 Slight dose of melancholy this morning for me because, as those with long service badges might remember, first days of 2024 I wrote that my sole 2024 OXB target was for them to get back into the FTSE250.
Today (well close of play today if we are being picky) marks the 4th and final FTSE review of the year and quite obviously we haven't. I can't help but think that there have been a few opportunities during the year where much better IR/PR (or even some visible IR/PR) could have perhaps swung it for us, but unfortunately OXB can't / won't talk about that side of the business these days or doesn't see the point.
Anyway, onward and upward as someone once said, and I'm guessing that 4 weeks today is the end of the 2024 trading year in all but name and after the break we start our long awaited profitable year and finally return from the naughty step.
I'm sure most of you will have worked it out by now, but for the first time holding OXB (and unlike Del Boy) I don't see a "this time next year" for us as OXB shareholders.
I think Novo have eyes now firmly set on that prize of the forecast C> CDMO market and see OXB's "tech, knowhow and proven ability to expand" + Catalent's enormous waiting capacity as the route to that very big prize.
Yes it might be wishful thinking based upon a lot of news stories and circumstantial evidence all stuck together to come up with a case, but remember my honest preference would be to hold OXB as it becomes "the" pure C> CDMO with that 20%+ EBITDA margin in 2026 forecast looking very nice indeed.
But I think Novo have the same idea now (albeit on steroids). It gets rid of some of their enormous cash pile. Utilises the parts of Catalent which Novo have made no attempt to explain the attraction of. Gets them a premium slice of the gene delivery market + everything else OXB can do. Perhaps most importantly though, it would get Novo another huge income stream which was relatively risk free once mature, as of course it's the partners / customers who are taking the development risk - Novo would simply be charging handsomely for helping them with a service.
EU decide on approving the Novo Catalent purchase by 2 weeks today. |
Someone has to be ready to manufacture on that scale by the end of the next lustrum then Marcus?Who do we know who owns the biggest share of that pure C> CDMO and is in the process of buying 4 dedicated sites + the Oxford VMIC building.To have the cash to be in the right place at the right time with that capability/ capacity and the bottle to do it, then wait for the work to come? |
Novartis projected an approximately $55 billion market opportunity by 2030 for its cell and gene therapy platform |
Abingdon, UK, 21 November 2024: – OBN (UK) Ltd is thrilled to announce the winners of the prestigious OBN Awards 2024. This was the 16th year of the Awards, which OBN (UK) Ltd, the not-for-profit membership organisation that catalyses growth for the life sciences industry, established to celebrate innovation and outstanding achievement across the industry.
Presented by Ipsen, the most Impactful CRO was Oxford Biomedica, which has a mission to enable its clients to deliver life-changing cell and gene therapies globally. |
I don't think that is anything other than Novartis doing what we see mega-pharma (especially BMS) do quite often, which is to spend a relatively small amount of cash (for them) now, to get some rights to something which might turn out to be the next big thing in ten years time.
If I read Vyriad's website correctly then the modified LV which Novartis have secured some rights to hasn't even been tried on people yet. If so then that will be a long time and a lot more Novartis money before (if successful in the trial / approval process) it is sold in competition to OXB.
How it would compare to OXB re payload, targeting and such I don't know, but if the T-Charge currently in trials for them using OXB's vector works out well, then the Vyriad vector will have to start looking a lot better else they will simply drop it in a business review and stick with what they have. This is especially true when the speed of approval (i.e. arriving early) is a lot more important than arriving later with something slightly better.
I think it was Stuart at JPM who gets asked about similar and he replies that we can only ever really look 5 years ahead as anything much beyond that is pretty much anyone's guess as to what comes next. Remember back when we did the Homology deal, it was because the best paid advice said AV was dead in the water, LV would only ever be niche and thus OXB needed a good AAV. |
I wonder why they’ve decided to diversify Lv provider for new products, due to our closeness to Novo? |
Yesterday I was perhaps a little unfair when I wrote that I thought slide 17 was really the only "new" thing / point of interest for us.
By that I meant that they have added company logos for Coave, Transgene and Kalivir.
Coave had already been announced by ABL and ABL Strasbourg is the former Transgene manufacturing facility and is situated next door to their labs / offices, so those 2 could reasonably have been guessed.
Kalivir Therapeutics seems at first genuinely new to us and is based in the US, but read further and it's a MVA vector and I remember Seb saying that ABL had good MVA experience, so I think this too is probably ABL and therefore all 3 of these new names to us have come via the ABL purchase. Still good to know, but likely not "new" partners.
When I read the whole thing again today I noted the approvals on slide 9. Anvisa being the Brazilian regulator and PMDA the Japanese.
PMDA could mean something more progressed than we dare hope with Santen which would be about the right time for trialling something in the clinic. Alternatively it could be Astellas who are partnered with Kalivir. My guess is Santen though as that is most likely to be the one trialling in Japan (imho).
