Oxford Biomedica Share Discussion Threads

[dominiccummings] 26/3/2024 13:50

We won't move until the seller is finished.

[harry s truman] 26/3/2024 13:37

I appreciate the many past arguments made here about smallcap shares being all but invisible to most big pro-investors, then of course there's the "will they / won't they" of their recent forecasts when to many people OXB is simply a covid stock post covid.

Anyone with a bit of sense knows that they can't be a 25 year old covid vaccine stock, but unfortunately once you get a public label for anything in life then it's tough to shake it off (which is where, ironically, some malaria vaccine work would really help - as even though it's not CGT, it attaches OXB's name to something big where everybody has heard of the name and it isn't covid). Time will tell with that one.

As for £2, well, yes - it's a tiny step in the right direction, but when you consider that a smaller OXB without record sales or ABL, and with a much more cautious outlook was steady between £4 & £5 last year - right up until the beginning of August, then £2 for a significantly better outlook less than a year later?

[takeiteasy] 26/3/2024 12:38

If we can get above 200p we might get some momentum investor interest..until then stuck in the mud. dyor etc

[harry s truman] 25/3/2024 19:58

With the usual health warning here that I'm a long term shareholder and therefore inevitably biased, I would congratulate you on what seems to me to be excellent timing.

Currently this appears to me to be the end of a perfect storm of what has battered OXB's share price very badly (AZ covid vaccine ending early / shortfall of other work delayed by pandemic / post covid economy / interest rates / loss of a big customer in Homology).

The upside of course is that the new work is now back in quantity, a lot of our legacy / existing work has progressed to the more lucrative later stages / we now offer all vectors in 3 regions - and - it seems like those "permanently high" interest rates are on their way back down again, which reverses the stocks to bonds argument.

I'm not sure what it is which will tip the balance and send us back the other way, but our current rating is irrational.

Might be the results presentation 5 weeks today.
Might be partner news regarding a bigger name than us which catches the attention.
Might be a new venture.

[reddirish] 25/3/2024 14:57

Yes, it is that management revenue projection, along with the current excess of demand over supply capacity in the market, that has brought me in. This is as I understand it an experienced and reputable new management team, that is going to set expectations that they have reasonable confidence in beating. Delivery of close to 2026 revenues of £250m - for which OXB already has the internal capacity- would merit a very significant re-rating, especially if profitabilty returns before the remaining cash buffer is exhausted. Not everyone of course shares this view, but that is why we are investors. Some we get right, some we get wrong; if we cannot have conviction around our judgements we might as well just buy passive ETF's . (My other conviction investment is BUR.)

[harry s truman] 25/3/2024 14:29

I'm sure you will have done this already, but they say that better than 35% for the next 3 years is expected.

Rough figures based upon 2023 c£90m

2024 better than £121.5m (they have already said £126m to £134m)
2025 better than 2024 x 1.35
2026 better than 2025 x 1.35

Our best ever revenue year was £142.8m (peak covid vaccine manufacture). That is smashed next year.

On top of this which we know, we have the mystery of the unknown...

[reddirish] 25/3/2024 13:32

And at this level I have been an active buyer too, now also at a 'conviction' level across my SIPP and two ISA's. Not overly concerned if there is further drift down, for as is being debated here, the share price simply reflects the balance between selling and buying over the short term, and we private investors will not influence that very much. It's the medium term performance (next three years) that now interests me!

[harry s truman] 25/3/2024 13:01

A lot of this I just don't know Brucie.

To the best of my knowledge only 1 of the 9 covering brokers has put a note out since the interims. The rest have simply reiterated whatever their target was and said that they will wait and see.

If they aren't waiting for the FY results then what are they waiting for?

As interested amateurs (which I think we mostly are) does it seem logical that a covering broker with a hold rating and x target following the 2022 results (and loss forecast for 2023) would keep the same rating and target following the 2023 results with a forecast for '24 of something like £30m better revenue and no loss on operations?

I don't think so either, but we have been surprised before.

