Oxford Biomedica plc: Preliminary results for the year ended 31 December 2018
Oxford Biomedica plc
Preliminary results for the year ended 31 December 2018
Delivery of dual strategy leads to strong financial growth
Oxford, UK – 14 March 2019: Oxford Biomedica plc (LSE: OXB), (“OXB” or “the Group”), a leading gene and cell therapy group today announces preliminary results for the year ended 31 December 2018.
- Gross income increased by 72% to £67.9 million (2017: £39.4 million)
- Revenue increased by 78% to £66.8 million (2017: £37.6 million)
- Adjusted operating expenses increased by 38% to £31.7 million (2017: £22.9 million)
- Operating EBITDA of £13.4 million (2017: Operating EBITDA loss of £1.9 million)
- Licence income of £18.3 million (due to Axovant Sciences and Bioverativ deals), segmented by Product (£10.2 million) and Platform (£8.1 million)
- £6.0 million gain recognised on revaluation of investment in Orchard Therapeutics
- Cash inflow before financing activities of £2.8 million (2017: £1.0 million)
- Cash at 31 December 2018 of £32.2 million (31 December 2017: £14.3 million), reflecting significantly improved trading performance and placing to raise £20.5 million (gross)
- Gross proceeds of £20.5 million raised from new and existing investors through a placing to fund the proposed expansion and fit-out of the additional bioprocessing facilities at a new facility in Oxford, UK. Capital expenditure increased to £10.8 million (2017: £2.0 million)
- £5 million capital expenditure grants received from Innovate UK to support the UK’s efforts to produce viral vectors and ensure adequate supply to service expected demand
- Share consolidation completed in May 2018 to reduce the number of issued ordinary shares in Oxford Biomedica by a factor of 50
OPERATIONAL HIGHLIGHTS (including post period-end events)
Novartis’ commercialised product Kymriah®
- Kymriah approved by the US Food and Drug Administration for the treatment of relapsed and refractory B-cell diffuse large B-cell lymphoma (r/r DLBCL), the second indication in the US
- The European Commission, Health Canada and the Therapeutic Goods Administration of Australia also approved Kymriah for the treatment of children and young adults with r/r B-cell acute lymphoblastic leukaemia (r/r ALL) and adult patients with r/r/ DLBCL
- NHS England announced that Kymriah will be made available to children and young adults in England and the first patients have now been treated
LentiVector® delivery platform for gene and cell therapy partnerships
- $105 million collaboration and licence agreement signed with Bioverativ (now part of Sanofi) to access Oxford Biomedica’s LentiVector® platform and manufacturing technologies in the field of haemophilia
- Partnership formed with the UK Cystic Fibrosis Gene Therapy Consortium, Boehringer Ingelheim and Imperial Innovations to develop a novel inhaled gene therapy for cystic fibrosis
Proprietary product development
- $842.5 million exclusive worldwide agreement signed with Axovant Sciences (now Axovant Gene Sciences) for OXB-102 (now known as AXO-Lenti-PD) for the treatment of Parkinson’s disease
- Phase 1/2 clinical study for AXO-Lenti-PD began and patients from the first dose cohort have been treated. Based on initial feedback from members of the DMC received in March 2019, Axovant Sciences plans to proceed to the second dose cohort.
- Three proprietary OXB assets selected to advance from research through pre-clinical development: OXB-204 and OXB-208 target inherited retinal diseases, while OXB-201 is in development for the treatment of amyotrophic lateral sclerosis (ALS)
- Signed a fifteen year lease on a new 84,000 sqft (7,800 sqm) manufacturing facility in Oxford, close to Oxford Biomedica’s Windrush Court headquarters. Offices and warehousing are now in operation, with the additional GMP suites expected to be operational in 2020
- Signed a lease on an additional 32,000 sqft (2,975 sqm) discovery and innovation facility next to Windrush Court. The facility will bring together a multidisciplinary team of researchers, automation, bioprocessing and process development experts to drive innovations that will lead to new scientific and technical advances to support our pipeline and our platform
- Formed a £4 million digital framework initiative, supported by a £2 million grant from Innovate UK, the UK’s innovation agency, to build digital and robotics capabilities designed to drive improvements in analytical methodology, supply times and cost of goods. Announced an R&D collaboration with Microsoft in March 2019 to support the initiative
John Dawson, Chief Executive Officer of Oxford Biomedica, said:
“Oxford Biomedica is at the centre of a burgeoning industry in which life-changing, curative treatment has become a therapeutic reality. In the past year, alongside landmark regulatory approvals and launches in the sector, we have seen our strategy delivering with significant revenue-generating deals for both our platform and our products, and we continue to scale our capacity to meet the expected demand from future growth. We are confident that our focus on platform development, pipeline enhancement, technology innovation and operational delivery puts us on the right trajectory to capitalise on our market leading position.”
A briefing for analysts will be held at 12:00 GMT (8:00 ET) on 14 March 2019 in the Guildhall Room at 85 Gresham Street, London, EC2V 7NQ. There will be a simultaneous live conference call.
