The abridged version of that would be simply to say that if it works out anything close to guidance then I don't think they will last 5 years.
I think someone else will want the market share, understand the cost (both time and money) in getting two major vectors to that position and be willing to pay the necessary price. It may even be someone very close to home who does it in a friendly way. |
 I've written here many times over the years that I'm in OXB for the duration. It's difficult to argue with hindsight that dipping in and out would have been a better strategy, but there have been some exceptional events along the way and with my luck I would have been on the wrong side of most.
Notwithstanding my hold forever strategy, I think there have been several times over the years when we all (bulls and bears) saw plausible scenarios where OXB would have been taken out of our hands.
Best example being when we had a cancer drug partnered with Sanofi in a phase 3 trial. If that trial met its endpoint and the FDA approved it, then Sanofi would have ended up paying us more in milestones and royalties over the drug life than our market cap at the time.
So they would of course have bought us out, with whatever premium they had to pay to satisfy enough of the major shareholders - as beginning a bid with the knowledge that they would otherwise eventually owe the target company over 700m is quite a big discount to whatever headline figure they eventually all settled on.
As it happened the trial failed, but my point is that most of us here from the old days have always accepted the odds that at some point OXB would become part of a bigger company.
I still think that applies even though we are no longer in drug development biotech for our own drugs.
The numbers for this year are almost certainly going to top the £134m upper as we already know there are things they are not including yet. They have also forecast better than 35% growth for 3 years. So better than £180m next year. Better than £245m in 2026 (when they told us at the interims they were aiming for £180m in 2026 - not a bad change in 6 months that, is it?).
They have told us profit next year, better than 20% EBITDA margin in 2026, so better than £50m earnings in 2026?
So, come 2026 then the growth forecasts for the CGT market size will either have come true or they won't.
If those forecasts have become true and there is a new goldrush then big players will be looking for a piece of that market and the only practical route in is to buy a share of the market as starting from scratch takes too long.
OXB are at the moment the only CDMO which is pure CGT, so buying it at whatever cost would all go into that CGT market exposure. If any suitor / predator can tell its shareholders "yes, it's a lot of money we have to pay, but this company earns a million pounds a week which will go straight to our bottom line" then we all know what will happen don't we?
The only questions being who, when and how much. We know it won't be cheap or soon for reasons already covered, but we have seen "good" companies in this sector bought for 12x sales. That would be nudging £30 per share in 2026 on current predictions. I'm certain enough people would say yes to that and then OXB simply becomes "an ACME company" or whoever.
A lot of hurdles between now and 2026 though, not least getting back into the FTSE250 which you know is my target for this year. |
"....nobody has cracked it yet. Will this be the one? Give it 5 years and we will know."5 years falls within my actuarial ambit but i'd rather the revelation wasn't pushed out too far! |
It's something you can't teach Dom (this power to curse share prices) but those of us who have it learn to live with the great responsibility.
Meanwhile let's hope the US brings a good afternoon whilst we wait for OXB news. |
You've got to be really cautious with news stories Red, because first and foremost the news outlet wants a story and cancer cure stories are always popular.
The stories to watch are those where there are enough patients to prove the concept - i.e. it statistically can't be a fluke - and then lots of data over time.
I'm sure it will come and meanwhile we all wish the best for the chap in the story.
One which popped up in my feed this morning was this
Whoever perfects that one will make billions, but many have tried and nobody has cracked it yet. Will this be the one? Give it 5 years and we will know. |
The evidence that vaccine based approaches are effective in cancer treatment is being shared more openly. Soon it will become public knowledge, and then an expectation. A bright future for OXB.BBC News - Richard Scolyer: Top doctor remains brain cancer-free after a yearhttps://www.bbc.co.uk/news/world-australia-69006713 |
It looks like you DID curse it Mr President Sir. But now it seems like it is wobbling while it decides whether to go up or down. |
That's a good point, but remembering GeoVax are a US company, what I'm really getting at here is that I'd bet another pound of Dom's money that ABL - particularly Lyon (maybe not so much Transgene's former manufacturing arm in Strasbourg) - will be linked to a prestigious French university in the same way that OXB are with OU.
Meanwhile are we nearly out of our little dip here and climbing - ready for me to curse it again? |
Yes, we have an agreement with GeoVax for their next-generation COVID-19 MVA vaccine in France. |
Plutonian,
Another point here (just to add to the ever growing possibilities) - do you remember the chat when they were covering the many pluses of absorbing ABL?
