Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Oxford Biomedica Plc | OXB | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 7.50 | 1.82% | 420.00 | 16:35:25 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 402.50 | 402.50 | 420.50 | 420.00 | 412.50 |
| Industry Sector |
|---|
| PHARMACEUTICALS & BIOTECHNOLOGY |
| Top Posts |
|---|
Posted at 22/11/2024 10:11 by harry s truman Slight dose of melancholy this morning for me because, as those with long service badges might remember, first days of 2024 I wrote that my sole 2024 OXB target was for them to get back into the FTSE250.Today (well close of play today if we are being picky) marks the 4th and final FTSE review of the year and quite obviously we haven't. I can't help but think that there have been a few opportunities during the year where much better IR/PR (or even some visible IR/PR) could have perhaps swung it for us, but unfortunately OXB can't / won't talk about that side of the business these days or doesn't see the point. Anyway, onward and upward as someone once said, and I'm guessing that 4 weeks today is the end of the 2024 trading year in all but name and after the break we start our long awaited profitable year and finally return from the naughty step. I'm sure most of you will have worked it out by now, but for the first time holding OXB (and unlike Del Boy) I don't see a "this time next year" for us as OXB shareholders. I think Novo have eyes now firmly set on that prize of the forecast C> CDMO market and see OXB's "tech, knowhow and proven ability to expand" + Catalent's enormous waiting capacity as the route to that very big prize. Yes it might be wishful thinking based upon a lot of news stories and circumstantial evidence all stuck together to come up with a case, but remember my honest preference would be to hold OXB as it becomes "the" pure C> CDMO with that 20%+ EBITDA margin in 2026 forecast looking very nice indeed. But I think Novo have the same idea now (albeit on steroids). It gets rid of some of their enormous cash pile. Utilises the parts of Catalent which Novo have made no attempt to explain the attraction of. Gets them a premium slice of the gene delivery market + everything else OXB can do. Perhaps most importantly though, it would get Novo another huge income stream which was relatively risk free once mature, as of course it's the partners / customers who are taking the development risk - Novo would simply be charging handsomely for helping them with a service. EU decide on approving the Novo Catalent purchase by 2 weeks today. |
Posted at 08/11/2024 16:32 by xoptimist Greetings everybody. I am sure many of you will have clocked that Avid Bioservices was bought this week by a couple of large specialist healthcare private equity funds including the UK’s GHO. I am guessing you will have discussed this but I cant see any posts. Perhaps this got lost in the US election results on Wednesday.I know many of you shot me down last time when I suggested that Avid was one of our better CDMO comparables – albeit operating in a slightly different space in antibodies. However close you think it is to being a comparable I think it is nevertheless worth noting that Avid was sold for $1.1bn (£851m) – a 22% premium to market - or 6.8 times multiple of their forward guidance for FY2025 sales of $160-164m –17% growth rate over FY2024 (about half compared to our current estimated 3 year CAGR of 35%). If Avid is a decent industry comparable then OXB on similar multiples would be worth £884m today (or £8,35 a share). (I have used Frank’s 2024 revenue guidance as Avid is already halfway through their FY2025 but of course there would be a case for OXB being valued on its forward revenue estimate of £175m of revenue for 2025). Avid is in the larger antibody market and therefore carries a lower risk profile than OXB but this market generally has lower margins; more competition and lower barriers to entry. On the other hand, Avid is narrowly profitable, which is obviously a valuation plus. Whilst many of you will intelligently argue that OXB is unique with much superior competitive advantage and R&D depth and knowledge (creating some kind of a moat) – nevertheless I would happily take 6.8 times sales this year and next (£1,19bn on FY2025 sales of £175m or £11,23 a share). And if OXB is really so unique and superior and deserves a higher multiple than Avid’s 6.8 then hallelujah to that! Sadly, we are a long way away from these valuation levels with OXB currently trading with a market cap of about £440m ($568m) or about half the valuation the PE guys have put on Avid. And we are trading at 3.4 times our 2024 estimated revenue and 2.5 times 2025 est. If Novo does emerge as a potential buyer at least the Avid deal might establish a minimum benchmark – although perhaps there are other PE firms that can see that taking OXB private could unlock much greater value. In any event hopefully soon we will start to close what is a clear valuation gap with increasing benchmarks and comparables. |
Posted at 05/11/2024 15:03 by harry s truman The Eurovision side of this always makes me smile. Anyway, back to OXB.OXB presented recently in Rome at the European Society of Cell & Gene Therapy 2024 conference. You'd never guess unless you looked for it, but the relevant poster they presented is hidden on the OXB website here Crucial part to note here for those of us interested in OXB are the terms SAN & M-SAN. "Our findings demonstrate that the use of SAN and M-SAN exhibited superior activity under typical LV manufacturing conditions.". SAN is Salt Active Nucleases and it's the technology of ArcticZymes where our CEO Frank is the new Chairman and I understand from today's internet trawl that OXB are the first to try it. ”M-SAN demonstrated superior performance compared to the Industry Standard Nuclease when integrated into OXB’s LV production process” "SAN also outperformed the Industry Standard Nuclease when integrated into OXB’s LV production” “Over 10-fold reduction in residual DNA compared to the Industry Standard Nuclease” |
Posted at 26/10/2024 10:28 by harry s truman Biotech (as drug discovery) is uncannily similar to oil / mineral exploration in many ways.Companies in both raise money to try to discover something and the majority in both sectors run out of money without the dream coming true. People who follow the Bios (and I've followed a few) always like to try to find something which gives them an edge, but it is a very high attrition rate and most bios go bust before their Hail Mary moment. Miracles do happen (like Summit of late) but most fall away. Drop on a good one early enough and Sunseeker will send you their latest brochures. Pick the wrong one and you can easily walk away with nothing. Newcomers to OXB (management) have often said that OXB stood out as a 25+ year biotech company because that just doesn't happen. What they mean is that by that time the funding rounds are long exhausted or you have discovered a drug and were quickly bought out by a pharmaceutical company. OXB of course survived because even though their own drugs never quite made it, they began to provide services to others instead - thus becoming self funding - and that is now all we do. In the past I've written a few times in various places that I'll never do another 100% pure drug discovery play at early stage because the risk is just too high and the timescales too long for my age now. I'm still mostly of that mindset, and although I'm almost certain to dabble again at some point - it will only be a dabble. So the sector is ordinarily brutal and then it was hit by covid, because to run clinical trials you either need hospital beds to use or on standby - and of course worldwide the whole hospitals were reserved for covid - so that killed even more bios than normal covid hit companies as the bios were just sat there unable to do anything other than burn raised cash. Following covid the cash was even harder to raise. Regarding the FT250 then I think a quid over the next 4 weeks and OXB will be in. I realise that equates to quite a lot of money but the tide finally seems to have turned with OXB now and I think this trend is the result of more and more people noticing OXB (perhaps after the MF article) and taking a look at the prospects. I'm sure there will be hedge funds out there now who have clocked that OXB could be back in the MSCI on the 6th and back in the FTSE250 on the 22nd. If they feel there is good money to be made by taking a position to help ensure that happens, then it's going to happen isn't it? |
