 As is usually the case I am in complete agreement with Harry about the low level of attention we should be giving to any propsoects right now of a bid for the company given the shareholder base. The bedrock of Novo/IM/Vupes/Serum & Shah simply rule that out for the moment. Novo in particular facing the opposite problem of how to productively deploy mountains of incoming cash and having said publicly they want to use some of that cash to increase their investments in British biotech. It would be interesting to have more accurate figures on the average price that each of these key sharehiolders are sitting with. However, of the five you would have to think that the only one that is an opportunistic investor is vulpes and that any deal south of 800-1000p is of no interest. Our chairman also needs to see at least 800p given that his last quarter of a million shares bought between March 2022 and September 2023 have an average price of 647p and as of yesterdays closing price he is more than 800k underwater on that block of shares. (He has another 125000 shares bought before 2022 for which I cannot find the price he paid and if any of you have that I would be garteful for a share). And he, having been someone who always bought additional shares in the free period, must be kicking himself that he is missing this opportunity to average down his price further.
So Harry is right once again to be focussing us on why there is no insider buying this time around and right that there must be some lock up on a deal which because it would be price sensitive would be one of those that have to be announced to the market. (I wonder if anyione has a relaible definition on what the authorities define as material in terms of price sensitive information)
Malaria is the obvious candidate. Its almost certainly a tediously slow process involving Serum, the United Nations WHO, Gavi and a host of African governments who are beset with weak institutions and decision making processes and needing these type of vaccine roll outs to be funded by international partners which add another layer of delay. That being said there must also be some sense of urgency given that we are the second horse in the race with GSK's Mosquirix already being rolled out in at least 10 African countries.
From what I have been able to find the Boehringer Ingelheim cystic fibrosis programme still has some final trials before it can come to fruition. Is that right?
So we are in a holding/consolidation period post results awaiting a announcement for which it is impossible for anyone, even the clsoest insider, to know when it might drop given the multiple slow moving pieces involved in baking the cake. Frustrating for all of us - including management and board - but calling on us to be patient and rest in the certianty that it will come sometime this year - and there will be other pieces of smaller good news - and the worse case seems to be to trade in a relatively narrow range through to the inetrims where we will know a lot more and have greater visibility both on FY24 and FY25. |
Greetings everyone. I am joining into this discusssion group with some trepidation guven the very high level of intelligence and analysticaly thinking that has been so helpful to me in my thinking about OXB and I start by paying gartitude and tribute to all of you and in particular to Harry |
My first thought there Phil was that they might have inherited a big pharma contract or two in buying ABL, but although it's difficult to say anything for sure, my gut feeling says no.
I don't think ABL had any big deals because they didn't own any vectors to offer. That's certainly the way I understood the webcast explanation. So, great labs for contract work or production on someone else's tech - yes, but nothing to offer customers for the two biggest vector markets (AAV/LV) which is where OXB came in.
If you look about on the old ABL Europe website then the biggest / only partner they list is these people where ABL do manufacturing for their ALIGATER platform.
Then there's that thing you found where they manufacture MVA-based vaccines for Geovax, but if there's anything else of any significance then they don't mention it.
They do mention a work-share type agreement with RD Biotech (another French company) see
Whether that tie-up will continue or not with OXB I don't know, but I think if their turnover was £13m prior to OXB and you knock out Coave and Geovax from that, there isn't going to be a lot left for some large secret partnerships.
As I mentioned in a previous thought for the day, OXB did a deal with Immune Design which seemed promising but early stage at the time. 2019 and Merck bought them out. So there are two possibilities with that one - 1) the drugs have since been dropped or 2) Merck is one of our secret big pharma partners.
If you asked me to guess a bunch of names, then Sanofi would definitely be in there because we have had some great deals with them in the past - and human nature means that the familiar is always the easier future choice - but (but, but, but) in the past with OXB Sanofi never seemed to have a problem with being extremely open - so why would they now be a confidential partner?
