OPERATIONAL HIGHLIGHTS (including post-period end):
• Strong progress from LentiVector® delivery platform
• Portfolio review in Q1 2016: focus on OXB-102, OXB-202 and OXB-302
• OXB-102: On track for Phase I/II study in Parkinson's disease
• OXB-202: Phase I/II study preparations continued; CTA filing planned for 2016 in corneal graft rejection
• OXB-302: pre-clinical data demonstrates efficacy in tumour challenge model (CAR-T 5T4)
• OXB-201 safety, tolerability, dose responsive protein expression in eye
• Lentiviral vector production volumes increased by 71%
• Investment in people, facilities and plant
• Headcount increased from 134 to 231
• New Yarnton facility operational
• Harrow House extension and Windrush Court laboratories currently being validated
• Partnerships broadened
• Novartis extend beyond CTL019 with second CAR-T product
• Immune Design LV305 collaboration extended and new IP licence
• GSK acquired IP licence for two rare disease product candidates
• Board strengthened
• Dr Lorenzo Tallarigo joined as Chairman and Stuart Henderson joins as non-executive Director and Chair of Audit Committee in February 2016 and June 2016, respectively.
FINANCIAL HIGHLIGHTS(1):
• 28% growth in gross income (2) from
• 72% growth in income from process development and bioprocessing from
• Loss and total comprehensive expense for the year
•
•
•
(1) Audited financial results
(2) Aggregate of Revenue and Other operating income
Commenting on the financial results, John Dawson, Chief Executive officer of Oxford BioMedica, said: "Oxford BioMedica is ideally placed to capitalise on the rapid progress that is ongoing across the gene and cell therapy sector. We have a unique lentiviral vector delivery platform, LentiVector®, based on our intellectual property, expert staff, and state-of-the-art facilities and equipment. This platform is at the core of our business, enabling us to build a leading gene and cell therapy presence with both our own proprietary product candidates and, as the partner-of-choice for other companies operating in the sector, a long term economic interest in an increasing number of partners' products.
"The outlook for the business is excellent and I look forward to further success in 2016 as we advance our focused in-house pipeline, look forward to progress with our partners' programmes, and secure further partnerships."
Conference call for analysts
A briefing for analysts will be held at 11am GMT on 28 April 2016 at the offices of Consilium
Strategic Communications, 41 Lothbury,
Please visit the website approximately 10 minutes before the conference call, at 11am GMT, to download the presentation slides. Conference call details:
Participant dial-in: 08006940257
International dial-in: +44 (0) 1452 555566
Participant code: 61358755
An audio replay file will be made available shortly afterwards via the Group's website: www.oxfordbiomedica.co.uk
For further information, please contact:
Oxford BioMedica plc: Tel: +44 (0)1865 783 000
John Dawson, Chief Executive Officer
Tim Watts, Chief Financial Officer
Financial PR Enquiries: Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Matthew Neal / Chris Welsh / Laura Thornton
Consilium Strategic Communications
Disclaimer
This press release contains "forward-looking statements", including statements about the discovery, development and commercialisation of products. Various risks may cause Oxford BioMedica's actual results to differ materially from those expressed or implied by the forward-looking statements, including adverse results in clinical development programmes; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals and services resulting from development efforts; the requirement for substantial funding to conduct research and development and to expand commercialisation activities; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements. Oxford BioMedica disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Notes for editors
About Oxford BioMedica®
Oxford BioMedica (LSE:OXB) is a leading gene and cell therapy company focused on developing life changing treatments for serious diseases. Oxford BioMedica has built a sector leading lentiviral vector delivery platform (LentiVector®) through which the Group develops in vivo and ex vivo products both in-house and with partners. The Group has created a valuable proprietary portfolio of gene and cell therapy product candidates in the areas of oncology, ophthalmology and CNS disorders. The Group has also entered into a number of partnerships, including with Novartis, Sanofi, GSK, and Immune Design, through which it has long-term economic interests in other potential gene and cell therapy products. Oxford BioMedica is based across several locations in
CHAIRMAN'S STATEMENT
Having joined the Group as the new Chairman of Oxford BioMedica in February 2016, I am pleased to have the opportunity to report on the Group's significant achievements during the past year. The gene and cell therapy sector is continuing to advance at considerable pace and, as one of the pioneers in the field, Oxford BioMedica is well placed to capitalise on this growth and generate significant value across its integrated business. This is what attracted me to Oxford BioMedica.
Focusing our strategy
There have been very significant developments in the sector and at the Group over the past eighteen months and the management team and the Board has recently conducted a review to ensure that our business model and strategy are both clear and robust. Our conclusions from this review are that the Group has, over its 20 year existence, created and is continuing to develop a highly-valuable lentiviral vector gene delivery platform (LentiVector®). The platform is based on our unique combination of patents and know-how, expert and experienced employees and state-of-the-art bioprocessing and laboratory facilities. We are using the LentiVector® platform to develop our own focused portfolio of gene and cell therapy product candidates. We can also partner with other companies to help them develop better gene and cell therapy products more quickly than they could without our LentiVector® platform, in return for which we can obtain short and long-term economic interest in their products. We are already partner-of-choice for leading companies in the gene and cell therapy sector including Novartis, Sanofi, GSK and ImmuneDesign. We are also in specific discussions with further potential partners. The gene and cell therapy sector is now set to grow rapidly and the LentiVector® platform is our path to creating valuable products for patients and sustainable shareholder value.
During 2015 and early 2016 we also conducted a portfolio review of our in-house product candidates. Taking into consideration a full range of factors such as probability of technical success, time to market, and value to patients we have made the decision to prioritise our portfolio and focus our efforts in clinical development on three product candidates: OXB-102, for the treatment of advanced Parkinson's disease; OXB-202, for the prevention of patients becoming permanently blinded by recurrent corneal graft rejection; and OXB-302, a novel CAR-T cell approach to targeting solid cancer tumours. During 2015 we made good progress with these product candidates as we completed pre-clinical and toxicological studies with OXB-102 and OXB-202 and started preparing for their clinical studies. In the next 12 months we expect both OXB-102 and OXB-202 to begin Phase I/II clinical studies and we will receive pre-clinical results for OXB-302.