Posted at 23/10/2024 18:43 by harry s truman This skyrocketing growth stock is up 100% this year! Is it too late to buy?Mark David Hartley Wed 23 October 2024 at 4:33 pm BST 3 min read Move aside Rolls-Royce and Fresnillo — this small-cap biotech share is skyrocketing past some of the UK’s leading growth stocks. Up 100% this year, OXB (LSE: OXB) is taking no prisoners as it fights to recover its losses from 2022. Between November 2021 and October 2022, the share price crashed 78%, falling from a high of £16.78 to almost £3 per share. The price continued to fall through 2023 but has now recovered to £4.18 — the highest it’s been in over a year. So what’s next for the stock? Cutting-edge biotechnology Previously known as Oxford Biomedica, OXB is a relatively small £442m stock listed on the FTSE All-Share index. The Oxford-based biopharmaceutical company focuses on cell and gene therapy, specialising in viral vector manufacturing. It has over 25 years of experience working with some of the leading pharmaceutical and biotech firms globally. Recently it shifted to a pure-play contract development and manufacturing organisation (CDMO), aiming to position itself as a leader in viral vector services, helping other firms develop and commercialise gene therapies. Over the past year, its portfolio grew to include 37 clients and 48 programmes, focusing on viral vector types like lentivirus and adeno-associated virus (AAV). The value of these contracts is approximately £94m as of 31 August. Shaky financials Last year was not kind to OXB, with the share price falling 50%. In the first half of 2023, it reported a 33% drop in revenues compared to the same period in 2022. The decline was primarily due to the non-recurrence of AstraZeneca Covid vaccine manufacturing. It also posted an operating EBITDA loss of £33.7m, higher than the £5.8m loss in the previous year. This was attributed to inflation combined with higher expenses related to its new Oxford Biomedica Solutions division. Things seem to be improving in 2024, although first-half earnings were still somewhat disappointing. Both revenue and earnings per share (EPS) missed analyst expectations, by 4.7% and 110%, respectively. Although it posted a net loss of £32.5m, this was a 32% improvement on H1 2023. The balance sheet looks okay for now, with a debt-to-equity ratio of 55.8%. However, it’s burning through cash and piling on debt, possibly due to increased operational expenses and rising bioprocessing costs. Cash and liquidity are key areas to watch as the company expects to break even in EBITDA by the end of 2024. In an announcement made in September during the rebranding to OXB, new CEO Dr. Frank Mathias said it aims to improve its financial standing by focusing on its role as a CDMO. It’s unclear how well the change to a CDMO will pay off, but the price is already reacting positively. However, the loss of a large client like Novartis could easily turn things around. It already faces tough competition in the CDMO market — any drop in performance could result in lost contracts. If things go well, the transition should provide more stable, long-term revenue as opposed to the volatile revenues from internal R&D. I expect it will continue to do well so if I weren’t already a shareholder, I’d happily buy the stock today. The post This skyrocketing growth stock is up 100% this year! Is it too late to buy? appeared first on The Motley Fool UK. Mark Hartley has positions in OXB. The Motley Fool UK has recommended AstraZeneca Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2024 |
Posted at 24/9/2024 20:49 by mirabeau If anyone's interested below is OXB's earnings call transcript with the management and analysts asking questions - beware it's a hefty tome :Oxford Biomedica plc (OXBDF) Q2 2024 Earnings Call Transcript Sep. 23, 2024 10:14 AM ETOxford Biomedica plc (OXBDF) Stock SA Transcripts profile picture Oxford Biomedica plc (OTCPK:OXBDF) Q2 2024 Earnings Conference Call September 23, 2024 8:00 AM ET Company Participants Frank Mathias - Chief Executive Officer Sebastien Ribault - Chief Business Officer Lucinda Crabtree - Chief Financial Officer Stuart Henderson - Vice Chair Conference Call Participants Natalia Webster - RBC Capital Markets John Priestner - JPMorgan Paul Cuddon - Deutsche Numis James Orsborne - Stifel Julie Simmonds - Panmure Liberum Frank Mathias Good afternoon, everyone, and good morning to those on the other side of the ocean. Thank you for attending today's Analyst Briefing on our Interim Results for the Six Months ended June 30, 2024. It's always my pleasure to speak to you today for my fourth set of OXB results. It's also a great pleasure to see so many known faces, familiar faces here in the room. Thank you for joining us. With me today, and I'm proud to say, our newly appointed Chief Financial Officer, Luci Crabtree, who many of you already know probably from the past and who joined us just three weeks ago, exactly three weeks ago, Luci. We are very excited to have you on board, Luci, and as we embark on a very new or next chapter itself of our journey. And I will let Luci introduce herself when we start her part in the presentation shortly. I'm also delighted to have our Chief Business Officer, Dr. Sebastien Ribault with us, whom you already know from the past, you will hear from both of them in due course throughout this presentation. Also with us in the room is Stuart Paynter, our former CFO for the Q&A section eventually. And he has recently, as you know, handed over the reins to you, Luci. The disclaimer. Here's the agenda, in terms of the agenda for our briefing today, we'll begin by providing an overview of the key achievements across the business since the start of the year, before handing over to Sebastien to provide an update on the business development pipeline and the strong momentum we are seeing currently on the commercial side. Luci will then provide an update on our financial performance and then I will hand back to me -- she will hand back to me to wrap up before we start the Q&A session. So in line with the three pillar plan outlined three years -- last year, we are seeing a strong momentum in all areas of OXB. Indeed, the first-half of 2024 has been a period focused on continuing to deliver on our pure place CDMO Growth Strategy, which was put in place shortly after I joined OXB in March 2023. We have indeed made significant progress in further integrating our global operations to better serve our clients and realize synergies. Under the one OXB strategy, we have now moved to a multi-vector, multi-site model to improve operational efficiency, while offering our clients greater flexibility and accelerated project timelines to help them to bring their life-changing therapies to the market as quickly as possible. As part of the program of 21 OXB work streams, I'm very pleased to confirm that we have now successfully transferred our lentiviral vector capabilities to our Bedford site near Boston in the U.S. and we are also beginning to transfer our lenti vector platform technology to France. Since the beginning of the year I have been delighted with the commercial momentum we have seen. We have continued to experience very strong demand for our CDMO services and seen a significant increase in the number of commercial opportunities. This is reflected in the quality of the programs we are working on and the number of late-stage programs in our portfolio. We have onboarded new clients across all major viral vector types, including, important to mention here, seven early stage AAV programs in the U.S. and we are very pleased to now be supporting also late stage activities for four clients preparing for commercial launch of their products. So compared to last year, we have many more later stage programs in our pipeline, and we have started to make selective investment in new talent to support the delivery of these programs in 2025 and beyond. So our pipeline has clearly become more mature, as Sebastien will share in a few minutes. This isn't just good for us. It's also a sign that the whole cell and gene therapy sector is maturing, and we are seeing real progress in bringing these therapies to the market. There have already been four FDA approvals for cell and gene therapies this year, with three more expected before the end of the year. This commercial momentum is really encouraging and has helped us to develop a more balanced and mature pipeline. In the first-half of the year, we achieved organic growth of 38%, compared to the same period last year, providing clear evidence that the strategy that we have put in place is working. This strong revenue growth has been achieved on a reduced cost base allowing to reiterate the mid-term guidance we set first out last time at the same time last year. Luci will elaborate on this later in her presentation, but I will now hand over to you Sebastien to provide us with a commercial update. Sebastien Ribault Thank you, Frank. Good afternoon, good morning everyone. Let me start with the market situation. We all know that the macroeconomic environment is not very positive these days. But even in a difficult situation, we see that the number of programs in the various clinical phases that you see here on the left is still growing. 