawhile. Most ONT-only

bacterial genomes are

now>Q60.”

Ryan Wick

Oxford Nanopore customer

Oxford Nanopore Technologies Annual Report & Accounts 202332

Investment in R&D in 2023

£106m

P2 Solos sold or leased in 2023

>700

Priorities for 2024

Q-line

Oxford Nanopore Technologies amazing user community demonstrate novel

applications of our products on a daily basis. There are incredible high impact

opportunities in translational clinical research such as cancer, rare disease,

pathogen surveillance and detection and many more. Our Q-line range of products

will deliver a stable, frozen version of hardware, software and chemistry enabling

users to develop and deploy their assays without needing to follow our accelerated

upgrade path used by pure research customers. Q-line will be updated once a year

but enable support for chose iterations for up to three years to reduce the need for

re-validation. The Q-line GridION will be upgraded early in H2 of 2024 and the

PromethION Q-line available later in the year.

MinION Mk1D

2024 marks ten years of MinION and to celebrate, a new MinION, the MinION

Mk1D will be launched. The MinION is the smallest sequencer on the market. It is

used by a broad range of global customers and through software and chemistry

upgrades it has seen outputs improve 40-fold and accuracies move to 99%. The

Mk1D is designed with improved temperature control, further strengthening this

products ability to sequence in a broad range of environments, and with its iPAD

accessory, the MinION Mk1D can be run from any compute, but also, from an

apple M silicon iPAD, revolutionising the MinION’s portability.

End to end workflows

Oxford Nanopore users deploy our technologies in hundreds of different ways.

There are however, a number of set applications that are commonly run and

releasing fully supported end-to-end workflows will accelerate users who are

looking for defined answers. The core workflows already include plasmid and

amplicon sequencing, human variation and single cell. Further workflows will be

added to this menu throughout 2024 as we look to support our growing user base.

We have a robust innovation pipeline, which focuses on

thedevelopment of new technologies to broaden access to

genomics and deliver new capabilities to the market. In the

shortterm we are focused on the launch of our P2i device,

MinION Mk1D and our sample to answer automated solution,

project TurBOT. As we drive our technology into applied markets,

we will be increasing our Q-line range of products. In addition,

our Applications and R&D teams will be developing and

releasinga number of end-to-end workflows to support our

users research and simplify their sample to answer experience.

Key launches in 2024

Finally, we’re immensely excited by the progress made internally

during the last year on our platform performance (demonstrated

at our NCM conference) and will be sharing these updates with

our users over 2024. In the medium term, we have R&D

programmes to deploy our platform in novel fields such as

proteomics and to support easier end-to-end usage of nanopore

sequencing, such as TraxION and Ubik™, a sample extraction

and preparation device. In the longer term, we are developing a

‘voltage chip’ designed to deliver denser sensor arrays that have

the potential to drive significant increases in data output, as well

as a reduction in time and cost for sequencing to the user.

Image to come

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Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 3333Oxford Nanopore Technologies

Commercial execution

Performance in 2023

• Grew and diversified our customer base through new

customer acquisition and expansion; active accounts

increased from 6,839 to 7,615.

• Increased consumables revenue by 11%, reflecting

increased utilisation across the user base.

• Delivered strong underlying revenue growth across

all customer groups, excluding the EGP and COVID

sequencing. Underlying revenue in S1, S2, S3 and

indirect customer groups grew at 20%, 42%, 69%

and 19% respectively (on a non-underlying basis

LSRT revenue grew by 11%, 20%, 19% and 3%

respectively).

• Delivered strong underlying revenue growth across

all regions led by EMEAI, up 50%, and the Americas,

up 48% in the period. APAC revenue grew by 13%

on an underlying basis despite challenging market

conditions in the period. On a non-underlying basis

LSRT grew by 16% in EMEAI and 27% in the

Americas and declined by 2% in APAC.

• Increased demand for technology, reflecting in

growing number of publications; more than 2,800

peer reviewed papers were published by users of

Oxford Nanopore technology in 2023.

• Regionalised our commercial functions to align with

our customers in Americas, EMEAI and APAC

delivering sales and support tailored to each regions

need.

• Returned to full in-person capacity at our flagship

customer events, London Calling and the Nanopore

Community Meeting, as we continue to build

relationships with our original MinION Access

Programme (MAP) users, our more recent customers

and future customers. We also maintained our hybrid

approach as we reach thousands of users online

during our landmark events.

• Launched our ‘what you’re missing matters’

campaign to amplify the common message we hear

back from users who are deploying our technology to

tackle challenging science.

• Added new strategic collaborations to drive

expansion from use in LSRT for scientific discovery,

through the translational journey towards clinical and

industrial applications, including collaborations with

the Mayo Clinic to advance research in cancer and

bioMérieux to develop products that serve the

infectious disease diagnostics market.

Our commercial model focuses on driving rapid adoption and utilisation of

our products to catalyse change and growth of the sequencing and

analysis market. Our accessible starter packs and project packs break

down existing barriers to entry and broaden the user base. We support our

users with a strong digital and e-commerce presence and drive growth by

expanding our geographical footprint and bolstering our direct sales, field

application specialists and support teams. Our direct teams are

complemented with a number of strategic distributor relationships to

ensure our product is accessible anywhere. In addition, we work with

strategic commercial partners and collaborators to access new clinical and

applied industrial markets.

Our strategy continued

Links to KPIs

• LSRT revenue

• LSRT gross margin

• Adjusted EBITDA

• Publications

Priorities for 2024

• Continued focus on growing and diversifying our

global customer base in the LSRT market, and laying

the foundations for future growth in applied and

clinical markets through our partnership programme.

• Team investment: scaling our on-boarding and

commercial training curriculum.

• Sales execution: priority on forecast accuracy and

opportunity management.

• Performance driven: installing a strong performance

driven culture; introduced new KPIs, leader boards

and commercial bonus plan based on internal

revenue targets.

Oxford Nanopore Technologies Annual Report & Accounts 202334

Underlying S3 revenue growth

69%

Net increase in active customer accounts

>750

Operational excellence

Performance in 2023

• Expansion of global commercial teams, including

strategic leadership hires to increase traction in key

markets across the Americas, EMEAI, and APAC.

Commercial infrastructure is capable of supporting

the Group’s development over the coming years to

drive long-term sustainable growth.

• Expansion of the leadership team, post period end,

to support the business in its next phase of growth:

Nick Keher appointed as CFO and Director of Oxford

Nanopore, adding significant financial leadership

experience and a deep understanding of global

capital markets. Nick succeeds Tim Cowper, who

moves into a new role as Chief Operating Officer and

will lead Oxford Nanopore’s continuous improvement

programmes and expanding international footprint

and operations.

• Delivered 80 basis points increase in underlying

LSRT gross margin, driven by automation,

improvements in manufacturing techniques and the

recycling of electronic components. Underlying

improvements were offset by one-off and short term

impacts from: i) the EGP contract ii) the write off of

COVID sequencing kits and legacy devices and iii)

upgrading the compute on large PromethION

devices, resulting in an overall LSRT gross margin

decline of 300 basis points in the period.

• Focussed resources on robustness, risk mitigation

and ensuring scaleability of operations over the

medium term. Further introduced redundancy into

core processes to protect continuity of supply.

• Investment in our Technology Transfer team

responsible for on-boarding novel innovations from

our R&D group and transferring these to our

manufacturing operations. With improved structure

and processes this function accelerates novel

innovations to our customers and improves and

supports existing product manufacturing to drive

quality and performance.

• Continued improvements to our automated cleaning

process has resulted in an initial three-fold increase

in component cleaning capacity. This scale up will

support expanding operational efficiencies whilst

significantly reducing reliance and consumption of

solvents as reported in 2022.

• Automation for Flongle flow cell assembly was

released into manufacturing

• Automation for MinION and PromethION Flow Cell

assembly was introduced for validation into Tech

Transfer.

• Scale up activities in biologics has enabled delivery

of larger batch sizes which reduce head count

requirements for making and release testing.

• Secured lease on Spectrum Building, a new 56,000

square foot facility in Abingdon which will offer

warehousing, logistics, flow cell component recycling

and technical labs for device box build. This facility is

expected to become operational in Q3 2024.

We are investing in and improving our operational and manufacturing

infrastructure and processes to enable long-term growth and drive margin

expansion. This includes optimising manufacturing processes through

innovation to drive efficiency, building a best-in-class, resilient supply chain

and strong global teams, with a focus on culture and people development.

Priorities for 2024

• Focus on further expansion of automation and

process improvements across key areas of

operations and completion of build-out of Spectrum

Building and development laboratories in Sherard

Building (to support launch of Q-line).

• Further expansion of global logistics network to

make it an easier and more predictable customer

purchasing experience.

• Improve customer experience, including expanded

support self-help resources and training of customer

support teams.

• Improving training and auditing of channel partners

to drive sales, improved customer experience, and

mitigate compliance risks.

• Strengthening of key supplier relationships to further

drive reliability and resilience of supply.

Links to KPIs

• LSRT revenue

• LSRT gross margin

• Adjusted EBITDA

• Percentage of women in

senior leadership roles

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Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 3535Oxford Nanopore Technologies

Increase in underlying LSRT gross margin

80bps

Manufacturing space

>60,000 sq ft

S3 customer case

study: Plasmidsaurus

Plasmids

Plasmids are typically small, circular DNA

molecules that exist naturally in bacteria

and have also been artificially engineered

to become critical tools in genetics and

biotechnology labs. Plasmid constructs

are the backbone of molecular biology,

serving as fundamental input material for

various uses, from basic research to

industrial applications, gene therapy,

vaccine development, genetic

engineering and more.

Because plasmid constructs are

fundamentally important for downstream

experiments and applications, scientists

often employ various quality control

methods to ensure the accuracy and

integrity of their plasmid constructs. One

longstanding sequencing method

pioneered by Sanger in the 1970s has

been a widely used method to confirm

the accuracy of the DNA sequence. By

comparing the generated sequence with

the expected sequence, scientists can

verify the correct assembly of the

plasmid and identify any potential errors

or mutations. However, this legacy

method has several limitations, such as a

limited read length of up to a few hundred

bases, requirement of specific primers

that bind to the template DNA during the

sequencing reaction, and high relative

costs when processing or outsourcing

high numbers of samples.

Nanopore-based sequencing has

sparked a paradigm shift, as our system

allows for real-time, long-read

sequencing of DNA molecules, including

whole plasmids without the need for

primers. Whole plasmid sequence

verification allows for a thorough

assessment of the entire plasmid

construct, providing a comprehensive

overview of its sequence, structure, and

potential modifications.

The commercial team were able to

leverage their deep understanding of the

technology and its capabailities to help

Plasmidsaurus achieve their business

objectives by marrying the best and most

efficient use of the technology in their

application and setting to find a solution

that works.

By upscaling from GridION to the larger

PromethION devices Plasmidsaurus has

been able to scale their business and

execute on their objectives including

customer turnaround time, growth and

increased capacity.

With their expanded capacity and

success in building up a customer base

for whole plasmid sequencing they are

now expanding their menu of offerings to

include other applications such as

amplicon and bacterial whole genome

sequencing.

This shift is driving market adoption and

revenue growth as nanopore-based

sequencing becomes the preferred

method for rapid DNA sequencing

applications that are displacing

traditional methods.

Commercial execution

Strategy in action

As a result, the market is rapidly

transitioning from Sanger to

nanopore-based sequencing for plasmid

verification and similar applications.

Plasmidsaurus

Plasmidsaurus is a US-based company that

provides international customers access to

affordable, high-accuracy whole plasmid

sequencing with fast turnaround times

solely using Oxford Nanopore technology.

They were one of the first service providers

to capitalise on the attributes of our

platform to build a rapid whole plasmid

verification business, generally providing

results to customers the very next day.

They started as a small customer using

MinION flow cells, first on MinION and then

GridION devices. Within less than two years

they have scaled up rapidly and are now

one of our top 10 customers globally, after

transitioning to PromethION 24 devices in

2023.

The expansion of this contract reflects the

investment we have made in the

commercial team and the ability to provide

ongoing support and regular meetings with

customer service, field application

scientists and technical application

scientisits.

Oxford Nanopore Technologies Annual Report & Accounts 202336

Logistics

The challenge

To deliver the best customer experience,

Oxford Nanopore products must be

delivered quickly and robustly. Our Asia

Pacific territory covers 21 countries and is

one of the most challenging due to its size,

language needs, and compliance

requirements from a Customs and

importation perspective. During 2022, the

Group identified a need to invest in two key

areas to improve access to

our platform and provide a

capability for growth of our

customer base within the

region.

The solution

During 2023, the Group

invested in increasing our

logistics footprint to simplify

the shipping in these

traditionally harder to reach

territories. The Group

opened new logistics

capacity in Singapore and

Melbourne to support our

growing customer base,

within the Asia &

Australasia territories, and

to provide faster access to our platform. This

has had two effects; simplifying the

importation into the region as Customs

regulations differ in most countries, and

speeding up the receipt of orders as they are

shipped from Singapore and Melbourne

rather than from UK. We are now able to

ensure most Customers and Channel

Partners in this region receive their orders

with 48 hours of despatch. We also now

have the flexibility to cater for varied local

demand more quickly and respond to

geographic requirements by holding the

most commonly ordered products.

As our customer base has expanded within

the Asia Pacific region, we have needed to

combine the new investments in Logistics

capacity with that of appointing new Channel

Partners who have the relationships and

expertise to navigate their country’s

Customs and compliance regulations. This,

coupled with local import licences,

significantly reduces the time for Customs

clearance and therefore enables The

Group’s products to be received in optimum

condition more quickly and more reliably.

The results

The combination of these two investments

expands the Group’s geographic reach

across the Asia Pacific region and

enables customers to access local

expertise to ensure their projects are set

up to meet the project aims.

P2: high-output sequencing for every lab

In line with our vision to make DNA

sequencing accessible to anyone,

anywhere, we completed the early access

launch of our PromethION 2 Solo (P2

Solo) device. More than 700 P2 Solos

were leased, through starter packs, or

sold in 2023.

The P2 Solo utilises PromethION Flow

Cells that generate hundreds of

gigabases, to enable PromethION-scale

benefits in small to medium-sized labs.

The P2 Solo is designed to make

high-output sequencing more accessible

to users with lower sample processing

requirements (up to approximately 200

flow cells per year). It allows customers to

conduct rapid, competitively priced

sequencing of whole human genomes,

transcriptomes, single cells, plants, animal

or highly multiplexed targeted samples or

pathogens. We believe that this will drive

the creation of new user types for

high-output sequencing.

In addition to the P2 Solo we have also

released the PromethION 2 integrated

(P2i), a self-contained benchtop device

that can run up to two PromethION Flow

Cells at a time. P2i was released to a small

group of developers (developer access

release) to confirm functionality in the

second half of 2023 and progressed to

early access in Q1 2024.It contains fully

integrated compute and a screen for

generating, analysing and visualising

nanopore data.

Operational excellence

Innovation

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 3737Oxford Nanopore Technologies

LSRT revenue LSRT Gross Margin Adjusted EBITDA

169.7

146.8

127.0

53.3%

56.3%

53.8%

(104.9)

(78.6)

(57.7)

Definition

LSRT revenue is derived from the sale

ofour sequencing products to global

customers who are using our technology

for scientific research and public health.

For now, it also includes a small amount

of revenue from customers using our

sequencing products for clinical and

applied uses.

Definition

Gross margin percentage is LSRT gross

profit expressed as a percentage of

LSRTrevenue.

Definition

Adjusted EBITDA is Loss for the year

before finance income, loan interest,

interest on lease, income tax,

depreciation and amortisation and

exceptional items. See reconciliation

onpage 191.

Why is it important?

Revenue growth is crucial for

sustainable long-term growth and

isdriven through increasing and

diversifying our customer base and, in

turn, the number of starter packs and

consumables sold.

Why is it important?

LSRT gross margin is a key metric for

monitoring the Group’s earnings quality

and potential.

Why is it important?

Adjusted EBITDA is used to assess

thetrading performance of the

Group’sbusiness.

Performance

LSRT revenue increased by 15.6% on a

reported basis and 15.3% on a constant

currency basis

, driven by the continued

increase in the user base and utilisation

of our technology, partially offset by a

£18 million headwind from COVID

sequencing. In the period from FY18 to

FY23 LSRT revenue grew at a CAGR

of39%.

Performance

LSRT gross margin decreased by 300

basis points to 53.3%, predominantly

reflecting i) adverse performance of the

EGP, ii) the write-off of excess COVID

sequencing kits and legacy devices, and

iii) upgrading the compute on large

PromethION devices.

Performance

Adjusted EBITDA decreased by £26.3m;

higher LSRT gross profit offset by

increased operating expenses, reflecting

investment in commercial and marketing

teams and our manufacturing and

logistics infrastructure, to support long

term sustainable growth.

Link to strategy

Associated risks

1. Alternative Performance Measures as defined on page 207.

2. Constant currency - the application of the same exchange rate to the FY23 and FY22 non-GBP results, based on FY22 rates.

Financial KPIs

Key performance indicators

Oxford Nanopore Technologies Annual Report & Accounts 202338

Women in senior leadership roles Publications*

46.6%

46.6

39.7

41.3

>11,000

11,000

8,000

5,200

Definition

The proportion of women in leadership

roles globally. Includes women on the

Board, Operating Committee and direct

reports to members of the Operating

Committee (excluding admin support).

Definition

The cumulative number of scientific

publications that include nanopore

sequencing as an experimental method,

as publicly available in online resources.

Why it is important?

Nurturing a diverse and inclusive culture

drives our growth as a business. We

continue to focus on driving greater

gender balance throughout the

Company and, in particular, at the most

senior levels.

We are targeting 40% representation of

women at the Board level.

Why it is important?

Publications are an indicator of the

breadth and diversity of the use of

nanopore sequencing in the scientific

community, reflecting expanding utility

and acceptance in genomics research.

Performance

As at 31 December 2023, the proportion

of women in senior leadership roles

increased to 46.6% (2022: 39.7%).

Performance

The increase in publications reflects

thegrowing momentum for the Group’s

sequencing technology in the scientific

research community. This also reflects

theimpact of the Group’s strategy of

broadening access to genomics through

more accessible technology as publications

appear from diverse scientific communities.

Link to strategy

Associated risks

Non-financial KPIs

Principal risks and uncertainties

Ability to make products: supply chain

andmanufacturing

Ability to successfully introduce products to

remain a technology leader and to offer a

stable platform on which customers can rely

Trade, war, post-pandemic life sciences

downturn and component and

sequencinginflation

Concentrated revenues

Cyber security

Intellectual property protection and competition

Founder-led company and succession planning

Ability to achieve medium-term revenue growth

targets and ability to expand into diagnostics

and applied industrial sectors

Data privacy and data classification

Environment, health and safety

Link to strategy

Disruptive innovation

Commercial execution

Operational excellence

* Cumulative peer review publications. The Company uses best efforts to avoid any duplicates and provide an accurate number of publications and excludes review articles,

bookchapters, editorials, protocols, and conference proceedings.

Note: due to a change on the date that publications are recorded, certain publications initially recognised in 2022 have now been recognised in 2023 instead.

This has resulted in the number for 2022 being updated from >8,200 to >8,000.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 39

Financial review

2023 performance

The Group delivered total revenue of £169.7 million (2022: £198.6

million), a decline of 14.6% as there was no COVID Testing revenue

in 2023 (2022: £51.8 million).

Revenue from our core LSRT business grew 15.6% in the year,

15.3% on a constant currency basis.

Underlying LSRT revenue growth, excluding the Emirati Genome

Program (EGP) and COVID sequencing, grew approximately

39.3% and approximately 39.1% on a constant currency basis.

During the year our global customer base expanded from 6,839 to

7,615 active accounts; an increase of 11%. We saw particularly

strong revenue growth in our S2 (+20%) and S3 (+19%) customer

groups. S2 revenue grew by 42% and S3 by 69%, on an

underlying basis.

Performance across the broader customer base in 2023 was

driven by consumable sales of £124.9 million, which grew by 11%

(2022: £112.5m), which accounted for approximately 74% of

revenue.

In December 2023, the original EGP agreement was revised to

provide greater flexibility to achieve the programme objectives and

reflected both parties desire to refocus on clinical uses of the

platform, that can utilise the platform’s unique benefits of richer

and faster data. The new agreement removes the outstanding

purchase commitment from the original agreement and extends the

expiration date to 31 December 2026. EGP revenue in 2024 and

beyond is not anticipated to be a material portion of revenue and as

such, the Group will cease reporting EGP revenue separately

following these results. Revenue related to the EGP in 2023 (under

the original and revised agreement) was approximately £12 million

(2022: £13.2m).

The Group’s gross profit and gross margin reduced in 2023 - gross

profit by 26.9% to £90.5 million (2022: £123.8 million) and gross

margin by 900 bps to 53.3% (2022: 62.3%) - primarily due to

gross margin generated from the DHSC contract in 2022, the

adverse performance of the EGP contract and several specific

inventory write downs in 2023.

LSRT gross profit increased to £90.5 million (2022: £82.7 million)

in the year, up 9.4% on 2022.

We delivered strong, resilient growth in

our core LSRT business through

execution of our strategy

Key Highlights

LSRT revenue grew by

15.6%

(Constant currency: 15.3%)

Underlying LSRT

revenue grew by

39.3%

Cash, cash equivalents and

other liquid investments

£472.1m

LSRT gross margin

decreased by

300bps

Active customers

grew by

11%

Reduction in cash, cash

equivalents and other liquid

investments in the year by

£85.9m

Confidence in the future

• Broad, diverse user base of

>7,600 active accounts

providesstability

• Disruptive technology

platform and robust

innovation pipeline

continues to drive growth

• Resilient supply chain and

multiple levers to drive

gross margin expansion

FY27 medium-term targets

• Grow LSRT revenue by

>30% CAGR at constant

currency between FY24

and FY27

• Increase LSRT gross

margin to >62%

• Achieve adjusted EBITDA

breakeven

Oxford Nanopore Technologies Annual Report & Accounts 202340

Group operating loss increased to £168.6 million (2022: £98.5 million), reflecting the reduction in revenue and gross profit and increase in

operating expenditure.

During 2023, we continued to invest in research and development to drive both continuous improvement in the performance and usability

ofour technology, and to deliver new products and technologies that address a broader range of applications and users’ needs. We also

continued to expand our global sales and marketing team during 2023. Commercial and marketing headcount grew to 416 employees at

31December 2023, up by 43% during the year.

Despite continuing investment in innovation and sales and marketing, we finished the year with cash, cash equivalents and other liquid

investments of £472.1 million (2022: £558.0 million) reflecting a total reduction of £85.9 million. In October 2023, bioMérieux agreed to

subscribe for 29,025,326 shares at a subscription price of 238.08p per share which equated to a total investment of nearly £70 million.

Results at a glance

Year ended 31 December:

2023

£m

2022

£m

Change

reported

Total revenue 169.7 198.6 (14.6)%

– LSRT revenue 169.7 146.8 15.6%

– COVID testing revenue – 51.8 (100.0)%

Underlying LSRT

149.7 107. 5 39.3%



Gross profit

90.5 123.8 (26.9)%

Gross margin (%)

53.3% 62.3% (900)bps

LSRT gross profit

90.5 82.7 9.4%

LSRT gross margin (%)

53.3% 56.3% (300)bps

Operating loss

(168.6) (98.5) (71.2)%

Adjusted EBITDA

(104.9) (78.6) (26.3)

Loss for the year

(154.5) (91.0) (63.5)





Cash, cash equivalents and other liquid investments

472.1 558.0 (15.4)%

Net assets at year end

643.9 693.6 (7.2)%

Alternative Performance Measures (see note 35, page 191).

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 41

Financial review continued

Alternative performance measures

The Group has identified Alternative Performance Measures

(APMs) that it believes provide additional useful information on the

performance of the Group. These APMs are not defined within

International Financial Reporting Standards (IFRS) and are not

considered to be a substitute for, orsuperior to, IFRS measures.

These APMs may not be necessarily comparable to similarly titled

measures used by other companies. All adjusted measures are

reconciled to the most directly comparable measure prepared in

accordance with IFRS in note 35 to the consolidated financial

statements.

Directors and management use these APMs alongside IFRS

measures when budgeting and planning, and when reviewing

business performance.

Revenue

Whilst our reportable segments are LSRT and COVID Testing, we

continue to look at revenue by size of customer (e.g. S1, S2, etc.)

and geography. In addition we also analyse revenues by franchise

i.e. PromethION and MinION franchises, which represent revenues

generated by each range of our product groups.

Underlying revenue by franchise

Underlying revenues grew fastest across the PromethION

franchise, representing all devices and flow cell sales from the

PromethION range, reaching £48.8 million from £26.6 million in

2022, representing underlying growth of 83% when stripping out

the impact of EGP.

Revenues of our MinION franchise, representing all sales of

MinION flow cells and devices that run MinION flow cells (including

GridION and MinION) grew 14% to £58.8 million (2022: £51.5

million) when stripping out the impact of COVID sequencing.

Other revenues, representing kits, services revenues and other

devices grew 44% underlying to £42.2 million from £29.4 million

when stripping out the impact of EGP and COVID sequencing.

2023

(£m)

2022

(£m)

% change

actual

PromethION franchise 59.2 38.6 53.2%

Less EGP (10.4) (12.1)

Underlying PromethION franchise 48.8 26.6 83.4%

MinION franchise 63.4 68.2 (7.0)%

Less COVID sequencing (4.6) (16.7)

Underlying MinION franchise 58.8 51.5 14.1%

Other 47.1 40.0 17. 8%

Less EGP (1.5) (1.1)

Less COVID sequencing (3.3) (9.4)

Underlying other 42.2 29.4 43.5%

Total LSRT revenue 169.7 146.8 15.6%

Less EGP (12.0) (13.2)

Less COVID sequencing (8.0) (26.1)

Total underlying revenue 149.7 107. 5 39.3%

Revenue by customer group

At a customer group level (with groups based on size of revenue by

customer), revenue growth was driven by S2 and S3 customers,

excluding EGP, as well as strong growth through our most

significant distributor, Avantor (included in Indirect).

Our commercial partnership with Avantor (signed in 2021) helps

expand our reach and improve accessibility for entry level products

such as MinION. We continue to focus on driving indirect revenue

growth through both rapid expansion and diversification of the

customer base, as well as increasing revenue per customer

account. Avantor is performing equally in the EMEAI and Americas

regions, with over 90% of revenue attributable to consumables.

Oxford Nanopore Technologies Annual Report & Accounts 202342

2023

(£m)

2022

(£m)

change

S1 29.4 26.4 11.2%

Less COVID sequencing (0.8) (2.5)

Underlying S1 revenue 28.6 23.9 19.6%

S2 62.3 51.7 20.5%

Less COVID sequencing (3.1) (10.0)

Underlying S2 revenue 59.2 41.7 42.0%

S3 55.3 46.7 18.6%

Less EGP (12.0) (13.2)

Less COVID sequencing (2.4) (9.2)

Underlying S3 revenue 41.0 24.3 68.8%

Indirect 22.6 22.0 2.8%

Less COVID sequencing (1.7) (4.4)

Underlying indirect revenue 21.0 17.6 18.9%

Underlying LSRT revenue 149.7 107. 5 39.3%

EGP 12.0 13.2 (9.2)%

COVID sequencing 8.0 26.1 (69.2)%

Total LSRT revenue 169.7 146.8 15.6%

COVID Testing revenue – 51.8 (100.0)%

Total revenue 169.7 198.6 (14.6)%

2022 numbers by customer group have been reclassified to reflect Avantor revenue

within the Indirect customer group.

NB S1 customers generate revenue of up to $25,000 per year per customer account.

S2 customers generate revenue between $25,000 and $250,000 per year per customer

account. S3 customers generate revenue of more than $250,000 per year per customer

account.

Total S3 revenue increased by 18.6% to £55.3 million. Underlying

S3 revenue grew by 68.8% in 2023, reflecting an increase in the

number of active customers in this group (excluding EGP) from 72

to 84 during the year with average revenue per customer of

approximately $641,900 (2022: $581,000). This group consists

mostly of customers performing human disease and cancer

research.

S2 revenue grew by 20.5% during the year to £62.3 million. Active

customers in this group grew by 25% to 1,210 in 2023, with an

average annual revenue of approximately $64,000 (2022:

$66,800) per customer. S2 customers are key to our expansion

over the medium term, as we provide localised high-quality

sequencing capabilities at competitive prices. These customers are

able to manage their own projects rather than continuing to be

dependent on centralised sequencing services, where they have to

wait for their samples to be processed.

S1 revenue grew by 11.2% during the year to £29.4 million,

reflecting continued demand for our entry-level and portable

sequencing devices. Active customers in this group grew by 9% to

6,298 in 2023, with an average annual revenue of approximately

$5,800 (2022: $5,700) per customer. Growth across the S1

customer base came from two areas, expansion of end users within

organisations and new accounts in new organisations, with Mk1B

being the most popular device. To date we have had less direct

contact with this customer group with most conversations taking

place at conferences, in forums and in our Nanopore Community.

Split of 2023 LSRT revenue by customer group

S1 17%

S 2 37%

S 3 33%

Indirect 13%

Read more on page 7

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 43

Financial review continued

Geographical trends

The Group aims to make its technology available to a broad range

of scientific users, and currently supports users in more than 125

countries.

LSRT revenue by region (%)

Americas 36%

EMEAI 44%

APAC 20%

2023

(£m)

2022

(£m)

change

Americas 61.5 48.3 27.4%

Less COVID sequencing (3.1) (8.9)

Underlying Americas revenue 58.4 39.4 48.2%

APAC 34.1 34.8 (2.1)%

Less COVID sequencing (1.2) (5.6)

Underlying APAC revenue 32.9 29.2 12.7%

EMEAI 74.0 63.7 16.2%

Less EGP (12.0) (13.2)

Less COVID sequencing (3.6) (11.6)

Underlying EMEAI Revenue 58.4 38.9 50.2%

Total LSRT revenue 169.7 146.8 15.6%

COVID Testing – 51.8 (100.0)%

Total LSRT revenue 169.7 198.6 (14.6)%

At a regional level, revenues were predominantly driven by growth

in our two largest regions, EMEAI (Europe, Middle East, Africa and

India) and the Americas.

Revenue in APAC declined by 2.1%, reflecting a reduction in

revenue from China, which reduced by 12%. However on an

underlying basis (excluding COVID sequencing) China grew by 5%.

The Group opened new logistics hubs in Singapore and Melbourne

during the period - our distribution hubs for Asia Pacific – creating

further revenue opportunities in this region.

Revenue in EMEAI increased by 16.2%, 50.2% on an underlying

basis, reflecting the growing success of our commercial team in

this region.

In some territories the Group works with Channel Partners whom

have the commercial and technical expertise to enhance our

geographic reach, engaging customers in their country and local

language. The Group currently works with:

• Avantor in the European Union and United States.

• A network of Channel Partners across 53 countries in Asia,

Africa, India, Latin America, Middle East and The Gulf, and

non-EU European territories.

• We are expanding this to include a further 40+ countries

including the remainder of Africa and Latin America, today we

rely on specialist logistics brokers who can work directly with the

Group’s customers in these territories to ship our platform.

Gross margins

Year ended 31 December 2023 2022 Change

Gross margin (%) 53.3% 62.3% (900) bps

LSRT gross margin (%) 53.3% 56.3% (300) bps

Overall gross margin declined by 900 bps in 2023. This was due to

a number of factors:

• the 2022 gross margin benefitted from the DHSC contract

accounting for 600 bps

• impacts on the 2023 gross margin include adverse performance

of the EGP and the impact of write down of excess inventory in

COVID sequencing kits, devices that became end-of-life during

the year and upgrading the compute on large PromethION

devices. Excluding these one-off items, the 2023 gross margin

would have been 58.8% (2022: 58.0%)

We remain committed to continual margin improvement across all

products and will continue to invest in manufacturing innovation, to

deliver this goal.

Oxford Nanopore Technologies Annual Report & Accounts 202344

Gross margins

Gross margin (%)

LSRT gross margin (%)

(900)bps

(300)bps

53.3

56.3

53.8

53.3

62.3

54.8

Impact of headcount

Average headcount (FTEs) 2023 2022

Change

(%)

Research and Development 464 380 +22%

Manufacturing 156 149 +5%

Selling, General

&Administration

513 393 +31%

Total 1,133 922 +23%

In 2023, the average number of employees across all functions

increased by 23%. The Group invested in bringing onboard new

Research and Development staff to execute on our platform and

product roadmap. Our Research and Development teams work on

fundamental research for novel sensing applications, sequencing

chemistry, nanopores, enzymes, algorithms, software electronics

and arrays to deliver future platforms and improvement on current

products. A significant investment of 2023 was in the

establishment of our regulatory development teams and expansion

of our platform development groups as we support a growing

product portfolio of sample to answer.

The Group’s manufacturing team expanded by 5%, primarily in our

biologics production facilities, which expanded during the year

providing more robustness and resilience to our manufacturing

capabilities.

Overall selling, general and administration headcount grew by

31%, primarily within the commercial team, which grew globally by

49% in the year supporting the Group’s growth objectives.

Research and development expenses

The Group’s research and development expenditure is recognised

as an expense in the year as it is incurred, except for development

costs that meet the criteria for capitalisation as set out in IAS 38

(Intangible assets). Capitalised development costs principally

comprise qualifying costs incurred in developing the Group’s core

technology platform.

As amortisation related to internally generated assets has

increased over time, management now consider that it is a more

appropriate presentation to present amortisation and the R&D tax

credit within research and development expenses, rather than as

previously presented within selling, general and administration

expenses. The comparative numbers have been re-presented to be

consistent with the current year presentation.

2023

(£m)

2022*

(£m)

Research and development expenses 103.8 69.2

Adjusting items:

Employer’s social security taxes on

pre-IPO share awards

0.6 9.9

Adjusted R&D expenses 104.4 79.1

Amortisation of capitalised

development costs

(18.4) (11.4)

Capitalised development costs 19.5 19.2

Total R&D expenses and capitalised

development costs

105.5 86.9

* see note 11 on page 168 for details of the re-presentation.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 45

Financial review continued

Adjusted research and development expenses increased by £25.3

million to £104.4 million in 2023 (2022: £79.1 million). This increase

was principally due to a 22% increase in headcount (2022: 31%

increase) leading to a £7.0 million increase in payroll costs (2022:

£7.1 million).

Amortisation of capitalised development costs increased by

£7.0million to £18.4 million. There is now £77.2 million of costs that

have been capitalised as at 31 December 2023 (31 December

2022: £57.7 million), so driving the increase in amortisation.

Capitalised development costs increased by £0.3 million to £19.5

million in 2023 (2022: £19.2 million). This included £11.3 million of

staff costs (2022: £10.4 million) and £8.2 million of third-party

costs (2022: £8.8 million), across a number of projects that

occurred during the year.

Overall investment in research and development was £105.5 million

(2022: £86.8 million); an increase of £18.7million (2022: £9.4

million) over the prior year.

Selling, general and administration expenses

The Group’s selling, general and administrative expenses in 2023

increased by £2.1 million to £155.2million (2022: decreased by

£3.7 million to £153.1 million).

On an adjusted basis selling, general and administrative expenses

in 2023 increased by £22.9 million to £134.6 million (2022:

increased by £13.8 million to £111.7 million).

2023

(£m)

2022

(£m)

Selling, general and administration

expenses 155.2 153.1

Adjusting items:

Share-based payment expense on

Founder Long Term Incentive Plan (LTIP) (20.9) (53.2)

Employer’s social security taxes on

Founder LTIP and pre-IPO share awards 0.3 11.7

Adjusted selling, general and

administration expenses 134.6 111.7

The main changes were:

• a 49% increase in average headcount of staff within the

Group’ssales, marketing and distribution functions (2022: 48%

increase), leading to a £14.4 million increase in payroll costs

(2022: £11.7 million increase). This is in line with our plan to

expand our global sales team;

• a 4% increase in average headcount of corporate staff within the

Group’s Human Resources (HR), finance, central administration,

legal, applied functions and certain corporate executives to

support business growth (2022: 30% increase), contributing to

a £1.7 million increase in payroll costs (2022: £7.9 million);

• an increase in depreciation of £1.6 million (2022: increase

of£4.8 million), partially offset by a decrease in sharebase

payments (non-Founder LTIP) of £1.5 million (2022: decrease

of£6.9 million).

Balance sheet

Our balance sheet remains strong, with £472.1 million of Cash,

cash equivalents and other liquid investments at 31 December

2023. Key movements during the year are outlined below:

2023

(£m)

2022

(£m)

Property, plant and equipment 49.9 37. 3

Intangible assets 32.9 30.0

Right-of-use assets 32.5 25.9

Net deferred tax asset 5.5 7.7

Working capital 84.6 70.4

Other assets and liabilities 21.0 11.6

Provisions (13.0) (13.3)

Cash and cash equivalents and other liquid

investments

472.1 558.0

Lease Liabilities (41.7) (34.1)

Net assets 643.9 693.6

Oxford Nanopore Technologies Annual Report & Accounts 202346

Property, plant and equipment

Property, plant and equipment additions of £34.9 million were

made in the year (2022: £23.1 million). This included:

• £25.6 million on devices with customers (2022: £12.6 million),

ofwhich £14.9 million was on compute upgrades, and

• £5.7 million was spent on manufacturing facilities and

laboratories across our sites in the UK (2022: £8.1 million).

Intangible assets

Intangible asset additions of £21.4 million (2022: £19.2 million)

were made in the year relating to capitalised development costs

and patent and license purchases.

Right-of-use assets

During the year right-of-use asset additions were £12.0 million

(2022: £15.5 million), resulting in a net book value at 31 December

2023 of £32.5 million (2022: £25.9 million). As at 31 December

2023, the outstanding balance sheet liability in respect of the

right-of-use assets was £41.7 million (2022: £34.1 million).

Working capital

The working capital balance of £84.6 million (2022: £70.4 million)

predominantly reflects inventory of £101.5 million (2022: £87.7 million),

trade and other receivables of £61.5 million (2022: £62.9 million)

and trade and other payables of £78.4 million (2022: £80.1 million).

The increase in working capital was due primarily to increased

inventory due to our long-term agreements with key suppliers

focused on electric components. In particular, inventory related to

flow cells and devices have increased by £7.8 million and by £5.2

million respectively in the year.

Provisions

Provisions of £13.0 million at 31 December 2023 (2022: £13.3

million), primarily relates to a provision for employer social security

taxes on share awards of £9.9 million (2022: £10.8 million). The

provision is estimated at each reporting period with reference to

both the expected number of awards vesting and their expected

value, using the share price at the reporting date. The release of

the provision during the year is reflective of the reduction in share

price from £2.47 at 31 December 2022 to £2.08 at 31 December

2023.

Cash, cash equivalents and other liquid investments

Cash, cash equivalents and other liquid investments were

£472.1million at 31 December 2023, a decrease of £85.9 million

inthe period. See note 35 to the consolidated financial statements.

Cash flow

In 2023, there was a net cash outflow of £137.3 million from

operations (2022: £63.8 million *), the difference is primarily driven

by the 2022 cash flow including the benefit of the DHSC income.

Cash outflows from investing activities were £61.8 million (2022:

£51.4 million *). This includes:

• the purchase of financial assets of £150.0 million (2022: £130.0

million), offset by the proceeds of other financial assets of

£104.6 million (2022: £60.5 million);

• the purchase of property, plant and machinery of £5.9 million

(2022: £8.6 million);

• the purchase of an IP licence of £1.9 million (2022: £nil);

• the investment in associate of £3.0 million (2022: £nil);

• the capitalisation of development costs of £19.5 million (2022:

£19.2 million); offset partially by

• interest received of £13.9 million (2022: £3.4 million).

Cash inflows from financing activities were £64.7 million (2022:

outflow of £13.7 million), which includes:

• proceeds from issue of shares of £71.6 million (2022: £3.8

million) less costs of share issue of £0.4 million (2022: £2.4

million). This was primarily generated by the investment of nearly

£70 million made by bioMérieux, and

• lease and interest payments of £6.5 million (2022: £5.6 million).

* restated – see notes 11 and 28

Outlook

We remain focused on our vision to bring the widest benefits to

society through the analysis of anything, by anyone, anywhere.

The continuous strengthening of our team, the establishment of

strategic partnerships across the globe, together with significant

investment in platform development, bespoke electronics, IP and

infrastructure, combined with the strength of our balance sheet,

puts us in a strong position to achieve this goal and continue to

deliver strong growth.

Glossary

Adjusted EBITDA: EBITDA adjusted for: i) share-based payment

expense on Founder LTIP awards; ii) employer’s social security

taxes on pre-IPO share awards; iii) impairment of investment in

associate; iv) gain on sale of property; and v) settlement of the

COVID Testing contract. See reconciliation in note 35, page 191

bps: basis points

CAGR: Compound annual growth rate

Cash, cash equivalents and other liquid investments: Cash and

cash equivalents, treasury deposits and investment bonds

Constant Currency: the application of the same exchange rate to

the 2023 and 2022 non-GBP results, based on 2022 rates

EBITDA: Loss for the year before income tax expense, finance

income, loan interest, interest on leases, depreciation and

amortisation

IFRS: International Financial Reporting Standards

LTIP: Long Term Incentive Plan

Underlying LSRT revenue growth: LSRT revenue growth

excluding EGP and COVID sequencing revenue.

Underlying LSRT revenue growth on a constant currency basis:

LSRT revenue growth excluding EGP and COVID sequencing

revenue on a constant currency basis

Working capital: inventory plus trade and other receivables less

trade and other payables

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 47

At Oxford Nanopore, we are committed

to innovating and growing in a

sustainable way that honours our core

values even as we maintain our cutting-

edge technology advantage.

Advancing biological sciences, human and environmental

health and improving food and agricultural outcomes are

consistent with and enabled by our product and our

business model. And yet, we recognise that a commitment

to sustainability and positive impact must extend through

every facet of our business, from our product to our

footprint and our team. This year, we have continued with

our sustainability strategy focused on the three areas of

product, people, and planet, in which we set clear targets to

hold ourselves accountable to the highest sustainable

standards that will help guide us as we enter this next phase

of growth. Based on the results of our newly carried out

materiality assessment, ‘people’ has been ranked as a highly

impactful material topic for Oxford Nanopore and therefore

this section has been moved earlier in the report to

emphasise its importance.

Our

sustainable

impact

Product

Planet

People

Oxford Nanopore Technologies48 Annual Report & Accounts 2023

CEO’s statement

We strive to grow in a responsible way,

by protecting the planet through

energy efficiency, product design, and

ensuring that our commitment to

sustainable practices extends beyond

our internal operations to encompass

our entire value chain.”

Dr Gordon Sanghera

Chief Executive Officer

We founded Oxford Nanopore with a goal of developing and

deploying a new generation of electronics-based molecular

sensing technology. In the 10 years since we launched our first

product, the MinION, we have worked hard to improve our DNA/

RNA sequencing platform so that it is best in class, providing

highly accurate, fast, information-rich genetic information in an

accessible and affordable design. Our vision is to enable the

analysis of anything by anyone, anywhere and this has framed

our mission to empower people to explore and answer biological

questions with our transformative technology platform.

Increasing access to valuable genetic information is foundational

to our business model, and the scientific work by the research

community is starting to actively address real-world problems in

health (e.g. human genetics, cancer, infectious disease),

agriculture, environment, education and more. Our goal is to have

a profoundly positive and sustainable impact on society and the

planet by enabling our customers to access the advanced

scientific data to support their work, whether in fundamental

scientific research or in future clinical and applied markets.

Wedothis by breaking down barriers to acquiring and using our

sophisticated sequencing tools. After our initial decade of

fundamental R&D that resulted in novel technology features for

broad communities – such as portability and the ability to

sequence longer fragments of DNA/RNA – we have also invested

deeply in continuous improvement of our technology. We strive to

ensure that their accessibility is matched by the quality and

comprehensive nature of the data generated on Oxford Nanopore

sequencers, in addition to the small environmental footprint

created by the devices themselves.

We are proud of the incredible innovation and productivity of our

technology’s user community, who have published more than

11,000 peer-reviewed papers in scientific journals using nanopore

sequencing. We are in a phase of rapid international growth, as

our technology is used by more scientists to answer more

biological questions. We are committed to growing responsibly.

Alongside our business strategy grounded in positive global

impact, we have fully committed to building environmental, social

and governance (ESG) considerations into our products and our

business operations. We strive to grow in a responsible way, by

protecting the planet through energy efficiency, product design,

and ensuring that our commitment to sustainable practices

extends beyond our internal operations to encompass our entire

value chain. Last year we published our first Sustainability

Report, which included the introduction of a new sustainability

strategy – product, people, planet – to embed sustainability

practices into our wider business strategy. We enhanced our

emissions reporting, completed a full scope 3 emissions

assessment, and reported against TCFD for the first time.

Alongside this, we continued to take actions to reduce our

emissions intensity whilst growing the business, successfully

reducing tonnes of CO

e emitted per £m revenue by 12.7% in

2023, beating our target of 2.5% reduction. This year we have

built on that strong foundation. In 2023 we concluded an in-depth

materiality analysis to review and understand our priorities when

addressing our environmental and social impacts and

opportunities. We worked with an external consultant to identify

the environmental and social issues that are more pertinent to

Oxford Nanopore and our external stakeholders, including

customers, investors and partners, and to ensure that the

sustainability investments we make are aligned with those

priorities. This year, we also published our first-ever Net Zero

Transition Plan, joining the UK’s commitment of reaching net zero

by 2050 in accordance with the Paris Agreement, through

identifying and analysing several projects to help us reach

thattarget.

Beyond our environmental footprint, we recognise that the

success of our products is only possible through the strength of

our team. We are incredibly proud of our people and the dynamic,

interdisciplinary culture we have created and continue to foster

through a variety of talent development programmes, which have

continued to grow over the last year. We are committed to

building sustainability considerations into the foundations of our

long-term growth. This year we will be publishing our second

sustainability report, which provides an update on our progress

throughout FY23. Thank you for following us along our journey.

Corporate Governance Financial Statements Further InformationStrategic Report

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 49

Expanded our global collaboration with UPS healthcare,

which now serves the Americas, APAC and Australia.

Sustainable impact highlights

Product

We continued to design and support a

transformative technology platform

that empowers people to answer

biological questions.

We saw a 55% year on year increase in the tonnes of used

products returned to 8.6 tonnes (7.4 tonnes of devices; 1.2

tonnes of consumables) in 2023.

A 21% year on year increase in the

recycling of disposable flow cells

returned to us. We were able to reuse

one quarter of these for external

customers, R&D activities, and in

Configuration Test Cells (CTCs).

We published an updated Supply Chain Policy, which covers a

range of environmental and social considerations to foster

transparency and accountability throughout our supply chain.

56% of the 29 tonnes of packaging

material we purchased for our primary

products was renewable (made from a

natural resource that can be

replenished).

We hosted London Calling, an ISO 201201-accredited event,

which enabled a diverse array of scientists across a breadth

of research areas to network and share their research using

nanopore sequencing.

Achieved a 25% reduction in plastics

used in flow cell consumables through

re-engineering the flow of materials.

increase

reduction

Staff training hours completed increased by 308% year on

year, totalling 36,050 total training hours completed, of which

1,134 hours were completed through LinkedIn Learning.

People

333

increase

After its launch in 2022, the Values in Action initiative

progressed successfully in 2023 with three initiatives

delivered, including Inclusion Week.

A year-long executive business

strategy programme for 39 senior

leadership culminated in the

identification and delivery of

organisational effectiveness

priorities.

The roll out of a new internship

programme in December 2023

resulted in 1,300 applicants by

year’s end, reflecting a 333%

increase from 300 applicants for

the previous programme.

A new web-based platform was

implemented, EcoOnline, which

has made our EHS information

more transparent and accessible.

Successfully trained 33 staff

to become mental health first

aiders in 2023.

36,050

total training hours

Oxford Nanopore Technologies Annual Report & Accounts 202350

We submitted science-based targets

and have disclosed a transition plan

showing Oxford Nanopore’s

commitment to the UK’s own net zero

ambitions. We also reported against

TCFD with full compliance.

Planet

NET

ZERO

Successfully reduced energy consumption through

upgrading the boiler at Gosling. We also performed lighting

retrofits at Florey and ECH to improve energy efficiency.

We successfully reduced tonnes of CO

per £m revenue by 12.7% in 2023,

beating our target of 2.5% reduction.

This year we hired a new programme manager, Kara Dicks,

who brings 15 years’ experience in conservation and

molecular lab techniques to support the expansion and

success of the ORG.one programme, designed to support

sequencing of critically endangered species.

Externally published a standalone

environmental policy in 2023 that covers

biodiversity, climate change, energy,

waste and water with a commitment

to minimise the environmental impact

of our products.

12.7

e reduction

tonnes

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 51

Materiality assessment

Our mission is to empower people to explore and answer biological

questions with our transformative technology platform. Creating

positive, lasting impact is at the core of what we do. Alongside

ourcompany strategy, last year we launched our sustainability

strategy as part of our commitment to apply a sustainability-

embedded mindset to our entire value chain, from our products,

toour team and to our global footprint.

Our sustainable strategy

Product

10 Biomedical ethics

11 Product responsibility

(Environment & Social)

12 Product quality & aafety

13 Access & impact

14 R&D innovation

People

5 Cybersecurity/IP & data

protection

6 Talent & career

management

7 Ethical conduct &

compliance

8 Diversity & inclusion

9 Health, safety & wellbeing

Planet

1 Climate change including

emissions and energy

management

2 Resource efficiency,

Packaging and circularity

3 Waste management

4 Responsible sourcing

Impact on Oxford Nanopore

LOW

HIGH

Influence on Stakeholders

During FY23, we completed a materiality assessment to determine the company’s key

sustainability issues. The results of the assessment has provided guidance on what areas should

be prioritised for measurement and disclosure in reporting. See results in the matrix below:

Oxford Nanopore Technologies Annual Report & Accounts 202352

Product PlanetPeople

STRATEGY PILLAR 1:

Accessibility & impact

Design our business and innovate

ourproducts to increase accessibility

within the broader scientific communities

who are driving solutions to global

challenges in health, food and the

environment.

STRATEGY PILLAR 2:

Sustainable innovation

Continuous innovation of our

technology through creative and

flexible approaches to maintaining our

competitive advantage without

sacrificing our core values.

STRATEGY PILLAR 3:

Inclusivity & wellbeing

Promote a culture that is inclusive,

embraces diversity and prioritises

thedevelopment of our people and

their wellbeing.

STRATEGY PILLAR 4:

Responsible scaling

Maintain high growth in a

responsible way by protecting the

planet through energy efficiency and

ensuring that our commitment to

sustainable practices extends

beyond our internal operations and

distribution to encompass our entire

value chain.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 53

Our sustainable impact continued

Our commitments

Guiding principle

Design our business and innovate our products to increase

accessibility within the broader scientific communities who are

driving solutions to challenges in health, food and the environment.

Commitments

• Continue to establish global support and logistics to fulfil

ourmission to enable anyone, anywhere to use Oxford

Nanopore products, building on progress made to date.

• Continue to iterate on product design to develop smaller,

easier-to-use, and lower cost formats to enable more people

inbroader communities to use this technology.

• Strengthen our relationships and collaborations with the

education landscape, utilizing these examples to showcase

student research impact across demographics and

geographies.

Related sustainable development goals (SDGs)

With a goal to increase access to genomics and optimise for positive,

global impact, we have designed our business model and innovated

our products to broaden accessibility for global scientific

communities who are driving solutions to challenges in health, food

and the environment. Our vision is to put these tools directly into the

hands of existing scientific communities so that researchers no

longer need to rely on external partners to perform their experiments.

Accessibility

The cost, size and complexity of legacy sequencing technologies

have historically made genomic insight inaccessible to much of the

world, and have resulted in imbalances in the most developed

countries. We have brought solutions to the market that increase

access to high-quality sequencing. Our products are easy to use

and portable, making nanopore sequencing technology accessible

to anyone, anywhere. Accessibility at Oxford Nanopore also

involves disrupting access to technology within hierarchical

institutional structures in wealthier economies. Traditional

academic research funding and even commercial sequencing

mechanisms have been centred around a small number of expert

institutions, with researchers traditionally sending their samples

through these central laboratories. This often causes significant

time delays, removing the ability for real-time insights and rapid

trial and error, which is useful in the scientific process. Oxford

Nanopore technology removes the need for this centralised

processing, enabling rapid, high-throughput insights to help

answer whatever the scientific question, however capitalised the

investigator. We have been proud to play a part in a changed

market dynamic as researchers are increasingly able to take

control of their own sequencing.

Impact

Oxford Nanopore technology is positioned to provide solutions to

many of the world’s greatest challenges. Scientists continue to use

our technology in more traditional laboratory environments in

universities, industry or government facilities, but many are also

expanding the reach of science by sequencing in new

environments such as jungles, deserts, in the Antarctic and on the

International Space Station. Our technology provides a more

comprehensive insight into genomics with the ability to read

short-to-long fragments of DNA, as well as being able to look

directly at the individual bases that make up DNA and RNA in a

way not possible using other sequencing technology. As a result, a

new generation of research is pushing biological science further

than previously possible.

Sustainable products

STRATEGY PILLAR 1:

Accessibility & impact

Product

Sustainable innovation has been key to developing a product line that fulfils our

mission to increase global access to genomic information, while minimising our

environmental impact.

Oxford Nanopore Technologies Annual Report & Accounts 202354

Impact Why is this important?

Impact in

biomedical

research and

human health

Infectious disease: rapidly understanding the

genomic sequence of pathogens can identify

the disease and any drug-resistance

characteristics. Oxford Nanopore tech rapidly

characterises pathogens, on demand and in

environments near the sample.

Lower respiratory infections remain the fourth most common

cause of death. Infectious diseases including tuberculosis, viral

hepatitis, rare disease and sexually-transmitted infections were

forecast to kill an estimated four million people in 2020 (World

Health Organization: December 2020).

Human genetics: from discovery of new drug

targets for various diseases, to understanding

the cause of rare disease and characterising

tissue for rapid transplants, the impact of

comprehensive genomic insights is broad.

It is estimated that 5.3% of newborns will suffer from a genetic

disorder and 34% of all disease-causing variation is made up

ofvariants that are larger than a single base-pair substitution,

making long sequencing reads vital.

Cancer: DNA/RNA is altered in cancer.

Understanding those changes can help design

best treatment pathways and identify new drug

candidates. Oxford Nanopore tech provides the

most comprehensive characterisation of cancer

DNA, including methylation (chemical corruption

of the DNA), and ‘liquid biopsy’ samples that

identify cancer markers directly from blood.

Worldwide there will be 28 million new cases of cancer each year

by 2040.

Food security

and agriculture

Genomics can help grow a more efficient crop/

livestock, reduce food spoilage and enable

quality assurance. Oxford Nanopore tech

provides accessible, high-performance

analyses to users in broad environments.

Around 795 million people face hunger daily and more than two

billion people lack vital micronutrients, affecting their health and

life expectancy. 30% of food production is lost to pests and

pathogens.

Environment

Oxford Nanopore tech is enabling researchers

to find out quickly, and often

in situ

, if a

species is endangered and how to support it.

Our tech also helps to further knowledge of

changing environments such as the ocean

microbiome.

