 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? |
I'll add one last one for today too.
Slightly deflated about very good results about sums it up for me. I've been happy for them to keep quiet because the last two results presentations had a lot more in them than just results (naming multiple new partners / buying ABL and such). Today was much more like old OXB and if they are going to keep results day just to results, then they should at least put out that KPI table more often (imho) else we are going to be back to potentially having 6 month runs of not much besides faith.
These are not doubts btw - I still have the OXB armband - and there was an awful lot there to like e.g.
Contracted value of client orders to end of July £80 million. To end of August £94m. To date £115m. A lot of companies would give an organ for a trend like that but how many people would guess it's happening at OXB?
Similarly the revenue backlog of £94 million at end of December, £113m end of July, £120m end of August - so even though OXB are putting plates on sticks to get work done in the UK and other territories, the backlog continues to grow.
It's a very good story - just one without much "colour" (as AK used to say) today. I'm sure if they could have named names then they would have.
I suspect the analysts will be kinder this time and if so we'll see it in the share price over the next few weeks. But unless Frank has a big announcement up his sleeve can they make it back into the 250 this year?
Let's hope their roadshow goes well... |
Very possibly Gareth. That might be our "possible" with most different organisations involved. It's also one which we've certainly known about for long enough (without ever actually knowing what it is for). |
A final comment on todays solid results and presentation. One question which seemed slightly left field (these are my novice interpretation of the question and answer). Have any clients been waiting over 12 months to sign a commercial deal? Yes one due to the complexities of alignment over multiple factors. Serum Institute possibly? |
Yes the IC recommendation isn't propitious but even a stopped clock tells the right time twice a day |
Investor's Chronicle positive? That has to be a sign of the end of the world.
Results & Trading Updates
Revamped OXB moves closer to profitability
Forthcoming client drug launches should support the group’s growth ambitions
Published on September 23, 2024
by Jennifer Johnson
Losses narrowing
Momentum behind the shares
Earlier this month, Oxford Biomedica announced the launch of its new corporate brand — OXB (OXB) — designed to reinforce what management calls “its transformation into a global pure-play cell and gene therapy CDMO". To investors, this probably looks like an attempt to distance itself from the vaccine manufacturing contract that brought it into the public consciousness – and that’s no bad thing.
(Can't see the rest of it)
OXB:LSE
Oxford Biomedica PLC |
I think Autolus Therapeutics have their own vector too (for what that's worth).
Seeking Alpha have the transcript out if anyone who missed the webcast is curious before it eventually appears on our website |
I may be wrong, but I thought Autolus had invested in its own in-house manufacturing facilities? For my sins, I also have some Syncona and try to keep up with the underlying positions, where information is available. It had irked me that it seemed that OXB had been overlooked for manufacturing! |
I think i’d be right in suggesting that Harry almost certainly knows a great deal more about OXB than any of the investment analysts at today’s meeting.Brokers migrate towards concentrating on big volume generating large caps and the coverage of small caps suffers from that understandable bias.That actually provides an opportunity for industry peer groups to pick up undervalued assets of which they have a working knowledge.Yet,it also provides a similar opportunity to the more opportunistic old style private client looking for individual company stock holdings.In 2025,OXB will move to profitability and confirm its status as a solid cash generative CDMO.Wishful thinking perhaps but its quite feasible in a thin market, with well over 50% of the equity held in institutional and corporate hands,that OXB could double in the next calendar year. |
I think all 3 of those are ours and will be reviewed Q4, bodes well for next year? |
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