5% more than in Q3 2023, with an overall number of clinical molecules that has progressed nicely into the latest phase, meaning Phase 3 and commercial, confirmed by the number of FDA approvals that Frank just mentioned. Last year, we had seen seven approval, two more than in 2022. This year, again, although the environment is difficult, we expect the same number of approvals. This maturation of the markets and the increasing number of approved program is very important for us, because it's a source of recurrent commercial manufacturing revenue, which we see in our pipeline. And I will elaborate a bit more on that in the next slides. But starting overall with the pipeline compared to when I joined the company at the end of 2022, where we had a pipeline that was shy of $300 million, where today above $560 million, corresponding to a 94% growth of the pipeline of opportunities across all phases. You see here that the growth was quite similar comparing ‘22 to ‘23 and ‘23 to today, meaning that we expect at the end of the year to be above the number you see here. More important than just the growth of the pipeline, if you look at the right side of the slide here, you will see that about 57% of our opportunities are covering feasibility studies preclinical Phase 1 and Phase 2 versus 43% in Phase 3 and commercial manufacturing. That's the reason why I was talking about recurrent manufacturing revenue. Because the recurrent manufacturing starts in Phase 2, at the very end of Phase 2, and becomes routine and can be predicted through long-term forecasts when we reach the Phase 3 and the commercial steps. It's actually what we see in terms of maturity through here on the left side of the slide, risk adjusted pipeline value. So you've seen the pipeline before $565 million. You see here the pipeline adjusted with the probability of success of the ongoing negotiation, including the probability of success through the various clinical phases as well. And when the pipeline grew by 94%, you see that the risk-adjusted pipeline grew even more at 99%, compared to the end of 2022. The pipeline is healthy, well-balanced between the various types of clients, always using the same terminology here with the emerging biotechs, the established biotech and the big pharma. About a year ago I mentioned that one of my objectives was to make sure that not only we would have the right split between the different types of clients, but also the right split between the existing clients and the new opportunities, which you see here in the middle of the slide. And you see that roughly 50-50 today is the split of the pipeline between existing clients and new opportunities coming from new accounts. One of the key objective which led to the acquisition of the legacy ABL sites in Lyon and Strasbourg, one of the key objective was also to diversify the pipeline in terms of geographical reach. We had a pipeline that was very heavy on the U.S. side and very poor in Europe. We've moved the pipeline to slightly above 10% in Europe at the end of 2022 to above 30% today. That's the change that we were expecting. It's coming obviously from the ABL acquisition, where a number of opportunities had been identified by the ABL team, but also from the fact that now clients have identified that OXB is a real global player operating from U.S. from U.K. and from continental Europe with the site in Lyon and Strasbourg. Talking about the split between the phases you see here looking at the line September 2024 that we've increased very significantly the number of projects in the two late phases, Phase 3 and commercial agreement, moving from two projects in September 2022 to six projects in September 2024. That's the reason why we're extremely confident on the revenue generated through the second-half of the year, but also for the revenues of 2025, since all these contracts are linked to projections going through 2025, but also visibility on 2026 and 2027. Obviously, when you're a biotech today, investing to launch a product, meaning in Phase 3, you want to make sure that there is capacity for your future project and product in the OXB suites and that's why we have a lot of visibility on what's going to happen through next year and the next two years as well. What's the benefit for our clients? I mean the benefit from our track record and that's the reason why we've been able to acquire more clients on the late stage. It's not only the maturation of the existing pipeline. It's also clients coming to us asking for a tech transfer post-Phase 2 to make sure that we're going to bring them successfully to the commercial stage and taking their project at Phase 3 is maximizing their chances of success. We have established technology, it's obviously one of the drivers why people come to us and we keep saying that we're a quality and innovation led CDMO. I think that's one of the reasons why we keep winning programs including program at late stage. I'm going to stop here and hand over to Luci. Lucinda Crabtree Thank you, Sebastian. So firstly it's great to see so many familiar faces in the room. I'm delighted to be here and to be presenting this update on OXB results. I've known the OXB business for a long time and with this new clear-cut strategy and focus as a pure play CDMO alongside an incredibly experienced management team. This was an obvious opportunity for me to grasp. I believe this business has great potential and a very exciting growth trajectory, not least because of the ultimate benefit to patients from the therapeutic modalities our viral vector technology platform serves. Just a few words on me. As you may know, my last role was as CFO of MorphoSys, which was recently acquired by Novartis. Prior to that, I was CFO at Autolus Therapeutics, a NASDAQ listed CAR-T business. And I have a background in both sell side and buy side roles where I will know many of you from. I'm obviously only three weeks in, so it's very early days for me, but I can tell you I have been incredibly impressed with the high energy of the team and my fantastic colleagues on the senior leadership team. So next slide, please. So as you all know, I joined the business just three weeks ago. Whilst these results relate to the period before I joined, I'm happy to report that there was strong growth in top line, positive results seen from the cost streamlining exercise, which the team executed last year, as well as positive indicators for the future. Let's start with revenue. We saw an 18% increase in our first-half 2024 revenues to GBP50.8 million compared with GBP43.1 million in the same period last year. Importantly, when you look at organic revenue growth, which excludes the impact of the acquisition of OXB France and the loss of revenues from Homology, our revenues grew 38%. And I think this is an important metric to measure the company's revenue performance by. Looking towards the future, our KPIs continue to give us confidence. Our revenue backlog figure at the 31 August 2024 stood at approximately a GBP120 million. This metric measures the amount of future revenue yet to be earned and therefore, recognized on our existing orders, sort of like our open order book. As contracted orders are signed, this figure correspondingly increases and as revenues are ultimately recognized, it decreases. On orders, our contracted value of orders from clients currently stands at approximately a GBP115 million. This has seen an increase since the GBP94 million of orders that we signed -- that we had signed at the end of August 2024. These KPIs and the commercial momentum we are seeing, which you will have heard from Sebastian, are strong indicators of our ability to continue a favorable revenue growth trajectory. In terms of cash, we had GBP81.4 million in the bank at the 30 June. This compared with a GBP103.7 million at the 31 December 2023. Net