Three quarters of the land-based environment and roughly 66%

of the marine environment have been significantly altered by

human actions and one million species are now threatened with

extinction. Loss of biodiversity is therefore shown to be not only

an environmental issue, but also a developmental, economic,

security, social and moral issue as well.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 55

Our sustainable impact continued

Product

STRATEGY PILLAR 2:

Sustainable innovation

Our commitments

Guiding principle

Continuous innovation of our technology through creative and

flexible approaches to maintaining our competitive advantage

without sacrificing our core values.

Commitments

Minimise the environmental impact of our product packaging by:

• Further investing in recyclable materials and packaging,

aiming to continue to improve our packaging by moving up

thewaste hierarchy and/or by improving the % of recycled

material. Ensure all recycled packaging states it is made

ofrecycled content and includes the material symbol

wherefeasible.

• Improving the processes and systems for recording packaging

to ensure scope and boundary is consistent and data/

measures are accurate.

• Compiling SKU data on all packaging weights by types and

material component and continuing to reduce SKU packaging

variability to reduce packaging waste.

• Minimising packaging weight, while ensuring the protection of

the product.

• For sub-components, using reusable packaging for transport

where feasible.

• If using plastics, selecting those that are recyclable.

• Strengthening our supply chain by identifying opportunities

toreplace disposables with reusables in all points of the

valuechain.

Related sustainable development goals (SDGs)

Resource efficiency and materials

We are committed to conducting our operations and producing our

devices in the most sustainable and resource-efficient manner

possible. We have focused on internal processes, switching the

packaging material in our distribution process, as well as increasing

circularity in the life cycle of our products. We are constantly

reviewing and optimising our manufacturing processes and use of

materials to reduce our environmental impact. In 2023, we

maximised the circularity of our raw materials to deliver resource

efficiency by taking back 8.6 tonnes of our products (7.4 tonnes of

devices; 1.2 tonnes of consumables).

Boosting innovation

We continue to integrate sustainability into our product design and

delivery as new materials and components become available. We

consider and respond to environmental issues throughout every

stage of our product lifecycle, and our high-efficiency products

play a role in helping the economy move to a low-carbon future.

Packaging

To ensure our packaging is as recyclable and sustainable as

possible, starting in 2017, we began insulating our products with

Woolcool®, a recyclable cardboard container with a wool-based

insulator to keep products at the required temperature without the

need for polystyrene. In 2023, we continued to insulate our

products with Woolcool® and make best use of Credo Boxes

(reusable iceless insulating containers) resulting in a reduction in

plastic use of 11.3 tonnes. Overall, in 2023 across all our products

and services, we were able to source 82 tonnes (72%) of

packaging from recycled materials. Additionally, the nanopore

development team has worked to deliver reagent kits that are

suitable for ambient or cool shipping. This enables them to be

shipped alongside our consumable flow cells and reduces the

number of parcels required to ship compared to other technologies

that have to ship their consumables and reagents separately.

Product quality & safety

Oxford Nanopore is committed to providing high quality products.

We have a Quality Management System in place, which was

certified to ISO 9001:2015 at year end. There have been no

product recalls in the current or last 2 fiscal years. Our Quality

Policy outlines our commitment to:

• meet and exceed customer expectations by delivering

high-quality products and services

• maintain compliance with applicable external regulations and

standards

• ensure through quality system feedback processes that the

voice of the customer (internal and external) is heard throughout

the organisation so opportunities for improvement are identified

and acted upon.

Oxford Nanopore Technologies Annual Report & Accounts 202356

Biomedical ethics

Oxford Nanopore is committed to promoting and conducting

research involving human samples or data in accordance with all

applicable laws and regulations, and in line with the highest standards

of ethical conduct. Oxford Nanopore does not support the use of

its technology for purposes that may deliberately or illegally harm

human health or otherwise deliberately infringe on human rights,

for example for the creation of biological weapons or deliberate

ethical misuse of genomic data. Oxford Nanopore employees

should not engage in research that supports any such uses.

The company has developed an ethics policy that sets out Oxford

Nanopore’s approach to ethical conduct within research involving

human samples and/or data. To hold itself accountable, the

Company has several governing bodies in place to ensure

adherence to the policy, including:

• A designated Ethics Committee, which oversees all matters

relating to the conduct of ethical research within Oxford

Nanopore. The committee meets a minimum of twice yearly, with

additional meetings scheduled as needed.

• The Human Physical Sample Committee reviews projects

involving human samples and approves commencement of

projects involving the acquisition and use of human samples

within the Company based on review of information provided by

the project team in relation to relevant policies.

• The Board of the Company is responsible for ensuring that

Oxford Nanopore has appropriate technical and organisational

measures in place designed to enable compliance with this policy.

Responsible sourcing

Our commitment to sustainable practices extends beyond our

internal operations and distribution, to encompass our entire value

chain. Oxford Nanopore seeks to work with worldwide suppliers who

operate under principles that are similar to Oxford Nanopore’s

business conduct and ethics. All suppliers must comply with the laws

governing such supplier and apply the United Nations Guiding

Principles on Business and Human Rights to all business operations.

Supply chain code of conduct

Oxford Nanopore has a Supply Chain Code of Conduct in place and

a robust, risk-based approach to managing ESG within our supply

chains. It is important that Oxford Nanopore works with suppliers

who have a consistent set of ethical standards and who conduct

business legally, fairly, and with integrity. All suppliers must comply

with the laws of applicable legal systems and conform to the United

Nations Guiding Principles on Business and Human Rights in all

their business operations. We are dedicated to engaging with

suppliers who uphold high ethical standards, prioritise

environmental stewardship and embrace social responsibility.

During 2023, we implemented a new supply chain risk monitoring

system that automated several elements of the supplier audit

process, allowing us to increase the audit coverage of suppliers

and obtain substantial supplier data across both environmental and

social factors. Thorough risk assessments of all our global key

suppliers, which comprised 43% of our total spend, were

undertaken using a third-party software in 2023. This year we

have extended ESG disclosures required by suppliers on further

social factors to include - Supply Chain Responsibility, Quality

Management, Health & Safety.

As part of our Net Zero commitments and supporting science-based

targets, a dedicated Supply Chain Engagement programme will be

developed and launched during 2024 to assist our suppliers in

developing and improving their own environmental monitoring and

improvement processes that will drive decarbonisation in the supply

chain and align them with Oxford Nanopore’s own environmental

ambitions. This will include elements to improve carbon footprint

reporting, ISO 14001, EMS systems implementation and energy audits.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 57

Building an inclusive culture that supports the health, wellbeing and development

of our people is a key driver to the success of our business.

Our sustainable impact continued

People

Our commitments

Guiding principle

Promoting a culture which is inclusive, embraces diversity and

prioritises the development of our people and their wellbeing

Commitments

• Continue running events through our Values in Action

initiative. From 2023, ViA commits to deliver the introduction

of emergency hygiene products to all UK offices (rolling out

globally by end of 2024), volunteer in the community and host

wellbeing events in June for International Wellbeing Week.

• Continue to strengthen the skills of our employees through

ongoing customised learning and development. Bespoke

training solutions will be devised and delivered for several

teams needing to focus on key skills and build collective

performance.

• Improve EHS resources, implementing additional modules,

including documents, training, and checklists, which will

enhance the value of the database as a one-stop EHS portal

for Oxford Nanopore.

• Align our EHS programmes with the international standards

for the environment (ISO 14001) and occupational health and

safety (ISO 45001) by 2025.

Related sustainable development goals (SDGs)

Health and safety

Health and safety is of paramount importance to us as a responsible

employer. We strive to safeguard the health, safety and wellbeing of

all our employees, visitors and contractors. Our EHS Policy sets out

our arrangements for Health and Safety, with the Board having

ultimate responsibility and accountability. Performance against the

objectives of the EHS policy is reviewed at least every six months at

Oxford Nanopore’s EHS Steering Committee meetings. Leaders at

all levels of the organisation have been trained and are required to

communicate Oxford Nanopore’s health and safety expectations

and ensure appropriate resources are provided to achieve a high

health and safety performance standard. All employees are

responsible for their health and safety through compliance with

Oxford Nanopore’s EHS policy, procedures and EHS performance

expectations. Employees are also responsible for the health and

safety of their colleagues, contractors, and visitors by highlighting

and reporting health and safety risks and concerns and, where safe

to do so, taking action.

Safety first

Oxford Nanopore is in the process of developing an EHS

management system, and we are continuing to align our EHS

programmes with the international standards for the environment

(ISO 14001) and occupational health and safety (ISO 45001) with

an objective to be certified in 2025. We provide all of our

employees with health and safety training, including general and

role-specific EHS training. General training includes EHS induction,

manual handling, ergonomics, fire and evacuation procedures.

Employees are also given specific training based upon their role,

such as managerial responsibilities and accountability awareness,

best laboratory practices, first aid and fire marshal training.

STRATEGY PILLAR 3:

Diversity & inclusion

Oxford Nanopore Technologies Annual Report & Accounts 202358

Safety performance

We are committed to preventing occupational accidents, diseases

and illnesses to ultimately achieve an accident-free workplace.

Health & Safety hazards are identified and associated controls

enacted; the process is documented and disseminated through

formal risk assessments. Health and Safety metrics are recorded

using a cloud-based EHS management system EcoOnline and we

actively encourage the reporting of injuries, incidents, improvement

suggestions, near misses and hazards. There have been no

fatalities of employees or contractors in 2023 and in all prior years.

Our LTIR is defined as total number of lost-time incidents in a year,

divided by the total number of hours worked, multiplied by

200,000. We define a lost-time incident as an incident that occurs

when a worker sustains a lost-time injury that results in time off

from work, or loss of productive work. In FY23, we no reported

RIDDOR incidents (Reporting of Injuries, Diseases and Dangerous

Occurrences) making our RIDDOR rate 0.

Health and wellbeing

We believe that our employees’ wellbeing is a critical component

ofthecompany’s success. Both physical and mental wellbeing are

ofimportance to us, and we take steps to proactively assist all our

employees. We aim to make sure that we provide them with the

support they need to stay healthy and to have easy access to help,

advice and treatment when they may need it. We have various

programmes and provide a range of benefits to support their health

and wellbeing including private medical insurance and an Employee

Assistance Programme (EAP). The EAP is an employee benefit

designed to help employees deal with personal and professional

problems which could be affecting their home or work life, health and

general wellbeing. We consistently review the range of support we

provide and to continue our focus on mental health and in 2023 we

provided 33 employees with Mental Health First Aid (MHFA) training.

Our people

Our people believe in the purpose and vision of Oxford Nanopore.

Effective engagement aligns employees with our strong culture and

core values, ensuring everyone works together towards a shared

vision. We look after our employees, support their training and

development, recognise cultural differences, respect their human

rights and promote a fair working environment with equal

opportunities for all.

Engagement

It is important to us that we engage with our employees. In 2022, we

launched the Values in Action (ViA) programme, a framework to create

a pathway to optimise engagement and offer everyone in the Company

the chance to contribute. In 2023, the ViA pods gathered monthly to

gather input and drive their initiatives, resulting in three initiatives

delivered in 2023. One of these was Inclusion Week. Two members

attended the Inclusive Employers Association conference in 2023, and

used their insights to shape Inclusion Week in October, sponsored by

SVP Lakmal Jayasinghe. This involved four days of activity, workshops

and discussion panels promoting understanding of LGBTQ+, Women

in Tech, Ethnicity and international cultures. Kate Priestman, Oxford

Nanopore’s designated Non-Executive Director, has taken on

responsibility for employee engagement and inclusion. The ViA

community will also be an opportunity for Kate to engage with

employees, to explore and validate the lived culture and Values in

Action of our organisation, and report back to the wider Board.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 59

Our sustainable impact continued

People

Diversity and inclusion

At Oxford Nanopore, we actively recruit people from diverse

backgrounds with varied experience and perspectives, who truly

reflect the global scientific community we serve. Diversity is

reflected across our entire business practice; there are currently 59

different nationalities employed at Oxford Nanopore. Our ambition

is to build and maintain a diverse, equitable, and inclusive culture in

the workplace and across Oxford Nanopore’s value chain. We

value people as individuals with diverse opinions, cultures,

lifestyles, and circumstances and believe in equality of opportunity,

following practices which are free from unfair and unlawful

discrimination. We are committed to creating a supportive and

inclusive environment where respect and understanding are

fostered, and the diversity of both people and perspective is

positively valued. Oxford Nanopore has an Equality and Diversity

Policy in place, applicable to all employees. The Board has overall

responsibility for this policy. We have clear procedures in place that

enable job candidates and employees to raise a grievance or make

a complaint if they feel that they have been unfairly treated.

Our diversity commitments

• Creating an environment in which individual differences and your

contributions are recognised and valued

• Providing a working environment that promotes dignity and

respect for all, where no form of intimidation, bullying or

harassment is tolerated

• Providing training, development and progression opportunities

for all

• Understanding equality in the workplace is good management

practice

• Reviewing all our employment practices and procedures to

ensure fairness

• Reviewing our recruitment practices to ensure they are fair,

consistent and free from unconscious bias

• Full support of this policy by senior management

• Monitoring and reviewing this policy annually

• Having clear procedures that enable candidates for jobs and

employees to raise a grievance or make a complaint if you feel

that you have been unfairly treated

• Treating breaches of our equality and diversity policy as

misconduct which could lead to disciplinary proceeding.

Talent and career management

Our goal is to attract, develop, and retain talent at Oxford Nanopore,

as well as inspire and nurture the next generation of scientists

through provision of accessible technology and educational

support. To strengthen these efforts, we conduct a number of

internal and external programmes. The Nomination Committee is

responsible for ensuring that appropriate talent development

programmes are in place to maximise the potential of our

employees. We have worked to maintain a culture that incentivises

and rewards excellence, while encouraging long-term relationships

with Oxford Nanopore, resulting in our low attrition rates over the

years. In 2023, our attrition rate was 8.03% (2022: 12%).

Training

We are committed to offering training for all levels, providing

opportunities for our employees to engage in life-long learning.

LinkedIn Learning is a resource offered to all employees worldwide,

with the exception of China where another solution is being

sourced. This allows unlimited access to personal effectiveness,

management and skills based learning. In 2023 we increased

focused on regional growth to ensure our colleagues in the

Americas, APAC and EMEAI are included and connected. This was

not only achieved through online and virtual sessions scheduled for

the time zones, but with in-person Development Weeks hosted in

New York, Shanghai and Abu Dhabi.

Career development

We are committed to promoting career development. A year-long

executive business strategy programme for 40 senior leaders has

culminated in the identification and delivery of significant

organisational effectiveness priorities. Organisational Development

is reflected through four functional, ongoing capability programmes

(Supply Chain, Lean Six Sigma Programme, Challenger Sales

Training and Customer Success Training) in addition to our personal,

management and leadership development ‘Mastery’ modules.

Six Sigma qualifications were achieved by 12 participants, with a

further cohort planned for 2024. This has been a key area for

Oxford Nanopore to enhance the operational effectiveness of our

teams through teaching the Six Sigma methodologies and tools

focused on enhancing quality while staying efficient.

39 Senior Leaders completed 2,730 hours of residential learning

and coaching to develop their thought leadership and strategic

business skills.

Last year, we launched our Mastery series of leadership,

management, and personal development programmes: a suite of

modular content that supports personal effectiveness through to

strategic thought leadership. In 2023, 383 employees completed a

My Mastery or Manager Mastery programme with 387 hours of

instructor-led mastery programmes conducted. The female/male

participation rates for these programmes was 51% female and

49% male.

Internships and apprenticeships

Our core intern programme runs from April each year and

accommodates up to 22 science undergraduates/postgraduates

for 3-to-12 month placements. An additional five interns are placed

for 12 months each in our Corporate Functions. For 2024 a new

process has been designed to create a cohesive campaign

promoting Equality, Diversity & Inclusion (ED&I) and improving

candidate experience, including extensive recorded marketing

collateral on our Early Careers pages within the Company website.

The intention is to build an intern community where onboarding,

social activities and personal development opportunities will be

promoted during their placements and a talent pipeline will be

created to attract candidates to return for permanent opportunities.

Oxford Nanopore Technologies Annual Report & Accounts 202360

We believe that high growth does not need to come at the expense of the planet

– and we are committed to scaling responsibly by making choices that protect

ourenvironment.

Our commitments

Guiding principle

Maintain high growth in a responsible way by protecting the planet

through energy efficiency and ensuring that our commitment to

sustainable practices extends beyond our internal operations and

distribution to encompass our entire value chain.

Commitments

• Repeating our target to reduce the tonnes of Scope 1 and 2

e emitted per £m revenue by 2.5% again in 2024.

• Continue to work with all suppliers on core ESG Governance,

ensuring that all key suppliers (covering 43% of total spend)

meet our ESG standards on human rights, environmental

protection, health and safety, compliance and more.

• Align our ESG Governance in supply chain with best practice

of the UN Global Compact.

• The EcoOnline system has been implemented for Health and

Safety in 2023, however we commit to adding in the

environmental data and metrics in 2024.

• As part of Net Zero commitments, a dedicated Supply Chain

Engagement programme will be developed and launched

during 2024 to provide training on the following topics:

• Carbon Footprint

• ISO 14001 EMS Systems Implementation

• Energy Audits

• Use the waste hierarchy to assess, and where feasible,

implement projects to further enhance waste management

practice across the organisation.

• Increase the recycling and reuse of waste materials by 10%

from 2023 totals at our Oxford and Harwell sites managed by

A XIL- IS .

Related sustainable development goals (SDGs)

Responsible scaling

At Oxford Nanopore, our devices contribute to research designed to

analyse, assess and develop solutions and strategies to address the

impacts of climate change that affect us all globally. We are

committed to protecting the environment and reducing our impact

within all our operations. We are adapting to, and mitigating against,

climate change risks and impacts, through commitments to improved

efficiencies throughout Oxford Nanopore’s operations, including in

our buildings and value chain. Our commitment to transparency

includes the disclosure of our carbon emissions and reporting

against the Task Force on Climate-Related Financial Disclosures

(TCFD) recommendations, which includes details of our oversight,

risk assessment and strategy of climate-related issues.

Managing environmental performance

Our EHS Policy sets out our environmental arrangements and the

Board has ultimate responsibility for environmental matters. The EHS

Policy applies to all employees. In 2023, environmental training was

provided to employees through EHS Inductions, management

training, communications via our Resource Centre and through

discussions at the EHS Steering Committee meetings. In 2023 there

was a significant increase in the range and number of options for

training and made this more accessible for our people. We strive to

improve our environmental performance throughout all of Oxford

Nanopore’s global operations. We are committed to pollution

prevention; the reduction of waste, releases, emissions and water

use; and to the efficient use of energy. Oxford Nanopore also has an

environmental team who were formed in late 2022, whose aim is to

facilitate the implementation of employee ideas to improve the

environmental performance of Oxford Nanopore. Oxford Nanopore

incurred no environmental fines or penalties in the year ended

31December 2023.

Water

Oxford Nanopore’s operations are not particularly water intensive.

However, we recognise the importance of water conservation and

are committed to reducing our water consumption and withdrawal.

We will employ water-efficient technologies and practices to

minimise our impact on water resources.

2023 2022 2021 2020

Freshwater usage (m

) 4,152 4,311 2,558 3,304

This data covers water use in Gosling, MinION, Gensis and ECH.

It is based on water bill estimates.

Environmental leadership

STRATEGY PILLAR 4:

Responsible scaling

Planet

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 61

Planet

Our sustainable impact continued

Energy consumption and emissions data

FY23 FY22

Global

(excl UK) Total UK

Global

(excl UK) Total

Emissions (tCO

Scope 1 (tCO

e) Total 361 0 361 592 0 592

Scope 2 – location based (tCO

e) 1,197 0 1,197 959 0 959

Total scope 1 & 2 – location based 1,558 0 1,558 1,551 0 1,551

Scope 2 – market based (tCO

e) 0 0 0 0 0 0

Total scope 1 & 2 – market based 361 0 361 592 0 592

Intensity ratio (tCO

e per £m revenue)– Scope 1 & 2 – location based 9.22 10.56

Energy (kWh)

Total energy consumption (kWh) 6,802,410 0 6,802,410 6,682,065 0 6,682,065

1 2022 Scope 1 has been restated due to the emissions from refrigerants being omitted in error. Scope 1 and 2 were also both restated due to several sites being determined to not

be within Oxford Nanopore’s operational control.

Energy consumption (renewable/non-renewable)

FY23 FY22

Energy (kWh)

Total renewable energy consumption 5,259,759 5,0 16,174

Total non-renewable energy consumption 1,542,651 1,665,891

2 2022 energy consumption has been restated due to the changes mentioned in Note 1 where by those sites energy consumption has been removed.

Energy and greenhouse gas emissions

Oxford Nanopore has committed to reduce the carbon intensity of our

operations. With support from several environmental consultants, we

have begun to recognise opportunities to understand and improve

sustainability, and we have placed a specific focus on identifying

projects to reduce carbon emissions. For the year ending 31 December

2023, we aimed to reduce the tonnes of CO

e emitted per £m revenue

by 2.5%. We have successfully reduced tonnes of CO

e emitted per

£m revenue by approximately 12.7% in 2023. In 2024 we will repeat

our target to reduce the tonnes of Scope 1 and 2 CO

e emitted per £m

revenue by 2.5%. To calculate our emissions and energy usage data,

we have followed the 2019 UK Government environmental reporting

guidance. We have used the GHG Protocol Corporate Accounting and

Reporting Standard (revised edition) and emission factors from the UK

Government’s GHG Conversion Factors for Company Reporting 2019.

Our reporting of scope 1 and 2 emissions and energy data covers

100% of our global operations. Furthermore, our reporting of scope 3

emissions covers 100% of our upstream and downstream value chain.

Scope 1 has decreased year on year largely due to fewer refrigerant

top-ups needed for the air conditioning systems. There was also a

reduction at Gosling due to the new, more efficient boiler which we

expect will see even further reductions in 2024. Scope 2 increased in

line with increased employee numbers and operational growth.

For Scope 3, the process of setting science-based targets led to a

review of the footprint and enhancement of the quality of data used

and the methodology carried out. This resulted in increased business

travel emissions as more accurate data was obtained for flights.

Despite spend increasing, purchased goods and services emissions

decreased due to more accurate emissions factors being utilised.

However, the increased expenditure on purchased goods resulted in

increased transport emissions year on year.

Scope 3 Emissions

Category

FY23

(tCO2e)

FY22

(tCO2e)

Purchased goods and services 36,477 49,014

Capital goods – –

Fuel and energy-related activities

439 390

Upstream transports and distribution 331 204

Waste generated in operations 7 66

Business travel 7,203 1,078

Employee commuting 1,216 1,057

Upstream leased assets 875 420

Total Upstream Scope 3 46,548 52,229

Downstream transportation and distribution 1,441 1,053

Processing of sold products – –

Use of sold products

1,935 870

End-of-life treatment of sold products 2 37

Downstream leased assets – –

Franchises – –

Investments 1,778 306

Total Downstream Scope 3 5,156 2,266

Total Scope 3 51,704 54,495

3 Fuel and Energy related activities has been restated due to the changes mentioned in

Note 1 whereby those sites not within Oxford Nanopore’s operational control have

been removed from Scope 1 &2 and therefore the associated fuel and energy related

activities have also been removed.

4 Use of sold products has been restated due to changes in methodology.

Oxford Nanopore Technologies Annual Report & Accounts 202362

Transitioning our business

tonet zero

Introduction

Our business was founded on the vision of making a positive impact

and we are committed to understanding and improving our

environmental and social performance so that we can ensure this

vision is realised. We strive to grow in a responsible way, by

protecting the planet through energy efficiency, product design,

and ensuring that our commitment to sustainable practices extends

beyond our internal operations to encompass our entire value chain.

The development of our climate change response reflects this

vision. In 2022, we launched and formalised our sustainability

strategy – product, planet, people – and we enhanced our

emissions reporting, completed a full scope 3 emissions

assessment, and reported against TCFD for the first time.

Alongside this, we continued to take actions to reduce our

emissions intensity whilst growing the business, setting a target for

2023 to reduce the tonnes of CO

e emitted per £m revenue by

2.5%, which was achieved. We also committed to develop a net

zero transition plan during 2023.

To that end, in 2023 we set ambitious near-term science-based

targets for scope 1 & 2 and 3 emissions and formalised the Group’s

commitment to net zero across all scopes by 2045, with minimal

use of offsets. To support the delivery of our targets, we have

identified, and analysed several initiatives to deliver emissions

reductions, as outlined below.

Our targets

In order to ensure we align to the Paris Agreement goals of keeping

warming within a 1.5˚C scenario and contribute to the UK’s

commitment of reaching net zero by 2050, we have set the

following science-based targets:

By 2030 By 2045

42% reduction in scope 1 and

2 emissions; and

52% reduction in scope 3

emissions per value added

Net zero emissions across the

value chain (all scopes)

• Our targets have been submitted to the Science Based Targets

initiative (SBTi) for validation

• Targets are set on a 2023 base year

• We target at least 90% reduction in emissions by 2045. Any

residual emissions may be addressed via the use of offsets

By 2030

Reduce absolute scope 1 and 2 emissions

42%

Reduce scope 3 emissions per value added

52%

Our plan

We have developed site-level decarbonisation pathways for our

main operational sites, drawing on the recommendations set out in

our recent ESOS report and Building Energy Use Audits. By

analysing the sources of our scope 3 emissions we have also

developed pathways for our key value-chain emissions, which will

be actioned by our team in collaboration with our customers and

suppliers. Our biggest emission impacts are from our Purchased

Goods and Services. We recognise we will need to work

collaboratively with our main suppliers to achieve reductions; work

in this area has only just started.

We are a fast-growing and ambitious business, so our expectations

also factor in potential growth for the coming years and the

implications of that on both our operational and value chain

emissions. Based on the outline below we do not envisage any

material changes in the Group’s resource allocation from our

transition plan over and above our current business strategy and

expect to achieve our plans within a business-as-usual context in

the near term.

Scope 1 & 2 emissions

Our operational emissions are concentrated. Our market-based

scope 2 emissions are zero, and our operational footprint is nearly

equally split between natural gas used for heating and fugitive

emissions from the use of HVAC systems, coolers, and water chillers.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 63

Our sustainable impact continued

Planet

Scope 1 & 2 emissions, 2023 (market-based)

Natural gas 79%

Fleet 1%

Fugitive emissions 20%

Our primary focus is to maximise energy efficiency and reduce our

energy demand. Whilst no reduction in electricity is required to

meet our targets, several efficiency measures have been identified,

which in aggregate produce a meaningful reduction in electricity

use over time. These include behaviour and process changes,

installs and upgrades, smart metering and intelligent controls. We

then plan to install solar panels for renewable self-generation

where we can, thereby reducing our exposure to the grid and the

use of REGOs.

The same is true for heating & cooling (scope 1 emissions), where a

number of efficiencies have also been scoped and ranked,

including the use of timers, smart sensors, seasonal adjustments to

space use, altering the temperature of freezers and use of

reflective films on windows. Larger scale upgrades include the

replacement of low efficiency cooling units, switching natural gas

heating to heat pumps and replacing cooling units with those that

use refrigerants with lower global warming potential. The

commercial availability of zero emissions refrigerants is expected

to be beyond our near-term target window. Our project team will be

phasing these larger scale upgrades over time, in conjunction with

our landlords where required, taking into consideration our

equipment upgrade cycle and our buildings strategy.

Our scope 1 & 2 emissions pathway

Scope 3 emissions

Our value-chain emissions footprint is dominated by emissions

from Purchased Goods and Services, which are those embedded

in the goods directly linked to the production and delivery of

products, as well as emissions from the providers of services to our

business. Other less meaningful scope 3 emissions relate to

Business Travel, Employee Commuting and Downstream

transportation of our products.

Purchased goods

and services 70%

Business travel 14%

Use of sold products 4%

Investments 3%

Downstream transportation 3%

Employee commuting 2%

Upstream leased assets 2%

Fuel-and-energy-related

activities 1%

Upstream transportation

and distribution 1%

End-of-life treatment

of sold products 0%

Waste generated

in operations 0%

Reduction in our Purchased goods and Services emissions is key

to our net zero ambition, which has led us to improve dialogue with

our supply chain and develop a long-term strategy for emissions.

This year we introduced supply chain management software to

provide additional data on the carbon impact of our suppliers to

help focus our efforts. We will work with our suppliers to identify

specific improvements they can make. We may investigate

collaboration with other customers of our larger suppliers via

multi-sector working groups to coordinate our ambition for

improved environmental performance. Suppliers’ environmental

performance is already a feature of our procurement process,

including within the selection and review of suppliers. We believe

that our suppliers will be receptive to any engagement that takes

place to improve our joint environmental impact; however if there is

continued disengagement on such matters, we may consider the

viability of other suppliers. We also factor in background trends

into our plan such as the decarbonisation of global electricity grids,

which will benefit our suppliers’ emissions profiles over time.

In addition, through our own internal product development

processes, we have the ability to design for lower carbon in our

products, such as via lightweighting or the use of alternative

materials and we will investigate these, cognisant that there may

also be trade-offs between product price and performance.

We will also be looking at controlling our smaller emissions

sources. We will assess our logistics strategy to identify

opportunities for reducing the overall emissions footprint

associated with product logistics. We are continuing to seek

reduction opportunities from business travel and employee

commuting, making full use of technology to reduce the need for

travel and encouraging low-carbon travel options.

2022

Potential growth

Efficiencies

Renewable electricity

Large scale projects

2030 projection

2030 target

2045 target

Oxford Nanopore Technologies Annual Report & Accounts 202364

Task force on climate-related

financial disclosures

In 2023, we developed a plan for the decarbonisation of our

business and our value chain and submitted science-based targets

to the Science Based Targets initiative for validation. Details of our

high-level net zero transition plan pathway can be found on page 63.

In conjunction with our net zero ambition, this report covers the

Group’s governance of climate change, the integration with overall

risk management, strategy in managing climate-related issues and

opportunities, and the metrics to measure progress towards our

targets. In line with the requirements of the Companies (Strategic

Report) (Climate-related Financial Disclosure) Regulations 2022

Recommendation Recommended disclosures Reference

Governance

Disclose the organisation’s governance around

climate-related risks and opportunities

a) Describe the Board’s oversight of climate-related risks

andopportunities

Page 66

b) Describe management’s role in assessing and managing

climate-related risks and opportunities

Page 66

Strategy

Disclose the actual and potential impacts of climate-related

risks and opportunities on the organisation’s businesses,

strategy, and financial planning where such information

ismaterial

a) Describe the climate-related risks and opportunities

theorganisation has identified over the short, medium,

andlong term

Page 68

b) Describe the impact of climate-related risks and

opportunities on the organisation’s businesses, strategy,

and financial planning

Page 68

c) Describe the resilience of the organisation’s strategy,

taking into consideration different climate-related scenarios,

including a 2°C or lower scenario

Page 68

Risk management

Disclose how the organisation identifies, assesses,

andmanages climate-related risks

a) Describe the organisation’s processes for identifying

andassessing climate-related risks

Page 69

b) Describe the organisation’s processes for managing

climate-related risks

Page 69

c) Describe how processes for identifying, assessing,

andmanaging climate-related risks are integrated into

theorganisation’s overall risk management

Page 69

Metrics and targets

Disclose the metrics and targets used to assess and manage

relevant climate-related risks and opportunities where such

information is material

a) Disclose the metrics used by the organisation to assess

climate-related risks and opportunities in line with its strategy

and risk management process

Page 71

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

greenhouse gas (GHG) emissions, and the related risks

Page 71

c) Describe the targets used by the organisation to manage

climate-related risks and opportunities and performance

against targets

Page 71

and Listing Rule 14.3.27R, the following pages set out our

Non-Financial and Sustainability Information Statement consistent

with all of the TCFD recommendations and recommended

disclosures, as detailed in “Recommendations of the Task Force on

Climate-related Financial Disclosures” (2017) and the additional

guidance as set out in the TCFD 2021 Annex, “Implementing the

Recommendations of the Task Force on Climate-related Financial

Disclosures” (“TCFD Annex”). Given our transition plan

development, we are now in full alignment with all requirements.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 65

Our sustainable impact continued

Planet

Governance

Board level

Management level

Risk Pathway

EHS Steering Committee

Cross-functional committee and responsibility over

environmental issues

Operational/Strategic Pathway

Operating Committee

Led by CEO, monitors related risks

Board

Overall climate change responsibility

Audit and Risk Committee

Four meetings p/a

Board level

The Board, headed by the Chairman, has overall responsibility for

climate change management and strategic response, including

oversight of climate-related risks and opportunities, in addition to

all relevant Group policies matters that impact the Group’s

strategy. The Board is supported and informed on climate-related

issues via two pathways as detailed in the following diagram. This

structure ensures that any potential impacts of climate change are

incorporated into the review of Group strategy, business plans and

risk management. The operational and strategic pathway manages

the company’s strategic response to climate change and the flow

of information to the Board around key KPIs, capital spend, and

strategic initiatives. Metrics such as scope 1, 2 and 3 emissions,

progress against the annual carbon emission intensity target and

newly submitted SBTi targets are reported to the Board and

monitored as reported by the EHS Steering Committee, via the

Operating Committee. To date, our longstanding environmental

programme has included energy efficiencies and renewable

electricity purchases, which have formed part of our ongoing

strategy and have been included in annual budgeting. Our new

SBTi emissions targets provide a framework that enhances our

ambition, resulting in a high-level plan that is being incorporated

into our financial planning and strategy. This plan includes a

continuation of energy efficiencies and renewable electricity

purchases, but also includes considerations for our building

strategy and actions around our supply chain and products, which

need to be factored in over time. These details are outlined in our

transition plan and monitored by the EHS Steering Committee.

The risk pathway monitors, manages and informs the Board of

climate-related risks through the Audit and Risk Committee,

suppored by the Operating Committee. The Audit and Risk

Committee meets four times each year and reviews all risks at least

twice each year, with the Chair of the Audit and Risk Committee

referring key matters of risk to the Board, including climate-related

issues if deemed material. The Audit and Risk Committee reports to

the board who provide direction on risk profiling and mitigation.

Additionally, the Board is informed of any key strategic or financial

issues arising from the management of climiate-related risks and

opportunities by the Operating Committee. The Board considers

climate-related risks twice per year.

Management-level

The EHS Steering Committee is a cross-functional committee

which has responsibility at management level over all

environmental issues facing the Group, including climate-related

risks and opportunities and progress against our transition plan.

This committee reports to the Operating Committee, led by the

CEO. The EHS Steering Committee monitors metrics related to

climate risks and opportunities as outlined in this report, tracks our

progress to our targets (below) and monitors matters relevant to

climate-related risks and opportunities, such as the status of

relevant decarbonisation projects like our energy efficiency efforts

and the transition to renewable electricity underway in the

business. The Operating Committee is also responsible for

identifying, assessing, and mitigating risk under the direction of the

Audit and Risk Committee. The Operating Committee enables the

flow of information to and from the Board and from across the

Company to the senior management. Twice yearly (and as needed

on an ad hoc basis), the Operating Committee reports to the Audit

and Risk Committee on risks and mitigation.

Oxford Nanopore Technologies Annual Report & Accounts 202366

The Group has used third-party climate consultants to assist in the

identification of climate-related risks and opportunities. All

categories of risks from the TCFD guidance have been considered,

but not all climate-related risks and opportunities are relevant to the

business. A bottom-up site level risk assessment using geospatial

natural hazard mapping software was conducted to determine the

potential climate-related physical risks for each site. Climate-related

transition risks tend to impact the Group in a top-down manner.

These are identified and shortlisted, in collaboration with internal

stakeholders and senior management, in conjunction with the EHS

Steering Committee. This analysis includes a horizon-scanning

exercise to incorporate policy and legal risks and is refreshed

annually to include any changes to the business, external regulatory

developments, or operating conditions.

Following identification, climate-related risks are then integrated into

the Group’s overall risk management framekwork. All the group’s

risks, including climate-related risks, are categorised using the same

methodology, so that their importance is comparable. The Group’s

Risk Register categorises all existing and emerging risks, including

climate-related risks, with the Register covering the probability of

the risk occurring, the degree of the potential impact and whether

they first occur within the Group’s short- (0 to 1 year), medium- (1 to

3 years), or long term (3 years+). The short-term horizon covers our

immediate in-year actions, the medium-term horizon includes our

near-term business strategy, and the long-term time horizon is

sufficient to incorporate our asset life, our net zero targets and

time for certain climate-related risks to manifest. For the purposes

of our climate risk assessment, we assess risks out to 2050 in the

long-term. A risk that is present during the short or medium term

may continue into the long term.

All risks are assessed on a 5x5 matrix incorporating an

assessment of both impact and likelihood, which allows for the

prioritisation of risks. Risk impact (materiality) is determined based

on materiality limits agreed with the external auditors, as currently

defined by the table below:

Risk likelihood is defined by under five categories: Remote,

Unlikely, Possible, Probably, Highly Probable.

Mitigation factors for all risks are included in the companies Risk

further mitigation, accept, or control), with this decision determined

by the options for mitigation, cost of mitigation and overall risk

management strategy. The Risk Register is reviewed and updated

twice annually to reflect new and developing areas in the operating

environment which might impact business strategy. Internally, the

cost of mitigation is described (where possible) along with an

explanation of how this is derived. Risks are subject to ongoing

refinement and quantification over time and assist with

incorporating climate-related risks into the ongoing strategy,

budgets and financial statements, if required.

Risk management

Insignificant Minor Moderate Major Catastrophic

Financial

Impact*

Estimated impact or

lost opportunity of

<£1.65m

Estimated impact or

lost opportunity of

£1.66m–£3.2m

Estimated impact or

lost opportunity of

£3.3m–£6.5m

Estimated impact or

lost opportunity of

£6.5m-£13.1m

Estimated impact or

lost opportunity of >

£13.2m

* The materiality limits have been updated in line with the Group’s financial statement materiality levels. The materiality used for the Group financial statements was £3,300,000

- see page 144.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 67

Our sustainable impact continued

Planet

Strategy

Oxford Nanopore recognises the global threat climate change

poses on the environment and acknowledges that it may present

both risks and opportunities to the business.

We have assessed all our sites for physical climate risks with the

conclusion that direct physical risk exposure to our sites is

extremely limited due to the nature of our business and locations of

our sites. Only three of our sites are deemed to be business critical,

being our head office and key manufacturing sites in Oxford and

Harwell, all of which face a low risk of riverine flood as the only

physical risk exposure. The headcount across other business sites

represents a small fraction of staff and therefore would result in

only minor disruption to productivity in the event of travel or

site-related disruption. Oxford Nanopore’s established home

working procedures, insurance recovery in the event of natural

disasters, and short-term leases of facilities, further mitigates the

impact of physical risks. Risks such as higher mean temperatures,

rising sea levels, wildfires and severe weather are also not seen as

having any impact over the period to 2050. We do however include

physical risks exposure of our supply chain within our key risks

below. Transition risks, e.g., potential exposure to reputation,

policy, and legal and technology risks, were also considered and

those that we deem material are outlined below.

Scenario analysis out to 2050 has been used to improve our

understanding of how different climate outcomes may affect the

behaviour of certain risks, and thereby improve our understanding

of the resilience of our business to climate change. Physical risks

were analysed using scenarios embedded in the software tool,

which are from the Intergovernmental Plan on Climate Change

RCP 2.6: a climate-positive pathway, likely to keep global

temperature rise below 2°C by 2100. CO

emissions start declining

by 2020 and get to zero by 2100.

RCP 4.5: an intermediate and probably baseline scenario more

likely than not to result in global temperature rise between 2°C and

3°C by 2100 with a mean sea level rise 35% higher than that of

RCP 2.6. Many plant and animal species will be unable to adapt to

the effects of RCP 4.5 and higher RCPs. Emissions peak around

2040, then decline.

RCP 8.5: a bad case scenario where global temperatures rise

between 4.1-4.8°C by 2100. This scenario is included for its

extreme impacts on physical climate risks as the global response to

mitigating climate change is limited.

Transition risks and opportunities were flexed using scenarios from

the International Energy Agency (‘IEA’)

, which are far more

descriptive and useful for modelling positive climate outcomes.

Net zero 2050 (NZE): an ambitious scenario which sets out a

narrow but achievable pathway for the global energy sector to

achieve net zero CO

emissions by 2050. This meets the TCFD

requirement of using a “below 2°C” scenario and is included as it

informs the decarbonisation pathways used by the Science Based

Targets initiative (SBTi).

Stated policies scenario (STEPS): a combination of physical and

transitions risk impacts as temperatures rise by around 2.5°C by

2100 from pre-industrial levels, with a 50% probability. This

scenario is included as it represents a base case pathway with a

trajectory implied by today’s policy settings.

Each of our climate-related risks has been analysed against the

scenarios and we have quantified our exposure to each risk. We

deem our overall climate-related risk exposure to be ‘Minor’ after

factoring in our industry and business model, site locations and

exposures and the impact of our mitigating actions and our net

zero transition plan. We believe Oxford Nanopore has the financial

resilience and strategic robustness to mitigate climate change.

Twoof our climate-related risks are mitigated through our net zero

transition plan and the opportunities outlined below are to be

developed in line with the company strategy and objectives for net

zero. Given the limited direct impact of climate-related risks on the

business as per our assessment, no effects are reflected in any

judgments and statements applied in the financial statements and

any mitigation or required investment is currently assumed to be

covered and integrated into the Group’s strategy. We will continue

to monitor the climate exposure and action plans through the

Groups risk management framework, whilst developing our

analysis as new data is made available to us.

1 https://www.ipcc.ch/report/ar5/syr/

2 https://www.iea.org/reports/global-energy-and-climate-model

Oxford Nanopore Technologies Annual Report & Accounts 202368

Four key climate-related risks have been identified as follows:

Risk

1. Carbon pricing

in operations

2. Carbon pricing

in the supply chain

3. Water risk

in the supply chain

4. Risk of not achieving

our emissions targets

Type Transition (Current and

Emerging Regulation)

Transition

(Emerging Regulation)

Physical

(Flood Disruption,

Water Scarcity)

Transition

(Market and Reputation)

Area Own Operations Upstream Upstream Upstream/Own Operations

Primary potential

financial impact

Higher costs associated

with energy

(Operations)

Higher input costs

(Supply chain and/or

valuechain)

Lost production/revenues

(Supply chain and/or

valuechain)

Higher costs,

higher cost of capital

Time horizon Medium term Long term Medium term Long term

Likelihood Highly Probable Highly Probable Possible Possible

Impact Minor Moderate Minor Major

Location or service

most impacted

United Kingdom Group Group Group

Related metric(s) Scope 1 & 2 emissions Scope 3 emissions

(Purchased Goods

&Services and

UpstreamTransportation

and Distribution)

Annual Supplier Risk

Assessment

Scope 1, 2 and 3 emissions

1) Carbon pricing in operations

We have quantified the financial impact to our operating expenses of an application of carbon prices applied as a “tax” to our FY 2023

Scope 1 and 2 emissions under NZE and STEPS scenarios. The table below shows forecasts for carbon pricing under NZE and STEPS

scenarios. Our analysis shows the impact to be “Minor” in magnitude in all time periods, using the financial impact magnitudes outlined

previously. This analysis assumes no mitigaton and that Scope 1&2 emissions are not reduced in the future. As part of efforts to reduce

emissions and ultimately reach our net zero targets, we have begun to implement a number of mitigation measures. All of our sites now

have REGO-certified electrical power supplies, reducing our market-based scope 2 emissions to zero. The recommendations set out in

our recent ESOS report and Building Energy Use Audits have outlined several further initiatives which support our target of a 42%

reduction in scope 1 & 2 by 2030 and ultimately our net zero ambition. These are highlighted in our transition plan, page 63. The risk falls

to “insignificant” net of our transition plan actions.

Carbon price estimates (US$/t)

Scenario – STEPS 2030 2040 2050

EU (as worst case) 120 129 135

Scenario – NZE 2030 2040 2050

Advanced Economies with net zero emissions pledges 140 205 250

* Used as Global est. Source: IEA (2023), World Energy Outlook 2023, https://iea.blob.core.windows.net/assets/614bb748-dc5e-440b-966a-adae9ea022fe/WorldEnergyOutlook2023.pdf

Scope 1 & 2 carbon price impact

STEPS Scenario NZE Scenario

2030 2040 2050 2030 2040 2050

Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant

Risks

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 69

Our sustainable impact continued

We have currently identified the following three climate-related opportunities, which relate to the mitigation of risk exposures above:

Opportunity 1. Energy & waste savings 2. Renewable energy 3. Electrification

Type Resource efficiency, esilience Energy source Energy source

Area Own operations Own operations Own operations

Primary potential financial impact Decreased costs (Operations) Decreased costs (Operations) Decreased costs (Operations)

Time horizon Medium-term Medium-term Long-term

Planet

Opportunities

2) Carbon pricing in the supply chain

There is a risk of carbon pricing being applied to activities upstream of our businesses (Scope 3). Based on the IEA’s carbon price

forecasts above and our Scope 3 emissions for the 2023 financial year (Purchased Goods and Services and Upstream Transportation

and Distribution) the potential financial impact under NZE and STEPS scenarios is outlined below, using the grading of the financial

impact outlined previously. This analysis assumes no mitigation and that Scope 3 emissions are not reduced in the future. Overall, we

assess the impact of this risk to be “Moderate” in magnitude, considering potential mitigating factors and an assessment of the likelihood

of application. Purchased Goods and Services emissions form the largest component of our scope 3 emissions, reflecting a potential

carbon pricing risk associated with the embedded carbon in our supplied goods. Our supplier strategy is therefore critical to our net zero

ambition. This is outlined further in our transition plan, page 63.

Scope 3 (purchased goods & services and upstream transportation & distribution) carbon price impact

STEPS Scenario NZE Scenario

2030 2040 2050 2030 2040 2050

Moderate Moderate Moderate Moderate Major Major

3) Water risk in the supply chain

Extreme weather events are expected to rise in both frequency and magnitude as an impact of climate change. Global temperatures rise

in all three scenarios we studied, peaking only in 2050. Under these scenarios, changes in precipitation patterns and weather extremes

could increase both the risk of flooding in some locations within the Group’s supply chain and influence water availability in regions with

water scarcity risks. Geospatial modelling found that two supplier sites in North America are located in regions of high-water stress when

projected out to 2030, and one supplier site in Asia is located in an area of high riverine and coastal flood risk. Modelled under the RCP

8.5, drought risk at the North American supplier locations is forecast to progressively intensify when projected to 2030, 2050 and

beyond. In addition, exposure to storm surge and precipitation risk at the Asian supplier site is forecast as very high throughout these time

horizons. Our plans for enhanced engagement with our supply chain will provide further context to our suppliers’ resilience to these

physical risks. Whilst the sites do not represent a significant proportion of our supply chain, alternative supply precautions have also been

initiated for all three suppliers to introduce redundancy within the overall supply chain. Our initial assessment of this risk is “Minor” based

on a risk-adjusted assumption of the impact on our business from an outage of each of the suppliers concerned. We are currently working

with our suppliers to gather additional data that will help us to refine the calculation of the financial impact of this risk.

4) Risk of not achieving our emissions targets

In light of our new science-based targets, we introduce a risk based on our reliance on drivers outside of our direct control in order to

achieve our ambitions for both near-term and long-term science-based targets. We consider this not to be a risk in relation to our

near-term scope 1 & 2 targets, but a potential issue for our scope 3 near-term targets, and in the long-term. Our scope 1 & 2 targets are

partially reliant on the actions of our landlords to achieve our near-term targets and on the development of widespread low or zero

emissions HVAC technologies for our long-term net zero target. Our scope 3 targets are partially reliant on the emissions performance of

our value chain partners (suppliers and logistics providers), global technological developments such as low carbon transportation

solutions for both goods and mass transport, the decarbonisation of global electricity grids and public/private collaboration to add policy

or pressure on our value chain. We cannot meaningfully quantify reputation exposure due to the number of assumptions and estimates

required and categorise this risk as “Major” for now, but we also expect the market to be reasonably accommodative to our reliance on

external factors to achieve our goals. We will continue to monitor progress to plan, refine our plans and review based on experience and

emerging technology as required.

Oxford Nanopore Technologies Annual Report & Accounts 202370

We monitor and report on relevant cross-industry metrics such as our Scope 1, 2, and 3 greenhouse gas (GHG) emissions, calculated in

line with the GHG protocol. We also track and disclose freshwater use and total renewable and non-renewable energy consumption, see

page 62. The metrics used to track our identified climate-related risks and opportunities are outlined above. Of these, the only metric not

reported publicly corresponds to our Annual Supplier Risk Assessment. Within our plans for enhanced engagement with our supply chain,

we will begin to collate details of our suppliers’ resilience to physical risks (existing or planned mitigation features), to track exposure to

Risk 3 above.

In2023,the Groupestablished thefollowingemissions near-termand long-term targets which have been submitted to SBTi for validation:

• Reduce absolute scope 1 and 2 GHG emissions 42% by 2030 from a 2023 base year

• Reduce scope 3 GHG emissions 52% per value added by 2030 from a 2023 base year

• Reduce absolute scopes 1, 2 and 3 GHG emissions by 90% by 2045 from a 2023 base year

• Reach net zero GHG emissions across the value chain by 2045

Alongside this, we continued to take actions to reduce our emissions intensity whilst growing the business. Our target for 2023, set at the

end of 2022, was to reduce the tonnes of CO

e emitted per £m revenue by 2.5%, which was achieved and which has been renewed

again for 2024. In line with the TCFD recommendations, the remuneration policy of the executive board members includes performance

metrics related to climate change. In 2023, one of the performance measures of the annual bonus for the executive board members was

to advance Oxford Nanopore’s ESG strategy, with climate change being a substantial element of this. Further details of this metric can be

found on page 123.

Whilst acknowledging the recommendation to integrate an internal carbon price, as Risk 1 highlights, it is not financially material and

therefore deemed unnecessary to implement. However, it may be used in assessing future large capex and investment activities.

Metrics and targets

Opportunity 1. Energy & waste savings 2. Renewable energy 3. Electrification

Likelihood Probable Possible Probable

Impact Minor Minor Minor

Location or service most impacted United Kingdom United Kingdom United Kingdom

Related metric(s) Energy consumption and

Scope 2 emissions

% renewable energy

consumption

Energy consumption and

Scope 1 emissions

1) Energy & waste savings

Efficiency improvements across our sites may reduce costs as well as reducing environmental impact. Moreover, reducing energy

consumption, helps mitigate risks related to carbon pricing. After a Building Energy Use Audit at our Oxford corporate headquarters

identified significant opportunities to reduce the building’s energy consumption, a second building energy audit of our next two largest

energy users was commissioned. This identified opportunities that are outlined in our transition plan, page 63. Reductions in waste will

also act to reduce operating costs and reduce associated emissions with disposal which would positively impact Risk 2. Consequently, we

continue to maximise the circularity of raw materials and improve the material efficiency of the manufacturing process to deliver resource

efficiency. Measures to reduce the weight of packaging, as well as the plastic content, are ongoing.

2) Renewable energy

Procuring energy from renewable sources can help mitigate the risks associated with carbon pricing as well as reducing our

environmental impact. Initial focus was on sourcing Energy Attribute Certificates (e.g. REGOs) to reduce scope 2 market-based emissions

to zero whilst efficiency measures and self-generation initiatives are investigated; this was achieved for all UK sites in 2023 and we will

investigate the viability of this for our sites abroad. Installation of solar panels at primary UK sites is currently under proposal, with one site

confirmed to have solar panels installed in the near future. At other office locations in leased buildings with shared occupancy, we will

continue to engage with landlords to make energy efficiency improvements and source renewable energy.

3) Electrification

Electrification of heating may reduce costs as well as reducing environmental impact, via the mitigation of risks related to carbon pricing. One of our

key operational decarbonisation levers is the electrification of natural-gas-based heating. Only two of our major operating sitesstill havegas-

based heating. Electric solutions are available, and we will look to phase these in where we have control or otherwise discuss the potential

for a switch with our landlords, taking into consideration our equipment upgrade cycle and our buildings strategy.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 71

Principal risks evaluation

Risk management framework

The Group has established a risk management framework

thatincludes:

a. formal focused risk registers established for International

Organisation for Standardisation (ISO) 27001 (Information

Security and Process), 9001 (Quality Management), 22301

(Business Continuity) and 13485 (Medical Devices)

accreditations

b. a process for profiling and scoring risks

c. a process to report risk to the senior leadership team, who will

approve mitigations and report to and consult with the Audit and

Risk Committee

d. a process for sharing direction from the Audit and Risk

Committee and the Board on risk tolerance and mitigation with

leadership and, in turn, their reports

Audit and Risk Committee

• Twice yearly (and as needed on an

ad hoc basis), the Operating

Committee reports to the Audit and

Risk Committee on risks and

mitigation

• The Audit and Risk Committee

review the risk register twice each

year

• The Audit and Risk Committee

reports to the Board

Internal audit

• The Group has engaged Grant

Thornton to fulfil the responsibilities

of an internal audit function to assess

the adequacy of such internal

controls. In 2023, Grant Thornton

completed and presented findings on

internal audits on five functions, with

two additional audits completed in

Q4 2023 and reported at the

February 2024 Audit & Risk

Committee meeting. Grant Thornton

provides independent assurance to

the Audit & Risk Committee on the

effectiveness of the risk framework

and internal controls

Due diligence

• Due diligence checks are performed

by third parties on suppliers and

channel partners. Due diligence on

customers is also completed in

certain jurisdictions

Departmental meetings/

Committees

Representatives of each standing

departmental meeting who serve on the

Operating Committee escalate risks

identified in the departmental meetings

for review in the Operating Committee

Research & Development

Manufacturing & Supply Chain

Legal/Finance

Strategic People & Organisation

Information Technology

Intellectual Property

Commercial

Board

• Based on a recommendation of the

Chief Executive Officer, the Board

defines and adjusts the Group’s risk

tolerance

• Direction from the Board is shared

with the Operating Committee

Operating Committee

• Risk is a standing discussion item in each

Operating Committee meeting

• Risks and mitigation plans are

documented in the Group’s risk register

and the Operating Committee’s minutes.

The minutes identify the risk discussed,

the mitigation agreed, assigned next

steps, and the responsible party

• Direction from the Board is shared by the

Operating Committee with each

department

• Twice annually the Operating Committee,

in coordination with the VP Finance and

Risk & Controls Manager, reviews and

updates the Risk Register

Central Functions and Internal Controls

The Group has established controls, which

provide a solid basis for making proper

judgements on an ongoing basis as to its

FPP. These controls cover:

• High-level reporting environment

• Forecasting and budgeting

• Management reporting

• Financial and accounting reporting

• Significant transactions and strategic

projects

• Technology

Third Line of

Defence

Independent

assurance

First Line of

Defence

Operational

teams

Second Line of

Defence

Business assurance

and oversight

Legal & Co Sec

Strategic Comms

Finance

Investor Relations

Three Lines of Defence

Oxford Nanopore Technologies Annual Report & Accounts 202372

Principal risks and uncertainties

Identify risks

A detailed risk assessment is routinely

performed to identify the significant

risks in a timely fashion and provide

accurate Financial Position and

Prospects (FPP) information

Identify mitigating

controls

For each of the risks that are

identified, the Group considers and

reviews the processes currently in

place and identifies the controls

which mitigate each risk

Document mitigating

controls

The mitigating controls are documented,

and the Audit and Risk Committee signs

them off to confirm that the descriptions

are appropriate and accurate

Score risks

Risks are scored based on

agreed materiality thresholds

Regular review

The risk register is formally

reviewed by the risk owners

and senior management team

twice each year to ensure that

the risks identified are

accurate and up-to-date

Directors assess

mitigation

Based on the processes set out in

steps 1-4, the Directors conclude

on the effective mitigation of the

risks identified

Our risk

management

framework

Risk management process

The Group has created a risk profiling framework pursuant to which the Operating Committee (either directly or through delegation

to department leadership) is responsible for identifying, assessing, and mitigating risk under the direction of the Audit and Risk

Committee. The Operating Committee enables the flow of information to and from the Board and across the Company to the senior

management. The risk profiling procedure consists of the steps as described below.

