Oxford Biomedica Share Discussion Threads

[woody110] 18/3/2024 19:01

just googled jobs at OXB three days ago on BeBee, its showing
Chief Commercial Officer up for grabs, have I missed something, is Sébastien leaving or moving positions, would they have to inform the share holders

[harry s truman] 18/3/2024 19:00

Interpretation of words Brucie - it has to be up there with the the ink blot test, as we all see something different.

When I wrote that I would never do it again, I simply meant get drawn into an online community which at times has been great and, other times, not so great. Anything I buy now, then if I have the conviction of thinking it's worth the punt I buy, hold and sometimes lurk. Mostly I don't even read the threads regularly as often (pretty often) it's not that related to either the company or reality.

You have to remember that we all change as we get older and that's very natural. When I bought into OXB the drug developer then that was extremely speculative (certainly not for widows and orphans) but the 20 year younger me didn't care. Lots of conversations of trial success against trial stage, so we all knew that the chances of the TroVax TRIST registration trial succeeding was statistically about 2 out of 3 and it ended up with a result in the other fraction.

I'd probably never do that again (invest in something which pretty much had it all on red), but as you hopefully understand, that OXB and this OXB share the same company name and not much else. What they have morphed into (we're into the saying book again here) is selling the shovels rather than looking for the gold.

Yes I have some SCLP as my drug discovery fix, which might seem to contradict my point here, but their risk is spread across a lot of drugs and the story is a good one.

Where are we going with OXB?

Each to their own, but I think they are winning an unexpectedly large amount of work - and - with 41 eggs in 25 baskets (as of the interims - it will be much more now) then a partner / customer having a TroVax style disaster wouldn't be great for us, but it also wouldn't cause us more than a blip in the chart (at most).

[brucie5] 18/3/2024 17:58

Harry S Truman18 Mar '24 - 16:44 - 7307 of 7308
0 1 0
Someone once wrote that free advice is worth what you pay for it.
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Harry that proverb deserves space on every wall. And how I know it to be true! If it came to a Dutch auction of mistakes I do wonder which one of us would win.
;)

So concerning this-

"I don't follow ONT, and as you will have no doubt worked out I don't do this with my other shares. I'll also never do it again when the day comes that I'm out of OXB (long made little promise to myself about that one)"- I surmise that you became overconfident in your knowledge and therefore complacent about what the share price was telling you. But your reading NOW is the correct one.

And since you're by far the most knowledgeable poster on the board (no offence intended to other experts) you can see the cognitive problem for us lesser thinkers.

Therein my constant, childlike need for reassurances outside the power of your skillful words; viz, if your analysis stands, there will come a time when the market acknowledges. This would/could be
- a chart bottom pattern. Let's see. I think there might be one now, but it's far from conclusive.
- pattern of strong buying. Well: IM might of course be one such. But it would be good to see more evidence. For example, some were speaking over the w/e of the recent large trade as suggestive of shorters leaving and maybe a further large buyer. Give the changed business model from speculative drugs to CDMO, why do we have little/no interests from the likes fo Paul Hill or Wheeler Dealer, or Christopher Mills for that matter? But perhaps peeps can tell me who has -outside the broker community- been looking positively at this, if only to see what Harry sees?

Also is anyone able to summarise for us the largest buys over the last 12 months, to see who's building?

December 23rd is when it hit rock bottom - and then again recently in March; so the last four months might be instructive in terms of who else sees value. The share price will not rise on our account.

[steeplejack] 18/3/2024 17:14

One could create a book on Harry's profession as they did in Private Ryan.Tom Hanks,the Captain,turned about to be an English teacher.You could have,for example...Traffic Warden 25/1Astronaut. 12/1Postmaster. 10/1Sound Engineer 8/1Disc Jockey. 15/1...the possibilities are endless but i don't think i'll bother.

[harry s truman] 18/3/2024 16:44

Someone once wrote that free advice is worth what you pay for it. Even if you particularly warm to someone, then the old Russian proverb of trust but verify is very good advice.