Re the question of who we could be partnering with in Brazil to require inspection / approval from their national regulator. I'll have to ponder that one. |
Jefferies Presentation is on the Website |
Jez,
2 quick (for me) points:-
1) They are very busy. That 85% utilisation they projected for the suites next year is very good / doesn't get much better. This sort of begs the question (Phil's point above) of why they aren't rushing to bring more capacity online - but maybe the other big news story with NH explains that. The jobs they are advertising pretty constantly seems to back up the very busy statement at least.
2) Other advertising. I think as 100% pure CDMO they have to advertise / visit every relevant conference. Wasn't it Leverhulme who penned "early to bed, early to rise, it's no bloody good if you don't advertise"? They can probably live off word of mouth for LV quite nicely, but for AAV they will need to sell as it won't be immediately obvious to many that a company famous for lots of firsts in LV now offers AAV too. |
This stock is marginally better than watching paint dry. Like Harry, i am forever the optimist. But the continual stream of OXB advertisment's i am seeing on various pharma sites, makes me nervous. Are they getting desperate, why the need to advertise ALL year round!!! |
Great post, Harry. |
some serious consolidation here across the sector even now hitting the "big 2" GLP1 plays - so everything is relative as they say, even our OXB share price :) |
It's obviously something I've pondered myself gh, and I think the magic number is somewhere around what Serum paid.
Let me give you my logic (or lack of it) :-
At the moment OXB struggles to shake off the covid work. Some recent news articles have actually headlined "Lossmaking vaccine manufacturer...".
Next year OXB will make a profit (a small one yes, but finally that "lossmaking" monkey off our backs - if I can still say that without a police visit at 4am).
A profitable CDMO should trade on 5.5x sales on average. OXB have said a projected FY2024 revenue range of £126 million to £134 million and better than 35% on that for 2025.
Can we say £180m revenue next year as a round number? x 5.5 = somewhere around £10 per share as a fair value.
Then you need a bid premium. Pick your number but 50% would have Serum not losing face on their 3% (just). |
The “bid” number will be an interesting one indeed. Making a friendly offer but not wanting to be seen to overpay is a tricky one…all that said, the overall number is like petty cash to Novo.
Interesting times and removes the hardest decision for me..knowing when to sell |
Slide 17 - look at the new names.
Good set of slides but still at interims for the KPI stuff it looks, so hard to guess anything from that. |
I'm more than happy with my OXB investment the management are switched on and the future looks positive. I hedged my position in Cambridge Cognition with OXB and that has proved worthwhile. In the long term both busineses being great examples of business at its best and creating employment for highly educated graduates |
Gareth, don't believe snide comments from people who have a long history of looking down on and criticising other people's efforts whilst lazily contributing sfa themselves.
This is a great company and if you want to be part of of an online community which is largely actually enthusiastic about that then you do it, but to be fair I can't ever remember them dropping a pre-emptive RNS about something which was going to be in a presentation later that day. They just wouldn't do that.
When they post the slides, I think most we can hope for will be an update of the KPI numbers, but we will see. |
Gareth don't believe some of the hype spouted here just leads to disappointment |
No 7am RNS ahead of todays presentation at 10am, Jeffries Conference. |
Dom,
As I happily admit, I'm no market professional but I have watched OXB for a long time and I have a reasonable memory.
For most of this year, if we broke 100k daily volume then it was a very good day.
We could argue that was because OXB have said very little since the beginning of the year and of course there is the curious question regarding no senior staff share purchases this year as well.
Of late we are seeing much better volume (352,886 shares traded today) but somehow this is being managed by price movements during the day, whilst the end of day close is often within spitting distance of the opening price (today +0.24%).
What are the chances of that happening regularly by accident (the supply apparently matching demand almost perfectly)?
The order book at close has 3 bids of 275p, 280p and 285p all at exactly 5,000 shares and the offer side has 415p, 420p, 425p and 435p all at exactly 1,200 shares.
I'm sure that's done to get the correct closing price somehow and tomorrow they will all expire without being actioned.
I don't know what is happening but we are seeing a load of big volume days with no news from OXB to excite small punters in a recession market and no thresholds broken by people with deep enough pockets to have to notify (% over 3% if based here / % over 5% if outside).
The only scenario I can come up with is brokers working very hard to fill big orders at very tight prices with order sizes which will stay below declaration thresholds. But why?
Is simply "time" with OXB about to enter the year where it returns to profit from 3 years in the wilderness, or is it something else?
I wonder when OXB will upload tomorrow's Jefferies presentation, which of course will be our latest and only update from them since the interims. Hopefully they won't take forever with that.
Can't believe any of this today was down to some part-time guy who was notified as starting another job on exactly the same day. |
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