Our LentiVector® delivery technology also meets an important strategic need in the broader gene and cell therapy sector which, having expanded rapidly in recent years, has outgrown available development and bioprocessing resources. By providing partners with access to our expanded world-class facilities, expertise and industry-leading intellectual property, we have the opportunity to generate near and medium-term revenues as well as longer-term value-sharing through royalty payments. Consequently, we have the potential to support the ongoing development of our wholly-owned portfolio and to provide future income based on the success of partners' products. In 2015, we continued to perform strongly in our CTL-019 contract with Novartis and we expanded our work with this industry leader when they entrusted to us a second CAR-T product candidate. In addition, our expanded collaboration and new IP licence with Immune Design further validates the demand from partners to access our capabilities and IP, and we expect to be able to announce further collaborations during the course of 2016. We also made good progress with GSK who during the year exercised their option on two of the targets covered by Oxford BioMedica's IP license.
Financing the strategy
At the end of 2014 and during 2015 Oxford BioMedica embarked on a major capacity expansion programme which the Group financed by raising a
During this important expansion phase we are grateful to our shareholders for their support for our strategy and we look forward to their continued support as we transition towards a self-sustaining business.
We estimate that we have sufficient cash to last well into the third quarter of 2016, without including any potential inflows from further contracts or licence agreements. We have confidence that we will be able to secure adequate further cash but, as this is not yet committed, these circumstances create a material uncertainty and I draw readers' attention to the going concern statement in the Financial Review and in Note 1 to the Preliminary Financial Information.
Encouraging outlook
After a significant period of development across the wider gene and cell therapy sector, I believe that the field is now truly coming of age, and the ex vivo cell therapy sector in particular is beginning to deliver on its promise. With our sector leading LentiVector® platform, Oxford BioMedica is well placed to capitalise on this growth, and our significant investment in facilities, expertise and intellectual property is advancing us towards our goal of creating value for shareholders.
During 2016, we look forward to progress across all areas of our business. Our in-house pipeline will move forward with our prioritised programmes for Parkinson's disease, corneal graft rejection and oncology; we look forward to continuing our strong performance under our Novartis partnership, contributing to the filing of CTL-019 and progressing work on a second CAR-T product; we will advance our expanded collaboration with Immune Design on LV305; and with an increasing number of companies working in the field, we also anticipate additional opportunities to create value through our integrated business model.
Since joining Oxford BioMedica, I have been greatly impressed by the quality of the team, the level of expertise and world-class facilities and I believe that our LentiVector® platform gives us a powerful tool to benefit from the growth of the sector. I am proud to chair a Group that is a world-leader in its field, with a clear strategy for success and commitment to achieve its goals. I have no doubt that Oxford BioMedica is in a strong position, and 2016 promises to be a year of important achievements.
Dr. Lorenzo Tallarigo
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
The past year has been an important period of investment and growth for Oxford BioMedica, building on the significant progress we made in 2014. Operationally, we have continued to make strong advances in each part of our integrated business, as we execute our strategy to build a world-class, self-sustaining gene and cell therapy group. In the past eighteen months our business has evolved significantly. Operationally, we have continued to make good progress with our in-house pipeline and licensing of our intellectual property, and our bioprocessing work with partners is now well established.
Pipeline advancements: priority programmes
OXB-101/OXB-102
In May 2015 we presented encouraging clinical results from one of our priority pipeline programmes, OXB-101, a gene-based treatment for late stage Parkinson's disease that utilises our LentiVector® technology to carry three genes that encode the key enzymes for the synthesis of dopamine. The data showed long-term follow up demonstrating that the improvements seen in patients during the Phase I/II study had been sustained in the majority of patients for up to three years following treatment with a single dose despite the neurodegenerative nature of the disease. We are continuing to follow patients from this study and expect soon to be able to present further evidence of the long-lasting effect. These results form the foundations for the ongoing development of OXB-102, an enhanced OXB-101 construct that has demonstrated up to five times greater potency in preclinical testing. During 2015, the OXB-102 development programme made good progress and we expect to initiate clinical studies for a phase I/II study in mid-2016.
OXB-202
OXB-202, our lentiviral vector based treatment designed to prevent corneal graft rejection, is currently nearing completion of its pre-clinical and non-clinical development programme, and we are planning to initiate a phase I/II clinical study at the Moorfields Eye hospital at the end of 2016 or early 2017. Cornea grafts are one of the most successful tissue transplants but, over time, a significant number of grafts are rejected due to corneal neovascularisation. OXB-202 is designed to genetically modify human donor corneas to secrete two anti-angiogenesis proteins, endostatin and angiostatin, to inhibit neovascularisation and prevent rejection.
OXB-302
OXB-302 is a novel oncology product that combines our proprietary lentiviral vector and 5T4 technology platforms. This cell therapy uses our LentiVector® system to engineer harvested T-cells to express an antibody against the 5T4 antigen, which is expressed on cancer cells in many common solid tumours. These T-cells are then infused, and subsequently recognise the 5T4 tumour antigen and initiate cell killing mechanisms. During pre-clinical testing the product has demonstrated efficacy in an industry standard model. If successful, this could open up the possibility of using CAR-T cells to treat solid tumours.
Other candidates
OXB-201
The results of the OXB-201 Phase I study were announced as a "Hot Topic" at the Association for Research in Vision and Ophthalmology (ARVO) conference on 4 May 2015. The 21 patient study met the primary endpoints of safety and tolerability. Patients also showed signs of clinical benefit, with visual acuity stabilisation and a reduction in vascular leakage consistent with the mechanism of endostatin and angiostatin function in vivo in this severe wet AMD population. The study also demonstrated stable dose-dependent gene expression over 12 months which is important supporting evidence for the strength of our LentiVector® platform more broadly.
