 It's not a case of what we or OXB managers want, more the best of a situation which might drop upon us soon. Important to remember that OXB is a small cap stock (formally a mid cap stock), whilst the names we mention currently regarding this possibility are mega-cap. They will win.
If (and I'm just making up numbers here for the sake of an argument) Novo see OXB as an instrumental part of the plan in making their 16.5bn starter investment in Catalent (currently No3) a serious rival to Lonza (No1) and Thermo Fisher (No2), then they may have already said to OXB "If Catalent gets approved then we are going to bid 10x sales for OXB".
So if there is currently that conditional offer somewhere in the background based upon a multiple of sales, the actual share price at any point in time is a bit irrelevant and Frank's job (to do the best for the shareholders) is to wait and take it.
To the best of my knowledge the only time a CEO would try to talk the price up is to fight off a bid which he or she sees as too cheap, but if the bid is a good one then the CEO is pretty much compelled to recommend it to shareholders. If a bidder offers 10x sales and the sector average for your company is something like 5x sales, then they have made a very good offer haven't they?
Just to repeat I have no evidence for this other than a feeling and I made up the 10x number to make the point of an argument. |
Harry, one bit of your argument I am not sure I fathom is why we would want an interest from a larger player when the share price still is on the floor. Why not let the company blossom for a couple of years first and work from a better start point... |
feels like firmly rather than gently to me - but so agree with your sentiments... |
Perhaps (probably) I am fitting this into the overall process, but the behaviour of the company hasn't appeared to be helping their share price. Additionally, the daily curve (up at start then promptly down for the rest of the day until a little rise at close) suggests that the share price is being gently choked. Might this help to show a good offer as even better? |
I'm on the fence tbh Phil. I've written what I think will happen, which all basically started when the boss of Novo Holdings said in the press interview that he was going to use up his GLP-1 drug windfall profits to buy up carefully selected service providers to the pharma industry.
It struck me at that point that Novo holding 12% of OXB shares meant that we had already been carefully selected. The rest I've written too many times now.
Catalent shareholders see it as the best option considering what might be without Novo's money.
Catalent's employees seem very happy with the job security (a big thing in today's economy) which Novo's billions will bring.
I think the FTC will look more at the jobs than some of the other complaints (which Novo and Catalent have given assurances about) and follow the EU approval.
Should that happen then we will find out very quickly afterwards if my guess here is correct or not.
If OXB stays independent through the all time record sales year of 2025 which also marks our return to profit, then I honestly would be very happy with that - but the Doris Stokes in me thinks Novo are about to shower us with money.
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philh75 6 Dec '24 - 20:02 - 9348 of 9349
Great news. |
Jez,
I think the grand unifying answer to that one is the oft used "it is what it is".
I've noted more than a few times that my ideal scenario is for OXB to to remain single and become a dominant player in C> CDMO. I would very much like it to become a British success story, even though Frank has dropped the Oxford link in the company name already.
How many people sold at the top and bought at the bottom? I would have thought it's not most of us. I certainly bought every time I thought it was the bottom from £7 down to under £2, but I'm not sure that counts as timing it right.
If my guess here is correct - and remember it is just a guess based upon a large bag of clues which individually might not be that compelling - then for Frank to grow OXB to another 5 locations internationally is an amount of time and money which is probably not within his realistic remaining time at OXB given his age.
Conversely, for Novo to give Catalent a bag of cash to develop the world's best / equal best LentiVector, all the supporting tech and process improvements + a similar but more recent AAV, well that literally could take 20 years.
To me there's an obvious threesome where OXB's knowledge marries Catalent's capacity and Novo's money, giving "the" C> CDMO in a timescale which none could achieve without the other two.
If I'm correct then the FTC will soon say yes because Catalent was in a bit of a pickle going forwards without Novo's money. Novo (in this scenario) would want OXB quickly and without resistance from the big holders (we don't really count).