The Principal Risks and Uncertainties (PRUs)

identified are:

1 Ability to make products: supply chain

andmanufacturing

2 Ability to successfully introduce products to remain

a technology leader and to offer a stable platform

on which customers may rely

3 Trade, war, post-pandemic life sciences downturn

and component and sequencinginflation

4 Concentrated revenues

5 Cyber security

6 Intellectual property protection and competition

7 Founder-led company and succession planning

8 Ability to achieve medium-term revenue growth

targets and ability to expand into diagnostics and

applied industrial sectors, including the successful

introduction of products

9 Data privacy, data classification and sample collection,

use and study ethics, and ethnical use of products

10 Environment, health and safety

Based on information shared

by the Operating Committee,

the Audit and Risk Committee

has assessed the principal

risks facing the Group as at

31 December 2023. This

included an assessment

ofthe likelihood of each

principal risk identified, and

the potential impact of each

risk after taking into account

mitigating actions being

taken. Risk levels were

modified to reflect the

currentview of the relative

significance ofeach risk.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 73

Principal risks and uncertainties

1. Ability to make products: supply chain and manufacturing Mitigation Strategy Rating

Trend since

2022

Supply chain issues driven by demand, logistics interruptions,

heightened geopolitical tensions – particularly between the United

States and the People’s Republic of China, and the wars in Ukraine

and Israel/Gaza – have made it increasingly challenging to source

key electronic components on a timely and cost-effective basis and/

or source key electronic components that we can include in our, or

with our, products and redistribute on a timely and cost-effective

basis. The Group’s products include several unique customised

components, many of which have been developed and produced

solely for the Group and tailored to its specifications. The Group’s

products are manufactured or assembled either at the Group’s

manufacturing facilities located in the MinION Building in

Oxfordshire or within the Group’s laboratories and facilities within

England or, in the case of certain components of the Group’s

products, including the ASIC chips and wafers and certain biologics,

at the Group’s third-party manufacturers’ facilities. Unavailability of

or the lack of timely availability of such components or the inability

to redistribute such goods to some jurisdictions may require the

Group to use substitute components, which could increase the cost

of manufacture and support, and may decrease the demand for the

Group’s goods, on a temporary or ongoing basis. The manufacture

of the Group’s products is highly exacting and complex, and

problems may arise during manufacturing or shipment for a variety

of reasons, including equipment malfunction, failure to follow

specific protocols, or defective materials and components. In

addition, if the manufacturing facilities of third parties on whom the

Group relies, become unavailable for any reason, the Group would

need to secure alternative manufacturing facilities with the

necessary capabilities or move such manufacturing processes

in-house. This could require substantial lead times and substantial

capital investment, particularly if moving manufacturing in-house. If

this were to include unavailability of access to parts designed,

fabricated or assembled in Taiwan, the Group may not be able to

continue to manufacture its products or meet growing demand.

• Policies and agreements to manage our

suppliers, including use of dual sourcing

• Detailed forecasting of requirements

• Maintaining large inventories of key

components

• Developing alternative components,

suppliers, and/or products

• Maximising internal manufacture

• Established a Business Continuity Plan

(BCP) and conduct test scenarios on a

regular basis

High

2. Ability to successfully introduce products to remain a technology

leader andto offer a stable platform on which customers may rely Mitigation Strategy Rating

Trend since

2022

The global life science research market is characterised by rapid

and significant technological changes, frequent new product

introductions and enhancements, and evolving market standards.

This may result in the Group’s products becoming obsolete. The

Group is also aware of possible new competition in the nanopore

sequencing space. The Group’s success depends on its ability to

continue delivering improvements to its products, aswell as its

ability to develop and introduce new products, in each case, to

address the evolving needs of the Group’s customers on a timely

and cost-effective basis. In turn, this has an impact on the Group’s

ability to increase revenue andmargin.

• Investment in Q-line and collaborations for

regulated products for clinical and applied

industrial markets

• Continued focus and investment in R&D

activities separate and in addition to product

development

• Executive team focus and regular monitoring

• Continuous product release through early

access channels to establish customer

requirements and input into the product

development pipeline

• Investment in technology transfer groups

that focus on prototype to production-ready

manufacturing processes

• Continuing manufacturing innovation and

optimisation

• Focus on dedicated teams to research

alternative product designs to enable high

volume and high-quality manufacturing

• Continuous data collection at every critical

point of manufacturing to drive production

improvement projects

• Focus on strong Quality Management

System (QMS)

High

Trend since 2022

Increase No change Decrease

Oxford Nanopore Technologies Annual Report & Accounts 202374

3. Trade, war, post-pandemic life sciences downturn,

and component inflation and sequencing deflation Mitigation Strategy Rating

Trend since

2022

The Group operates a global business and its business has been

and may continue to be impacted by restrictions on trade and the

wars in Ukraine and Israel/Gaza. In particular, the UK and US trade

restrictions on sale of certain goods to China, including the recently

issued US semiconductor rules with respect to advanced AI has

increased the Group’s costs, slowed growth, and reduced demand

from customers in the Middle East and Asia. Further, budget

adjustments post-COVID have limited funding for large sequencing

projects and to some extent life science research more generally.

This has slowed demand and may continue to do so.

• Development of an integrated P24

• Proactive forward-looking licence applications

• Investments in trade compliance

• Investment in sales and marketing in the

US and Europe

• Maintaining large inventory of key components

• Minimising outsourcing of manufacture

• Robust export control policy

• Detailed training provided to staff

• In-house legal team supported by access

toexternal advice

Medium

4. Concentrated revenues Mitigation Strategy Rating

Trend since

2022

Although the customer concentration of the Group’s revenue

decreased further in 2023, one or more large-scale human genomic

projects can have a material impact on its results. Moreover, flow

cell utilisation and/or demands made by a relatively small number of

customers can materially impact revenue and/or margin. Despite

growth in the Group’s wider customer base across S1 and S2

sectors, loss of (or even interruptions in the work of) a few of these

customers would have a significant impact on the financial

performance of the Group.

• Expansion of the global sales team for

utilisation by our existing customer base

• Expansion of commercial marketing

operations to generate new customer

leads, focusing on customer prospects with

the potential for significant demand

• Expansion of technical support services

toimprove service to customers

• Investment in field applications support

tomaximise potential of each customer

Medium

5. Cyber security Mitigation Strategy Rating

Trend since

2022

The Group’s systems, data (wherever stored), software, networks,

and those of third parties, are vulnerable to security breaches

(whether deliberate or unintentional), including unauthorised access

from within the Group or by third parties (for the purpose of

misappropriating financial assets, IP or sensitive information, or

otherwise), computer viruses or other malicious code and other

cyber threats that could corrupt data, cause operational disruption

or otherwise have an adverse security impact. In addition, certain of

its devices are similarly vulnerable when deployed by the Group’s

customers. As the Group and its customers begin to use the

Group’s products for clinical and translational research, including

the development of LDTs, the risks related to unauthorised access

to devices grows. Further, while the Group continues to minimise

collection and storage of human genomic data, some such data is

collected and an even smaller amount is stored. Recent events

experienced by companies in related sectors show this is an

ever-present risk.

• Investment in resources to protect the data

held by the Group and the use of it

• Regular training and awareness provided

to all employees with at least annual

requirement to read Company policies

• ISO 27001 certified and regular ISO audits

• Internal testing plan to test for network

vulnerabilities on a regular basis and

annual penetration testing

• Business Continuity Plan in place and

conduct test scenarios periodically

• Incident reporting channels in place

• Firewalls and other technical safeguards

are established, including encryption of

wireless networks and deployment of

end-point detection and response tools, to

provide network protection

• Cyber insurance including access to

experts in event of attack

Medium

6. Intellectual property protection and competition Mitigation Strategy Rating

Trend since

2022

The Group’s ability to add and create value and, therefore, its

success, depends, in large part, on its ability to obtain, maintain and

enforce a combination of patents, trademarks, copyright, trade

secrets and proprietary knowledge, and to impose confidentiality

procedures and contractual and other restrictions, in all cases so as

to establish and protect its proprietary IP rights. The failure to do so

may lead to substantial harm to the Group and its ability to operate.

The life science industry generally is litigious. The Group itself has

in the past had to spend significant amounts of money and time

defending itself from unsuccessful patent litigation.

• IP treated as a priority

• Increased resources in protecting IP

• Training and awareness of staff

• Controls around use of technology

• Experienced legal counsel

Medium

Trend since 2022

Increase No change Decrease

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 75

Principal risks and uncertainties continued

7. Founder-led company and succession planning Mitigation Strategy Rating

Trend since

2022

The Group’s future success depends to a large extent on the

experience and knowledge of the Executive Directors, its executive

team and other key employees, and loss of the services of one or

more of such persons could adversely affect the Group’s business.

Risk is heightened in the event of a departure of the Group’s Chief

Executive Officer, and Chief Strategy Officer (who are also the

Group’s co-founders), Chief Technology, Innovation and Product

Officer, Chief Financial Officer, Chief Operating Officer, or key

employees, consultants, suppliers and/or advisers with specialist

scientific and technical skills that the Group requires for its product

development. The Group’s success also depends on its ability to

attract, train, motivate and retain key personnel.

• Competitive remuneration package

including a Long Term Incentive Plan (LTIP)

in place to retain executive talent

• Succession planning in process

• Expanding leadership team and depth

• Recruitment of and fostering development

of emerging leadership

• Implemented a competitive reward and

recognition package

• Established career development

opportunities widely promoted

• Focus on culture, mission, and creating

astable and motivating environment for

allstaff

Medium

8. Ability to achieve medium-term revenue growth targets and ability

to expand into diagnostics and applied industrial sectors, including

the successful introduction of products Mitigation Strategy Rating

Trend since

2022

The Group has incurred significant losses since inception and

continues to be loss making. We incurred operating losses of

£168.6 million in 2023, £98.5 million in 2022, and £164.6 million in

2021, and as at 31 December, 2023, we had an accumulated deficit

of £257.7 million.

The Group will need to generate and sustain increased revenue

levels and decrease proportionate expenses in future periods to

achieve profitability. We may continue to incur losses in the near

term as a result of substantial increases in our operating expenses,

as we continue to invest in order to increase the number of

customers and utilisation. We may be required to continue to

provide discounts to large customers and/or invest in proofs of

concepts to demonstrate the utility of our products. We will continue

to invest in existing and new markets, research and development,

expanding marketing channels and operations, and adding new

products. These efforts may prove more expensive than we

anticipate, and we may not succeed in increasing our revenue and/

or gross margins sufficiently to offset these expenses. Many of our

efforts to generate revenue and/or increase margin are new and

unproven, and any failure to adequately increase revenue or contain

the related costs could prevent us from attaining or increasing

profitability. As we grow the customer base for our PromethION line,

our costs increase, but this leads to an increase in higher margin

consumable sales. Further, we have not accurately forecasted our

revenue or margin on a consistent basis. Parts of our business – e.g.

large-scale human genomics projects — are difficult to forecast,

particularly the timing of revenues.

With negative cash flow expected until the Group achieves EBITDA

break-even, which it aims to do by the end of 2027, and continued

investments in growth, the Group is expected to continue to incur

net losses and experience negative cash flow from operations over

the next few years. This could increase the Group’s vulnerability to

general adverse economic and industry conditions, limit its ability to

react to changes in the Group’s business and the industry in which

it operates and place it at a disadvantage to its competitors.

• Commercial team doubled since IPO

• Development of new markets, including

clinical and applied industrial, through

collaborations with partners and potential

customers

• Development of Q-line

• Regular review and prioritisation of ongoing

and new investment, including, without

limitation, hiring and personnel, projects,

markets, and products, based on prudent

financial analysis and management

• Development of applications demonstrating

unique features of the platform and

innovative research that can be done on

the platform

• Regular improvements to the platform and

products

• Expanded manufacturing capability

• Expansion of and investment in indirect

sales channels

Medium

Trend since 2022

Increase No change Decrease

Oxford Nanopore Technologies Annual Report & Accounts 202376

9. Data privacy, data classification and sample collection, use and

study ethics, and ethical use of products Mitigation Strategy Rating

Trend since

2022

The Group operates globally and relies on access to data relating to

its customers, its employees, and its research and development to

conduct its operations. Properly collecting, classifying, and

controlling this data to comply with often conflicting laws and in a

manner to enable the Group to grow its business is expensive and

challenging. In addition, the Group’s ability to identify and protect its

trade secrets while remaining nimble is also a challenge.

• Investment in resources to protect the data

held by the Group and the use of it

• Data protection policy in place

• Segregation of duties within systems where

personal data is handled has been

established

• The HR records are segregated from other

data, and only limited access is available

• A Data Protection Officer (DPO) role is

active within Oxford Nanopore with

independent responsibility for assuring

security of personal information

• Legal support in-house

• General Data Protection Regulation

(GDPR) practices employed to limit data

processing

• Regular training and awareness provided

to the staff with at least annual requirement

to read Company policies

• Implementation of a system to enable

classification of data and establishment of

different controls based on such

classifications

Medium

10. Environment, health and safety Mitigation Strategy Rating

Trend since

2022

The Group’s R&D and manufacturing activities involve the use of

hazardous materials, including chemicals, biological materials,

solvents, and radioisotope materials (“hazardous materials”). One or

more of the kits sold by the Group include a chemical that may be

deemed hazardous. Accordingly, the Group is subject to laws,

regulations, and permits relating to environmental, health and safety

matters, including, among others, those governing the use, storage,

handling, exposure to and disposal of solvents and other hazardous

materials and waste, the health and safety of its employees, and the

shipment, labelling, collection, treatment and disposal of

non-hazardous and hazardous waste appropriately managed by

internal staff and approved waste contractors. If the Group were

found to have failed to handle hazardous materials with care and/or

to have violated environmental, health and safety laws and

regulations (in respect of past or future activities), as a result of

human error (including failure to understand applicable laws and

regulations), accident, equipment failure, or otherwise, it may be

subject to investigations, substantial fines and penalties,

remediation costs, property damage and personal injury claims,

suspension of production or product sales, loss of permits or a

cessation of operations. This may result in potential fines,

reputational damage, and/or suspension of operations leading to an

impact on financial results.

• Dedicated Health & Safety (H&S)

resources to ensure all rules are enforced

• Complete and accurate safety data sheets

are prepared and maintained for all

products

• Software tools and third-party advisors to

better enable compliance and incident

avoidance

• Training and awareness given to staff

• Full regulatory assessment and

identification of any compliance gaps and

actions to mitigate these

• Legal support in-house and engagement of

third-party consultants as SMEs

Medium

Trend since 2022

Increase No change Decrease

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 77

Oxford Nanopore Technologies Annual Report & Accounts 202378

Section 172 statement and

stakeholder engagement

The vision of Oxford Nanopore is to enable the analysis of

anything, by anyone, anywhere. We have developed our technology

to make it accessible for all those who need it, whether in

developed markets or more resource-limited settings. Our

technology is being used by scientists around the world to make a

positive impact on society and we are committed to running our

business in a sustainable and ethical way. This is firmly embedded

in our culture.

The Group’s stakeholders are the people, communities and

organisations, which have an interest in our vision, purpose and

strategy or who may otherwise be affected by decisions made by

its Board. The Board is committed to open, transparent dialogue

with stakeholders and believes that effective engagement is critical

to drive long-term value creation.

The Board confirms that throughout the year ended 31 December

2023, it had regard to the matters set out in section 172 of the

Companies Act 2006 as amended by the Companies (Miscellaneous

Reporting) Regulations 2018. Further information on each of the

matters set out in s172 is detailed in the table opposite.

In addition to the Group’s key stakeholders, the Board engages

with and considers the interest of any other stakeholders who may

be interested in the Group’s business or otherwise be impacted by

its decisions. Examples of other stakeholders include governments

and governmental bodies, research partners, academic

institutions, analysts, governance bodies, which include proxy

advisors, and regulators.

Pages 78 to 84 detail the ways in which the Board engages with

our key stakeholders to deepen their understanding of the issues

that matter to them and to allow for stakeholder views to be taken

into account in Board decision making.

Section 172 factor Disclosure

The likely consequences of any

decision in the long term

Our mission (page 2)

Our business model (pages

28-29)

Our strategy (pages 30-37)

KPIs (pages 38-39)

Viability statement and going

concern (pages 86-87)

The interests of the Group’s

employees

Diversity and inclusion (page 58)

Talent and career management

(page 60)

Our people (page 58-60)

The need to foster the Group’s

business relationship with

suppliers, customers, and

others

Our business model (pages

28-29)

Our strategy (pages 30-37)

Our sustainable impact (pages

48-71)

Governance (page 88-137)

The impact of the Group’s

operations on the community

and the environment

Sustainability (page 48)

TCFD (page 65)

The desirability of the Group

maintaining a reputation for

high standards of business

conduct

Culture (page 58)

Governance (page 88)

Internal controls (page 114)

The need to act fairly between

members of the Group

Annual General Meeting (page

91)

Rights attaching to shares (page

136)

I am proud of how we have grown as

aglobal team and was delighted to

support and participate in our first

Inclusion Week, arranged by our

Values in Action inclusion pod. We held

a range of activities during the week to

celebrate our differences in

backgrounds, thoughts, and expertise.”

Dr Gordon Sanghera

Chief Executive Officer Women in Biotech event held during Inclusion Week

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 79

Our people

Why our people matter

• Effective engagement aligns employees with the Group’s

strong culture and core values, ensuring everyone works

together towards a shared vision. We continue to invest in our

ability to engage, retain, incentivise, and develop the best

talent globally.

What matters to our people

• Execution and delivery of strategy

• Purpose and culture

• Training and development

• Diversity and inclusion

• Reward and benefit structures

• Wellbeing and mental health

How we engage

• Designated Non-Executive Director for workforce engagement

• All-Employee Meetings

• “Tales Live” – sharing great customer case studies

• Employee intranet

• Values in Action initiative (see page 59 for further details)

• Internal talent development programme

• Senior Leaders joining delegates from attendees on Essential

Manager course to share leadership challenges and

perspectives, and agree solutions

• HR business partnering

• Externally facilitated whistleblowing hotline

• Mental health first aiders

How feedback influences board discussions

• The Non-Executive Director of Workforce Engagement meets

with employees taking part in the Group’s employee

experience initiative, Values in Action

• Following requests from employees, the Board supported the

introduction of a new Staff Financial Support Fund for

employees most impacted by cost-of-living pressures and

financial strain. Employees can apply for assistance on a

confidential basis

• The ability to recruit and develop the most talented employees

who believe in the Group’s purpose and motivating employees

towards a common goal, is a priority for the Board in its

decision making

• The Board receives updates at each Board meeting on

employees including KPIs around headcount, attrition, and

diversity. The Board considered the interests of employees

and the need for the Group to grow, alongside external factors

such as inflation, when approving the Group’s annual budget

for 2024

Highlights for 2023

• 33 mental health first aiders were trained during the year

• Three initiatives were delivered by our Values in Action pods:

(i) Inclusion Week (see below), (ii) more detailed Q&As around

career development to enhance employee understanding

andcommunications, and (iii) the provision of emergency

sanitary supplies inUK offices

• Over 2,500 training hours completed on Manager Mastery

courses and over 1,800 training hours completed on My

Mastery courses

Stakeholder engagement in action

Engaging with our people – Inclusion Week

In October, we held Inclusion Week, in celebration of our growing team’s diversity and talent. Our people are made up of 59

different nationalities working across three regions globally. Our differences are something we want to celebrate openly and

regularly, embracing our mix of backgrounds, thought, and expertise gives us more creativity in innovation and makes us more

effective at engaging our broad, global community. Our goal is to foster an environment where each and every individual feels an

inherent sense of belonging and support from the Company, with equal access to resources and opportunities.

The event was hosted by employees who form our Values in Action Inclusivity group or ‘pod’ and the objective of the week was to

raise awareness through a series of engaging activities, including panel discussions, talks, and learning sessions. The events

were designed to create a platform for meaningful conversations and actions that promote a more inclusive workspace for

everyone. Events that were held physically in the UK were also livestreamed so that every member of our global team could

participate, regardless of location and time zone. They were also recorded and shared for those employees who were unable to

attend live.

Events included panels or talks on ‘Women in Biotech’, celebrating the LGBTQ+ community, neurodiversity, and a diversity and

inclusion at work panel which featured Gordon Sanghera CEO. We finished the week by holding a World Food Day celebration in

our offices globally, to celebrate our team’s rich cultural diversity.

Engaging with our stakeholders

Oxford Nanopore Technologies Annual Report & Accounts 202380

Section 172 statement and

stakeholder engagement

continued

Our customers, research partners

and collaboration partners

Why our customers, research partners, and collaboration partners

matter

• The Group considers itself part of a broader scientific

community of users of its technology. The Group collaborates

deeply with its customers, as well as supporting them from a

technical and customer services perspective. The Group also

collaborates with a number of third parties. As such,

understanding, engaging, and responding to customer and

partner needs is a critical priority.

What matters to our customers

• High performance technology that enables the performance of

groundbreaking and routing scientific analyses

• The ability of our technology to enable advancements of

science and to be used in applied settings

• Vision, purpose and progress and how this relates to market

opportunities

• Strategy and operational performance

• The range of applications that customers are performing and

how the Group is supporting new application development

• Sustainability

How we engage

• Meetings/calls with senior leadership team and Board

members

• Extensive training of our customer-facing teams, to ensure we

support our customers in the best way possible

• Direct customer feedback

• London Calling and Nanopore Community Meeting (NCM)

conferences

• Strategy planning processes, taking into account both existing

and future customer needs and trends over the next five years

How feedback influences board discussions

• Following customer engagement and insight gathered from

ongoing market intelligence and customer relationships, the

Board reviews and provides input on strategy, resource

allocation and prioritisation across markets and customers

• The Board continued to drive the senior leadership team to

deliver disruptive, high performing technology into existing

markets and to create new markets and utilise good business

practice with all stakeholders

• The Board receives updates and feedback on the Group’s

markets, customers and operational performance at every

Board meeting

Highlights for 2023

• Three main customer events held during the year - London

Calling (London), National Community Meeting (Singapore)

and National Community Meeting (Houston)

• Entered into Strategic Partnership Agreement with bioMérieux

to explore selected opportunities to advance patient care by

providing access to nanopore-based clinical research and in

virtro diagnostic solutions

• Entered into Collaboration Agreement with the Mayo Clinic for

a multi-year development collaboration to develop new clinical

tests for diseases and improve patient care

Engaging with our stakeholders continued

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 81

Our shareholders

Why our shareholders matter

Engagement with and an aligned vision with the Group’s

shareholders is key to our success. The Board treats all

shareholders fairly and ensures decisions are made for the

benefit of all shareholders.

What matters to our shareholders

• Execution and delivery of strategy

• Technology, operational, commercial, and financial

performance

• Sustainability

• Long-term growth and vision

• Developments in customer markets and the competitive

landscape

• Capital allocation considerations

• Executive remuneration

How we engage

• Annual General Meeting

• Meetings and calls

• Capital Markets Day

• Investor roadshows

• Analyst events

• Regulatory announcements

• Annual Report and Accounts

• Dedicated Investor Relations function

• Updates on website and social media

How feedback influences board discussions

• The Board takes into account shareholder opinions when

developing and discussing the Group’s strategy to deliver

long-term and sustainable growth. The Board considered the

interests of all stakeholders, including shareholders, when it

discussed the Group’s medium-term plan

• The Board ensures that the Group has sufficient capital to

achieve its purpose and pursue its long-term strategic aims.

The Board considered the capital needs of the Group

throughout 2024 and in particular, when approving the

Group’s financial statements and the investment from

bioMérieux

• The Audit and Risk Committee reviews the internal and external

audit processes and reports to ensure the Group has a strong

framework of controls to protect shareholder investment

Stakeholder engagement in action

Engaging with our shareholders –

Capital Markets Day

On 19 October, the Group held its first Capital Markets Day,

which was attended by many institutional investors and

sell-side analysts. The Capital Markets Day was a key

opportunity to provide further detail on the Group’s

short-to-medium and medium-to-long-term growth

strategies.

During the Capital Markets Day, Gordon Sanghera and a

diverse range of senior leaders introduced the Group’s

strategy to address unmet needs in the clinical and applied

markets, which has a total addressable market of >$150

billion. This included explaining how the Group’s technology

is well placed to be successful in these markets. In addition,

the Group showcased its product innovation pipeline and

showcase how highly differentiated nanopore sequencing

technology will continue to drive new standards and

expectations in DNA/RNA sequencing by providing richer

information, faster and more accessibly and affordably.

Attendees were provided with the opportunity to take part in

Q&A sessions, to speak to speakers informally before,

during, and after the event, to attend product demos and to

have the chance to use the Group’s technology by loading

their own Flow Cells.

Highlights for 2023

• Met with more than 500 investors from 240 institutions during

the year

• Held first Capital Markets Day

• Investor Relations update provided at each Board meeting

including any movement in top 20 shareholders, market

feedback and investor engagement.

Oxford Nanopore Technologies Annual Report & Accounts 202382

Our suppliers

Why our suppliers matter

• The Group has a complex and robust supply chain, and our

suppliers contribute to innovative processes by developing

their own products and services, which are sometimes

bespoke, to achieve the Group’s goals. The Group aims to

build honest, respectful and transparent relationships with

suppliers who comply with applicable regulations and share

our commitment to the highest standards of corporate

governance.

What matters to our suppliers

• Responsible business practices and due diligence

• Conduct and ethics

• Fair business terms and prompt payment

• Robustness and flexibility of supply chain

• Locations from which components and resources are sourced

• Sustainability

How we engage

• Supply chain team reports directly to Chief Operating Officer

• The Group’s supply chain team develops deep relationships

and seeks feedback from both new suppliers and existing

suppliers

• Full supplier performance management in place and

developing ways to further improve relationships

• Dedicated function within Supply Chain to manage

ESG & Risk

• Commenced the rollout of further support to key suppliers

through a committed Supply Chain engagement programme.

This will help the Company drive decarbonisation and better

governance to address Scope 3 emissions

How feedback influences board discussions

• The Board discussed the Group’s suppliers when deciding

onthe Group’s inventory levels and approving purchase

orderrequests

• The Board considered key risks in relation to its supply chain

when reviewing its risk register and discussing risk

• The Board received regular reporting on matters concerning

suppliers, including key procurement reviews

Highlights for 2023

• Carbon footprint data requested from key suppliers to enable

the Company to understand our Scope 3 emissions

• Enhanced due diligence measures introduced, including the

use of software-based global intelligence platforms

• All key suppliers have completed ESG disclosures on

antibribery and anti corruption, human rights and

environmental protections

Engaging with our stakeholders continued

Section 172 statement and

stakeholder engagement

continued

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 83

Our communities and the environment

Why our communities and the environment matter

• Our communities comprise those living and working in close

geographic proximity to the Group’s operations, those with

whom the Group does business, and more broadly, the wider

members of society whose lives the Group aims to positively

impact with its technology.

• The Group’s products and operations are designed to enable

access to sequencing technology for the public good, whether

this is in rapid pathogen analysis in outbreak situations, in

human genetics, or in crop science in developing countries or

those with lower incomes.

• The Group is committed to limiting the impact of its operations

on the environment. Please see page 61-71 for further details.

What matters to our communities and the environment

• Vision and purpose

• Problem solving where genomics may be a solution at a

strategic level e.g., with governments and senior corporate

leadership

• Sustainability

How we engage

• An internal working group has been established which

produces the Group’s Sustainability Report

• The Board has overall accountability for the Group’s

sustainability strategy and receives updates on sustainability

• Sponsorship programmes, including for universities and the

Royal Society of Chemistry’s Broadening Horizons programme

How stakeholder interest influences board discussions

• The Remuneration Committee implemented ESG metrics into

the Group’s remuneration targets for 2023

• The Board regularly discusses the positive impact of the

Group’s technology on communities and the environment

• The Board receives regular operational reports on the impact

of our customers’ work, in areas across science and society

Highlights for 2023

• New lead hired for Org.one programme to support

conservation

• 12.7% reduction in tonnes of CO

e emitted per £m revenue

• ESG measures were included in the 2023 annual bonus

scheme for all employees, including Executive Directors, to

ensure performance in this area is linked with remuneration at

all levels throughout the business

Stakeholder engagement in action

Engaging with our communities and the

environment – Education

During the year, the Group established a new education

function, with the goal to facilitate educators and partner

with leaders in the genomic and scientific education space,

bringing nanopore sequencing as a scientific education tool

to high school and undergraduate environments. In the

second half of the year the pilot Education Beta programme

launched with approximately 60 participants across 12

countries, showcasing the Group’s commitment to the

Community, and the first collaboration was announced with

the CSHL DNA Learning Center. The education function

also released high quality, impactful materials for our Early

Careers focus, containing video content and a dedicated

space for internship recruitment.

Mwansa Chikange, who took part in the 2023 internship programme

Oxford Nanopore Technologies Annual Report & Accounts 202384

Principal decision: Investment from bioMérieux

In October, the Board approved the investment of approximately

£70 million from bioMérieux. The Board believes that the

investment strengthens the relationship between the two

companies, and aligns the Group’s increasing focus on clinical

markets in the medium to long term. The investment is designed

to support development for products in the Group’s portfolio to

serve in vitro diagnostics (IVD) markets in conjunction with

bioMérieux’s commitment to advancing global public health.

Following consideration, the Board concluded that the

investment would be in the best interests of all stakeholders.

When making the decision, the Board had regard to the

followingstakeholders:

• Shareholders: The Board considered the impact on the

Group’s existing shareholders. The Board noted that the

investment would help to strengthen the relationship between

the companies and help to support the Group’s

medium-to-long-term strategy to address unmet needs in the

clinical and diagnostic markets.

The Board noted that although the investment would result in

dilution for the Group’s shareholders, that the shareholders

had previously approved the ability for the Company to allot

new shares up to specified limits in accordance with the

Pre-Emption Group’s advised limits at the 2023 AGM. The

Board noted that the investment would be well within the limits

approved at the AGM. In addition, bioMérieux indicated that it

intended to make further market purchases of the Company’s

shares up to a further 3.5% of the Company’s shares. The

Board felt that this would enhance liquidity of the Company’s

shares, which was beneficial for the shareholders.

In addition, the money received from the investment would

further strengthen the Group’s cash position, which the Board

believes is in the best interests of all stakeholders including

theshareholders.

• Employees: Although the investment was unlikely to impact

employees on a day-to-day basis, the Board concluded that

the investment would be positive for employees as it would

help enhance the Group’s strategy and provide additional

cashto the Group.

Engaging with our stakeholders continued

• Community and the environment: The Board noted that the

two companies had a previous partnership agreement and

through the partnership and the investment, this would

support development for products in the Group’s portfolio

toserve IVD markets in conjunction with bioMérieux’s

commitment to advancing human health. The Board concluded

that the fact that the investment would help the Group to

deliver rapid, accessible, and affordable clinical toolsmore

quickly and improve healthcare worldwide clearly would have a

positive impact on the wider community, including patients.

• The separate collaboration will accelerate clinical adoption

ofthe Company’s nanopore sequencing technology and

bioMérieux’s clinical and diagnostic regulatory and commercial

strengths, including the expectation of bringing the Company’s

TB test to the market over the next two-three years.

• Other stakeholders: The Board also considered its wider

stakeholders and noted that the transaction would either have

no impact on the stakeholders or have a positive impact on

wider stakeholders.

Section 172 statement and

stakeholder engagement

continued

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 85

Non-financial information statement

Oxford Nanopore’s Non-financial information statement is presented in this section, complying with Sections 414CA and 414CB of the

Companies Act 2006. The following table incorporates the Group’s approach on relevant non-financial matters.

Reporting Requirement Oxford Nanopore’s policies and standards Where to read more in this report

Business model N/A Business model pages 28-29

Non-financial KPIs N/A Key performance indicators pages 38-39

Principal risks Risk Register

ISO 27001, 22301, 13485 and 9001

accreditations

Risk management page 72

Principal risks and uncertainties pages 72-77

Business model pages 28-29

Audit and Risk Committee report pages 111-115

Stakeholders Group Data Protection Policies including

andData Retention Policy

Stakeholder engagement pages 79-85

s172 statement page 78

Board activities page 92

Our sustainable impact page 48-71

Employee engagement page 79

Corporate Governance report pages 100-107

Audit and Risk Committee report pages 111-115

Employees Flexible Working Policy

Whistleblowing Policy

Directors’ Remuneration Policy

Environment, Health and Safety Policy

Our sustainable impact pages 48-71

s172 statement page 78

How the Board assesses and monitors culture page 101

Human rights Modern Slavery Statement

(available at https://nanoporetech.com/

about-us/modern-slavery-policy)

Board Diversity Policy

Conflict Minerals Policy

Risk management page 72

Nomination Committee Report pages 108-110

Our sustainable impact pages 48-71

Social matters Modern Slavery Statement Our sustainable impact pages 48-71

Directors’ report pages 136-138

Anti bribery and anti

corruption

Anti-Bribery and Anti-Corruption Policy

Conflicts of Interest Policy

Our sustainable impact pages 48-71

Audit and Risk Committee report pages 111-115

Environmental matters Environment, Health and Safety Policy Our sustainable impact pages 48-71

The Group has policies and codes of conduct in place to ensure consistent governance. For the purpose of the non-financial reporting

requirements these include but are not limited to Anti-Bribery and Corruption Policy, Modern Slavery Statement, Whistleblowing Policy,

Anti-Facilitation of Tax Evasion Policy, Conflicts of Interest Policy, Privacy Policy, Data Retention Policy and Securities Dealing Code.

The Directors have voluntarily complied with Provision 31 of the

Code, in which the Directors are required to issue a Viability

statement declaring whether they believe the Group is able to

continue to operate over an appropriate period and state whether

they have a reasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall due

throughout this period.

In doing so, the Directors have considered the Group’s prospects

taking into account its current financial position, its recent

historical performance, its business model and strategy (pages 28

to 37) and the Principal Risks and Uncertainties (PRUs) (pages 72

to 77).

The Group’s prospects are assessed primarily through its strategic

planning process. This includes an annual review which considers

forecast profitability and cash flows over three years, culminating

in the Budget setting for the following year, approved by the Board

in November 2023. As part of this strategic planning process, the

forecast profitability and cash flows for the year are assessed each

quarter and any necessary revisions are made to the forecast

outcome for the year. The most recent forecast plan was updated

and approved by the Board in March 2024.

The first year of the forecast is based upon the Group’s most

recent forecast for 2024. The second and third years are based off

this forecast, with a top-down strategic overlay on revenues, gross

margins and operating expenses.

The Group’s financial forecasts are based on modelling of revenue

by product group. Detailed financial forecasts are then prepared

for the Group that considers orders, revenue, gross profit, capital

expenditure, working capital, cash flow and key financial ratios.

The planning process is led by the Chief Executive Officer and the

Chief Financial Officer through the Operating Committee and in

conjunction with relevant functions. The Board participates fully in

the annual process and has the task of considering whether the

plan continues to take appropriate account of the external environment

including technological, social and macro-economic changes.

As set out in the Audit and Risk Committee Report at pages 111

to115, the Audit and Risk Committee reviews and discusses with

management the schedules supporting the assessments of going

concern and viability.

Forecasts have been sensitised based on a series of scenarios

incorporating plausible yet severe impacts on revenue, cost

inflation, and consequently the Group’s consolidated cash position.

In constructing these scenarios the Directors have assessed the

viability of the Group’s operations while considering the following

fundamental properties of the business:

• A fast-growth revenue model;

• A variable cost structure which allows the Group to mitigate

adverse financial conditions via the flexing of its major cost

items; and

• The strong liquidity position of the Group.

Assessment period

The Directors have reviewed the period in which to frame the

viability assessment and determined a three-year period of

assessment to 31 December 2026 to be most appropriate. This

period aligns considerations of viability with the Group’s internal

planning framework and revenue expectations.

Assessment of viability

The output of the Group’s strategic planning process reflects the

Board’s best estimate of the future prospects of the business. To

make the assessment of viability, additional scenarios have been

modelled over and above those in the ongoing plan. These scenarios

were overlaid into the plan to quantify the potential impact of one or

more of the Group’s PRU’s crystallising over the assessment period.

Viability statement

Oxford Nanopore Technologies Annual Report & Accounts 202386

The Group’s PRUs are set out on pages 72 to 77. Each of the

Group’s principal risks has a potential impact and has therefore

been considered as part of the assessment; however only those

that represent severe but plausible scenarios have been modelled.

These were:

Scenario modelled

Principal risks include

in the scenario

1. Significant trading shortfall

To consider the possibility that the

Group is unable to continue delivering

improvements in its LSRT products as

well as its ability to develop and

introduce new products which could

lead to a sustained adverse impact on

trading, we have modelled a significant

reduction in revenue and gross profit.

This is intended to capture the

possibility of a reduction in new

customers and the loss of some existing

customers.

During this period the Group continues

to invest for growth and recovery

throughout with no cost-saving

measures.

Ability to successfully

introduce products to

remain a technology

leader

2.Cost pressure

A risk leading to the potential for supply

chain disruption, resulting in shortages

and consequential material cost price

inflation, given reports across the wider

economy of rising raw material costs,

labour inflation and rising energy prices.

This could lead to an adverse impact on

gross profit where margins would be

adversely impacted as well as

increasing overheads.

During this period the Group continues

to invest for growth with no cost-saving

measures.

Ability to make products:

supply chain and

manufacturing

Trade, war, pandemic, and

inflation

The above scenarios were considered in isolation and cumulatively.

The results of the scenario modelling showed that the business

would be able to withstand each of the scenarios in isolation,

without recourse to mitigating actions. On a combined basis some

mitigating actions to reduce costs were modelled.

In the event that scenarios such as those tested were to occur, the

Directors would have a number of controllable mitigating options

available to maintain the Group’s financial position including

cost-reduction measures should they be required.

Confirmation of longer-term viability

Based on the assessments as outlined above, the Directors have

assessed the prospects of the Group over a period they deem to

be appropriate and confirm that they have a reasonable

expectation that the Group will be able to continue in operation and

meet its liabilities as they fall due over the three-year period ending

December 2026.

The Audit and Risk Committee reviewed the process undertaken

and challenged whether management’s assessment of the

principal and emerging risks facing Oxford Nanopore and their

potential impact were appropriate. This involved reviewing Oxford

Nanopore’s financial performance, Forecast for 2024 and cash

flow projections. The Audit and Risk Committee also considered

whether there were any additional risks which could impair

solvency or which, whilst not necessarily principal risks in

themselves, could become severe if they occur in conjunction with

other risks. The Admission to the London Stock Exchange in

October 2021, plus further funds of nearly £70 million raised in

October 2023 from an investment by bioMérieux, has given Oxford

Nanopore substantial cash reserves available to draw down upon

and the Directors consider Oxford Nanopore is in a strong position

to weather any further uncertainty.

The Strategic Report, which has been prepared in accordance with

the requirements of the Companies Act 2006, has been approved

by the Board and signed on its behalf.

On behalf of the Board

Duncan Tatton-Brown

Chair of the Board

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 87

Corporate

governance

88 Corporate Governance

90 Chair’s corporate governance statement

92 Governance at a glance

94 Board of Directors

100 Corporate governance report

108 Nomination Committee report

111 Audit and Risk Committee report

116 Directors’ remuneration report

136 Directors’ report

139 Directors’ responsibilities statement

Oxford Nanopore Technologies Annual Report & Accounts 202388

88—

139

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 89

Chair’s corporate governance statement

Duncan Tatton-Brown

Chair

Dear Shareholder,

On behalf of the Board, I am pleased to present our corporate

governance report for the financial year ended 31 December 2023.

Our focus throughout 2023 has been to further strengthen the

Board, ensuring it is set up for long-term sustainable success,

andalso to further communicate the Group’s vision and growth

strategy, including our medium-to-long-term targets. This included

communicating at our Capital Markets Day how the Group is

uniquely positioned to unlock long-term future potential clinical

andapplied market opportunities.

The Board remains firmly committed to strong corporate governance,

which includes compliance with the UK Corporate Governance

Code 2018 (Code) which is available at www.frc.org.uk/directors/

corporate-governance/uk-corporate-governance-code#current-

edition. This report explains the key features of the Group’s

governance framework and how it complies with the Code. I am

pleased to report that as at 31 December 2023, the Group is in full

compliance with the Code.

Board composition and diversity

The composition of the Board is regularly reviewed to ensure that

ithas the requisite skills, experience and balance, including with

respect to diversity.

We were pleased to welcome three new independent Non-Executive

Directors during the year – Kate Priestman, Dr Sarah Fortune and

Dr Heather Preston. Sarah Gordon Wild also retired from the Board

in December 2023. The Board would also like to express our

thanks to Sarah for her hard work, dedication and valuable input

over her nine-year tenure on the Board.

We were also delighted to welcome Nick Keher as Chief Financial

Officer and Director in January 2024. Nick succeeds Tim Cowper,

who moved into a new role as Chief Operating Officer after having

performed both the role of Chief Financial Officer and fulfilling

most of the responsibilities typically assigned to a Chief Operating

Officer for the past five years.

As announced in February 2024, Clive Brown stepped down from

the Board with immediate effect while Tim Cowper and Spike

Willcocks will not stand for re-election at the 2024 AGM. These

changes are part of normal Board evolution and in line with best

practice governance. All three Directors will remain in their

operational leadership roles at the Company and the Board would

like to thank them for their outstanding contribution and support to

the Board. The Board looks forward to their ongoing dedication

and leadership. In addition, Wendy Becker will not stand for

re-election at the 2024 AGM and the Board would like to thank

Wendy for her valuable input as both a Board member and as Chair

of the Remuneration Committee.

We continued to enhance our corporate

governance structure during the year,

including welcoming three new Non-

Executive Directors to the Board. This will

help us build a successful business and

support long-term sustainable growth.”

Oxford Nanopore Technologies Annual Report & Accounts 202390

As at 31 December 2023, the Board had 33.3% female

representation on its Board. This increased from 20% as at

31December 2022.

Oxford Nanopore meets the ethnic minority representation targets

setout in the Parker Review and the new Listing Rules. We also

meet the Listing Rule recommendation to have a female director

inat least one senior Board position.

Board effectiveness review

At the end of 2023, we performed our second annual effectiveness

review. This was an internally facilitated review and the outcomes

of the review and suggested action points were discussed and

agreed at the Board meeting in January 2024. We will report on

progress against key action points in our 2024 Annual Report.

More detail can be found on page 105.

The Board intends to comply with Code Provision 21 whereby

anexternally facilitated review will take place at least every three

years and plans to hold an externally facilitated review by the

endof 2024.

Stakeholders

Stakeholder engagement and trust are critical for us to achieve the

Group’s strategic aims. We recognise the importance of having open

and effective communication with stakeholders and understanding

the range of matters that are important to stakeholders so that

these form part of the Board’s discussions and decision making. For

more information regarding shareholder engagement, including the

key stakeholder groups and engagement activities that have taken

place during the year, please see page 78-84.

Capital Markets Day

In October, the Group held its first Capital Markets Day at the

Science Museum in London. We were pleased to meet with many

institutional shareholders and analysts and for our diverse range

ofsenior leaders to present further information on the Group’s

short-to-medium, and medium-to-long-term growth strategies.

Thisincluded how the Group intends to address unmet needs in

theclinical and applied markets in the medium to long term.

Annual General Meeting (“AGM”)

The Company’s second AGM was held on 12 June 2023, and we

were pleased to receive in excess of 92% of votes cast in favour

for all of the resolutions.

The Board welcomes opportunities to discuss matters relating

tocorporate governance with shareholders at any time during the

year, including at its AGM. The 2024 AGM is scheduled to take

place atthe Company’s offices as Gosling Building, Edmund Halley

Road, Oxford Science Park, Oxford, OX4 4DQ at 1pm on Monday

10June2024.

The Notice of AGM contains details of the resolutions to be

proposed at the meeting and explanatory notes on those

resolutions. As previously announced, Wendy Becker, Tim Cowper

and Dr Spike Willcocks will notstand for re-election at the 2024

AGM.

Looking forwards

As a Board, we will continue to focus on delivering our strategic

aims, maintaining good corporate governance and continuing to

enhance the Company’s culture of innovation.

Duncan Tatton-Brown

Chair

Key sections in this Report

UK Corporate

Code section Location of Information

Board leadership

and company

purpose

Governance at a glance (pages 92-93)

Board of Directors (pages 94-98)

Board activities in 2023 (page 92)

Workforce engagement (page 79)

How the Board assesses and monitors culture

(page 101)

Division of

responsibilities

The role of Board and Committees

(pages 102-103)

Composition,

succession and

evaluation

Board of Directors (pages 94-98)

Board effectiveness review (page 105)

Nomination Committee report (pages 108-110)

Audit, risk and

internal control

Audit and Risk Committee report

(pages 111-115)

Remuneration Directors’ Remuneration report

(pages 116-135)

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 91

Governance at a glance

• Reviewed and approved half-year and

annual results

• Approved 2024 annual budget

• Appointed Kate Priestman, Dr Sarah Fortune

and Dr Heather Preston as Non-Executive

Directors

• Appointed Kate Priestman as the new

Non-Executive Director responsible for

Workforce Engagement

• Held Board strategy session

• Received updates from CEO on

operational performance

• Undertook second Board effectiveness review

• Considered the principal risks and

emerging risks

• Provided input ahead of Group’s first Capital

Markets Day

• Reviewed the Group’s compliance

with the Corporate Governance Code

• Approved the investment of approximately

£70m from bioMérieux

• Received presentations from the Group’s

brokers and external lawyers

• Received updates following the Company’s

major customer conferences

• Approved the appointment of JP Morgan

as joint broker

• Received reports and updates on investor

relation activities, including a report on the

Group’s first Capital Markets Day

• Approved long-term plan

2023 Board activities

All employees

Male 715 (57%)

Female 536 (43%)

Operating Committee direct reports

Male 32 (50%)

Female 32 (50%)

1 Excluding administrative support

Board

Male 8 (67%)

Female 4 (33%)

Male 7 (58%)

Female 5 (42%)

Operating Committee

Gender diversity as at 31 December 2023

Oxford Nanopore Technologies Annual Report & Accounts 202392

Board meeting attendance

The following table shows attendance at Board meetings during 2023:

Director

Meetings

attended

Percentage of

meetings attended

Wendy Becker 6/6 100%

Clive Brown 6/6 100%

Tim Cowper 6/6 100%

Dr Sarah Fortune

***

0/0 N/A

Sarah Gordon Wild

5/6 83%

Dr Guy Harmelin 6/6 100%

Adrian Hennah 6/6 100%

John O’Higgins 6/6 100%

Dr Heather Preston

***

0/0 N/A

Kate Priestman

3/3 100%

Dr Gordon Sanghera 6/6 100%

Duncan Tatton-Brown 6/6 100%

Dr Spike Willcocks 6/6 100%

* Sarah Gordon Wild missed one Board meeting due to a pre-existing conflict

** Kate Priestman was appointed to the Board on 13 July 2023

*** No Board meetings were held in 2023 following the appointment of Dr Sarah Fortune and Dr Heather Preston

0-2 years 6

3-6 years 4

Over 6 years 2

Board tenure

White British or other White 8

Mixed/Multiple Ethnic Groups 2

Asian/Asian British 1

Black/African/Caribbean/

Black British 0

Other ethnic group 0

Prefer not to say 1

Operating Committee

Chair 1

Executive Directors 4

Independent

Non-Executive Directors 7

Board composition

White British or other White 8

Mixed/Multiple Ethnic Groups 1

Asian/Asian British 1

Black/African/Caribbean/

Black British 0

Other ethnic group 0

Prefer not to say 2

Board

Board composition as at 31 December 2023

Ethnic diversity as at 31 December 2023

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 93

Board of Directors

Appointed: 23 May 2005

Tenure: 18 years

Independent: No

Skills and experience:

Gordon is a co-founder of Oxford Nanopore

along with Spike Willcocks and Hagan

Bayley. He was appointed CEO in May

2005 and has led the Company through

multiple financing rounds, and in 2021, a

listing on the London Stock Exchange.

Gordon has significant experience in the

design, development and global launch of

disruptive platform sensor technologies.

Prior to working at the Company, Gordon

spent 16 years at MediSense, Inc. Following

its acquisition by Abbott Laboratories,

Gordon held both UK and US vice president

and director positions, including as Vice

President for Worldwide Marketing,

Research Director, and Manufacturing

Process Development Director. During this

time, he was instrumental in the launch of

several generations of blood glucose

bio-electronic systems for the consumer

and hospital medical markets.

Gordon has a doctorate in bio-electronic

technology and a degree in chemistry from

Cardiff University.

Current external appointments:

None

Committee memberships:

Appointed: 22 January 2024*

Tenure: Less than 1 year

Independent: No

Skills and experience:

Nick is an experienced life sciences CFO,

having previously served as CFO of

Clinigen Group and Benevolent AI. Prior to

his CFO roles, he gained extensive

experience in the life sciences industry

serving as Managing Director and Head of

the European healthcare equity research

team at Royal Bank of Canada, and before

that held roles at Investec and GSK after

switching from practising pharmacy.

Nick has significant experience of financial

leadership of complex, scientific

businesses, and has a deep understanding

of capital markets. Nick was appointed CFO

in January 2024 and has responsibility for

the Group’s finance function and investor

relations function.

Nick has a masters degree in pharmacy

from Aston University and is a qualified

chartered accountant.

Current external appointments:

None

Committee memberships:

None

Appointed: 1 August 2022

Tenure: 1 year

Independent: N/A

Skills and experience:

Duncan brings extensive, relevant

experience as an executive and

Non-Executive Director of FTSE

companies, growth and founder-led

technology businesses, and, in particular,

where UK-born businesses have grown to

have a strong international commercial

presence. He has had a distinguished

career across a wide range of innovative

businesses in the technology, retail and

media sectors, including serving as Chief

Financial Officer of Ocado Group plc from

2012 to 2020, during which time the

business expanded from being a pure-play

online grocer to a leading UK technology

business serving clients around the world,

with revenue growing 3.5times and

technology headcount growing 10-fold.

Duncan holds a master’s degree in

engineering from King’s College, Cambridge.

Current external appointments:

Duncan serves on the board of Trainline plc

and chairs Wednesday Topco Limited, the

company behind loveholidays.com.

Committee memberships:

Duncan Tatton-Brown

Non-Executive Chair

Chair Executive Directors

Dr Gordon Sanghera

Chief Executive Officer

Nick Keher

Chief Financial Officer

Key to Committees

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Chair

* Shareholders will be required to approve

Nick’s appointment at the 2024 AGM

Oxford Nanopore Technologies Annual Report & Accounts 202394

Appointed: 24 May 2006

Tenure: 17 years

Independent: No

Skills and experience:

Spike is one of the co-founders of the

Company and has served on the Board

since May 2006. He was appointed Chief

Business Development Officer of the Group

in November 2016 and now serves as Chief

Strategy Officer.

Spike was one of the initial members of IP

Group plc (“IP Group”) following its landmark

partnership with the University of Oxford’s

Department of Chemistry. Ultimately leading

its life science team, Spike’s role

encompassed all aspects of technology

commercialisation, including spin-out

company formation and business and

corporate development, as well as private

and public equity financings. During this

time, Spike was responsible for the

formation of Oxford Nanopore. Gordon

persuaded Spike to join the Company full

time at the start of 2006.

Spike has a doctorate in biological sciences

and a degree in chemistry from the

University of Oxford.

As previously disclosed, Spike will not stand

for re-election at the 2024 AGM.

Current external appointments:

Veiovia Limited

Committee memberships:

None

Appointed: 19 September 2019*

Tenure: 4 years

Independent: No

Skills and experience:

Clive is the Group’s Chief Technology,

Innovation and Product Officer, having

joined as Director of Bioinformatics and IT

in2008. He joined the Board in September

2019 and stepped down from the Board in

February 2024. Clive joined the Group from

the Wellcome Trust Sanger Institute

inCambridge, UK, where he played a key

role in the adoption and exploitation of

‘nextgeneration’ DNA sequencing platforms.

In 2003, he was appointed Director of

Computational Biology and IT atSolexa

Limited (acquired by Illumina, Inc. in 2007),

where he was central to the development

and commercialisation of the Genome

Analyzer. Clive has also held various

management and consulting positions at

Glaxo Wellcome (now GlaxoSmithKline plc),

Oxford Glycosciences plc and other EU and

US-based organisations.

Clive holds degrees in genetics and

computational biology from the University

of York.

Current external appointments:

None

Committee memberships:

None

*Clive stepped down from the Board on 29 February

2024

Appointed: 13 December 2018

Tenure: 5 years

Independent: No

Skills and experience:

Tim moved into a new role as Chief

Operating Officer in January 2024, after

performing both the role of Chief Financial

Officer and fulfilling most of the

responsibilities typically assigned to a Chief

Operating Officer for the past five years.

Prior to his role as Chief Financial Officer,

Tim previously served as Vice President,

Finance. He joined the Group as Financial

Controller in 2012 and became Commercial

Operations Director in 2013. Tim took the

role of Finance Director in 2017 and joined

the Board in 2018. Having qualified as an

accountant at Ernst & Young, Tim became

Financial Controller of Celltech, serving as

a key member of their IPO team and

managing several of their transactions as

alisted company. He went on to serve as

Financial Controller at Sterilox Medical.

Timhas also been Finance Director at

British Biotech plc (Vernalis plc) and has

previously worked in management roles at

other biotech and technology companies,

including the AIM-listed Bioventix plc.

Tim has an economics degree from the

University of Sussex and is a qualified

chartered accountant.

As previously disclosed, Tim will not stand for

re-election at the 2024 AGM.

Current external appointments:

None

Committee memberships:

None

Executive Directors

Dr Spike Willcocks

Chief Strategy Officer

Clive Brown

Chief Technology, Innovation

and Product Officer

Tim Cowper

Chief Operating Officer

(with effect from 22 January 2024)

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 95

Board of Directors continued

Non-Executive Directors

Appointed: 24 June 2021

Tenure: 2 years

Independent: Yes

Skills and experience:

Adrian spent 18 years in Chief Financial

Officer roles at three FTSE 100 companies

and his executive career spans healthcare,

engineering, and fast-moving consumer

goods. He was CFO at Reckitt Benckiser

Group plc and held the same positions at

Smith & Nephew plc and Invensys plc (now

Invensys Limited). Prior to this, he spent 18

years at GlaxoSmithKline plc working in

both finance and operations. Adrian has also

recently completed a nine-year term as a

director on the board of RELX plc. Adrian

began his career working in audit and

consultancy with PwC and Stadtsparkasse

KölnBonn, the German regional bank.

