Oxford Biomedica Share Discussion Threads

[harry s truman] 11/4/2024 13:29

Today's volume was extremely unusual though PB, with only 4,000 shares traded by early afternoon (it has picked up now to 30k or something), but of late a normal day for OXB is something around 100k in the morning and the same again by close. That suggests to me that our forced seller is finished (for now) and that everybody else is sat on their hands waiting for the results.

Should be an interesting end to the month. Not the loss for 2023 and such (which we all of course know about already) but the forecast for 2024 and 2025.

By the nature of our work (how long it takes and end invoiced) even though the order book value increases all of the time, OXB will have a very good idea by the end of month 4 of the amount of work they will be able to complete and invoice for this year.

Yes exceptional things could happen both ways, but I'm guessing that Stuart will give a spread of figures for 2024 with something like 85% confidence and that those figures will be nothing like the broker consensus. What will happen then?

[pharmaboy3] 11/4/2024 13:04

Some traders / market makers leave silly buy/ sell prices on the books overnight. In the hope that some clown takes the bait.As day trading begins, then sensible folk ask/ put sensible prices.The gap narrows.

[steeplejack] 11/4/2024 10:56

The equity spread reflects the stocks liquidity.OXB is a thinly traded stock hence the relatively wide nominal spread .The ‘touch’ might narrow after an hour or two of trading as the MMs shuffle those spreads.SEAQ trading predominated when i was in the markets but the SETS system can only do so much.In the absence of a relatively liquid market (where there are active buyers and sellers who can be matched up)marketmakers will have to step in to facilitate trades especially those that exceed normal market size NMS.Fund managers are necessarily nervous of taking large positions in illiquid stocks unless they are running a specialist fund,they can suffer the ‘Hotel Calfornia’ conundrum ie you can check in anytime you want but you can never leave.Traders in the market will generally avail themselves of level 2 access so they can get a detailed view of what is going on behind the scenes,something close to a marketmakers birds eye view.

PS OXB must wonder why it pays handsome annual fees to be listed on the LSE when it attracts such little day to day investor interest and thats despite having heavyweights like Novo and entities like IMT as large shareholders.These sort of experiences are prompting the exodus to foreign listings and going private.

[harry s truman] 11/4/2024 10:26

I know a little bit about OXB, but next to nothing about how the market works.

I do know that OXB is a main market SETS stock and so supposedly not at the whim of the people who make the markets on less liquid / non-main market stocks. In other words it should just be what it is - i.e. no shenanigans.

A little used feature on the OXB website is the almost hidden link where you can see the LSE order book.

So, go to and above the chart click "today" rather than "history" which is the default. Once you click that then right at the bottom of the page is the order book depth which changes all the time.

OXB pay money for us to be able to see that, but I've honestly never found a use for knowing that say (as I type this) there's one order with 6,364 on the bid at 200p.

Go to the book viewer for the European exchanges

Type OXB in the box there, and you can toggle through CXE, DXE and so on seeing the same thing.

I realise this doesn't answer your question, but as I mentioned the other day - we are in this odd pre-results period now where we are all expecting big things on the 29th, but something may or may not happen before. That will be true for people who do this for a living too - it's an unclear / uncertain period.

[reddirish] 11/4/2024 09:59

I've puzzled the same question, with no answer...

[wooster4] 11/4/2024 08:19

would someone with more knowledge than me explain why the market always opens the price each day with a massive spread? Seems to take a couple of hours for that to narrow.

[harry s truman] 10/4/2024 16:22

It's also the season for filling ISAs.

[brucie5] 10/4/2024 16:20

Hope springs eternal. ;)
But if you are of a bullish persuasion and given to tea leaves take a look at the 200 WMA. This is more of an early signal than the SMA, suggesting breakout at about 2.15 level. In contrast the SMA gives about 2.60 as BO.
Beyond these points the chart shows a huge potential gap up to about £4.50; so I guess some may wish to be under starters orders before the April update.
Though of course that doesn't mean it can only go one way as recent history has shown. But we have been led to expect good news, I think; and a lot of bad news appears to be in the price.
I hold a full position.