I think in a bid scenario the minimum price has to be what Serum paid for their 3% else they immediately alienate one large holder.
The other issue is IM (who of course own 10%) and it's pretty much impossible to work out what IM actually paid for their shares as they gave us a very good business for next to nothing and let us pay with shares which were an artificially high price. They didn't do that in a fit of altruism, they did to be part of the the future number 1 C> CDMO. If Novo bid low then not only have they had that future plan rug pulled from under them, but they have also been robbed in the process. QED IM will want a lot of money to compensate them. Happily Novo have a lot of money.
I suppose the bottom line here is how important this future part of their CDMO empire (the C> part) is in Novo's plan. We have seen other companies in our sector bought for 10x and 16x sales when they weren't even profitable - they simply had something the bidder wanted.
We are 3 working weeks away from OXB starting their return to profit.
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jezmundo 6 Dec '24 - 13:10 - 9342 of 9348
H. Your theory on an impending takeover is compelling but to me personally very undesirable. Having like most of us, sold most of my stock during the covid fiasco, re entering when the price had tanked, a takeover of lets say 10 - 15 pound would be at best disappointing |
Great news. |
Catalent and Novo Holdings Receive European Commission Unconditional Approval for Pending Transaction
www.catalent.com/catalent-news/catalent-and-novo-holdings-receive-european-commission-unconditional-approval-for-pending-transaction/ |
Assemble some fresh "crack troops" for the next push on the 4.30 barrier...working a treat for the market as these repeated attempts keep flushing out new sellers at this level so will be rinse and repeat until everyone has been cleared out :) |
Apologies, pay wallA UK political committee says the country is underprepared for future pandemics due to "worrying developments" on domestic vaccine manufacturing.The UK's House of Lords' Science and Technology Committee released a 15-page letter on Thursday that mentioned its concerns on news reports of the Labour government cutting the funding for what would have been a £650 million build of AstraZeneca's vaccine manufacturing site in Liverpool. It also raised the alarm on the UK only working with Moderna on vaccine production and the lack of a guarantee that these vaccines would not be sent elsewhere."The UK must have a resilient, diversified domestic vaccine manufacturing sector, from research through to clinical trials and large-scale manufacturing," committee chair Julia King wrote to Pat McFadden, chancellor of the Duchy of Lancaster.The push for stronger domestic manufacturing is building momentum elsewhere, too, with Europe looking for ways to reshore its supply chains and the US making moves to nationalize its drug production.The UK has been working with Moderna since December 2022 and is expected to last a decade, but this deal has made it more likely that other vaccine makers would not collaborate with the UK, the letter states. The committee called for more transparency on the list of vaccines Moderna manufactures for the UK. It also voiced concerns that working with an mRNA vaccine company would limit its options for other vaccine approachesEarlier this week, the UK Health Security Agency signed a contract with vaccine maker CSL Seqirus, who will produce five million doses of human H5 influenza vaccines for the country.The Lords' letter also suggested launching a so-called "peacetime vaccines taskforce" to keep UK factories alive in the absence of a pandemic. This would work by getting UK sites to intermittently produce vaccines for "novel" world.MORE LIKE THISAmgen deepens roots in North Carolina with latest $1B factory build December 5, 2024National Resilience's new CEO; Moderna opens Australian manufacturing siteDecember 5, 2024Novo Nordisk budgets $409M for new quality control lab in Denmark December 5, 2024You are reading this article for free. Enjoy! Upgrade for unlimited access. |
If only we knew of a company with vaccine manufacturing ability based in the UK !HTTps://endpts.com/uks-local-vaccine-production-stymied-by-budget-cuts-government-committee-says/ |
I think £15 would do it and £12 might. |
H. Your theory on an impending takeover is compelling but to me personally very undesirable. Having like most of us, sold most of my stock during the covid fiasco, re entering when the price had tanked, a takeover of lets say 10 - 15 pound would be at best disappointing |
Sad indictment of the state of the UK mid cap markets that we are so far away from what we might see as a fair valuation vs. international rivals such that we are even needing to discuss things in this way.
