 Mr Ygor Paranoid would be a memorable name ;)
There are risks Ygor, and I'm sure you have seen the risk statement, it's just how likely a company wide hit is? 37 clients and 48 programmes is a lot of insurance against one of them going bad and having multiple facilities in 3 territories surely must also score highly on the egg and basket safety ratio.
I've written here too many times that the right time to sell is simply the right time for the holder. Anyone who has gone I've wished well and what happens after doesn't matter. There are plainly people who bought in during the early months of this year and have now gone (I'm guessing Brucie for sure, but there are other names too) and good luck to them. They saw an opportunity and took a profit.
Bad things can happen out of the blue. I never foresaw what would be forced upon us during covid, and whilst we were undoubtedly saved by being a very good CDMO for AZ, we were royally stuffed when that work ended a year earlier than planned whilst our old regular work was still stymied by covid restrictions. That one is pretty much burnt into me now (I'm sure many others too) about the damage which can be dished out by very powerful unaccountable people who the end result doesn't affect.
So these days I would never argue against a cautious strategy, but I want my share of the c£50m EBITDA earnings in 2026 assuming Novo doesn't own us by then. Assuming we get there and OXB are still talking about industry standard margins (median 35% across the top 15 CDMOs) then I think at that point we should be holding £20 shares in anticipation of those bigger margins.
Will we get there? Who knows. |
Hear what you say guys but when I talk about cash burn, I don't just mean all of those things that suck away cash because of our operating in a fast growth environment. It can also be the other things that are outside our control like politics, economic crises, liabilities suddenly coming out of the woodwork of which shareholders were unaware etc etc. Call me Mr Paranoid, but a solid and recurring positive cash flow is what really does it for me. That might well be where we are heading but as with all modern businesses there is not much room for error here. |
I think if it closes above 380.5p then that would be our new 12 month high (which I will doubtless just have cursed). |
Posts crossed there SJ but I'm sure that's true with the algos too. |
It can happen very quickly Gareth (as we all saw when it was going the other way). The masses of small PIs just don't seem to be there for anything in this post covid economy, but I'm hoping the people that Frank, Lucy and Sophia are visiting this week can make up for that. We will see.
As for your % per day up, then if that brings in the momentum traders (aka the self-fulfilling prophecy) then I'm all for it.
I'm hopeful for the end of November and see a good chance of it happening - but if we're still smallcap as we ring in the new year then it wouldn't shock me. I think if it gets to the Results in April and we're still smallcap as Frank says "I'm pleased to confirm that this is the year OXB returns to profit" then I will have sold quite a lot of other things I own and put it into OXB the day before. But that's 7 months away and I honestly don't expect OXB to miss the next 2 reshuffles. |
"Basically 2 months for either the market to wake up (which to my mind is more like a fashion statement as they mostly all follow the herd) or Frank has to do something which he actually thinks worth sticking in an RNS"Very true and algorithms amplify the 'fashion statement' extenuating both positive and negative trends such that fundamentals almost take a back seat.If OXB was to get within say 20% of a calculated inclusion in the FTSE 250,institutions would be tempted to accelerate purchases.Surveys show that stocks move more aggressively in anticipation of inclusion in an index than thereafter,better to travel than arrive.It'll get there,ones only debating when. |
No worries boadicea :)
I heard the other day that RBC have promoted OXB into the top 10 on their own index for small and mid cap shares.
Obviously we know RBC as our house broker, but the organisation is massive with a huge number of companies covered and their assets under management is half a trillion quid worldwide. So to become a top 10 SMID stock for them (all UK sectors) is quite a nice nod to OXB I think.
I'm sure you know my target for this year is back into the FT250 which would need nearly £6 at the end of November. Even though they have missed the 1st three quarterly reviews I still have hopes that they can do it in the final reshuffle of the year.
Basically 2 months for either the market to wake up (which to my mind is more like a fashion statement as they mostly all follow the herd) or Frank has to do something which he actually thinks worth sticking in an RNS.
Would be a nice Christmas present for us if he can get us back in at the end of November, letting us go through the festive season and into the profitable new year as a FTSE250 stock. |
My apologies HST! Don't know what I was thinking - now corrected. |
I agree boadicea with the small point that FDR would be a different dead president ;) |
Afternoon Ygor,
If what they told us earlier in the year is true - and why wouldn't it be? - then I don't think they have burnt cash on ordinary operations for quite a while now. I'd be extremely confident that is true of this half.
The money which has gone, you can guess most of it from the presentation / RNS, but there is some other stuff you can reasonably guess too.
Maybe we can count some as technically being operations (I would say more "training") because we know they have been recruiting pretty much constantly to meet demand from our customers (and I'd say staff costs is most likely our biggest cost).
Seb told us yesterday that with the example of bioprocessing technologists then they have 6 months shadowing someone (on top of already meeting the job spec) to learn OXB before they are let loose on a job. Then it will be a long time before the invoice comes in, but when it does and from then on...
