Just a quick one for the morning:- To the two of you who voted up Gareth's little jape of attributing something to me in reply which I didn't type - thanks very much. It's the little things like that which make this all worthwhile. OK, I can likely guess who you are without too much trouble, but it's a bit poor isn't it? |
Next leg up starting? |
BTW (just for the record) re "because something didn't happen it means something bigger is about to happen". I didn't actually type that. My assumption is simply it's the same thing of the same size taking the usual amount of time. |
It's not just me Gareth, there has been a sea change recently - but the mortals are always the last to know.
Look at the FT forecast page
The colour bars tell the story best, but as of this month 3x buys. I do like the green and dark green there. |
Thank you HST. I admire your conviction, I just hope your belief because something didn't happen it means something bigger is about to happen is correct. As Hughie Green said "I mean that most sincerely folks". |
 Part habit, part long interest in OXB and part having the time to do it Gareth. In a way it's only like making running notes on any shareholding - it just happens to be on here. As mentioned previously though, I don't do this with my other shares and intend to break the spell when I'm eventually bought out of my little piece of OXB.
To my mind the fact that no insider bought any shares in the little open period which follows the results told me that they know of something which is price / market sensitive.
That wouldn't be "just" another AAV or LV contract which could be expected as part of our ordinary business. What it is I don't know, but it would have been big enough to change guidance, which is why they couldn't buy if it's common knowledge at a senior level within OXB.
I'm assuming it's still on the go, but have no way to say. I appreciate it seems ages (when watching a pot) but the results were end of April and so it's been 2 months - which is nothing really on pharma timescales.
As for the senior staff not buying since, I suspect they probably can't whether "something big" is still hovering or not - and that they will have to wait until after the interims for their next chance.
One of these mornings we will have the RNS we are waiting for (maybe even a little run of them).
I like the car manufacturing analogy for any business, that if the breakeven costs are hit selling 300k cars per year then 301k sold means you can sleep at night whilst 350k sold is happy days. 299k sold isn't a good place and 250k sold is a disaster.
OXB had their disaster post covid and it's just a case of timescales now on the way to happy days (presently our 2026 FY forecast as £218m sales and better than 20% EBITDA). What if the hovering news brings that forwards? |
HST, thank you for your continued updates and reminders of things in the pipeline, things stated previously and possible scenarios. Unfortunately there have been no signals or signs of "something substantial" imminently, no director buys, no broker updates, low volumes, no institutional buying. I'm looking for the green shoots but still can't see them. Come on OXB you know the futures bright! |
We are definitely overdue news. Totally agree with that one and they have hinted in the past about a number of things (see below for an example) - then of course we have none of the insiders buying after the results.
The problem, and this isn't new - it's been the same issue over multiple CEOs, is that our customers control both the timing of the news and what we can release. We also know that whilst the small partners can be very quick (because often the founders share many company roles between a few people), the big partners can take an awful long time - but when they do eventually sign then it's worth it. I'm sure I remember JD giving the example that one of the Novartis contracts took 14 months to get signed.
I've mentioned many times that I think OXB is in the frame as a manufacturing territory to meet Serum's malaria vaccine requirements - but there are so many big organisations involved in that, the potential for delay is large.
Anyway, the example of OXB hinting but not telling - if you look at the 2022 annual report
Go to the portfolio / pipeline on page 14.
Scroll down to the Cell therapy / Undisclosed client / Rare indication (undisclosed) Phase III trial.
They don't say CAR-T or TCR-T, just cell therapy. Rare diseases are usually not big trials as you can't recruit the patients for a big trial and they also tend to have a lower bar if it is unmet need, but if it was at PIII in 2022 then we are 2 years further down the road and maybe even up for review now / soon.
So there could be a very nice surprise there (or nothing if the trial doesn't produce good data), which might be tomorrow or next year or never - unfortunately we just don't know.