OXB-301
OXB-301 is a cancer vaccine currently undergoing four investigator sponsored Phase I/II and Phase II clinical trials in mesothelioma, inoperable metastatic colorectal cancer, ovarian cancer and early prostate cancer. The patients are selected using a biomarker, and the product utilises a 5T4 tumour associated antigen-encoding gene delivered by a poxvirus vector to stimulate the immune system to destroy cancerous cells expressing the antigen. In May 2015, investigators presented encouraging interim data from the colorectal cancer study at The Cancer Vaccine Institute's Second International Symposium on Immunotherapy. The mesothelioma study completed recruitment during 2015, and the data analysis is underway. Results from these two studies are expected during 2016.
An outcome of our portfolio review is that we have decided to give OXB-102, OXB-202 and OXB-302 high and focused priority compared to OXB-201 and OXB-301 due to the risk/reward balance. We will continue to explore ways of progressing OXB-201 and OXB-301 which could include partnering or out-licensing.
Novartis CTL-019 partnership
Throughout 2015, we made good progress in our partnership with Novartis, with much of the capacity in our existing GMP1 facility devoted to CTL-019 production.
CTL-019, which was awarded breakthrough therapy designation by the FDA in 2014, is a lentiviral vector based chimeric antigen receptor (CAR) T-cell therapy for the treatment of relapsed / refractory acute lymphoblastic leukaemia (r/r ALL). During 2015, the product made significant progress, with Novartis announcing highly positive data in paediatric r/r ALL patients, with 93% achieving complete remission. In October 2015, Novartis confirmed that the marketing application for CTL-019 in r/r ALL is on track for submission in late 2016 or early 2017, and as a key partner Oxford BioMedica will support the bioprocessing components of the filing. In addition, Novartis has announced encouraging new data showing the potential of CTL-019 to treat certain types of hard-to-treat non-Hodgkinson's lymphoma.
Under the terms of our partnering contract with Novartis, we have the potential to receive payments of up to
Based on our strong performance on CTL-019, Novartis has recently extended our partnership to include a second CAR-T product. Under this further agreement, we will support the Novartis programme with process development, scale-up and production, mirroring our activities on CTL-019. This new partnership demonstrates Novartis' faith in our LentiVector® platform, and work on this new Novartis product is now underway.
Partnership with Sanofi
In 2014, we announced that Sanofi had taken exclusive licenses to
Expanded agreement with Immune Design
In addition, we have been working with Immune Design over the past few years, mainly in developing analytical assays for their LV305 programmes. As further validation of our capabilities and our IP, we have recently signed a licence agreement with Immune Design for access to our lentiviral vector intellectual property, and an expanded collaboration contract.
Further collaborations
The rapidly growing gene and cell therapy sector, much of which requires lentiviral vectors, has created a demand for the expertise which Oxford BioMedica has built up over many years. Our investment in expanding our manufacturing and laboratory capacity means that we now have the opportunity to offer our services to a wider range of customers. Our work with Novartis has enhanced our credibility in the sector and we are in discussions with a number of third parties working in a variety of cell therapy areas to provide such services and IP licences.
As an original pioneer of gene and cell therapy, we have built a dominant position in lentiviral vector intellectual property, with our LentiVector® platform protected by over 100 granted and pending patents. These provide comprehensive coverage of gene-based delivery technologies and their therapeutic application, providing us and our partners with robust protection. This is complemented by our extensive world-class know-how associated with process development, scale-up and production, covering the route to commercialisation.
Capacity expansion
Throughout 2015 our existing Harrow House GMP1 clean room facility ran at full capacity and, to ensure availability for our in-house and partners' programmes, we made good progress expanding our facilities. As a result, we have now established a second facility (GMP4) at Yarnton,
Strengthening our Board and operational capabilities
Board changes
The past 12 months have been a period of significant growth for the Group. In February 2016 we strengthened our Board, welcoming new Chairman Dr Lorenzo Tallarigo. He brings significant international and commercial experience to Oxford BioMedica having held a number of senior roles in the industry. Until 2014, Dr Tallarigo was Chairman of Intercept Pharmaceuticals (NASDAQ: ICPT) and Chief Executive of Genextra, prior to which he was President of International Operations at Eli Lilly.
We are also delighted to have announced on 26 April 2016 that Mr Stuart Henderson is joining the board as a non-executive Director and Chair of the Audit Committee with effect from 1 June 2016. Mr Henderson was Head of European Healthcare and Life Sciences at Deloitte and was previously Head of Emerging Biotechnology at Arthur Andersen. He has extensive experience in audit and transaction support in life sciences.
Team expansion
During 2015, we also strengthened our internal teams to support our rapidly expanding operations. As a result, we have recruited an additional 97 colleagues, expanding our workforce by over 70% compared with the end of 2014. In addition, we completed the move of our offices to our Windrush Court facilities in Cowley,
Encouraging outlook
During the past year Oxford BioMedica, and the wider gene and cell therapy sector, has continued to make significant progress, demonstrating the major potential the field offers for patients, physicians and shareholders. We expect that in 2016 this trend will continue, and we plan to advance our integrated business through a number of inflection points.
We are working hard to advance OXB-102 and OXB-202 into clinical development in the coming year and complete the OXB-302 pre-clinical programme by the end of 2016.
We also await follow-up data from patients who received OXB-101 four years previously, as well as results from OXB-301 oncology studies, following an encouraging interim analysis presented in 2015 in colorectal cancer.
In addition, we expect to complete our capacity expansion in the first half of the year, which will ideally position us to capture further value through strategic partnering, as well as supporting the development of our in-house pipeline. During 2016, we plan to continue our important partnership with Novartis on CTL-019 supporting the product filing, and progressing our work on the second CAR-T therapy. We also intend to provide access to our world-class IP and process development and bioprocessing capabilities to an expanding number of players in the gene and cell therapy sector.