Adrian holds a degree in law and economics

from the University of Cambridge.

Current external appointments:

Adrian currently serves as a non-executive

director of Unilever plc and J Sainsbury plc

where he is also Chair of the Audit

Committee. Adrian also serves as an external

member of the Finance Committee of Oxford

University Press and a Trustee of the charity,

“Our Future Health”.

Committee memberships:

Adrian Hennah

Non-Executive Director

Appointed: 24 June 2021

Tenure: 2 years

Independent: Yes

Skills and experience:

Wendy previously served as Chief Executive

Officer at Jack Wills Limited, a British-based

brand name clothing manufacturer and

retailer, having been promoted from Chief

Operating Officer after turning around its

historical operational difficulties and pursuing

new growth avenues. Previously she worked

in the telecoms industry as Group Chief

Marketing Officer at Vodafone Group plc and

Managing Director at TalkTalk. Wendy was

also previously a partner at McKinsey &

Company and spent the last five years on the

board at FTSE 250 property business Great

Portland Estates plc, stepping down in July

2022. Wendy started her career in brand

management at The Procter & Gamble

Company after gaining a bachelor’s degree in

economics from Dartmouth College. She also

holds a Master of Business Administration

from Stanford University’s Graduate School

of Business and has been named by the FT

in the “Top 50 Women to Watch in

International Business”.

As previously disclosed, Wendy will not

stand for re-election at the 2024 AGM.

Current external appointments:

Wendy is the current Chair of

NASDAQ-listed Logitech International SA

and is a non-executive director of GSK and

Sony Corporation. Wendy is also a member

of the University of Oxford’s executive

governing body. She also has directorships

at the Oxford University Press and Saïd

Business School, Oxford.

Committee memberships:

Wendy Becker

Non-Executive Director &

Senior Independent Director

Appointed: 19 December 2023*

Tenure: Less than one year

Independent: Yes

Skills and experience:

As a Professor of Immunology and

Infectious Diseases at the Harvard T.H.

Chan School of Public Health in Boston, Dr

Sarah Fortune brings deep expertise in

genomic diagnostics and multi-omics

approaches to infectious disease, including

at the intersection of human genetics. Her

world-leading research has focused on

understanding how Tuberculosis (TB)

mutates to become drug resistant using a

combination of single cell, genetic, and

genomic approaches, including nanopore

sequencing. In 2019, she led one of three

labs awarded funding by the US National

Institutes of Health to establish a new

centre for immunology research to

accelerate progress in TB vaccine

development - work that remains ongoing.

Oxford Nanopore will draw on Sarah’s rich

experience as the company seeks to

develop more sequencing-based

applications in the clinical space, including

its first sequencing-based test for

drug-resistant TB.

Sarah holds a Doctor of Medicine from

Columbia University and a Bachelor of

Science in biology from Yale University.

Current external appointments:

None

Committee memberships:

Dr Sarah Fortune

Non-Executive Director

* Shareholders will be required to approve

Sarah’s appointment at the 2024 AGM

Oxford Nanopore Technologies Annual Report & Accounts 202396

Non-Executive Directors

Key to Committees

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Chair

Appointed: 19 September 2019

Tenure: 4 years

Independent: Yes

Skills and experience:

From 2006 to 2018 John was the Chief

Executive Officer of Spectris plc, an

international productivity-enhancing

instrumentation and controls business,

where he led rapid global growth and

evolution of the company as it pursued

multiple market applications from a board

technology platform. From 2010 to 2015,

hewas a non-executive director of Exide

Technologies, Inc. a US-based supplier of

battery technology to automotive and

industrial users.

John has a Master of Business

Administration from INSEAD and a master’s

degree in mechanical engineering from

Purdue University.

Current external appointments:

John currently serves as senior

independent director of Johnson Matthey

plc and as chairman of Elementis plc. John

is also a director of Envea Global SA. He is

also a trustee of the Wincott Foundation.

Committee memberships:

John O’Higgins

Non-Executive Director

Appointed: 17 September 2020

Tenure: 3 years

Independent: Yes

Skills and experience:

Guy has extensive experience in

healthcareand technology investment

andentrepreneurship. He was previously

on the leadership team at Harel Insurance

Investments and Financial Services Ltd

(“Harel”), the largest insurance group in

Israel. He has invested and worked with

multiple companies including Lemonade,

Inc., Innoviz Technologies Ltd, American

Well Corporation, Ecoppia Scientific Ltd,

Ayala Pharmaceuticals, Inc., Biond

Biologics Ltd, Tabit Technologies Ltd,

Assured Allies (Assured, Inc.), QM

Technologies, Inc., Rafael and Ein-Tal

Hospitals. Prior to joining Harel, Guy was

aco-founder and chief executive officer of

RondinX Ltd, a computational drug target

discovery company that was acquired by

BiomX, Inc. in 2017.

Guy has a Doctor of Medicine (Summa Cum

Laude) from the University of Florence and

served as a resident physician at the Tel

Aviv Medical Centre.

Current external appointments:

Guy is currently a director of Ecoppia

Scientific Ltd, Pantogran LLC and Tsumego

Ltd.

Committee memberships:

Dr Guy Harmelin

Non-Executive Director

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 97

Board of Directors continued

Non-Executive Directors

Appointed: 19 December 2023*

Tenure: Less than one year

Independent: Yes

Skills and experience:

Heather brings more than 30 years of

experience in healthcare, as a scientist,

physician, McKinsey management

consultant and long-time investor in biotech

and the life sciences, most recently as a

Managing Partner of Pivotal BioVentures

based in San Francisco. She has been a

director of more than 18 private and public

technology-based healthcare companies,

where she was involved in designing and

implementing effective scaling strategies.

Oxford Nanopore will draw on her expertise

as it looks to deliver long-term growth and

shareholder value.

Heather holds a Doctor of Medicine from

the University of Oxford and a Bachelor of

Science degree in biochemistry from St

Bartholomew’s Hospital Medical School at

the University of London.

Current external appointments:

Heather currently serves on the Board of

Oxford Biomedica plc and Azura

Ophthalmics

Committee memberships:

Dr Heather Preston

Non-Executive Director

Key to Committees

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Chair

Appointed: 13 July 2023*

Tenure: Less than one year

Independent: Yes

Skills and experience:

Kate brings extensive experience as a

biopharma executive for more than 25

years, serving in leadership roles across

commercial, operations, corporate strategy,

communications and government affairs.

She is currently Chief Corporate and

External Affairs Officer on the management

team of global biopharma CSL, and was

previously Senior Vice President of R&D

Strategy, Portfolio and Operations at GSK,

where she led the evolution of GSK’s

science and technology strategy, portfolio

management and global R&D operations &

business transformation, helping steer the

FTSE 100 company’s growth. Kate also

served on GSK’s separation board,

delivering the successful spin-out of Haleon

plc in 2022.

In addition, she previously held global and

UK roles at Eli Lilly & Co and Zeneca, after

an early career at the BBC, where she

spent several years as a broadcaster. Kate

also currently also serves as a Trustee of

RBG Kew, an organisation with around 500

scientists working globally to understand

plant biology and fight biodiversity loss.

Current external appointments:

None

Committee memberships:

Kate Priestman

Non-Executive Director and Director

responsible for Workforce Engagement

* Shareholders will be required to approve

Kate’s appointment at the 2024 AGM

* Shareholders will be required to approve

Heather’s appointment at the 2024 AGM

Oxford Nanopore Technologies Annual Report & Accounts 202398

Operating Committee

IMAGE TO COME

Clive Brown

Chief Technology, Innovation

and Product Officer

Jordan Herman

SVP, General Counsel

Dr Gordon Sanghera

Chief Executive Officer

Carolyn Tregidgo

VP, Late Stage and Applied

Product Development

Chris Brown*

VP, Strategic Programmes

Nick Keher**

Chief Financial Officer

John Schoellerman

SVP, Corporate and

Business Development

Dr Spike Willcocks

Chief Strategy Officer

Rich Compton

SVP, Sales & Commercial

Operations

Sarah Lapworth

SVP, Global Human Resources

Rosemary Sinclair Dokos

SVP, Product & Programme

Management

Tim Cowper

Chief Operating Officer

Zoe McDougall

SVP, Strategic Communications

and Corporate Affairs

Emma Stanton

SVP, Clinical and Head of

Oxford Nanopore Diagnostics

* Appointed to Committee in February 2024

** Appointed to Committee in January 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 99

The Board

The Board is responsible for establishing the purpose, values,

and strategy for the Group and has overall authority for the

management and conduct of its business. The Board is also

responsible for approving strategic plans, financial statements,

acquisitions and disposals, major contracts, projects, and capital

expenditure. The Board is focused on ensuring the long-term

sustainable success of the Group and the continuous creation of

value for its shareholders and stakeholders.

Compliance with the Code

The Group is committed to a high standard of corporate

governance and continues to focus on the evolution of its

corporate governance framework. As at 31 December 2023, the

Company was in full compliance with the provisions of the Code.

Matters reserved for the Board

The Board has identified certain reserved matters for its

approval. The schedule of matters reserved for the Board, along

with the terms of reference for each of the Audit & Risk,

Remuneration, and Nomination Committees can be found on the

Company’s website at https://nanoporetech.com/about-us/

investors/corporate-governance. The schedule of matters

reserved for the Board was reviewed in March 2024 and it was

concluded that no updates were required.

Dr Gordon Sanghera

Chief Executive Officer

Key matters reserved for the Board

Strategy and management

• Establishing the Group’s purpose, values, objectives,

strategic and long-range plan and monitoring culture

• Approval of strategic aims

• Approval of budgets

Structure and capital

• Approving or recommending changes to share capital

• Approving major changes to corporate structure

Financial reporting and controls

• Approval of annual report and accounts

• Approval of half-yearly report

• Approval of treasury policies

Audit, internal controls, and risk management

• Overseeing maintenance of a sound system of internal

control and risk management

Contracts

• Approving major capital projects, contracts, commitments,

expenditures or disposals

Stakeholder engagement and communication

• Receiving reports on, and reviewing the effectiveness of

dialogue with shareholders and wider stakeholders

• Considering balance of stakeholder interests in accordance

with s172 obligations

Board membership and other appointments

• Overseeing Nomination Committee, which leads on Board

appointments and succession planning

• Approves Board appointments

Remuneration

• Oversees Remuneration Committee

Delegation of authority

• Agrees division of responsibility between Chair and CEO

• Approves delegated levels of authority

Corporate governance matters

• Undertakes review of its own performance, committee

performance, and individual director performance

Policies

• Approves formal corporate policies

Board leadership and company purpose

Duncan Tatton-Brown

Chair

Corporate governance

report

Oxford Nanopore Technologies Annual Report & Accounts 2023100

How the Board assesses and monitors culture

The Board recognises that the Group’s culture is key to ensuring its

long-term success and understands that everyone who works for

Oxford Nanopore shares in the vision to create a positive impact in

society. The Group’s purpose of enabling the analysis of anything,

by anyone, anywhere drives and motivates a deep level of

commitment from its employees and wider workforce, which

facilitates a positive, determined, and supportive culture.

Since Oxford Nanopore originated as a disruptive start-up,

conversation, challenge and connection has been essential to our

success and defines our culture to this day. As we expand and

develop, we have considered how this culture can continue to ignite

our imagination and inspire our approach.

Values in Action (ViA)

The ViA has six interest groups (known as ‘pods’) to represent the

core themes which drive a highly engaged and impactful

organisation: Diversity and Inclusion, Wellbeing, Social and

Community, Internal Communications, Career Development and

Environment. Our pods are supported in their activity by our senior

leadership team, through two roles:

• Business unit Advocates who help pod members navigate

contacts and themes in a specific business area

• Sponsors who mentor a specific pod and support emergent

ideas for the benefit of the whole organisation

Following the creation of the pods in 2022, the pods met at least

monthly during the year and members of each pod also met with

the CEO during the year.

Following the resignation of Sarah Gordon Wild from the Board in

December, Kate Priestman was appointed as the new designated

Non-Executive Director responsible for workforce engagement.

The ViA community would like to thank Sarah Gordon Wild for her

time and guidance since conception. The ViA community will give

Kate the chance to engage with employees and to explore and

validate our culture and our values of Contribution, Determination,

and Judgment.

Three initiatives from the ViA community were implemented

during2023:

• Development of a more comprehensive set of Q&A around

career development to further enhance employee

communications on this topic

• Hosting an inclusion week in October 2023, celebrating our

diversity and breadth of talent (see page 59 for more details)

• Launching the supply of emergency sanitary products in our UK

offices, with an initiative to launch this globally during 2024

6 pods:

Meet at their own discretion

a minimum of six times a year

Engage with the company to

seek ideas and take action

Be supported by their Sponsor

and engage with their Advocate

when necessary

Send a representative (different

each time) every quarter to meet

The ViA Hub

Rotate roles after a minimum

of 12 months' and maximum

of 18 months' service

Each Business Unit and

Region will nominate:

Six representatives, one to

join each of the pods

One senior leader to be a

key contact Advocate

One senior leader to

Sponsor one of the

six pods

Wellbeing

Inclusion

Americas

Internal

Comms

Innovate

Environment

Make &

Supply

Social &

Community

Sell &

Support

Career

Development

Corporate

APAC

APJ

The ViA Hub

meets quarterly with

CEO and twice yearly

with Board member

Each pod sends one

representative, rotating

attendance

World Food Day held during Inclusion Week

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 101

Division of responsibilities

Audit and Risk Committee

Pages 111-115

The Audit and Risk Committee’s role is

to assist the Board with the discharge

of its responsibilities in relation to

financial reporting, and, in particular,

to:

• review the Company’s financial

statements and accounting policies,

internal and external audits and

controls

• review and monitor the scope of the

annual audit and the extent of the

non-audit work undertaken by

external auditors

• advise on the appointment of

external auditors

• review the effectiveness of the

internal audit, internal controls,

whistleblowing and fraud systems in

place within the Company

The Audit and Risk Committee meets

at least four times each year and

otherwise as required.

Remuneration Committee

Pages 116-135

The Remuneration Committee’s role is to:

• develop the policy on executive

remuneration including bonuses,

incentive payments and pension

arrangements

• determine the levels of remuneration

for the Chair, the Executive Directors,

the Company Secretary, senior

management and such other members

of the Company’s management as

determined by the Board

• oversee the implementation of the

Company’s employee share plans

• ensure that a report on the Directors’

remuneration policy and practices is

included in the Annual Report

(please see pages 120-121) and that

such policy is submitted to the

Ordinary Shareholders for approval

at the AGM

The Remuneration Committee meets

at least twice each year and otherwise

as required.

Nomination Committee

Pages 108-110

The Nomination Committee’s role is to:

• review the leadership needs of the

Company and lead the process for

the appointments of Directors and

senior management

• review the balance of skills,

knowledge, experience,

independence and diversity of the

Board and senior management

• be responsible for succession

planning to ensure the long-term

success of the Company

The Nomination Committee meets at

least twice each year and otherwise

asrequired.

Board

Executive Directors

• Chief Executive Officer

• Chief Strategy Officer

• Chief Financial Officer

• Chief Operating Officer

Operating Committee - page 103

The Operating Committee is a committee of senior managers

responsible for developing the Company’s purpose, values,

objectives, culture, strategic and long-range plans. The

Operating Committee is also responsible for the Company’s

market disclosure requirements and oversees compliance with

the Market Abuse Regulation.

The Operating Committee meets on a monthly basis and

otherwise as required.

Delegated authorities

The Company has a formal delegation of authority policy in

place which establishes a clear framework for the use of any

authority delegated from the Board to certain individuals

within the Company in order to facilitate effective and efficient

management of the business of the Company. The policy also

details financial authority limits for employees at all levels

within the business.

To maximise its effectiveness and ensure sufficient time can be devoted to matters requiring its attention, the Board has delegated

authority in certain areas to its Board Committees. Each Board Committee has terms of reference which are reviewed annually.

Corporate governance

report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023102

Roles and responsibilities of the Board

Chair • Leads and manages the business of the Board

• Ensures clear structure for effective operation of

the Board and its Committees

• Promotes high standards of governance

• Sets Board agenda

• Ensures effective communication with

shareholders

Chief

Executive

Officer

• Leads on development and delivery of strategy

with the Chief Strategy Officer

• Responsible for the day-to-day management of

the business and sets operational targets

• Leads delivery of the Company’s operating plans

and budgets

• Ensures the Company’s financial structure and

capacity supports the Company’s objectives and

implements the Board’s decisions

• Maintains an active dialogue with shareholders in

respect of the Company’s performance

Executive

Directors

• Support the Chief Executive Officer in the

development of strategy

• Responsible for respective areas

Non-

Executive

Directors

• Use outside expertise to support the Executive

Directors and the senior leadership team

• Provide constructive challenge to the development

of strategy

Senior

Independent

Director

• Acts as a sounding board for the Chair and

actsasintermediary between the Chair and the

other Directors

• Available to shareholders to discuss their views

Company

Secretary

• Ensures the right Board policies and procedures

are in place and followed

• Advises the Board on corporate governance

matters

Operating Committee

Committee Members

Clive Brown (Chief Technology, Innovation and Product Officer)

Chris Brown (VP, Strategic Programmes) - joined February 2024

Rich Compton (SVP, Sales & Commercial Operations)

Tim Cowper (Chief Operating Officer)

Jordan Herman (SVP, General Counsel)

Nick Keher (Chief Financial Officer) - joined January 2024

Sarah Lapworth (SVP, Global Human Resources)

Zoe McDougall (SVP, Strategic Communications and Corporate Affairs)

Dr Gordon Sanghera (Chief Executive Officer)

John Schoellerman (SVP, Corporate and Business Development)

Rosemary Sinclair Dokos (SVP, Product & Programme Management)

Emma Stanton (SVP, Clinical and Head of Oxford Nanopore Diagnostics)

Carolyn Tregidgo (VP, Late Stage and Applied Product Development)

Dr Spike Willcocks (Chief Strategy Officer)

Purpose and responsibilities

The Committee’s role is to assist the Board with its remit of

responsibilities in relation to corporate operations, including to:

• Develop the Group’s purpose, values, objectives, culture,

strategic and long-range plans;

• Develop annual operating and capital expenditure budget

targets;

• Align Group priorities;

• Facilitate communications and engagement with key meetings;

• Identify and mitigate risk and review and approve updates to

riskregister;

• Develop Board agenda;

• Review and manage key projects, strategic and significant

transactions and major litigation;

• Review financial updates, including revenue update, material

budget variances; and

• Act as Disclosure Committee and oversee the Company’s

compliance with its disclosure obligations.

The Operating Committee meets on a monthly basis and otherwise

as required.

Operating Committee’s focus on risk

Risk is a standing discussion item in each Operating Committee

meeting. Based on a recommendation of the CEO, the Board

defines and adjusts the Company’s risk tolerance. The risks and

mitigation are documented in the Company’s Risk Register.

The representatives of each departmental meeting who serve on

the Operating Committee escalate risks identified in the

departmental tactical meetings for review in the Operating

Committee. The Operating Committee reviews and updates the

Risk Register twice each year and reports to the Audit and Risk

Committee on risks and mitigation twice yearly (and as needed on

an ad hoc basis).

The Audit and Risk Committee reports to the Board. The

OperatingCommittee shares the direction from the Board with

each department.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 103

Corporate governance

report continued

The Board is satisfied that, having considered the other demands

on their time, each of Kate, Sarah, and Heather have sufficient time

to devote to their roles as Non-Executive Directors.

As previously disclosed, Wendy Becker has indicated that she will

be stepping down from the Board from the conclusion of the AGM

and will not stand for re-election.

Following year end, and after a comprehensive search process, the

Company welcomed Nick Keher as Chief Financial Officer and a

member of the Board in January 2024. This allowed Tim Cowper to

move to a new role as Chief Operating Officer, having performed

the role of Chief Financial Officer and fulfilling most of the

responsibilities typically assigned to a Chief Operating Officer for

the past five years. Tim now leads the development of the Group’s

expanding international footprint and operations, including

day-to-day functions such as manufacturing, tech transfer, IT,

supply chain, global distribution, environment, health and safety,

and set-up and management of international facilities.

Nick is an experienced life sciences CFO, having previously served

as CFO of Clinigen Group and Benevolent AI. Prior to his CFO roles

he gained extensive experience in the life sciences industry,

serving as Managing Director and Head of the European

healthcare equity research team at Royal Bank of Canada (RBC)

and before that held roles at Investec and GSK after switching from

practising pharmacy. Nick comes to the role with significant

experience of financial leadership of complex, scientific

businesses, and has a deep understanding of capital markets. Nick

has responsibility for the Group’s finance and investor relations

functions. The Board unanimously recommends to shareholders

the appointment of Nick Keher at the 2024 AGM.

As previous disclosed, Clive Brown stepped down from the Board

in February 2024 and Tim Cowper and Spike Willcocks will not

stand for re-election at the 2024 AGM. All three Directors will

remain in their operational leadership roles at the Company. These

changes are part of normal Board evolution and in line with best

practice governance.

Non-Executive Directors and independence

The Non-Executive Directors constructively challenge and

scrutinise the performance of the Executive Directors and senior

management team. The Company regards each of its

Non-Executive Directors as independent within the meaning of the

Code. There are no circumstances which are likely to impair, or

could impair, each Non-Executive Director’s independence. The

Company complies with the Code recommendation that at least

half of the Board (excluding the Chair) should be independent.

Board meetings and provisions of information

The Board meets at least six times each year with further ad hoc

meetings as required.

Composition, succession and evaluation

Board composition

As at 31 December 2023, there were 12 Directors on the Board.

The biographies for each Director are provided on pages 94 to 98.

In July 2023, the Board welcomed Kate Priestman as

Non-Executive Director of the Company. The Board subsequently

welcomed Dr Sarah Fortune and Dr Heather Preston as directors in

December 2023. Sarah Gordon Wild retired from the Board in

December 2023 after nine years of service.

The Board unanimously recommends to shareholders the appointments

of Kate Priestman, Dr Sarah Fortune, and Dr Heather Preston.

Kate brings extensive experience as a biopharma executive for

more than 25 years, serving in leadership roles across commercial,

operations, corporate strategy, communications, and government

affairs. She is currently Chief Corporate and External Affairs

Officer on the management team of global biopharma CSL and

was previously Senior Vice President of R&D Strategy, Portfolio

and Operations at GlaxoSmithKline, where she led the evolution of

GSK’s science and technology strategy, portfolio management,

and global R&D operations & business transformation, helping

steer the FTSE 100 company’s growth. Kate also served on GSK’s

separation board, delivering the successful spin-out of Haleon plc

in 2022.

As a Professor of Immunology and Infectious Diseases at the

Harvard T.H. Chan School of Public Health in Boston, Dr Sarah

Fortune brings deep expertise in genomic diagnostics and

multi-omics approaches to infectious disease, including at the

intersection of human genetics. Her world-leading research has

focused on understanding how tuberculosis (TB) mutates to

become drug resistant using a combination of single cell, genetic,

and genomic approaches, including nanopore sequencing. In 2019,

she led one of three labs awarded funding by the US National

Institutes of Health to establish a new centre for immunology

research to accelerate progress in TB vaccine development - work

that remains ongoing. The Group will draw on Sarah’s rich

experience as the Company seeks to develop more

sequencing-based applications in the clinical space, including its

first sequencing-based test for drug-resistant TB.

Heather joins the board at a time when Oxford Nanopore’s platform

and its latest Q20+ chemistry have delivered profound

developments in system performance, including accuracy and data

yield, positioning it for ambitious growth. She brings more than 30

years of experience in healthcare, as a scientist, physician,

McKinsey management consultant, and long-time investor in

biotech and the life sciences, most recently as a Managing Partner

of Pivotal BioVentures based in San Francisco. She has been a

director of more than 18 private and public technology-based

healthcare companies, where she was involved in designing and

implementing effective scaling strategies. The Group will draw on

her expertise as it looks to deliver long-term growth and

shareholder value.

Oxford Nanopore Technologies Annual Report & Accounts 2023104

Board effectiveness review

2022 internal Board effectiveness review

As noted in the last Annual Report, an internal Board effectiveness

review was carried out during 2022. A summary of the actions

arising from the 2022 review and their outcomes are set out below:

Actions from 2022 review Outcome

Hold an annual dedicated

strategy session / have a

more detailed open and

constructive discussion

around strategy

The Board held a dedicated strategy

session at the July Board meeting.

The meeting was held offsite at the

Company’s factory in Didcot and the

Directors also received a tour of the

facilities including the progress on

automation.

To bring more formality to

the succession plans for the

Company’s Executive

Directors and other

members of the Operating

Committee and to keep the

succession plans updated

The Nomination Committee

progressed the succession plans

during the year. The Board agreed

that this would be a continuing

action for 2024.

To focus to improving

diversity at Board level, with

a particular focus on gender

diversity

The Board improved its gender

diversity during the year, increasing

from 20% at 31 December 2022 to

33.3% at 31 December 2023. The

Board recognises that it is not yet

compliant with the Listing Rule

target of 40% female representation

of the Board and aims to continue to

make improvements in this area.

To increase the

opportunities for Board

informal communications

including Board dinners

The Board increased informal

communications during the year and

held six dinners in 2023. In addition,

the Non-Executive Directors met

separately before each Board

meeting and also had a separate

session with the Chief Executive

prior to each meeting.

2023 internal Board effectiveness review

The Board completed its second internal Board effectiveness

review at the end of 2023. The evaluation was led by the Chair,

with the support of the Company’s SVP General Counsel and the

Company Secretary. The Board will continue to perform annual

reviews to ensure the effectiveness of the Board and ensure

alignment with the interests of stakeholders. For 2024 and in line

with the Corporate Governance Code, the Board intends to

complete an externally facilitated review.

The review included a questionnaire which was completed by each

Director. The process also involved questions around the operation

and effectiveness of each of the Board Committees. The results of

the evaluation were presented to the Board and discussed by the

Board in January 2024. Overall, the results demonstrated that the

Board and its Committees fulfil their responsibilities, operate

effectively and there is a clear structure and division of

responsibilities between the Board and its Committees. It was

noted that the Company has continued to make improvements in

its Board operations during the year.

Following the conclusion of the evaluation, the Board discussed

and agreed the following priorities for 2024:

• to bring more formality to the succession plans for the

Company’s Executive Directors and to keep the succession

plans updated

• to build more flexibility into the Board meetings, including the

length of Board meetings, to facilitate deeper discussions on

certain topics

• to consider ways for the Board to gain a deeper understanding

of the Company’s culture

Progress against the action points will be monitored and an

external Board effectiveness review will be completed during 2024.

Succession planning

Details of the Company’s succession planning are set out on page

110 of the Nomination Committee report.

Board support

The Directors have access to advice and services from both the

Company’s SVP General Counsel and the Company Secretary.

Directors are also able to take independent professional advice.

Audit, risk, and internal controls

The Board is responsible for determining the Company’s risk

appetite, agreeing the approach to risk management and

assessing the Company’s principal risks. The Company has in

place an ERM framework and a risk register, which allows the Audit

& Risk Committee to assess risks across different areas of the

business.

Grant Thornton acts as the Company’s internal auditors and the

Audit & Risk Committee has approved a one-year plan for 2024

and also reviewed a suggested three-year plan.

The Company has carried out a robust assessment of the

Company’s emerging and principal risks. Further details are set out

on pages 72-78.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 105

Induction of new directors and training

As new directors, Kate Priestman, Dr Sarah Fortune, and Dr

Heather Preston received a comprehensive induction process. This

included the following:

• Meetings/calls with

directors and key

senior management

• Visit to the Company’s

offices and site visit

to factory

• Calls with auditors,

legal advisors and

remuneration

advisers

• Call with the

Company’s brokers

• Meetings/calls with

shareholders

• Update on HR and

Company culture

• Access to

background reading

and attending

meetings as observer

in advance of joining

• Overview of the

business, structure,

functions and risks

Training

Directors have access to the expertise of senior management

and receive presentations on different areas ofthe business at

Board meetings.

Directors received ongoing training on their responsibilities

and received updates on new and existing legislation

throughout the year. This included in relation to the new

Corporate Governance Code, the proposed changes to the

Listing Regime, and audit market reform.

The Board received two updates on information security

throughout 2023 from the Group’s VP Global IT & Customer

Solutions.

The Board also received presentations from the Company’s

brokers, Citi and JP Morgan, and the Company’s solicitors

Slaughter & May.

Director inductions - Meetings with Senior Management

Topics Session with

Finance & investor relations Chief Financial Officer and VP, Finance

HR & reward SVP Global HR & VP, Reward

Strategy Chief Strategy Officer

Technology, R&D & product Chief Technology, Innovation & Product Officer, SVP Programme

Manager & SVP R&D Biologics

Strategic communications and corporate affairs SVP, Strategic Communications & Corporate Affairs

Commercial operations, including sales SVP, Sales & Commercial Operations

Clinical SVP, Clinical

Business development SVP, Corporate & Business Development

Legal & intellectual property General Counsel, Company Secretary, and VP, Intellectual

Property

Operations and manufacturing VP Operations and VP Manufacturing

Supply chain and logistics VP, Global Supply Chain and Senior Director, Global Logistics

Corporate governance

report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023106

Operations of the Board

Director conflicts of interest

The Company has a formal system in place for the Directors to

declare conflicts of interest and for such conflicts to be considered

for authorisation. The authorisation of any conflict and the terms of

any such authorisation may be reviewed by the Board at any time.

The Board has no reason to believe its formal system to deal with

conflicts is not operating effectively.

Engagement with stakeholders

Details of how the Company engaged with its stakeholders can be

found on pages 79-84.

Annual General Meeting (AGM)

The Company’s AGM is scheduled to take place at 1pm on 10 June

2024 and will be held at the Company’s offices at Gosling Building,

Edmund Halley Road, Oxford Science Park, Oxford, OX44DQ.

Duncan Tatton-Brown

Chair of the Board

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 107

Duncan Tatton-Brown

Nomination Committee Chair

Overview

• The Nomination Committee is comprised of the Chief Executive

Officer, Chair and all Non-Executive Directors

• All members have relevant commercial and operating

experience

• Three formal meetings were held during the year along with

one ad hoc meeting

• The Group’s VP, Global HR is invited by the Committee to

attend meetings

Committee roles and responsibilities

• Review the structure, size and composition of the Board

• Review the balance of skills, knowledge, experience,

independence, and diversity of the Board and senior

management

• Review the leadership needs of the Group

• Lead the process for the appointments of Directors and senior

management

• Ensure adequate succession planning to ensure the long-term

success of the Group

Main committee activities in 2023

• Oversaw the recruitment and the appointments of Kate

Priestman, Dr Sarah Fortune, and Dr Heather Preston as

Non-Executive Directors of the Company

• Recommended the appointment of Kate Priestman as

Non-Executive Director responsible for workforce engagement

• Oversaw the recruitment and appointment process for Nick

Keher, who joined as Chief Financial Officer in January 2024

• Increased female representation on the Board to 33.3% as at

31 December 2023

• Performed Board effectiveness review and discussed progress

against action points from 2022 review

• Discussed succession planning for Executive Directors

Committee focus areas for FY2024

• Progress the formalisation of succession plans for the Executive

Directors

• Review succession planning for members of the Operating

Committee

• Further develop the internal talent pipeline

• Perform the first externally evaluated effectiveness review of

the Board and its Committees

• Review the Committee’s corporate governance obligations in

light of the changes to the Corporate Governance Code

Committee member

Meetings

attended

Percentage of

meetings attended

Duncan Tatton-Brown

(Chair of the Committee) 3/3 100%

Dr Gordon Sanghera 3/3 100%

Wendy Becker 3/3 100%

Dr Sarah Fortune

0/0 N/A

Sarah Gordon Wild 3/3 100%

Dr Guy Harmelin 3/3 100%

Adrian Hennah 3/3 100%

John O’Higgins 3/3 100%

Dr Heather Preston

0/0 N/A

Kate Priestman

1/1 100%

1 Kate Priestman was appointed to the Board on 13 July 2023

2 Dr Sarah Fortune and Dr Heather Preston were appointed to the Board

on19December 2023. No meetings were held following this date

We were delighted to welcome three new

Non-Executive Directors to the Board during

the year andmake important progress on

our Boardgender diversity objectives”

Nomination

Committee report

Oxford Nanopore Technologies Annual Report & Accounts 2023108

Dear Shareholder,

I am pleased to present the Nomination Committee report for the

year ended 31 December 2023. Details of the progress against key

focus areas are set out in this report.

Meetings

The Nomination Committee meets as and when required, or as

requested by the Board, and had three scheduled meetings during

the year, plus one ad hoc meeting.

A majority of the members of the Nomination Committee (88.9%

as at 31 December 2023) are independent in accordance with the

Corporate Governance Code.

Board and Operating Committee changes

During the year, the Nomination Committee recommended the

appointments of Kate Priestman, Dr Sarah Fortune, and Dr Heather

Preston as Non-Executive Directors of the Company. The

appointments were all unanimously approved by the Board.

Sarah Gordon Wild retired from the Board at the end of 2023, after

a tenure of nine years, and Kate Priestman was appointed as the

new Non-Executive Director of Workforce Engagement.

Russell Reynolds, an independent external search firm, advised the

Committee on the appointment of all new directors ensuring that in

all cases, a diverse set of candidates was presented to the

Committee for consideration. Russell Reynolds is an external

search firm which has no other connection with the Company or its

individual directors. Russell Reynolds is a signatory to the

Voluntary Code of Conduct for Executive Search Firms.

The Company also worked with Russell Reynolds to conduct an

extensive search during 2023 for a new Chief Financial Officer.

This resulted in the appointment of Nick Keher as Chief Financial

Officer and Director in January 2024. This allowed Tim Cowper to

move into the role of Chief Operating Officer on the same date.

The Company worked with Russell Reynolds to create a detailed

job description containing the experience, skills and qualities that

the Company wanted in a new Chief Financial Officer. Alongside an

excellent cultural fit, the Company also wanted somebody with

sector experience, international experience, exposure to growth

companies and strong investor relations and capital market

experience. The Nomination Committee reviewed a long list of

diverse candidates before interviewing a smaller list of candidates.

Following the interview process, during which Nick met with the

Chair, various Non-Executive Directors, the Executive Directors

and various members of senior management, Nick was identified

as the preferred candidate. The Nomination Committee

recommended Nick’s appointment to the Board and the Board

unanimously agree to Nick’s appointment in January 2024.

Shareholders will be asked to approve the appointments of Nick,

Kate, Heather, and Sarah at the 2024 AGM.

During the year, Carolyn Tregidgo, VP Late Stage and Applied

Development and Emma Stanton, SVP Clinical and Head of Oxford

Nanopore Diagnostics, joined the Group’s Operating Committee,

the Group’s decision-making body. Louisa Ludbrook, stepped

down from the Operating Committee in December 2023 as she

plans to leave the Group during 2024.

Nick Keher joined the Operating Committee in January 2024 upon

his appointment as Chief Financial Officer.

Diversity

Gender representation at Board and Operating Committee Level (as at 31 December 2023)

Number of Board

members % of the Board

Number of senior

Board positions

(CEO, CFO, Chair,

SID)

Number of

Operating

Committee

members

% of Operating

Committee

members

Men 8 66.7% 3 7 58.3%

Women 4 33.3% 1 5 41.7%

Not specified/prefer not to say – – – – –

Ethnicity representation at Board and Operating Committee Level (as at 31 December 2023)

Number of Board

members % of the Board

Number of senior

Board positions

(CEO, CFO, Chair,

SID)

Number of

Operating

Committee

members

% of Operating

Committee

members

White British or other White

(inc. minority white groups) 8 66.7% 3 8 66.7%

Mixed/Multiple Ethnic Groups 1 8.3% 0 2 16.7%

Asian/Asian British 1 8.3% 1 1 8.3%

Black/African/Caribbean/Black British 0 0% 0 0 0%

Other ethnic group, including Arab 0 0% 0 0 0%

Not specified/prefer not to say 2 16.7% 0 1 8.3%

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 109

Diversity

The Company is committed to, and recognises the benefits of,

diversity at all levels throughout the organisation. The Company

places great importance on ensuring the members of the Board

reflect diversity in its broadest sense and believe that greater diversity

is essential to deliver the Company’s strategy and can provide the

Company with a competitive edge. The Nomination Committee will

consider diversity, with a particular focus on increasing gender

diversity, in relation to future appointments to the Board.

Board and Operating Committee gender and ethnicity metrics

The Company has met the new Listing Rule targets for gender and

ethnic diversity on the Board with the exception of the target for

40% female representation on the Board. However, the Company

made progress on this metric during the year and increased its

female representation from 20% at the end of 2022, to 33.3% at

the end of 2023. The Company remains committed to achieving

the target for 40% female representation on its Board.

The metrics on page 109 set out the range of gender and ethnicity

as they relate to our Board and Operating Committee (being the

Company’s executive management body) as at 31 December 2023.

The process by which diversity data was collected was, where

permitted by relevant laws, to contact relevant individuals and ask

them how they identified using the categorisations set out in the

Listing Rules.

Succession planning

The Nomination Committee has responsibility for ensuring that

plans are in place for orderly succession to both the Board and

senior management positions. During 2023, the Committee

reviewed the succession plan for the Executive Directors, to ensure

that arrangements are in place for clear, robust succession. This

process is ongoing and includes an exercise to further define the

skillsets, qualities and experience that would be desirable in

potential candidates. This is in addition to emergency succession

planning to minimise disruption to the business in the event of

anyunanticipated departure.

The Nomination Committee also monitors the tenure of

Non-Executive Directors and notes that following the retirement of

Sarah Gordon Wild, who served for nine years on the Board, none

of the existing Non-Executive Directors are close to reaching the

recommended maximum nine-year tenure.

The Nomination Committee is also responsible for ensuring that

appropriate talent development programmes are in place to maximise

the potential of the Group’s employees. The Group’s Group Talent

Development team offers a series of trainings at all levels.

During the year, the Group partnered with the Butcher Bailey

Partnership and delivered an accelerated Senior Leadership

programme which allowed over 40 senior leaders within the

business to engage in a challenging executive development

experience. This resulted in the senior leaders presenting to the

Executive Directors and other senior key leaders on reflections

following the course and to provide ideas and recommendations for

consideration in order to ensure the Group delivers on its short,

medium and long-term strategic goals. 22 new senior leaders also

undertook a comprehensive senior leadership onboarding

programme during the year.

A total of 195 managers completed one of the Group’s Manager

Master courses, which cover topics such as essential management

skills and having crucial conversations. A total of 442 employees

completed one of the Group’s My Mastery courses, which focus on

personal development and cover skills such as assertiveness,

presentation skills, personal effectiveness and influencing.

Board effectiveness review

The Board undertook its second internal Board effectiveness

review during the year, which also include a review of each of the

Board Committees. Details of the review are set out on page 105

within the Corporate governance report.

The Board intends to complete an externally facilitated review by

the end of 2024 in compliance with the Code recommendation that

an externally facilitated review should take place every three years.

Terms of reference

The terms of reference describe the roles and responsibilities of

the Nomination Committee and can be found on our website at

https://nanoporetech.com/about-us/investors/corporate-governance.

In light of the planned changes to the Corporate Governance Code,

the Company deferred review of its terms of reference until March

2024 when the new Corporate Governance Code was published.

Following such review, it was concluded that minor changes were

required to align the language with the 2024 Code.

Duncan Tatton-Brown

Chair of the Nomination Committee

18 March 2024

Nomination Committee report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023110

Audit and Risk

Committee report

Adrian Hennah

Audit and Risk Committee Chair

Overview

• The Audit and Risk Committee (“Committee”) comprises three

Independent Non-Executive Directors

• Adrian Hennah is considered by the Board to have recent and

relevant financial and accounting experience. All members

have relevant commercial and operating experience

• Five meetings were held during the year

• The CEO and CFO, members of management, the internal auditors

and the external auditors attend the meetings by invitation

• The Committee members meet for private discussion with the

external auditors and the internal auditors

Committee roles and responsibilities

• Monitoring external financial reporting

• Overseeing relationship with external auditor

• Monitoring effectiveness of internal controls and risk

management systems

• Ensuring effective internal audit and governance arrangements

• Ensuring establishment of fraud prevention and whistleblowing

arrangements

Main committee activities during FY23

• Oversaw and scrutinised the preparation of the financial

statements for FY22 and the interim report for HY23

• Approved the audit plan and fee for FY23

• Discussed key areas of financial judgement and estimates used

by management, including revenue recognition and capitalised

development costs

• Oversaw the implementation of disclosures in accordance with

the TCFD framework and ensured that climate-related

disclosures were appropriately included within the Annual

Report and Accounts

• Reviewed the effectiveness of Deloitte LLP as external auditor

• Approved the internal audit plan and oversaw the progress of

the internal auditor in FY23

• Assisted the Board in its review of the effectiveness of the

Group’s internal control and risk management systems

• Reviewed the Group’s evaluation of principal risks and

uncertainties, including emerging risks

• Reviewed the Group’s whistleblowing procedures

Committee focus areas for FY24

• Oversee and scrutinise the preparation of the financial

statements for FY23 and the interim report for HY24

• Discuss key areas of financial judgement and estimates used

by management

• Overseeing the relationship with the external auditor

• Assist the Board in its review of the effectiveness of the

Group’s internal control and risk management systems

• Review and monitor the principal risks identified by

management and ensure continued appropriate mitigation

• Review the performance of the external auditor

• Assess the internal auditor and monitor the progress of their

internal audit plan

Committee member

Meetings

attended

Percentage of

meetings attended

Adrian Hennah

(Chair of the Committee)

5/5 100%

Dr Sarah Fortune

0/0 N/A

John O’Higgins 5/5 100%

Dr Guy Harmelin 5/5 100%

1 Dr Sarah Fortune was appointed to the Board on 19 December 2023.

No meetings were held in 2023 following this date.

The Committee has monitored the

Group’s embedding of a robust

environement of internal control,

risk management and financial

reporting.”

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 111

Dear Shareholder,

I am pleased to present the Group’s Audit and Risk Committee

report. The report provides a summary of the Committee’s role

andactivities for the financial period ended 31 December 2023 and

sets out the work that the Committee has performed in respect of

this Annual Report.

During FY23, the Committee comprised three Independent

Non-Executive Directors: Adrian Hennah, John O’Higgins

andDrGuy Harmelin. Adrian Hennah fulfils the requirement

foracommittee member to have recent and relevant financial

experience and all members (and therefore the Committee as

awhole) have relevant commercial and operational experience. The

biographies of each member of the Committee are set out

onpages 94 to 98.

The Committee’s Terms of Reference include monitoring the

integrity of the Group’s financial reporting; effectiveness of the

internal control and risk management framework; internal audit;

and the independence and effectiveness of external audit. The

internal audit function is outsourced to Grant Thornton LLP,

whoprovide the Group with specialist expertise in delivering

arisk-based rolling review programme. Grant Thornton LLP

hasattended all Committee meetings held during the year.

The Group’s external auditor, Deloitte LLP, attended all five

Committee meetings held during the year. The CEO, CFO and

other members of management attended by invitation. Both the

external auditor and the internal auditors will continue to regularly

attend future meetings.

The Committee has reviewed the content in the Annual Report

andconsiders that it explains the Group’s strategic objectives

andis fair, balanced and understandable. Whilst this Audit and Risk

Committee report contains some of the matters addressed during

the year, it should be read in conjunction with the external auditor’s

report starting on page 140 and the Oxford Nanopore Technologies

plc financial statements in general. At the 2024 AGM, shareholders

will vote on the Board’s recommendation to reappoint Deloitte LLP

as the Group’s external auditor. During theyear, the Committee

performed a review of the external auditor’s performance and

concluded that the external auditor remained effective.

I would like to thank my fellow Committee members John O’Higgins

and Guy Harmelin, whose focus and contributions have enabled

the Committee to perform its duties effectively.

Adrian Hennah

Chair of the Audit and Risk Committee

18 March 2024

Purpose and responsibilities

The Committee’s role is to assist the Board with the discharge

ofitsresponsibilities in relation to financial reporting, including:

• Monitoring the integrity of the Group’s Annual Report and

financial statements and any other formal announcements

relating to its financial performance and reviewing the significant

financial reporting judgements made in connection with their

preparation

• Overseeing and maintaining an appropriate relationship with

theCompany’s external auditor and reviewing the independence,

objectivity and effectiveness of the audit process

• Monitoring and reviewing the adequacy and effectiveness of the

Company’s internal financial controls and internal control and

risk management systems

• Ensuring that internal audit and governance arrangements are

appropriate and effective

• Ensuring that fraud prevention and whistleblowing arrangements

are established which minimise the potential for fraud and

financial impropriety

As the Committee, we assist the Board in its oversight of the

Group’s financial reporting, internal control and risk management

and in doing so seek to ensure that shareholders’ and other

stakeholders’ interests are protected and the Company’s long-term

strategy is supported.

Terms of reference

The terms of reference for the Committee describe the roles

andresponsibilities of the Committee and can be found on our

website at https://nanoporetech.com/about-us/investors/

corporate-governance. The terms of reference were adopted by

the Company on its initial public offering in October 2021. They are

reviewed on an annual basis and updates made where appropriate

in order to reflect current market practice.

Financial reporting

The primary role of the Committee in relation to financial reporting

is to review and monitor the integrity of the financial statements,

including annual and half-year reports, and any other formal

announcement relating to the Group’s financial performance.

In the preparation of the Group’s 2023 financial statements,

theCommittee assessed the accounting principles and policies

adopted, whether management had made appropriate estimates

and judgements and assessed the appropriateness of the

disclosures in note 4 of the Financial Statements.

In doing so, the Committee discussed management reports and

enquired into judgements made. The Committee reviewed the

reports prepared by the external auditor on the 2023 audit. The

Committee, together with management, identified significant areas

of financial statement risk and judgement as described below.

Significant accounting matters

The Committee received reports from management in relation to

the identification of significant accounting matters, judgements

and key sources of estimation uncertainty, significant accounting

policies and proposed disclosures in the 2023 Annual Report and

Accounts. The Committee is satisfied that the judgements made by

management are reasonable, and that appropriate accounting

policies have been adopted and appropriate disclosures have been

made in theaccounts.

Audit and Risk Committee Report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023112

The Committee’s review of the full-year financial statements

focused on the following:

• the materiality of the areas; and

• the nature of matter to the extent that they require significant

judgement or estimation.

All such matters of focus were discussed and addressed with

ourexternal auditor throughout the external audit process.

Therewere no significant differences between management

andthe external auditor.

The key matters of focus are set out below:

Internally generated intangible assets - Research & Development

Capitalisation of Research & Development costs is a particular

area of focus due to:

• critical judgements being required in determining that

development spend meets the criteria for capitalisation of such

costs as laid out in IAS 38 “Intangible Assets”

• management does not have a formal timesheet process for

monitoring time spent by employees on projects in their

development stage. Instead management consults with the

relevant project leaders on a regular basis to understand and

estimate the time spent on projects in their development stage.

How the issue was addressed

The Committee reviewed the assumptions and disclosure around

capitalisation of development costs made by management.

Particular focus was placed upon:

• capitalisation policies and the procedures and controls in place

• the application of IAS 38

Revenue recognition

Revenue recognition for the Group’s revenue is a particular area

of focus due to:

• LSRT revenue, and revenue growth, being key

performanceindicators

• revenue from significant contracts within the period

• application of IFRS15 for the sale of bundled goods and

services, specifically the performance obligations and the

allocation of the transaction price on these significant contracts

• where sales are made around the year end, ensuring that

revenue is recognised in the correct year

How the issue was addressed

The Committee reviewed the assumptions and disclosure around

revenue recognition made by management.

Particular focus was placed upon:

• terms of significant contracts

• application of IFRS15 to contract bundles which include the

lease of PromethION or GridION sequencing devices

• revenue cut-off

IFRS 2: Share-based payment valuation and employer social security taxes

The Group issued a number of share options to the Executive

Directors of the Group, in particular in preparation for the IPO.

These included:

• conditional retention awards representing up to 6.5% of the

overall share capital, with expected vesting over a period of

between two and five years and subject to achievement of a

number of performance conditions linked to the Group’s

revenue and share price

• limited anti-takeover (LAT) non-voting shares issued to the

Chief Executive Officer, Chief Strategy Officer, and Chief

Technology, Innovation and Products Officer (see page 136)

The retention awards require the use of valuation models and

certain assumptions in determining their fair value at grant date

and the recognition of charges in the income statement under

IFRS2 Share-based payments.

The employer’s social security taxes on share options are accrued

over the vesting period of the awards. The accrual is based on the

market price at the period end.

There is a risk that the expense recognised in the year may be

materially misstated due to unreasonable assumptions or error.

How the issue was addressed

The Committee reviewed the assumptions made by management

(which were based on advice from PWC LLP) on the conditional

retention equity awards (Refer to Directors’ remuneration report

on page 116).

Inventory provisioning

The Group holds significant inventory balances across a number

of locations for the purposes of fulfilling sales orders and

contractual obligations. Additionally, certain components of

inventory are held for use within research and development.

Inventory is held at the lower of cost and net realisable value, in

line with IAS2. Consideration is made of the technical properties

of the inventory and its effect on net realisable value.

Management judgement is primarily used to assess future

revenues of product lines and where there is a doubt over its

future net realisable value a provision is made.

How the issue was addressed

The Committee discussed with management the level of

provisioning and reviewed the assumptions made by management

and considered whether the inventory provision was at an

appropriate level.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 113

• procedures by which the Group’s consolidated financial

statements are prepared, which are monitored and maintained

through the use of internal control frameworks addressing key

financial reporting risks arising from changes in the business or

accounting standards

• robust IT systems, with significant investment in cyber security

and focus on IT security eg penetration testing

• an experienced and commercially focused legal function that

supports the Group’s operational and technical functions

• established policies and procedures setting out expected

standards of integrity and ethical standards which reinforce the

need for all employees to adhere to all legal and regulatory

requirements

• an experienced, qualified and adequately resourced finance

function which regularly assesses the possible financial impact

of the risks facing the Group

• internal audit fucntion (outsourced to Grant Thornton) and

• an ongoing risk management programme.

Risk management framework

Oxford Nanopore has a robust risk management process that

follows a sequence of risk identification, assessment of probability

and impact, and assigns an owner to manage mitigation activities.

A register is kept of all identified corporate risks and is monitored

by senior management and regulary discussed at the Operating

Committee and reported to the Committee.

The risk register and the methodology applied is the subject of

continuous review by senior management, which includes the

ongoing process of categorising and prioritising risks already

identified in addition to reflecting new and developing areas which

might impact business strategy. This risk management framework

includes risks identified at the time it was implemented as part of

the IPO process in 2021, updated to the present and also seeks to

capture emerging risks that might impact the business in the

coming years.

The Committee will continue to review the risk register throughout

the year and assess the actions being taken by senior management

to monitor and mitigate the risks. Those risks which are considered

to be the principal risks of the Group are presented on page 72.

Anti-bribery and corruption

The Company has a zero-tolerance approach to bribery and

corruption at all levels within the organisation globally and expects

high standards of integrity from our people, agents, consultants,

interns and subcontractors and any other person associated with

the Company in business dealings and relationships worldwide.

Whilst the Board is ultimately accountable for the Company’s

anti-bribery and corruption efforts, responsibility for reviewing the

Company’s systems and controls for preventing these have been

delegated to the Committee.

The Company has in place a clear Anti-Bribery and Corruption

Policy, which is available for our people to access on our internal

policy hub. The Company requires everyone at Oxford Nanopore

toattest to this policy on joining the business. The Company also

provides mandatory online training to ensure our people understand

their responsibilities in preventing bribery and corruption.

Fair, balanced and understandable

A key governance requirement is for the Board to ensure that the

Annual Report and Financial Statements, taken as a whole, are fair,

balanced and understandable and provides the information

necessary for shareholders to assess the Group’s position,

performance, business model, and strategy.

To assist it in making this determination, the Board has requested

the advice of the Committee.

To assist the Committee in making its assessment, it received

drafts of the Annual Report at key points in the production process

in order to provide its feedback and also reviewed papers from

leadership highlighting the supporting evidence for the report’s key

messages. Any disclosures that the Committee believed required

additional information or clarification were highlighted and the

necessary edits made during the subsequent drafting phase. The

Committee also reviewed narrative reporting in the front half of the

Annual Report to ensure its consistency with the financial reporting

in the back half, and that the overall layout and linkage between

each section of the report were clear and understandable.

Having completed its assessment, the Committee concluded

thatthe disclosures throughout the Annual Report and Financial

Statements were appropriate and that the 2023 Annual Report

andFinancial Statements was fair, balanced and understandable,

allowing the Committee to provide positive assurance to the Board

to assist it in making the statement required by the Code.

Internal controls and risk management environment

The Board is ultimately responsible for the operation of an

effectivesystem of internal control and risk management

appropriate to the business.

Oxford Nanopore has aligned with provisions of the Code in

theperiod to the date on which these financial statements

wereapproved.

Day-to-day operating and financial responsibility rests with senior

management and performance is closely monitored on amonthly basis.

Set out below is further comment on the areas of internal control

and risk management.

Internal control environment

The following key elements comprise the internal control

environment which has been designed to identify, evaluate and

manage, rather than eliminate, the risks faced by the Group in

seeking to achieve its business objectives and ensure accurate

andtimely reporting of financial data for the Group:

• an appropriate organisational structure with clear lines

ofresponsibility

• systems of control procedures and delegated authorities which

operate within defined guidelines, and approval limits for capital

and operating expenditure and other key business transactions

and decisions

• a robust financial control, budgeting and rolling forecast system,

which includes regular monitoring, variance analysis, key

performance indicator reviews and risk and opportunity

assessments at Board level

Audit and Risk Committee Report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023114

Whistleblowing

Whilst the Board is ultimately responsible, it has delegated

oversight of the Group’s whistleblowing policies and procedures

tothe Committee. We expect all our people to act professionally,

honestly and ethically in their dealings with people, whether they

are within the organisation, customers, suppliers or any other

external partner they may have contact with. The behaviours and

standards expected of our people are set out in our policy, to which

everyone who joins Oxford Nanopore must sign up.

The Company also provides mandatory online training to ensure

our people understand the whistleblowing policy. A confidential

incident reporting facility is available, provided by an independent

specialist firm Safeline, for circumstances where an individual

wishes to report an issue anonymously. Monitoring the

effectiveness and appropriateness of the whistleblowing policy falls

within the remit of the Committee.

During the year one concern was reported via the Company’s internal

whistleblowing procedures around the security of one of the Company’s

IT systems. Following an internal investigation and the engagement

of an external IT specialist, it was concluded that there was no

evidence of unauthorised access to the Company’s system.

Review of effectiveness

The Committee, on behalf of the Board, has reviewed the effectiveness

of the internal control systems and risk management processes

during FY23. This work has been supported by our internal auditor.

The effectiveness review included regular meetings with the

Internal Auditor, and review and approval of aplan of work having

considered the Group’s principal, strategic andoperational risks.

The Committee will continue to review the ongoing development

ofthe internal control systems and risk management processes.