[boadicea] 10/4/2024 15:41

So what just happened in the last 15 minutes to put the share price up a couple of pence with no reported trade.
A large buy perhaps with delayed reporting or a whiff of leak?
Will it last?

Ed: Now (15:48) up 4.5p Trying not to get over-excited!

[harry s truman] 09/4/2024 13:45

I think we are in limbo now Dom (or phoney war or whatever you want to call it) in this little period before the results presentation - and why should the pattern change?

OK, I have hopes that the long notice was so that something can happen before the presentation, but if it doesn't then nobody covering OXB is going to write a note based upon a guess, when OXB will give an hour long presentation with the full kitchen sink at the end of this month.

[dominiccummings] 09/4/2024 13:11

Same old then... up a bit, seller, down again.

[harry s truman] 08/4/2024 21:46

Johnson & Johnson’s Carvykti is the one mentioned by Plutonian the other day.

We already have that undisclosed deal with BMS.

Possibilities?

[marcusl2] 08/4/2024 21:36

FDA approves CAR-T therapies from J&J, Bristol Myers for earlier myeloma use

[harry s truman] 08/4/2024 16:30

I'm not going to pull you up for kicking the tyres. I'm sure a lot of us wish now that we had kicked the tyres when OXB told us (peak covid) that the AZ vaccine was 87% of our bioprocessing work (aka covid restrictions had the rest of our work at 13%). How much money would scepticism have saved us there over the company line that vaccine work should carry us until our normal work came back?

Hindsight aside though, it is what it is.

I would assume (unless they say otherwise) that the JPM presentation about spin-out was superseded by the interims statement "There will be no further spend on the product or on our own internal therapeutics portfolio post-H2 2023. We've already said that. We can confirm that today. That's already done.".

So you're correct that they said that they would spin-out and it was also Ravi's job to make that happen. The spinout never happened and Ravi no longer works for OXB. I suspect it's a very difficult market to sell trial drugs into (as Homology are likely to conclude regarding their pipeline very shortly). If the market booms and money comes back then I'm sure our pipeline will remain for sale, but to my mind the only really saleable trial drug is the one they already have clinical data on for PD. At the moment I don't think the money is there and spinning out anything this year would really surprise me.

If we are thinking about the same thing here (re payments) it relates to OXB's previous model of hybrid upfront, milestone / stage payments and sometimes even an equity stake. Nowadays our work is end weighted - simply paid for on completion, which is what I think Stuart meant and is more normal for CDMO.

Stage payments and such are great if the drug is a success and hits the milestones, but these days a simpler full payment on completion is better for all I think, though we still have lots of milestones attached to legacy contracts - which came as part of the deal and may or may not happen one day.

I think it's very difficult to pin that on a style of CEO.

JD was an accountant by trade who became head of a biotech drug discovery company which branched out into doing work for others. JD was the one who I think favoured the equity stake route (which is how we got our Orchard shares).

But if the company isn't an eventual success? Maybe a bigger / simpler one off payment is better on average - unless you are really good at picking winning partners?

Roch is a veterinary doctor who ran a huge pharmaceutical company. So a medic vs an accountant and a pharmaceutical company vs a drug discovery company. I think he only ever wanted to be interim CEO anyway - else he would still be our CEO.

Frank is a pharmacist, so again a scientist / medic who ran a successful CDMO company and knows how to do that.

My only point here is not better or worse for any of them, just that they have been different people from different backgrounds in the same role.

Stuart said some words when Frank first joined, to the effect that whilst the vaccine earnings had been a revelation to almost everyone from the old guard at OXB, it was a story Frank already knew well - and that is our direction / focus now (a very profitable CDMO business).

Think about it and we've moved from 28 programmes in September 2022 to 41 active client programmes in September 2023. How many will it be on the 29th of April 2024?