Look at page 13 of this (our latest news) and it does still seem to be there. Should it be granted a licence after review then commercial manufacture will follow and that's a big thing for us - a rolling ball of growing commercial work. |
I would be very surprised if we didn't get an update from the company in the next 2-3 weeks as this was clearly flagged in the financial KPIs for this year and needs to happen before the August holidays. And I would be equally surprised if that update didn't affirm that everything was on track as per guidance and maybe put a little flesh on the bone of the multiple myeloma deal. Given OXB's history I am not surprised to see this drift lower in the share price over the past 4 weeks as in the absence of news its only natural given the share price track record for people to get nervous and sell down at least a bit - although we have been in very thin volumes traded of about 125,000 a day on average for the past four weeks. With a positive/confirmatory July trading update and good interims in September we should see 400p by Q4. |
It does on a once popular share that has now been shunned by those that previously supported it, PI's. |
£2.96 .......... What don't we know? |
My honest opinion here as an openly "non-city type", is that if OXB had been vulnerable to being bought on the cheap then the PE boys would have done it by now.
I'm sure some of that argument (recently) is backed up by the cost of cheap money, but I'm equally sure that when OXB sold their buildings and ended the in-house drug development programme which hadn't made money for years, it was with an eye to the point that if they didn't do it then it would be very tempting for someone else to do it for them. But it never happened and I see that PE risk now as gone.
There's also the argument that what happened wasn't to cut off a possible PE attack, more simply that Frank, Mark, Seb, Thierry and such are all proven CDMO pros and that Frank wants to repeat what he knows (and is good at) which is CDMO not Biotech drug discovery. We might never know which was the deciding factor and it might have been a bit of both.
We all should know that CDMO sector average market cap is about 5.5x sales and for specialists in our niche it can be much more. OXB is currently on 2.4x sales and this year moves out of its phase where we had a little run of everything going wrong (Sio/Axovant going bust / the AZ contract ending a year earlier than thought / Homology exiting the CGT business / post covid biotech winter).
This year is looking pretty good (I appreciate you could be forgiven for not guessing). Next year when Boston is in full swing as a LV hub and France both LV and AAV is looking very good.
I still expect something to happen shortly (hopefully before the next quarterly review) which sees us back into the FTSE250 and then we are absolved of the last few exceptional years and can look to the future.
Longer term, I expect Novo to buy us, but they have enough money to wait until OXB has returned to being a profitable business and then offer a sum which would be agreeable to everybody (i.e. the opposite of PE where they look to buy cheap, slash and burn, then quickly sell it again).
House broker's revenue estimate for OXB next year is £171m.
A Lonza multiple of 7.6x revenue on that? |
Blackrock can be scamps.They build a reasonably sized interest in a stock but invariably trade in and out of a few as if to keep occupied.Yet,as Harry mentions,its unusual for Blackrock to take an interest in a small,relatively illiquid stock like OXB.Que sera,sera but it all suggests you don't want to be out of OXB as the pieces fall into shape. |
I'd like to know where that "industry standard CDMO" KPI table fits into things too Sean.
If they are planning on doing some kind of quasi-quarterly reporting (like the old interim management statements) then it will be sometime before the end of this month. If not then I guess the plan is to tag it on to every significant RNS which warrants a business update.
H1 was far from news free (see my post 8172 for a recap) and I think we all understand now the reason why they don't announce each new vector deal these days (else between the last two full year results we would have had 17 RNS (51-34 programmes) where it would have said confidential partner, confidential indication, undisclosed terms). So they just don't do that anymore, unless it's something out of the ordinary.
I'm more than slightly curious about BlackRock at the moment as they shouldn't be interested in OXB. That's not because there's anything wrong with OXB, it's the same reason as Buffett doesn't invest in small caps - even a good result is not worth the effort as it's not significant against billions returned with much bigger investments.