Going concern and long-term viability

The Committee reviewed the Group’s going concern and long-term

viability disclosures in this Annual Report, together with the reports

prepared by the leadership team in support of each statement and

advised the Board on their appropriateness. As part of its review,

the Committee considered amongst other things a number of

scenarios modelled by the business (including a “severe but

plausible” downside scenario) and reverse stress tests carried

outto assess the strength of the Group’s finances.

The going concern and long-term viability statements were reviewed

by the external auditor, which discussed its findings and the conclusions

drawn by leadership in producing each statement with the Committee.

More detailed information about the Group’s approach to its going

concern and long-term viability assessments can be found on page

86 of the Strategic Report.

Independence and performance of the auditor

The Committee oversees and maintains the relationship with the

external Auditor on behalf of the Board. Deloitte was appointed

asthe auditor of Oxford Nanopore in the year ended 31 December

2010 and became the auditor of the Company on its admission to

listing on the London Stock Exchange on 5 October 2021. The

current audit partner is Sukhbinder Kooner who was appointed

atthe time of the IPO.

The audit was last tendered in 2010 and Deloitte has been in place

as Oxford Nanopore’s auditor for more than 12 years. Auditors are

required to report regularly on and confirm their independence in

their role. Whilst we do not consider it necessary to have a policy

for the rotation of the external audit firm given the short period of

time since Oxford Nanopore’s IPO, we plan to keep this possibility

under review in the coming years and will continue to comply with

the audit tender rules applying to Oxford Nanopore.

The Committee has primary responsibility for conducting any

tender process and making recommendations on appointment,

reappointment and removal of auditors, and approving the terms

ofengagement and the remuneration of the external auditor.

TheCommittee keeps under review the requirements on audit

tendering and rotation as set out in Regulation EU/537/2014

(asretained in UK law) and from the Competition and Markets

Authority. At the latest, Oxford Nanopore will be required to tender

the audit for the year ending 31 December 2030 and to change its

audit firm for the year ending 31 December 2040.

For the financial year ending 31 December 2024, the Committee

has recommended to the Board that Deloitte be reappointed as

external auditor and the Company will be seeking shareholder

approval for the reappointment of Deloitte at its AGM to be held

inJune.

The Committee has developed and recommended to the Board a

formal policy on the provision of non-audit services by the auditor,

including prior approval of non-audit services by the Committee

and specifying the types of non-audit service to be pre-approved,

and assessment of whether non-audit services have a direct or

material effect on the audited financial statements.

During 2023, Deloitte received total fees of £0.7 million (2022:

£0.7million), comprising £0.6 million of audit fees (2022: £0.6 million)

and £0.1 million (2022: £0.1 million) for assurance related non-audit

services. The fees for non-audit services during the year related

towork undertaken on the interim financial review.

The fees paid for these other non-audit services during the year

represented 14% of the fees paid for the statutory audit and

audit-related assurance services together. Further details of these

amounts are included in note 9 of the financial statements.

On behalf of the Audit and Risk Committee

Adrian Hennah

Chair of the Audit and Risk Committee

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 115

Directors’

remuneration report

Wendy Becker

Remuneration Committee Chair

Committee overview

• The Remuneration Committee (“Committee”) comprises

fiveindependent Non-Executive Directors

• All members have relevant commercial and operating

experience, as well as experience of serving on the boards

ofother businesses

• Three Committee meetings were held in 2023

• The Chair and the Chief Executive Officer may, by invitation,

attend Committee meetings except when their own

remuneration is discussed. The Group HR Director and the

Group Head of Reward are also invited by the Committee to

provide their views and advice. The Chief Financial Officer may

also attend to provide performance context to the Committee

during its discussions about target setting. Information on

meetings held and director attendance is disclosed in the

corporate governance report

• No individual takes part in any decision related to his or her

own remuneration

Committee roles and responsibilities

• Recommendations to the Board on the remuneration policy as

applied to the Chair of the Board, Executive Directors, and the

Executive Committee

• Setting, reviewing, and approving individual remuneration

arrangements for the Chair of the Board, Executive Directors

and Executive Committee members including terms and

conditions of employment

• Determining arrangements in relation to termination of

employment of the Executive Directors and other designated

senior executives

• Ensuring that remuneration outcomes are appropriate in the

context of underlying business performance and that

remuneration practices are implemented in accordance with

the approved remuneration policy

• Reviewing the wider workforce remuneration policies and practices

Full terms of reference for the Committee are available on the

Company’s website at https://nanoporetech.com/about-us/

investors/corporate-governance

Main committee activities during FY23

Key actions and areas of review by the Committee during the

yearincluded:

• Consideration of feedback from investors and proxy agencies

following publication of the 2022 Annual Remuneration Report

• Initial consideration of any revisions to the Directors’

remuneration Policy ahead of the 2025 renewal

• Review of market and governance updates and impact on

theCompany

• Approval of vesting of a proportion of legacy share awards

• Approval of Long-term Incentive Plan awards granted April

2023 including ascale back to number of awards granted

• Review and approval of the design of the Annual Bonus Plan

(ABP) and performance measures for 2024

• Review and approval of performance measures for awards to be

granted in 2024 under the Long-term Incentive Plan (LTIP)

• Review of budget and approach for all-employee annual pay

review and consideration of remuneration issues relating to the

wider workforce

The Company’s remuneration

arrangements have been designed

toencourage long-term, sustainable

growthand to provide market

competitive overall remuneration for the

achievement ofstretching targets

aligned to the businessstrategy.”

Oxford Nanopore Technologies Annual Report & Accounts 2023116

Committee focus areas for 2024

The Committee is planning to undertake a number of key

activities during the coming year on a range of matters including:

• Determination of the 2023 ABP outcomes and approval of the

2024 LTIP grant

• Review and approval of the design of the ABP and performance

measures for 2025

• Review ongoing implementation of the Directors’ Remuneration

Policy to ensure it operates appropriately

• Further review of the Directors’ Remuneration Policy including

required consultation on any planned changes with

stakeholders, ahead of the 2025 renewal

• Monitoring of the external remuneration environment, including

developments in best practice and all-employee remuneration

Committee member

Meetings

attended

Percentage of

meetings attended

Wendy Becker

(Chair of the Committee)

3/3 100%

Dr Guy Harmelin 3/3 100%

John O’Higgins 3/3 100%

Sarah Gordon Wild 2/3 66%

Kate Priestman 2/3 66%

Advice to the Committee

Since listing on the London Stock Exchange, the Committee

hasappointed FIT Remuneration Consultants LLP (FIT) as their

independent advisor following a competitive tender process. FIT

is a member of the Remuneration Consultants’ Group and, as

such, voluntarily complies with its Code of Conduct which sets

out guidelines to ensure that its advice is independent and free of

undue influence. FIT has no other connection with the Company.

The Committee is therefore satisfied that the advice provided by

FIT is independent and objective. The fees paid to FIT in relation

advice provided to the Committee were £54,268.53 (inc. VAT)

and were determined on a time and expenses basis.

Annual statement by the

Chair of the Remuneration

Committee

Dear Shareholder,

As Chair of the Remuneration Committee, I am pleased to present

the Directors’ remuneration report for the year ended 31 December

2023. The Report comprises three sections:

• My statement, which outlines the activities and the focus of the

Committee throughout the year.

• The Annual Report on Remuneration, which provides details of

the remuneration earned by the Directors in 2023 and how the

Policy will be operated in 2024.

• A summary of the Policy, which was approved at the 2023

Annual General Meeting on 12 June 2023.

At the 2023 AGM, shareholders supported the vote onthe

remuneration report, with 99.56% of shareholders voting infavour.

2023 context

The 2023 financial results have been achieved against a

challenging macoeconomic backdrop, reflecting a continued

demand for the technology, and the strength of the teams. In

summary, the Group delivered LSRT revenue growth of 15.6%,

and underlying growth of 39%, through an expansion of our global

customer base. The gross margin did however reduce by 300bps

during the period, primarily as a result of the EGP contract, the

impact of the write off of excess inventory in COVID sequencing

kits, and upgrading the compute on large PromethION devices to

enable real time basecalling.

During 2023, the Company has made key strategic partnerships

across its global footprint, demonstrating the high regard for the

technology, notably:

• The £70m investment from bioMérieux has strengthened the

relationship between the two Companies and further aligns

Oxford Nanopore’s focus on clinical markets. This investment

will support development for products to serve IVD markets. In

addition, the two companies have established an IVD Advisory

Board to advance nanopore technology into routine clinical use.

• The multi-year joint development collaboration with the

world-renowned Mayo Clinic will develop new clinical tests for

diseases seeking to improve patient care. The focus of the

development is wide-reaching, from translational research into

Human Genetics to detection of predisposition to cancer.

• The utilisation of Oxford Nanopore Technology by The UK

National Institute for Health and Care Research (NIHR), the

National Australian rare disease programme, and the National

German rare disease study.

Common to all of these, is the desire to use Oxford Nanopore’s

technology to drive advances in medical research, clinical practice

and global public health. Unsurprisingly, the enthusiasm regarding

these partnerships throughout the workforce is immense and

incentivised further the desire to innovate to further push the

boundaries of science.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 117

Directors’ remuneration report continued

We have continued to innovate, delivering new technologies and

expanding our reach across the areas of clinical, applied, and

industrial sciences. In 2023, the R&D team successfully brought to

market the Q20+ chemistry and with regards to PromethION the

P2 solo and P2 were fully launched and 90% of active P24/48

devices were made capable of Q20+ chemistry. These innovation

successes contributed further to the realisation of our vision to

make DNA sequencing available to anyone, anywhere.

Recognising that, our employees are key to driving the future

success of the Company, a number of notable interventions were

made during 2023 to support the engagement, attraction and

retention of employees including the launching of the employee

engagement forum, VIA and our global recognition programme

“NanoStars!”.

We also continued to expand the global sales and marketing teams

in 2023, making some strong hires in all regions to help achieve our

commercial growth ambitions. In addition to ensure that our

commercial teams are motivated and incentivised a Commercial

Bonus Plan has been established for revenue generating

employees allowing them to be accountable for their reward

outcomes through high commercial performance.

Performance and reward for FY23

The Annual Bonus plan measures and targets were set at the start

of FY23, no adjustments to the targets were made during the year.

These comprise:

Financial measures:

• Life Sciences Research Tools (LSRT) revenue growth (45%

weighting);

• Gross profit margin (25% weighting); and

• Strategic Scorecard measures (20% weighting) to underpin

innovation and customer experience as being core to the

Company’s strategic advantage. These measures assessed the

level of completion during 2023 of the following:

• Commercial execution of Q20+ chemistry

• Full launch of new PromethION technology products to market

• Improvement to customer experience with Customer Centricity

being the core focus for our customer and technical service

teams

• ESG measures

With regards to the performance against each of the financial

measures, noting the challenging macroeconomic backdrop:

• the Company delivered LSRT revenue of £169.7m (an increase of

15.6% on 2022), driven by expansion of our global user base

and utilisation of our technology, partially offset by a £18m

headwind from COVID sequencing. Whilst not achieving an

on-target bonus multiple, this revenue outcome equated to a

bonus multiple of 71.4% of the target (35.7% of max), allocated

to this measure.

• LSRT Gross Profit margin for FY23 was 53.3%. This decline

reflected the amendment to the Company’s agreement with G42,

the one-off impact of investment in upgrading the computer

towers on our large PromethION devices, and the write-off of

excess COVID sequencing kits. The Committee noted the

decrease from 2022 and hence the bonus element for this

measure was determined to be zero.

Turning to the Strategic Scorecard measures, 2023 saw the

successful execution of the Q20+ Chemistry, further innovation of

PromethION, and the foundations of improved customer centricity

being set. The first two strategic measures were delivered to the

targets; however in the case of the customer centricity measure,

whilst completing the groundwork to deliver improvements for

customers going into 2024, the threshold achievement was not met

in 2023. The bonus outcome for these measures equated to a

bonus multiple of 66.67% (c. 33.33% of max) of the target level

allocated to this measure.

2023 saw the introduction of our first ESG measure to our variable

pay arrangements. This measure comprised of three separate

metrics focused on driving our societal impact in human health and

environmental sciences, growing our research communities to push

the boundaries of science further and furthering our culture of

inclusion so that our employees have the opportunity to provide

their ideas and perspectives to support our innovation and have

access to learning opportunities to ensure the talent pipelines

required to support our growth ambitions. The Committee

assessed each of these measures as meeting their targets. The

bonus outcome for these measures equated to a bonus multiple of

100% (50% of the max) of the target level allocated to this

measure.

Further detail on the performance against these measures can be

found on page 123.

The resulting bonus equated to 55.46% of the target bonus

opportunity (27.73% of the maximum bonus opportunity) for the

four Executive Directors. The Committee believes that the

formulaic outcomes of the bonus calculations are appropriate in

light of the Company and individual performance delivered in the

year and so has not applied discretion. In line with the Policy, 33%

of the bonus will be deferred into shares, 50% of which must be

held for one year and 50% for two years.

No long-term incentives were due to vest in relation to the

performance period ended 31 December 2023, the first vesting of

post-IPO share awards will be April 2025.

In addition, while the normal policy is to grant LTIP awards each

year at a level of 250% of salary for the CEO and 200% for other

Executive Directors, in light of the share price at the time of the

grant in April 2023, these levels were reduced by 30%.

New CFO appointment

Nick Keher was appointed to be Chief Financial Officer from 22

January 2024, and Tim Cowper moved to the new role of Chief

Operating Officer. Nick is a sector-experienced CFO with a broad

range of experience that will enhance the ONT leadership team. Tim

has performed the majority of responsibilities typically assigned to a

COO for the past five years alongside his CFO duties, and his sole

focus on operations going forward will support the scaling of the

business. Both arrangements have been set taken into

consideration the market data commensurate to these roles as well

as the competence and experience offered. Details of their

respective remuneration for 2024 are set out on page 120 but

importantly include setting the new CFO’s salary at a lower level

than that of his predecessor (subject to ongoing review as his

experience grows).

Oxford Nanopore Technologies Annual Report & Accounts 2023118

Legacy pre-IPO awards (performance based) vesting

As noted in my letter last year, the grant of a one-off legacy

conditional performance-related equity award was made to the

Executive Directors under the Oxford Nanopore Technologies

Limited Long-Term Incentive Plan 2021 (“Founder LTIP”) to retain

and incentivise them through the IPO process and beyond. This

one-off, exceptional award was made with the approval of the

Company’s shareholders and at a time when the Company was

aprivate company and does not form part of the “go forward”

remuneration package offered to the Executive Directors as a

listed company and there is no provision in the policy for equivalent

awards in the future. This permits vesting linked to pre-set targets

over the period to the end of 2026.

No additional vesting occurred in 2023.

Implementation of the policy for 2024

The importance of the alignment of the remuneration structure

throughout the workforce and the tone of communication with

regards to the Company’s strategic focus are key considerations of

the Committee when making decisions on executive base pay. In

order to demonstrate the importance of moving the Company to

profitability and the creation of value for shareholders, the

Executive Directors asked the Remuneration Committee not to

consider them for a salary increase for 2024, with the wider

employee population being allocated a budget of 3.5% for base

pay increases, a reduction on the 5% provided for the 2023

review. Both decisions support the focus on good cash stewardship

through 2024. The detail of the pay arrangements for Nick Keher

as CFO and Tim Cowper as COO are outlined on page 120. Both

arrangements have been set taken into consideration the market

data commensurate to these roles as well as the competence and

experience offered.

Bonus arrangements will continue to operate in line with the Policy,

with a maximum opportunity of 200% of salary for the CEO and

160% for the other Executive Directors, with 33% of any bonus

earned subject to deferral into awards over shares in the Company.

The FY24 bonus will be assessed against a similar scorecard to

2023 with a combination of financial and non-financial objectives

which are set out on page 123.

As referred to above, the policy is for LTIP awards to be granted

over shares worth 250% ofsalary in the case of the CEO and

200% of salary in respect ofthe other Executive Directors. To

recognise the material decline in the Company’s share price since

the IPO and lack of recovery, the Committee has determined that a

scale back of 30% of the number of share awards granted to the

Executive Directors will again be applied (with the exception of Nick

Keher, who was not employed during financial year 2023).

These awards are subject to stretching TSR performance

conditions with 25% vesting at median, rising to full vesting at

upper quartile. TSR is measured, as to 50%, relative to abespoke

group of 16 international life sciences companies and, as to the

other 50%, relative to the constituents of the FTSE350 (excluding

investment trusts).

Board changes

A number of changes to the Board were announced in 2023. We

were pleased to welcome three independent Non-Executive

Directors to the Board during the year, Kate Priestman joined the

Board on 13 July 2023, and Dr Heather Preston and Dr Sarah

Fortune on 19 December 2023. Both Kate and Heather will serve

as members of the Remuneration Committee. Sarah Gordon-Wild

also retired from the Board on 19 December 2023.

I have also informed the Board that I will not stand for re-election at

the 2024 AGM but will remain a committed supporter of the Company.

Conclusions

FY23 has been a year in which, despite being faced with continued

challenging macroeconomic factors, the Company has made

strong strategic alliances and continued to deliver further

innovative technology to the market. The Committee therefore

regards the reward outcomes for the Executive Directors to be

appropriate without the exercise of any discretion.

We are pleased with the support we have received from the

shareholders with over 99% approval from the votes cast at the

last AGM for the annual remuneration report for 2022.

As a Committee, we continue to be committed to supporting

theCompany’s ambition to be a high-performing organisation by

incentivising and rewarding performance, and therefore driving

thedelivery of the corporate strategy and investor goals.

We look forward to welcoming you and receiving your support

atthe AGM.

Wendy Becker

Chair of the Remuneration Committee

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 119

Annual remuneration report

This section of the Directors’ remuneration report provides details of:

• How we propose to implement our policy for 2024; and

• How Directors were paid for the year ending 31 December 2023.

Implementation of policy for 2024

Component of Pay Implementation for FY23

Base salaries CEO: £832,000 CFO: £425,000 COO: £520,000 CTI&PO £660,000 CSO: $852,800

• There will be no change to pay as part of the Company’s Annual Pay review in April 24.

• The CTI&PO ceased to be an Executive Director on 29 February 2024. There will be no change to the

compensation for this role.

• The COO and CSO will cease to be Executive Directors following the AGM in 2024. There will be no change to their

compensation.

• The CSO receives a £12,000 annual fee in respect of the undertaking of Oxford Nanopore Technologies plc board duties.

Benefits and

pension

For CEO, CFO, COO and CTI&PO a pension contribution or allowance of 6% of base salary.

For CSO, a Company-matching contribution of 6% to the US Section 401(k) defined contribution plan.

No changes to benefit provision.

Annual bonus CEO: Maximum 200% of base salary

CFO, COO, CTI&PO and CSO: Maximum 160% of base salary (target bonus is 50% of maximum).

Subject to the following performance conditions:

• Group revenue growth – 45% weighting.

• Group gross profit margin – 25% weighting.

• Non-financial – 20% weighting, which will consist of a range of measures linked to key strategic projects in FY23.

• ESG – 10% weighting, which will consist of a range of measures linked to the Company’s approach to ESG.

Consistent with market practice, the target ranges are currently commercially sensitive and will be reported next year.

LTIP CEO: Maximum award of 250% of base salary.

CFO, COO, CTI&PO and CSO: Maximum award of 200% of base salary.

To recognise the maintained decline in the Company’s share price since the first LTIP in April 2022, the Committee has

determined that a scale back of 30% of the number of share awards granted be applied to the awards granted in April

2024.

Subject to the following performance conditions:

Relative Total Shareholder Return (TSR) 100% weighting as follows:

• 50% of the performance measure depending on the Company’s TSR position against a group of comparators

consisting of 16 global life sciences and other companies; and

• 50% depending on the Company’s TSR position against the constituents of the FTSE350, excluding investment trusts.

Details of the peer group are as follows:

Adaptive Biotechnologies

Biotechne

Cellink

Exact Sciences

Guardant

Illumina

Nanostring Technologies

Olink

Seer

Singular Genomics

Pacific Biosciences

Quanterix

Qiagen

Twist Biosciences

908devices

10X Genomics

NED fees Chair fee: £275,000

Non-Executive Director base fee: £72,500

(All of which will remain unchanged for 2024)

Audit and Remuneration Committee Chairs: £20,000

Senior Independent Director Fee: £20,000

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023120

Projected total remuneration scenarios

The graphs below illustrate scenarios for the projected total remuneration of each of the Executive Directors at four different levels of

performance: minimum, target, maximum, and maximum including assumed share price appreciation of 50% on the LTIP. The impact of

potential share price movements and dividends is excluded from the other three scenarios. These charts reflect projected remuneration

for the financial year ending 31 December 2024.

5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

‘000s

Illustrations of application of Policy

Minimum Target Maximum Maximum

with growth

100% 40%

19%

16%

37%

36%

29%

23%

45% 37%

18%

£883

£2,235

£4,627

£5,667

100% 45%

23%

19%

34%

28%

21%

43%

35%

18%

£552

£1,228

£2,424

£2,944

Minimum Target Maximum Maximum

with growth

Gordon Sanghera Tim Cowper

Share Price Growth

LTIP

Annual Bonus

Total Fixed Remuneration

5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

‘000s

Illustrations of application of Policy

Minimum Target Maximum Maximum

with growth

Minimum Target Maximum Maximum

with growth

Clive Brown Spike Willcocks

Share Price Growth

LTIP

Annual Bonus

Total Fixed Remuneration

100% 45%

23%

19%

34%

28%

21%

43%

35%

18%

£700

£1,558

£3,076

£3,736

100% 46%

23%

19%

34%

28%

21%

43%

35%

18%

$927

$2,035

$3,997

$4,849

‘000s

Illustrations of application of Policy

Minimum Target Maximum Maximum

with growth

Nick Keher

Share Price Growth

LTIP

Annual Bonus

Total Fixed Remuneration

100%

43%

21%

17%

32%

31%

25%

48%

39%

19%

£451

£1,051

£2,171

£2,691

3,500

3,000

2,500

2,000

1,500

1,000

500

Basis of calculations and assumptions

1 Salary represents annual base salary for 2024. Benefits such as private medical insurance are included based on the full calendar year.

2 Pension represents the value of the annual pension allowance for the Executive Directors as 6% of base salary.

3 Minimum performance comprises salary, benefits and pension only with no bonus awarded and no LTIP awards vesting.

4 Target performance comprises annual bonus and LTIP pay-outs at “target” level (50% of maximum for the bonus and 25% for the LTIP - with no share price appreciation).

5 Maximum performance comprises annual bonus and LTIP payouts at maximum level (100% of maximum with no share price appreciation).

6 Maximum with share price growth comprises 5.) above plus an assumed increase of 50% in the value of the LTIP award to take account of potential share price appreciation.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 121

Remuneration Outcomes for 2023

Single figure table for Executive Directors (audited)

The following tables set out the single total figures of remuneration for Executive and Non-Executive Directors for the period from

1January 2023 to 31 December 2023 with comparative information for the period 1 January 2022 to 31 December 2022.

Gordon Sanghera Tim Cowper Clive Brown Spike Willcocks

FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22

Salary and fees

824,000 800,000

515,000

500,000

645,000

600,000

677, 6 80

668,260

Benefits

747 759

2,547

2,559

2,547

2,559

16,566

18,137

Pension

49,440 48,000

30,900

30,000

38,700

36,000

15,927

14,645

Total fixed remuneration

874,187 848,759

548,447

532,559

686,247

638,559

710,173

701,042

Annual Bonus

461,427 724,000

230,714

362,000

292,829

434,400

304,352

475,134

Legacy LTI P

- 27,624,274

6,278,247

25,112,990

22,601,705

Total variable remuneration

461,427 28,348,274

230,714

6,640,247

292,829

25,547,390

304,352

23,076,839

Other One-off payment

15,384 15,384

425

11,538

12,620

Total other pay

15,384 15,384

425

11,538

12,620

Total remuneration

1,350,998 29,212,417

779,161

7,173 , 231

990,614

26 ,197,4 87

1,014,521

23,790,501

Total remuneration excluding legacy awards

1,350,998 1,588,143

779,161

894,984

990,614

1,084,497

1,014,521

1,188,796

Wendy

Becker

Dr Guy

Harmelin

Adrian

Hennah

Dr Sarah

Fortune

John

O’Higgins

FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22

Salary and fees 111,884 108,888 71,884 70,000 91,884 90,000 2,582 – 71,884 70,000

Benefits – – 2,088 – – – – – – –

Pension – – – – – – – – – –

Total remuneration 111,884 108,888 73,972 70,000 91,884 90,000 2,582 – 71,884 70,000

Dr Heather

Preston

Kate

Priestman

Sarah

Gordon Wild

Duncan

Tatton-Brown

FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22

Salary and fees 2,582 – 34,164 – 69,500 70,000 275,000 115,273

Benefits – – 1,149 – – – 539 –

Pension – – - – – – – –

Total remuneration 2,582 – 35,313 – 69,500 70,000 275,539 115,273

1 Base salaries of the Executive Directors have been rounded to the nearest £10.

2 Remuneration for Spike Willcocks has been converted to Pounds Sterling from US Dollars using an exchange rate of 1.2432 which is the average rate for FY23. Base salary and

fees include a £12,000 annual fee in respect of plc board duties. Spike Willcocks is paid in US Dollars.

3 Benefits comprise private medical insurance for all Executive Directors. In addition, Tim Cowper and Clive Brown participate in the UK SIP, and the benefits number includes

matching shares with a value of £1,800. For Non-Executive Directors, benefits comprise travel and subsistence related expenditure.

4 All UK-based Executive Directors receive cash in lieu of pension contributions. The pensions value for Spike Willcocks is the matching employer contribution to the US 401(k) plan.

5 The Annual Bonus plan is the bonus payable for performance year 2023. One third of the cash bonus amount will be deferred into awards over Oxford Nanopore shares under the

Deferred Bonus Plan (DBP) in line with the Policy. The bonus payable to Spike Willcocks has been converted to Pounds Sterling from US Dollars using an exchange rate of 1.2432

which is the average rate for FY23.

6 The one-off payment received by Gordon Sanghera and Clive Brown represents a payment in lieu of holiday that could not be taken.

7 Fees received by Kate Priestman are for the period commencing on the date of appointment to the Board of Directors 13 July 2023 to 31 December 2023.

8 Fees received by Sarah Gordon Wild are for the period 1 January 2023 to 19 December 2023, when she retired from the Board of Directors.

9 Fees received by Heather Preston and Sarah Fortune are for the period commencing on the date of appointment to the Board of Directors 19 December 2023 to 31 December 2023.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023122

Notes to the single figure table for Executive Directors (audited)

Annual Bonus Plan (ABP) (audited)

The maximum ABP opportunity for 2023 was 200% of salary for the CEO and 160% for the other three Executive Directors (unchanged

from FY21 for the period from IPO). The ABP performance measures were based on the achievement of Group financial targets and a scorecard of

quantifiable strategic objectives. Performance targets and actual outturn as a percentage of the target bonus are summarised below.

Performance measures Weighting Threshold Target Maximum

Actual 2023

Achievement

Bonus

outcome

(% of max.

bonus)

Financial measures

Group revenue growth

Group gross

profit margin

45%

25%

£162m

56.3%

£180m

60%

£198m

62.5%

£169.7m

53.3%

16.07%

Strategic Scorecard

measures 20%

Commercial Execution

of Q20+ Chemistry

Responsible for flow cell

and kit 40% of revenue

(excluding EGP and Q or

OND applications)

Responsible for flow cell

andkit 60% of revenue

(excluding EGP and Q or

OND applications)

Responsible for flow cell

and kit 80% of revenue

(excluding EGP and Q or

OND applications)

6.667% 3.33%

PromethION • P2 solo fully launched

• P2 in Early Access

(20 sites)

• P24/P48: Active devices

60% capable of Q20+

chemistry (Excl EGP)

• P2 solo fully launched

• P2 in Early Access

(all customer sites)

• P24/P48: Active devices

75% capable of Q20+

chemistry (Excl EGP)

• P2 solo fully launched

• P2 fully launched

• P24/P48: Active devices

90% capable of Q20+

chemistry (Excl EGP)

6.667% 3.33%

Customer Centricity 25% reduction in:

• Time to customer case

closed in CS and TS

(e.g. from 5.25 days

inCS to 3.9 days)

• Product complaints

(e.g. from 15% of flowcells

run to 11.25% – excludes

flowcell warranty

replacements)

45% reduction in:

• Time to customer case

closed in CS and TS

(e.g. from 5.25 days

inCSto 2.8 days)

• Product complaints

(e.g. from 15% of flowcells

run to 8.25%– excludes

flow cell warranty

replacements)

65% reduction in:

• Time to customer case

closed in CS and TS

(e.g. from 5.25 days

inCS to 1.8 days)

• Product complaints

(e.g. from 15% of flowcells

run to 5.25%– excludes

flowcell warranty

replacements)

0% 0%

ESG 10% 10%

Increasing our social

impact through

broadening usage of

our technology

Increase year on year of cumulative number of publications in circulation and

categorisation of publications to demonstrate alignment to our priority areas

i.e. human health (cancer, infectious disease) and developing-world impact

Growing our

engagement with the

research and

nanopore communities

further

Date to demonstrate Year-on-Year increases to online delegates and content views

at our bi-annual community meetings

Furthering our culture

of inclusion through:

• Successfully

embedding our

Employee

Engagement

Framework “Values

in Action” (ViA)

• Providing access to

learning opportunities

for all

• A qualitative assessment of the impact of ViA through presentation of the initiatives

pursued as a direct consequence of the engagement channels

• Establishment of ViA as part of the annual Company-Wide calendar

(1/4ly meetings with the CEO, bi-annual meetings with the designated NED and

monthly pod group meetings)

• Data to demonstrate the inclusivity of our learning opportunities

Total 100%

27.73%

The performance measures were set at the start of the year and were based on external market guidance, our strategic priorities, and a

desire to align part of our executive pay arrangements to ESG. All targets were set on a stretching basis.

With regards to Revenue Growth, the gross revenue for 2023 was £169.7m. This represents an achievement of between threshold and

target, providing a bonus multiple of 71.4% of the target opportunity. Target was not met due to a delay in the ramp-up of some large

contracts (e.g. NIHR), meaning revenue was less than expected for the year. Revenue achievement was also impacted by the amendment

to the EGP contract.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 123

The gross profit margin for the year ending 31 December is 53.3%. This represents an outcome below the minimum of the target range

and provides a bonus multiple of 0x. The margin target was not met primarily due to the change in the terms of the EGP contract.

Innovation and commercial delivery of the technological advancements was strong in 2023. We upgraded our entire fleet to

Q20+chemistry (60% of 2023 revenue was derived from Q20+ chemistry) and our PromethION execution was strong, including P2 Solo

and our P24/48 upgrades. In summary, these achievements against the Q20+ and PromethION performance measures provided a

bonus outcome of 100% of target. However, whilst the groundwork was done to deliver improvements to our customers moving into 2024,

the threshold of our Customer Centricity target was not met, and as result the Strategic Scorecard measures delivered an outcome of

66.67% of its target opportunity.

Each of our ESG measures delivered an on-target achievement. Our increase in publications (6.7% more in 2023) demonstrated the far

reach of our technology to create a positive impact in the areas of human health and environmental sciences. Our online audiences and

content views increased year on year at our annual community events, demonstrating the larger interaction with our nanopore community

and wider research communities (London Calling had an average increase of 16.2% in 2023 across the three days and NCM Houston a

12% increase compared to the daily attendance numbers at NCM New York in 2022). A culture of inclusion within the workplace was

demonstrated through the establishment and embedding of an employee engagement community and the delivery of learning

opportunities across the organisation.

Taking into account these achievements, the Remuneration Committee determined that a bonus of 55.46% of target (27.73% of the maximum)

would be payable for 2023.

ABP payments are calculated using base salary as at 31 December 2023, in line with the global policy that applies to other employees across

the Company. Consistent with the Policy, one third of the entire bonus will be deferred into an award of shares under the DBP, with a holding

period of one year for 50% of the award, and two years for the remaining 50% of the award, with vesting subject to continued

employment.

None of the value of the ABP awards relates to share price appreciation.

Awards granted in 2023

Long-Term Incentive (LTIP) (audited)

On 11 April 2023, the Executive Directors received awards of shares under the LTIP as a percentage of salary in line with the terms of the

Policy. To recognise the drop in share price since the 2022 grant, the Committee exercised their discretion to scale back the number of

awards granted by 30%. The three-year performance period over which performance will be measured is from 1 January 2023 to 31

December 2025. The performance measures and targets for awards made in April 2023 are outlined below:

2023 LTIP Relative TSR – depending on the Company’s TSR

position against a group of comparators consisting

of16 global life sciences and other companies.

Relative TSR – depending on the Company’s TSR

position against the constituents of the FTSE 350,

excluding investment trusts.

Weighting target range 50% median to upper quartile 50% median to upper quartile

• 25% of the LTIP awards will vest at threshold, with vesting up to 100% only if upper quartile performance is achieved for both measures;

• A ranking position between median and upper quartile will result in a vesting outcome calculated on a straight-line basis by ranking with

interpolation between positions;

• A three-month backward looking averaging period will be used (starting from three months prior to the start and end of the

performance period (i.e. October to December); and

• The TSR of each company in the 16 life sciences and other companies group will be measured in local currency.

The Committee will reserve discretion as to the treatment of companies which delist.

In accordance with the plan rules, the number of performance shares granted under the LTIP, as shown in the table below, was calculated

using the average closing price for the five trading days prior to the date of grant.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023124

LTIP awards granted during the year

Name Date of grant

Face value of LTIP

Performance Share

awardon grant (post scale

back) Price per Share

Number of Shares

subject to LTIP award

(post scale back)

Gordon Sanghera 11-Apr-23 £1,455,998 £2.14 680,373

Tim Cowper 11-Apr-23 £727,998 £2.14 340,186

Clive Brown 11-Apr-23 £923,998 £2.14 431,775

Spike Willcocks

11-Apr-23 £959,741 £2.14 448,477

1 The face value of the share award on grant for Spike Willcocks was converted to Pounds Sterling from US dollars using the exchange rate of US$1.244:£1 which was the closing

exchange rate on the last working day before the grant.

2 The number of shares subject to the LTIP award were scaled back by 30% to take account of the drop in share price from the previous grant made in April 2022. The face value

of the awards also reflects the 30% scale back.

Deferred Bonus Plan (DBP) (audited)

On 11 April 2023, shares awards were granted under the DBP to the Executive Directors for the deferred element (one third) of their

FY22annual bonus.

DBP awards granted during the year

Name Date of grant

Face value of

DBP award on grant

Price per Share

Number of Shares

subjecttoDBP Award

Gordon Sanghera

11-Apr-23 £241,333 £2.14 112,772

Tim Cowper

11-Apr-23 £120,666 £2.14 56,385

Clive Brown

11-Apr-23 £144,800 £2.14 67,663

Spike Willcocks

11-Apr-23 £159,078 £2.14 74, 335

1 Equates to one third deferral of FY22 bonus

2 Calculated by using the five-day closing average share price prior to the date of grant

3 The face value of the share award on grant for Spike Willcocks was converted to sterling from US dollars using the exchange rate of US$1.244 :£1, which was the closing

exchange rate on the last working day before the grant.

Legacy pre-IPO awards (performance based)

The legacy pre-IPO awards were granted under the Founder LTIP to the Executive Directors on 22 June 2021. These awards vest on the

achievement of two performance conditions: the Share Price Performance Condition comprises 50% of the total award with the Revenue

Condition making up the remaining 50%. The detail of each of the performance conditions and the operation of these awards is as follows:

• In the case of the share price hurdles, vesting occurs in equal portions at 120% of the Company’s share price at IPO (i.e. £5.10), £7.70

per share and £10.45 per share, and on a straight-line basis between hurdles.

• In the case of the revenue hurdles, vesting occurs in equal portions at £140 million annual revenue, £231 million annual revenue and

£308 million annual revenue to be achieved by the end of 2026, and on a straight-line basis between hurdles.

• The Retention Awards are also subject to post-vesting holding periods which, together with the hurdles, are designed to retain the

executive talent and tie executive rewards to increased shareholder value. The effect of the retention awards is accounted for within

share-based payments within operating expenses in the Company’s accounts.

• If a vesting event occurs within three years of grant, the relevant portion of the award will not be released until at least a two-year period

has elapsed. No element of the award may be released until at least three years of the award date. At the end of the performance period

(31 December 2026) any element that has vested will be released and any unvested element of the award will lapse.

On 27 April 2023, the Remuneration Committee approved the vesting of a further 126,907 shares allocated to the Revenue Condition.

This was as a result of actual revenue for the 12 months ending 31 December 2022 of £198.6m being achieved. These shares were

included in the Single Figure Table on page 130 of the 2022 Remuneration report and will be released on 26 April 2025. 54.79% of the

shares allocated to the Revenue Condition have now vested. The table below shows the number of the vested shares approved in 2023

and their value at 31 December 2023 based on a share price of 208.2p (the closing share price on 29 December 2023). None of the

value of the awards which vested relates to share price appreciation.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 125

2021 Pre-IPO retention awards vesting in 2023 under Founder LTIP

Name

Maximum

number of

Share Price

Performance

Condition payout

%of maximum

Revenue

Condition payout

% of maximum

Number of

shares vesting

Value of shares

vesting at 31.12.23

Gordon Sanghera 15,601,160 0% 0.275% 42,953 £89,428

Tim Cowper 3,545,720 0% 0.275% 9,762 £20,324

Clive Brown 14,182,880 0% 0.275% 39,048 £81,297

Spike Willcocks 12,764,600 0% 0.275% 35,144 £73,169

Summary of outstanding share awards (audited)

The table below details the share awards and options granted to the Executive Directors under the various pre- and post-IPO

arrangements and granted during FY23 under the DBP and LTIP.

Director

Name of

Share Plan

Exercise

price

Award

Grant Date

As at

1.1.23

Granted

during

year ended

31.12.23

Exercised/

released

during 2023

As at

31.12.23

Vested but

not exercised

during 2023

Earliest date

shares can be

acquired/

released

Date of

Lapse of

award

Gordon

Sanghera



CSOP approved £1.035 14-Jan-19 28,980 – – 28,980 – 14-Jan-22 14-Jan-29

Founder LTIP

22-Jun-21 15,601,160 – – 15,601,160 42,953 22-Jun-24 31-Dec-26

USOP unapproved £1.035 14-Jan-19 641,020 – – 641,020 – 14-Jan-22 14-Jan-29

USOP unapproved £3.0625 15-Jun-21 2,400,000 – – 2,400,000 800,000 15-Jun-24 15-Jun-31

Deferred Bonus Plan 11-Apr-22 72,226 – 36,113 36,113 – 11-Apr-23 –

Deferred Bonus Plan 11-Apr-23 – 112,772 – 112,772 – 11-Apr-24

LTIP 11-Apr-22 523,560 – – 523,560 – 11-Apr-27

LTIP 11-Apr-23 – 680,373 – 680,373 – 11-Apr-28 –

Tim

Cowper



CSOP approved £1.035 14-Jan-19 28,980 – – 28,980 – 14-Jan-22 14-Jan-29

Founder LTIP

22-Jun-21 3,545,720 – – 3,545,720 9,762 22-Jun-24 31-Dec-26

Options

– UK unapproved

£1.20 10-Nov-16 162,836 – – 162,836 – 10-Nov-19 10-Nov-26

USOP unapproved £1.035 14-Jan-19 771,020 – – 771,020 – 14-Jan-22 14-Jan-29

USOP unapproved £3.0625 15-Jun-21 1,600,000 – – 1,600,000 533,320 15-Jun-24 15-Jun-31

Deferred Bonus Plan 11-Apr-22 33,486 – 16 ,743 16,74 3 – 11-Apr-23 –

Deferred Bonus Plan 11-Apr-23 – 56,385 56,385 – 11-Apr-24 –

LTIP 11-Apr-22 261,780 – 261,780 – 11-Apr-27 –

LTIP 11-Apr-23 – 340,186 – 340,186 – 11-Apr-28 –

Clive

Brown



Founder LTIP

22-Jun-21 14,182,880 – – 14,182,880 39,048 22-Jun-24 31-Dec-26

Options

– UK unapproved

£0.13 03-Dec-12 65,002 – 65,002 – – 03-Dec-15 30-Jun-23

Options

– UK unapproved

£1.20 10-Nov-16 1,300,000 – – 1,300,000 – 10-Nov-19 10-Nov-26

USOP unapproved £1.035 14-Jan-19 871,020 – – 871,020 – 14-Jan-22 14-Jan-29

USOP unapproved £3.0625 15-Jun-21 1,800,000 – – 1,800,000 600,000 15-Jun-24 15-Jun-31

Deferred Bonus Plan 11-Apr-22 44,795 – 22,398 22,397 – 11-Apr-23 –

Deferred Bonus Plan 11-Apr-23 – 67, 663 67,6 6 3 – 11-Apr-24 –

LTIP 11-Apr-22 314,136 – 314,136 – 11-Apr-27 –

LTIP 11-Apr-23 – 431,775 – 431,775 – 11-Apr-28 –

Spike

Willcocks



Founder LTIP

22-Jun-21 12,764,600 – – 12,764,600 35,144 22-Jun-24 31-Dec-26

Options

– UK unapproved

£.0668 05-May-21 148,660 – 148,660 – – 05-May-

2021

30-Jun-23

USOP unapproved £1.035 02-Jul-19 1,260,000 – – 1,260,000 – 02-Jul-22 02-Jul-29

USOP unapproved £3.0625 15-Jun-21 1,600,000 – – 1,600,000 533,320 15-Jun-24 15-Jun-31

Deferred Bonus Plan 11-Apr-22 48,441 – 24,221 24,220 – 11-Apr-23 –

Deferred Bonus Plan 11-Apr-23 – 74,3 3 5 74 ,335 – 11-Apr-24 –

LTIP 11-Apr-22 329,991 – 329,991 – 11-Apr-27 –

LTIP 11-Apr-23 – 448,477 – 448,477 – 11-Apr-28 –

1 The award granted under the Founder LTIP can be referenced to page 255 of the prospectus where it is cited as “Conditional Award”. The market value per share at the date of

award was £3.50. Vested awards are subject to a holding requirement as defined by the plan rules.

2 All CSOP and unapproved share options met their performance conditions pre-IPO and are now subject only to the employee’s ongoing employment and holding periods.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023126

UK Share Incentive Plan (SIP) shares awarded (audited)

The UK SIP is a tax-favoured all-employee plan that enables UK employees to save out of pre-tax salary. Monthly contributions are used

by the plan trustee to buy Oxford Nanopore shares (partnership shares). The Company funds an award of an equal number of shares

(matching shares). The current maximum contribution is £150 per month. Shares held in the plan for five years will be free of income tax

and National Insurance, as well as Capital Gains Tax if retained in the plan until sold. The table below shows all SIP shares awarded to the

UK-based Executive Directors from 1 January 2023 to 18 March 2024.

Director

Shares held at

1.1.23

Partnership shares

acquired to

31.12.23

Matching shares

acquired to

31.12.23

Free Shares

awarded to

31.12.23

Total Shares held

31.12.23

Partnership &

Matching Shares

acquired between

1.1.24 & 18.3.24

Gordon Sanghera 633 0 0 0 633 0

Tim Cowper 1,793 816 816 0 3,425 568

Clive Brown 1,749 816 816 0 3,381 568

Directors’ interests in the share capital of the Company (audited)

The table below summarises the Directors’ interests in shares, including unvested awards under employee share schemes, as at 31

December 2023. Further details of all outstanding awards are provided on page 126.

The Shareholding Requirement for each of the Executive Directors as set out in the Policy is 300% of base salary.

Ordinary

held at

31.12.23

Retention

Awards

unvested and

subject to

performance

conditions

Retention

Awards

vested and

subject only to

employment

condition

Deferred

Bonus Plan

Awards

subject only to

holding period

CSOP

approved

Options

vested but

not exercised

Unapproved

Options

vested but

not exercised

Unapproved

Options

unvested

subject only to

employment

condition

LTIP Awards

unvested and

subject to

performance

condition

SIP

(Restricted)

% of salary

under

Remuneration

Policy

shareholding

guidelines

Shareholding

requirement

met

Executive Directors

Gordon

Sanghera 10,409,373 7,589,916 8,011,244 148,885 28,980 2,641,020 400,000 1,203,933 633 3734% yes

Tim

Cowper 201,369 1,724,982 1,820,738 73,128 28,980 2,267,176 266,680 601,966 3,425 658% yes

Clive

Brown 1,515,931 6,899,927 7,282,95 3 90,060 - 3,671,020 300,00 745 ,9 11 3,381 2101% yes

Spike

Willcocks 4,750,888 6,209,938 6,554,662 98,555 - 2,593,320 266,680 778,468 - 2797% yes

Non-Executive Directors

Dr Guy

Harmelin – – – – – – – – – – –

Adrian

Hennah 14,125 – – – – – – – – – –

Wendy

Becker 9,008 – – – – – – – – – –

John

O’Higgins – – – – – – – – – – –

Sarah

Gordon Wild 101,678 – – – – – – – – – –

Duncan

Tatton-

Brown 280,000 – – – – – – – – – –

Kate

Priestman – – – – – – – – – – –

Dr Sarah

Fortune – – – – – – – – – – –

Dr Heather

Preston – – – – – – – – – – –

1 Ordinary shares comprise all shares held in Oxford Nanopore Technologies including those held by spouses or in trust.

2 The % of base salary held in share interests has been calculated using a share price of 208.2p as of 31 December 2023. The value of the shareholding for each Executive Director is

the summation of the value of any ordinary and SIP shares held at 31 December 2023, the gross gain on any CSOP option and the net gain of any unvested (subject to employment

condition only) and vested unapproved options. This is then expressed as a percentage of base salary (base pay for Spike Willcocks has been converted to Pounds Sterling from US

Dollars at 1.2432.

3 The Chair and Non-Executive Directors are not awarded incentive schemes and are not subject to a shareholding requirement

4 Spike Willcocks participated in the US Employee Share Purchase Plan (ESPP) for the offering period 1 January 2023 to 31 December 2023. 5,560 shares were purchased on

11January 2024 with contributions made throughout the offering period. The purchase price was £1.77.

The shareholding as a percentage of salary relates to those awards not subject to ongoing performance conditions. The share price used

is 208.2p being the closing price as at 31 December 2023.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 127

Performance graph against FTSE 350

The following chart shows the value of £100 invested in the Company (at the IPO share price of £4.25) compared with the value of £100

invested in the FTSE 350 Index in both cases for 2023 The FTSE 350 Index (excluding Investment Trusts) has been chosen as it provides

the most appropriate and widely recognised index for benchmarking the Company’s corporate performance.

180

160

140

120

100

Total Shareholder Return

(Value of a 100 unit investment made at the IPO price of £4.25)

29/09/2021

29/12/2021

29/03/2022

29/06/2022

29/09/2022

29/12/2022

29/03/2023

29/06/2023

29/09/2023

29/12/2023

Oxford Nanopore

FTSE 350

(excluding Investment Trusts)

Source:

Datastream (a LSEG product)

CEO remuneration

The table below sets out the CEO’s single figure of total remuneration for the year ended 31 December 2023 together with the percentage

of maximum bonus awarded and long-term incentive awards that vested over the same period.

2021 2022 2023

Total remuneration £3,696,883 £29,212,417

£1,350,998

Annual bonus (as a % of maximum opportunity) 100% 45.25%

27.73%

Performance Shares vesting (as a % of maximum opportunity) N/A 51.07%

N/A

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023128

Percentage change in Directors’ remuneration

The table below shows the annual percentage change in base salary, benefits and bonus for all Directors compared with the average

percentage change for UK-based employees. Where a Director does not have comparable data for FY22 they have been excluded from

the table. Over time, the percentage change over a five-year rolling period will be disclosed.

Table 5 – Percentage Change in Directors’ remuneration

% change

in salary

22/23

% change

inbenefits

22/23

% change in

annual bonus

22/23

% change

in salary

21/22

% change

in benefits

21/22

% change

in bonus

21/22

Gordon Sanghera 3.00% (1.56%) (36.27%) 27. 8% (82.4)% (12.53)%

Tim Cowper 3.00% (0.46%) (36.27%) 37.7% (42.7)% (5.67)%

Clive Brown 7.50% (0.46%) (32.59%) 22.3% (40.7)% (15.38)%

Spike Willcocks 1.48% (8.66%) (35.94%) 29.5% (1.00)% (9.38)%

Duncan Tatton-Brown – – – – – –

Dr Guy Harmelin 2.69% – – 9.8% – –

Adrian Hennah 2.09% – – 0% – –

Wendy Becker 2.75% – – 21% – –

John O’Higgins 2.69% – – 9.8% – –

Sarah Gordon Wild 2.69% – – 8.8% – –

Average of UK employees 8.27% (1.58%) (18.96%) 7.9% (82.4)% 40.67%

1. The percentage change in all salaries reflects the salary and NED fee adjustments which were effective 1 April 2023.

2. The percentage decrease in benefits from 2022 to 2023 reflects the reduction benefit premiums achieved at the 2023 renewals.

3. Bonuses for the Executive Directors reduced in 2023 compared to 2022. The overall performance outcome for 2023 was 27.73% of the maximum bonus opportunity compared

to 45.25% for 2022. Details of the achievement against the specific targets can be found on page 123.

4.The average bonus for UK employees for 2023 was £8,883.04. This was a reduction of 18.96% on the average for 2022 of £10,961.69 and reflects corporate performance outcome.

5. Fees for 2023 have been annualised for Sarah Gordon Wild and Duncan Tatton-Brown to allow a comparison to 2022. Sarah resigned on 19 December 2023 and Duncan was

appointed on 1 August 2022.

CEO pay ratio

Financial year Calculation Methodology Element P25 P50 P75 CEO

2021 A CEO Pay ratio 97:1 65:1 42:1

Total Pay and benefits £10,752 £16,031 £24,704 £1,037,779

Salary £6,873 £10,042 £16,656 £193,650

2022 A CEO Pay ratio 698:1 509:1 329:1

Total Pay and benefits £41,874 £57,415 £88,773 £29,212,417

CEO Pay ratio excluding legacy awards 38:1 28:1 18:1

Total Pay and Benefits excluding

legacy awards £41 , 874 £57,415 £88,773 £1,588,143

Salary £36,000 £50,000 £70,768 £800,000

2023 A CEO Pay ratio 31:1 22:1 14:1

Total pay and benefits £43,776 £60,350 £96,247 £1,343,614

Salary £36,000 £55,418 £74,000 £832,000

The Company has chosen to use Option A as defined by the relevant regulations, as Oxford Nanopore recognises that this is the most

statistically accurate method for calculating the ratio. For 2021, the above covers the period from admission on 5 October 2021 to 31

December 2021. For the CEO and each UK employee employed on 31 December 2023 the Single Total Figure of Remuneration comprises

the summation of base pay and benefits received for the period 1 January to 31 December 2023, including the value of any SIP-free and

matching shares, income derived from LTIPs, employer pension contributions or cash equivalent and includes the full-year bonus for FY23.

Base pay has been included on a full-time equivalent basis. For 2023, no legacy LTIPs have vested. Compared to the previous reporting

year 2022, the CEO pay ratio has decreased at each quartile: this reflects the smaller bonus payment received by the CEO for the

financial year ending 31 December 2023. The bonus for the Executive Team is weighted 100% to company performance compared to a

weighting of 70:30 corporate/individual performance for the rest of the workforce. In addition, salaries at the respective percentiles have

increased reflecting the recruitment of experienced talent into the organisation, specifically within our commercial and innovation teams.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 129

Relative importance of spend on pay

The table below shows the Group’s expenditure on employee pay (wages and salaries) compared to distributions to shareholders for the

year ended 31 December 2023, compared to the year ended 31 December 2022.

Table 6 – Relative importance of spend on pay

£’000 FY23 (£000) FY22 (£000) % change

Employee Costs

99,111

81,613 21%

Distribution to Shareholders

–

– 0%

Payments for loss of office and/or payments to former Directors (audited)

No payments for loss of office, nor payments to former Directors were made from 1 January to 31 December 2023.

Dilution limits

It is the Company’s intention to use newly issued shares to satisfy awards made under all executive and employee share plans. The

Company’s share plans comply with the IA guidance on dilution limits and the position at 31 December 2023 was:

Table 7 – Dilution limits

Limit of 5% in any ten years under all executive share plan Actual 1.47%

Limit of 10% in any ten years under all share plans Actual 1.64%

Statement of shareholding voting

The advisory vote on the Directors’ Remuneration Report received sufficient shareholder support at the 2023 AGM. The table below

shows the votes cast by shareholders:

Table 8 – Statement of shareholding voting

Remuneration

Policy (2022

AGM)

Remuneration report

(2023 AGM)

Votes % Votes %

Votes in favour 589,737,541 99.70 592,811,165 99.56

Votes against 1,777,387 0.3 2,623,223 0.44

Votes withheld 35,944,210 - 3,300,996 –

Executive Directors’ service contracts

The three UK-based Executive Directors are employed under rolling contracts of employment with Oxford Nanopore Technologies plc.

TheUS-based Executive Director is employed under a rolling contract of employment with Oxford Nanopore Technologies, Inc. Each

Executive Director’s service agreement is effective from the date of admission to trading on the Main Market of the London Stock

Exchange with a notice period of 12 months from the Company and the Executive Director.

The Executive Directors’ Service Agreements are available for inspection at the Company’s registered office.

Non-Executive Directors’ letters of appointment

All Non-Executive Directors, including the Chair, are on three-year terms which are expected to be extended up to a total of nine years.

The dates of initial appointment to the Board are shown in the table below. The appointments continue on a rolling basis until terminated

by either party on threewritten months’ notice.

Date of appointment Date of Expiry of Initial Term

Duncan Tatton-Brown

Wendy Becker

Dr Guy Harmelin

Adrian Hennah

John O’Higgins

Kate Priestman

1 August 2022

24 June 2021

17 September 2020

24 June 2021

19 September 2019

13 July 2023

31 July 2025

23 June 2024

16 September 2021 – extended

24 June 2024

18 September 2022 – extended

12 July 2026

Dr Heather Preston 19 December 2023 18 December 2026

Dr Sarah Fortune 19 December 2023 18 December 2026

Sarah Gordon Wild served on the Board of Directors under an appointment letter originally dated dated 1 January 2015 (and extended on

1 January 2018) and retired from the Board on 19 December 2023.

The Chair of the Board and the NEDs are subject to confidentiality undertakings without limitation in time, and a non-compete restrictive

covenant for the duration of their appointments and for nine months after the termination of their appointments.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023130

Summary of the Directors’ Remuneration Policy

The Policy was approved by shareholders at the 2022 AGM and will operate for three years. The design of the Policy is intended to meet

the following objectives: Clarity; Simplicity; Risk; Predictability; Proportionality; and Alignment to Culture.

The table below summarises the Policy and explains how each element operates and how it links to the corporate strategy. A full copy of

the Policy may be inspected on the Company’s website (on pages 112 to 116 of the Company’s 2021 annual report and accounts).

Base Salary

Purpose and link to strategy • To support the attraction and retention of the best global talent with the capability to deliver Oxford

Nanopore’s strategy.

Operation • Base salaries will normally be reviewed annually or following a change in responsibilities with changes

usually taking effect from 1 April.