[cousinit] 08/4/2024 14:57

I guess there's an element here in terms of personality. I'm trying to kick the tyres in a bit of detail as there has been some overconfidence previously from the company. I think that Frank is trying to ensure that it's a culture of only promise what you can deliver. The speed bump of moving to that last year was painful and clearly miffed a number of analysts.

I may be wrong, but I recall Stuart saying the the internal pipeline *would* be spun out last year. That meant quite a painful volte face.

I am more comfortable on the cash position as the analyst forecasts seem unduly pessimistic in terms of cash burn.

Just thinking on AAV sales, I think I also recall Stuart saying how flexible they were being in terms of remuneration for early stage work (JPM last year?) It feels like since Frank arrived he's given Seb a mandate of holding the line in that quality and expertise comes at a price. (Does it suggest that things were a bit loose with Roch and Frank has really tried to get a tight grip?)

The bigger picture does seem to point to a number of potential game changers. I'm more content now that the foundationa (eg cash) are reasonably robust.

A few US buyers out today by the look of it.

[harry s truman] 08/4/2024 14:06

I realise I'm talking you off specifics here, but I think it's important not to get tied up on one particular issue.

We paid a lot of money to get a clinical stage AAV vector which came with baggage but that was the deal.

We then got 2 facilities in France (which didn't have any vectors of their own but wanted to sell / manufacture ours) for an absolute bargain.

There's some natural justice there where it sort of averages out (or better) and I'm sure you know what I mean.

A scenario is building here where it seems to be working out much better than even I (an obvious long term bull) would previously have dared to hope.

Every release from OXB the story gets better. The number of customers, the growth, all the planets seem to be lining up.

I'm very much focussed now on the presentation of the 29th, with the additional hope that they might be trying to squeeze in something exciting before it.

[cousinit] 08/4/2024 12:43

Agree Harry.

I think the 5.5x multiplier for Solutions is on the whole and 20% of that buys the 20% remaining stake.

It does seem odd that they have reported so little other revenue for Solutions ex Homology, so your scepticism at the numbers Homology have put out seems justified. Plausibility can often trump auditor review! (Might be Homology have reported 'purchase payments' and Solutions booked work in progress at the end of 2022, some of which was only paid in 2023?)

As you say, Q32 in the driving seat now and the Solutions stake is in the CVR so I doubt there will be any further reporting other than from OXB itself.

[harry s truman] 08/4/2024 00:38

Cousin,

No thanks required and (as admitted) some of this stuff I just don't know.

We talked about it a lot on here at the time (of the deal) but without seeing the contract we don't know the detail (which means we won't ever know).

I find it hard to believe that we signed up to a deal where we pay 5.5x the whole company's sales to buy 20%. Isn't that equivalent to paying a 27.5x multiple on the final fraction? (which seems a lot, but maybe it is correct).

Before we entered the news blackout phase and that strange AGM answer, then on top of the Homology work we had notifications of 4 new contracts for early stage AAV in 2022 and 3 more post period in 2023 before they stopped telling us. Then of course there is the one mentioned very recently, but given sales last year from Seb's team I find it tough to imagine that no more AAV work was sold for nearly a year.

Guesstimate figures here, but if process development averages at $3m per customer and takes about a year, then on the 7 process development AAV contracts they told us about (early stage) that's something like $20m worth of work in the building alone there?

5.5x the last 12 months and that would be $110m in this example and yet at the interims OXB had a figure of £20m for the put option at that time. Massively different numbers there unless the multiple is 5.5x 20% of the sales and then it would seem much more comparable. Then there are the figures you quote from Homology which are different again.

There are some big costs at Boston (lease, utilities, investment in equipment, etc.) and it seems we also basically paid off a full shadow board there which won't have been cheap, but regardless of what actually happened (we will never know), I think the point to dwell on is that OXB now have the AAV they wanted (inAAVate) for the much bigger AAV market.

