Shares in Oxford Nanopore sunk as much as 12% in early trade as the biotech business warned of the potential knock to sales of a cut in US federal funding.

The London-listed firm, based in the Oxford Science Park, said there “remains material uncertainty and risk” to funding to the US National Institutes of Health (NIH), as well as a “tightening of export control restrictions,” with as much as 16% of the company’s revenues thought to be exposed to funding from NIH and other US federal institutions.

Oxford Nanopore said it expected future growth “to be somewhat impacted by changes to Federal funding in the US for institutions such as the NIH, albeit the materiality of this impact is still uncertain as the situation is still evolving.”

“Management have prudently assumed a material reduction pending further clarity.”

The warning underscores the potential exposure that British tech firms, in particular biotech, have to potential cuts to government funding in the US.

The new US administration under Donald Trump has pledged to reduce government spending by as much as $1tn per year, with a new department fronted by tech billionaire Elon Musk tasked with identifying targets for cuts.

Musk’s department, known as the Department of Government Efficiency or DOGE, has already unveiled deep spending cuts within weeks of being established, with government-funded research institutions thought to be high on its list of targets.

That has prompted calls from academics to have Musk expelled from the Royal Society, a centuries-old British science academy to which he was inducted in 2018.

Royal Society member Geoffrey Hinton, who collected a Nobel Prize last year for his research in AI, said: “I think Elon Musk should be expelled from the British Royal Society.

“Not because he peddles conspiracy theories and makes Nazi salutes, but because of the huge damage he is doing to scientific institutions in the US.”

Musk described the comments as “carelessly ignorant, cruel and false.”

Oxford Nanopore today reported a 11.1% jump in revenue growth to £183.2m in 2024, with losses narrowing slightly to £146.2m.

The firm, which develops DNA sequencing products, said that despite the risks to US government funding, it had successfully struck a number of new government partnerships during the year, including with the UK Government, UK Biobank and Precision Health Research Singapore.

“While we expect the macroeconomic and geopolitical backdrop to remain uncertain, we enter 2025 with strong operational momentum and a growing opportunity pipeline,” the firm said.

It comes after the firm in September said it was drawing up plans for a lawsuit against Chinese biotech firm BGI over an alleged breach of contract.

The London-listed biotech firm told shareholders it had filed a US court application in the Northern District of California for leave to serve subpoenas in support of a lawsuit it intends to file in the courts of England and Wales against Beijing-based genomics business BGI and MGI, its former subsidiary that was later spun out as a separate entity.

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