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Oxford BioDynamics attracts the big guns of global pharma

Since joining the London stock market in October 2016, the genetics specialist has signed partnerships with five of the top 30 global pharma companies
Oxford BioDynamics attracts the big guns of global pharma

Announcements have gushed out of the press office of genetics specialist Oxford BioDynamics (OBD) in the last six months and investors have started to take notice. The shares hit a record high of 279p in October after the group’s proprietary biotechnology platform EpiSwitch was successful is diagnosing breast cancer, earned patent approval in the US, and began to generate commercial interest in Asia. Recently signed partnerships with two major US pharma companies have created optimism that OBD and EpiSwitch could play an important role in the future of personalised medicine.

IC TIP: Buy at 188p

While financial success is still thin on the ground, new partnerships (which include five of the top 30 global pharma companies) should help boost revenues this year. The £1.2m-worth of sales generated in the year to September 2017 came from the group’s collaborations with various pharma companies, which pay OBD to develop new drugs or diagnostic methods using EpiSwitch.

OBD also remains a very lean organisation. Operating cash burn in the reported period was just £1.5m – negligible compared to the vast majority of biotech groups. And though staff and general admin costs rose by £0.41m and £0.45m respectively, broker Shorecap expects expenses to fall in the year to September 2018, meaning adjusted losses before tax will narrow from £4m to £2.5m.

OXFORD BIODYNAMICS (OBD)  
ORD PRICE:188pMARKET VALUE:£165m
TOUCH:184-194p12-MONTH HIGH:278pLOW: 125p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:13.2pNET CASH:£11m
Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2013*0.35-1.1-1.4na
2014*0.66-0.7-1.0na
2015*0.70-1.4-1.3na
2016*1.09-2.1-2.1nil
20171.18-4.0-4.5nil
% change+9---
Ex-div:na   
Payment:na   
*Pre-IPO figures