No wonder firms are leaving the UK markets in fair numbers atm... |
Just wish that it will happen |
I don't think it will be long before we find out and either I will have guessed correctly or it will be a historic victory for the constructive criticism team.
My logic is simply that there is nothing to be had by waiting after a decision. Novo will have put a lot of time and effort into this CDMO diversification plan and then had to sit and wait a year for the EU / USA regulators.
If someone had made me wait a year then I would have spent it having everything in the plan ready for D-Day and I'd also be reassured that for OXB the UK DTI / MMC is nothing compared to the other 2 regulators. A quick promise of maintained jobs in Oxford / created jobs utilising the old HMG VMIC site and they would have a minister cut the ribbon for you. |
Super,
I'm sure you must have picked up on it by now, but I've 99% convinced myself that OXB's effective closed period since our major shareholder bid for Catalent (who have a business division which fits nicely with OXB's business) isn't a coincidence.
It of course could turn out to be just that, but I don't think it is. I've thought about this for a long time now and tried to work out what else it might be (malaria and such) but I think that by far the best fit (on information we have) is Novo and I'm expecting something to happen following the EU/FTC decisions on the Catalent bid (the EU decision due by tomorrow night).
Novo seem to want to diversify away from the diabetes business which has made them their billions and CDMO ("selling expertise to others") seems eminently sensible to me. They have to do it on a huge scale else it's pointless for them (what use is a £40m profit to a company with £150bn in assets?).
If they want the world's biggest or equal biggest CDMO then buying the previously struggling Catalent for $16.5bn is a good start.
Assuming the regulators say yes then my best guess is that Novo will make a very friendly offer to OXB which Frank will recommend to us. That will go very quickly as Novo have no need to visit banks or the markets and after we all accept then Frank will be asked to roll out OXB into the 4 Catalent C> sites + the empty VMIC site at Oxford.
From then on OXB Catalent "a Novo Holdings company" will not only have all the "firsts" but will also be the biggest in C> CDMO. Frank will be back in charge of a private company and with the support Novo will offer I expect them to do very well.
As I've said a lot, just the way I see it at the moment, but it all seems to fit very nicely and if we are all still OXB shareholders this time next year then I won't be disappointed but I will be surprised. |
The 'spending spree' continues. Where will it all end?
Novo Nordisk keeps manufacturing expansion spree rolling with plans for $400M quality hub in Denmark
Amid a multi-year, multibillion-dollar spending spree to scale its global manufacturing capacity, Novo Nordisk is laying down fresh foundations at its old stomping grounds in Denmark to bolster a critical component of production: quality control.
Novo will invest 2.9 billion Danish kroner (roughly $409 million) to construct a new, 53,000-square-meter (570,487-square-foot) quality control laboratory in Hillerød, Denmark, where the company also operates a sprawling plant focused on cranking out injection pens for chronic diseases such as diabetes and obesity.
Novo said Monday that it’s already kicked off construction on the lab and plans to complete the project in 2027. The $409 million outlay represents the company’s largest investment in advanced quality control to date, the company noted in a release.
Once completed, the new facility will act as a central hub for quality control operations in Denmark and consolidate existing locations at a single site, Novo explained. The quality assurance hub is being designed to meet both “known demand” as well as future capacity expansions.
“As we expand our manufacturing capacity and anticipate new products to meet the growing global demand, this new quality control facility will play an important role in ensuring the quality of our products and position us to meet the evolving requirements of patients and regulators,” Erik Lorin Rasmussen, Novo’s SVP of product supply for aseptic manufacturing, said in a statement.
Novo’s investment follows a string of high-profile cash infusions designed to bolster manufacturing capacity in recent years. Chiefly, Novo has busied itself beefing up in areas like fill-and-finish to meet the rampant demand for its diabetes and obesity GLP-1 agonists, Ozempic and Wegovy.