That's the logic which leads me to believe that BlackRock don't follow OXB. If they don't follow OXB then why have they bought in? I would imagine it's because they do follow Novo (much more their size of investment) and so will have heard the Novo boss say that he's going to use his windfall earnings to buy up specialist service companies to the pharmaceutical industry. It wouldn't take long to work out that Novo already hold 12% of OXB, thus a no-brainer for BlackRock to simply buy some and wait for the inevitable without ever having to bother studying OXB. |
Well were we not supposed to be getting more regular market updates? We report half yearly, so at the very least that should mean quarterly updates. We have completed first half trading so.... |
Plutonian,
Mentioned before I know, but with the smaller OXB it was much easier to guess some things, though the deals still pretty much all came out of the blue... Today with 50+ programmes (mostly confidential) it's not so easy.
I'm very happy that they partner 3 late stage trials at the moment, remembering that Frank said he doesn't count the P2 BLA route in that column - so it genuinely is 3 at P3. Add in what might come via the BLA route and there's potentially quite a bit nearing the end of the sausage machine.
On top of that we have this recent commercial deal for multiple myeloma CAR-T and presumably something still hovering which stopped the insiders buying in that little open period after the results.
Near-term for OXB should be pretty good, but we all know that timescales in this business take as long as they take.
The upside with the recent multiple myeloma CAR-T manufacturing deal is that it's signed, and if that is CARVYKTI as you suggested a long time ago (which seems to be the only match) then we have just doubled our long term banker work which of course is Novartis. |
Harry, yes that looks compelling - I had not seen the AGC Biologics link to Rocket.
I shall continue to watch Rocket Pharma as the news from the FDA will drop in the not-too-distant future. |
Morning Plutonian,
As you may have guessed, I have a running list of what I know we're involved with and then what I think we're involved with, finally some "might possibly be" names.
With OXB growing so rapidly of late, it isn't as useful as it once was (we had 35 customers at the results and firm knowledge / good clues for only about half of them), but it's something and occupies me when I'm bored.
I put Rocket in the 3rd column when you first mentioned it, as at the time it seemed an excellent fit for OXB's single partnered PIII at that time (now 3 x PIII of course), but I later thought that one much more likely to be AGC's "ProntoLVV" vector and so took it off my list again.
(this one)
(and my logic was the word "expands" in this) |
Rocket Pharma KRESLADI (possibly an OXB vector?)
FDA has requested additional CMC information to complete its review... |
It would be a surprise if all of those companies were NOT shareholders in Blackrock and anyone else of a size! Cash to burn.... |
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#8198 Well I despise their bully boy tactics at times, but if it is a case of whether I want them on my side or the other side, I'll happily accept them on 'my side'.
So they are buying and accumulating.... what will be their end game. |
Blackrock again |
OK, and now my Radio 4 thought for the day...
Today is of course the end of H1 and in September we'll get to see the interim results from close of play today.
For reasons I've done too many times now, I'm convinced that the OXB story is excellent (even if the share price isn't) and that we can get a good idea of this from circumstantial evidence like the job ads.
Today I want to do a reminder about Yarnton.
Old hands know that Yarnton was leased for the period when Harrow House was too busy and OxBox was still being planned. So a short-term lease as a stop gap and I believe (just my recollection here) and has been used as a dedicated Novartis facility since.
The Yarnton lease was always stated as being up in 2024.
The savings of simply moving that into OxBox would be large (many duplicated costs of two buildings over one).
But I think if they were winding Yarnton down this year that they would have told us by now - because winding down and moving everything to OxBox is a big job.
Not only that but at the end of the lease term Yarnton would have to be back to its original condition (so all the clean room kit out and the shell retuned to pre-lease which is not quick or cheap).
With no clue anywhere of that happening - coupled with previous OXB messages about Oxford being at capacity - I'm struggling for a better explanation than one where an abundance of work has dictated that OXB extended the lease beyond 2024.
If so then another good sign. |
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