Oxford BioMedica's light is dimming

It's not the first time shareholders have been burnt by Oxford BioMedica. Back in February the group raised £7.5m net to help boost dwindling cash resources, and sterling's weakness has pushed the reported amount of its dollar denominated Oberland loan to £31m, pushing net debt to more than 200 per cent of total equity. That’s worrying for any company, but particularly one with such heavy investment requirements.

Oxford BioMedica seems to have been blinded by its deal with Novartis, for which it produces batches of cancer drug CTL019. In order to meet the Swiss giant's needs, Oxford BioMedica has had to expand its facilities, which were opened in January 2016. Granted, this has boosted revenues, but at what cost? Spending on manufacturing facilities is likely to have reduced the group's capacity to plug money into its own research and development activities.

That said, there has been some progress in drug development: two drug candidates will move into the clinic within the next nine months and CTL019 is expected to be filed in early 2017. But any hope that Novartis may have been tempted to purchase another drug of Oxford BioMedica's has now been extinguished since the Swiss group recently closed the rest of its gene therapy unit.