Xoptimist,
Avid have more than 200m debt and little cash while the reverse is true for OXB. The revenue guide you cite for Avid is for FY25 whereas for OXB FY24. Taken together on an EV/fwd sales basis the valuation gap is significantly greater than what you've estimated. That is of course before even discussing other quantitative and qualitative differences. |
Well spotted Phil.
To me that all lines up with our past observations here (circumstantial evidence that they appear to have extended the "stopgap" Yarnton lease and the pretty much constant high volume recruitment), followed of course by the recent OXB RNS which included the line "With increasing demand for services, OXB to invest in talent to support future growth".
In less words they are a lot busier than they expected to be at this point and they needed to split that role which is now too much work for one.
I would say it's a very good sign. |
 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. |
Hey Harry
I 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. |
Change in people page.
Thierry now COO only
Mark Caswell moved from US to UK site head
New US site head: John Maravich joined Oxford Biomedica as the VP of operations at the Bedford site in November 2023 and became Site Head of US Operations in September 2024. |
I think you are correct Sean.
I also think Frank learnt a lesson last year (after coming from years at a private company) that you can't just change full year guidance on interims day and think it will all be fine. Hence him telling us mostly what we already knew again on the 8th of last month, which would really be to reassure the market that the full year guidance for this year and the forecast of profitability next year is still on track or better.
There are several things looming with OXB now which are gamechangers. We know some as shareholders but there will be others we don't know about. The great thing of course about multiple eggs in multiple baskets is that we have very good odds of landing multiple deals, and of course we "know" we have a second commercial CAR-T deal already (they told us in March). They just haven't given any detail - which would be my guess for Frank's "big reveal" at the interims presentation, but we will see.
Regardless of if the market follows OXB's detail or not (likely not) the headline figures will be big news and for OXB the multiples are currently all wrong.
If you say £130m revenue for this year, then the market cap should be around £650m and yet we are £365m.
Frank has promised better than +35% for next year, so £175m sales would be a market cap nudging a billion on very average sector ratings.
If the new CAR-T deal (announced but still secret) is anything like what it should be, then OXB will be back in the FTSE250 at the last review of the year. |
Well Ive been in OXB and ridden its ups and downs for a very long time now and done my research (much of it having been greatly assisted by Harry - thank you Harry) but I have a sense that we are on the cusp of reaching the holy grail of sustained and significant profitability within a year or so. Maybe sooner. Which is very good news to all us LTHs although the downside of course is that could make us too much of a temptation for the likes of Novartis. However that is unlikely to happen without a very significant share price re rating. I think next week could be very interesting. |
Week 2 of the 10 working day interims countdown, "the final furlong":-
5 days to go - Beam Theraputics (allogeneic CAR-T for leukaemia and lymphoma).
Abridged version bullet points:-
* Beam's CAR-T is an allogeneic therapy (will be made in bulk / not individually).
* Beam use OXB's LentiVector to make their CAR-T in roughly the same way as Novartis use LentiVector to make their personalised CAR-T (Kymriah).
* First patients were treated with BEAM-201 just over a year ago now, which means they will be adding up 12 month data as the following patients all hit that point.
* Beam are to present findings at the ASH conference in December.
Unabridged version for those who can take it:-
Why are Beam featuring in this "selection of 10" highlights from the list of OXB partners?
Because if successful it's a non-personalised treatment - i.e. can be made in bulk - quicker / cheaper and so will be available to more patients as the personalised step in the process (after OXB) isn't required.
Bit of history:-
3rd August 2020 Beam sign with OXB to use our LentiVector Platform in their Next Generation CAR-T Therapeutics.
Beam's next gen CAR-T is BEAM-201 see
From the internet "BEAM-201 is produced by base editing T cells from healthy donors at four genomic loci, and then transducing them with a lentivirus. The resulting cells are allogeneic, meaning they are universally compatible.". (The lentivirus bit there being OXB's LentiVector and the first patient on the trial was dosed just over a year ago).