I'm optimistic that inAAVate will do well and that it's simply a matter of time now for process development to work through to the later (more lucrative) stages. Meanwhile we know that TetraVecta (our lentivector) is selling so well that we are at capacity in Oxford and work is being moved to Boston (where I'm sure the money helps a lot - win / win).

Honest opinion here is that I think that is the point to dwell on, rather than trying to make sense of numbers when we don't know the full contract story.

If Homology merging into Q32 counts as a change of owner (and I think it does) then I'd expect OXB to buy out that last 20% early as per their right, but that's just me and it may make more sense to OXB for them to keep hold of the cash now and pay more later.

This theme probably seems a bit rich coming from me, but I wouldn't get too caught up with what Homology do as they wind up their company and exit gene therapy. Very soon (maybe even now) their side of the building will be empty and the cash will be in Q32's books. Whatever we pay for the put option will be split across the CVRs given to Homology's old shareholders and then that's the final nail in the biotech company previously known as Homology.

I think for us the results in 4 weeks is everything.

This time last year we were mid £4 per share.
Under no bad news we were sold down to under £2.
All the good news last year (and there was a lot of good news) made no difference.

On the 29th, OXB have their biggest publicity day of the year (2023 FY results presentation of course) which is really a presentation on 2024 and a peek at 2025 as 2023 is already history.

The wider market isn't expecting breakeven this year on a massively expanded company and record all time sales next year. It will be interesting to see the response.

I mentioned this at the time, but they also gave us 2 months notice of these results when normally it's 2 or 3 weeks. Now that may just be a Frank thing, but it might also be that they want to get something else in first as a springboard.

Hope? Well, yes. But it was a long notice. We have talked about all the possibilities we have guessed at, but it could just as easily be something new too.

I want to make the tsunami analogy here, and I don't think it's hyperbole to say, that the tide went out for us when covid restrictions battered our customers, the AZ vaccine ended a year before the competition and then we lost the Homology work, but the tide is coming back in now and it's going to be an awful lot of work.

We've had 2 pretty awful years but it gets much better from now on.

[cousinit] 07/4/2024 21:27

Thanks Harry.

Re Serum, the terminology used seemed to have two elements which was what made me wonder when I saw the CEPI capacity reservation and some initial funding being awarded. As ever, there is some definite reading of the tea leaves required which is not always reliable, hence the value of discussion here!

On cash - I spent far too much time digging around when the answer was in plain sight in the 5/3 RNS! On your points re stale/unrevised broker forecasts, the blended forecasts that I can see show 31/12/23 cash still being estimated as £86m gross/£46m net which is what drove me to investigate, given how severe the implied cash burn was to get to that.

Just on Homology, I do have a different interpretation. The Homology financial statements show their equity interest in Solutions, but the supporting notes give some of the gross Solutions information. That's what I've referenced. Just as an aside in readiness for the OXB results, the Solutions loss reported by Homology for 2023 was $167.1m, but that included an impairment of $119.1m (so £134m/£95m if OXB use a similar GAAP basis in their results).

On the put option, does Homology derived revenue count in the 5.5x multiplier? I believed that it did. If so, would OXB swoop later this year when most of the Homology revenue for 2023 has fallen out of the 'last 12 months' reference period? The revenue was $14.6m in H2 23, but I don't see a split of that between Q3 and Q4.

[harry s truman] 07/4/2024 14:42

Part 3.

The Homology situation is very opaque.

The good news (as I believe our house broker noted) is that OXB could take the loss of a customer worth c20m per year in revenue and just eat it / shrug it off and still forecast rough breakeven for the whole company this year. Not many companies our size could do that.

I also think it's important when looking at Homology's figures regarding specific figures of what Solutions is worth in their accounts, to remember they are talking about value of the 20% they own. The full values would have no meaning.

From the interim report - "At 30 June 2023 the put option liability was adjusted to £20.3 million".

So 9 months later who knows.

