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Oxford BioMedica’s borrowings cloud growth opportunities

Oxford BioMedica’s borrowings cloud growth opportunities

Oxford BioMedica (OXB) is not unlike many of its biotech peers in that it is lossmaking and has recently tapped the stock market, for another £20.5m. But that is not why we remain uncomfortable about holding the shares. The group remains on the wrong side of the ledger, although the loss position has narrowed thanks to a big increase in revenue, while the new cash has stiffened the balance sheet and proved-up shareholder support. What is concerning is Oxford BioMedica’s year-end net debt position of £22.5m, coupled with £10.8m paid out in annual interest charges (that's not a misprint), and the fact that internal R&D costs are likely to increase now the group is moving its own drugs into the clinic.

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