Overall, we expect that 2016 will be year of significant progress for the Group as we strengthen our position as a leader in the increasingly exciting field of gene and cell therapy.
John Dawson
Chef Executive Officer
FINANCIAL REVIEW
2015 has been a year of significant progress for Oxford BioMedica. We have continued to make steady progress with the development of our in-house pipeline of gene and cell therapy products with Phase I/II clinical studies expected to start for OXB-102 in mid-2016 and for OXB-202 by the end of 2016/early 2017. In the past 15 months we have also invested significantly in our LentiVector® platform and partnering capabilities.
Our commitments to Novartis have required us to increase our capacity for viral vector bioprocessing and the associated analytical testing, and also to expand our process development capabilities. We have seen this as a unique opportunity to develop our capabilities to partner with the increasing number of companies working with lentiviral vectors, particularly in the ex vivo cell therapy arena. We have therefore brought into use a completely new bioprocessing clean room facility at Yarnton ("GMP4"), near
As a result of these activities, our gross income (the aggregate of revenues and other operating income) and our operating costs have grown significantly in 2015, and we have also incurred substantial capital expenditure.
|
Key financial indicators |
2015 (£m) |
2014 (£m) |
|
Gross income (1) |
18.8 |
14.7 |
|
Bioprocessing and process development income (2) |
12.4 |
7.2 |
|
License, milestone and grant income |
6.4 |
7.5 |
|
Operating Loss |
14.1 |
10.6 |
|
Cash used in operations |
14.9 |
7.4 |
|
Capital Expenditure |
16.7 |
5.6 |
|
Cash burn (3) |
29.8 |
11.6 |
|
|
|
|
|
Year End |
|
|
|
Cash balance |
9.4 |
14.2 |
|
Loan balance |
27.3 |
1.0 |
|
Headcount at year end |
231 |
134 |
(1) Aggregate of revenues and other operating income
(2) Income from providing bioprocessing and process development expertise to partners
(3) Net cash used in operations plus purchases of non-current assets and interest received
Gross income
Gross income - the aggregate of revenue and other operating income - amounted to
-
- Income from licences, milestones and grants was
Note that process development income in 2015 arising from the October 2014 Novartis collaboration is included in Other operating income whereas process development income in 2014, which arose under the May 2013 contract, is included in Revenue. This difference in accounting treatment is due to the differing nature of the two contracts with process development income under the 2014 contract essentially being the reimbursement of R&D costs incurred in developing IP which Oxford BioMedica will own.
Operating loss
|
Operating loss |
2015 (£m) |
2014 (£m) |
|
Gross income |
18.8 |
14.7 |
|
Cost of sales |
(5.8) |
(4.4) |
|
R&D + Bioprocessing costs |
(20.3) |
(17.0) |
|
Administrative expenses |
(6.7) |
(4.0) |
|
|
|
|
|
Operating loss |
(14.1) |
(10.6) |
Despite the increase in gross income the operating loss for 2015 was
Cost of sales represents the cost of producing lentiviral vector batches which are sold to partners and includes raw materials, direct labour, indirect labour (including facility support staff and the significant effort required for quality control and analytical testing), as well as facility costs and overheads. Cost of sales also includes royalties payable on any licence income recognised as revenue by the Group. Excluding such royalties payable, the cost of sales increase in 2015 was around 45% and is broadly in line with the increased number of batches sold compared with 2014.
R&D and Bioprocessing costs
R&D and Bioprocessing costs increased from
The main components of these costs are:
- Payroll and other manpower-related costs such as recruitment, training, and travel. These costs account for just over half of the
- Facility costs including depreciation account for just over 10% of the costs in both years. The growth, which accounts for around
- External expenditure on clinical and pre-clinical costs, including regulatory and pharmacovigilance costs, was around
Administrative expenses
Administrative expenses were
Segmental analysis
Given the growth of the partnering revenue-generating business the Senior Executive Team has recently started to monitor the business performance split between a) strategic partnering and b) the proprietary research and development activities ("R&D") which cover clinical and pre-clinical product development and also the development of technical intellectual property. We have therefore for the first time presented a segmental analysis in the Notes to the Financial Statements, summarised below:
|
|
Partnering £m |
R&D £m |
Total £m |
|
Gross income |
16.3 |
2.5 |
18.8 |
|
Operating loss |
(3.9) |
(10.2) |
(14.1) |
Most of the Group's gross income is attributed to Partnering except for some corporate licence income and the grant income received from Innovate
The purpose of this analysis is to monitor the net costs of each segment and ensure that they are being operated efficiently.
The operating loss of the Partnering activities was
The net investment in R&D in 2015 was
Employee numbers
To enable us to fulfil the anticipated 2016 partnering demand we have built up during 2015 we have recruited the employees needed to service this demand. To this end our headcount has risen from 134 at the end of 2014 to 231 at the end of 2015.
|
Employee numbers |
31 Dec 2015 |
31 Dec 2014 |
|
Bioprocessing, including QA, QC and analytical |
116 |
58 |
|
Product and technology development |
95 |
57 |
|
Administrative and corporate |
20 |
19 |
|
Total |
231 |
134 |
Although the most rapid period of growth is now over, headcount will continue to grow in 2016 as we complete the recruitment needed to underpin the expected activities.