I always try to make sure that people realise it's an opinion, and usually I mention the what's and where's that make up a post, but it still is an opinion. To my mind worth 100x the "going bust soon" one-liners, but then again I am biased towards me.

I was neither salesman nor scientist and have said many times that my interest here is layman's level.

I don't follow ONT, and as you will have no doubt worked out I don't do this with my other shares. I'll also never do it again when the day comes that I'm out of OXB (long made little promise to myself about that one).

Amongst other things I hold SCLP, which reminds me very much of early days OXB in that they have cancer drugs which will work alongside the current gold standard, much as TroVax would have done for OXB had it been successful. Absolutely enormous market should that work out well with drug approvals - almost unlimited upside - but of course there is the risk.

OXB these days as a service provider, where our customers stand those risks of drug development is something which has grown on me progressively and I now like very much.

Had we stayed pure drug development then none of us would be here now as OXB would have run out of steam years ago.

The hybrid system (of CDMO work for Novartis) which became pure CDMO at the end of last year was something I never imagined when I bought in for a cancer vaccine and some gene delivery vectors. An example of my foresight there (or lack of it).

Who saw covid coming? If you had told me that the UK would ever have turned to as close to martial law as doesn't matter for a chest infection of little danger to anyone without serious comorbidities, then I would never have believed you. But it happened.

The vaccine work was a blessing and a curse. A blessing in that it gave us a lot of money (87% of our bioprocessing earnings) when our other work dropped away - and without that then it would have been very bad for OXB. But also a curse in that when the vaccine work ended earlier than Pfizer or Moderna, OXB (which likely had been unknown to most covid driven shareholders pre-pandemic) was dumped. Fortunately they had the covid vaccine cash pile, but we all know where the selling led us.

The work is back now and most days there is another clue. Like this job ad today



Sounds very positive on the description, and then you see that they also want 2 of them.

For?

And there we have it.

I think now, and as I have said / done many times before in the past, perhaps best for us all to step back and wait. In this example enjoy spring, but just wait for news.

We can't do anything about the ups / downs and if someone has to sell then they will. It only really matters if you are a trader.

If OXB continue to keep us updated (as they have done recently - and very well) then as long as they hit what they have guided so far, I'm expecting 3x to 4x our current level by Q4. If not then we will be bought by someone who does believe it.

We have insiders now who must know much better than this how it's all going, so it will be interesting to see what happens in that little open period following the results. That would be a brilliant sign for us.

[brucie5] 18/3/2024 12:57

Steeplejack, I mainly jest. But on a bb where we are all strangers to each other I have found it pays to be circumspect even/ especially even of the best informed... Who may know so much they fail to see the banana skin under their own feet.
Unfortunately, and with no disrespect to Harry, 25 years experience on these and other boards teaches me that it pays to be cynical. Or in the language of Jared Diamond, of to adopt the attitude of 'constructive paranoia'.
But as I also say, we are lucky to have a Harry on this board; otherwise it might be necessary to invent him.

[steeplejack] 18/3/2024 12:35

Blimey,a ‘salesman̵7;…..a salesman.You’re walking on thin ice Brucie!

I reckon Harry is a biochemist with career experience and extensive knowledge of his science.Harry is very much the analyst,its the salesman types who aren’t buying the story.Afterall,its been much the easier option to buy Novo Nordisk,Eli Lilly or if desperate Nvidia!

[brucie5] 18/3/2024 12:28

Harry, did you have a career as salesman? If so, I'm surprised you even need to be here.
;)
Outstanding patter, if I may say and since I can't see any problem with it, I am entirely dependent on Redwing to be my dark angel.
Do you by an chance follow ONT, where I see a parallel story: a huge historic opportunity in UK life sciences, set against race to BE.

[steeplejack] 18/3/2024 12:17

Indeed,UK equities are secondary to a bond market geared to providing funding for excessive public spend in a low growth economy and that isn’t going to change under Labour.

