Edison Investment Research Limited
London, UK, 28 May 2021
Oxford Biomedica (OXB): Driving innovation in a thriving CGT industry
Oxford Biomedica (OXB) is one of few global lentiviral vector manufacturers with capacity in a thriving cell and gene therapy industry, and its FY20 results highlight strong operational progress throughout the business. OXB boasts a diversified revenue base; and FY20 benefited from new deals including Juno/BMS covering multiple CAR-T programmes, as well as increased bioprocessing and commercial development activities for several customers including Novartis and the AZN COVID-19 vaccine. Post period, OXB upgraded its financial guidance for the COVID-19 vaccine supply agreement with AZN to in excess of £100m by end FY21. In the long term, much value resides in OXB's ability to develop and monetise its own CGT assets, which are progressing towards the clinic. Bolt on acquisitions that complement the pipeline or enhance technology capabilities represent further opportunities. We value OXB at £846m or 1,027p/share.
We increase our valuation of OXB to £846m or 1,027p/share, vs £711m or 892p/share previously. The main source of uplift is the increased expectations of revenue generated from the AZN agreement, which we include for 2021-23. We remove the Sanofi/Bioverativ partnership, delay AXO-Lenti-PD launch by two years to 2026 and update our assumptions for the terminal value. Our valuation does not capture the group's ability to deliver on new customers and expand existing partnerships. Our model reflects net cash of £65.9m (31 March 2021).
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