cash stood at GBP41.7 million at the end of June, which obviously takes into account the GBP39.7 million of loans which are primarily related to the loan facility we have with Oaktree. Lastly, with respect to our cost base, we are seeing the benefits of the 2023 reorganization. We reported an operating EBITDA loss of GBP20.3 million, compared with GBP33.7 million in the first-half of last year and an operating loss of GBP32.2 million, compared with GBP50.7 million in the first-half of 2023. Next, I will discuss our financial guidance. In a nutshell, our guidance remains consistent with the trading update communicated a few weeks ago. We have reiterated both our existing near-term and medium term financial guidance communicated to the market. To recap, we expect full-year 2024 total revenues to be between GBP126 million and GBP134 million with a three-year revenue CAGR of more than 35% for the years 2023 to 2026. This is based on the approximately GBP90 million of revenue we had for the full-year 2023. On the near-term, we expect a low-double-digit operating EBITDA loss in 2024, which includes the impact of the acquisition of OXB France and investment in talent to support an increased level of late stage client activity in 2025. On EBITDA, we expect to be profitable on an EBITDA level in 2025. In 2026, we expect to achieve operating EBITDA margins in excess of 20%. Supporting our guidance, we see positive indicators on OXBs growth objectives. As Sebastien has mentioned earlier, our total potential revenue pipeline stands at $565 million, up 29% from $438 million at the start of the year. This as well as the risk adjusted pipeline, which Sebastian also presented to you, certainly underpins the momentum we continue to expect in new revenue opportunity. And as I previously mentioned, year-to-date, our contracted value of orders stands at around GBP115 million, which also supports this momentum. Another important indicator we look at is the maturity of our client portfolio, and it has been encouraging to see a high level of more advanced late stage programs. These are potentially higher value programs, and it is promising to see the development of these programs and clients entrusting OXB with their late stage assets, which I think speaks to the credibility of the team in the viral vector CDMO space. On the cost side, we will continue to exercise prudence in terms of our cost base as we work to build a sustainable and profitable business. All in all, I feel very encouraged by the positioning of OXB in this growth market and incredibly excited to be part of the team. So with that, thank you. I very much look forward to working with you all. And I'll now pass to Frank. Frank Mathias Thank you so much, Luci. Let's come to the end of the presentation. But before I conclude today's presentation, I would like to show you this slide, which is, in my view, at least a powerful reminder of why OXB exists and how our recently launched new corporate values align well with our vision, mission and strategy. Ingrained in our OXB DNA is our vision to transform life through cell and gene therapy. We want to help to treat seriously ill patients, that's why we feel responsible for our mission. Responsible is our first value. To enable our clients to provide cell and gene therapy to patients in need, we must be responsive. We must be agile and fast in responding to the needs of our clients. That's why responsive is our second value for the company. And because we know that our role is not always as simple as that, we need to be resilient as an organization. We must adapt to change, we must always find solution and persevere. That's why resilient is our third value. And finally, and this is non-negotiable, we must always show respect. We must build trust with each other and with our clients by being open and honest and respect, at the same time, the environment. So as you can imagine, the three of us, we are, with the rest of the team, very proud to do something life changing together. So I would like to end the presentation now with a few take home messages summarizing the reason why I have full confidence in our ability to continue to deliver on our pure play CDMO growth strategy. Firstly, we have, and it was mentioned by both, a highly experienced and energetic new management team that is fully committed to achieving our goals. This should also be evident from the results we have presented to you today. Secondly, the demand for our services is very strong, and we have continued to grow in the market as evidenced by the 55% year-on-year increase in our client base. This demand is significant and this demand and significant commercial momentum has led to a strong growth in our order book, which, as Luci just alluded to, stood at GBP115 million last week in pounds. All of this makes me very confident about our future as a pure play CDMO, and I'm really looking forward to seeing what else we can achieve together for the remainder of the year. So we will now move to our Q&A session. We will first take the questions from those here in the room. And Sofia, you have a microphone already. I say already a few hands going up. So, and afterwards, we'll take the questions from our lines -- phone lines. So please. Question-and-Answer Session Q - Natalia Webster Thank you. Natalia Webster from RBC. Thanks for taking my questions. I have two please, so my first question's on visibility. So you've got 80% of your 2024 revenues are covered by binding contracts and client forecasts? What is your visibility on the remaining 20%, and what's the equivalent, percentage visibility figure for 2025? And then my second question is just on revenues. So you've delivered strong organic growth in H1, up 38%. What's your expectations for the contribution from the France and the U.S. sites sort of into the end of the year in 2025? Frank Mathias Two questions for you, Sebastian. Sebastien Ribault Thank you, Frank. We have full visibility on what's going to happen through the end of the year in terms of remaining order. And actually, I must say that we had to discuss with a number of clients, who have request that we would probably have to postpone the start of some of their project to next year, because the pipeline not only is full, but the capacity is full as well for the end of the year. So, a number of our existing clients know that, the signatures of the contract that will happen in the next week will trigger execution through Q4. And for others, we've already started to discuss execution in 2025. That's always a good news, in our activity to see that, the GMP suites are full and the labs are running full steam. We're always extremely proactive in these discussions with our clients. We want to show them that, I mean, the capacity has its limits. So we tell people, we express their intent to start before the end of the year very early, that we need decision by June, July, August, September, and so on. We usually know that whatever is signed in Q4, usually corresponds to a start in Q1, and we're already in that situation today. So we have very good visibility. That's also the reason why I was mentioning that we have good visibility on the 2025 revenues as well, since the Q1 and Q2 and even now, Q3 situations, are quite clear. And my colleague, Thierry Cournez, our chief operating officer, is already working on the people plan for next year to make sure that not only we can deliver on what's been signed, but also we'll be able to deliver on what's going to be signed in Q4. On the revenues for H2, I did not calculate the growth. I don't know if you did, Luci, what will be the growth of revenue. But since we know what revenue we achieved in H1 and we just reiterated the guidance for the revenue for the full-year, I think we just have to make the math and we'll know what's the growth for H2, but I did not calculate it. Lucinda Crabtree Exactly. Yes, I mean, and I don't think it's appropriate for us to calculate the growth. We've given a guidance range and that's been reiterated. Natalia Webster I guess just on the sort of inorganic side, the France and U.S. operations, what you're expecting from them? How they're going to ramp over time? Lucinda Crabtree We haven't split out. I mean, I think the first thing is that we're looking at OXB as one OXB. So but as you can imagine, there is a lot of potential in France and U.S. to grow revenues and we'd expect that to happen over time. And we did point to seven new AAV programs signed. I think this gives us that confidence in the future growth trajectory across