Oxford Biomedica swings to loss as Covid vaccine winds down

Oxford Biomedica reported a 21% decrease in its first-half total revenue on Thursday, to £64m.

The company said double-digit revenue growth in its core business, excluding Covid-19 vaccine manufacturing, was offset by the decrease in Covid-19 vaccine manufacturing.

Bioprocessing and commercial development revenues decreased by 24% year-on-year to £57.3m, largely driven by a reduction in Covid-19 vaccine manufacturing revenues, but partly offset by an increase in revenues from lentiviral vector and AAV commercial development and manufacturing activities.

Licences, milestones and royalties totalled £6.7m, rising from £5.7m a year ago, with the 18% increase resulting from licence fees from new partner programmes.

The board said the launch of Oxford Biomedica Solutions, enabling entry into the growing AAV market while also establishing a key strategic presence in the US, including one-off acquisition-related costs, drove an increase in operating expenses to £56.2m from £23.6m.

Active cost control initiatives were initiated in the period to reduce the group's operating cost base as the Covid-19 pandemic continued to ease.

The company recorded an operating EBITDA loss and an operating loss of £5.8m and £19.2m, respectively, swinging from an EBITDA profit and an operating profit of £27.1m and £19.7m in the same period last year.

It said that included one-off acquisition-related due diligence costs of £5.1m, relating to the transaction with Homology Medicines to establish Oxford Biomedica Solutions.

Cash used in operations totalled £24.5m, compared to £22.2m generated in the first half of 2021.

The group's capital expenditure of £6m, rising from £3.5m, consisted mainly of purchases of equipment required for manufacturing and laboratory facilities.

Cash at period end on 30 June totalled £118.5m and £115.8m on 31 August, while net cash at 30 June was £50.1m, and £42.1m as at 31 August.

“We have made significant strategic and operational progress towards our goal of becoming a global viral vector leader,” said chair and interim chief executive officer Roch Doliveux.

“In the first half of 2022 we achieved double digit revenue growth in our core business and since the start of the year have signed numerous new or expanded partnership deals, including a new AAV deal, resulting in an over 70% increase in the number of customers with whom we work.

“In addition, we executed the transformational launch of Oxford Biomedica Solutions which brings innovative AAV capabilities, further capacity and a significant platform in the US, delivering on our strategic objective to become vector agnostic and provide world-leading innovative process development and manufacturing services to our clients.”

At 0951 BST, shares in Oxford Biomedica were down 0.54% at 455.01p.