Cash used in operations
Cash used in operations increased from
-
- 2015 working capital increased by
|
Cash used in operations |
2015 £m |
2014 £m |
|
Operating loss |
(14.1) |
(10.6) |
|
Non-cash items included in operating loss (1) |
2.3 |
1.5 |
|
Operating loss excluding non-cash items |
(11.8) |
(9.1) |
|
Working capital movement |
(3.1) |
1.7 |
|
Cash used in operations |
(14.9) |
(7.4) |
(1)Depreciation, amortisation, charge in relation to share schemes
Cash burn
Cash burn is the aggregate of the cash used in operations, interest payments, R&D tax credit receipts, and the purchase of property, plant and equipment.
|
Cash burn |
31 Dec 2015 £m |
31 Dec 2014 £m |
|
Cash used in operations |
(14.9) |
(7.4) |
|
Purchases of property, plant and equipment |
(16.7) |
(5.6) |
|
Interest paid, less received |
(1.5) |
(0.2) |
|
R&D tax credit recieved |
3.2 |
1.6 |
|
|
(29.8) |
(11.6) |
Capital expenditure
Most of the capital expenditure in 2014 and 2015 is due to the capacity expansion programme in our manufacturing and laboratory facilities.
|
Purchase of property, plant and equipment |
2015 £m |
2014 £m |
|
Freehold property (1) |
- |
3.7 |
|
Short-leasehold improvements (2) |
0.9 |
- |
|
Office equipment and computers |
0.6 |
0.2 |
|
Manufacturing and laboratory equipment |
2.2 |
1.1 |
|
Assets under construction (3) |
13.0 |
0.6 |
|
Total |
16.7 |
5.6 |
(1) Freehold property includes the purchase cost of the Windrush Court facility.
(2) Expenditure on short-leasehold improvements relates to our Yarnton site over which we have a 10 year lease.
(3) Assets under construction is the expenditure to date on the fabric and enabling services at our facilities, such as power, water and air handling, which has not yet been completed.
The
Purchases of property, plant and equipment in 2015 were
Including the purchase of Windrush Court, in the 15 months from October 2014 to the end of 2015 we have incurred
The capital expenditure on capacity expansion is being financed by the Oberland loan facility.
Interest and R&D tax credit
Interest paid in 2015 was
The R&D tax credit in respect of 2014 which was received in 2015 was
Cash balance
The Group began the year with
In February 2016 the Group raised a further
Loan balance
We began the year with a loan balance of
The
Balance sheet
The most significant changes to the balance sheet have been
- the increase in property, plant and equipment from
- the increase in the loans balance from
- Trade and other receivables have increased from
- Inventories have risen from
Comparison with profit estimate
On 23 February 2016 the Group announced a proposed Placing to raise
|
|
Estimate £m |
Actual £m |
|
Gross income |
18-19 |
18.8 |
|
Operating loss |
(15.5) - (16.5) |
(14.1) |
|
Loss for the period |
(13) - (14) |
(13.0) |
|
Cash |
9.4 |
9.4 |
|
Debt |
27.3 |
27.3 |
The primary reason for the lower Operating loss is that the portion of the R&D tax credit which is claimed under the large company scheme has been offset against the Operating Loss in the Actual results whereas it was included in Taxation in the Estimate. There is no net impact on the Loss for the Period.
Financial outlook
Partnering revenues should continue to grow strongly in 2016 as our bioprocessing capacity will more than double with the addition of the GMP4 (Yarnton) and GMP2 (Harrow House) clean room facilities. We also have reasonable expectations of further process development and bioprocessing contracts which will add to the requirements from Novartis and Immune Design.
Investment will continue in our three key products and technology development in 2016, broadly at the same level as in 2015, as we take OXB-102 and OXB-202 into their respective Phase I/II clinical studies and complete the OXB-302 pre-clinical programme. We will also continue to invest in our lentiviral vector technology.
The capacity expansion programme will be largely completed during the second quarter of 2016. Capital expenditure in 2016 required to complete the expansion is anticipated at approximately
Going concern
The Directors estimate that the cash held by the Group together with known and probable receivables will be sufficient to support the current level of activities into the third quarter of 2016. This estimate does not include the potential benefit of any upfront receipts from further contracts for process development and bioprocessing services or from licencing-out the Group's intellectual property, and the Directors are therefore continuing to explore other sources of finance available to the Group.
The Directors have confidence that they will be able to secure sufficient cash inflows for the Group to continue its activities for not less than 12 months from the date of approval of these financial statements, and have therefore prepared the financial statements on a going concern basis. However, because the additional finance is not committed at the date of approval of these financial statements, these circumstances represent a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Should the Group be unable to obtain further finance such that the going concern basis of preparation were no longer appropriate, adjustments would be required including to reduce balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify fixed assets as current assets.
Tim Watts
Chief Financial Officer
Consolidated statement of comprehensive income
for the year ended 31 December 2015
|
|
|
Group |
|
|
|
|
2015 |
2014 |
|
Continuing operations |
Notes |
Total £'000 |
Total £'000 |
|
Revenue |
|
15,909 |
13,618 |
|
Cost of sales |
|
(5,839) |
(4,416) |
|
Gross profit |
|
10,070 |
9,202 |
|
Research, development and bioprocessing costs |
|
(20,274) |
(16,986) |
|
Administrative expenses |
|
(6,741) |
(3,957) |
|
Other operating income |
|
2,862 |
1,128 |
|
Operating loss |
|
(14,083) |
(10,613) |
|
|
|
|
|
|
Finance income |
|
26 |
53 |
|
Finance costs |
|
(2,925) |
(238) |
|
Loss before tax |
|
(16,982) |
(10,798) |
|
Taxation |
|
3,963 |
2,137 |
|
Loss and total comprehensive expense for the year |
|
(13,019) |
(8,661) |
|
Basic loss and diluted loss per ordinary share |
4 |
(0.51p) |
(0.43p) |
The notes on pages 19 to 24 form part of this preliminary information.