[brucie5] 25/3/2024 12:30

Thanks Boadicea- that's what I suspected. Good to see you strongly on board. In the absence of a bid out of the blue, but with materialisation of the sort of recovery anticipated by RBS, the chart would of course turn quite visibly and there will be potential for many to come on board. I think there are two time frames to buy this kind of share - at the bottom, or at the first sign of clear B/O, which is where such situations generally comes to the notice of a Michael Taylor / equivalent. The first is riskier, since always carries the special danger of further breakdown; though I think we're comfortably on the bottom right now, as the shorts have apparently closed. For contrast, see charts of CWR and ONT, with very analogous situations wrt cash runaways to B/E. I hold neither but follow both.
As to OXB, and as Harry says, end of April may give the kind of fillip needed.
One hopes.
;)

[brucie5] 25/3/2024 11:15

Harry S Truman25 Mar '24 - 11:05 - 7410 of 7410
0 0

As for the charts, not really my thing...
-----------------------------------------
No further comment necessary.
;)

Re. Boadicea, that's good to know; but peeps move in and out, to judge from my own experience.

[harry s truman] 25/3/2024 11:05

Boadicea has been here a long time Bruice.

As for the charts, not really my thing...

[brucie5] 25/3/2024 10:53

Boadicea, I'm delighted to see on board. May I ask when you decided to take the plunge; or have you had an earlier position?
Re PI interest, Harry, I'm not saying it moves the dial per se: but it can be a useful indicator that the dial is moving. When was the time to reenter MKS or RR..? How might you have known..? They were flagged up by shrewdies who are often guided by charts as much as fundamentals.
IMHO, obviously.

[harry s truman] 25/3/2024 10:36

Small PIs are a bit irrelevant imho Brucie.

How many small shareholders does it take to counter Swedbank selling 831,000 or UBS selling 690,000 or Artisan selling 423,000 to name just 3 recent sellers?

They aren't selling because of cashburn worries, they are selling because of fund holding rules or because of a need to meet redemptions or to cover something elsewhere.

I'm assuming that this year there will be a lot of insider buying following the FY results. It's not clear whether IM are an insider or not (they are certainly a very supportive shareholder). If they are then like NN and all the others they can't trade on insider knowledge and definitely can't in the runup to the results. They can however normally trade in the little "open period" following the results. It will be interesting to watch that space.

Most relevant for us of course is the FY forecast for 2024, because by the 29th of April then OXB will have almost everything booked in which they will be able to complete and invoice for this year.

So Stuart will know something like 80% of the full year figure with some confidence at the FY presentation (which of course is 6 months before the interims).

He will know what OXB's operating costs are with some high degree of accuracy and any capex on something additional is at their discretion.

It will definitely be worth listening to.

On Wednesday you saw how close we are (relative term I appreciate) to 3 more commercial supply deals. One of those (Novartis) has kept the company going long term. Another (AZ) was a huge boost on a short term / large scale contract. 3 more?

3 more long term (assuming all FDA approved) is an extremely nice place to be.

Then we have the question of our large scale capability (the three 1,000 litre bioreactors). Finding something to do with those will be somewhere near the top of Frank's to do list, but what if we are correct with the malaria assumptions?

You only need to wait 5 weeks and a lot of these questions will (to some extent) be answered. It's not a long time to wait.

[boadicea] 25/3/2024 10:26

DC - I think the problem may be that we have too many "last hope holders" that have either now given up hope or who may go bust if they don't liquidate something! The follow-up problem is that more holders will choose OXB to liquidate if and when the price rises, making for a slow recovery unless the big boys start buying in. Visionaries may see the opportunity but the bean-counters who hold the strings don't yet see many actual beans.
Personally, I am finding the company ticks all the right boxes.
It is now a significantly different beast compared to five years ago and some may want out because of that. In fact it would appear to be have become less speculative now and potentially capable of long term stable growth.
The covid event boom was a flash in the pan due to the demand profile not because of bioreactor problems.
It does not need me to enthuse over the expertise and the opportunities avaialble which have been researched and explained so well by the President. It could become a premier go-to choice for those requiring CDMO bioreactor capacity with ample, well-chosen sites and availablity.
I am just pleased to be in a position to back an odds-on success (my view, of course) before it gets acknowledged big time by the institutions or snapped up by PE or a competitor.

[harry s truman] 25/3/2024 10:12

My only explanation Dom (which is a guess) is that we still have a seller who is dripping out a large number of shares.

On days when we have a bit of excitement (like the RNS last Wednesday) then we can see a little rally, but as that "moment" passes from "current" then the selling takes over again, but they are apparently not prepared to sell below a certain level, so it's very drawn out.

Could also be more than one seller, though I doubt that anybody is selling for fundamental reasons as there aren't any - as confirmed by none of the 9 covering brokers having a sell recommendation.