From their Q2 statement (see)
"Initial data from the Phase 1/2 clinical trial of BEAM-201, a multiplex-edited allogeneic CAR-T product candidate for the treatment of relapsed/refractory T-cell acute lymphoblastic leukemia (T-ALL)/T-cell lymphoblastic lymphoma (T-LL), have been submitted for presentation at the ASH Annual Meeting.". (American Society of Hematology (ASH) Annual Meeting takes place in December).
Without intending to sound flippant here, if something had gone horribly wrong there then we would already know as they would have halted / stopped this trial so it's just a matter of waiting to see how well it worked.
(Usual non-scientist warning) I don't think that any of the allogeneic (universal) CAR-T treatments tried so far have been anywhere near as effective (either efficacious or durable) as autologous (personalised - like our Kymriah work for Novartis). But there is a second chance here, in that even if it doesn't prove to be a better treatment than personalised, an "off the shelf" universal treatment available immediately in specialist hospital labs could be very useful to "buy time" for late stage patients where the wait for a better personalised treatment might be too long.
Why might Beam's try at allogeneic work when other have failed?
This is a good link
Selected quote:- "“multiplex editing,” in which several genes are edited. The edits are designed to eliminate expression of four genes known as CD7, TRAC, PDCD1 and CD52. Beam claims this approach could lead to a more powerful and durable treatment. In its statement, the company noted BEAM-201’s potential to sidestep a variety of issues associated with cell therapies, like propensity for the modified cells to kill one another, or become weaker as time goes on."
Egghead quote from this link
"BEAM-201 is an anti-CD7 CAR-T cell therapy candidate, which undergoes multiplex base editing to eliminate expression of the CD7, TRAC, PDCD1 and CD52 genes. Base editor mRNA and 4 single-guide RNAs that each target one of the aforementioned genes are delivered to healthy donor T cells via a single electroporation step, and the edited cells are then infused into patients.
What do all these edits do?
CD7 is a transmembrane protein that is naturally expressed on the surfaces of thymocytes and mature T cells. It is seen as an attractive target for immunotherapy of T-ALL/T-LL as well as acute myeloid leukaemia due to its widespread distribution on these cancers. BEAM-201 cells express a CD7-targeting CAR that is designed to target CD-7 expressing cells. To avoid T cell fratricide, i.e., a situation whereby the CAR-T cells target each other, BEAM-201 cells are base-edited to silence CD7.
TRAC disruption blocks endogenous TCR-mediated signalling, which enables the safe use of allogeneic T cells as the source of CAR-T without inducing life-threatening graft-versus-host disease (GvHD).
PDCD1 disruption eliminates the expression of the checkpoint inhibitor protein, PD-1. PD-1 and its ligand programmed cell death ligand 1 (PD-L1) are immune checkpoint proteins expressed on the surface of T cells. Under physiological conditions their interaction results in T cell immune suppression, but cancer cells can hijack this pathway to escape immune detection. However, this can be reversed by blocking PD-1’s interaction with PD-L1, in this case, through PDCD1 disruption.
CD52 disruption renders BEAM-201 cells resistant to therapeutic anti-CD52 monoclonal antibodies, which are used during lymphodepletion to reduce host rejection of allogeneic cells."
Interims results countdown do far:-
10 Sardocor (Cardiac gene therapy)
9 Cargo Therapeutics (Bicistronic and tricistronic CARs)
8 Oxford University labs (Lassa Fever vaccine)
7 Boehringer Ingelheim (Cystic Fibrosis)
6 Immatics (T-cell-redirecting cancer immunotherapies)
5 Beam Therapeutics (allogeneic CAR-T for leukaemia and lymphoma). |
I like that one PB (I'm a big fan of pictures painting a thousand words) but I think important to stress / remind that whilst most CAR-T uses some kind of viral vector, CAR-T is just one of a very long list of things which you can do with a viral vector. |
Nice chart HTTps://x.com/Larvol/status/1835036047178449300?s=19 |
We've either got some very short memories here (or I suppose it could be people who sensibly have me filtered), but I posted that 4 days ago in 8599.
Just out of curiosity, did anybody listen to the OXB Xtalks webcast which we got the invite to (aired last Wednesday 4pm)? |
The UK shares to own as interest rates fall
With borrowing costs down and expected to decline further, City writer Graeme Evans reveals one analyst’s tips to exploit looser monetary policy.