At Hillerød specifically, Novo last June unveiled a 15.9 billion kroner ($2.3 billion) investment to install a new, 700,000-square-foot multi-product facility, which is slated to start producing active pharmaceutical ingredients by 2029. At the time, Novo said it had embarked on the project to “develop its future clinical late-phase product portfolio.”
More recently, the Danish drugmaker in June said it would lay out $4.1 billion to construct a second fill-finish plant at its campus in Clayton, North Carolina. The facility will chip in on production Ozempic and Wegovy and represents a portion of Novo’s total planned manufacturing investment of $6.8 billion in 2024.
Meanwhile, just this week, vaccine maker Novavax said it is selling a recombinant protein plant in the Czech Republic to Novo Nordisk for $200 million. Novo and Novavax expect that transaction to wrap up by the year's end, at which point Novo will take control of the plant and some 300 employees who currently work there. The facility will not be used to make Ozempic and Wegovy, a spokesperson told Fierce Pharma Wednesday.
Elsewhere, Novo is in line to purchase three Catalent fill-finish sites for $11 billion from its sister company Novo Holdings. Novo Holdings, which operates alongside Novo Nordisk under the banner of the Novo Nordisk Foundation, is aiming to purchase CDMO Catalent for $16.5 billion in a deal that’s expected to close in the next few weeks. |
I simply go off the sector average for CDMO market caps being a little over 5x sales, with the top end of the range being those in profit and those in the higher tech like Samsung (i.e. not generic pill bashers).
OXB have indicated that sales next year will be somewhere around £180m.
If the market valued us as highly as Samsung Bio (15.77x sales) we would be almost exactly £27 per share.
That's not to say I expect that, but it's something to bear in mind when dismissing £10 as fantasy.
At the moment I'm more inclined to wonder what the premium is that Novo would be prepared to offer, in the full knowledge that as OXB moves into profit then the longer they delay the more it is going to cost. |
I would suggest that a twelve month target of 550p is realistic,a target of somewhere between £6-£7-50 perhaps optimistic and something approaching ten pounds is fanciful.However,remember that some of the high range price targets haven’t been plucked out of thin air,they’re generally predicated on tried and tested analytical ratios.On a price to sales ratio ,OXB is undervalued compared to many of its peers.My target, for what it’s worth, before I would top slice any stock would be 750p but I tend to agree with Harry that ultimately like most good UK companies,OXB is more than likely to be acquired. |
It's very difficult to second guess these things on information available to us Gareth, but I do know that OXB spend quite a bit of time & effort on their sales pitch to much larger investors than us. Could easily be someone from the Jefferies conference who liked what they heard and have been buying a few since. Could easily be many other things too.
Separately, I become more convinced by the day that Novo have made a top level decision to use some of their enormous cash pile to build a manufacturing empire which will rival Lonza, Samsung and such.
If you think about it then currently Novo have a huge number of eggs in diabetes and weight loss (which are very closely related). If they want to do something strategic by way of future insurance (i.e. mitigate against being a Kodak with their eggs in the camera film basket) then building an empire of being a very technical service provider to others is quite a good idea.
You know my thoughts on how they can get a running start to be the leading C> CDMO. |
A lot of trades at 425p including 215K “sel”. Volume does appear to have picked up this week with a couple of new broker notes (neutral not particularly informative from JPM). Could something be stirring? Interesting to see what happens when NYSE opens. May be nothing! Time reveals all! |
It's an interesting prediction there Jez.
Unless you are expecting some kind of as yet unforeseen disaster here, I'm not sure why you would think that a record revenue year by something around £40m over this year plus a profit would only be worth another quid.
That said, how many times did we have to suffer Peter the badger and his handbag carrier luminaire tell us that OXB were going bust? And get voted up for it... |
You will upset HST with your projection. However I would say that is a much more realistic twelve month target. Peoples expectations round here have been totally unrealistically raised. |
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