I quite like the idea they we have a foot in the door with 7 huge companies though. The only downside there being the time it takes them to do anything (usually by committee). |
A very good point Harry! |
The early takeover at a discount is honestly my only occasional worry - but it isn't one which troubles me greatly.
I appreciate you know the rules, but very shortly IM will own 10% of OXB and they have gone to quite a lot of time and effort to get that.
Novo own 12% and are the love child of the richest public company in Europe - hardly likely they will need the money is it?
Vulpes have 8.5%
Serum own over 3% which they paid over £14 per share for.
That's like a 3rd of the company with 4 entities which are extremely unlikely to be sellers to an opportunistic bidder. Then there are some extremely wealthy long term holders like Mr Shah (another 3% which is just below that now - thanks to recent dilutions).
I think if it were possible then someone would have tried it in the post-covid carnage when those US funds were dumping.
At the moment I'm still in results mode, wrt what they told us a fortnight ago.
I often look back as my memory isn't perfect and I was thinking about what Seb said when talking about slide 11 on this
So he talks about winning 15 new clients, but then he talks about the way he balances our whole portfolio (the middle graphic) vs the way the market is split.
His point being that emerging biotech are the biggest number of customers in the market, but they are also the smallest / newest and therefore most likely to come across funding issues. Established biotech much less likely to have future funding issues and big pharma don't have funding issues.
So out of the available spread in the market, we deliberately take more of our share in established biotech / big pharma and in doing that minimise the possibility of another Homology. All great.
What caught my eye the second time of looking though, wasn't the eminently sensible plan of prioritising paying customers by their financial health, it was the part where they tell us that 20% of our client breakdown by type (all clients) is big pharma.
We had 35 clients at the results and therefore 7 of them are big pharma.
We have brilliant deals with Novartis and BMS who are obviously big pharma and OXB have previously told us that AZ asked if they could keep the pandemic vaccine contract open, so that is 3. Who are the other 4 big pharma?
Endless entertainment possibilities there in guessing that, but partnering 7 big pharma is quite an achievement / validation for OXB. Just a shame that they can't talk about it. |
"....we don't really know what multiple a pure CGT CDMO should be on"As ever,interesting comments Harry.So there's a learning coefficient to be scaled which clearly requires patience with a succession of results better " educating" investment analysts as to what the future holds.Perhaps that is inhibiting any swift reassessment of OXBs prospects by the market.I think it is.However,there are industry professionals who will be ahead of the curve in appreciating the OXB metamorphosis.I believe there remains a very real prospect of takeover. |
All true, but the point Seb and others make is that there isn't really an OXB peer out there.
Yes there are other CDMOs who do some cell and gene therapy as part of a bigger business, but there are none which just do CGT business.
So it's important to mention that any peer ratings are comparing to companies making more traditional medicines (antibody / small molecule / whatever) alongside a CGT division.
QED we don't really know what multiple a pure CGT CDMO should be on. It could easily be much higher - especially if the viral vector CDMO market size predictions come true.
Seb used to be VP of a CDMO division for Merck. What attracted him from that to a much smaller company? He also advises IM. What did he tell IM to convince them that ABL needed to be a part of OXB to succeed? As the analyst said in the Q&A "If you can't beat them, join them?" and the reply was yes.
Frank has told us that the figures in the results excluded the partner now preparing for commercial launch (my point the other day that things are likely much better than they let on). |
OXBs peer average price to sales ratio could be as high 6X.However,given the current lack of appetite for small cap UK equities, a post covid vaccine stock 'hangover' and a lack of appreciation of the CDMO model,i suppose one might say that OXB could more realistically attain a price to sales ratio of around 3X revenue right now.However,on that basis,you still get a price of around 450p.Understandably,there's been some profit taking here after the sharp price gains but the stock still looks to be pretty compelling value. |
It surprised me Dom that not a single UK paper followed up on the results as usually someone comes forward with a bigger story. Could that be because now the pandemic is over our 15 minutes of fame has gone, or could it mean that OXB's PR dept haven't contacted The Times yet to offer Frank for an interview?