• The Remuneration Committee will consider a number of factors when setting base salaries including

(but not limited to):

• Pay increases for other employees across the Group. Where increases are awarded in excess of the

wider employee population, rationale for this will be provided in the relevant year’s Directors’

Remuneration Report.

• The individual’s performance, skills and responsibilities.

• Base salaries at companies of a similar size, international scope, in similar sectors and geographical

locations as Oxford Nanopore, with roles typically benchmarked against these.

Maximum potential value • There is no monetary maximum salary level but salary increases will normally be in line with increases

awarded to other employees across the Group.

• The Committee retains the discretion to increase salaries above this rate where appropriate, for

example where there is a change in role or responsibility, or the need to align an Executive Director’s

salary to market level over time.

• The current base salaries for the Executive Directors are set out on page 122.

Performance metrics • Not applicable. Individual performance, in addition to the overall performance of the Group, is however

considered as part of the annual review process.

Benefits

Purpose and link to strategy • To provide market-competitive and cost-effective benefits to enable the attraction and retention of the

best global talent.

Operation • The benefits package may include insurance coverage, such as life, medical, dental, income

protection, accidental death and disability insurance, and other benefits provided more widely across

the Group from time to time. A full annual health check may also be included.

• The Committee has the discretion to offer additional allowances, or benefits, to Executive Directors, if

considered appropriate and reasonable. These may include travel allowances, the provision of a

company car or car allowance, relocation expenses, housing allowances and school fees where a

Director has to relocate from his/her home location as part of their appointment.

Maximum potential value • As the cost of benefits will depend on an individual’s personal circumstances, there is no specific

monetary maximum although it is not expected to exceed what the Committee considers a normal

market level.

Performance metrics • Not applicable

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 131

Post-retirement provision

Purpose and link to strategy • To provide cost-effective retirement plans to support the attraction and retention of the best global

talent.

Operation • Provision of market-competitive pension arrangements, or a cash alternative based on a percentage

of base salary.

• The approach to pension arrangements for the Executive Directors is in line with the wider workforce.

Maximum potential value • In the UK, Executive Directors are eligible to participate in the Group’s defined contribution pension

scheme, with a maximum Company contribution aligned with that of the wider workforce, currently

6% of base salary (but subject to periodic review), which they may opt to receive as a cash allowance

in lieu of employer pension contributions.

• Executive Directors based in the US will be offered participation in the US Section 401(k) defined

contribution plan, with the Company matching contributions up to, currently, a maximum of 6% of

salary (subject to periodic review).

Performance Metrics • Not applicable.

Annual Bonus Plan

Purpose and link to strategy • To incentivise and reward the achievement of annual financial and non-financial corporate targets in

line with the Company’s short-term financial and strategic objectives.

• To align with shareholders’ and wider stakeholders’ interests.

Operation • Executive Directors are eligible to participate in the Annual Bonus Plan (“ABP”) at the discretion of

theCommittee.

• Measures and stretching targets are determined in respect of each financial year of the Company by

the Committee and may vary to ensure alignment with the Company’s business plan and strategy.

• The level of award is determined with reference to the Company’s overall financial and strategic

performance and is paid out after the end of the relevant financial year. At least one third of any bonus

earned will be deferred into an award of shares under the Deferred Bonus Plan (DBP) with a holding

period of at least one year for 50% of the award, and at least two years for the remaining 50% of the

award.

• Awards granted under the DBP may incorporate the right to receive an amount of cash or shares equal

in value to the dividends that are paid on the shares that vest during the holding period. This amount

may assume re-investment of dividends.

• The Committee has discretion to adjust the level of payment if it is not deemed to reflect appropriately

the individual’s contribution, the Company’s overall business performance and such other factors as

the Committee considers appropriate. Any discretionary adjustments will be detailed in the relevant

year’s Directors’ Remuneration Report.

• Malus and/or clawback provisions apply as set out on pages 118 and 119 of the 2021 annual report

and accounts.

• Bonus awards are non-pensionable and are payable at the Committee’s discretion.

Maximum potential value • The maximum opportunity is 200% of base salary in respect of any financial year for outstanding

performance.

• For threshold performance, up to 50% of base salary may be earned, with up to 100% of base salary

earned for on-target performance.

Performance metrics • The Committee will determine the performance measures and targets each year taking into account

the Company’s key strategic objectives at that time.

• Performance measures may include financial, strategic, operational, ESG and/or personal objectives.

• At least 60% will be linked to financial measures.

• The performance measures for FY23 are set out on page 123.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023132

Long-Term Incentives

Purpose • To incentivise and reward the delivery of long-term shareholder value through the achievement of

long-term financial and strategic objectives.

• To align with shareholders’ interests and to create a long-term mindset.

Operation • Executive Directors are eligible to participate in the Oxford Nanopore Technologies plc Long-Term

Incentive Plan 2021 (the “PLC LTIP”).

• Awards will normally vest after a period of at least three years, subject to the achievement of the

relevant performance conditions and continued employment. The Committee will then also normally

impose a further post-vesting holding period of two years.

• The level of vesting is determined by the Committee after the performance period, taking into account

the degree to which the performance conditions have been met. In determining the final vesting

outcome, the Committee may also consider the underlying performance of the business, as well as the

value created for shareholders and any other factors it considers relevant.

• The Committee has discretion to adjust the formulaic outcomes of awards (within the Policy limits) to

ensure alignment of pay with the underlying performance of the business over the performance

period. Any adjustments would be explained to shareholders.

• Awards granted under the PLC LTIP may incorporate the right to receive an amount of cash or shares

equal in value to the dividends that are paid on the shares that vest during the vesting period and the

holding period. This amount may assume re-investment of dividends.

• Malus and/or clawback provisions apply as set out on pages 118 and 119 of the 2021 annual report

and accounts.

Maximum potential value • The maximum annual award is 300% of base salary in respect of any financial year.

• There is a threshold vesting level of no more than 25% of maximum, with pro rata vesting up to 100%

at maximum.

Performance metrics • Performance measures and stretching targets will be determined annually by the Committee for each

new award to align with the Company’s longer-term strategic priorities at that time.

• The measures that may be considered include financial and shareholder-value metrics, in addition to

strategic non-financial measures.

• At least 50% will be linked to financial (including TSR) measures.

• Details of the measures, weightings, and targets applicable for FY23 are provided on page 123.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 133

Employee Share Plans

Purpose and link to strategy • To encourage wider share ownership through locally “tax-approved” plans (such as an Employee

Stock Purchase Plan in the United States).

• To align with shareholders’ interests.

Operation • Executive Directors are eligible to participate in all-employee share plans offered by the Group on the

same basis as is offered to the Group’s other eligible employees.

• The Company operates tax-efficient all-employee share plans in various jurisdictions.

Maximum potential value • Limits for all employee share plans are set by the relevant local tax authorities. The Company may

choose to set its own lower limits.

Performance metrics • Not applicable.

Shareholding Requirements

Purpose • To ensure alignment between the interests of Executive Directors and shareholders.

• To create a long-term mindset.

Operation • Shareholding guidelines are in place whereby Executive Directors are expected to build and maintain

over time a shareholding in the Company.

• Executive Directors have five years from the date of their appointment to the Board in which to build

up their shareholding. Unvested shares not subject to performance conditions (e.g. deferred

share-based awards and vested LTIP awards subject to a holding period) will count towards the

shareholding requirement (assuming shares have been sold to settle tax).

• Executive Directors will normally be required to continue to hold 100% of the in-employment

shareholding requirement (or, if lower, their actual shareholding on cessation) for two years after

leaving the Company unless the Committee determines, by exception, that it is not appropriate to so

require. Details of the Executive Directors’ current shareholding are provided in the Directors’

Remuneration Report.

Maximum potential value • The shareholding requirement is 300% of base salary.

Performance metrics • Not applicable.

Directors’ remuneration report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023134

Policy for Chair and Non-Executive Directors (“NEDs”)

The following table summarises the fee policy for the Chair and NEDs.

Fees

Purpose • To provide a competitive fee to support the attraction and retention of high-quality NEDs with skills

and experience relevant to the Company.

Operation • Fees are determined annually based on the responsibility and time commitment required, and with

reference to appropriate market comparisons carried out by non-conflicted members of the Board.

• Fees for the Chair are set by the Committee.

• NEDs are paid a base fee for membership of the Board, with additional fees being paid for the role of

Chair or membership of a Board Committee, to reflect their additional responsibilities and the

workload required.

• The Company has the discretion to pay an additional fee to NEDs, should the Company require

significant additional time commitment in exceptional or unforeseen circumstances. Any such fees will

be time limited in nature.

• Fees are normally paid in cash.

• NEDs are not eligible to participate in the Company’s pension or incentive arrangements.

• NEDs do not currently receive any benefits but may do if considered appropriate and consistent with

roles at other listed companies.

• Travel and other reasonable expenses incurred in the course of performing their duties are

reimbursed. Any tax due on travel and accommodation benefits may be paid by the Company.

• The Chair of the Board and the NEDs have the benefit of the Company’s directors’ and officers’

liability insurance policy.

This Directors’ remuneration report was approved by the Board and signed in its behalf by

Wendy Becker

Chair of the Remuneration Committee

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 135

The Directors present their report, together with the audited

financial statements for Oxford Nanopore Technologies plc and its

subsidiary companies, for the year ended 31 December 2023.

The Directors’ report, together with the Strategic Report on pages

10 to 87, represent the management report. The Strategic Report

contains matters required to be disclosed in the Directors’ report, in

accordance with the Companies Act 2006, the Large and

Medium-sized Companies and Groups (Accounts and Reports)

Regulations 2008 and the UK Corporate Governance Code 2018.

The Corporate Governance Report on pages 88 to 135 is

incorporated into the Directors’ Report by reference.

Subject matter Page reference

Principal risks evaluation 72-78

Viability statement 86-87

Engagement with employees 79

Engagement with suppliers, customers and others 80-83

Greenhouse gas emissions 62

Chair’s corporate governance statement 90-91

How the Board assesses and monitors culture 101

Annual statement by Chair of the Remuneration

Committee

117-119

Financial instruments and risk management 186

Likely future developments in the business 19

Directors

The following Directors currently hold office or did so during 2023:

Duncan Tatton-Brown (Chair)

Clive Brown (resigned on 29 February 2024)

Tim Cowper

Wendy Becker

Dr Sarah Fortune (appointed on 19 December 2023)

Sarah Gordon Wild (resigned on 19 December 2023)

Dr Guy Harmelin

Adrian Hennah

Nick Keher (appointed on 22 January 2024)

John O’Higgins

Dr Heather Preston (appointed on 19 December 2023)

Kate Priestman (appointed on 13 July 2023)

Dr Gordon Sanghera

Dr Spike Willcocks

Biographical details of each Director are set out on pages 94 to98

and details of the Directors’ interests in the shares of the Company

are detailed on page 127. Details of share awards granted to

Executive Directors under the Company’s share schemes during

the reporting period are in the Directors’ remuneration report on

pages 124 to 126.

The powers of the Directors are determined by the Company’s

Articles of Association and the legislation and regulations in force

in the UK, together with any specific authorities that may be given

to the Directors by the Company’s shareholders, such as in relation

to the allotment of shares. The rules governing the appointment

and retirement of Directors are set out in the Company’s Articles

ofAssociation, the Companies Act and other related legislation.

Dividends

The Directors do not recommend the payment of a dividend for the

year ended 31 December 2023. The Company does not currently

have a formal dividend policy.

Branches outside of the UK

The Group’s subsidiaries, including subsidiaries located outside

ofthe UK, are set out on page 199 of the financial statements.

Share capital and related matters

The Company has a Standard Listing on the London Stock

Exchange. The Company has four share classes as set out below:

Share Class

Number of shares

as at 31 December

2023

Ordinary Shares 859,224,047

A limited anti-takeover share (“A LAT Share”) 1

B limited anti-takeover share (“B LAT Share”) 1

C limited anti-takeover share (“C LAT Share”) 1

Ordinary Shares

The ordinary shares of £0.0001 each (“Ordinary Shares”) rank

equally for voting purposes. On a show of hands each holder of

Ordinary Shares has one vote and, on a poll, each Ordinary

Shareholder has one vote per Ordinary Share held.

Each Ordinary Share ranks equally for any dividend declared.

EachOrdinary Share ranks equally for any distributions made on

awinding up of the Company. Each Ordinary Share ranks equally

in the right to receive a relative proportion of shares in the case

ofacapitalisation of reserves.

There are no restrictions on the free transferability of the

OrdinaryShares.

LAT Shares

The Articles contain provisions for three classes of “limited

anti-takeover” shares, each of £1.00 each in the capital of the

Company: the A LAT Share, the B LAT Share and the C LAT Share

being, collectively, the LAT Shares. The rights attaching to the LAT

Shares are set out below.

The Active LAT Share is determined as follows:

• the Active LAT Share shall be the A LAT Share unless, for

anyreason, Dr Gordon Sanghera ceases to be a director or

employee of any company in the Group (including by reason

ofdeath) or is given, or gives, notice of the same (a “GS

Disqualifying Event”);

Directors’ report

Oxford Nanopore Technologies Annual Report & Accounts 2023136

• if a GS Disqualifying Event occurs, then the Active LAT Share

shall be the B LAT Share unless, for any reason, Dr James

Willcocks ceases to be a director or employee of any company

inthe Group (including by reason of death) or is given, or gives,

notice of the same (a “JW Disqualifying Event”);

• if a GS Disqualifying Event and a JW Disqualifying Event have

occurred, then the Active LAT Share shall be the C LAT Share

unless, for any reason, Clive Brown ceases to be a director or

employee of any company in the Group (including by reason

ofdeath) or is given, or gives, notice of the same (a “CB

Disqualifying Event”);

• if, at any time, each of a GS Disqualifying Event, a JW

Disqualifying Event and a CB Disqualifying Event have occurred

then, from the last of those events to occur, there shall no longer

beany Active LAT Share; and

• the holder of a LAT Share will have the right to attend and speak

at any general meeting of the Company. However, no LAT Share

will carry any separate voting rights (other than in respect of a

separate class meeting of the LAT Shares or any class of them

(as a separate class)) until a Change of Control of the Company.

Immediately on a Change of Control of the Company, the Active

LAT Share will automatically carry such number of votes on any

resolution put to the shareholders at a general meeting as shall be

necessary to ensure the effective passing of such shareholder

resolution if those votes are cast by the holder of the Active LAT

Share in favour of, or to ensure the defeat of, such shareholder

resolution if those votes are cast by the holder of the Active LAT

Share against such shareholder resolution.

For the purposes of this summary, a Change of Control will broadly

arise if there is an acquisition by any person of an interest in

Ordinary Shares which (when taken together with the Ordinary

Shares in which that person and any persons acting in concert with

them are interested) carry more than 50% of the voting rights

exercisable by the shareholders on a poll in a general meeting

(excluding those attributable to the Active LAT Share). In

circumstances where an offer is made for the Ordinary Shares,

aChange of Control will occur: (a) on a scheme of arrangement

under Part 26 of the Companies Act 2006 at the point at which the

scheme of arrangement becomes effective; and (b) on a takeover

offer under Part 28 of the Companies Act 2006, at the point at

which the takeover offer becomes unconditional in all respects.

No LAT Share will entitle any holder to receive any dividend or

other distribution of the Company whether out of profits or on the

winding up of the Company or otherwise.

LAT Shares are not capable of transfer (unless pursuant to a

purchase or cancellation by the Company of any LAT Shares

following the sunset period (as set out below)) and the broader

transfer provisions under the Articles applicable to the Ordinary

Shares will not apply.

The rights attributable to a LAT Share will cease (and that LAT

Share will be capable of being repurchased or cancelled by the

Company) on the earlier of: (a) the date falling three years after the

date of the issue of that LAT Share; (b) the transfer of that LAT

Share to any person; and (c) a GS Disqualifying Event, JW

Disqualifying Event or CB Disqualifying Event (as relevant).

The rights attached to the LAT Shares (or any class of them)

shallnot be capable of being varied or abrogated in any respect

whatsoever without the prior written consent of the holder of each

affected class of the LAT Shares.

The LAT Shares cease to carry any rights after the date three

years following the issue of the LAT Shares in October 2021.

Substantial shareholdings

The Company received notice of the following interest of 3% or

more in its Ordinary Shares as at 31 December 2023 and

29February 2024:

Shareholder

Percentage

of ordinary

shares as at

31 December 2023

Percentage

of ordinary

shares as at

29 February

2024

IP Group 9.70% 9.70%

Baillie Gifford

6.94% 8.28%

Tencent Holdings 7.35% 7.3 4%

bioMérieux SA 6.87% 6.87%

G42 5.16% 5.16%

Oracle 4.11% 4.11%

GIC 4.60% 3.93%

Lansdowne Partners

3.02% Below 3

1 Not all underlying clients delegate authority to Baillie Gifford to vote the shares

itmanages on their behalf.

2 Funds affiliated with Lansdowne Partners (UK) LLP.

Significant agreements

The Company entered into an agreement with bioMérieux on

19October 2023, pursuant to which bioMérieux agreed to

subscribe for 29,025,326 ordinary shares (which equated to 3.5%

of Oxford Nanopore’s voting rights as at 13 October 2023) in the

Company ata subscription price of 238.08p per share (the

“Subscription”).

As part of the Subscription, subject to certain customary

exceptions, bioMérieux agreed to the following undertakings:

• For a period of five years, not acquire or agree to acquire any

interests in Oxford Nanopore’s shares which would result in it

and its affiliates having an interest exceeding 9.9% of the issued

share capital of Oxford Nanopore (provided that this restriction

shall be suspended for so long as Oxford Nanopore is in an offer

period (included in the Definitions of the City Code on Takeovers

and Mergers (the “Code”)), and in the case of an offer period

which is commenced by an announcement under Rule 2.4 of the

Code, for a one-month period after the cessation of such offer

period);

• not dispose of any shares in Oxford Nanopore for 12 months,

subject to certain limited exceptions; and

• comply with certain orderly marketing obligations for a period

offour years after expiry of the 12-month lock-up period, subject

to certain limited exceptions.

The Company does not have any significant agreements that take

effect, alter or terminate upon a change of control.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 137

Save for the Subscription, the Company does not have any

agreements between holders of securities that may restrict transfer

ofsecurities or voting rights.

There are no agreements between the Group and its Directors

oremployees providing for compensation for loss of office or

employment that occurs because of a takeover bid, except that the

provisions of the Group’s share plans may allow options and

awards granted to Directors and employees to vest on completion

ofatakeover offer.

Employees with disabilities

The Company is an equal opportunities employer and is committed

torecruiting people from diverse backgrounds including people

with disabilities. Any person who identifies as having a disability is

given fair consideration for a vacancy against the requirements of

the role and, where possible, the Company makes reasonable

accommodations for employees who identify as having a disability.

Allemployees are giving the same training, development, and

jobopportunities.

Should any employee experience any situation where they become

disabled during their employment, the Company would ensure all

efforts are made to retrain and adjust employees’ environments

and/or working patterns where possible to allow them to continue

to maximise their potential.

Articles of Association

The Company’s Articles may be amended by special resolution at

ageneral meeting of the shareholders.

Insurance and indemnities

During the past year, the Company has maintained liability

insurance in respect of its Directors. The Company renewed and

increased its liability insurance during 2023. The Company has

provided a qualifying third-party indemnity to each Director as

permitted by section 234 of the Companies Act 2006 (“CA 2006”)

and by the Articles, which remain in force at the date of this report.

Political expenditure and donations

Although it is the Company’s policy not to incur political

expenditure, as a result of the broad definitions in the CA 2006,

normal business activities of the Group such as funding

conferences, which may not be considered political donations or

expenditure in the normal sense, may possibly fall within the

restrictions of the CA 2006. The Company obtained shareholder

approval in June 2023 at the Company’s AGM, in line with best

practice, to authorise the Company to make political payments up

to a maximum aggregate of £100,000. The Company intends to

propose the same resolution for approval at the 2024 AGM.

The Group did not make any political donations during 2023.

Disclosure of information to auditors

The Directors confirm that, so far as they are each aware, there is

no relevant audit information of which the Company’s auditors are

unaware. Each Director has taken all reasonable steps that they

ought to have taken as a Director of the Company to make

themselves aware of any relevant audit information and to establish

that the Company’s auditors are aware of that information.

Going concern

The Directors confirm that they have a reasonable expectation that

the Group will have adequate resources to continue in operational

existence for at least the next 12 months from the date of the

accounts and accordingly they continue to adopt the going

concern basis in preparing the financial statements. The

Company’s viability statement is on pages 86-87.

The Directors’ Report, which has been prepared in accordance

with the requirements of the CA 2006, has been approved by the

Board and signed on its behalf by:

Hannah Coote

Company Secretary

18 March 2024

Directors’ report continued

Oxford Nanopore Technologies Annual Report & Accounts 2023138

The Directors are responsible for preparing the Annual Report and

the financial statements in accordance with applicable law and

regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the Directors are

required to prepare the Group financial statements in accordance

with international accounting standards in conformity with the

requirements of the Companies Act 2006. The financial statements

also comply with International Financial Reporting Standards

(IFRSs) as issued by the IASB. Under company law the Directors

must not approve the financial statements unless they are satisfied

that they give a true and fair view of the state of affairs of the

Company and of the profit or loss of the Company for that period.

In preparing these financial statements, International Accounting

Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner

that provides relevant, reliable, comparable and understandable

information;

• provide additional disclosures when compliance with the specific

requirements in IFRSs are insufficient to enable users to

understand the impact of particular transactions, other events

and conditions on the entity’s financial position and financial

performance; and

• make an assessment of the Company’s ability to continue as a

going concern.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any time the

financial position of the company and enable them to ensure that

the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the

Company and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of

the corporate and financial information included on the Company’s

website. Legislation in the United Kingdom governing the

preparation and dissemination of financial statements may differ

from legislation in other jurisdictions.

Each of the Directors confirms that, to the best of their knowledge:

• the Group financial statements, prepared in accordance with the

applicable set of accounting standards, give a true and fair view

of the assets, liabilities, financial position and profit or loss of the

Company and the undertakings including in the consolidation as

a whole;

• the Directors’ report includes a fair review of the development

and performance of the business and the position of the

Company and the undertakings included in the consolidation

taken as a whole, together with a description of the principal

risks and uncertainties that they face; and

• the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the necessary information for

shareholders to assess the Group’s position, performance,

business model and strategy.

By order of the Board

Dr Gordon Sanghera Tim Cowper

Director Director

18 March 2024 18 March 2024

Directors’ responsibilities

statement

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 139

Report on the audit of the financial statements

1. Opinion

In our opinion:

• the financial statements of Oxford Nanopore Technologies plc

(the ‘Company’) and its subsidiaries (the ‘Group’) give a true

and fair view of the state of the Group’s and of the Company’s

affairs as at 31 December 2023 and of the Group’s loss for the

year then ended;

• the Group financial statements have been properly prepared in

accordance with United Kingdom adopted international

accounting standards and International Financial Reporting

Standards (IFRSs) as issued by the International Accounting

Standards Board (IASB);

• the Company financial statements have been properly

prepared in accordance with United Kingdom adopted

international accounting standards and as applied in

accordance with the provisions of the Companies Act 2006;

and

• the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

Group

• the consolidated statement of comprehensive income;

• the consolidated statement of financial position;

• the consolidated statements of changes in equity;

• the consolidated statement of cash flows; and

• the related notes 1 to 35

Company

• the Company statement of financial position;

• the Company statement of changes in equity;

• the Company statement of cash flows; and

• the related notes 1 to 19

The financial reporting framework that has been applied in the

preparation of the Group financial statements is applicable law,

United Kingdom adopted international accounting standards and

IFRSs as issued by the IASB. The financial reporting framework

that has been applied in the preparation of the Company financial

statements is applicable law and United Kingdom adopted

international accounting standards and as applied in accordance

with the provisions of the Companies Act 2006.

2. Basis for opinion

We conducted our audit in accordance with International Standards

on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the

auditor’s responsibilities for the audit of the financial statements

section of our report.

We are independent of the Group and the Company in accordance

with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the Financial Reporting

Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public

interest entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements. The

non-audit services provided to the Group and Company for the

year are disclosed in note 9 to the financial statements. We confirm

that we have not provided any non-audit services prohibited by the

FRC’s Ethical Standard to the Group or the Company.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

Independent Auditor’s Report to the members

of Oxford Nanopore Technologies plc

3. Summary of our audit approach

Key audit matters The key audit matters that we identified in the

current year were:

• Revenue recognition – accuracy and cut-off

• IFRS 2: Share-based payments and employer

social security taxes provision valuation; and

• Inventory provisioning

Materiality The materiality that we used for the Group

financial statements was £3.3m which was

determined on the basis of revenue. This is a

change in methodology from prior year and is

considered in more detail in section 6 below.

Scoping We selected two components where we

performed a full scope audit of the

component’s financial information.

These two components comprise 99% of

revenue, 95% of operating expenses and

99% of net assets.

Significant changes

in our approach

We have made no significant changes in our

audit approach in the year.

4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the

Directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and

Company’s ability to continue to adopt the going concern basis of

accounting included:

• Evaluation of management’s assessment of the Group’s ability to

continue as a going concern, including challenging the

underlying data and key forecasting assumptions used to make

the assessment, and evaluation of the Directors’ plans for future

actions in relation to going concern;

• Performance of testing over the integrity and mechanical

accuracy of the going concern model by recalculating the cash

headroom available in each of the scenarios prepared by

management and approved by the Directors;

• Performance of our own sensitivity analysis based upon

evidence, including consideration of market data, and latest

third-party economic forecasts, along with the FY24 results to

date; and

• Assessment of the appropriateness of the going concern

disclosures made in the financial statements.

Based on the work we have performed, we have not identified any

material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the

Group's and Company’s ability to continue as a going concern for a

period of at least twelve months from when the financial

statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK

Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the Directors’ statement in the

financial statements about whether the directors considered it

appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with

respect to going concern are described in the relevant sections of

this report.

Oxford Nanopore Technologies Annual Report & Accounts 2023140

5. Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements

of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we

identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and

we do not provide a separate opinion on these matters.

5.1. Revenue Recognition – Accuracy and Cut-off

Key audit matter description The Group generates revenue primarily through the manufacture and sale of DNA and RNA sequencing

products. Products are either sold on a stand-alone basis or as part of a larger bundle of goods and

services.

In cases where revenue relates to the sale of bundled goods and services including multiple performance

obligations, management is required to allocate the total bundle price between the different performance

obligations, such that the appropriate revenue is recognised either at a point in time or over time depending

on the goods or service provided to the customer. This considers the requirements of IFRS 15 Revenue

from Contracts with Customers.

During 2023, the Group recognised £169.7 million of revenue (2022: £198.6 million). The decrease in

revenue is in part associated with the non-recurring revenue of £51.8 million generated in 2022 from the

conclusion of the Group’s Covid-19 testing contract with the Department of Health and Social Care (see

Note 6(a)).

The Group has a significant individual sales contract where the combinations of goods and services

included differ to the standard offerings of the Group. We have identified performance obligations and the

allocation of the transaction price to those obligations within the specific significant contract, along with the

contract amendment in the year as a key audit matter and fraud risk. Determining the revenue recognition

profile for such contracts is complex and requires management judgement, and as such increases the risk

of error.

Revenue could be misstated if the various performance obligations are not properly identified, and if the

transaction price is inappropriately allocated between these obligations because of management estimates.

Further to this, the process for recording revenue on such contracts involves manual calculations and

postings, which also increases the risk of revenue being recorded inaccurately.

In addition, where goods are shipped to customers around the year-end date, this can create the need for

judgement in determining whether the Group had completed the relevant performance obligation within the

year. As a result, there is a cut-off risk that revenue is not recognised in the correct year and is also

considered to form part of the key audit matter with respect to revenue recognition.

Further details on the Group’s accounting policy for revenue recognition can be found in note 3 on page

155, and discussed within the Audit and Risk Committee report on page 113.

How the scope of our audit

responded to the key audit

matter

• We obtained an understanding of management’s process and tested relevant controls over the timing of

revenue recognition at year-end.

• We also obtained an understanding of the relevant controls over the recognition of revenue from the

significant individual contract.

• We challenged management’s assessment of the accounting for the significant sales contract in the year.

We have determined the contract that is significant through the total contract price, judgements involved

in determining whether performance obligations are met, and revenue recognised in the year for the

contract. This included considering corroborative and contradictory evidence in cases where

management had made judgements or estimates in determining the performance obligations and

allocation of the total contract price to each of these obligations. We performed sensitivity analysis over

the key assumptions made by management.

• We selected samples of transactions recorded in revenue and assessed whether revenue recorded was

in line with an appropriate allocation of revenue to the performance obligations for the relevant contract.

• We selected samples from a population of transactions before and after the year end to assess whether

revenue has been recognised in the correct period and at the appropriate transaction price.

Key observations We concluded that revenue is being recognised appropriately and in line with the requirements of IFRS 15.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 141

5.2. IFRS 2: Share based payments and employer social security tax provision valuation

Key audit matter description In June 2021, the Group issued a number of share options to the Executive Directors of the Group. These

include:

• Conditional retention equity awards of up to 6.5% of the company’s equity, which is subject to

achievement of a number of performance conditions linked to the Group’s revenue and share price; and

• Limited anti-takeover (“LAT”) non-voting shares issued to the Group’s Executive Directors.

These share options have a vesting period of 3-5 years, and accordingly the charge is recorded over the

vesting period, including a charge in 2023. The Group has recognised a charge of £35.1 million (2022:

£70.0 million) in relation to these, and other, share based payments in the year.

Management prepared a calculation of the charge required under IFRS 2 Share-based payment

considering the expected value of the shares and the likelihood of performance conditions being achieved.

For options with a share price linked condition, these assumptions are determined at the point of granting

the options and these are then not revised over the vesting period. For options with a revenue linked

condition, at the end of the reporting period, management are required to reassess the likelihood of vesting

based on their latest best estimate of future revenue forecasts.

Additionally, management have recorded a provision as at 31 December 2023 of £9.9m (2022: £10.8m) for

employer social security taxes which will be due at the point of exercise of the share options. This provision

is recorded in line with the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets

and requires estimates to be made about the likelihood of vesting and the social security taxes payable at

the point of exercise.

The key audit matter relates to management’s estimate of the valuation and judgemental accounting

treatment of the share options issued in June 2021 and the associated employer social security taxes

provision. The valuation is estimated through a model which requires a number of assumptions, including

the likelihood of vesting. Some of the inputs used are not observable in the market and are based on

estimates derived from available data.

Further details are included in note 27 to the financial statements in relation to share-based payments.

Additionally, details on the Group’s accounting policy for share-based payments can be found in note 3 on

page 161, whilst it is identified as one of the key sources of estimation uncertainty within note 4 on page

162, and discussed within the Audit and Risk Committee report on page 113.

How the scope of our audit

responded to the key audit

matter

• We obtained an understanding of the relevant controls over the recognition of the share-based payment

charge and the social security tax provision including the controls over the review of underlying

calculations and valuations.

• We inspected the share plan rules and evidence of plan approval, including signed and approved

Remuneration Committee minutes and evidence of shareholder approval.

• We challenged, with reference to supporting and contradictory information, management’s assessment

of the accounting for the share options and employer social security taxes provision.

• Where relevant, we worked with our specialists to assess the appropriateness of the approach adopted,

and the models used to value the share-based payments granted during the period and certain key

assumptions used in the IFRS 2 calculation.

• We obtained the forecasts used in estimating the vesting of the revenue linked options, which we agreed

to the board approved forecasts. We challenged the appropriateness of the forecasts with reference to

current and historical performance, sales contracts signed to date and external communications made by

the Group to investors.

• We recalculated the amounts recorded in the year based on the inputs and assumptions.

Key observations We concluded that the charge recorded in relation to the share-based payments in the year is appropriate.

The assumptions used in the valuation are within an acceptable range and the charge recorded in the

income statement is in line with the requirements of IFRS 2. We also concluded that the valuation of the

employer social security tax provision is appropriate and consistent with the requirements of IAS 37.

Independent Auditor’s Report to the members

of Oxford Nanopore Technologies plc continued

Oxford Nanopore Technologies Annual Report & Accounts 2023142

5.3. Inventory Provisioning

Key audit matter description The Group holds inventory across a number of locations for the purposes of fulfilling sales orders and

contractual obligations. Additionally, certain components of inventory are held for use within research and

development. Net inventory as at the year-end is £101.5 million (2022: £87.7 million). In line with the

requirements of IAS 2 Inventories, inventory is stated at the lower of cost and net realisable value.

Management is required to make a number of estimates around the net realisable value of inventory, which

represents the estimated selling price less all estimated costs of completion. In cases where the net

realisable value is below cost, management records a provision such that inventory is held at the lower of

cost and net realisable value.

To estimate the inventory provision, management uses inputs based on the location and status of inventory

held by the Group. This includes the intended use of the inventory, including whether it is expected to be

sold or used for research and development purposes.

Management makes assumptions around the net realisable value of each category of inventory. These

estimates are then applied to the inventory balance, to record a provision in cases where the net realisable

value is below cost.

Given the uncertainty and judgement required by management, we have identified inventory provisioning as

a key audit matter.

Further details are included in note 19 to the financial statements in relation to inventory. Additionally,

details on the Group’s accounting policy for inventory can be found in note 3 on page 160, whilst it is

identified as one of the key sources of estimation uncertainty within note 4 on page 162, and discussed

within the Audit and Risk Committee report on page 113.

How the scope of our audit

responded to the key audit

matter

• We obtained an understanding around management’s process for estimating the inventory provision

balance and the relevant controls over management’s determination of the inventory provisioning

estimates.

• We challenged the key estimates, made by management in the calculation of the inventory provision,

including with reference to forecast sales and considering any potentially contradictory evidence which

would indicate the net realisable value of inventory was below the cost.

• For a sample of items, we challenged both the finance and supply chain teams on management’s

intended use of those items.

• Although not directly part of the key audit matter, to audit the gross stock balance, we attended

stocktakes at key locations which held significant levels of inventory, and performed confirmation

procedures where stock was held at third party locations. This included observing the condition of

inventory and assessing the expected use of the stock. Additionally, we evaluated the cost of gross stock

before any provisions were recorded.

Key observations We concluded that the inventory provision recorded by management is appropriate such that inventory is

stated at the lower of cost and net realisable value in line with the requirements of IAS 2.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 143

6. Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of

a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and

in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Group financial statements Company financial statements

Materiality £3,300,000 (2022: £3,300,000) £2,640,000 (2022: £2,700,000)

Basis for determining

materiality

2% of Revenue.

For the year ended 31 December 2022, our materiality

was determined through consideration ofrevenue,

operating expenses (with certain adjustments for

share based payment charges andemployer social

security taxes provision release) and net assets. Using

our professional judgement wehave determined that

for the year ended 31December 2023 that revenue is

the key benchmark and determined Group materiality

to remain £3.3 million.

We determined materiality in a manner consistent

with the approach to the Group financial statements,

however capped this at 80% (2022: 82%) of Group

materiality in order to address the risk of aggregation

when combined with other components of the

Group.

Rationale for the benchmark

applied

Revenue reflects the manner in which business performance is reported and assessed by external users of

the financial statements, particularly for a loss-making company. Recurring revenues of the Group continue

to grow and are a key metric for users. As outlined, the benchmark to determine materiality has shifted from

consideration of a number of benchmarks to be based primarily on revenue. We also considered other

secondary benchmarks as part of determining materiality. We have used our professional judgement in

determining that revenue is the key metric for users.

Revenue

Group materiality

Revenue

£169.7m

Group materiality £3.3m

Component materiality

range £2.0m to £2.6m

Audit and Risk Committee

reporting threshold £0.2m

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected

misstatements exceed the materiality for the financial statements as a whole.

Group financial statements Parent company financial statements

Performance materiality 70% (2022: 70%) of Group materiality 70% (2022: 70%) of Company materiality

Basis and rationale for

determining performance

materiality

In determining performance materiality, we primarily considered our risk assessment together with the

Group’s overall control environment, the history of aggregated uncorrected prior period adjustments and

our assessment of the competence of key management and accounting personnel.

6.3. Error reporting threshold

We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in excess of £165,000 (2022:

£165,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the

Audit and Risk Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

Independent Auditor’s Report to the members

of Oxford Nanopore Technologies plc continued

Oxford Nanopore Technologies Annual Report & Accounts 2023144

7. An overview of the scope of our audit

7.1. Identification and scoping of components

Our Group audit was scoped by obtaining an understanding of the

Group and its environment, including Group-wide controls, and

assessing the risks of material misstatement at the Group level.

The nature of the Group’s structure means that the Company acts

as the main trading company for the Group’s UK operations. As

such, the Company was subject to a full scope audit. Additionally,

the Group’s operating company for the USA was also subject to a

full scope audit.

The charts below show the coverage on each of consolidated

Revenue, Operating Expenses and Net Assets based on this scoping.

All procedures were completed by the Group engagement team. We

did not engage component auditors.

At the Group level we also tested the consolidation process and

carried out analytical procedures to confirm our conclusion that there

were no risks of material misstatement of the aggregated financial

information of the remaining components not subject to audit.

Full audit scope

Review at Group level

Revenue

99%

95%

Profit

before tax

99%

Net assets

7.2. Our consideration of the control environment

We obtained an understanding of controls over revenue, the

financial close and reporting and management’s review of

judgements and estimates. We have engaged with our IT

specialists to obtain an understanding over management’s IT

systems, and we have tested and relied on controls in addressing

the risk of material misstatement over the cut-off of revenue.

7.3. Our consideration of climate-related risks

In planning our audit, we considered the potential impacts of

climate change on the Group’s business and its financial

statements. The Group has set out in the Strategic Report its

reporting with respect to its greenhouse gas emissions (GHGs), in

addition to future plans to reduce the GHG emissions resulting

from the Group’s business.

As a part of our audit, we have performed a risk assessment,

including enquiries of management, to understand how the impacts

of climate change, including the physical or transition risks of

climate change, may affect the financial statements and our audit.

There was no impact of this work on our key audit matters.

We have engaged with our environmental, social and corporate

governance (ESG) specialists to assess the climate related

disclosures within the financial statements, and considered

whether they are materially consistent with the wider financial

statements and our knowledge obtained in the audit.

8. Other information

The other information comprises the information included in the

annual report other than the financial statements and our auditor’s

report thereon. The Directors are responsible for the other

information contained within the annual report.

Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in

our report, we do not express any form of assurance conclusion

thereon.

Our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the

course of the audit, or otherwise appears to be materially

misstated.

If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives

rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we

are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the directors’ responsibilities statement,

the directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine is

necessary to enable the preparation of financial statements that

are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible

for assessing the group’s and the parent company’s ability to

continue as a going concern, disclosing as applicable, matters

related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the group

or the parent company or to cease operations, or have no realistic

alternative but to do so.

10. Auditor’s responsibilities for the audit of the financial

statements

Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is

a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial

statements.

A further description of our responsibilities for the audit ofthe

financial statements is located on the FRC’s website at: www.frc.

org.uk/auditorsresponsibilities. This description forms part of our

auditor’s report.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 145

11. Extent to which the audit was considered capable of

detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with

laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud

is detailed below.

11.1. Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in

respect of irregularities, including fraud and non-compliance with

laws and regulations, we considered the following:

• the nature of the industry and sector, control environment and

business performance including the design of the Group’s

remuneration policies, key drivers for Directors’ remuneration,

bonus levels and performance targets;

• results of our enquiries of management, internal audit, the legal

function including the Group’s General Counsel, the Directors

and the Audit and Risk Committee about their own identification

and assessment of the risks of irregularities, including those that

are specific to the Group’s sector;

• any matters we identified having obtained and reviewed the

Group’s documentation of their policies and procedures relating to:

• identifying, evaluating and complying with laws and regulations

and whether they were aware of any instances of

non-compliance;

• detecting and responding to the risks of fraud and whether they

have knowledge of any actual, suspected or alleged fraud;

• the internal controls established to mitigate risks of fraud or

non-compliance with laws and regulations;

• the matters discussed among the audit engagement team and

relevant internal specialists, including tax, valuations, pensions,

IT, ESG and financial instruments specialists regarding how and

where fraud might occur in the financial statements and any

potential indicators of fraud.

As a result of these procedures, we considered the opportunities

and incentives that may exist within the organisation for fraud and

identified the greatest potential for fraud in the accuracy and

cut-off of revenue recognition. In common with all audits under

ISAs (UK), we are also required to perform specific procedures to

respond to the risk of management override.

We also obtained an understanding of the legal and regulatory

framework that the Group operates in, focusing on provisions of

those laws and regulations that had a direct effect on the

determination of material amounts and disclosures in the financial

statements. The key laws and regulations we considered in this

context included UK Companies Act and tax legislation.

In addition, we considered provisions of other laws and regulations

that do not have a direct effect on the financial statements but

compliance with which may be fundamental to the Group’s ability

to operate or to avoid a material penalty.

11.2. Audit response to risks identified

As a result of performing the above, we identified ‘Revenue

Recognition – Accuracy and Cut-off’ as a key audit matter related to

the potential risk of fraud. The key audit matters section of our report

explains the matter in more detail and also describes the specific

procedures we performed in response to that key audit matter.

In addition to the above, our procedures to respond to risks

identified included the following:

• reviewing the financial statement disclosures and testing to

supporting documentation to assess compliance with provisions

of relevant laws and regulations described as having a direct

effect on the financial statements;

• enquiring of management, the Audit and Risk Committee and

legal counsel (both in-house and external) concerning actual and

potential litigation and claims;

• performing analytical procedures to identify any unusual or

unexpected relationships that may indicate risks of material

misstatement due to fraud;

• reading minutes of meetings of those charged with governance,

reviewing internal audit reports and reviewing correspondence

with HMRC; and

• in addressing the risk of fraud through management override of

controls, testing the appropriateness of journal entries and other

adjustments; assessing whether the judgements made in making

accounting estimates are indicative of a potential bias; and

evaluating the business rationale of any significant transactions

that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and

potential fraud risks to all engagement team members including

internal specialists, and remained alert to any indications of fraud

or non-compliance with laws and regulations throughout the audit.

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies

Act 2006

In our opinion the part of the Directors’ Remuneration Report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

In our opinion, based on the work undertaken in the course of the

audit:

• the information given in the Strategic Report and the Directors’

report for the financial year for which the financial statements

are prepared is consistent with the financial statements; and

• the Strategic Report and the Directors’ Report have been

prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and

the parent company and their environment obtained in the

course of the audit, we have not identified any material

misstatements in the Strategic Report or the Directors’ Report.

Independent Auditor’s Report to the members

of Oxford Nanopore Technologies plc continued

Oxford Nanopore Technologies Annual Report & Accounts 2023146

13. Corporate Governance Statement

Based on the work undertaken as part of our audit, we have

concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

• the Directors’ statement with regards to the appropriateness of

adopting the going concern basis of accounting and any

material uncertainties identified set out on page 138;

• the Directors’ explanation as to its assessment of the Group’s

prospects, the period this assessment covers and why the

period is appropriate set out on page 115;

• the Directors’ statement on fair, balanced and understandable

set out on page 114;

• the Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out on

page 114;

• the section of the annual report that describes the review of

effectiveness of risk management and internal control systems

set out on page 114; and

• the section describing the work of the Audit and Risk

Committee set out on page 111.

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if,

in our opinion:

• we have not received all the information and explanations we

require for our audit; or

• adequate accounting records have not been kept by the

Company, or returns adequate for our audit have not been

received from branches not visited by us; or

• the Company financial statements are not in agreement with the

accounting records and returns.

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in

our opinion certain disclosures of Directors’ remuneration have not

been made or the part of the Directors’ remuneration report to be

audited is not in agreement with the accounting records and

returns.

We have nothing to report in this regard.

15. Other matters which we are required to address

15.1. Auditor tenure

Following the recommendation of the audit committee, we were

appointed by the Board of Directors in 2010 to audit the financial

statements for the year ending 31 December 2010 and subsequent

financial periods. The period of total uninterrupted engagement

including previous renewals and reappointments of the firm is

13years, covering the years ending 31 December 2010 to 31

December 2023. The year ending 31 December 2023 is our third

year as Auditors of the Company since it completed is Initial Public

Offering during 2021.

15.2. Consistency of the audit report with the additional report to the

Audit and Risk Committee

Our audit opinion is consistent with the additional report to the

Audit and Risk Committee we are required to provide in

accordance with ISAs (UK).

16. Use of our report

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006.

Our audit work has been undertaken so that we might state to the

Company’s members those matters we are required to state to

them in an auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility

to anyone other than the Company and the Company’s members

as a body, for our audit work, for this report, or for the opinions we

have formed.

As required by the Financial Conduct Authority (FCA) Disclosure

Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R,

these financial statements form part of the Electronic Format

Annual Financial Report filed on the National Storage Mechanism

of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This

auditor’s report provides no assurance over whether the Electronic

Format Annual Financial Report has been prepared in compliance

with DTR 4.1.15R – DTR 4.1.18R.

Sukhbinder Kooner (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

18 March 2024

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 147

Financial

Statements

148 Financial Statements

150 Consolidated Statement of Comprehensive Income

151 Consolidated Statement of Financial Position

152 Consolidated Statement of Changes in Equity

153 Consolidated Statement of Cash Flows

154 Notes to the Consolidated Financial Statements

192 Company Statement of Financial Position

193 Company Statement of Changes in Equity

194 Company Statement of Cash Flows

185 Notes to the Company Financial Statements

Oxford Nanopore Technologies Annual Report & Accounts 2023148

148—

205

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023

Strategic Report Corporate Governance Financial Statements Further Information

149

Strategic Report

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2023

	Note	2023 £000	2022 Restated * £000
Revenue	5	169,668	198,603
Cost of sales		(79,187)	(74,793)
Gross profit		90,481	123,810
Research and development expenses *		(103,842)	(69,186)
Selling, general and administrative expenses *		(155,248)	(153,103)
Loss from operations		(168,609)	(98,479)
Finance income	12	18,853	5,941
Finance expense	12	(2,206)	(1,628)
Other gains and losses	13	2,278	13,186
Share of loss in associate	18	(228)	(238)
Write-back/(impairment) of investment in associate	18	144	(2,193)
Loss before tax	7	(149,768)	(83,411)
Taxation	14	(4,739)	(7,614)
Loss for the year		(154,507)	(91,025)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Fair value movements on investment bonds	13	4,024	936
Exchange (losses)/gains arising on translation of foreign operations		(3,880)	4,021
Taxation	14	(1,240)	–
Other comprehensive income for the year, net of tax		(1,096)	4,957
Total comprehensive loss		(155,603)	(86,068)

Note

2023

Pence

2022

Pence

Loss per share 8 19 11

* See note 11 for details regarding the restatement of comparatives.

The notes on pages 154 to 191 form part of these financial statements.

Oxford Nanopore Technologies Annual Report & Accounts 2023

150

Consolidated Statement of Financial Position

as at 31 December 2023

Note

2023

£000

2022

Restated *

£000

Assets

Non‑current assets

Property, plant and equipment 16 49,890

37,294

Intangible assets 15 32,910 30,039

Investment in associate 18 742 826

Right-of-use assets 17 32,526 25,906

Other financial assets 21 208,325 84,144

Deferred tax assets 14 5,486 7,681

329,879 185,890

Current assets

Inventory 19 101,548

87,698

Trade and other receivables 20 61,475 62,905

Current tax assets 14 1,030 –

R&D tax credit recoverable 14 12,819 9,148

Other financial assets 21 49,514 119,411

Derivative financial assets 22 261 2,060

Cash and cash equivalents 28 220,536 356,778

447,18 3 638,000

Total assets 777,062 823,890

Liabilities

Non‑current liabilities

Lease liabilities * 25 37,333 30,042

Share-based payment liabilities 141 108

Provisions 24 6,538 8,645

44,012 38,795

Current liabilities

Trade and other payables 23 78,447 80,249

Current tax liabilities 14 ‑ 1,639

Lease liabilities * 25 4,322 4,056

Derivative financial liabilities 22 ‑ 962

Provisions 24 6,430 4,633

89,199 91,539

Total liabilities 133,211 130,334

Net assets 643,851 693,556

Issued capital and reserves attributable to owners of the parent

Share capital 26 86 83

Share premium reserve 26 698,553 627,557

Share-based payment reserve 27 203,099 168,200

Translation reserve (173) 3,707

Accumulated deficit

(257,714)

(105,991)

Total equity 643,851 693,556

* See note 11 for details regarding the restatement of comparatives.

The financial statements on pages 150 to 191 were approved and authorised for issue by the Board of Directors on 18 March 2024 and

were signed on its behalf by:

G. Sanghera

Director

The notes on pages 154 to 191 form part of these financial statements.

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023

Strategic Report Corporate Governance Financial Statements Further Information

151

Consolidated Statement of Changes in Equity

as at 31 December 2023

Share capital

£000

Share premium

£000

Share-based

payment

reserve

£000

Translation

reserve

£000

Accumulated

deficit

£000

Total equity

£000

At 1 January 2022	82	623,760	96,350	(314)	(15,902)	703,976
Loss for the year	–	–	–	–	(91,025)	(91,025)
Exchange gain on translation of foreign operations	–	–	–	4,021	–	4,021
Fair value movements on investment bonds	–	–	–	–	936	936
Comprehensive gain/(loss) for the year	–	–	–	4,021	(90,089)	(86,068)
Issue of share capital	1	3,796	–	–	–	3,797
Cost of share issue	–	1	–	–	–	1
Employee share-based payments	–	–	71,165	–	–	71,165
Tax in relation to share-based payments	–	–	685	–	–	685
Total contributions by and distributions to owners	1	3,797	71,850	–	–	75,648
At 31 December 2022	83	627,557	168,200	3,707	(105,991)	693,556

Loss for the year	‑	‑	‑	‑	(154,507)	(154,507)
Other comprehensive income	‑	‑	‑	(3,880)	2,784	(1,096)
Comprehensive loss for the year	‑	‑	‑	(3,880)	(151,723)	(155,603)
Issue of share capital	3	71,562	‑	‑	‑	71,565
Cost of share issue	‑	(566)	‑	‑	‑	(566)
Employee share-based payments	‑	‑	34,995	‑	‑	34,995
Tax in relation to share-based payments	‑	‑	(96)	‑	‑	(96)
Total contributions by and distributions to owners	3	70,996	34,899	‑	‑	105,898
At 31 December 2023	86	698,553	203,099	(173)	(257,714)	643,851

Note 26 26 27

The notes on pages 154 to 191 form part of these financial statements.

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152

	Note	2023 £000	2022 Restated * £000
Net cash outflow from operating activities *	28	(137,302)	(63,826)
Investing activities
Purchase of property, plant and equipment *		(5,906)	(8,632)
Proceeds from sale of property	16	‑	42,500
Capitalisation of development costs	15	(19,522)	(19,163)
Purchases of IP licences		(1,862)	–
Investment in associate		(3,000)	–
Interest received		13,898	3,443
Purchase of other financial assets		(150,000)	(129,962)
Proceeds from sale of other financial assets		104,598	60,459
Net cash outflow from investing activities		(61,794)	(51,355)
Financing activities
Proceeds from issue of shares		71,597	3,751
Costs of share issue		(366)	(2,378)
Principal elements of lease payments		(4,291)	(4,111)
Repayment of bank borrowings		‑	(9,500)
Interest paid		(1)	(221)
Interest paid on leases		(2,205)	(1,256)
Net cash inflow/(outflow) from financing activities		64,734	(13,715)
Net decrease in cash and cash equivalents before foreign exchange movements		(134,362)	(128,896)
Effect of foreign exchange rate movements		(1,880)	(2,166)
Cash and cash equivalents at beginning of year		356,778	487,840
Cash and cash equivalents at end of year	28	220,536	356,778

* See note 11 for details regarding the restatement of comparatives.

Consolidated Statement of Cash Flows

for the year ended 31 December 2023

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1. General information

Oxford Nanopore Technologies plc (the Company) is a public limited company incorporated in the United Kingdom under the Companies Act

2006 and is registered in England and Wales. The Company’s registered office is at Gosling Building, Edmund Halley Road, Oxford Science Park,

Oxford, Oxfordshire, OX4 4DQ. These consolidated financial statements comprise the Company and its subsidiaries (collectively the “Group” and

individually “Group companies”). The Group is primarily involved in researching, developing, manufacturing and commercialising a novel

generation of deoxyribonucleic acid (DNA) or ribonucleic acid (RNA) sequencing technology that provides rich data, is fast, accessible and easy

to use, and which allows the real-time analysis of DNA or RNA. This enables our customers to perform scientific/biomedical research in a range

of areas, including human genetics, cancer research, outbreak surveillance, environmental analysis, pathogens/antimicrobial resistance,

microbiome analysis and crop science. These emerging uses may include applications in healthcare, agriculture, biopharma production, food/

water supply chain surveillance, and education or consumer markets; anywhere where DNA information can tell a user about a sample: for

example its identity, whether it is changing, healthy or diseased.

The Company is the parent entity and the ultimate parent company of the Group.

The financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the

Group operates, and are rounded to the nearest thousand pounds. Foreign operations are included in accordance with the policies set

out in the accounting policies.

2. Adoption of new and revised standards

New and amended IFRS Accounting Standards that are effective for the current year

In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting

Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2023. Their adoption

has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IFRS 17 (including the June 2020

Amendments to IFRS 17)

Insurance Contracts

Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies

Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction

Amendments to IAS 12 International Tax Reform — Pillar Two Model Rules

Amendments to IAS 8 Definition of Accounting Estimates

New and revised IFRS standards in issue but not yet effective

At the date of authorisation of the consolidated financial statements, the Group has not applied the following new and revised IFRS

standards that have been issued but are not yet effective:

Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Amendments to IAS 1 Classification of Liabilities as Current or Non current

Amendments to IAS 1 Non-current Liabilities with Covenants

Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements

Amendments to IFRS 16 Lease Liability in a Sale and Leaseback

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial

statements of the Group in future periods.

3. Significant accounting policies

3.1 Basis of preparation

These consolidated financial statements have been prepared in accordance with international accounting standards in conformity with

the requirements of the Companies Act 2006 and International Financial Reporting Standards (IFRSs) as issued by the International

Accounting Standards Board (IASB).

The consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial

instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting

policies below. Historical cost is generally based on the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation

technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if

market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value

for measurement and/or disclosure purposes in the financial statements is determined on such a basis, except for share-based payment

transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of IFRS 16, and measurements that have

some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

Notes to the Consolidated Financial Statements

for the year ended 31 December 2023

Oxford Nanopore Technologies Annual Report & Accounts 2023154

The principal accounting policies adopted are set out below.

3.2 Going concern

As at 31 December 2023, the Group held £472.1 million in cash, cash equivalents and other liquid investments (note 35).

The going concern assessment period is the twelve months to the end of March 2025. In order to satisfy the going concern assumption,

the Directors of the Group review its budget periodically, which is revisited and revised as appropriate in response to evolving market

conditions.

The Directors have considered the budget and forecast prepared through to the end of March 2025, the going concern assessment

period, and theimpact of a range of severe, but plausible, scenarios, including supply chain issues driven by demand, logistics

interruptions, the pandemic, heightened geopolitical tension; particularly between the United States of America and the People’s Republic

of China and thewar in Ukraine. In particular, the impact of key business risks on revenue, profit and cash flow are as follows:

• Reduced revenues due to customer, regulatory and research and development (R&D) delays; and

• Increased costs due to supply chain restrictions, rising utilities costs, rising wages & salary costs, additional R&D requirements and

rising costs of component parts.