all platforms. Natalia Webster Thank you. Frank Mathias Sofia? There's an order. Okay, you have to walk more. That's only… John Priestner Hi, John Priestner at JPMorgan. Maybe just two for me, please. So you mentioned the high level of GMP Suite reservations in 2025. Maybe you can just kind of help us understand how high that is relative to this time last year going into ’24? And, historically, what percentage of reservations have translated to revenue? So trying to understand can put clients just push a reservation back for 12 months, or have they fully committed to that capacity? And the second question just on the 2024 guidance. So beyond the, obviously, increase in revenues in the second-half, how should we think about the cost lines developing in the second-half? I think COGS was slightly high in the first-half. So thank you. Frank Mathias So, Sebastian, I want to take the one of the reservation capacity. Sebastien Ribault Yes. We have planned for 80% suite utilization in 2025. Why 80%? Just because it's good practice to, keep about 20% for maintenance and your shutdown, but also some programs that are going to move from one quarter to the other. So we want to have flexibility. We don't want to be in a situation where some of our clients would be impacted by their clinical studies, timeline variation, and we have no solution to provide them. Our -- we're talking in terms of capacity based on the suite and resources, [FTSE] (ph) utilization. We have not manned all the suites, for a very simple reason. In our world, a biotech technician needs about six months for proper onboarding and another six months to be fully autonomous, which means one year. And we do not want to manufacture at the level of quality that would be under the level of quality that we had so far. We want to stay at a very high level of quality. So our, capacity utilization is based on the number of people that we have to manned the difference with. And for next year, 80%. Very similar this year, so not a big change, except that we had less FTSE this year than we plan to have next year. I will have hard time commenting on what happened before 2023 as I joined in November 2022. And before that, as you certainly know, the company, business model was hybrid, internal projects and CDMO works. I'm not sure we had a CDMO capacity utilization number. I'm looking at Stuart, but I'm not sure that number ever existed before. Stuart Henderson But the only thing I'll say before you joined, Sebastian, obviously, we have to… Frank Mathias Wait, we cannot hear you. We need to take the microphone. Stuart Henderson It's just following on from Sebastian's comment. Before Sebastian joined, we were, of course, the utilization was skewed by the by the COVID vaccine, which was, you know, very, very, very high 24-hour a day running utilization for very obvious reasons. So I think that from the time Sebastien has been in, that's probably ground zero in terms of the new way of doing things. Frank Mathias But what it says is we can open new suites and by the way that's what Sebastien, we just came from a meeting last week where we try now to look into 2025 with a high level of visibility, which we get. And we know that we might be obliged to open additional suites, that's why we have started this brings me to the cost of the second part of the year. We have started to recruit additional people, because we anticipate additional trained people. As Sebastien said, it takes up to six months to train the people to the level where they are really able to do a great job in the suite. So we have started now to invest in additional people, very prudently because of our new CFO. The cost. Lucinda Crabtree So, yes, your question was on cost base. I mean, as you pointed out, we do expect to see progress on our revenues. That's what sits behind our longer term guidance. And what sits behind that EBITDA 2025 guidance is obviously, we expect to grow revenues more than we expect to grow our cost base as you'd imagine. So you asked about COGS, I think H1 2024, you saw an impact from the acquisition of France, which had an impact on our COGS. So I, and of course, the decline in U.S. revenue. So I think those factors are what sits behind the lower margin, in H1, and that's certainly not an indicator of the future. John Priestner Perfect. Very clear. Frank Mathias Thank you. Paul Cuddon Paul Cuddon from Deutsche Numis. Just working through the risk adjustment on the pipeline, there seems to be a big increase in your probability of converting the pipeline in 2024 versus kind of where it was in 2023. So just want to understand some of the drivers there? And just more broadly in the cell therapy market, I suppose I'm noticing a lot more in terms of new targets, combination targets, increased complexity of cell engineering. So kind of how does that sort of fit into your capabilities and your kind of existing cost framework as well? Frank Mathias So that's not the conversion rate that change in the pipeline. It's the size of the large scale opportunity that are at the stage of negotiation where the probability of OXB acquiring the target is very high. But the conversion rate is pretty much the same than in 2023. We just have more opportunities, bigger opportunities, and as shown on one of the slides, about 50% of the opportunity is coming from new clients, but also since we have discussions with existing clients, who give us additional programs, we have more visibility and faster on these new opportunities. I can mention, for example, one of our existing client was a late stage program with us who requested development on an early stage program and already asked us if we could take a second program at late stage. So when you have discussions with existing accounts, the master services agreement is in place. So it simplifies very much the negotiation obviously. They know our terms and conditions. So the probability of acquiring that program is obviously much higher than the discussion that we just start with an account that, that we've known for a couple of weeks only. So that's really the maturity of the pipeline more than the conversion rate that has changed. On the complexity of cell therapy, it's not something that we see, because in our segments, the way our clients are using the AAVs or the lentis or the adenos is the same than last year and the year before and so on. So there are a number of discussions on IPSCs, for example, but that doesn't change the need to have lenti viruses for CAR-T's. And there are still a lot of CAR-T programs. Actually, if you look at cell therapy, CAR-T is still driving the growth, still. So that's the reason why it doesn't add any complexity for us. We're obviously looking on a real-time basis at the evolution of the markets. There are lots of discussions on new cell types, including non-modified cells. But as of now, that's not impacting our activity, and I don't expect an impact even for next year. Paul Cuddon Thank you. Unidentified Analyst Hi, [Indiscernible] from Peel Hunt. Just a couple on the France site. You say that you're still integrating lenti vector into France. When are you predicting that OXB France will be fully integrated? And are there any associated costs that you're still expecting from this integration? Thanks. Frank Mathias Sebastien on… Sebastien Ribault I can take the integration timeline. So we're halfway through the integration process now. It's hard to tell you when the integration will be complete. I mean, if we're talking about the full integration program, it includes, for example, the alignment of the quality management systems and a number of systems, including the ERP, for example, and we know that these alignment take years. If we're talking about the integration by segments, the strategy and commercial activities are fully integrated. If we're looking at execution today, Frank mentioned briefly that we've started the tech transfer of the lenti vector platform. I know from a discussion with our CEO from last week that we'll have all the activities at small scale and pilot scale fully transferred by the end of the year, meaning that we're on track to have GMP activities in France next year, aligned with what we're doing today in Oxford and soon in Bedford. I think that the delivery activities will be fully integrated sometimes next year, hard to say now when it's going to be, but before the end of the year for sure. So what we expect to see still running in 2026 will be systems integration only. Frank Mathias And on the costs? Lucinda Crabtree