If (I know, if again) there is something of significance waiting to drop, then maybe the correct news management route is to wait and then get a bigger hit with the combined story?
Yes I'm into hopes again here, but to pick an example - let's say this second commercial agreement (shown in the KPI table but not announced yet it seems) is big and long term, then that's hugely significant for us - because as we know the Novartis deal alone has been a great financial support for OXB for a long time now. Another in parallel would be fantastic.
Of course it might not be as newsworthy as the AZ covid jab was - and almost certainly nowhere near as large in quantity of doses - but the covid jab was always only a pandemic response (temporary), where this is likely to be for a significantly more expensive drug and for the patent lifetime in duration at least.
That's obviously just a guess but at the moment OXB is trading on £301m market cap which is basically 2x the upper end of Stuart's guided revenue for this year. That's just not right for a company in an exciting field which isn't lossmaking - which sort of suggests that a lot of people still don't know that (as smallcap OXB is under their radar). |
Well, momentum seems to have drifted away again. It's hard to know, with the story that we have, what the company has to do to attract buyers? It's not even a complex story. |
I don't think that's particularly negative and I think there are some things which we both agree on.
A pipeline is really for drug development companies and of course we are no longer one of those. When we were a drug development biotech then there was a lot of waiting involved - sometimes years of waiting without much news - and in that scenario a pipeline page is a good reassurance tool for investors to follow progress.
With CDMO then most work seems to be confidential and in that case a number in a table is just as useful as a bar on a chart. I wish they had told us how often they plan to update that table and how they plan to share it, but I guess that will become apparent in time.
Go back a long way and someone once complained about hardly ever seeing the headline sum in a deal RNS and basically never the payment terms. I think it was JD (but I'm not sure now) who in reply asked why they should publish a price list - as all that does is lets the next similar customer ask for the same deal.
I think the only time from now on where we will see financial terms mentioned is if it's something exceptional. Our typical day to day CDMO work is going to be no RNS / no partner name / disease indication and never what the job is worth.
You know from long experience here that my glass is always half full, but I'm convinced that the story is actually better than they let on - and I much prefer that light under a bushel approach to this US fashion of fake it until you make it.
What do I mean? Well it's easy to compare totals of partners & programmes to past dates and think "haven't they done well", but we never spend too much time pondering the fact that we have been doing this long enough now that there must have been early stage partner work which wasn't a success (either in the lab or the clinic) and just ended there. Look at the success stats for any drug development and they are slim odds.
OXB often say that they have never lost a customer to a competitor (which is a great stat) but we have very evidently lost some when the programmes ended. We know of at least 2 (Sio/Axovant and Homology) where they have gone out of the business completely.
As one of the analysts wrote, particularly impressive that they can just eat the Homology loss and move on. With Homology as an example, wouldn't that be 1 partner and 3 pipeline programmes removed from the list? So the data point which included that loss is actually the apparent increment +1 in the partner column and +3 in the pipeline column?
I know I've mentioned this before, but I think in the presentations they sometimes ad lib and in the Q&A part there's usually something worth noting which wasn't in the prepared speech.
A few quotes here from the latest webcast:-
Frank
Furthermore, we saw an increase in the number of late stage and commercial programmes from two to five. This increase in the number of clients and programmes has led to an 11% growth in revenue backlog for the year to date which stood now at £104 million at the end of March. I would like to note that this figure excludes a new order with a US client preparing for commercial launch, which we announced in March recently.
Seb
We've also seen some of our mature to very mature accounts being well funded and that's the reason why as we'll see later on this deck, we've been able to progress significantly projects and programmes that were at late stage and will very soon be at the manufacturing stage.
