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The bold bet that reversed the fortunes of Oxford vaccine manufacturer

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Oxford Biomedica CEO John Dawson inside Oxbox, the manufacturing hub that produces the AstraZeneca jab - John Lawrence
Oxford Biomedica CEO John Dawson inside Oxbox, the manufacturing hub that produces the AstraZeneca jab - John Lawrence

The gleaming white table in the boardroom of Oxford Biomedica’s headquarters is so enormous and heavy it can only be removed by taking down the windows and lifting it with a crane. The carpet feels soft, squishy – expensive.

“The Woodford way of doing things was extravagant,” says chief executive John Dawson, smiling.

Oxford Biomedica took over the space 18 months ago – it was the base of Neil Woodford’s crumbled biotech investment empire, complete with gold-coloured toilet brushes and gilded bathroom taps.

“We didn’t have to change a thing and we got this table for nothing, though I think we’re stuck with it,” he jokes. In a twist of fate, Woodford never invested in Oxford Biomedica , despite the chief’s best efforts.

“We tried quite hard,” says Dawson. “There was a time when if you didn’t get Woodford into your fundraising, people wondered why.”

The 62-year-old is friendly, humble and unassuming, the opposite of what might be expected from the boss of a FTSE 250-listed pharmaceutical whose future looks more promising than ever before in its 25-year history.

“A lot of people talk to us now about our potential. Large UK, European and US investors. We used to have to go out hunting for money all the time. In the old days we had very low fundraisers and had to discount an awful lot, it scars me to think about,” he says. “But in June 2020 we raised £40m, and could have had £80m.”

In spring 2020, Oxford Biomedica was thrown into the limelight after being chosen to manufacture the Oxford/AstraZeneca vaccine at its Oxbox facility on the outskirts of the university city.

The timing was serendipitous. “We had just finished kitting out Oxbox, it was just opening up and we hadn't planned to use all the suites yet, they were going to be empty for a while,” says Dawson, who lives in Surrey.

The Telegraph was granted rare access to Oxbox, last given to Prime Minister Boris Johnson.

Here, in an extraordinary maze of corridors and layers of containment rooms, staff donned in hazmat suits meticulously grow the cells used in AstraZeneca’s coronavirus vaccine.

Manufacturing the vaccine

When selected to manufacture the jab, Oxford Biomedica was an expert in making one form of viral vector but had little experience in adenoviral vectors. These vectors are used to transport genetic instructions to the body’s cells to make the Covid spike protein, so the immune system can recognise it as dangerous and attack the virus.

Dawson accepted the challenge and scaled up the manufacturing process in just four months – a process that would normally take at least twice as long.

“Our people were working around the clock, seven days a week to make it happen, they gave up their lives because it was so important,” he says.

AstraZeneca signed an 18-month supply agreement with Oxford Biomedica, and in December 2020 the vaccine was approved in the UK. Money came pouring in. Oxford Biomedica has made tens of millions of doses and now expects to book more than £100m in sales by the end of the financial year from that contract alone.

Oxford Biomedica, which began as an Oxford University spin-out focused on drug discovery in 1995, made its first real profit last year. Originally listed on the Aim in 2001, its midcap share price has shot up more than 200pc since the start of the pandemic.

“Working with the vaccine, it did settle things for us, it brought us a lot of turnover, and the experience of working on a different vector to what we worked on before,” Dawson says.

A recent further £50m equity investment from India’s Serum Institute gave the company the cash it needs to finish kitting out the remaining half of its manufacturing site, a former Royal Mail sorting office. That will roughly double its capacity to meet growing demand.

Despite the success now, it has taken a while for Dawson, who was parachuted in as chief executive in October 2008, to turn things around. After a major drug flop, the company needed a commercial brain and he had been running the European arm of US pharma Cephalon.

Dawson, who owns a house in Portugal, says he was drawn by “the future, the potential”.

“What I didn’t realise was just how long it would take to come good. You work in a company like Cephalon and everything just works. You go to do a deal, get it done, money in the bank, move on.

“Then I came here and it wasn't quite so easy, and the availability of cash wasn't quite so easy. You learn more on your bad days than you ever do on your good days,” he adds.

“It was a matter of trying to keep things going forward, we had to think about raising money all the time, to have another story, another justification for going to investors.”

 John Dawson spent years struggling to raise funds for Oxford Biomedica - John Lawrence
John Dawson spent years struggling to raise funds for Oxford Biomedica - John Lawrence

Not for lack of trying, the company wasn’t raising much amid a “chronic lack of cash”. It had two cornerstone investors at the time: Vulpes Investment Management and M&G, who at one point owned 40pc.

“I used to have discussions with them trying to raise £6m. Nowadays it seems trivial, but in those days it was lifeblood. Without their support we wouldn’t be here.” Vulpes now owns 10pc of Oxford Biomedica, which has a market cap of £1.3bn.

Going in-house

It was only in 2011 that things started looking up for the biotech firm after Dawson took the crucial, but much criticised decision as a small company, to shift manufacturing of its experimental drugs in-house.

It meant the company could apply for government grants and it was given millions – the cash flow needed to survive. In 2014 it signed its first commercial agreement with Novartis to manufacture Kymriah – the first ever approved cell therapy treatment to hit the market. The deal was a game changer.

Now Dawson, an avid Arsenal fan and golfer-in-training, has “aggressive” plans to push forward Oxford Biomedica’s expertise in manufacturing different types of viral vectors.

It’s clear why: the market is forecast to grow from $600m (£435m) in 2020 to $2.8bn by 2026, as a wave of cell and gene therapy treatments, prompted by Kymriah’s success, begin to come through.

“Lots of companies are trying to get into cell and gene therapy. Where they fall down is in manufacturing, and that is where we come in,” says Dawson.

He also wants to invest in the company’s small portfolio of in-house drugs, which hitherto have been starved of cash.

“Doing the Covid vaccine has put us in the shop window and anyone in cell and gene therapy is now talking to us because we have done such a good job... and proven we can do it on scale and get the cost of goods down.”

He is confident Oxford Biomedica will sign at least three new deals next year: new manufacturing suites at Oxbox will be ready by mid-2023 and it recently hired its first chief commercial officer in the US.

The pharma company is looking at opening a US headquarters at some point and an acquisition might also be on the cards, given it now has “the currency to do things like this”.

Brimming with ideas, Dawson dismisses speculation of being ripe for retirement and under pressure to step down.

“I know my age, and I’ve done this job for 13 years, but I’m committed to it and enjoying it. The board has to think of succession, but I don’t expect to go anytime soon.

“Sounds odd to say it, but everything we thought about, planned and hoped for has happened and everyone at Oxford Biomedica should be so proud of what they've achieved, because we've saved thousands of lives.”

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