Under all scenarios, the Group had sufficient funds to maintain trading before taking into account any mitigating actions that the Directors

could take. Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation for

the foreseeable future and at least one year from the date of approval of the financial statements. On the basis of these reviews, the

Directors consider it remains appropriate for the going concern basis to be adopted in preparing these financial statements.

3.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and

its subsidiaries. Control is achieved when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more

of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are

sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts

and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant

activities at this time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control

of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the

consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when

the Company ceases to control the subsidiary.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the

Group’s accounting policies.

3.4 Revenue recognition

The Group manufactures and sells a range of DNA and RNA sequencing products and also provides a range of technical training and

consultancy services to customers. Products are either sold on a stand-alone basis or as part of a larger bundle of goods and services.

Revenue is recognised when control of the products has transferred, typically being when the products are delivered to the customer at

the location specified during the sales ordering process. Revenue from providing services is recognised in the period in which the

services are rendered because the customer receives and uses the benefits simultaneously.

Revenue from the sale of bundled goods and services include multiple performance obligations which are separately recognised. For

example, a bundled contract might include the lease of a sequencing device, software licences required to operate the device,

sequencing consumables and technical training services. Each deliverable is accounted for as a separate performance obligation and the

transaction price for the bundle is allocated to each performance obligation based on the stand-alone selling prices of each deliverable

observed on the Group’s online store. In instances where there is no directly observable stand-alone selling price, management estimate

this based on an expected cost plus margin approach or by using the closest market comparable as a basis. As each performance

obligation in the bundle is satisfied, revenue is recognised either at the point in time when the consumables are delivered or, in the case of

the lease of the sequencing device or provision of software licence, recognised over the period to which they relate.

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3. Significant accounting policies continued

In the case of bundled goods and services contracts, customers either pay for the whole contract in advance of delivery of all the goods

and services on the contract or are invoiced as the goods and services are delivered. If the transaction price allocated to the goods

delivered or services rendered by the Group exceeds the payment received from a customer, a contract asset is recognised. If the

payment exceeds the transaction price allocated to the goods delivered or services rendered by the Group, a contract liability is

recognised. In the case of non-bundled goods and services contracts, payment of the transaction price is typically due when the

customer receives the goods or services.

For bill-and-hold arrangements in respect of the supply and delivery of goods, revenue is recognised when the customer has obtained

control of the goods. Control is deemed to have transferred when the goods have been delivered to the specified delivery location. Under

bill-and-hold arrangements it is deemed appropriate to recognise revenue provided the customer has requested the bill-and-hold

arrangement for substantive purposes, for example, because it lacks the physical space/facilities to store the goods. In addition, the

goods must be able to be identified as belonging to the customer and cannot be used to satisfy orders for other customers, meaning that

the customer can redirect or determine how the goods are used or where the goods are delivered to.

Consistent with the terms of agreement with distributors, revenue from distributors is recognised upon transfer of control over the goods

to a third party. Typically this occurs when title passes to the customer, either on shipment or on receipt of goods by the customer,

depending on local trading terms. The nature of the agreements are such that the Group’s customer is deemed to be the distributor, and

therefore the Group recognises revenue as principal in the transaction with the distributor. The distributor subsequently controls the

products before making sales to end users, however bears inventory risk and has discretion for specific commercial arrangements with

the end users of the products. On this basis revenue is recorded by the Group at the point control of the products is passed to the

distributors. The agreements do not contain a clause for the Group to repurchase the goods from the distributors. For the year ended 31

December 2023, the Group’s revenue from distributor sales amounted to £22.6 million (2022: £18.1 million), representing 13.3% (2022:

9.1%) of the total Group’s total revenue for the year.

Revenue includes royalty income from collaboration agreements, where the Group has out-licensed certain rights associated with

products. These agreements cover the development, manufacturing and/or commercialisation of products with third parties. The income

generated from these agreements is defined as revenue, as out-licensing and collaboration agreements are considered to form part of the

Group’s ordinary activities. Income from the agreements may take the form of upfront fees, milestone payments and/or royalties. For the

year ended December 2023, the Group earned £0.6 million (2022: £0.2 million) revenue from collaboration and royalty agreements,

representing 0.4% (2022: 0.1%) of the Group’s total revenue for the year.

3.5 Alternative performance measures

Alternative performance measures are used by the Directors and management to monitor business performance internally and exclude

certain cash and non cash items which they believe are not reflective of the normal day-to-day operating activities of the Group. The

Directors believe that disclosing such non-IFRS measures enables a reader to isolate and evaluate the impact of such items on results

and allows for a fuller understanding of performance from year to year. Alternative performance measures may not be directly

comparable with other similarly titled measures used by other companies. A detailed reconciliation between reported and adjusted

measures is presented in note 35.

Share-based compensation is an important aspect of the compensation of our employees and executives, but management believes it is

useful to specifically exclude the Founder LTIP and employer’s social security taxes on pre-IPO share awards from adjusted profit

measures to better understand the long term performance of the core business.

The share-based compensation expenses of the other LTIPs and share award schemes are not treated as adjusting items.

3.6 Leased assets

The Group as a lessee

The Group leases various offices and buildings. Rental contracts are typically made for fixed periods of 12 months to 21 years and may include

extension and termination options. These are used to maximise operational flexibility in terms of managing the assets used inthe Group’s

operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset

and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as

leases with a lease term of 12 months or less). For these leases, the Group recognises the lease payments as an operating expense on a

straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic

benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted

by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

• fixed lease payments (including in substance fixed payments), less any lease incentives receivable;

• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• the amount expected to be payable by the lessee under residual value guarantees;

• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023156

The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently

measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing

the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right of use asset) whenever:

• the lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise

of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in

which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the

lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used);

• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is

remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at

the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the

commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less

accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or

restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured

under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless

those costs are incurred to produce inventory.

Right-of-use assets are depreciated over the shorter period of lease term and Useful Economic Life (UEL) of the underlying asset.

Ifalease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise

apurchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at

thecommencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36

todetermine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the “Property, plant

and equipment” policy.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset.

The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and

are included within “operating expenses” in the statement of comprehensive income.

A sale and leaseback transaction is where the Group sells an asset and immediately reacquires the use of the asset by entering into a

lease with the buyer. A sale occurs when control of the underlying asset passes to the buyer. A lease liability is recognised, the associated

property, plant and equipment asset is derecognised, and a right-of-use asset is recognised at the proportion of the carrying value

relating to the right retained. Any gain or loss arising relates to the rights transferred to the buyer.

The Group as a lessor

The Group leases some of its devices to customers. Leases for which the Group is a lessor are classified as finance or operating leases.

Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a

finance lease. All other leases are classified as operating leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred

in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line

basis over the lease term. See note 5 for income from leases.

When a contract includes both lease and non-lease components, the Group applies IFRS 15 to allocate the consideration under the

contract to each component.

3.7 Foreign currencies

In preparing the financial statements of each individual Group entity, transactions in currencies other than the entity’s functional currency

(foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting

period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried

at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was

determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:

• exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are

included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

• exchange differences on transactions entered into in order to hedge certain foreign currency risks (see note 29); and

• exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor

likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other

comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

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157

3. Significant accounting policies continued

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations are

translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at

the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange

rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and

accumulated in equity (and attributed to non-controlling interests as appropriate).

3.8 Employee benefits

(i) Retirement costs

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling

them to the contributions.

(ii) Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the

related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to

be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the

present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up

to the reporting date.

3.9 Taxation

The tax expense represents the sum of current and deferred taxes.

Current tax

Current tax is based on taxable profit for the year. Taxable profit differs from profit or loss before tax as reported in the statement of

comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes

items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or

substantively enacted by the reporting period date.

A current tax provision is recognised when the Group has a present obligation as a result of a past event and it is probable that the Group

will be required to settle that obligation. Tax liabilities are recognised when it is considered probable that there will be a future outflow of

funds to a taxing authority. Provisions are measured at the best estimate of the amount expected to become payable. The assessment is

based on the judgement of tax professionals within the Group supported by previous experience in respect of such activities and in

certain cases based on specialist independent tax advice.

The Group is entitled to claim tax credits in the United Kingdom for certain research and development expenditure. The credit is paid in

arrears once tax returns have been filed. An estimate of the tax credit expected to be received is recognised in the statement of

comprehensive income above the line of profit or loss before tax. A notional tax charge on the credit is recognised within the taxation line

in the statement of comprehensive income, and the corresponding net asset is included within current assets in the consolidated

statement of financial position until such time as it is received.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying

amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of

taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable

temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against

which deductible temporary differences can be utilised.

Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business

combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, a

deferred tax liability is not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that

sufficient taxable profits will be available to allow all or part of the asset to be recovered. In considering the recoverability of deferred tax

assets, the Group assesses the likelihood of their being recovered within a reasonably foreseeable timeframe, being typically a period of

between three to five years, taking into account the future expected profit profile and business model of each relevant company or

country, and any potential legislative restrictions on use.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised

based on tax laws and rates that have been enacted, or substantively enacted, at the reporting date.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against

current tax liabilities and the deferred taxes relate to income taxes levied by the same taxation authority and the Group intends to settle

its current tax assets and liabilities on a net basis.

Current and deferred tax

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive

income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in

equity respectively.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023158

3.10 Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If

significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items

(major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is

recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with

the expenditure will flow to the Group.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected UEL.

It is provided at the following rates:

Leasehold land over lease period straight line

Buildings over 40 years straight line

Leasehold improvements over the shorter of the UEL and the term of the lease

Plant and machinery 3-10 years straight line

Office equipment 3 years straight line

Assets subject to operating leases 2-3 years straight line

Assets under construction are not depreciated.

The UELs, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in

estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from

the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between

the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

3.11 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated

impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and

amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for

ona prospective basis.

(i) Patents and licences

Patents and licences are measured initially at purchase cost and are amortised on a straight-line basis over the expected duration of the

patent or licence.

(ii) Capitalised development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised

ifall of the following have been demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale;

• the intention to complete the intangible asset and use or sell it;

• the ability to use or sell the intangible asset;

• how the intangible asset will generate probable future economic benefits;

• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

• the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the

intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised,

development expenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and

accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

The Group regularly assesses the development expenditures against the criteria for development costs to be recognised as an asset,

asset out in IAS 38 “Intangible Assets”. The amortisation periods for internally generated assets incurred by the Group are:

Development of Core Technology Platform 3 years

Development of Sequencing Kits 2 years

Impairment of intangible assets excluding goodwill

At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any

indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is

estimated to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from

other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable

and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise

they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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3. Significant accounting policies continued

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash

flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the

asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless

the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease and to the extent

that the impairment loss is greater than the related revaluation surplus, the excess impairment loss is recognised in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised

estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been

determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment

loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the

impairment loss is treated as a revaluation increase.

3.12 Inventory

Inventory is stated at the lower of cost, calculated as standard cost based on average cost, and net realisable value.

Cost comprises direct materials and, when applicable, direct labour cost and those overheads that have been incurred in bringing the

inventory to its present location and condition. Net realisable value represents the estimated selling price less all estimated costs of

completion. The net realisable value of inventory expected to be used as part of Research and development is £nil.

3.13 Financial instruments

Financial assets, other than those at fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI) ,

are assessed for indicators of impairment at each balance sheet date. In accordance with IFRS 9 impairment of financial assets is based

on an expected credit loss (ECL) model. The ECL model requires the Group to account for the ECLs and changes in those ECLs at each

reporting date to reflect changes in credit risk since initial recognition of the financial assets. Financial assets are impaired where there

isobjective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated

future cash flows of the investment have been affected; IFRS 9 also requires current and future events to be considered when making an

impairment assessment.

The Group applies the IFRS 9 simplified approach to the measurement of the ECLs which uses a lifetime ECL for all trade receivables.

The ECL on these trade receivables is estimated using a provision matrix for collective assessment based on the Group’s historical credit

loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current

as well as the forecast direction of conditions at the reporting date, to the extent that these are expected to have an effect on recovery of

trade receivables.

To measure the ECLs, trade receivables have been grouped based on shared credit risk characteristics where relevant, and the days

pastdue. The ECL percentage rates of default applied to trade receivables grouped by days past due are based on the payment profiles

of sales over a selected period and the corresponding historical default (non-payment which resulted in the debt being written off)

experienced in relation to these sales. The percentage rates of default are adjusted to reflect current and forward looking information

onmacroeconomic factors affecting the ability of customers to settle the receivables where applicable.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and

the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

Assets that are held at fair value through other comprehensive income are those that are held to collect contractual cash flows on

therepayment of principal and interest and which are held to recognise a capital gain through the sale of the asset. Movements in the

carrying amount are recognised in other comprehensive income except for the recognition of impairment, interest income and foreign

exchange gains or losses which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other

comprehensive income is reclassified from equity to profit or loss. Interest income is included in finance income using the effective

interest rate method.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade

receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered

uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against

the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition

or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are

added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction

costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised

immediately in the statement of comprehensive income.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023160

3.14 Investments in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.

Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint

control over those policies.

Under the equity method, an investment in an associate is recognised initially in the consolidated statement of financial position at cost

and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint

venture. When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that associate, the Group

discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal

or constructive obligations or made payments on behalf of the associate.

An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On

acquisition of the investment in an associate, any excess of the cost of the investment over the Group’s share of the net fair value of the

identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment.

Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after

reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.

3.15 Trade and other receivables

Trade receivables are recognised at cost less allowances for expected credit losses with specific adjustments. They arise principally

through the provision of goods and services to customers. The provision is based on the Group’s expected credit loss.

3.16 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and deposits held at call with banks and other short-term highly liquid investments with

a maturity of three months or less at the date of acquisition.

Cash is not held for the purpose of investment in its own right and the primary goal of investment strategies is capital preservation. Cash

not required for short-term working capital requirements is invested in either investment bonds or short-term treasury deposits (“other

financial assets”). To the extent that it is reasonable, deposits are spread between banks that have been approved by the Directors. Cash

required to meet short-term working capital requirements as they arise is maintained in instant access accounts at one or more approved

banks.

3.17 Trade and other payables

Trade payables are non-interest bearing and are stated at cost which equates to their fair value.

3.18 Other financial assets

Other financial assets comprise unlisted investments, short-term deposits, and investment bonds held with banks that do not meet the

IAS 7 definition of a cash equivalent.

3.19 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that

the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the

reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash

flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time

value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is

recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.20 Share-based payments

Where share options and other equity instruments are awarded to employees, the fair value of the instrument at the date of grant is

charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number

of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting

period is based on the number of instruments that eventually vest.

Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a

charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to

achieve a market vesting condition. Where the terms and conditions of options are modified before they vest, the increase in the fair value

of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining

vesting period.

Where equity instruments are granted to persons other than employees, the income statement is charged with the fair value of goods and

services received.

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4. Critical accounting judgements and sources of estimation uncertainty

In applying the Group’s accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and

assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and

associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ

from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the

revision affects both current and future periods.

Critical judgements in applying the Group’s accounting policies

The following are the critical judgements and estimates that the Directors have made in the process of applying the Group’s accounting

policies and that have the most significant effect on the amounts recognised in the financial statements.

Judgements

i. Internally generated intangible assets research and development expenditure (R&D)

Critical judgements are required in determining whether development spend meets the criteria for capitalisation of such costs as laid out

in IAS 38 “Intangible Assets,” in particular whether any future economic benefit will be derived from the costs and flow to the Group. The

Directors believe that the criteria for capitalisation as per IAS 38 paragraph 57 for specific projects were met during the year and

accordingly all amounts in relation to the development phase of those projects have been capitalised as an intangible asset during the

year. All other spend on R&D projects has been recognised within R&D expenses in the income statement during the year.

Management does not have a formal timesheet process for monitoring time spent by employees on projects in their development stage.

Instead, management consults with the relevant project leaders on a regular basis to understand and estimate the time spent on projects

in their development stage. When a percentage allocation has been agreed, in line with the estimation process described below, this is

then applied to other, non-employee related development costs to ensure that costs are consistently and appropriately capitalised. The

net book value of internally generated capitalised assets at 31 December 2023 was £30.8 million (2022: £29.7 million).

Estimates

Key sources of estimation uncertainty

i. Inventory

The Group holds inventory across a number of locations for the purposes of fulfilling sales orders and contractual obligations. Additionally,

certain components of inventory are held for use within research and development. Net inventory at 31 December 2023 was £101.5 million

(2022: £87.7 million). In line with the requirements of IAS 2 Inventories, inventory is stated at the lower of cost and net realisable value.

Management is required to make a number of estimates around the net realisable value of inventory, which represents the estimated

selling price less all estimated costs of completion. In cases where the net realisable value is below cost, management records a provision

such that inventory is held at the lower of cost and net realisable value.

To estimate the inventory provision, management uses inputs based on the location and status of inventory held by the Group. This

includes the intended use of the inventory, including whether it is expected to be sold or used for research and development purposes.

Management makes assumptions around the net realisable value of each category of inventory. These estimates are then applied to the

inventory balance, based on its cost, location and intended use, to record a provision in cases where the net realisable value is below cost.

If the net realisable value had increased by 5%, then the value of inventory would have increased by £1.5 million and the revised stock

value would have been £103.0 million (2022: £1.2 million and £88.9 million respectively). If the net realisable value had decreased by 5%,

then the value of inventory would have decreased by £1.5 million and the revised stock value would have been £100.0 million (2022: £1.2

million and £86.5 million respectively).

ii. Share-based payments

Details of the share-based payment schemes operated by the Group are disclosed in note 27. In June 2021, awards were granted to the

Executive Directors of the Company under the Oxford Nanopore Technologies Limited Long Term Incentive Plan 2021 (Founder LTIP).

Half of the awards are subject to a non-market revenue performance condition which drives number of awards expected to vest

depending on when certain revenue targets are met. At each reporting date, management makes an estimate as to the extent to which

therevenue condition is expected to be achieved by the end of each future reporting period. This is driven by revenue forecasts. Whilst

management may make an appropriate estimate of the annual revenue target on grant date, this estimate might change in future periods.

If the annual revenue forecast to 31 December 2024 decreased by 10%, the Group recognised total expenses of £35.0 million relating to

equity settled share-based payment transactions would decrease by £2.7 million.

In addition, the Founder LTIP awards in issue give rise to an associated employer’s social security liability. Management updates the

estimate for this liability at each reporting period with reference to both the expected number of awards vesting and their expected value,

using the share price at the period end date. Half of the Founder LTIP awards are linked to a share price condition, which is a

market-based performance condition incorporated into the fair value calculation and to which no subsequent adjustments can be made

from an IFRS 2 charge perspective. However, management has estimated the proportion likely to vest for the purposes of assessing the

employer’s social security contributions to accrue at each period end using a Monte Carlo simulation model which calculates the average

expected vesting based on a large number of randomly generated projections of the Company’s future share price. At 31 December

2023, the expected vesting of the share price linked awards was estimated at 50.8% (2022: 56.3%).

Other sources of estimation uncertainty

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023162

iii. Internally generated intangible assets research and development expenditure (R&D)

Estimates are made in determining the capitalisation of costs in relation to the development phase of R&D projects. Management capitalises

development costs in respect of R&D projects based on an estimate of the percentage of time spent on the project by employees while the

project is in its development phase. Development costs capitalised in 2023 amounted to £19.5 million (2022: £19.2 million). If the estimated

time spent on these projects had varied by up to 5% then the development costs capitalised in 2023 would have been in the range £18.5

million to £20.5 million (2022: £18.2 million to £20.2 million).

iv. Non-standard customer contracts

As noted in the revenue recognition accounting policy, revenue contracts for the sale of bundled goods and services require the allocation

of the total contract price to individual performance obligations based on their stand-alone selling prices. The Group occasionally enters

into larger bespoke contracts which might include a clause linked to the performance of the products and options on the total units of

certain consumables to be purchased under the contract. This requires management to estimate the number of items likely to be delivered

under the contract.

5. Revenue

The Group derives revenue from the transfer of goods and services over time and at a point in time in the following categories and

geographical regions:

2023

£000

2022

£000

Geographical region

Americas 61,542 48,300

EMEAI 74,037 115,498

APAC 34,089 34,805

Total revenue 169,668 198,603

2023

£000

2022

£000

Category

Sale of goods 141,907 17 7, 672

Rendering of services 17,445 9,902

Lease income 10,316 11,029

Total revenue 169,668 198,603

2023

£000

2022

£000

Timing of revenue recognition

At a point in time 141,907 17 7, 672

Over time 27,761 20,931

Total revenue 169,668 198,603

Notes 20 and 23 disclose assets and liabilities the Group has recognised in relation to contracts with customers.

Revenue recognised in relation to contract liabilities:

2023

£000

2022

£000

Revenue recognised that was included in the contract liability balance at the beginning of the year 15,848 1 7,670

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6. Segment information

Products and services from which reportable segments derive their revenues are set out below.

The information reported to the Group’s senior management team, which is considered the chief operating decision maker (CODM), for

the purposes of resource allocation and assessment of segment performance is defined by market rather than product type. The segment

measure of profit evaluated by the CODM is Adjusted EBITDA, as this is considered to give the most appropriate information in respect of

profitability of the individual segments.

The Directors consider that the Group reportable segments in accordance with IFRS 8 Operating Segments are as set out below:

Reportable segments Description

Life Science Research Tools

(LSRT)

Oxford Nanopore’s core business, generating revenue from providing products and services for

research use, including research and development expenditure and corporate expenditure.

COVID Testing Revenue from providing products for SAR-Cov-2 testing. No revenues were expected in this segment

after 2022, and none were reported in the current year. We do not expect this segment to continue

after this year’s results.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 3.

(a) Information about major customers

In the year there were no individual customers representing more than 10% of the Group’s total revenue. In 2022, the Group had one

major customer, the Department of Health and Social Care (DHSC). Revenue from this customer was £51.8 million, which represented

26.0% of Group revenue and was reported within the COVID testing segment.

The following is an analysis of the Group’s revenue, results, assets and liabilities by reportable segment.

LSRT

£000

COVID Testing

£000

2023

£000

LSRT

£000

COVID Testing

£000

2022

£000

Revenue

Americas 61,542 - 61,542 48,300 – 48,300

EMEAI 74,037 - 74,037 63,710 51,788 115,498

APAC 34,089 - 34,089 34,805 – 34,805

Total revenue 169,668 - 169,668 146,815 51,788 198,603

(b) Adjusted EBITDA

LSRT

£000

COVID Testing

£000

2023

£000

LSRT

£000

COVID Testing

£000

2022

£000

(Loss)/profit after tax (154,507) - (154,507) (128,824) 37,799 (91,025)

Tax expense 4,739 - 4,739 7,6 14 – 7,614

Finance income (18,853) - (18,853) (5,941) – (5,941)

Finance expense 1 - 1 221 – 221

Interest on lease 2,205 - 2,205 1,382 25 1,407

Depreciation and amortisation 41,627 - 41,627 31,799 72 31,871

Share-based payments (Founder LTIP) 20,886 - 20,886 53,182 – 53,182

Employer’s social security taxes on Founder

LTIP and pre-IPO share awards (888) - (888) (21,634) – (21,634)

Gain on sale of property - - - (18,620) – (18,620)

Settlement of COVID-19 testing contract - - - – (37, 8 9 6) (37, 8 9 6)

(Write-back)/impairment of investment in

associate (144) - (144) 2,193 – 2,193

Adjusted EBITDA (104,934) - (104,934) (78,628) – (78,628)

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023164

Adjusted EBITDA is defined as loss for the year before income tax expense, finance income, loan interest, interest on lease, depreciation

and amortisation, adjusted for: i) share-based payment expense on Founder LTIP awards; ii) employer’s social security taxes on Founder

LTIP and pre-IPO share awards; iii) impairment of investment in associate; iv) gain on sale of property; and v) settlement of the COVID-19

testing contract.

Adjusted EBITDA is used as a key profit measure because it shows the results of core operations exclusive of income or charges that are

not considered to represent the underlying operational performance.

LSRT

£000

COVID Testing

£000

2023

£000

LSRT

£000

COVID Testing

£000

2022

£000

Depreciation of property, plant and equipment 18,105 - 18,105 15,968 – 15,968

Depreciation of right-of-use assets 5,031 - 5,031 4,403 72 4,475

Amortisation of internally generated intangible assets 18,419 - 18,419 11,378 – 11,378

Amortisation of acquired intangible assets 72 - 72 50 – 50

Additions to non-current assets

68,259 - 68,259 5 7,7 75 – 57,7 75

Segment assets

Investment in associate 742 - 742 826 – 826

Acquired intangible assets 2,136 - 2,136 346 – 346

Other segment assets

276,213 - 276,213 243,496 – 243,496

Total segment assets 279,091 - 279,091 244,668 – 244,668

Deferred tax assets 5,486 7,681

R&D tax credit recoverable 12,819 9,148

Current tax asset 1,030 –

Derivative financial assets 261 2,060

Other financial assets 257,839 203,555

Cash and cash equivalents 220,536 356,778

Total assets 777,062 823,890

Segment liabilities

Total segment liabilities (133,211) - (133,211) (127,733) – (127,733)

Derivative financial liabilities - (962)

Current tax liabilities - (1,639)

Total liabilities (133,211) (130,334)

Net assets 643,851 693,556

* Additions to non-current assets include all non-current assets except for investments, and deferred tax assets.

** Other segment assets include inventory, trade and other receivables and non-current assets except for investments, acquired intangible assets, other financial assets and

deferred tax assets.

The Group’s non-current assets, excluding deferred tax assets, by geographical location are detailed below:

LSRT

£000

COVID Testing

£000

2023

£000

LSRT

£000

COVID Testing

£000

2022

£000

Americas 13,130 - 13,130 11,255 – 11,255

EMEAI 310,208 - 310,208 166,572 – 166,572

APAC 1,055 - 1,055 382 – 382

324,393 - 324,393 178,209 – 178,209

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7. Loss before tax

2023

£000

2022

£000

This is after charging/(crediting):

Non-staff research and development costs 35,671 32,651

Amortisation of intangible assets 18,491 11,428

Depreciation of property, plant and equipment 18,105 15,968

Depreciation of right-of-use assets 5,031 4,475

Loss/(gain) on disposal of property, plant and equipment 3,663 (16,740)

Cost of inventory 49,162 42,559

Write-down of inventory 9,839 6,045

Short-term lease costs 928 602

Impairment of intangible assets – 736

(Write-back)/impairment of investment in associate (144) 2,193

Net foreign exchange gain (1,385) (2,490)

All amounts relate to continuing operations.

8. Loss per share

2023

Pence

2022

Pence

(a) Basic and diluted loss per share

Total basic and diluted loss per share attributable to the ordinary equity holders of the Group from

continuing operations 19 11

2023

£000

2022

£000

(b) Reconciliation of earnings used in calculating earnings per share

Loss attributable to the ordinary equity holders of the Group used in calculating basic and diluted loss per

share from continuing operations (154,507) (91,025)

2023

Number

2022

Number

Weighted average number of ordinary shares and potential ordinary shares used as the denominator in

calculating basic and diluted earnings per share 833,960,358 823,742,709

Options

Options granted to employees under the Oxford Nanopore Technologies Share Option Scheme and the Oxford Nanopore Technologies

Limited Share Option Plan 2018 are considered to be potential ordinary shares. These options have not been included in the

determination of the basic and diluted loss per share as shown above, because they are anti-dilutive for the years ended 31 December

2023 and 31 December 2022. These options could potentially dilute basic earnings per share in the future. Details relating to share

options are set out in note 27.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023166

9. Auditor’s remuneration

During the year, the Group obtained the following services from the Group’s auditors:

2023

£000

2022

£000

Audit of the Group’s financial statements 500 465

Audit of the Group’s subsidiary financial statements 70 129

Assurance-related non-audit services 90 89

660 683

10. Staff costs

Employee benefit expenses (including directors) comprise:

2023

£000

2022

£000

Wages and salaries 99,111 81,613

Social security costs 10,361 8,671

Pension costs 4,113 3,183

Share-based payment expenses 35,076 70,009

Social security credits (share awards) (168) (21,222)

Other staff costs 3,032 1,834

151,525 144,088

Directors and key management personnel

Directors and key management personnel are those persons having authority and responsibility for planning, directing and controlling the

activities of the Group, including the Directors of the Company listed in the section of the annual report labelled Board of Directors.

Director and key management personnel compensation consisted of:

2023

£000

2022

£000

Salaries, bonuses and benefits in kind 6,367 7, 260

Amounts paid as directors’ fees 735 655

Share-based payment expenses – 86,097

7,102 94,012

The share-based payment charge comprises the value of awards that have vested relating to the Share Price Performance Condition and

the Revenue Condition awards. The value for 2023 is £nil as the small number of awards that were approved as vested by the Committee

in 2023 related to a performance condition met in 2022, and therefore were included in the 2022 figures.

The value shown in 2022 is based on the closing price on the vesting dates of 28 January 2022 and 12 October 2022. In addition, a

further performance condition was met in respect of the shares allocated to the Revenue Condition based on the full year revenue

outcome for 2022. The value of these shares was included using the average share price for the 3 months to 31 December 2022.

Further information on the remuneration of the Directors is given in the sections of the annual report on remuneration labelled as audited

in the Directors’ Remuneration Report.

Employee numbers

The monthly average number of employees was as follows:

2023

Number

2022

Number

Research and development 464 380

Production 156 149

Sales, general and administration 513 393

1,133 922

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11. Re-presentation and restatements

(a) Re-presentation of development-related costs

As amortisation related to internally generated assets has increased over time, management now considers that it is more appropriate to

present amortisation and the R&D tax credit within research and development expenses, rather than as previously presented within

selling, general and administration expenses. The comparative income statement has been re-presented to be consistent with the current

year presentation. The net effect on the statement of comprehensive income is nil as shown below:

2023

£000

2022

£000

Research and development expenses

Before re-presentation 95,509 64,842

Re-presentation of amortisation and R&D tax credit 8,333 4,344

After re-presentation 103,842 69,186

Selling, general and administrative expenses

Before re-presentation 163,581 157,447

Re-presentation of amortisation and R&D tax credit (8,333) (4,344)

After re-presentation 155,248 153,103

Total operating expenses

Before re-presentation 259,090 222,289

After re-presentation 259,090 222,289

(b) Restatement of current and non-current lease liabilities

In 2023, the Group identified a misclassification of £11.0 million of non-current lease liabilities incorrectly presented as current lease

liabilities in the financial statements for the year ended 31 December 2022. The misclassification has been corrected by restating the

2022 current and non-current lease liabilities line items within the 2023 financial statements as shown below. There is no effect on the

total liabilities of the Group.

2022

£000

Increase/

(decrease)

£000

2022

Restated

£000

Non-current liabilities

Lease liabilities 19,049 10,993 30,042

Current liabilities

Lease liabilities 15,049 (10,993) 4,056

Total liabilities 130,334 - 130,334

In 2023, the Group identified that the cash outflows associated with additions to assets subject to operating leases of £14.4 million had

been incorrectly classified in the cashflow statement within the 2022 financial statements as cash used within investing activities.

Following a review of relevant accounting requirements, the Group has restated these 2022 cash outflows to be presented as cash used

in operations to correct the presentation in the 2023 financial statements. The presentation of the cash flow in 2023 is consistent with the

restated presentation. See below for details regarding this restatement of comparatives. There is no effect on the net cash position or

total cash outflow of the Group.

2022

£000

Increase/

(decrease)

£000

2022

Restated

£000

Cash used in operations

Increase in inventory (24,717) (14,439) (39,156)

Total cash used in operations (50,621) (14,439) (65,060)

Net cash outflow from investing activities

Purchase of property, plant and equipment (23,071) 14,439 (8,632)

Total cash outflow from investing activities (65,794) 14,439 (51,355)

Total cash outflow (128,896) - (128,896)

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023168

12. Finance income and expense

2023

£000

2022

£000

Finance income

Bank interest 11,533 4,477

Interest on treasury deposits 2,047 1,464

Interest on investment bonds 5,273 -

Total finance income 18,853 5,941

Finance expense

Bank interest (1) (221)

Interest on lease (2,205) (1,407)

Total finance expense (2,206) (1,628)

Net finance income recognised in profit or loss 16,647 4,313

13. Other gains and losses

2023

£000

2022

£000

Gain/(loss) on derivative financial instruments 2,125 (5,434)

Gain on investment bonds 153 -

Gain on sale of property - 18,620

2,278 13,186

2023

£000

2022

£000

Fair value movements on investment bonds (included in other comprehensive income) 4,024 936

Further information on derivative financial instruments is disclosed in note 22.

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14. Taxation

(a) Income tax recognised in statement of comprehensive income

Income tax recognised in profit and loss

2023

£000

2022

£000

Current tax

Notional tax on R&D expenditure credit 2,446 1,187

Prior year adjustment in respect of notional tax on R&D expenditure credit (48) 159

Prior year adjustment in respect of current tax (822) 519

Tax payable on foreign subsidiary 2,949 6,059

Total current tax 4,525 7,924

Deferred tax

Origination and reversal of temporary differences 214 (310)

Total deferred tax 214 (310)

Total tax 4,739 7,6 14

Income tax recognised in OCI

2023

£000

2022

£000

Deferred tax on investment bonds 1,240 –

Total tax 1,240 –

Current tax balances have been calculated at the rates enacted for the period. The effective rate of Corporation Tax is -3.16% (2022:

-9.13%) of the loss before tax for the Group.

The reasons for the difference between the actual tax charge for the year and the standard rate of Corporation Tax in the United

Kingdom applied to losses for the year are as follows:

2023

£000

2022

£000

Loss for the year (154,507) (91,025)

Income tax expense 4,739 7,6 14

Loss before income taxes (149,768) (83,411)

Tax rate in the UK for period as a percentage of losses at 23.5% (2022: 19.0%) (35,196) (15,848)

R&D incentives 2,067 813

Adjustment in respect of overseas tax rates 410 1,104

Adjustments to tax charge in respect of prior years 133 62

Impact of share options 6,634 12,337

Movement on unrecognised deferred tax 29,775 7, 845

Other timing differences (1,160) 287

Expenses not deductible for tax purposes 2,076 1,014

Total tax expense 4,739 7,614

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023170

(b) Current tax asset/(liability)

2023

£000

2022

£000

Corporation Tax asset/(liability) 1,030 (1,639)

1,030 (1,639)

Deferred tax balances have been recognised at the rate expected to apply when the deferred tax attribute is forecast to be utilised based

on substantively enacted rates at the balance sheet date. The rate of UK Corporation Tax increased to 25% from 1 April 2023. Taxation

for other jurisdictions is calculated at the rates prevailing in the respective territories. £5.2 million (2022: £7.4 million) of the net deferred

tax asset relates to the US subsidiary, which is profitable.

In respect of share-based payments, to the extent that the tax deduction (or future estimated tax deduction) exceeds the amount of

therelated cumulative IFRS 2 expense, the excess of the associated current or deferred tax has been recognised in equity and not in the

consolidated statement of comprehensive income. For current tax this increases the charge to the consolidated statement of comprehensive

income by £0.2 million (2022: £0.1 million). For deferred tax this increases the credit to the consolidated statement of comprehensive income

by £0.3 million (2022: reduction of £0.5 million).

A deferred tax asset (DTA) of £7.7 million (2022: £9.4 million) has been recognised in relation to future share option exercises and other

timing differences in Oxford Nanopore Technologies, Inc. and other overseas subsidiaries, because it is probable that the asset will be

utilised in the foreseeable future as a result of taxable profits forecast in future years.

A deferred tax asset has been recognised in relation to the Company of £8.1 million (2022: £5.9 million), being the amount equal to the

deferred tax liability in the same entity.

Recognised deferred tax balances are made up as follows:

Recognised deferred tax assets and liabilities

2023

£000

2022

£000

Deferred tax assets

Provisions 1,498 2,487

Losses 8,127 5,912

Share awards 6,052 6,360

Share awards (equity) 180 543

Total recognised deferred tax assets 15,857 15,302

Deferred tax liabilities

Accelerated capital allowances (2,276) (1,741)

Investment bond unrealised gain (1,240) –

Intangibles (6,855) (5,880)

Total recognised deferred tax liabilities (10,371) ( 7, 621)

Net recognised deferred tax asset 5,486 7,681

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14. Taxation continued

Reconciliation of deferred tax

2023

£000

2022

£000

Balance at 1 January 7,681 6,077

Prior year adjustments (1,002) 616

Charge to the statement of comprehensive income (449) (306)

(Charge)/credit to equity (341) 523

Foreign exchange movements (403) 771

At 31 December 5,486 7,681

Deferred tax assets and liabilities have been offset where the group has a legally enforceable right to set off current tax assets against

current tax liabilities and where the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same tax

authority on the same taxable entity.

A DTA of £189.7 million (2022: £156.2 million) has not been recognised due to uncertainty that the asset will be utilised in the foreseeable

future due to the absence of sufficient taxable profits. This DTA relates to the UK (2022: UK). This includes a deferred tax asset of £155.0

million (2022: £128.3 million) in relation to UK tax losses. The losses and deductible temporary differences are expected to be available

indefinitely.

Unrecognised deferred tax assets

2023 2023 2022 2022

Gross amount

£000

Tax effected

£000

Gross amount

£000

Tax effected

£000

Losses 619,990 154,998 513,111 128,278

Provisions 17, 451 4,363 11,050 2,762

Share awards 71,338 17,834 71,454 17,8 6 3

Share awards (equity) 4,327 1,082 14,503 3,626

Accelerated capital allowances 27,476 6,869 5,924 1,481

RDEC 18,177 4,544 8,584 2,146

Total unrecognised deferred tax assets 758,759 189,690 624,626 156,156

(d) R&D tax credit recoverable

In the statement of comprehensive income the R&D expenditure credit (RDEC) is recognised in the loss before tax and a notional tax

charge is recognised in the tax expense. The net asset is recognised within current assets in the statement of financial position. The

current asset is made up as follows:

2023

£000

2022

£000

At 1 January 9,148 14 , 274

Adjustment to R&D tax credit in respect of previous years (203) 678

Cash receipt (4,088) (10,864)

R&D tax credit for the year 10,408 6,247

Notional tax charge on R&D tax credit for the year (2,446) (1,187)

At 31 December 12,819 9,148

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023172

15. Intangible assets

Capitalised

development

costs

£000

Patents and

licences

£000

Total

£000

Cost

At 1 January 2022 38,464 446 38,910

Additions 19,163 – 19,163

Foreign exchange movements 36 – 36

At 31 December 2022 57,663 446 58,109

Additions 19,522 1,862 21,384

Foreign exchange movements (22) - (22)

At 31 December 2023 77,163 2,308 79,471

Accumulated amortisation and impairment

At 1 January 2022 15,856 50 15,906

Charge for the year 11,378 50 11,428

Impairment 736 – 736

At 31 December 2022 27, 970 100 28,070

Charge for the year 18,419 72 18,491

At 31 December 2023 46,389 172 46,561

Net book value

At 31 December 2022 29,693 346 30,039

At 31 December 2023 30,774 2,136 32,910

Development costs have been capitalised in accordance with IAS 38 Intangible Assets and are therefore not treated as a realised loss

until recognised as an amortisation or impairment charge in the statement of comprehensive income.

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173

16. Property, plant and equipment

Land &

buildings

£000

Leasehold

improvements

£000

Plant and

machinery

£000

Assets under

construction

£000

Assets subject

to operating

leases

£000

Equipment

£000

Total

£000

Cost or valuation

At 1 January 2022 15,057 8,908 19,557 1,982 30,075 13,762 89,341

Additions – 350 1,249 6,897 12,627 1,985 23,108

Disposals (15,057) (1,607) (317) (691) (3,921) (87) (21,680)

Transfers between classes – 2,822 2,059 (5,356) – 475 –

Foreign exchange movements – 20 49 – 1,064 130 1,263

At 31 December 2022 – 10,493 22,597 2,832 39,845 16,265 92,032

Additions - 161 679 4,828 25,600 3,583 34,851

Disposals - - (63) - (9,785) (4) (9,852)

Transfers between classes - 1,106 4,982 (6,162) - 74 -

Foreign exchange movements - (27) (26) - (902) (88) (1,043)

At 31 December 2023 - 11,733 28,169 1,498 54,758 19,830 115,988

Accumulated depreciation and impairment

At 1 January 2022 1,231 3,939 11,158 – 15,866 9,915 42,109

Charge for the year 149 1,276 3,112 – 9,086 2,345 15,968

Disposals (1,380) (640) (114) – (2,036) (46) (4,216)

Impairments – 28 117 – – – 145

Foreign exchange movements – 5 41 – 588 98 732

At 31 December 2022 – 4,608 14,314 – 23,504 12,312 54,738

Charge for the year - 1,609 3,477 - 10,213 2,806 18,105

Disposals - - (63) - (6,122) (4) (6,189)

Foreign exchange movements - (8) (22) - (462) (64) (556)

At 31 December 2023 - 6,209 17,706 - 27,133 15,050 66,098

Net book value

At 31 December 2022 – 5,885 8,283 2,832 16,341 3,953 3 7, 2 9 4

At 31 December 2023 - 5,524 10,463 1,498 27,625 4,780 49,890

The Group leases some of its devices to customers. Lease payments in relation to these devices are received in full either in advance or

on shipping of the device, meaning that there are no undiscounted future lease payments expected to be received on these devices.

On 8 July 2022, the Company sold its interest in the Gosling Building (the Property) to The Oxford Science Park (Properties) Limited

(TOSP) for £42.5 million. TOSP immediately granted to the Company an occupational lease of the Property for ten years at a rent of £1.8

million per annum (for which a right-of-use asset and related lease liability were recognised). Overall, in 2022 the transaction resulted in a

reduction in net property, plant and equipment of £15.6 million, and a gain on disposal of £18.6 million.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023174

17. Right-of-use assets

Total

£000

Cost

At 1 January 2022 20,302

Additions 15,504

Disposals (973)

Foreign exchange movements 586

At 31 December 2022 35,419

Additions 12,024

Disposals (1,336)

Foreign exchange movements (332)

At 31 December 2023 45,775

Accumulated depreciation

At 1 January 2022 5,615

Charge for the year 4,475

Disposals (782)

Foreign exchange movements 205

At 31 December 2022 9,513

Charge for the year 5,031

Disposals (1,142)

Foreign exchange movements (153)

At 31 December 2023 13,249

Net book value

At 31 December 2022 25,906

At 31 December 2023 32,526

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175

18. Investment in associate

The following entity has been included in the consolidated financial statements using the equity method:

Name of associate Principal activities

Country of

incorporation

Proportion of ownership held

as at 31 December - %

2023 2022

Veiovia Limited Technology Development UK 26.1 26.1

The carrying value is calculated as follows:

2023

£000

2022

£000

Investment cost 4,548 4,548

Share of loss (530) (302)

Impairment (3,276) (3,420)

Carrying value of the interest in the associate 742 826

Reconciliation of investment in associate

2023

£000

2022

£000

At 1 January 826 257

Further investment - 3,000

826 3,257

Share of loss (228) (238)

Decrease/(increase) in impairment of investment 144 (2,193)

At 31 December 742 826

The associate is accounted for using the equity method in these consolidated financial statements as set out in the Group’s accounting

policies in note 3. It is held directly by the Company.

(i) Pursuant to a shareholder agreement, the Company has the right to cast 24.9% of the votes of Veiovia Limited (2022: 24.9%).

(ii) The Company holds more than 20% of the equity shares of Veiovia Limited, and exercises significant influence by virtue of its

contractual right to appoint one director to the board of directors of that entity.

(iii) For the purposes of applying the equity method of accounting, the financial statements of Veiovia Limited for the year ended 31

December 2023 have been used. The Company’s share of the net asset value of the investment is significantly below the investment

amount. Management has recorded an impairment loss of the investment to reflect the recoverable amount.

(iv) Veiovia Limited’s registered office is The University of York, Biology B/A/039, Wentworth Way, York, UK, YO10 5DD.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023176

19. Inventory

2023

£000

2022

£000

Raw materials 50,888 41,852

Work in progress 39,154 34,960

Finished goods 11,506 10,886

101,548 87,6 9 8

The carrying amount of inventory was not materially different from its replacement cost.

The cost of inventory recognised as an expense includes £9.8 million (2022: £6.0 million) in respect of write-downs of inventory to net

realisable value. There were no reversals of write-downs in either year.

20. Trade and other receivables

2023

£000

2022

£000

Trade receivables 33,626 38,097

Contract assets 204 3,084

Accrued income and other debtors 7,750 4,724

Accrued interest income 746 1,065

Other taxes 6,351 5,262

Prepayments 12,798 10,673

61,475 62,905

Contract assets relate to the Group’s rights to consideration for goods and services provided but not billed at the reporting date for goods

and services provided. They are transferred to receivables when the rights become unconditional. This usually occurs when an invoice is

issued to the customer.

The ageing of trade receivables and the loss allowance calculated using the Group’s provision matrix was as follows:

Not past due

£000

30-60 days

£000

61-90 days

£000

91+ days

£000

Total

£000

At 31 December 2023 28,495 2,238 1,036 2,804 34,573

Loss allowance (227) (87) (55) (578) (947)

28,268 2,151 981 2,226 33,626

At 31 December 2022 28,654 3,390 2,696 5,971 40,711

Loss allowance (930) (262) (315) (1,107) (2,614)

27,724 3,128 2,381 4,864 38,097

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20. Trade and other receivables continued

The following table shows the movement in lifetime Expected Credit Loss that has been recognised for trade receivables in accordance

with the simplified approach set out in IFRS 9:

£000

At 1 January 2022 2,955

Net charges and releases to statement of comprehensive income (464)

Foreign exchange movement 123

At 31 December 2022 2,614

Net charges and releases to statement of comprehensive income (1,425)

Foreign exchange movement (242)

At 31 December 2023 947

21. Other financial assets

2023

£000

2022

£000

Treasury deposits – 1 0 1, 274

Investment bonds 256,534 100,898

Other financial assets 1,305 1,383

257,839 203,555

These items were analysed as follows:

2023

£000

2022

£000

Current 49,514 119,411

Non-current 208,325 84,144

257,839 203,555

Investment bonds are classified as financial assets at fair value through other comprehensive income (FVOCI).

22. Derivative financial assets and liabilities

2023

£000

2022

£000

Derivative financial assets

Foreign currency forward contracts 261 2,060

261 2,060

Derivative financial liabilities

Foreign currency forward contracts – 962

– 962

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023178

23. Trade and other payables

2023

£000

2022

£000

Trade payables 25,184 23,103

Share-based payments 504 460

Payroll taxation and social security 4,507 2,585

Accruals 33,096 33,801

Contract liabilities 15,156 20,300

78,447 80,249

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period

taken for trade purchases by the Group is 50 days (2022: 59 days).

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

The Directors consider that the carrying amount of trade payables approximates their fair value.

Contract liabilities primarily relate to performance obligations on customer contracts which were not satisfied at 31 December. In 2023

they decreased by £5.1 million (2022: decrease of £1.3 million). Management expects that most of the transaction price allocated to

unsatisfied performance obligations as at 31 December 2023 will be recognised as revenue during the following year.

24. Loans and provisions

Loans

There were no extant loans on 31 December of the current or prior year.

On 8 July 2022, the Company completed the sale of its interest in the Gosling Building to The Oxford Science Park (Properties) Limited

for £42.5 million. On completion of the sale, the term loan facility of £9.5 million with Barclays Bank plc was fully repaid. The average

interest rate charged in 2022 was 3.51%.

Provisions

Dilapidation

provisions

£000

Employer

taxes

£000

Other

£000

Total

provisions

£000

At 31 December 2022 2,346 10,772 160 13,278

Movement in provision for the year 52 (168) 590 474

Payments – (736) (69) (805)

Foreign exchange movements (14) 45 (10) 21

At 31 December 2023 2,384 9,913 671 12,968

Current – 5,759 671 6,430

Non-current 2,384 4,154 – 6,538

At 31 December 2023 2,384 9,913 671 12,968

Current – 4,473 160 4,633

Non-current 2,346 6,299 – 8,645

At 31 December 2022 2,346 10,772 160 13,278

The dilapidation provision relates to the leased properties, representing an obligation to restore the premises to their original condition at

the time the Group vacates the related properties. The provision is non-current and expected to be utilised in between two and 21 years.

Employer social security taxes relates to the expected employer taxes on share-based payments. This is expected tobeutilised between

one and ten years. The provision is based on the best estimate of the liability, which is reviewed and updated at each reporting period.

The provision is accrued over the vesting period to build up to the required liability at the point it is ultimately due.

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25. Lease liabilities

2023

£000

2022

Restated *

£000

Current * 4,322 4,056

Non‑current * 37,333 30,042

Lease liabilities included in the statement of financial position 41,655 34,098

2023

£000

2022

£000

Maturity analysis ‑ contractual undiscounted cash flows

Up to one year 6,865 6,459

Two to five years 28,057 22,996

Greater than five years 21,358 17,705

Total undiscounted lease liabilities at 31 December 56,280 47,160

* See note 11 for details regarding the restatement of comparatives.

Information on the associated right‑of‑use assets is included in note 17.

26. Share capital and share premium

Share capital comprised the following:

Nominal value

Number of

shares issued

Aggregate

nominal value

At 31 December 2023

Share class

Ordinary Shares (fully paid) £0.0001 859,224,047 85,922

Issued Class A Limited Anti‑takeover share of £1 £1 1 1

Issued Class B Limited Anti‑takeover share of £1 £1 1 1

Issued Class C Limited Anti‑takeover share of £1 £1 1 1

85,925

Nominal value

Number of

shares issued

Aggregate

nominal value

At 31 December 2022

Share class

Ordinary Shares (fully paid) £0.0001 825,570,509 82,557

Issued Class A Limited Anti‑takeover share of £1 £1 1 1

Issued Class B Limited Anti‑takeover share of £1 £1 1 1

Issued Class C Limited Anti‑takeover share of £1 £1 1 1

82,560

In the course of 2023, 4,628,212 ordinary shares (2022: 4,012,862) were issued in respect of employee share schemes. This resulted in

an increase in the share premium reserve of £2.5 million (2022: 3.8 million).

Also during the year, the Company issued 29,025,326 ordinary shares to bioMérieux SA. This resulted in a net increase in the share

premium reserve of £68.5 million.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023180

27. Share‑based payment reserve

2023

£000

2022

£000

At 1 January 168,200 96,350

Equity settled share‑based payment transactions 34,995 71,165

Tax in relation to share‑based payment transactions (96) 685

At 31 December 203,099 168,200

Share‑based payment transactions

2023

£000

2022

£000

Expense arising from share‑based payment transactions:

Included in research & development expenses 5,897 6,883

Included in selling, general & administrative expenses 29,179 63,126

35,076 70,009

Equity settled share‑based payment transactions 34,995 71,165

Cash settled share‑based payment transactions 81 (1,156)

35,076 70,009

The Group operates a number of share schemes. Awards are normally granted to employees to acquire shares but in some circumstances

may be settled in cash. The schemes are as follows:

• Oxford Nanopore Technologies Limited Share Option Plan

• Oxford Nanopore Technologies Limited Share Option Plan 2018

• Oxford Nanopore Technologies Limited Long‑Term Incentive Plan 2021 (Founder LTIP)

• Oxford Nanopore Technologies plc Long‑Term Incentive Plan 2021 (plc LTIP)

• Oxford Nanopore Technologies Deferred Bonus Plan 2021

• Oxford Nanopore Technologies Share Incentive Plan 2021

• Oxford Nanopore Technologies 2021 Employee Stock Purchase Plan

Share options

Options under each scheme have been aggregated. Share options have been awarded under two equity‑settled share‑based

remuneration schemes: the Oxford Nanopore Technologies Share Option Scheme and the Oxford Nanopore Technologies Limited Share

Option Plan 2018. The contractual life of all options is ten years.

Oxford Nanopore Technologies Limited Share Option Plan 2018

This plan replaced the Oxford Nanopore Technologies Share Option Scheme and closed to new members following the Company’s

admission to the London Stock Exchange in 2021. All unexercised awards will have expired by 2031.

All employees were eligible to be awarded approved share options, with the exception of employees in some foreign subsidiaries. These

employees were instead eligible to be remunerated under a local phantom bonus scheme. Awards granted to participants were subject to

either service conditions or both service and market performance conditions. Options were not normally able to be exercised before the

third anniversary of the date of grant.

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181

27. Share‑based payment reserve continued

The movement in share options outstanding is summarised in the following table:

2023 2022

Number of

share options

Weighted

average

exercise price

(pence)

Number of

share options

Weighted

average

exercise price

(pence)

At 1 January 50,839,486 181 55,450,832 176

Forfeited (283,700) 176 (821,783) 240

Exercised (3,525,969) 60 (3,789,563) 99

Outstanding at 31 December 47,029,817 190 50,839,486 181

Exercisable at 31 December 43,794,843 182 40,403,625 155

Share options outstanding at the end of the year have the following expiry and exercise prices:

Grant year Expiry year Exercise price

(pence)

2023

Number

2022

Number

Oxford Nanopore Technologies Limited Share

OptionScheme 2008 ‑ 2018 2024 ‑ 2028 73 ‑ 140 13,700,109 16, 517,490

Oxford Nanopore Technologies Limited Share

OptionPlan 2018 2019 ‑2021 2029 ‑2031 104 ‑ 350 33,329,708 34,321,996

47,029,817 50,839,486

The weighted average share price at the date of exercise for share options exercised during the year was £2.28 (31 December 2022:

£3.65). The options outstanding at 31 December 2023 had a weighted average exercise price of £1.90 (31 December 2022 £1.81), and

aweighted average remaining contractual life of 5.3 years (2022: 6.0 years).

Valuation models

Oxford Nanopore Technologies Limited Share Option Plan 2018

There were no options granted during the current or prior years. The fair value of share options granted during the prior year was

determined using the Monte Carlo Simulation model and Black Scholes model dependent on the performance vesting conditions.

Black Scholes: The following assumptions were used in the Black Scholes model in calculating the fair values of the options granted:

Range of share prices £2.65 ‑ £3.50

Range of exercise prices £2.12 ‑ £3.50

Expected volatility range 47% ‑ 50%

Expected life 6.5 years

Risk‑free rate range 0% ‑ 0.4%

Expected dividend yields Nil

The volatility assumption has been derived as the median volatility over a five‑year period of a bespoke comparator group. For options

granted during 2021, the expected life assumption of six and a half years assumes exercise will occur halfway through the total

exercisable period, being the midpoint of years three and ten. The risk‑free interest rate used reflects the UK Government five‑year Gilt

rate as reported by the Bank of England.

The weighted average fair value of options granted during the period determined using the Black Scholes model at the grant date was £nil

(2022: £nil) per option.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023182

Monte Carlo Simulations The inputs into the Monte Carlo Simulation model for options issued were as follows:

Weighted average share price £2.65

Weighted average exercise price £2.12

Expected volatility 48%

Expected life 2.5 years

Risk‑free rate 0%

Expected dividend yields Nil

The Monte Carlo Simulation model has been used to value the portion of the awards which have a market performance vesting condition

(achievement of a target company valuation). The model incorporates a discount factor reflecting this performance condition into the fair

value of this portion of the award. The weighted average fair value of options granted during the year determined using the Monte Carlo

Simulation model at the grant date was £nil (2022: £nil) per option.