Well, yes, look, I mean, I think, first of all, early days for me, but, you know, as Sebastian has alluded to, in terms of integration activities, you can assume, you know, at this juncture I don't envisage there being any sort of large associated costs related to the remaining integration activities. James Orsborne Hi, James Orsborne from Stifel. Just on the investment going into 2025, I just wondered if you could give a bit of color around headcount, where it is today? Where you expect it to be? And I guess, sort of looking at the slide here in terms of geographical split, where you think you might be under-invested and where you think the opportunities are and perhaps a little color on the personnel you're looking at as well to hire? Lucinda Crabtree Yes, look it's a very short answer. I mean obviously, you know, we're coming to that point in time where we start our budgetary activities anyway and you know, I think we will look carefully and add sensibly and carefully to our head count as is required, with the backdrop of retaining that kind of prudent outlook on the cost base. So I'm not going to be drawn into specifics in terms of numbers, but we will be good stewards. James Orsborne Okay, thank you. And then just on the inAAVate platform obviously you've built a pretty nice reputation in lenti with the full target CAR-T therapies you got in late stage? How's the AAV market looking with that platform now established? I guess how competitive is that versus lenti that you're seeing as, I guess, a new brand or new person in the space? Sebastien Ribault We still have a much stronger reputation on the lenti side, I mean, which makes sense. OXB founded in 1995. When you have almost 30-years of existence in the lenti space, it's hard to compete with only 10-years on the AAV side. But the platform is very competitive. I know from the client feedback directly that they're happy with the performance. That is the reason why we signed, Luci mentioned, it's seven new AAV programs during the first-half of the year. We've seen the volume of orders increasing since the beginning of H2. So very positive on the AAV platform. One of the questions for 2025, and I'm going to put my head of strategy hat for a minute, is how do we combine the existing AAV platform that we had in France that came through the acquisition and the existing platform that we're running routinely in the U.S. I think it can add even more value to our clients. But so far we've decided that we would continue delivering based on the inAAVate platform, but we're obviously always looking at modification that can bring additional value to our clients. James Orsborne That's great. Thank you. Frank Mathias Thank you. Julie Simmonds Thanks. Julie Simmonds, Panmure Liberum. Just a question on how long it's taking to sign on new clients if -- when they're interested and then given the capacity that you have, what sort of the runway looking like now for a new client coming on board? Frank Mathias Yes. That's one of my favorite question, one of the most difficult. It depends what you want. If you want to go through a feasibility study and understand better what's going to be the productivity, the yield, and what if you want to get the first data to have a more precise business model for the future, understand the cost per dozen, it's going to be very quick. So if you were signing today, we would probably start the project in two to four weeks from now. If you come today and say, I would like to have a full program just before Phase 3, process characterization, validation, it's going to take some time. Because we've seen a very, very high demand in this field. We're talking about programs that are 12 to 18 months of activities. That's actually the biggest program in terms of FTSE mobilized on these programs. I mean, you're preparing for Phase 3 and commercials, so there's obviously a lot of activities. And if you were asking to start a new process characterization program today, your onboarding would probably be in Q1 next year. I usually say there are five types of capacity on which we're working. Clinical manufacturing; commercial manufacturing; process development; analytical development; and the fifth one, which as I said, is the biggest in terms of volume of activity, process characterization, and validation. So it really depends what you want. Julie Simmonds Thank you. And thinking about that in the context of sort of gross margins and how your capacity goes, clearly the margin was quite low in the first-half in comparison to some of the better years. Where do you expect it to get to once you've got that balanced? And how does the second-half of this year look in comparison to that? Lucinda Crabtree Do you want me to take that? Frank Mathias Yes. Lucinda Crabtree Look, you know, again I'm going to sort of say too early for me to give any kind of granularity, but we have our guidance, right? And we've guided to sort of EBITDA levels. Where do we ultimately want to get to as a competitive CDMO business is industry standard margins, right? But I think it's premature for us to give specific guidance as to as and when we're going to hit that. But that is not the ultimate objective. Julie Simmonds Lovely, thanks. Frank Mathias So is there another question there? James Orsborne Hi, a question regarding from Stifel. Just on, you know, just a bit of a context around what's making you win all this new business. You know, you've reset a new commercial team in the last sort of 18 months or so, I'm assuming these are still pretty competitive contracts that you're going after? So what's resonating here? Is it just a factor of more salespeople out there actually able to win this business? Or is there something distinct? And then related to that, is there any impact? How much does pricing ultimately come into play here in some of these contract wins? Frank Mathias We've not touched on the prices. The prices today compared to the prices a year ago or even when I joined the company are very much the same. The main reason why we have more opportunities in the pipeline today is number one, we're more visible. You've probably seen last week the launch of our new brand OXB that we see on the slides here. I was in a trade show in Asia 10-days ago 100% of the people I met knew Oxford Biomedica. 100% of the people I met didn’t know that we were acting exclusively as a CDMO. It's Asia, it's particular, it's a new market for OXB. I commented with the same audience about 18-months ago that most of the people we were meeting knew us as a lenti company, not lenti and AAV, although we had both. That they knew us as a hybrid company that was developing its own products and a CDMO. If I look at the change, I must say that when we were at about 10% of the market that knew us as a CDMO, we're somewhere between 40% and 60% today based on the latest survey that we ran. Still not a 100%, but more people know us, more people come to us. So we've increased the size of the BD team, we've professionalized the commercial teams as well. We have a real continuum of activities now from strategies, from marketing, commercial operations and biddies, which wasn't the case two years ago. The team is stable. I'm very proud to say that in my space, in the CBO perimeter, the turnover is 0%. With a stable team, you have stable relationships, and our clients see that. You're not just one number in the middle of the other. We know their need. We try to anticipate as much as we can what they need for the future. I mentioned in my slides, we have the track record. People know that we can push successfully a program into the commercial space. I know many CDMOs, actually the vast majority who put on their slide were commercial ready. We're not commercial ready. We're operating at commercial scale. That's very different and there are not that many CDMO doing that. So that's the reason why we win more. James Orsborne Thank you. And then just a clarification, I guess, on the ‘26 guidance, the 20% margin, is that for the full-year or is that an exit rate at the end of the year? Lucinda Crabtree We haven't been that specific, but I can -- I think you can assume that we're looking to achieve that at some point through 2026? James Orsborne Thank you. Frank Mathias Any other question here in the room? Seems not to be the case, so we open. No questions on the phone. Everyone is here. Yes, there's another question there. John Priestner Hi, John Priestner from JPMorgan. Just a quick follow-up question. So maybe thinking about the revenue backlog and the BD pipeline. So