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Oxford BioDynamics builds capacity

The genetics specialist has invested in staffing as more customers show interest in its technology
June 13, 2017

The potential use of genetics to create personalised treatments for patients of many different illnesses is creeping closer to reality. But, despite the excitement, genetic medicine is mind-boggling stuff. That may explain why shares in Oxford BioDynamics (OBD) - which has developed tools to help pharmaceutical companies better identify the genes that have a role to play in disease - have not performed that well since the company joined the Alternative Investment Market (Aim) in December.

IC TIP: Hold at 138p

That's not to say OBD has made no progress. In the first six months of its financial year, the group signed new partnerships, which broker Stifel thinks will contribute to a tripling in revenues by the 2018 financial year. One of those partners is going to use the EpiSwitch platform to assess why some people find it easier to lose weight or get fitter than others do.

The group has also been investing in developing the capabilities of its technology and expanding its patent suite. Even so, cash burn was relatively modest at £1.1m and research and development costs fell by nearly £100,000 to £160,000. But as more customers show interest in EpiSwitch, management has decided to expand the group's capacity. The subsequent rise in staff and admin expenses - as well as £529,000 IPO costs - sent operating losses up 70 per cent to £1.8m. Stifel has forecast losses per share of 4.3p in the year to September 2017 (from 2.1p in FY2016).

OXFORD BIODYNAMICS (OBD)

ORD PRICE:138pMARKET VALUE:£119m
TOUCH:136-140p12-MONTH HIGH:168pLOW: 125p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:14.6pNET CASH:£11.5m

Half-year to 31 MarTurnover (£'000)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016389-0.97-1.0nil
2017384-1.78-2.0nil
% change-1---

Ex-div:na

Payment:na