The volatility assumption has been derived as the median volatility over a five‑year period of a bespoke comparator group. For options

granted during 2021, the expected life represents the term until expected vesting and exercise. The risk‑free interest rate used reflects

the UK Government five‑year Gilt rate as reported by the Bank of England.

Long term incentive plans

Oxford Nanopore Technologies Limited Long Term Incentive Plan 2021 (Founder LTIP):

This was a one‑off discretionary share plan, under which the Company granted awards over 6.5% of the Company’s Ordinary Share

capital (at the date of grant) to the Executive Directors. The Founder LTIP awards are free to the recipient. The plan was approved by the

board on 22 June 2021. Awards were granted as conditional awards of Ordinary Shares (Conditional Awards) subject to achievement of

performance obligations tied to revenue and share price and is subject to holding periods.

There were no awards granted during the current or prior years and all remained outstanding as at 31 December 2023 with a weighted

average remaining contractual life of four years.

Valuation models

The inputs into the valuation models for Founder LTIP awards were as follows:

Monte Carlo Black Scholes

Share price at grant £3.50 £3.50

Share price £4.50 n/a

Expected volatility 50.14% 50.14%

Expected term 2.16 years 5 years

Risk‑free rate 0.4% 0.4%

Expected dividend yields Nil Nil

The volatility assumption has been derived as the median volatility over a five‑year period of a bespoke comparator group. The risk‑free

interest rate used reflects the UK Government five‑year Gilt rate as reported by the Bank of England.

The weighted average fair value of Founder LTIP awards granted, determined using the Black Scholes model at the grant date, was £3.22

per award.

The weighted average fair value of Founder LTIP awards granted, determined using the Monte Carlo simulation model at the grant date,

was £2.18 per award.

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28. Notes to the cash flow statements

2023

£000

2022

£000

Cash and cash equivalents 220,536 356,778

Cash and cash equivalents comprise cash and short‑term bank deposits with an original maturity of three months or less. The carrying

amount of these assets is approximately equal to their fair value.

2023

£000

2022

£000

Loss before tax (149,768) (83,411)

Depreciation on property, plant and equipment 18,105 15,968

Depreciation on right‑of‑use assets 5,031 4,475

Amortisation on intangible assets 18,491 11,428

Loss on disposal of property, plant and equipment and right‑of‑use assets 3,854 1,880

Research and development expense tax credit (10,157) ( 7, 0 8 4)

Foreign exchange movements (519) 5,556

Interest on leases 2,205 1,407

Bank interest income (18,853) (5,941)

Bank interest expense 1 221

Movements on investment bonds 337 –

Movements on derivatives 836 (1,203)

(Write‑back)/impairment of investment (144) 2,193

Impairment of operating assets ‑ 1,173

Share of losses in associate 228 238

Gain on sale of property ‑ (18,620)

Employee share benefit costs including employer’s social security taxes 34,908 48,784

Operating cash flows before movements in working capital (95,445) (22,936)

Increase in receivables 118 ( 7,4 02)

Increase in inventory and assets subject to operating leases * (43,060) (39,156)

Increase in payables 1,502 4,434

Cash used in operations (136,885) (65,060)

R&D tax credit received 4,088 10,864

Foreign tax paid (4,505) (9,630)

Net cash outflow from operating activities (137,302) (63,826)

* See note 11 for details regarding the restatement of comparatives.

(i) Non cash transactions

Additions to right‑of‑use assets during the year of £12.0 million (2022: £15.5 million) were financed by new leases.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023184

(ii) Changes in liabilities arising from financing activities

The table below details change in the Group’s liabilities arising from financing activities, including both cash and non‑cash changes.

Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s

consolidated cash flow statement as cash flows from financing activities.

Bank loan

£000

Lease liabilities

£000

Total

£000

At 1 January 2022 9,500 15,304 24,804

Non‑cash changes

New leases – 22,523 22,523

Lease surrendered – (191) (191)

Interest – 1,407 1,407

Foreign exchange movements – 422 422

Cash changes

Bank loan repaid (9,500) – (9,500)

Principal repaid – (4,111) (4,111)

Interest paid – (1,256) (1,256)

At 31 December 2022 – 34,098 34,098

Non‑cash changes

New leases ‑ 12,024 12,024

Interest ‑ 2,205 2,205

Foreign exchange movements ‑ (176) (176)

Cash changes

Principal repaid ‑ (4,291) (4,291)

Interest paid ‑ (2,205) (2,205)

At 31 December 2023 ‑ 41,655 41,655

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29. Financial instruments – risk management

(i) Classes and categories of financial instruments and their fair values

The following table combines information about:

• classes of financial instruments based on their nature and characteristics

• the carrying amount of financial instruments

• the fair value of financial instruments (except financial instruments when carrying amount approximates their fair value)

Amortised

cost

£000

FVTPL

£000

FVTOCI

£000

Total

carrying

value

£000

Fair value

£000

31 December 2023

Financial assets

Cash and cash equivalents 220,536 – – 220,536 220,536

Trade and other receivables 42,326 – – 42,326 42,326

Investment bonds – – 256,534 256,534 256,534

Other financial assets – 1,305 – 1,305 1,305

Derivative financial assets – 261 – 261 261

Financial liabilities

Trade and other payables (73,436) – – (73,436) (73,436)

Amortised

cost

£000

FVTPL

£000

FVTOCI

£000

Total

carrying

value

£000

Fair value

£000

31 December 2022

Financial assets

Cash and cash equivalents 356,778 – – 356,778 356,778

Trade and other receivables 46,970 – – 46,970 46,970

Treasury deposits 101, 274 – – 101, 274 101, 274

Investment bonds – – 100,898 100,898 100,898

Other financial assets – 1,383 – 1,383 1,383

Derivative financial assets – 2,060 – 2,060 2,060

Financial liabilities

Trade and other payables ( 7 7,20 4) – – ( 7 7,204) ( 77, 204)

Derivative financial liabilities – (962) – (962) (962)

The following summarises the method and assumptions used in estimating the fair value of financial instruments reflected in the table.

Trade payables and receivables generally have a remaining life of less than one year so their value recorded in the balance sheet is

considered to be a reasonable approximation of fair value.

Treasury deposits are short‑term deposits held with banks that do not meet the IAS 7 definition of a cash equivalent, as well as

investment grade quoted bonds classified as fair value through other comprehensive income. See note 13.

The assets shown above have been classified based on three categories depending on the inputs used in the valuation technique. The

categories used are as follows:

• Level 1: quoted prices for identical instruments;

• Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and

• Level 3: inputs which are not based on observable market data.

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023186

Level 1 Level 2 Level 3 Total

Investment bonds 256,534 – – 256,534

Derivative financial instruments 261 – – 261

Other financial assets – – 1,305 1,305

At 31 December 2023 256,795 – 1,305 258,100

Level 1 Level 2 Level 3 Total

Investment bonds 100,898 – – 100,898

Derivative financial instruments 1,098 – – 1,098

Other financial assets – – 1,383 1,383

At 31 December 2022 101,996 – 1,383 103,379

Fixed forward contracts

Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting

period) and contract forward rates.

During the year, the portfolio of forward contracts matured, and were either fulfilled, cashed out or exchanged. One forward contract

remains unsettled, with a settlement date of 10 May 2024.

Fixed forward contracts are included in the balance sheet as follows:

2023

£000

2022

£000

Derivative financial assets

Foreign currency forward contracts 261 2,060

261 2,060

Derivative financial liabilities

Foreign currency forward contracts – 962

– 962

(ii) Financial risk management objectives and policies.

Overview

The Group has exposure to liquidity, credit and market risks from its use of financial instruments. This note sets out the Group’s key

policies and processes for managing these risks.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing

liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities as they fall due, under both normal

and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group has sufficient cash

to fund its operations.

At 31 December 2023, the Group had the following financing arrangements:

2023

£000

2022

£000

Maturity analysis

‑ Expiring within one year 6,865 6,459

‑ Expiring beyond one year 49,415 40,701

56,280 47,160

The amounts disclosed in this table are for lease liabilities, based on contractual undiscounted cash flows.

The Directors consider that except for lease liabilities, all of the Group’s financial liabilities at the year end and prior year end have

maturity dates of less than 12 months from the balance sheet date.

Management monitors rolling forecasts of the Group’s financing arrangements (comprising the lease liabilities above) and cash and cash

equivalents (note 28) on the basis of expected cash flows.

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29. Financial instruments – risk management continued

(ii) Financial risk management objectives and policies continued

Credit risk

Credit risk is the risk of financial loss to the Group if a deposit taker should fail. Maturities are staggered whenever possible to spread

exposure to interest rate movement. Although the Board accepts that this policy neither protects the Group from the risk of receiving

rates below the current market rates nor eliminates the cash flow risk associated with interest receipts, it considers that it achieves an

appropriate balance of exposure to these risks.

At year end, the Group placed £468 million (2022: £542 million) deposits with several reputable financial institutions to minimise its credit

risk. £441 million (2022: £310 million) of this is placed in institutions with an S&P grade of A (Moody’s A1/A2), with the remainder all being

placed at S&P grade BBB (Moody’s Baa2) or higher institutions in line with the Group’s treasury policy.

Additional credit risk exists on trade receivables, which is managed by a centralised accounts receivable process including credit checks

on initial order acceptance.

Credit approvals and other monitoring procedures are also in place to ensure that follow‑up action is taken to recover overdue debts.

Furthermore, the Group reviews the recoverable amount of each trade debt and debt investment on an individual basis at the end of the

reporting period to ensure that adequate loss allowance is made for irrecoverable amounts. In this regard, the Directors consider that the

Group’s credit risk is significantly reduced and will remain at the same level for the foreseeable future. Trade receivables consist of a large

number of customers, spread across diverse geographical areas.

Of the trade receivables balance at the end of the year, £4.5 million (2022: £4.9 million) was due from the Group’s largest customer, G42.

At 31 December 2023, an amount of £0.9 million (2022: £2.6 million) measured at an amount equal to lifetime expected credit losses was

estimated as a loss allowance in accordance with IFRS 9 (see note 20).

The credit risk on liquid funds are measured at an amount equal to lifetime expected credit losses. The credit risk is considered as limited

because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the

Group’s costs or the value of its holdings in financial instruments.

Investment bonds offer fixed coupon interest rates and are subject to variations in market value arising due to movements in the prevailing

base interest rate. The Group mitigates this by holding a wide range of bonds in various jurisdictions.

Interest rate risk also arises on returns on short‑term fixed interest deposits which will vary with movements in underlying bank interest

rates.

The Group’s principal market risk exposure is to movements in foreign exchange rates.

Foreign currency risk

Foreign exchange risk arises because the Group from time to time enters into transactions denominated in a currency other than Pounds

Sterling. Where it is considered that the risk to the Group is significant, it will enter into a matching forward contract with a reputable bank

or hold deposits of the currency in cash.

Derivatives are only used for economic hedging purposes and not as speculative investments.

In addition, significant amounts of dollars were held during the year. In the year ended 31 December 2023 approximately 25% (2022:

17%) of the Group’s annual expenditures was denominated in US Dollars and approximately 11% (2022: 13%) of the Group’s expenditure

was denominated in Euro. A significant portion of the Group’s revenue is denominated in US Dollars.

In 2023 the ONT Group’s Euro requirements were no longer covered by its currency receipts, as a result, spot Euro purchases were

required on an adhoc basis. These occasional Euro shortfalls were identified as part of the weekly cash forecasting. Appropriate currency

cover was obtained from a variety of FX brokers driven by pricing, selling Pounds Sterling.

Exchange rate exposures are managed within approved policy parameters. The carrying amounts of the Group’s foreign currency

denominated monetary assets and monetary liabilities at the reporting date are as follows:

Assets Liabilities

2023

£000

2022

£000

2023

£000

2022

£000

Financial assets and liabilities 57,8 41 54,778 (32,367) (25,886)

Sensitivity analysis

A 5% strengthening/weakening of the US Dollar relative to Pounds Sterling at 31 December 2023 would have impacted profit or loss and

Group equity by£1.2 million (2022: £1.1 million).

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023188

The interest yield on investments in Money Markets is variable between funds. During the year ended 31 December 2023, the investment,

evenly split between eight different funds, returned an average yield of 4.6% (2022: 1.48%). Treasury deposits were all matured in the

current year.

The Group has considered its sensitivity to interest rate fluctuations and does not believe that a change in interest rates would have

amaterial risk impact on the Group financial statements.

Capital management

The Group defines the capital that it manages as the Group’s total equity. The Group’s objectives when managing capital are:

• to safeguard the Group’s ability to continue as a going concern, so that it can continue to strive to provide returns to investors;

• to provide an adequate return to investors based on the level of risk undertaken;

• to have available the necessary financial resources to allow the Group to invest in areas that may deliver future benefits;

• to maintain sufficient financial resources to mitigate against risks and unforeseen events.

The Debt to Equity ratio of the Group is 6.5% (2022: 4.9%).

Debt is defined as long and short‑term borrowings (excluding derivatives and financial guarantee contracts). Equity includes all capital

and reserves of the Group that are managed as capital.

30. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on

consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

As at 31 December 2023, the Company had invested a total of £4.5 million in its associate, Veiovia Limited, which is related to the

Company by the shared directorship of J P Willcocks. During the year, a reversal of impairment of £0.1 million has been recognised.

The Company paid academic research costs in 2023 of £0.6 million (2022: £0.5 million) to the University of Oxford, which is related to the

Company by the shared directorship of W Becker.

31. Retirement benefit plan

The Group operates a defined contribution pension scheme for the benefit of its employees. Most of the employees who contribute to the

Group’s pension scheme do so via salary sacrifice.

The total expense recognised in the consolidated income statement of £3.8 million (2022: £3.2 million) represents contributions payable

tothe scheme by the Group at rates specified in the rules of the scheme. As at 31 December 2023, contributions of £0.7 million (2022:

£0.5 million) due in respect of the current reporting period had not been paid over to the plans.

32. Commitments

2023

£000

2022

£000

Within one year 4,530 1,768

In the second to fifth years inclusive 2,295 721

6,825 2,489

Commitments relate to agreements with third paries, universities and research institutions. The amounts are not risk‑adjusted or

discounted.

33. Events after the reporting date

The Group performed a review of events subsequent to the balance sheet date through to the date the financial statements were issued

and determined that there were no such events requiring recognition or disclosure in the financial statements.

34. Controlling party

There is no ultimate controlling party of the Group as ownership is split between the Company’s shareholders. The most significant

shareholders at 31 December 2023 were as follows: IP Group (10%), Tencent Holdings (7%), Baillie Gifford (7%), bioMérieux SA (7%),

G42 (5%) and GIC Asset Management (5%).

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35. Alternative performance measures

The Group’s performance is assessed using a number of financial measures which are not defined under IFRS and are which therefore

comprise alternative (non‑GAAP) performance measures. These are as follows:

• Underlying LSRT revenue growth: LSRT revenue growth excluding EGP and COVID sequencing revenue ‑ in order to understand

ongoing performance of the core business, management considers it appropriate to exclude revenues from contracts that are not

expected to recur. We also report underlying LSRT revenue performance within each of our customer groups and franchises;

• Underlying LSRT revenue growth on a constant currency basis: LSRT revenue growth excluding EGP and COVID sequencing revenue,

on a constant currency basis;

• Underlying LSRT gross margin: LSRT gross margin exclduing EGP, write off of COVID sequencing kits and legacy devices, and impact

of the compute upgrade on large PromethION devices;

• Adjusted research and development expenses: research and development expenses after adjusting for employer’s social security taxes

on pre‑IPO share awards;

• Adjusted R&D expenses and capitalised development costs: adjusted research and development expenses, excluding amortisation and

adding capitalised of development costs;

• Adjusted selling, general and administrative expenses: selling, general and administrative expenses after adjusting for share‑based

payments expense (Founder LTIP) and employer’s social security taxes on Founder LTIP and pre‑IPO share awards;

• EBITDA: loss for the year before income tax expense, finance income, loan interest, interest on leases, depreciation and amortisation;

• Adjusted EBITDA: EBITDA adjusted for: i) share‑based payment expense on Founder LTIP awards; ii) employer’s social security taxes

on Founder LTIP and pre‑IPO share awards; iii) impairment of investment in associate; iv) gain on sale of property; and v) settlement of

the COVID‑19 testing contract; and

• Cash and cash equivalents and other liquid investments: cash and cash equivalents comprise cash in hand, deposits held atcall and

other short‑term highly liquid investments with a maturity of three months or less at the date of acquisition; other liquid investments

comprise investment bonds in which a fixed sum is invested in an asset‑backed fund, and treasury deposits, which comprise deposits

held with banks that do not meet the IAS 7 definition of a cash equivalent.

The following table presents the adjusted underlying LSRT revenue growth:

2023

£000

2022

£000

LSRT Revenue 169,668 146,815

Adjusting Items:

EGP revenue (11,956) (13,172)

COVID sequencing revenue (7,9 66) (26,112)

Underlying LSRT revenue 149,746 1 07,531

Growth +39.3% +36.4%

Impact of foreign exchange (140) (5,370)

Underlying LSRT revenue on a constant currency basis 149,606 102,161

Growth +39.1% +29.6%

The following table presents the adjusted underlying LSRT gross margin:

2023 2022

LSRT gross margin 53.3% 56.3%

Adjusting Items:

EGP contract 2.3% 1.7%

Write off of COVID sequencing kits and legacy devices 2.3% –

Impact of compute upgrade on large PromethION devices 0.9% –

Underlying LSRT gross margin 58.8% 58.0%

Notes for the Consolidated Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023190

The following table presents the adjusted research and development expenses:

2023

£000

2022

£000

Research and development expenses 103,842 69,186

Adjusting Items:

Employer’s social security taxes on pre‑IPO share awards 604 9,890

Adjusted research and development expenses 104,446 79,076

Amortisation of capitalised development costs (18,419) (11,400)

Capitalised development costs 19,522 19,163

Adjusted R&D expenses and capitalised development costs 105,549 86,839

The following table presents the adjusted selling, general and administrative expenses

2023

£000

2022

£000

Selling, general and administrative expenses 155,248 153,103

Adjusting Items:

Share‑based payment expense on Founder Long Term Incentive Plan (LTIP) (20,886) (53,182)

Employer’s social security taxes on Founder LTIP and pre‑IPO share awards 285 11,74 3

Adjusted selling, general and administrative expenses 134,647 111,664

The following table presents the Group’s EBITDA and Adjusted EBITDA, together with a reconciliation to loss for the year:

2023

£000

2022

£000

Loss for the year (154,507) (91,025)

Taxation 4,739 7,6 14

Finance income (18,853) (5,941)

Interest expense 1 221

Interest on lease 2,205 1,407

Depreciation and amortisation 41,627 31,871

EBITDA (124,788) (55,853)

Share‑based payments (Founder LTIP) 20,886 53,182

Employer’s social security credit on Founder LTIP and pre‑IPO share‑based awards (888) (21,634)

Gain on sale of property – (18,620)

Settlement of COVID‑19 testing contract – (37, 89 6)

(Write‑back)/impairment of investment in associate (144) 2,193

Adjusted EBITDA (104,934) (78,628)

The following table presents cash, cash equivalents and other liquid investments:

2023

£000

2022

£000

Cash and cash equivalents 220,536 356,778

Treasury deposits – 101, 274

Investment bonds 256,534 100,898

Less: fair value movements on investment bonds (4,960) (936)

Cash, cash equivalents and other liquid investments 472,110 558,014

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191

Note

2023

£000

2022

Restated *

£000

Assets

Non‑current assets

Property, plant and equipment 4 39,056 30,379

Intangible assets 3 31,878 29,077

Right‑of‑use assets 5 29,571 21,983

Investments in subsidiaries 6 4,904 44,108

Investment in associate 7 742 826

Other financial assets 10 208,325 84,144

314,476 210,517

Current assets

Inventory 8 98,743 86,295

Trade and other receivables 9 68,145 53,381

R&D Tax credit recoverable 11 12,819 9,148

Other financial assets 10 48,209 118,028

Derivative financial assets 12 261 2,060

Cash and cash equivalents 18 215,587 348,106

443,764 617,0 1 8

Total assets 758,240 827,535

Liabilities

Non‑current liabilities

Lease liabilities * 15 35,838 27,524

Share‑based payment liabilities 17 141 108

Provisions 14 6,102 8,084

42,081 35,716

Current liabilities

Trade and other payables 13 68,428 97, 33 0

Lease liabilities * 15 2,763 2,627

Derivative financial liabilities 12 ‑ 962

Provisions 14 5,767 4,317

76,958 105,236

Total liabilities 119,039 140,952

Net assets 639,201 686,583

Issued capital and reserves attributable to owners of the Company

Share capital 16 86 83

Share premium reserve 16 698,553 627,557

Share‑based payment reserve 17 203,099 168,200

Accumulated deficit (262,537) (109,257)

Total equity 639,201 686,583

* See note 19 for details regarding the restatement of comparatives.

As permitted by section 408 of the Companies Act 2006, the Company’s statement of comprehensive income has not been included in

these financial statements. The Company’s loss for the year was £156.1 million (2022: £89.6 million).

The financial statements on pages 192 to 205 were approved and authorised for issue by the Board of Directors on 18 March 2024 and were

signed on its behalf by:

G. Sanghera

Director

The notes on pages 195 to 205 form part of these financial statements.

Company Statement of Financial Position

as at 31 December 2023

Oxford Nanopore Technologies Annual Report & Accounts 2023192

Share capital

£000

Share premium

£000

Share‑based

payment

reserve

£000

Accumulated

deficit

£000

Total equity

£000

At 1 January 2022 82 623,760 96,350 (20,604) 699,588

Loss for the year – – – (89,589) (89,589)

Fair value movements on investment bonds – – – 936 936

Comprehensive loss for the year – – – (88,653) (88,653)

Issue of share capital 1 3,796 – – 3,797

Cost of share issue – 1 – – 1

Employee share‑based payments – – 71,165 – 71,165

Tax in relation to share‑based payments – – 685 – 685

Total contributions by and distributions to owners 1 3,797 71,850 – 75,648

At 31 December 2022 83 627, 557 168,200 (109,257) 686,583

Loss for the year – – – (156,064) (156,064)

Other comprehensive income – – – 2,784 2,784

Comprehensive loss for the year – – – (153,280) (153,280)

Issue of share capital 3 71,562 – – 71,565

Cost of share issue – (566) – – (566)

Employee share‑based payments – – 34,995 – 34,995

Tax in relation to share‑based payments – – (96) – (96)

Total contributions by and distributions to owners 3 70,996 34,899 – 105,898

At 31 December 2023 86 698,553 203,099 (262,537) 639,201

Note 16 16 17

Company Statement of Changes in Equity

as at 31 December 2023

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193

Note

2023

£000

2022

Restated *

£000

Net cash outflow from operating activities * 18 (136,398) (65,447)

Investing activities

Purchase of property, plant and equipment * (5,591) (8,058)

Proceeds from sale of property 4 ‑ 42,500

Capitalisation of development costs 3 (19,522) (18,237)

Purchases of IP licences (820) –

Investment in associate (3,000) –

Investment in subsidiaries (1,236) (10)

Interest received 13,797 3,429

Purchase of other financial assets (150,000) (129,962)

Proceeds from sale of other financial assets 104,598 60,459

Net cash outflow from investing activities (61,774) (49,879)

Financing activities

Proceeds from issue of shares 71,597 3,751

Costs of share issue (366) (2,378)

Principal elements of lease payments (2,602) (2,729)

Repayment of bank borrowings – (9,500)

Interest paid (1) (219)

Interest paid on leases (2,070) (1,088)

Net cash inflow/(outflow) from financing activities 66,558 (12,163)

Net decrease in cash and cash equivalents before foreign exchange movements (131,614) (127,489)

Effect of foreign exchange rate movements (905) (2,997)

Cash and cash equivalents at beginning of year 348,106 478,592

Cash and cash equivalents at end of year 18 215,587 348,106

* See note 19 for details regarding the restatement of comparatives.

Company Statement of Cash flows

for the year ended 31 December 2023

Oxford Nanopore Technologies Annual Report & Accounts 2023194

1. Accounting policies

The principal accounting policies adopted, key estimates and judgements are set out within the consolidated financial statements,

notes3and 4.

2. Staff costs

Employee benefit expenses (including directors) comprise:

2023

£000

2022

£000

Wages and salaries 66,034 57,015

Social security costs 7,443 6,824

Pension costs 3,006 2,398

Share‑based payment expenses 25,722 51,675

Social security credit (share awards) (141) (19,283)

Other staff costs 1,077 632

103,141 99,261

Directors and key management personnel

Directors and key management personnel are those persons having authority and responsibility for planning, directing and controlling the

activities of the Company, including the Directors of the Company listed in the section of the annual report labelled Board of Directors.

Director and key management personnel compensation consisted of:

2023

£000

2022

£000

Salaries, bonuses and benefits in kind 5,352 4,416

Amounts paid as Directors’ fees 730 655

Share‑based payment expenses – 59,628

6,082 64,699

The share‑based payment charge comprises the value of awards that have vested relating to the Share Price Performance Condition and

the Revenue Condition awards. The value for 2023 is £nil as the small number of awards that were approved as vested by the Committee

in 2023 related to a performance condition met in 2022, and therefore were included in the 2022 figures.

The value shown in 2022 is based on the closing price on the vesting dates of 28 January 2022 and 12 October 2022. In addition, a

further performance condition was met in respect of the shares allocated to the Revenue Condition based on the full year revenue

outcome for 2022. The value of these shares was included using the average share price for the 3 months to 31 December 2022.

Further information on the remuneration of the Directors is given in the sections of the annual report on remuneration labelled as audited

in the Directors’ Remuneration Report.

Employee numbers

The monthly average number of employees was as follows:

2023

Number

2022

Number

Research & development 424 354

Production 155 148

Sales, general & administration 280 239

859 741

Notes to the Company Financial Statements

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023

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195

3. Intangible assets

Capitalised

development

costs

£000

Patents and

licences

£000

Total

£000

Cost

At 1 January 2022 38,464 446 38,910

Additions from internal development 18,237 – 18,237

At 31 December 2022 56,701 446 57,147

Additions 19,523 820 20,343

Transfer of assets 940 – 940

At 31 December 2023 77,164 1,266 78,430

Accumulated amortisation and impairment

At 1 January 2022 15,856 50 15,906

Charge for the year 11,378 50 11,428

Impairment 736 – 736

At 31 December 2022 27,970 100 28,070

Charge for the year 18,419 63 18,482

At 31 December 2023 46,389 163 46,552

Net book value

At 31 December 2022 28,731 346 29,077

At 31 December 2023 30,775 1,103 31,878

Development costs have been capitalised in accordance with IAS 38 Intangible Assets and are therefore not treated as a realised loss

until recognised as an amortisation or impairment charge in the statement of comprehensive income.

Notes to the Company Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023196

4. Property, plant and equipment

Land &

buildings

£000

Leasehold

improvements

£000

Plant and

machinery

£000

Assets under

construction

£000

Assets

subject to

operating

leases

£000

Equipment

£000

Total

£000

Cost or valuation

At 1 January 2022 15,057 8,857 19,193 1,983 22,222 12,703 80,015

Additions – – 1,197 6,894 7, 6 9 0 1,800 17,5 8 1

Disposals (15,057) (1,607) (317) (691) (3,169) (87) (20,928)

Transfers between classes – 2,822 2,059 (5,356) – 475 –

At 31 December 2022 – 10,072 22,132 2,830 26,743 14,891 76,668

Additions – 12 585 4,829 16,980 3,255 25,661

Disposals – – (63) – (7,330) (4) (7, 397)

Transfers between classes – 1,106 4,982 (6,162) – 74 –

At 31 December 2023 – 11,190 27,6 36 1,497 36,393 18,216 94,932

Accumulated depreciation and impairment

At 1 January 2022 1,230 3,926 10,852 – 11,323 9,163 36,494

Charge for the year 149 1,187 3,066 – 6,992 2,180 13,574

Disposals (1,379) (641) (114) – (1 ,74 4) (46) (3,924)

Impairments – 28 117 – – – 145

At 31 December 2022 – 4,500 13,921 – 16,571 11,297 46,289

Charge for the year – 1,513 3,428 – 6,973 2,580 14,494

Disposals – ‑ (63) – (4,840) (4) (4,907)

At 31 December 2023 – 6,013 17, 286 ‑ 18,704 13,873 55,876

Net book value

At 31 December 2022 – 5,572 8,211 2,830 10,172 3,594 30,379

At 31 December 2023 – 5,177 10,350 1,497 17,6 89 4,343 39,056

The Company leases some of its devices to customers. Lease payments in relation to these devices are received in full either in advance

or on shipping of the device, meaning that there are no undiscounted future lease payments expected to be received on these devices.

On 8 July 2022, the Company sold its interest in the Gosling Building (the Property) to The Oxford Science Park (Properties) Limited

(TOSP) for £42.5 million. TOSP immediately granted to the Company an occupational lease of the Property for ten years at a rent of £1.8

million per annum (for which a right‑of‑use asset and related lease liability were recognised). Overall, in 2022 the transaction resulted in

areduction in net property, plant and equipment of £15.6 million, and a gain on disposal of £18.6 million.

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197

5. Right‑of‑use assets

Total

£000

Cost

At 1 January 2022 15,467

Additions 13,267

Disposals (383)

At 31 December 2022 28,351

Additions 11,052

Disposals (1,178)

At 31 December 2023 38,225

Accumulated depreciation

At 1 January 2021 3,766

Charge for the year 2,833

Disposals (231)

At 31 December 2022 6,368

Charge for the year 3,273

Disposals (987)

At 31 December 2023 8,654

Net book value

At 31 December 2022 21,983

At 31 December 2023 29,571

Notes to the Company Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023198

6. Investment in subsidiaries

Name Registered office

Country of

incorporation Principal activity

Oxford Nanopore Diagnostics Limited Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK R&D

Oxford Nanopore Technologies, Inc. 1209 Orange Street, Wilmington, Delaware,

19801, County of New Castle

USA R&D and Limited risk

distributor

Oxford Nanolabs Limited Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK Dormant

The Genome Foundry Limited Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK Dormant

Metrichor Limited Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK R&D support

KK Oxford Nanopore Technologies Tokyo Club Building 11F, 3‑2‑6 Kasumigaseki,

Chiyoda‑ku, Tokyo 100‑0013

Japan Sales and marketing support

Nanopore Technologies Hong Kong

Limited

Room 1901, 19/F, Lee Garden One, 33 Hysan

Avenue, Causeway Bay

Hong Kong Holding company

Nanopore Technologies (Shanghai)

Co.,Limited

Room 2208, Tower 1, Grand Gateway 66, No. 1

Hongqiao Road, Xuhui District, 200030, Shanghai

China Sales and marketing support

Oxford Nanopore Technologies

Singapore PTE. Ltd

6001 Beach Road, #11‑08 Golden Mile Tower,

Singapore 199589

Singapore Sales and marketing support

Oxford Nanopore Technologies B.V. Herikerbergweg 88, 1101 CM Amsterdam,

Netherlands

The Netherlands Sales and marketing support

Oxford Nanopore Technologies

Australia PTY Ltd

Level 10, 171 Clarence Street, Sydney, NSW 2000 Australia Limited risk distributor

Oxford Nanopore Technologies

Denmark ApS

c/o Crowe Rygårds Allé 104, 2009 Hellerup Denmark Sales and marketing support

Oxford Nanopore Technologies SARL 22 Rue de Londres, 75009 Paris 9 France Sales and marketing support

Oxford Nanopore Technologies GmbH Augustenstr. 10, c/oDr. Kleeberg & Partner GmbH,

80333 München

Germany Sales and marketing support

Oxford Nanopore Technologies Gulf

Limited

Office No. 303 A, Level 3, Incubator Building,

Masdar City, Abu Dhabi

United Arab

Emirates

Sales and marketing support

Oxford Nanopore Technologies

Holdings Limited

Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK Holding company

Oxford Nanopore Technologies

Holdings 2 Limited

Gosling Building, Edmund Halley Road, Oxford

Science Park, OX4 4DQ

UK Holding company

Oxford Nanopore Technologies

CanadaLimited

333 Bay Street, Suite 2400, Toronto, Ontario,

Canada, M5H 2T6

Canada Sales and marketing support

Oxford Nanopore Technologies S.R.L. Viale Abruzzi, 94, 20131 Milano MI, Italy Italy Limited risk distributor

Northern Nanopore Instruments Inc. 333 Bay Street, Suite 2400, Toronto, Ontario,

Canada, M5H 2T6

Canada R&D; sales and marketing

support

Oxford Nanopore Technologies India

Private Limited

501 & 502, Eros Corporate Tower, New

Delhi‑110019, India

India Sales and marketing support

All the Company’s subsidiary undertakings are effectively 100% held and have been consolidated in the Group financial statements.

All subsidiaries are directly held by the Company, except for the following:

• Oxford Nanopore Technologies Canada Limited and Oxford Nanopore Technologies S.R.L. are subsidiaries held by Oxford Nanopore

Technologies Holdings Limited;

• Oxford Nanopore Technologies India Private Limited is a subsidiary 99% held by Oxford Nanopore Technologies Holdings 2 Limited

and 1% by Oxford Nanopore Technologies Holdings Limited;

• Northern Nanopore Instruments Inc. (which was acquired on 2 November 2023) is a subsidiary of Oxford Nanopore Technologies

Canada Limited;

• Nanopore Technologies (Shanghai) Co. Limited is a subsidiary of Nanopore Technologies Hong Kong Limited;

• Nanopore Technologies (Shanghai) Co. Limited has a branch in Beijing – Nanopore Technologies (Shanghai) Co., Beijing Branch.

Metrichor Limited (company registration number 08534345) is exempt from the requirements under the Companies Act 2006 relating to

the audit of the Financial Statements under section 479A of that Act. The Company has provided a parent company guarantee over the

liabilities of this subsidiary company, pursuant to section 479C of the Companies Act 2006.

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023

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199

6. Investment in subsidiaries continued

2023

£000

2022

£000

At 1 January 44,108 25,083

Equity‑settled instruments granted to employees of subsidiaries 9,356 19,015

Intra‑group recharge (49,796) –

Additions in the year 1,236 10

At 31 December 4,904 44,108

Certain subsidiaries have refunded the Company for historical amounts in relation to equity settled share‑based payment awards.

7. Investment in associate

See note 18 of the consolidated financial statements for information on investment in associate.

8. Inventory

2023

£000

2022

£000

Raw materials 50,885 41,848

Work in progress 39,148 34,938

Finished goods 8,710 9,509

98,743 86,295

The carrying amount of inventory was not materially different from its replacement cost.

9. Trade and other receivables

2023

£000

2022

£000

Trade receivables 24,653 27,986

Contract assets 54 2,992

Accrued income and other debtors 5,423 3,543

Accrued interest income 738 1,065

Other taxes 6,306 4,945

Prepayments 12,322 10,551

Intercompany 18,649 2,299

68,145 53,381

Contract assets relate to the Company’s rights to consideration for goods and services provided but not billed at the reporting date for

goods and services provided. They are transferred to receivables when the rights become unconditional. This usually occurs when an

invoice is issued to the customer.

The Company has assessed the intercompany receivables position at 31 December 2023, and no impairment is considered necessary.

Notes to the Company Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023200

The ageing of trade receivables and the loss allowance calculated using the Company’s provision matrix was as follows:

Not past due

£000

30‑60 days

£000

61‑90 days

£000

91+ days

£000

Total

£000

At 31 December 2023 20,786 1,532 899 2,120 25,337

Loss allowance (165) (60) (49) (410) (684)

20,621 1,472 850 1,710 24,653

At 31 December 2022 19,581 3,162 2,299 4,853 29,895

Loss allowance (628) (227) (247) (807) (1,909)

18,953 2,935 2,052 4,046 27,986

The following table shows the movement in lifetime Expected Credit Loss that has been recognised for trade receivables in accordance

with the simplified approach set out in IFRS 9:

£000

At 1 January 2022 1,789

Net charges and releases to statement of comprehensive income 120

At 31 December 2022 1,909

Net charges and releases to statement of comprehensive income (1,225)

At 31 December 2023 684

10. Other financial assets

2023

£000

2022

£000

Treasury deposits – 101,274

Investment bonds 256,534 100,898

256,534 202,172

These items were analysed as follows:

2023

£000

2022

£000

Current 48,209 118,028

Non‑current 208,325 84,144

256,534 202,172

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201

11. Taxation

Deferred tax assets and liabilities

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the

liability settled, based on the tax rates that have been enacted or substantively enacted at the balance sheet date. UK deferred tax assets

and liabilities have been calculated at the substantively enacted Corporation Tax of 25% applicable from 1 April 2023.

A deferred tax liability of £8.1 million (2022: £5.9 million) has been recognised on intangibles (£6.9 million; 2022: £5.9 million) and

investment bond gain (£1.2 million; 2022: £nil). A matching deferred tax asset of £8.1 million (2022 £5.9 million) arising on losses has

been recognised on the basis that the deferred tax liability relates to the same taxation authority and is expected to reverse in periods

into which a tax loss arising from the deferred tax asset can be carried forward.

Unrecognised deferred tax assets

2023 2023 2022 2022

Gross amount

£000

Tax effected

£000

Gross amount

£000

Tax effected

£000

Losses 619,990 154,998 513,111 128,278

Provisions 16,952 4,238 11,050 2,762

Share Awards 70,381 17,595 71,454 17, 8 63

Share Awards (Equity) 4,327 1,082 14,503 3,626

Accelerated Capital Allowances 27,476 6,869 5,924 1,481

RDEC 18,177 4,544 8,584 2,146

Total unrecognised deferred tax asset 757,303 189,326 624,626 156,156

R&D tax credit recoverable

See note 14 of the consolidated financial statements for information on R&D tax credit recoverable.

12. Derivative financial assets and liabilities

See note 22 of the consolidated financial statements for information on derivative financial instruments.

13. Trade and other payables

2023

£000

2022

£000

Trade payables 23,608 21,196

Share‑based payments 504 460

Payroll taxation and social security 3,119 2,384

Accruals 25,392 28,203

Contract liabilities 10,685 14,076

Intercompany 5,120 31,011

68,428 97,3 3 0

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.

The Company has financial risk management policies in place to ensure that all payables are paid within the pre‑agreed credit terms.

The Directors consider that the carrying amount of trade payables approximates their fair value.

Contract liabilities primarily relate to the performance obligations on customer contracts which were not satisfied at 31 December.

Notes to the Company Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023202

14. Loans and provisions

Loans

There were no extant loans throughout 2023, or on 31 December of the prior year. The average interest rate charged in 2022 was 3.51%,

on a loan that was repaid on 8 July 2022.

Dilapidation

provisions

2023

£000

Employer

taxes

2023

£000

Other

2023

£000

Total

provisions

2023

£000

Provisions

At 31 December 2022 2,043 10,358 – 12,401

Movement in provision for the year 51 (176) 290 165

Payments – (697) – (697)

At 31 December 2023 2,094 9,485 290 11,869

Current – 5,477 290 5,767

Non‑current 2,094 4,008 – 6,102

At 31 December 2023 2,094 9,485 290 11,869

Current – 4,317 – 4,317

Non‑current 2,043 6,041 – 8,084

At 31 December 2022 2,043 10,358 – 12,401

The dilapidation provision relates to the leased properties, representing an obligation to restore the premises to their original condition

atthe time the Company vacates the related properties. The provision is non‑current and expected to be utilised between two and 21 years.

Employer’s social security taxes relate to the expected employer’s taxes on share‑based payments. This is expected tobeutilised in

between one and ten years. The provision is based on the best estimate of the liability, which is reviewed and updated at the end of each

year. The provision is accrued over the vesting period to build up to the required liability at the point it is ultimately due.

15. Lease liabilities

2023

£000

2022

Restated *

£000

Current * 2,763 2,627

Non‑current * 35,838 27,524

Lease liabilities included in the statement of financial position 38,601 30,151

2023

£000

2022

£000

Maturity analysis contractual undiscounted cash flows

Up to one year 5,015 4,907

One to five years 26,495 20,218

Greater than five years 21,358 17,705

Total undiscounted lease liabilities at 31 December 52,868 42,830

* See note 19 for details regarding the restatement of comparatives.

Information on the associated right‑of‑use assets is included in note 5.

16. Share capital and share premium

See note 26 of the consolidated financial statements for information on share capital.

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203

17. Share‑based payment reserves

See note 27 of the consolidated financial statements for information on share‑based payments.

18. Notes to the cash flow statements

2023

£000

2022

£000

Cash and cash equivalents 215,587 348,106

Cash and cash equivalents comprise cash and short term bank deposits with an original maturity of three months or less. The carrying

amount of these assets is approximately equal to their fair value.

2023

£000

2022

£000

Loss before tax (154,905) (88,244)

Depreciation of property, plant and equipment 14,493 13 ,574

Depreciation of right‑of‑use assets 3,273 2,833

Amortisation of intangible assets 18,482 11,428

Research and development expense tax credit (10,157) (7,0 8 4)

Loss on disposal of property, plant and equipment and right‑of‑use‑assets 2,681 1,419

Foreign exchange movements (1,507) 4,825

Interest on leases 2,069 1,240

Bank interest income (18 ,743) (5,927)

Interest expense 574 219

Movements on investment bonds 337 –

Movements on derivatives 836 (1,203)

(Write‑back)/impairment of investment (144) 2,193

Employee share benefit costs including employer’s social security taxes 25,575 32,392

Share of losses in associate 228 238

Gain on sale of property – (18,620)

Impairment of operating assets – 1,173

Operating cash flows before movements in working capital (116,908) (49,544)

Increase in receivables 890 (6,955)

Increase in inventory and assets subject to operating leases * (32,518) (34,454)

Increase in payables 8,050 14,642

Cash used in operations (140,486) (76,311)

R&D tax credit received 4,088 10,864

Net cash outflow from operating activities (136,398) (65,447)

* See note 19 for details regarding the restatement of comparatives.

Notes to the Company Financial Statements continued

Oxford Nanopore Technologies Annual Report & Accounts 2023204

19. Restatements

(a) Restatement of current and non‑current lease liabilities

In 2023, the Company identified a misclassification of £11.0 million of non‑current lease liabilities incorrectly presented as current lease

liabilities in the financial statements for the year ended 31 December 2022. The misclassification has been corrected by restating the

2022 current and non‑current lease liabilities line items within the 2023 financial statements as shown below. There is no effect on the

total liabilities of the Company.

2022

£000

Increase/

(decrease)

£000

2022

Restated

£000

Non‑current liabilities

Lease liabilities 16,531 10,993 27,524

Current liabilities

Lease liabilities 13,620 (10,993) 2,627

Total liabilities 140,952 ‑ 140,952

(b) Restatement of assets subject to operating leases in operating cash flows

In 2023, the Group identified that the cash outflows associated with additions to assets subject to operating leases (£9.5 million) had

been incorrectly classified in the cashflow statement within the 2022 financial statements as cash used within investing activities.

Following a review of relevant accounting requirements, the Company has restated these 2022 cash outflows to be presented as cash

used in operations in the 2023 financial statements. The presentation of the cash flow in 2023 is consistent with the restated

presentation. See below for details regarding this restatement of comparatives. There is no effect on the net cash position or total cash

outflow of the Company.

2022

£000

Increase/

(decrease)

£000

2022

Restated

£000

Cash used in operations

Increase in inventory (24,964) (9,490) (34,454)

Total cash used in operations (66,821) (9,490) (76,311)

Net cash outflow from investing activities

Purchase of property, plant and equipment (17,548) 9,490 (8,058)

Total cash outflow from investing activities (59,369) 9,490 (49,879)

Total cash outflow (127,489) ‑ (127,489)

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023

Strategic Report Corporate Governance Financial Statements Further Information

205

Further

Information

206—211

206 Further Information

207 Alternative Performance Measures (APMs)

and other non‑statutory measures

209 Glossary

211 Company information

Oxford Nanopore Technologies Annual Report & Accounts 2023206

Alternative Performance Measures (APMs)

and other non-statutory measures

The Group tracks a number of performance measures (KPIs) including Alternative Performance Measures (APMs) in managing its

business, which are not defined or specified under the requirements of IFRS because they exclude amounts that are included in, or

include amounts that are excluded from, the most directly comparable measures calculated and presented in accordance with IFRS

orarecalculated using financial measures that are not calculated in accordance with IFRS.

The Group believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders

with additional helpful information on the performance of the business. These APMs are consistent with how the business performance

isplanned and reported within the internal management reporting to the Board.

These APMs should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial

statements relating to the Group, which are prepared in accordance with IFRS. The Group believes that these APMs are useful indicators

of its performance. However, they may not be comparable with similarly titled measures reported by other companies due to differences

in the way they are calculated.

Metric Definition Rationale APM KPI

Revenue Revenue per financial statements Helps evaluate growth trends, establish

budgets and assess operational

performance

No No

LSRT revenue growth LSRT revenue growth excluding EGP and

COVID sequencing revenue, expressed as a

percentage

Helps evaluate growth trends, establish

budgets and assess operational

performance

No Yes

Underlying LSRT revenue

growth on a constant

currency basis

LSRT revenue growth excluding EGP and

COVID sequencing revenue on a constant

currency basis, expressed as a percentage

Helps evaluate growth trends, establish

budgets and assess operational

performance

Yes No

COVID‑19 testing

revenuegrowth

COVID‑19 testing Revenue per Group’s

operating segment in current year compared

to prior year, expressed as apercentage

Helps evaluate growth trends, establish

budgets and assess operational

performance

No No

Gross profit Revenue less cost of sales. Cost of sales is

disclosed in the consolidated statement of

comprehensive income

Helps evaluate growth trends, establish

budgets and assess operational

performance and efficiencies

No No

Gross margin % Gross profit divided by Revenue Helps evaluate growth trends, establish

budgets and assess operational

performance and efficiencies

Yes No

LSRT Gross margin % LSRT Gross profit divided byLSRTrevenue Helps evaluate growth trends, establish

budgets and assess operational

performance and efficiencies

Yes Yes

EBITDA Earnings for the year before income tax

expense, finance income, loan interest,

interest on leases, expense, depreciation

ofright of use assets, depreciation and

amortisation

EBITDA is used as profit measure because

it shows the results of normal, core

operations exclusive of income or charges

that are not considered to represent the

underlying operational performance

Yes No

Adjusted EBITDA EBITDA adjusted for: i) share‑based payment

expense on Founder LTIP awards

ii)employer’s social security taxes on Founder

LTIP and pre‑IPO share awards; iii) impairment

of investment in associate iv)gain on sale of

property; and v) settlement of the COVID‑19

testing contract.

Adjusted EBITDA is used as key profit

measure because it shows the results of

normal, core operations exclusive of

income or charges that are not considered

to represent the underlying operational

performance, excluding exceptional items

Yes Yes

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 207

Metric Definition Rationale APM KPI

Number of publications The cumulative number of peer reviewed

scientific publications identified through

databases, including Google Scholar

andPubMed, that include nanopore

sequencing. Excluding review articles, book

chapters, editorials, protocols, andconference

proceedings. English language only.

Publications are a key indicator of the

breadth and diversity of the use of

nanopore sequencing in the scientific

community

Yes Yes

Active customer accounts Active customer accounts are customers that

have generated revenue in the prior 12 month

period

Increasing customer numbers is a key

driver of revenue and a reflection of our

ability to execute effectively

Yes No

Women in senior leadership

roles

The proportion of women in leadership roles

globally, including women on the Board,

Operating Committee and direct reports to

members of the Operating Committee

(excluding admin support)

Nuturing a diverse and inclusive culture

drives our growth as a business.

Yes Yes

Adjusted research and

development expenses

Research and development expenses

adjusted for employer’s social security taxes

on pre‑IPO shares

Adjusted research and development is a

measure that shows the underlying R&D

expenditure

Yes No

Adjusted R&D expenses

and capitalised

development costs

Adjusted research and development expenses

after removing amortisation and further

adjusting for capitalising of development costs

Adjusted research and development and

capitalised development costs is an

additional measure that shows the

underlying R&D expenditure

Yes No

Adjusted selling, general

and administrative

expenses

Selling, general and administrative expenses

after adjusting for share‑based

payments expense (Founder LTIP) and

employer’s social security taxes on Founder

LTIP and pre‑IPO share awards

Adjusted research and development is a

measure that shows the underlying selling,

general and administrative expenses

Yes No

Cash and cash equivalents

and other liquid investments

The total cash and cash equivalents, which

comprise cash in hand, deposits held at call

and other short‑term highly liquid investments

with a maturity of three months or less at the

date of acquisition, treasury deposits which

comprise deposits held with banks thatdo not

meet the IAS 7 definition of a cashequivalent

and investment bonds

Cash, cash equivalents and other liquid

investments is a measure that shows the

underlying cash reserves

Yes No

Alternative Performance Measures (APMs)

and other non-statutory measures continued

Oxford Nanopore Technologies Annual Report & Accounts 2023208

Glossary

Term Definition

ABP Annual Bonus Plan

AEM All‑Employee Meetings

AGM Annual General Meeting

AI Artificial intelligence

APAC Asia Pacific region

APMs Alternative Performance Measures

ASIC Application‑specific integrated circuit

B2C Business to consumer

BCP Business Continuity Plan

BPS Basis points

CAGR Compound annual growth rate

CARD Center for Alzheimer’s and Related Dementias

CDC Centers for Disease Control and Prevention

CEO Chief Executive Officer

CFO Chief Financial Officer

CNS Central nervous system

CODM Chief Operating decision maker

COO Chief Operating Officer

CSO Chief Strategy Officer

CTC Configuration Test Cells

CTI&PO Chief Technology, Innovation and Product Officer

DHSC Department of Health and Social Care

DNA Deoxyribonucleic acid

DPO Data Protection Officer

DR-TB Drug‑resistant tuberculosis

DTA Deferred tax asset

DTC Direct‑to‑consumer

EAP Employee Assistance Programme

EBITDA Earnings Before Interest, Taxes, Depreciation and

Amortisation

ECL Expected credit loss

ED&I Equality, Diversity & Inclusion

EGP Emirati Genome Program

EHS Environment, Health & Safety

EMEAI Europe, the Middle East, Africa and India

ERM Environmental Resources Management

ESG Environmental, social and governance

FAS Field Application Scientist

FCA Financial Conduct Authority

FPGAs Field Programmable Gate Arrays

FPP Financial Position and Prospects

FRC Financial Reporting Council

FTC Federal Trade Commission

FTE Full‑Time Equivalent

FTSE Financial Times Stock Exchange

Gb Gigabyte

GDPR General Data Protection Regulation

Term Definition

GHG Greenhouse gas

GISAID Global Initiative on Sharing Avian Influenza Data

GPUs Graphics processing units

HLA Human Leukocyte Antigen

HR Human Resources

H&S Health & Safety

IASB International Accounting Standards Board

IFRS International Financial Reporting Standards

INDEL Insertion or detection of nucleotides

IP Intellectual Property

IPO Initial public offering

ISO International Organization for Standardization

IT Information Technology

KPIs Key Performance Indicators

LAT Limited Anti‑Takeover

LSRT Life Science Research Tools

LTIP Long Term Incentive Plan

MAP MinION Access Programme

MHFA Mental Health First Aid

NASDAQ National Association of Securities Dealers Automated

Quotations

NEDs Non‑Executive Directors

NGS Next Generation Sequencing

NomCo Nomination Committee

NCM Nanopore Community Meetings

NIH National Institutes of Health

NZE Net Zero Emissions

OND Oxford Nanopore Diagnostics

OpCo Operating Committee

PCR Polymerase chain reaction

PRUs Principal Risks and Uncertainties

QC Quality controlled

QMS Quality Management System

R&D Research & Development

RemCo Remuneration Committee

RDEC Research and Development Expenditure Credit

RRIDDOR Reporting of Injuries, Diseases and Dangerous

Occurrences

RNA Ribonucleic acid

SASB Sustainable Accounting Standards Board

SBTi Science Based Targets initiative

SBS Sequencing by synthesis

SDGs Sustainable Development Goals

SEC Securities and Exchange Commission

SFM Short Fragment Mode

SG&A Selling, general and administrative expenses

SIP Share Incentive Plan

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 209

Term Definition

SKU Stock-keeping unit

SMEs Small and medium-sized enterprises

SNP Single Nucleotide Polymorphism

SNV Single nucleotide variant

SSD Solid-state drives

STEM Science, technology, engineering, and mathematics

STEPS The Stated Policies Scenario

STR Short tandem repeat

SV Structural variant

SVP Senior Vice President

TAM Total Addressable Market

TB Tuberculosis

TCFD Task Force on Climate-related Financial Disclosures

TOSP The Oxford Science Park

TSR Total Shareholder Return

UAE United Arab Emirates

UCSF University of California San Francisco

UEL Useful Economic Life

UN United Nations

Underlying

revenue

LSRT revenue excluding revenue from the EGP

andCOVID sequencing

USD United States Dollars

ViA Values in Action

VP Vice President

WHO World Health Organization

Glossary continued

Oxford Nanopore Technologies Annual Report & Accounts 2023210

Directors Wendy Becker

Nicholas Keher

Timothy Cowper

Sarah Gordon Wild

Dr Guy Harmelin

Adrian Hennah

John O’Higgins

Dr Gurdial (Gordon) Sanghera

Duncan Tatton‑Brown

Heather Preston

Sarah Fortune

Katherine (Kate) Priestman

Dr James (Spike) Willcocks

Company secretary Hannah Coote

Registered number 05386273

Registered office Gosling Building

Edmund Halley Road

Oxford Science Park

Oxford

Oxfordshire

OX4 4DQ

Company information

Independent auditors Deloitte LLP

2 New Street Square

London

EC4A 3BZ

Solicitors Slaughter & May

One Bunhill Row

London EC1Y 8YY

Brokers J. P. Morgan Securities plc

25 Bank Street

London EC1Y 8YY

Citigroup Global Markets Limited

Citigroup Centre

Canada Square

Canary Wharf

London E14 5LB

Registrar Equiniti Limited

Aspect House

Spencer Road

Lancing BN99 6DA

Forward-looking statements

This report contains certain forward‑looking statements. For example, statements regarding

expected revenue growth and profit margins are forward‑looking statements. Phrases such as “aim”,

“plan”, “expect”, “intend”, “anticipate”, “believe”, “estimate”, “target”, and similar expressions of a

future or forward‑looking nature should also be considered forward‑looking statements.

Forward‑looking statements address our expected future business and financial performance and

financial condition, and by definition address matters that are, to different degrees, uncertain. Our

results could be affected by macroeconomic conditions, the COVID‑19 pandemic, delays in our

receipt of components or our delivery of products to our customers, suspensions of large projects

and/or acceleration of large products or accelerated adoption of pathogen surveillance. These or

other uncertainties may cause our actual future results to be materially different than those

expressed in our forward‑looking statements.

Strategic Report Corporate Governance Financial Statements Further Information

Oxford Nanopore TechnologiesAnnual Report & Accounts 2023 211

Notes

Oxford Nanopore Technologies Annual Report & Accounts 2023212

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Edmund Halley Road

Oxford Science Park

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