They didn't mention Yarnton (10 year lease up in 2024) and so we have almost certainly renewed that for an unknown length of time - again money.
The big cost they actually mentioned was in France (which IM chipped in 10m euros to pay for, but will go in our books as a cost) is again an investment which will pay back many fold - it's not an operations cost. Millions but one off.
Then there was what they told us in the RNS but didn't mention in the presentation - i.e. how and why they thought it best to settle half of the final 20% put option with Homology early. It's unclear to me what they did there but that will have cost a lot of money. Again a one off cost but now 90% of what that plant earns out of AAV is ours. |
ygor705 - I think you underestimate the difference between what OXB was 3 years or more ago and what it is now. We are no longer in the super-high risk business throwing money into researching ideas and programmes with a low percentage chance of success but with a sometimes astronomic potential. Instead, we have a proven product which can branch into many specific avenues which others are researching and taking the risk on and some (a few?) of which will be successful, while we contract to supply a building block tailored to what they need. We potentially make money on their failures as well as their successes - we are merely one of their development expenses. We then also make big money on their successes with long term production potential.
Our investment now is more into expansion rather than the speculative side of research which will presumably be aimed at improving processes and yields and further development of an existing product. Our success will come from being our customer's chosen go-to source.
I am sure that HST could explain it more accurately and correct any misapprehensions that I may have, but that is my basic undestanding. |
As usual, some very good contributions about the latest results on this thread and my thanks to all who have taken the time to research some very technical areas. My take on the recent progress of OXB is not terribly different from how Oxfords local football team has been performing this year. A good run saw them promoted to the Championship in late May and they are now pretty well placed at 7th in that division. As with OXB, their supporters are wondering if they can regain the dizzy heights of the Premiership - or was it the 1st Division when they were last at the top level in 1988? The combination here of high growth potential and cash burn does not fit entirely comfortable in my psyche: it smacks of venture capital risk and one more roll of the dice - but I'm still here for the education and the ride! |
This has over recent past been thinly traded for quite a lot of the time. So the challenge of running around IIs to drum up some buying interest in the next few weeks is that an II think he might dip a toe in and finds a few thousand shares on the offer which is chicken feed.
Saying all that the chart is starting to get really interesting if we clear c. 380p and start a new break out :) |
It's some time now since we last turned over 100k shares before lunch, so interest has picked up a little. Their achievement to date seems to me to limit the downside even without the encouraging projected growth rate hereon, giving a very attractive upside/downside balance. |
I reckon Deutsch Bank are as wrong this time as last. I have a target well well above theirs on the current chart. I'll take mine! |
Dr Joe Pantginis at H.C. Wainwright & Co (and before that at Roth) was always very generous with his OXB assessments and usually the top guiding analyst.
I don't know what happened there as HCW are no longer in OXB's list of covering firms. I suppose possibly because he's a biotech specialist and OXB are now more specialist CDMO service provider, but it's a shame as he was very pro-OXB. |
Deutsche Bank Research raises Oxford Biomedica target to 380 (250) p - 'hold' |
I will be happier in 2026.....
If I live that long! |
Many thanks for that. |
From Citywire:
Interim results from OXB (OXB), the recently renamed Oxford BioMedica, prove it is continuing its transformation, says Panmure Liberum.
Analyst Julie Simmonds retained her ‘buy’ recommendation and target price of 505p on the stock, which added 0.8% to 360p on Monday.
The interim results are in line with guidance maintained, and Simmonds said that she does not expect any major change to consensus.
‘The update indicates a measured improvement in number of clients and active programmes, with an encouraging increase in late-stage and commercial programmes,’ she said.
‘These are necessary for the company to meet its mid-term growth targets. Visibility is getting better, with 80% of second-half revenue covered and clarity on 2025… A solid performance as the company continues its transformation.̵7; |
OXB-Helper_3
It's a catchy name, but I would have gone for something more like Fireball XL5.
Oxford Biomedica (US) LLC, Bedford, Massachusetts, USA. |
Belated thanks philh75 for your innovative A1 research |
Nice CC tbh, very professional bunch. My key take aways were:
Not needing to compete on price cutting margins to generate new business
Working hard to build brand recognition for the broad range of support services - I think 50% of major global industry players surveyed now understand the brand core competencies which is much higher than before-they are targeting now where there are gaps (Asia as noted in prior post and other areas)
So that is all good, I cannot really get a handle on how scalable this all is with comments that the pipeline is now fairly full and production at capacity i.e. if 3 large new clients rocked up how long will that take to translate to higher sales..
A lot of thought and planning going into how best to utilise the different production sites and this will take time as Europe comes up to speed
I think the management have done a super job overall, not least with recruiting such a high class leadership team - this deserves a major rerating but patience may be required to allow them first to hit the 2024 guidance and prove their model - so IIs defer to after that point - hope not, but prepared to be patient :) |
Final, final comment, there was a hint of talking to industry players in Asia earlier this month? |
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