Oxford Biomedica swings to loss as licensing revenue falls

Gene and cell therapy company Oxford Biomedica reported an improvement in bioprocessing and commercial development revenues to £47.3m in its preliminary results on Wednesday, from £40.5m.

The London-listed firm said that despite capacity constraints within the business, growth in full-year revenues of 17% was achieved for the 12 months ended 31 December, driven by double-digit growth across both of its activities.

It said licences, milestones and royalties revenues fell to £16.8m from £26.3m, with an £11.5m contribution from the Axovant milestone, and “strongly growing” royalties.

Those revenues were still 36% lower than the prior year, however, as that year saw “significant” licence income received on signing the Sanofi (Bioverativ) and Axovant agreements in 2018.

Total revenues decreased 4% to £64.1m, Oxford said, due to lower milestone and licensing revenue.

Operating expenses rose 57% to £41.8m, which the board said reflected its investment in bioprocessing operations and people, in preparation for the ‘Oxbox’ bioprocessing facility coming online in 2020.

It swung to an operating EBITDA loss of £5.2m, from a £13.4m profit, while its operating loss was £14.5m, compared to a £13.9m profit in 2018.

Capital expenditure totalled £25.8m, up from £10.1m year-on-year, reflecting the continued capital expenditure on the new Oxbox bioprocessing facility.

Cash at year-end stood at £16.2m, down from £32.2m.

Oxford said cash outflow before financing activities increased by £25.7m to £22.9m, compared to a £2.8m inflow in 2018.

A total of £53.5m of equity was raised from a new investor, Novo Holdings, which was used to fully repay the £43.6m Oaktree loan facility.

“Oxford Biomedica made good progress during 2019, extending our commercial supply agreement with Novartis for another five years, establishing a new partnership with Santen and delivering our new facilities expansion on target,” said chief executive officer John Dawson.

“Beyond the period end we also signed a new major new agreement with Juno Therapeutics [and] Bristol Myers Squibb.

“The cell and gene therapy sector continues to grow rapidly and we remain at the forefront of its innovation.”

Dawson said the company’s new collaboration with Microsoft was “harnessing the power” of artificial intelligence to boost the efficiency of its ‘LentiVector’ delivery platform, as it continued the process to industrialise lentiviral vector development and manufacture.

“We are building an exciting business, and with the significant investment by Novo Holdings in 2019, our simplified statement of financial position places us in a stronger position to realise the potential of our world-leading technology.”

At 1247 BST, shares in Oxford Biomedica were down 7.66% at 671.28p.