There’s a short 400/- reported at 189.218 this morning,a cross from the 2.1m sale I presume but there’s still around a million shares unaccounted from that sale.More trade reports should emerge.

Some 80% of my ISA portfolio consists of overseas listed equities.Domestic institutions show precious little interest in UK equites so why should overseas institutions (who are additionally required to pay 0,5% UK stamp duty not payable on US equity purchases).It’s disinterest rather that embedded scepticism that is stalking OXB,a small cap and thinly traded.As a result,there’s little buying in anticipation of better days.If you’re a ‘believer̵7;,that’s the opportunity,as recognised by Institut Merieux.

[harry s truman] 18/3/2024 11:57

5.5x sales isn't a model Brucie, it's just a historic sector average of what a CDMO company should trade on - so a very rough guide. There is a progressively more accurate way to gauge, involving EV and such, but when OXB's value is so low, does that even matter? No, it's just a comparison.

In a similar way using a sector average for CDMO is only very approximate as a lot of people in CDMO are making generic otc medicines which there is only money in on huge volumes. CGT is far more lucrative and so the rating can (with some justification be double the average) - but you don't see me do that do you?.

It's like the breakeven figure for OXB, or the amount they need to sell to cover their costs, and OXB have told you previously everything you need to know to have a good stab at working that out.

You know that c£90m last year wasn't enough, but you can't look at the loss because some of that was for other stuff besides operations (capex on expansion in the US, £10m on redundancies and such), but you can remember that OXB said that on 130% of c£90m OXB would be broadly breakeven this year.

Since then the ball has rolled on, but ABL was said to be neutral in its pre-OXB life and our growth is now up another 5%.

In the simplest terms though, last September OXB told you that c£117m (c£90m x 1.3) would be broadly breakeven this year and a fortnight ago they told you that this year is now projected to be a FY2024 revenue range of £126 million to £134 million.

They really have showered us with detailed news of late, which is there for anyone who wants to look.

Yes there will be costs to bring ABL into the OXB family, but IM are paying those - and are apparently very happy to do so.

If, (if, if, if) the margin on c£117m in sales covers OXB's wage bill, leases, interest payments, utility charges and everything else this year, then what they sell above that is basically margin to the bottom line less raw material costs, consumables, packing, logistics and such - isn't it?

But what I have written there isn't new or news - we have known an evolving story since September that they are selling an unprecedented amount of work. At each update that has got better.

I might have to wait until after the interims and I might not, but personally I'm convinced that barring some exceptional negative event, OXB will be back in the FTSE250 this year.

I think though that we've all set our stalls out now though, and that nothing we type here changes anything anyway - so perhaps the best policy is to wait for news now, whether that be on the 29th of April or before.

[dominiccummings] 18/3/2024 11:40

Disappointing that the UK share markets now suffer from too little liquidity, too little interest in equities, too much government greed for tax.

[brucie5] 18/3/2024 11:23

However, rising revenues within a Cdmo model with multiple supportive partners, including serum institute, and a multinational capacity, across EU, US and UK clearly implies a serious industry player. This is no story stock and in absence of proper value being accorded will inevitably be bought out.

[brucie5] 18/3/2024 11:18

Thanks both. As stated, I have a holding here so I really do appreciate analysis that is far more fundamental than my own, which is more meta than actual! Iow, reliant on the digests of others, with one careful eye on the charts. But balance sheet strength is a fairly objective reality, albeit of limited duration and ultimately relational to break even, so that's what we need to tease out and what the market must be doubting, if Harry's 5.5 revenue model is valid.

[redwing1] 18/3/2024 10:56

Hi Brucie5 - thanks for your kind words. I don't really have more to say than the seven points in my earlier post. I think Harry has a perfectly reasonable bull case for the stock and it was because I had become intrigued by the story that I looked up this thread in the first place. However, with quite a number of years under my belt as a professional investor I just wanted to temper Harry's enthusiasm a little.