From the original agreement - "The purchase price payable by Oxford Biomedica US or Oxford Biomedica Solutions on exercise of the Call Option or the Put Option will be equal to the amount Homology would be entitled to receive upon a liquidation of Oxford Biomedica Solutions assuming all of the assets of Oxford Biomedica Solutions’ AAV Manufacturing and Innovation Business are sold for a purchase price based on a valuation equivalent to a multiple of 5.5 times the revenue of Oxford Biomedica Solutions over the twelve months prior to the date of exercise. In addition, the maximum purchase price payable by Oxford Biomedica US or Oxford Biomedica Solutions on exercise of the Call Option or the Put Option will be capped at US$74.1 million (£55.4 million). Additionally, upon a change of control of Homology, Oxford Biomedica US has the right to purchase all (but not less than all) of Homology’s interests in Oxford".

So, there has been a change in the control of Homology - it will soon be part of Q32.

We know what the option was worth at the end of June.

Surely the simplest option here is for OXB to bite the bullet early and make Solutions 100% ours?

If not then there will be lawyers involved as soon as the US lentivector hub starts bringing the money in and Homology's old shareholders start trying to say that it actually counts towards AAV revenue for their CVRs (which it doesn't).

Meanwhile of course it's only weeks since we saw this - "Furthermore, the Company has signed a new agreement with a US-based client specialising in cardiac gene therapy for the tech transfer, optimisation and manufacture of an adeno-associated virus-based process (AAV).".

Last thing we want to do (imho) is wait until we owe Homology's old shareholders a multiple of that when the fees start coming in.

[harry s truman] 07/4/2024 14:23

Part 2.

Stuart said our cash runway (following the end of our biotech business spending) is pretty much infinite.

The cash position at 31 December 2023 was £103.7 million.

From that we owe a $50m loan and the final payment to Homology.

The loan comes with a caveat of a maintained minimum cash balance and I think the Serum cash covers that quite nicely until the loan is repaid at the end of its term and OXB then spend the Serum cash on the final 3 OxBox suites and what goes into them.

OXB shouldn't be spending cash on operations now. Whether they breakeven (or not / or better) for 2024 depends very much on what they spend (say) on capex kitting out Boston as a Homology hub.

They shouldn't need any more cash.

[harry s truman] 07/4/2024 14:13

Cousin,

You cover a lot of points there and some of it I just don't know for sure.

Brief as I can replies here:-

Serum. I believe that is worded the way it is because of what we have now vs what we will have - it's as simple as that. We don't currently have any 2,000 litre bioreactors. One reason for that is almost certainly because we don't have a use for them at present, the other being that our existing production suites are sized for smaller (normal size for CGT) bioreactors.

Some time ago the (unbuilt) 4 suites of the second phase of OxBox became 3 bigger suites and the explanation was bigger to give the option to use 2,000 litre bioreactors if the need arose.

Off at a tangent here, these things are on wheels can can be moved in or out to reconfigure a room or for deep cleaning of the suite or anything similar. We don't currently have a reason to produce vector on that scale for a couple of reasons - 1) is that there is no clinical need for that amount and 2) is that it would be the loss of a fortune if a batch was lost. In the near future (years) there is the possible requirement for such quantities of lentivector for (say) inhalation for CF patients, or liver / peritoneum / peritoneal cavity diseases where the area would be flooded with lentivector to treat, but no need / demand right now.

So no need (for that quantity for our CGT CDMO business) but Serum do have a need. Serum are the world's biggest vaccine company so it's almost certainly for a current unmet need vaccine. The odds are it's Malaria.

Our 3 larger 2,000 litre bioreactor capable suites won't be built for a long time yet and the bioreactors will be long lead time too. What we do have is 3 spare 1,000 litre bioreactors left over from covid vaccine production for AZ and suites in OxBox which they were previously used in. Remember they aren't going to give us any work which they could do in their huge Indian facilities cheaper. WHO rules for malaria vaccine states not all manufactured in one territory.

Long way of explaining there why I think Serum's 10 year deal is for the 1,000 litre which we have now and then the 2,000 litre when completed / available (i.e. I think it's the same deal not 2 different products).