If there is anything in the scenario as outlined, then 2 possibilities for an upside - 1) the selling comes to a natural conclusion, or 2) OXB do something to render it irrelevant.

Neither of those and we are just going to bumble on for a while until whoever this is has sold their shares.

[brucie5] 25/3/2024 10:06

The fear is overwhelmingly around cashburn, to judge from pis that I have corresponded with about this. Though the moment the chart turns positive it will be picked up as a momentum idea by likes of Michael Taylor and Zack's Cafe. So things can change quickly and it's hardest at the bottom.

[dominiccummings] 25/3/2024 08:39

But the price opens 4.88% down? That is a drop you expect with a last hope small cap that may go bust...

[harry s truman] 25/3/2024 00:04

I'm not sure what I did gh, but thank you anyway.

I've written it a lot, but my OXB target is simply back in the FT250 this year.

I honestly believe that OXB is a genuine FT250 stock which just happens to have a smallcap rating at the moment.

Yes I'm ever hopeful, but I keep pondering the timing of the results and what I expect to be a presentation to wake the market up, then wondering what effect that might have between the 29th of April and the end of May (next index reshuffle review).

They are adding new work in this booming CGT market at quite a rate.

We have a number of partners now who have been with us long enough to be at the point of registration trials (we were told about 3 on Wednesday) and that number will continue to grow.

Then there are the wildcards.

[gutterhead] 24/3/2024 23:12

Great work Harry.

[dominiccummings] 24/3/2024 22:00

It'll come one way or the other Mr. President sir. Just a matter of time.

[harry s truman] 24/3/2024 21:57

It's an interesting question Dom, and one we have no influence on at all.

I realise you have seen me mention this many times before when this subject comes up, but doesn't it all really hinge upon what IM, NN, Vulpes and the likes of others like Mr Shah want to do? If they hold a third of the shares firm then I don't think OXB is for sale (or it's so difficult / expensive to do (the hard way) that it would put off any opportunistic / cheap bid).

I only mention that multiple there (from memory and it's a while ago) as an illustration of how cheaply OXB is currently trading (£193m market cap against sales in the range of £126 million to £134 million this year - a multiple of 1.5x sales?).

OXB are currently banking work here which seems to be completely under the radar for the wider market. At some point and with some trigger (insert guess here) that gets resolved.

[dominiccummings] 24/3/2024 20:46

The question is, will the moribund UK market see the opportunity and reward the share price before the potential predators buy us as a cheap 'add-on'?

[harry s truman] 24/3/2024 19:28

All good points Phil and, as you note, there is mounting circumstantial evidence of right place / right time and (in OXB's case) right capacity / capability now.

When Roch did the Homology deal (very Marmite I know) OXB had already decided that they needed to be in AAV - it was just a case of how and where to get a good clinical stage AAV. We in effect paid $180m for 80% and will likely have to stump up something between £20m and £30m next year for the remainder.

Charles River paid $300m for Vigene Biosciences with a very similar rationale - to get their vector tech. That would have been 9x their sales I think.

If OXB hit £134m this year then that would be £12 per share on the same buyout multiple wouldn't it?

5 weeks tomorrow is the FY results, which the way things have been going wouldn't surprise me if it included a flypast. Maybe that is our next news but every chance of something before.

[philh75] 24/3/2024 18:33

Interestingly, this link shows that in back in 22, Lonza needing to reorient its business. Example of bigger outfits realising the market was shifting to CGT. You can’t read the responses to the questions but the question text is quite revealing.



(quote)
You noted that Lonza was not very competitive in early-phase C&GT projects. How significant an issue is that for the future growth of the business? My understanding is there are high switching costs for customers, so unless something goes terribly wrong, they typically remain with their original CDMO [contract development and manufacturing organisation] partner of choice as long as there is capacity and the lead times are manageable. Is that the case? If so, what does it mean for the longer-term growth and visibility of Lonza’s C&GT CDMO revenue if it cannot capture the early-stage customers today that represent the late-stage or commercial customers and growth drivers of tomorrow?

And Charles River, seeing CGT as likely growth area



But beyond these operational tweaks, it will be burgeoning cell and gene therapy (CGT) sector that will drive the sector going forward, he explained, with the majority of candidates still in the preclinical phase.

And Catalent, now owned by Novo Holdings of course.



All external confirmation that CGT is booming, but while you may see this as competition against OXB hotting up, it’s seems like being a specialised CGT CDMO makes them more agile, which looks like something Lonza was struggling with.