Oxford Biomedica sales up almost two-fifths

The Oxford university/ AstraZeneca (AZN) Covid-19 vaccine has met plot-twist after plot-twist in recent weeks, amid mounting fears about a suspected, extremely rare-side effect of blood clotting. In the UK, under-30s are being offered an alternative jab. Other countries have taken tougher measures – with Denmark completely ceasing the roll-out of the injection.

The path to wide-scale, quick-as-lightning immunisation was perhaps inevitably going to meet obstacles along the way. Across the Atlantic, Johnson & Johnson’s (JNJ) single-shot vaccine has also been paused because of clotting concerns.

But beneath the pharma giants and biotech firms at the centre of the unprecedented vaccine race, there lies another echelon of vitally important businesses: their manufacturing partners. Cell and gene therapy specialist Oxford Biomedica (OXB) is one of them.

The company is a key manufacturer of the AstraZeneca coronavirus jab, having signed an initial agreement last May and an 18-month supply agreement in September under a three-year master supply and development deal. It received a £15m capacity reservation fee with revenues of more than £35m expected by the end of 2021.

Oxford Biomedica’s vaccine work has granted it a chance to showcase its expertise on a global stage.  Such work has, the group said within its full-year report, demonstrated that “our manufacturing capabilities and state of the art facilities are inherently valuable”.

In turn, this could mean more deals in future. “[There] is the opportunity to leverage these capabilities and facilities to help more partners”, the group added.

Oxford Biomedica’s work on the Covid-19 vaccine has taken place at its new 84,0000 sq. ft. ‘Oxbox’ facility. That new site will also be used by Juno Therapeutics, a subsidiary of Bristol Myers Squibb (US:BMY), with which the group signed a deal in March. The agreement, worth up to $227m, entails multiple cell-therapy programmes in oncology and other indications.

Overall, the number of Oxford Biomedica’s partner programmes grew more than half in 2020 from 13 to 20.

Delivering revenue growth of almost two-fifths for the 12 months ending December, the group cited growth in commercial development and bioprocessing sales. Operating costs rose at a lower rate than sales, and losses improved from £14.5m to £5.7m.  

Oxford Biomedica’s shares are up a half since last April, giving it a market value of more than £800m and granting the group entrance to the FTSE 250. FactSet consensus puts adjusted pre-tax profits at £1.5m for 2021. Hold.

Last IC view:  Hold, 850p, 17 Sep 2020