For two of these programmes we have commercial agreements, meaning that we're
either already producing for a commercial product or preparing for the commercial launch of a new product, that is giving us a total of 51 to be compared to 28 as of 2022. We're now serving clients, as you can see from the logo at the bottom of the page on many different types of vectors as it was planned when we spoke about a year ago.
(Look down whilst he's on the slide and the logo below is Sardocor)
Stuart
As we look at where we are being successful in the area, what we see is coverage, as we've said, and the visibility we have in respective orders from existing clients that are not yet booked as orders. They won't be in backlog, but we have really good visibility on non-binding forecasts from our clients, which suggests that both '24 and the majority of '25 is there. So this is the maturity of these programmes all coming along, and you've seen us go from one late stage clinical, one commercial to three and two, and the output of that is we've got fantastic visibility into '24 and '25.
(end of the quotes there).
I'm really very pleased with it all at the moment and I feel it in my bones (lot's of clues, but the biggest being no post-results buying from the insiders) that we are due something extraordinary.
All I would add is that I know from long experience that deal timescales tend to be long with lots of lawyers milking it towards the end, and the bigger the partner the longer it tends to take.
So might be tomorrow, might be H2. Something extraordinary in the next 3 weeks and things could get very exciting quite quickly. Miss that and we might just travel sideways through the summer season until the interims when OXB present their first figures of the new company and an 80% or better projection of where we will be at year end. |
I mourn the demise of our pipeline page, but I can see the attractions of the replacement customer phase page as a simplified KPI. Initially, it was easy to map from one to the other, but lately it has been used to obfuscate.
The 20/03/2024 update said "As a result of commercial developments set out below, OXB is now working on three late-stage programmes", then proceeded to talk about a commercial agreement for a "CAR-T programme targeting multiple myeloma" - so is that late-stage or commercial?
The update went on to talk about "two new programmes with existing clinical-stage clients for projects including Process Development and GMP manufacturing" - so is that early-stage or late-stage?
Then they talked about "a US-based client specialising in cardiac gene therapy", which latterly we learned is Sardocor - hence early stage (or is it?)
I also note the sudden amalgamation of France into the KPIs without any hint of the effect on late-stage and commercial.
It appears to me that the lack of clarity is a determined attempt to silence the speculation of the company owners (Us!). I understand that a lot of this is commercially sensitive, but the company has a duty to inform shareholders of progress and this progress should be laid out against the company's chosen KPIs. The company can still conceal commercially sensitive details.
Sorry to be negative. So, please enjoy a pleasant sunny Sunday. |
From the transcript:-
Charles Weston: Thank you. And just last question, you've talked about the pipeline in terms of early stage being up to phase two and then phase three and commercial. But obviously, for cell therapies and gene therapy, sometimes phase twos are actually the pivotal trials. Could we think that even in that early stage there are actually some pivotal studies or do you classify them as phase three in your chart?
Dr. Frank Mathias: No, they are classified as phase two. There is still a probability of failure that is quite high still. But one of the projects that you do not see as late stage right now went from early stage to late stage in less than six months. But I prefer to classify them in early stage and have a good surprise than put them in late stage and have a bad surprise. |
I agree Plutonian, but, (and I realise I'm splitting hairs here) if you recall that breakdown in the results:-
Programme stage April 2024 (including France)
35 clients
51 client programmes
46 Pre-clinical through to early-stage clinical
3 Late stage clinical
2 Commercial agreements (meaning Novartis + 1 about to be announced).
Then one of the analysts asked if that 3 at late stage is just Phase 3 or if it's Phase 3 + Phase 2 going the BLA route. The reply was that it's just Phase 3 and that they don't distinguish in this table between Phase 2 going to Phase 3 and Phase 2 going to BLA.
The difference between BLA and IND is complicated, but as I understand it then if the drug is made from living material (like altered T-Cells) and if it also meets certain other requirements, then there is the BLA shortcut from Phase 2 to review committee. If I'm correct then it makes sense that we would have many more Phase 2 trials heading for BLA than those going the full IND route via Phase 3.
