Oxford Biomedica shares rise on post-acquisition guidance

Shares in cell and gene therapy specialist Oxford Biomedica were jumping on Tuesday afternoon, after the company updated the market on its medium-term financial guidance.

The London-listed firm said the update was on the back of the successful completion of its acquisition of ABL Europe from Institut Mérieux, bolstering its position in the sector.

It said that, in line with guidance issued during its interim results, it anticipated full-year 2023 revenue of about £90m.

The company further expected its operating EBITDA loss for the second half of 2023 to show an improvement of around £10m compared to the first half, as previously indicated.

Due to the integration of its newly-acquired French operations via the ABL Europe acquisition, Oxford Biomedica forecast revenue between £126m and £134m for the 2024 financial year, with revenue set to be weighted towards the second half.

The firm also increased its three-year revenue compound annual growth rate (CAGR) expectation for the 2023 to 2026 period to over 35%, exceeding its previous guidance of over 30%.

Oxford Biomedica reiterated its goal of achieving broadly breakeven EBITDA in 2024, excluding the impact of the ABL Europe acquisition.

When factoring in the transaction, the company anticipated a modest operating loss associated with the French operations.

It said it expected the loss to be fully covered by the €10m cash funding received from Institut Mérieux prior to the transaction's completion.

The company maintained previous guidance to achieve operating EBITDA margins surpassing 20% by the end of 2026, and profitability on an EBITDA level in 2025.

Oxford Biomedica reported a cash position of £103.7m as of 31 December, excluding the €10m cash funding for ABL Europe received from Institut Mérieux on completion on 29 January.

Institut Mérieux now held a 6.2% stake in Oxford Biomedica, and would further increase its shareholding with the issue of new shares as agreed during the transaction.

During 2023, Oxford Biomedica continued expanding and diversifying its client base, securing multiple new and expanded agreements for the development and manufacturing of various vector types.

The total contracted value of client orders signed in the 2023 financial year totalled £131m, representing an increase of over 50% compared to the prior year, excluding Covid-19 vaccine manufacturing.

Chief executive officer Dr Frank Mathias expressed confidence in the company's strategy and outlook.

“Our expansion into the European Union through the acquisition of ABL Europe strengthens our vector-agnostic service offering and strongly demonstrates our commitment to global client service and excellence.

“With these developments and our growing order book, we are confident about accelerating our financial performance and fulfilling our updated medium-term guidance.”

At 1555 GMT, shares in Oxford Biomedica were up 12.32% at 187.8p.

Reporting by Josh White for Sharecast.com.