Stories like this are often very compelling at the start, but become much trickier in the execution phase (take a look at SRT Marine as a classic example of investors waiting years for revenue delivery!). There are also several 'covid plays' that have had to re-think their business model and where the jury is still out (EKF Diagnostics and Avacta spring to mind), so caution is required. However, it is a promising sign that management see a clear path to 35% revenue growth, so who knows. Time will tell.

[takeiteasy] 18/3/2024 10:21

everything imvho is linked to 10 year treasury yields and if they keep going up most of biotech i suspect stalls or worst case retreats and all recent moves have been up in the flight to quality etcdyor and no advice of course

[takeiteasy] 18/3/2024 10:17

on this thread - i am but a layman here :)

[brucie5] 18/3/2024 10:10

On subject of OXB's March to profit I actually think it's great to have Redwing's counternarrative; I suspect I'm not alone in being unduly influenced by Harry's impressive command of the subject, which by his own confession has caused him to hold onto shares that should on any other rationale have been sold at multiples higher. Of course, if Oxb comes good as he believes, his extreme patience will have been rewarded, though it would be interesting to know at what average price.
For time being it would be great if Redwing could be encouraged to flesh out his more pessimistic view, which seems to revolve around time to BE, cash burn on the ever dwindling pile, and over optimistic assumptions about margins and sales.
Either the market is failing to see the bleeding obvious, or we are. And in absence of any other reward to shareholders, such as a dividend, there is comes a point where these amount to the same thing.

[brucie5] 18/3/2024 10:01

Well regarding these reported sales I'm none the wiser. But I'm still drawn to the idea that we are indeed at the bottom of the downtrend and that is at least a theory that can be empirically proven in time.
;

[dominiccummings] 18/3/2024 09:09

Which experts? ;-)

[takeiteasy] 18/3/2024 08:37

it seems the experts were right over the recent dealings here then :)

[harry s truman] 17/3/2024 14:04

To be fair Dom, I have previously posted pretty much everything redwing writes there (bar the NVidia comparison), so I'm not going to argue.

Obviously I'm of a similar mind to you though. At capacity in Oxford last year for process development following the work drought of post-covid is a pretty marvellous place to be.

On top of that we know the percentage which moves forward to the next phase is pretty much tied to us if they use our IP, which is continuing joy. A few of those actually approved and the commercial production is very long term work.

We need to wait.

We all know the forecasts and most of us know the history too. End of 2017 we had 6 partners. It's the beginning of 2024 and we don't yet know the number, but we do know we had 24 partners mid Sept last year and we had won another £21m worth of work between the interims and the end of the year. How much more since then?

Circumstantial evidence that they are monstering it is mounting.

[dominiccummings] 17/3/2024 13:11

OR, they actually perform an increase of much more t/o in 2024, and are significantly profitable. Feasible that they didn't want to provide estimates of contracted business that they felt the market would not believe?

[redwing1] 17/3/2024 11:50

Ah Harry - "To sleep, per chance to dream". Naturally it would be great if the above came to pass and maybe it will. Those share price targets of £6+ should easily be achievable if it does.

The trouble is that whilst these are the numbers that the company is suggesting, there is much to do from here. Lest we forget:
1. This year the company will produce a loss of c£50m.
2. For 2024 the target is only EBITDA breakeven on revenues expected to be at least 35% higher.
3. The 20% EBITDA margin target for two further years out is presumably predicated on maintaining that 35% revenue growth. Otherwise the cost base is still too high and there will be further cash burn.
4. Management has already failed to achieve forecasts in 2023 (albeit for plausible reasons).
5. Very few stocks grow at anywhere near 35%. The Nvidia's of this world don't grow on trees and one broker (Numis?) has already questioned whether OXB can do it.
6. OXB has only just pivoted to becoming a CDMO. We don't know if they can do it profitably yet.
7. The historic gene/cell research business may well only be 'upside' in terms of newsflow going forward because management is excluding it from core figures, but it will still consume cash if it has no success.

Let's hope management succeeds, but this is not a done deal. Good luck to holders.