OXB included in article |
You obviously remember YMG too Cousin ;)
For those who might be wondering about Marcus's very interesting link with this photo embedded
Well OXB have simply guided "better than" 20% margin for EBITDA earnings by 2026. When cornered on what that meant and what it eventually could be by an analyst, Stuart replied with words to the effect (from memory - I haven't looked back to check) that better than 20% was a waypoint not the target and that it would eventually end up at an industry standard level somewhere towards 40%.
You can see on that photo from Marcus that the sector average is 35% with Samsung leading on 43%. 35% on the amount of future revenue which OXB are now guiding would be an enormous income - which imho inevitably now leads at some point to Novo offering a very generous multiple to secure it for themselves. |
Interest rates to fall to 3pc within a year, says Goldman Sachs
Good for shares. |
Sorry, meant for Scancell BB ! |
Moderna failed because of small trial and size of control arm and it was not powered properly (read attached article).
The advantage between it and available treatment was not shown clearly enough.
If iScib+ has brilliant data then early approval is possible (I think likely).
An assessment of study power is essential in determining both the statistical significance and clinical relevance of any study and has serious implications for any conclusions that can be drawn. |
You've done very well, Harry! |
Pharma Looks To Redistribute CDMO Footprint. A redistribution of pharma outsourcing activities, both ex-China and also a wider shift in CDMO work from North America down... |
Many thanks GH, but this is a road we have been on many times before. Perhaps the economy is a little worse this time around, but anyone with a bit of OXB history can recognise the patterns.
End of 2016 / beginning of 2017 we are around £2 and all is doom apart from with the insiders at OXB who all knew they were negotiating the Novartis manufacturing deal which doubled the share price by mid 2017 as kymriah gets approval. By the middle of 2018 it had doubled the share price again and then the deal with Axovant takes us as near to £10 as doesn't matter. Also a much smaller company back then with no other vectors and only facilities in Oxford.
I only mention that Novartis manufacturing contract in particular, because it's such a similar scenario to today - i.e. sat in smallcap and pretty much invisible except to our major shareholders.
Back in 2017 we could only guess the Novartis contract was coming. In 2024 we know there is a very similar one coming because Frank told us in March.
So, 2017
2024
"Recently, the Company signed a contract with a new undisclosed US-based biotechnology company for the manufacture of lentiviral vectors as the client prepares for the commercial launch of its CAR-T programme targeting multiple myeloma. Manufacturing will take place in Oxbox, the Company's Oxford-based manufacturing facility.".
They haven't told us what that is yet, or disclosed the details, but it could easily be as big and I have an inkling that the big reveal on this might be Frank's centrepiece for a week on Monday (as he does seem to like a results day with a lot more than just the results). |
Great info thanks H |
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. |
That'll do as an advent entry Harry. |
I think he means it's a very long story rather than me just being a windbag Ygor, though both points are true.
It's difficult to do OXB justice because today it's not the company it was.
When Sue and Alan Kingsman founded OXB as a spinout from the Oxford University labs they were professors at, it was a drug discovery company with the ultimate aim of keeping some drugs or sales territories inhouse to eventually become a pharmaceutical company.
None of that can ever happen now, but it's really not an unusual story. Most drugs fail in trials and almost no biotech companies turn into pharmaceutical companies for the very simple reason that the few successful ones almost always get bought out by pharmaceutical companies for huge sums of money.
Part-way through JD's term as chief (after the Kingsmans) and we are already part drug discovery biotech / part service company for others. In a nutshell that's the only way we have stayed around this long (25+ years) without ever seeing a drug (of our own) approved. We have of course been a vital part in Novartis and AZ drugs which were.
Now we are 100% service provider to others, which I never saw coming - but I don't mind because it's regular money with much less risk.
So I would say it's impossible to do a share price story which means anything.
Drug discovery with any company is a cycle of hope, hype, reality and repeat - until you either get a winner or run out of money. Covid delays ran quite a few companies out of money which might otherwise have made it. Fortunately OXB had their cash pile but have still had to cut their cloth to suit. |
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