In a nutshell Tafty GeoVax has a current capitalisation of approval 3 million dollars so unlikely to be putting a great deal of money our wayStill from acorns great Oakes grow etc |
Thanks Harry |
 taffy,
I'd be cautious about hoping for too much there (certainly at this stage anyway) with the GeoVax deal. I like it and it's very positive, I'd just be wary that it might not be worth as much to us as we have come to expect with OXB deals.
Remember the ABL deal in a nutshell came around because ABL couldn't make traction and get access to the lucrative markets which OXB could, whilst OXB was fast running out of space / capacity for process development work - which ABL had lots of.
We had a connection to them via Seb as an advisor to IM and a dream deal was done.
However, I think it's important to remember that if anything they had was particularly valuable, then their turnover for everything last year would likely have been more than Euro 15m.
At this point I'll contradict myself (normal, as you know) and say that as the GeoVax deal was basically this time last year and this type of work almost always seems to be invoice upon completion (not stage payments), then maybe it is worth a lot more and it just didn't get invoiced before their year end.
So this is one of those situations where I'd really like to be wrong, it's just that by looking at that £13m end of year figure and noting two locations / multiple existing contracts, it does suggest that none of the existing / legacy ABL contracts are very big.
In fact (and I'm unleashing my brush of sweeping statements here) I think that because the GeoVax link is in the public domain, and had it been significant on the OXB scale, then it would have likely appeared in our presentation (on the logo page) as a win and obvious plus of the ABL deal.
I'm not trying to be negative and I will point out the obvious that money is still money and it's always nice to have, but logic does suggest the very likely possibility here that OXB has already placed more early stage work (in value) in France than they had there in total before. Maybe not, but OXB don't do anything which will be cheaper than single digit millions, so just 3 or 4 early stage process development contracts transferred to France? Remember they also started doing that in Boston late last year too, literally because Oxford is at capacity for upstream process development work.
This is a good news story and I'm not trying to pee on it, it's just a perspective thing.
The OXB watcher in me tells me that this commercial production deal which is about to drop (see recent RNS) is likely to be worth many times as much (even if the quantities aren't huge) not least because being commercial supply rather than trial support means the duration of the contract is likely to be very much longer.
If you want one of our earlier stage contracts to focus on (out of the few where we actually know a name) then I would be looking at Cabaletta.
Cabaletta may be our biggest contract (by number of programmes) because the first deal with them is for CAART and then they like that so much that they come back to us and do a deal for CABA-201.
If you look at their pipeline that's 11 programmes, but of more interest is that "initial clinical data from each of the first patients in the RESET-Myositis™ and RESET-SLE™ trials anticipated in 1H24".
(That quote is from them). So 6 weeks left in H1 and they are due early data. Because of the way these kind of treatments work, then it will be either quite obvious that it works - and a great sign for the rest with the same platform - or it won't. That one could be very positive for us.
The secret commercial deal is still likely the biggest significant near term gamechanger of the things we know about - even though we don't know the detail (if that makes sense). |
Some chunky sells being absorbed quite well - long may it last ...thanks again Harry for the ongoing lucid insights opening up a world that was hidden from me before :) |
GeoVax Reports First Quarter 2024 Financial Results and Provides Business Update
Achieved a significant milestone in manufacturing process development for Phase 3 and Commercial Production. This is an important step toward implementation of a validated chicken embryonic fibroblast (CEF) based production system for the company’s MVA-based vaccines, with the release of the first lot of GEO-CM04S1 (next-generation COVID-19 vaccine) produced with a commercial manufacturing platform. This milestone marks the successful completion of the transfer and scale-up of manufacturing from the research-focused Center for Biomedicine & Genetics at City of Hope to Oxford Biomedica, the Company’s cGMP (current Good Manufacturing Procedures) manufacturing partner. |
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. |
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