are there any projects in there, in the pipeline particular, that have been in there for 12 months or longer? What's the kind of average stay time in the pipeline before it's converted to the backlog? And maybe a similar question from the backlog, are there any revenues in there where customers haven't been able to get their capacity reservation in the last 12 months? Thank you. Sebastien Ribault We’re going to start with the end. No, we don't have any client in the backlog that's been waiting. I mean, all of that's been phased one by one when we started the activities. So we don't have a project in the backlog that would start in H2 next year, for example. We're talking about either ongoing activities or activities where the kickoff is imminent. I flew in this morning and I was sitting on the flight with one of our program managers, was coming here for a face-to-face meeting and the kickoff of a project that we signed four weeks ago now. So everything in the backlog is either in the work or is going to start very soon. It's hard to say what's the standard timeline between the start of the negotiation and the end. It really depends what kind of project we're negotiating. All of them, I believe, are between three and nine months, depending on the complexity of the program. As you can imagine, we have lots of discussions when all these programs are complex. So we want to make sure that the package is adapted to the need, that the timelines are also in line with the expectations in terms of clinical studies. It's rarely below three months. It's rarely above nine months as well. Six months is a good number for the standard negotiation. This being said, very specific to your question, do we have programs that have been sitting here for more than a year? The answer is yes. And the reason why we have that and I have in mind specifically one that we discussed with Frank last week, because it's a very complex project that requires alignment between these company and multiple partners with which they operate. So we're waiting for the alignment to make sure that the pipeline management reflect that situation. It's not a program that you would find in the risk adjusted pipeline with a high probability of success, because we're still waiting for the alignment. So that's a very low value in our pipeline. Frank Mathias Perhaps you can say a few words also to make it clear for the backlog what it means for commercial products, because then it's a binding that's important I believe. Sebastien Ribault The backlog for commercial products correspond to the binding forecast. The shortest forecast we have in the backlog is 12 months visibility, meaning that we already know what they will need in September 2025 and that's binding. So is that waiting for a start? No, it's not. I mean, every month we're delivering additional batches for this company. And although the binding forecast is 12 months, the forecast, the entire forecast is two years. So we know what they will need through 2026 as well. Frank Mathias But the two years figures are not in the backlog? Sebastien Ribault They are not in the backlog. They are in our forecast, but since it's not binding, they are not in the backlog. Frank Mathias Any other question? If this is not the case, let me take the opportunity before I close the meeting to express my thanks to you Stuart, Stuart Paynter for your contribution as CFO of OXB over the last seven years. Yes, so you have given me invaluable support when I started, so thank you again for that. You have been instrumental in bringing OXB also to where it is today, bringing us through the pandemic. And we have to thank you a lot. So thank you so much from the bottom of my heart. And thank you to all the rest in the room for your participation and attention today. I know that you will be on the road. Luci and Sophia will be on the road over the next weeks. I will join you, by the way, for some yes, but sorry for that. I will be with you. So thank you for coming today and have a nice afternoon. Bye-bye. Sebastien Ribault Thank you. |
Posted at 16/9/2024 18:06 by harry s truman Xoptimist,We can agree to disagree and I'm fine with that, but I'm in the same camp as Seb (and long before him JD who said much the same thing) in that looking around there is only really OXB which does what OXB does. Most of the people eyeing up and moving in on the business opportunity are fermenters, small molecule bashers or similar who fancy a piece of the CGT action. I think I'm correct in saying that Avid decided to expand into viral vectors in 2021 and opened some suites in 2022? That's great, but if true it's no time at all in this business and they will still be learning. OXB spent 25 years perfecting their 4th generation lentiviral vector which is acknowledged as a world leader and offered to all our clients. Where is the Avid equivalent? From what I can see on their website they offer to grow on most popular vectors for customers but offer none of their own. Unless they take a leaf out of OXB's book and spend a small fortune buying a good / proven AAV or similar (and then make it better using OXB tech which they likely don't have) then how are they going to catch up? Remember Seb (who works for OXB but also advises IM) explaining why IM sold us ABL for so little? Because they had no vectors of their own, realised that developing their own would take too long / cost too much and finally (after accepting they would probably never catch up) decided to pay in kind to become part of the world leader in a "if you can't beat them, join them" move. Avid's new viral vector facility is 53,000 sq ft OXB have 183,000 sq ft in Oxford, 96,000 sq ft in Boston and 123,000 sq ft in France. If Avid really are our nearest competitor then that should make us all feel an awful lot better about holding OXB. My guess would be Samsung are closer with their CGT division, but of course they trade on an enormous sales multiple. |
Posted at 16/9/2024 17:37 by xoptimist Hey HarryI think we all fundamentally believe that OXB is undervalued by the current market and the share price continues to be weighed down by its past and the lack of any news. I do however think we might need to retool our ideas around valuation multiples a little. I think we all believe there are very few exact apples to apples industry comparables to OXB and in some way OXB is a unique company. We have however often been told that the most clear comparable for OXB is Avid Biosciences of the US. That’s a CDMO company which has a current forward revenue guidance for FY25 (year ending April 30th 2025) of $160-168m (mid point of $164m) – which serendipitously is exactly what OXB is guiding with our mid point of £130m. At today share price of around $11.20 and with 63.8m shares in issue that gives Avid a market cap of about $715m or GBP568m. The multiple to forward sales is 4.35 compared to our 2.83 multiple based on OXB market cap of GBP368m and forward guided sales this year of £130m. Avid has three things going for it we don’t. Its profitable; it doesn’t have the kind of challenging back story we had in 2022 and 2023; and its U.S. listed. So the extent to which it is a good comparable for OXB one would think that we should have a similar multiple of sales once we are profitable and have further buried our recent past in the rear view mirror. So lets say a 4-4.5 times multiple at the end of next year when hopefully based on Frank’s forward guidance we have booked £175m of revenue and have turned a profit – so a market cap of £175m x 4.5 = £787m or £7.50 per share. That would be a more than doubling of the share price over the next 15 months. And then in 2026/2027 we will need to get to more traditional valuation metrics – multiples of earnings. So what is the right valuation today? Until we are profitable and palpably out of the woods it makes sense to me that the market has a valuation discount. As investors get more confident about management’s forward guidance – which hopefully will be what happens next week – then the market will start closing the valuation and multiple gap. Within the next 6 months what makes sense to me is that we get to, say, at least 3.5 times sales. So, we should be looking by the end of April at a market cap of around £612m. This would mean a 66% increase in the share price from where we are today - in seven months. That would be a handsome return without any need for a frothy valuation or multiple. Fingers crossed there is no backsliding by management on forward guidance next Monday and if we are lucky, as you have suggested, Frank finally puts some flesh on the bone of our multiple myeloma deal or releases some other major news. And if its really good news then maybe we get to 3.5 times sales sooner than I currently anticipate. Once again for me, assuming everything remains as guided, its just a matter of patience before the market plays catch up. |
