Oxford Biomedica PLC interim results for the six months ended 30 June 2023

20 September 2023

Newly appointed Chief Executive Officer, Dr. Frank Mathias, is leading a transformation to position Oxford Biomedica as a pure-play CDMO; strategic and operational streamlining ongoing
Transformation into a pure-play CDMO by 1 January 2024, with £30 million of annualised costs savings
Strong execution and delivery of commercial strategy evidenced by client base expanding by 50% since the end of 2022, with a robust growing business pipeline across all key vector types and clinical stages
On track for revenue growth in 2024 from existing and new client programmes, targeting broadly breakeven Operating EBITDA by year-end 2024
Medium term guidance provided; 3-year revenue CAGR in excess of 30% and Operating EBITDA margins in excess of 20% by the end of 2026
Entered into exclusive negotiations with respect to a proposed acquisition of ABL Europe from Institut Mérieux, as part of pure-play CDMO transformation. The proposed transaction would include:
Addition of ABL Europe’s facilities in Lyon and Strasbourg allowing Oxford Biomedica to gain a footprint in the EU and expand Oxford Biomedica’s capacity to address increased client demand
Consideration of £12.9 million (€15 million), including the value of £8.6 million (€10million) of pre-completion cash funding in ABL Europe from Institut Mérieux
Institut Mérieux providing an additional £17.2 million (€20 million) of committed future funding in exchange for Oxford Biomedica shares, with timing at Oxford Biomedica’s discretion
Institut Mérieux to become a major shareholder in Oxford Biomedica by building its ownership of Oxford Biomedica shares through purchases in the open market with the intention of reaching, in aggregate, approximately 10 per cent of the Company’s enlarged issued share capital

Oxford, UK – 20 September 2023: Oxford Biomedica plc (“Oxford Biomedica” or “the Group”) (LSE: OXB), a quality and innovation-led cell and gene therapy CDMO today announces interim results for the six months ended 30 June 2023.

Dr. Frank Mathias, Oxford Biomedica’s Chief Executive Officer, said:

“Oxford Biomedica is a market leader in the fast-growing gene and cell therapy market. Our expertise and unmatched track record sets us apart, and our focus on being a pure-play cell and gene therapy CDMO gives us a unique position in the market. Six months into the role, I am fully focused on sustainable growth and our path to profitability – accelerating us to being a pure-play CDMO. With the cell and gene therapy industry at an inflection point, I believe that we are in the right market at the right time, and well-equipped to succeed with our highly skilled workforce and leading-edge technology.

“This has required a transformation and a change of mindset. We are adapting our structure and processes to better serve our clients and work more efficiently. We will now work together as one company with aligned operations from our headquarters here in Oxford, UK, a footprint in the US, and will offer multiple vector types from our multiple sites. I value our staff tremendously and thank everyone for their hard work and contribution to Oxford Biomedica both now and into the future.

“’I’m especially excited to announce the potential acquisition of ABL Europe today, from Institut Mérieux, as part of our transformation strategy. This would bring us the opportunity to gain a footprint in the EU and greatly enhance our capacity to address the increase in client demand we are seeing. It would also enable us to become an end-to-end CDMO capable of serving customers across both sides of the Atlantic and across vector modalities, leveraging cutting edge science and innovation.

“We are already seeing the success of our new commercial strategy and increased market recognition. Not only did we grow our client base by 50% since the start of the year, but at the end of July we had signed more client orders than we had in the whole of 2022 (excluding COVID-19 vaccine manufacturing). We aim to be the partner of choice for pharma and biotech companies developing life changing cell and gene therapies, enabling them to get their products to market faster and reach more patients. Having already made significant progress, the Board and I are extremely excited about the future of Oxford Biomedica.”

FINANCIAL HIGHLIGHTS (including post-period events)

Total revenue decreased by 33% to £43.1 million (H1 2022: £64.0 million) and bioprocessing and commercial development revenues decreased by 29% to £40.6 million (H1 2022: £57.3 million), with the non-recurrence of COVID-19 vaccine revenue partly offset by double-digit growth in lentiviral vector revenues and a full six months of revenues from Oxford Biomedica Solutions.
License, milestones & royalties were £2.5 million (H1 2022: £6.7 million), a decrease of 63% due to a generally lower level of milestone payments from existing clients and relatively lower license fees from new clients in the period.
Operating EBITDA¹ loss and operating loss of £33.7 million and £50.7 million respectively (H1 2022: Operating EBITDA loss and operating loss of £5.8 million and £19.2 million respectively), the higher losses compared to prior year driven by the non-recurrence of COVID-19 vaccine revenue as well the full six-monthly impact of operating expenditure from the acquisition of Oxford Biomedica Solutions in March 2022.
Cash at 30 June 2023 was 9% higher at £129.4 million compared to £118.5 million at 30 June 2022. The net cash position was 16% higher at £90.1 million as of 30 June 2023 (30 June 2022: £78.7 million).
Cash and net cash at 31 August 2023 were £121.4 million and £83.0 million respectively.