[cousinit] 07/4/2024 13:23

We know the forecast was for OXB Group revenues of £90m for 2023. They booked £43.1m for H1, so is slightly 2nd half weighted.

Looking at Solutions, the revenues were $30.7m for 2023, and these were slightly 1st half weighted as $16.1m vs $14.6m (£12.9m vs £11.7m).

So, it shows some acceleration ex Homology in 2023 and really underlines the growth they are achieving to overall hit nearly 50% uplift for 2024 whilst losing a client generating nearly 30% of overall revenue in the year before! I guess this may underline some of the analyst scepticism (on top of delivering the cost savings.)

Just on this point, and circulating it back to cash, it looks like Solutions only generated $1m of revenue in 2023 that wasn't the minimum contracted by Homology. That suggests that the call option in March 2025 could be much less than £20m to buy the remaining 20% of Solutions. Obviously we don't know (yet) how revenue is being booked in 2024 in the 'everything everywhere' approach where sites are becoming multi vector rather than vector specific.

[cousinit] 07/4/2024 13:10

In trying to get a handle on cash I've been looking at the statements made by Homology on their share of OXB Solutions. In the joy of accounting, OXB report the full Solutions result in their Group statements despite being the 80% majority owner.

It's not ideal as Homology report current assets for Solutions and the amount they owe them, so you probably end up with largely cash plus biologistics assets WIP/for sale rather than pure cash. OXB report cash separately.

Cash and cash equivalents for the OXB Group was £141.3m at Dec 22. Solutions had $39.2m of current assets at the same date and $5.2m owed by Homology. So, if that's assumed as cash, it equates to about £27.2m ((39.2-5.2)@1.25 FX). So OXB ex Solutions c.£114.1m.

At June 23, OXB Group cash was £129.4m. Solutions had $15.7m of current assets at the same date and $10.2m owed by Homology. So, if that's assumed as cash, it equates to about £4.4m ((15.7-10.2)@1.25 FX). So OXB ex Solutions c.£125.0m. So cash consumption looks like it was all focused in Solutions.

At the end of Dec 23, Solutions has $10.8m of current assets and $3.1m owed from Homology, so around £6.2m of cash ((10.8-3.1)@1.25 FX) so cash burn appears to have slowed markedly (although we know that Homology ceased development in July, so this may have been helped by receiving minimum revenues for not having to do a great deal in return.)

Obviously, there is a chance that OXB was moving cash around between the parent and Solutions during the year, but I don't get the impression that was happening (and I would hope that it would have been flagged if it was.)

Just on cash, we know that the OXB group cash was £121.4m at end of Aug 23 as that is contained in the going concern statement. It is not clear how much of the $10.2m owed by Homology at end of June to Solutions had been paid by then - Homology say that they aim to pay within 90 days.

Appreciate that this is all very spreadsheet-y, but it does suggest that cash burn at Solutions slowed in the second half of 2023 but analysts expect overall cash burn at the OXB group to be much higher in that period. We know the £10m restructuring costs were due to be incurred, but that's almost compensated by Solutions burning less.

I've also looked at revenues.

[cousinit] 07/4/2024 12:23

I've also been doing some work on cash to try and get a handle on the runway there.

The £50m funding from Serum was described as requiring a quite specific commitment from OXB in the 2023 half year results:

'Additionally, the Group also had a Capital commitment of £48,935,000 for leasehold improvements in respect of the expansion of its OXBOX manufacturing facility as a result of the £50 million equity investment by Serum Life Sciences in September 2021.'

It had been referenced in passing before, but this was the first time I can see it being formalised in the notes to the financial statements. My assumption is that the amount spent on planning work to date is why it is £1m less than the Serum injection.

So OXB are seeing this as a reserved amount that they shouldn't 'touch' apart from the specified purpose. I guess they are at least earning decent interest on it for now! But it does reduce liquidity headroom if it is respected in the way described.