In less words I think we likely have more at late stage than that table suggests. |
It never had the politics little bird. Only when you visit. |
Ah yes, it's a much better thread without the politics ..... |
Harry,
I totally agree wrt BMS. We are obviously well-connected there.
All the known work (about unknown programmes) is early stage.
But, we don't know how much (if at all) we are working on late-stage programmes (approved or not), where they do not have enough in-house capacity.
... perhaps Donald Rumsfeld could explain this better :) |
I think it was always going to be something like this - as no government can punish so many of its own companies collaterally with sanctions on another country.
This of course isn't solely WuXi, they are simply the biggest, but what the US is proposing here is to give enough time for those locked in to get out with as little damage as possible.
I would have thought that whilst there will probably be some work for OXB in that long transition phase, the bigger change short term will be that US linked companies looking to place new contracts will now cross the Chinese companies off their shortlists, which of course gives OXB a bigger piece of the pie.
Meanwhile the Chinese will be hoping that before 2032 there's another president with an artist son selling paintings at half a million a pop. |
'WuXi Advanced Therapies is one of the top 3 cell and gene therapy CDMOs in the world' |
Plutonian,
I'm sure you appreciate this very well already, but by simply following the partners we know about it's surprising how many times BMS crop up with the funding and an option.
Hugely wealthy companies and I suppose they have to play the field to be sure of future success with something, but certainly from my digging around BMS seem to crop up most.
It does suggest that at some future point we will be hearing a lot more about them, but whether they are in with the late stage / preparing for commercial supply groups which OXB have told us about? Time will tell. |
You nearly had me there PB ;)
Oxford BioTherapeutics is a different company. |
I guess this is out of date info?HTTps://www.kitepharma.com/news/press-releases/2021/1/kite-and-oxford-biotherapeutics-establish-cell-therapy-research-collaboration-in-blood-cancers-and-solid-tumors |
... but we know we are developing CART-ddBCMA for Arcellx in collaboration with Kite (a Gilead company).
We really do have a finger in every pie! |
PB,
If we have anything with Kite then it's on the secret list. I'll not say it's impossible, but we do know it's very difficult to change vector mid trial stage and even harder once approved.
As of the results we had 35 current partners.
With what they have told us over previous years we only really have a clue about 14 of them:-
Arcellx = CAR-T ongoing with a pivotal P2 trial
AZ = Obviously the covid vaccine has gone, but they wanted to continue the contract?
Beam Therapeutics = CAR-T clinical data H2 this year.
Bioverative = Bought by Sanofi who deprioritised (dropped the programme).
BMS (Juno) = Mega deal at least 6 programmes. I have my guesses but OXB never say.
Boehringer Ingelheim = Cystic Fibrosis. Very exciting. Human trials start this summer.
Cabaletta Bio = Biggest partner we know of with 9 programmes. Data from 2 in H1.
CARGO Therapeutics = Partner with CD22 CAR-T data in H1 '25.
Homology = ran out of money / no longer exists.
Immatics = Partner on TCR-T
Immune Design = Bought by Merck who said they would continue but it's secret.
Kyverna = Partnered on KYV-101 which is ongoing.
Novartis = Brilliant commercial partner for OXB + multiple T-Charge to come.
Orchard Therapeutics = Using LentiStable in P3 + our vector in P2.
Oxford University = Lassa fever + MERS + likely Malaria + Junin vaccines.
Sardocor = newest deal we know of - heart disease technology transfer.
Sio/Axovant = ran out of money / no longer exists.
So 14 of those are current which meant that a fortnight ago they had another 21 partners where we have no idea who it is. Could one of the 21 be Kite? Yes, but if they have a working vector they are already established with then they are unlikely to change that unless there is a major problem. Could they be trialling LentiStable (like Orchard) to improve a non-OXB process? Absolutely.
But I do enough wild guessing about things where we actually know names... |
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