"This transaction would expand our viral vector service offering into areas including pox virus, MVA, and vaccinia".
Possibilities here that ABL were providing a similar service to a French university and now we do both? |
Red,
They don't seem to do that. Remember Frank's quote from the results a fortnight ago about the new commercial deal:-
"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."
He has previously said words to the effect that unless it's certain / announced then it doesn't get counted as he prefers to give us nice surprises over disappointments. |
You know I'm a card carrying OXB optimist, but I think they were already a go to partner for the Jenner Lab at OU, which was what led to OXB being front and centre with the covid vaccine.
OU may have the brightest and best in their labs, but they can't do everything, which is of course where AZ, Serum and OXB come in (or any permutation of). Professor Hill has variously mentioned the old / existing / established / proven team when talking about malaria. I'm sure that will be equally true for quite a few of their current projects.
So, Oxford University partnership possibilities now = Lassa fever + MERS + likely Malaria via Serum + Junin + NipahB vaccines. |
There has been a lot of conjecture here about the possibility of an 'extra' contract coming that would boost the forecast revenue numbers for this year, and potentially lead to an earlier than expected move into profitability. But is it not also a possibility that this has already been counted in the upwardly revised growth figure of 35% through to 2026? Certainly, in my corporate days we had to make judgements about future contract wins and build them into our forecasts. But even so, I've bought some more at £3.25 and OXB is now my largest holding ... |
Harry,
You may be right about AZ. The Covid vaccine is dead now, but several other vaccines are being produced using the ChAdOx vaccine platform (Ebola, MERS...). Maybe AZ is staying involved in that for distribution.
I just found a new one - Nipah virus...
University of Oxford launches first-in-human trial of the ChAdOx1 NipahB |
Welcome aboard Xoptimist,
GSK's Mosquirix (RTS) is more difficult to make than R21 (Oxford University / Serum). R21 also performed slightly better in trials which is why it was the first vaccine to meet the WHO target of 75% efficacy.
The efficacy bit is obviously an issue, but more important is because RTS is a more difficult process to produce in quantity, then R21 will become the dominant vaccine simply because of availability. On top of that it's significantly cheaper.
So, R21 is cheaper, faster to make and has better efficacy. RTS was first approved but will struggle with supply constraints, is more expensive and slightly less effective.
The WHO will press on with both because they are committed to not having all their eggs in one basket and think that multiple vaccines gives the best approach. R21 will sell in much bigger quantity though (eventually - and for political and geographic reasons you cover).
Regarding CF:-
Se this link recent
Relevant part :-
"After tackling challenges ranging from finding a suitable vector (It's much harder to get genes into the lungs than originally anticipated") to scaling up, the team partnered with Boehringer Ingelheim and Oxford Biomedica in 2018, and is set to begin human trials this summer." |
re 7 big pharma.
I would not include AZ as they have been dropped from the programme numbers.
The big 3 we know about...
* Novartis
* Bristol Myers Squibb
* Boehringer Ingelheim
My guesses for the other 4...
* Merck - inherited from Immune Design?
* Gilead - we know the Arcellx/Kite/Gilead link - is there more?
* J&J - maybe they need help with Carvykti (CAR-T BCMA)?
* Sanofi - We have worked with them before, so why not? |
Spam alertOvernight I received an email saying OXB is having an important shareholder meeting with a link for more details Needless to say I erased without opening Possible source IG index |
Finally, and forgive me for suddenly being so vocal as a newbie and also for so many typos in the previous posts, I think the valuation discussion you have been having is also fascinating. Harry is right that OXB doesnt have any directly close comparables or industry peers - apples to apples. However, 5-6x revenues must be in a decent valuation parameter range. So with revenues of 130m even at 5x we should be looking at 650m market cap rather than todays 317m and wouldnt the 104m of cash at the end of FY23 give us another 100m so 750m. But its right that OXB is under the radar with poor news coverage and relcutant analysts like investec who are cautious to upgrade too aggresively to their clients given the embarassment of the past 2 years and still somewhat trapped with the brutal share price meltdown of 2022 and 2023 and if you dont read the numbers right and focus on the future with a difficult narrative to move on from. So many observers thinking, I guess, lets wait and see. So once again this brings us back to news driving decent upwards price movement and hopefully, in the event we dont have major news, with some movement in the summer created by institutional buying and IM buying assuming they fufil their obligations to get to 10% before the end of Q3. So once again this brings us back to patience and for those of us that buy the intelligence and analysis of this group then perhaps a last opportunity to top up our positions before a new narrative gets established. |
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. |
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