1 Operating EBITDA (Earnings Before Net Finance Costs, Tax, Depreciation, Amortisation, fair value adjustments of assets at fair value through profit and loss, and Share Based Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share options. A reconciliation to GAAP measures is provided on page 14.

OUTLOOK AND FINANCIAL GUIDANCE

Significant revenue growth anticipated in 2024 vs. 2023 as existing client programmes progress through development, supplemented by new client wins reflecting a significant step up in business development activities.

Accelerating towards broadly breakeven Operating EBITDA¹ by the end of 2024; the Group’s revenue backlog¹ at 30 June 2023 stood at £95 million; this is the amount of future revenue available to earn from current orders. The Group expects to grow this backlog significantly going forward based on high levels of business development activity driving new client acquisition as well as orders from existing clients.
Aiming to achieve three-year revenue CAGR in excess of 30% resulting in at least a doubling of revenues by the end of 2026 compared to c.£90 million in 2023. With increased operational efficiencies, targeted cost management and targeted investment, the Group aims to achieve Operating EBITDA¹ margins in excess of 20% by the end of 2026.
As a result of the business transformation towards a quality and innovation-led pure-play CDMO, cost reductions will be completed by the end of December 2023. The ongoing cost base from 1 January 2024 is anticipated to be reduced by c.£30 million on an annualised basis compared to 2023. A one-off restructuring cost of c.£10 million is expected to be incurred in the current financial year.
Group revenues for 2023 are expected to be approximately £90 million; below current market expectations due to lower milestone and license payments than previously expected and reduced or delayed bioprocessing orders from clients. More than 90% of forecasted revenues for the second half of the year are covered by existing binding purchase orders and rolling client forecasts.
Financial impact from the proposed transaction to acquire ABL Europe announced today is excluded from mid-term guidance pending completion of the transaction.
Revenue backlog represents ordered CDMO revenues available to earn. The value of customer orders included in revenue backlog only includes the value of work for which the customer has signed a financial commitment for OXB to undertake, whereby any changes to agreed values will be subject to either change orders or cancellation fees.

ANALYST BRIEFING

Oxford Biomedica’s management team, led by new CEO, Dr. Frank Mathias, Stuart Paynter, CFO, and Dr. Sebastien Ribault, CCO, will be hosting a briefing and Q&A session for analysts at 13:00 BST / 8:00 EST today, 20 September, at One Moorgate Place Chartered Accountants Hall, 1 Moorgate Pl, London EC2R 6EA, United Kingdom.

A live webcast of the presentation will be available via this link.

The presentation will be available on Oxford Biomedica’s website at www.oxb.com

If you would like to dial in to the call and ask a question during the live Q&A, please email Oxfordbiomedica@consilium-comms.com

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Read the Oxford Biomedica PLC interim results for the six months ended 30 June 2023 in full:

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NOTES

Unless otherwise defined, terms used in this announcement shall have the same meaning as those used in the 2022 Annual report and accounts.

ENQUIRIES

Oxford Biomedica plc:
Sophia Bolhassan, VP, Corporate Affairs and IR

T: +44 (0)1865 783 000 / E: ir@oxb.com

ICR Consilium Strategic Communications
Mary-Jane Elliott / Matthew Neal / Davide Salvi, T: +44 (0)20 3709 5700

Peel Hunt (Joint Corporate Brokers):
James Steel /Dr. Christopher Golden, T: +44 (0)20 7418 8900

JP Morgan (Joint Corporate Brokers):
James Mitford / Manita Shinh, T: +44 (0)207 1347329

ABOUT OXFORD BIOMEDICA

Oxford Biomedica (LSE: OXB) is a quality and innovation-led cell and gene therapy CDMO with a mission to enable its clients to deliver life changing therapies to patients around the world.

One of the original pioneers in cell and gene therapy, the Company has more than 25 years of experience in viral vectors; the driving force behind the majority of gene therapies. The Company collaborates with some of the world’s most innovative pharmaceutical and biotechnology companies, providing viral vector development and manufacturing expertise in lentivirus, adeno-associated virus (AAV) and adenoviral vectors. Oxford Biomedica’s world-class capabilities span from early-stage development to commercialisation. These capabilities are supported by robust quality-assurance systems, analytical methods and depth of regulatory expertise.

Oxford Biomedica, a FTSE4Good constituent, is headquartered in Oxford, UK. It has locations across Oxfordshire, UK and near Boston, MA, US. Learn more at www.oxb.com, www.oxbsolutions.com, and follow us on LinkedIn and YouTube.