Balance sheet
as at 31 December 2015
|
|
|
Group |
|
|
|
Notes |
2015 £'000 |
2014 £'000 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
5 |
1,743 |
2,106 |
|
Property, plant and equipment |
6 |
24,396 |
8,944 |
|
|
|
26,139 |
11,050 |
|
Current assets |
|
|
|
|
Inventories |
7 |
2,706 |
1,407 |
|
Trade and other receivables |
8 |
10,930 |
5,153 |
|
Current tax assets |
|
2,721 |
2,000 |
|
Cash and cash equivalents |
|
9,355 |
14,195 |
|
|
|
25,712 |
22,755 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
9 |
9,286 |
6,304 |
|
Deferred income |
10 |
3,045 |
2,927 |
|
Provisions |
12 |
838 |
- |
|
|
|
13,169 |
9,231 |
|
Net current assets |
|
12,543 |
13,524 |
|
Non-current liabilities |
|
|
|
|
Loans |
11 |
27,255 |
1,000 |
|
Provisions |
12 |
533 |
535 |
|
|
|
27,788 |
1,535 |
|
Net assets |
|
10,894 |
23,039 |
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
Ordinary shares |
|
25,741 |
25,659 |
|
Share premium account |
|
141,677 |
141,615 |
|
Merger reserve |
|
2,291 |
2,291 |
|
Treasury reserve |
|
(102) |
(226) |
|
Other reserves |
|
- |
(682) |
|
Accumulated losses |
|
(158,713) |
(145,618) |
|
Total equity |
|
10,894 |
23,039 |
The notes on pages 19 to 24 form part of this preliminary information.
Statement of cash flows
for the year ended 31 December 2015
|
|
|
Group |
|
|
|
|
|
2015 |
2014 |
|
|
|
Notes |
£'000 |
£'000 |
|
|
Cash flows from operating activities |
|
|
|
|
|
Cash used in operations |
13 |
(14,866) |
(7,431) |
|
|
Interest paid |
|
(1,494) |
(238) |
|
|
Tax credit received |
|
3,247 |
1,637 |
|
|
Overseas tax paid |
|
(5) |
- |
|
|
Net cash used in operating activities |
|
(13,118) |
(6,032) |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(16,716) |
(5,577) |
|
|
Interest received |
|
38 |
53 |
|
|
Net cash used in investing activities |
|
(16,678) |
(5,524) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issue of ordinary share capital |
|
144 |
24,268 |
|
|
Costs of share issues |
|
- |
(1,460) |
|
|
Purchase of treasury shares |
|
- |
(226) |
|
|
Loans received |
|
27,812 |
2,500 |
|
|
Loans repaid |
|
(3,000) |
(1,500) |
|
|
Net cash generated from financing activities |
|
24,956 |
23,582 |
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(4,840) |
12,026 |
|
|
Cash and cash equivalents at 1 January |
|
14,195 |
2,169 |
|
|
Cash and cash equivalents at 31 December |
|
9,355 |
14,195 |
|
The notes on pages 19 to 24 form part of this preliminary information.
Statement of changes in equity attributable to owners of the parent company
for the year ended 31 December 2015
|
|
|
Ordinary shares |
Share premium account |
Merger reserve |
Treasury reserve |
Other reserves |
Accumulated losses |
Total equity |
|
Group |
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 1 January 2014 |
|
14,162 |
130,304 |
14,310 |
- |
(682) |
(149,196) |
8,898 |
|
Year ended 31 December 2014: |
|
|
|
|
|
|
|
|
|
Loss for the year |
|
- |
- |
- |
- |
- |
(8,661) |
(8,661) |
|
Total comprehensive expense for the year |
|
- |
- |
- |
- |
- |
(8,661) |
(8,661) |
|
Transactions with owners: Share options |
|
|
|
|
|
|
|
|
|
Value of employee services |
|
- |
- |
- |
- |
- |
220 |
220 |
|
Issue of shares excluding options |
|
11,497 |
12,771 |
- |
- |
- |
- |
24,268 |
|
Cost of share issues |
|
- |
(1,460) |
- |
- |
- |
- |
(1,460) |
|
Realisation of merger reserve |
|
- |
- |
(12,019) |
- |
- |
12,019 |
- |
|
Deferred Share Award |
|
- |
- |
- |
(226) |
- |
- |
(226) |
|
At 31 December 2014 |
|
25,659 |
141,615 |
2,291 |
(226) |
(682) |
(145,618) |
23,039 |
|
Year ended 31 December 2015: |
|
|
|
|
|
|
|
|
|
Loss for the year |
|
- |
- |
- |
- |
- |
(13,019) |
(13,019) |
|
Total comprehensive expense for the year |
|
- |
- |
- |
- |
- |
(13,019) |
(13,019) |
|
Transactions with owners: Share options |
|
|
|
|
|
|
|
|
|
Proceeds from shares issued |
|
82 |
62 |
- |
- |
- |
- |
144 |
|
Value of employee services |
|
- |
- |
- |
- |
- |
730 |
730 |
|
Vesting of deferred share award |
|
- |
- |
- |
124 |
- |
(124) |
- |
|
Liquidation of BioMedica inc. |
|
- |
- |
- |
- |
682 |
(682) |
- |
|
At 31 December 2015 |
|
25,741 |
141,677 |
2,291 |
(102) |
- |
(158,713) |
10,894 |
|
|
|
|
|
|
|
|
|
|
The notes on pages 19 to 24 form part of this preliminary information.
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
for the year ended 31 December 2015
1 Basis of preparation
This financial information, for the years ended 31 December 2015 and 31 December 2014, does not constitute the statutory financial statements for the respective years, and is an extract from the financial statements. It is based on, and is consistent with, that in the Group's statutory accounts for the year ended 31 December 2015 and those financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Financial statements for the year ended 31 December 2014 have been delivered to the Registrar of Companies. The auditors' reports on the financial statements for the years ended 31 December 2015 and 31 December 2014 were unqualified and did not contain statements under section 498 of the Companies Act 2006. While the auditors' opinion for the year ended 31 December 2015 is unmodified, their report contains reference to the material uncertainty disclosed below. The financial information in this report does not constitute a statutory financial statement within the meaning of sections 434-436 of the Companies Act 2006.
The financial statements have been prepared in accordance with IFRIC interpretations, as applicable to companies using International Financial Reporting Standards ('IFRS') as adopted by the European Union and with the Companies Act 2006 under the historic cost convention. Whilst the financial information included in this preliminary announcement has been prepared in accordance with IFRSs adopted for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRSs.