Posted at 12/9/2024 09:25 by harry s truman You can't get off that easily Ygor...7 working days to go "All hail the inhaler!" Cystic Fibrosis trial using OXB's LentiVector now live on the clinical trials database. We know from back in 2021 that "OXB will receive an option exercise fee of $4.7 million US dollars and can qualify for payments of up to $32 million based on achievement of development, regulatory, and sales milestones.". I would say that some of that 32m will almost certainly be against the the trial starting / first patient recruited / dosed, so that will likely be a few million to OXB before the end of the year - which is always nice. As a non-doctor / non-scientist I'm a little surprised to see that Phase 2 has a placebo arm in an experimental treatment for a disease where there isn't currently a cure - i.e. they shouldn't need a placebo to see if it works because it should be obvious? But I have read before that in all double blind trials where it's ethical to use a placebo (i.e. not cancer trials etc.) then it's normal (upon a successful trial drug gaining a licence) to immediately offer it to all the trial placebo patients for free as a thank you - so essentially they pay a time penalty but still get the treatment if it works. Why is this good for OXB? Well, our traditional gene therapy treatments (such as those which have gone into eyes and brains via extremely precise injection) use very little LentiVector. Professor Kingsman once referenced the quantity, then said "which is next to nothing" for those unfamiliar with the units. So OXB needed to make relatively little of it. LentiClair is inhaling it as a mist and so they will need a lot. Obviously not for the initial 36 patients (which will already be manufactured anyway) some of whom will get a placebo instead, but should this drug be a success then OXB will be needing our biggest bioreactors and as we know already that equates to very big money - for the lifetime of the drug. On top of this, should it work out then the early patients will be on the news / in the media and whilst Boehringer will get most glory for that (under the rule which says "he who has chequebook is king") everybody in the industry will know that Boehringer selected OXB's LentiVector because it was the best option to insert / correct that faulty gene. |
Posted at 09/9/2024 09:40 by harry s truman So much of life is random. I know we all think it isn't, and that it happened because of x or that we somehow saw it coming, but mostly we simply react to things which ordinarily couldn't be predicted. It's mostly luck.With OXB it's struck me for years that the lord giveth and the lord taketh away. We'll not do the full book again here, but TroVax very nearly retired a lot of us early, then it went to nothing and could easily have marked the end for the company when our TroVax partner (Sanofi) liked the look of our gene therapy eye drugs and saved us. The eye drugs were firsts and looked very good when Sanofi got cold feet and thought that at the end of long development costs, the projected big selling drugs would be going into already saturated markets and gave them back to us. Very nearly once again for OXB and the market back in doom mode. Happily Novartis were looking for a vector to use / someone to make it in their new CAR-T venture and noted that OXB's gene delivery LentiVector was first in man and had been used very successfully in human eyes and brains by then. They signed up and changed the company's fortunes. Then came coronavirus and basically crewed the world. So OXB went from having a commercial partner in Novartis and a lot of other partners in clinical trials to having a commercial partner in Novartis and a lot of clinical trials on hold as the hospital beds (needed to be at least on standby for clinical trials) were reserved for covid. Disaster for OXB, disaster for our partners, disaster for poorly trial patients and their families clinging to hope. OXB then becomes one of 11 manufacturers for the AZ covid vaccine (and the only one they kept the contract open with at the end of the pandemic - a different story) which meant that OXB left the pandemic with most of our partners still very battered with holds, but enough cash earned from vaccine manufacture to see us through. Not everyone in this business was so lucky. If you look at the financial reports which follow then OXB has the commercial Novartis work and not much more as the AZ vaccine work stops a year earlier than planned and most of our clinical / pre-clinical partners are at best walking wounded businesses as a result of covid restrictions upon them. What do OXB do? The one commercial contract (Novartis) was golden, but nowhere near enough to support all of OXB. They had a huge amount of cash but were spending it like Elton at the florists. Something had to be done. They did what must have seemed the most logical and rather than simply sitting it out as world leader / first in man / first FDA approved with LentiVector, decided to buy their way into the bigger AAV market. Homology were willing to sell 80% of their AAV I.P., their manufacturing experts, the knowhow, and the manufacturing facility in Boston for the snip of 180m USD, sweetened greatly by guaranteed work on Homology's own drugs. Back to the running theme of the lord giving and the lord taking away, what happened next? Homology were savaged like a lot of other biotech companies during the last few years and their chosen route was to abandon gene therapy (and the work we would be paid for supporting) whilst merging with Q32 to try to save their shareholders something. On the face of it another disaster for OXB (and perhaps even a factor in our recent CFO change) but the reality is that we now get to buy Homology out of their remaining 20% (next year) much cheaper than ever imagined, and at the last results 42% of the new work won was contracts for OXB's improved Homology AAV vector. In time that will come very good for whoever owns OXB, but quite a bit more AAV work required before it pays back what it cost us. It's been the business equivalent of the Hokey Cokey, but to continue the party theme here - OXB has seen a lot of contemporaries fall away and could easily now be the one left holding the parcel when the music stops. I always thought Stuart was our best presenter. Not too technical (because he wasn't a scientist) but very relatable and a good listen. I remember him saying that the money earned by simply knocking out a lot of something - even at a less than commercial rate (the AZ vaccine) - was a revelation to everybody at OXB. Whilst it wasn't a revelation to Seb and Frank (now Thierry and Mark too) who came from a CDMO background and already knew that. Our new drug R&D department is gone now, with perhaps a tinge of sadness that we will never see an OXB in-house drug approved (slight glimmer still that someone will take Axo-Lenti-PD / ProSavin) but with the consolation of the savings of 10s of millions every year from now on. Yes I have rose tinted glasses, but I feel we are basically here now. We have so many partners that it's pretty much a statistical certainty that we are partnered with trial drugs which will get FDA approval and are then tied to us for commercial supply. We really don't need that many of those to be golden. Chances are we will get many more than that. On top of that we have the random / wildcard possibilities of the triple bonus score - for example why the world's biggest vaccine manufacturer asked to reserve one of our biggest bioreactors for a decade. A fortnight today Frank will have read through what I expect to be very good figures as he only told us weeks ago that profitability next year is still the guidance, but it also seems that Frank (unlike JD who kept results presentations pretty much just for the results) likes to save up news for a big show. It should be a good day. Unfortunately we are still at periscope depth as far as the wider market is concerned, but I'm confident. A company with this much work in this sector and guiding back to profitability next year should be in the FT250. Hopefully our Christmas present there. |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Hot Features
Premium