Copies of this announcement and the Annual report for 2015 are available from the Company Secretary, and are on the Group's website. The audited statutory financial statements for the year ended 31 December 2015 are expected to be distributed to shareholders by 5 May 2016 and will be available at the registered office of the Company, Windrush Court, Transport Way,
This announcement was approved by the Board of Oxford BioMedica plc on 27 April 2016.
Going concern
The Directors estimate that the cash held by the Group together with known and probable receivables will be sufficient to support the current level of activities into the third quarter of 2016. This estimate does not include the potential benefit of any upfront receipts from further contracts for process development and bioprocessing services or from licencing-out the Group's intellectual property, and the Directors are therefore continuing to explore other sources of finance available to the Group. The Directors have confidence that they will be able to secure sufficient cash inflows for the Group to continue its activities for not less than 12 months from the date of approval of these financial statements, and have therefore prepared the financial statements on a going concern basis. However, because the additional finance is not committed at the date of approval of these financial statements, these circumstances represent a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Should the Group be unable to obtain further finance such that the going concern basis of preparation were no longer appropriate, adjustments would be required including to reduce balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify fixed assets as current assets.
2 Critical accounting judgements and estimates
In applying the Group's accounting policies, management is required to make judgements and assumptions concerning the future in a number of areas. Actual results may be different from those estimated using these judgements and assumptions. The key sources of estimation uncertainty and critical accounting judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Revenue recognition
In October 2014, the Group entered into a series of contractual arrangements with Novartis, including a licence over the Group's existing Lentivector® platform, a production and clinical supply agreement and an agreement covering process development. Total amounts of up to
Under these arrangements, the Group received
Management has judged that this amount should be recognised as a separate deliverable in 2014 discrete from amounts to be recognised over the period of the three year production contract. This judgement is based on management being satisfied that the customer is able and intends to realise value from this licence independently from any further intellectual property generated in the collaboration and that its fair value is sufficiently reliable. In reaching this judgement management had regard to several considerations including:
- The existing intellectual property covered by the licence is sufficient to allow CTL-019 to be bioprocessed for commercial use, and any intellectual property that might arise from the process development under the contract is not a pre-requisite for its commercial manufacture
- The licence allows Novartis to use the existing intellectual property for other oncology products apart from CTL-019
- The other elements of the arrangements have an appropriate price and fair value (the residual elements)
- The
This judgement reflects both the separability of the licence for the existing intellectual property and the assessment of the fair values of each of the components of the Novartis agreements.
The remaining
Intangible asset impairment
The Group has intangible assets arising from purchases of intellectual property rights and in-process R&D. Amortisation is charged over the assets' patent life on a straight line basis from the date that the asset becomes available for use. When there is an indicator of a significant and permanent reduction in the value of intangible assets, an impairment review is carried out. The impairment analysis is principally based on estimated discounted future cash flows. Actual outcomes could vary significantly from such estimates of discounted future cash flows due to the sensitivity of the assessment to the assumptions used. The determination of the assumptions is subjective and requires the exercise of considerable judgement. Any changes in key assumptions about the Group's business and prospects, or changes in market conditions affecting the Group, or its development partners, could materially affect whether an impairment exists. This risk is now concentrated on purchased patent rights which have been sublicensed to collaborative partners. At 31 December 2015 the book value of intangible assets was
Going concern
Management and the Directors have had to make estimates and important judgements when assessing the going concern status of the Group. Going concern is as stated in several places in this report including in note 1 and the Financial review.
3 Taxation
The Group is entitled to claim tax credits in the
|
|
2015 |
2014 |
|
|
£'000 |
£'000 |
|
Current tax |
|
|
|
|
(2,721) |
(2,000) |
|
Overseas taxation |
5 |
(51) |
|
|
(2,716) |
(2,051) |
|
Adjustments in respect of prior periods |
|
|
|
|
(1,247) |
(86) |
|
Taxation credit |
(3,963) |
(2,137) |
4 Basic loss and diluted loss per ordinary share
The basic loss per share has been calculated by dividing the loss for the year by the weighted average number of shares in issue during the year ended 31 December 2015 (2,570,202,150; 2014: 2,019,291,808). As the Group is loss-making, there were no potentially dilutive options in either year. There is therefore no difference between the basic loss per ordinary share and the diluted loss per ordinary share.
5 Intangible assets
|
|
|
2015 |
2014 |
|
Intellectual property rights |
|
£'000 |
£'000 |
|
Cost |
|
|
|
|
At 1 January |
|
5,591 |
5,591 |
|
Additions |
|
- |
- |
|
At 31 December |
|
5,591 |
5,591 |
|
Accumulated amortisation and impairment |
|
|
|
|
At 1 January |
|
3,485 |
2,958 |
|
Amortisation charge for the year |
|
363 |
396 |
|
Impairment charge for the year |
|
- |
131 |
|
At 31 December |
|
3,848 |
3,485 |
|
Net book amount at 31 December |
|
1,743 |
2,106 |
For intangible assets regarded as having a finite useful life, amortisation commences when products underpinned by the intellectual property rights become available for use. Amortisation is calculated on a straight line basis over the remaining patent life of the asset. Amortisation of
6 Property, plant and equipment
|
|
Freehold property |
Short leasehold improve-ments |
Office equipment and computers |
Manufac-turing and Laboratory equipment |
Assets under constru- ction1 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
|
|
|
At 1 January 2015 |
6,887 |
2,623 |
820 |
5,335 |
646 |
16,311 |
|
Additions at cost |
51 |
863 |
554 |
2,239 |
13,009 |
16,716 |
|
Reclassifications |
- |
3,911 |
- |
- |
(3,911) |
- |
|
At 31 December 2015 |
6,938 |
7,397 |
1,374 |
7,574 |
9,744 |
33,027 |
|
Accumulated depreciation |
|
|
|
|
|
|
|
At 1 January 2015 |
698 |
2,579 |
595 |
3,495 |
- |
7,367 |
|
Charge for the year |
223 |
330 |
158 |
553 |
- |
1,264 |
|
At 31 December 2015 |
921 |
2,909 |
753 |
4,048 |
- |
8,631 |
|
Net book amount at 31 December 2015 |
6,017 |
4,488 |
621 |
3,526 |
9,744 |
24,396 |
|
|
Freehold property |
Short leasehold improve-ments |
Office equipment and computers |
Manufac-turing and Laboratory equipment |
Assets under constru- ction1 |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
|
|
|
At 1 January 2014 |
3,225 |
2,623 |
621 |
4,265 |
- |
10,734 |
|
Additions at cost |
3,662 |
- |
199 |
1,070 |
646 |
5,577 |
|
At 31 December 2014 |
6,887 |
2,623 |
820 |
5,335 |
646 |
16,311 |
|
Accumulated depreciation |
|
|
|
|
|
|
|
At 1 January 2014 |
476 |
2,515 |
543 |
3,130 |
- |
6,664 |
|
Charge for the year |
222 |
64 |
52 |
365 |
- |
703 |
|
At 31 December 2014 |
698 |
2,579 |
595 |
3,495 |
- |
7,367 |
|
Net book amount at 31 December 2014 |
6,189 |
44 |
225 |
1,840 |
646 |
8,944 |
1 Assets under construction represents the capitalisation of ongoing construction works at Harrow House and Yarnton bioprocessing facilities and the Windrush Court laboratories. The opening balance within Assets under construction was included in Freehold property and Short leasehold improvements in the 2014 year-end financial statements.
7 Inventories
|
|
2015 |
2014 |
|
|
£'000 |
£'000 |
|
Raw Materials |
2,217 |
1,214 |
|
Work in progress |
489 |
193 |
|
Total inventory |
2,706 |
1,407 |
Inventories constitute raw materials held for commercial manufacturing purposes, and work-in-progress inventory related to contractual manufacturing obligations.
8 Trade and other receivables
|
|
|
|
2015 |
2014 |
|
|
|
|
£'000 |
£'000 |
|
Current |
|
|
|
|
|
Trade receivables |
|
|
7,374 |
3,621 |
|
Accrued income |
|
|
1,155 |
340 |
|
Other receivables |
|
|
31 |
16 |
|
Other tax receivable |
|
|
1,522 |
397 |
|
Prepayments |
|
|
848 |
779 |
|
Total trade and other receivables |
|
|
10,930 |
5,153 |
The fair value of trade and other receivables are the current book values.
Included in the Group's trade receivable balance are debtors with a carrying amount of
9 Trade and other payables
|
|
|
|
2015 |
2014 |
|
|
|
|
£'000 |
£'000 |
|
Trade payables |
|
|
3,588 |
2,787 |
|
Other taxation and social security |
|
|
384 |
270 |
|
Accruals |
|
|
5,314 |
3,247 |
|
Total trade and other payables |
|
|
9,286 |
6,304 |
10 Deferred income
|
Group |
2015 £'000 |
2014 £'000 |
|
Current |
3,045 |
2,927 |
|
Total deferred income |
3,045 |
2,927 |
Deferred income arises from contractual agreements with customers.
11 Loans
On 1 May 2015, an agreement was entered into with Oberland Capital for a
The Oberland Facility is a loan facility agreement provided by Oberland Capital Management LLC, to provide funds to invest in the Group's capacity expansion and for pipeline advancements and product acquisitions. The loan is repayable not later than 1 May 2022 and may be prepaid at any time. Over the course of the loan term, interest is payable quarterly at an annual interest rate of 9.5% plus the greater of 1% and three month LIBOR. In addition to interest, an exit fee is payable upon any repayment of the loan or part thereof. The Group is also required to pay an additional amount of 0.35% of annual worldwide net revenues for eight years commencing 1 April 2017 for each
The Group is required under the Oberland Facility to maintain cash and cash equivalents of not less than
During May 2015 the
12 Provisions
|
Group |
|
|
Dilapidations £'000 |
|
At 1 January 2015 |
|
|
535 |
|
Unwinding of discount |
|
|
3 |
|
Recognised for Yarnton/Medawar leasehold properties |
|
|
833 |
|
At 31 December 2015 |
|
|
1,371 |
|
|
|
|
|
|
At 1 January 2014 |
|
|
532 |
|
Unwinding of discount |
|
|
3 |
|
At 31 December 2014 |
|
|
535 |
The dilapidations provision relates to anticipated costs of restoring the leasehold Medawar and Yarnton properties in
13 Cash flows from operating activities
Reconciliation of operating loss to net cash used in operations:
|
|
|
|
2015 |
2014 |
|
|
|
|
£'000 |
£'000 |
|
Continuing operations |
|
|
|
|
|
Operating loss |
|
|
(14,083) |
(10,613) |
|
Adjustment for: |
|
|
|
|
|
Depreciation |
|
|
1,264 |
703 |
|
Amortisation of intangible assets |
|
|
363 |
396 |
|
Charge for impairment |
|
|
- |
131 |
|
Charge in relation to employee share schemes |
|
|
730 |
220 |
|
|
|
|
|
|
|
Changes in working capital: |
|
|
|
|
|
Increase in trade and other receivables |
|
|
(5,777) |
(2,561) |
|
Increase in trade and other payables |
|
|
2,982 |
3,370 |
|
Increase in deferred income |
|
|
118 |
1,647 |
|
Increase in provisions |
|
|
836 |
3 |
|
Increase in inventory |
|
|
(1,299) |
(727) |
|
Net cash used in operations |
|
|
(14,866) |
(7,431) |
14 Subsequent events
On 23 February 2016, the Group announced that it had placed 128,383,528 new ordinary shares in the Company at a price of
This information is provided by RNS
END
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