Dial-in details are:
UK dial-in: +44 (0) 20 3009 5710
US dial-in: +19177200178
Participant code: 1495518
A live webcast of the presentation will be available on Oxford Biomedica’s website at https://edge.media-server.com/m6/p/gsavmhjg
Oxford Biomedica plc
John Dawson, Chief Executive Officer
Stuart Paynter, Chief Financial Officer
Catherine Isted, Head of Corporate Development & IR
Sarah MacLeod, Head of Communications
T: +44 (0)1865 783 000
T: +44 (0)1865 783 000
T: +44 (0)1865 954 161 / E: firstname.lastname@example.org
T: +44 (0)7747 602 739 / E: email@example.com
Consilium Strategic Communications
Mary-Jane Elliott/Matthew Neal
T: +44 (0)20 3709 5700
About Oxford Biomedica
Oxford Biomedica (LSE:OXB) is a leading gene and cell therapy group focused on developing life changing treatments for serious diseases. Oxford Biomedica and its subsidiaries (the "Group") have built a sector leading lentiviral vector delivery platform (LentiVector®), which the Group leverages to develop 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, Bioverativ (now part of Sanofi), Axovant Sciences (now Axovant Gene Therapies), Orchard Therapeutics, Boehringer Ingelheim, the UK Cystic Fibrosis Gene Therapy Consortium and Imperial Innovations, through which it has long-term economic interests in other potential gene and cell therapy products. Oxford BioMedica is based across several locations in Oxfordshire, UK and employs more than 430 people. Further information is available at www.oxb.com
It has been a year of transformation for Oxford Biomedica, not only with significant revenue growth and cash flow generation but also in reaching profitability. These great strides made in 2018 are testament to Oxford Biomedica’s leading position in the innovation, development and manufacturing of lentiviral vectors, and the expertise of its people.
Our mission is to deliver life-changing gene and cell therapies to patients. It encompasses our strategy to support our partners in the development and commercialisation of their own gene and cell therapy programmes with our world-leading manufacturing capabilities while, in addition, pursuing a selective gene and cell therapy portfolio internally through early clinical development.
Our recent successes demonstrate that we have a strategy and business model that works. As is the nature of gene therapy development, reproducibility of results in late-stage trials is high and therefore much value can be created in early clinical studies. It is for this reason that we continue to explore the potential of our product pipeline in a focused and disciplined way.
Moving forward into 2019 and beyond, we see further significant opportunities both to advance the development of our in-house programmes, where we have particular expertise, and to create future out-licensing opportunities similar to our recent landmark deal with Axovant Sciences. In addition, our strategy to seek to retain manufacturing rights for our out-licensed programmes provides potential, additional long-term economic interest through their development and commercialisation.
We’ve spent the past 20 years honing our manufacturing expertise and capabilities. To date, Oxford Biomedica is the only FDA-approved commercial supplier of lentiviral vectors. While we’re immensely proud of this accreditation, we are not resting on our laurels. We strive to achieve continuous improvement in our manufacturing processes, a core group objective that aligns with one of our three values to ‘deliver innovation’.
To meet the expected long-term demand and futureproof Oxford Biomedica’s market leading position, we are more than doubling our manufacturing capacity with the development of new state-of-the-art clean rooms and fill/finish suites on a new site close to our headquarters in Oxford. Construction of the new facilities is progressing to plan and we expect to be operational from the second quarter of 2020.
By applying our expertise and continuing to innovate in lentiviral vector production, we believe we are well placed to take advantage of the expected growth in demand.
We have continued to benefit from a changing Board profile, with the appointment of Heather Preston as a non-executive director in March 2018. Peter Nolan has formally retired from his role as Chief Business Officer, having made a significant contribution to the business since its inception in 1996. With these developments, the Board is now composed of five non-executive and two executive directors.
Organisation and culture
On behalf of the Board I would like to take this opportunity to recognise all of our fantastic employees at Oxford Biomedica who have helped to get the company to where it is today. Within the business we have a highly engaged workforce with a diverse range of capabilities, knowledge and experience. We are very grateful to our people for their continued commitment and excellent contributions during the past year. Our culture and values will continue to drive performance and help attract and retain the best talent, and we are committed to their development to ensure we have the necessary skills that we need to succeed on our growth journey.
The global environment
We find combined economic and political challenges around the world, including questions about international trade and future partnerships between countries. Oxford Biomedica is experienced at adapting to change, now a constant in the environment in which we are living. We continue to prepare for all scenarios around the UK’s exit from the European Union this year and are well prepared for all expected eventualities. We look forward to an agreement on the final exit terms that will provide stability for our workforce and our business operations.
Despite this uncertainty, it is nevertheless an exciting time to be at the forefront of gene and cell therapy. After three decades of hope tempered by setbacks, it is now a therapeutic reality. In the past 18 months, three gene therapy products – including Novartis’ Kymriah for which Oxford Biomedica is the sole lentiviral vector manufacturer - have been made available to patients and along with them we’ve seen a raft of new investment and clinical development activity in the sector. Oxford Biomedica has been a beneficiary of this investment activity; we are grateful for the support of our shareholders as well as that of the UK Government through its Life Sciences sector deal, to ensure pioneering new treatments and medical technologies are produced in the UK.
The excitement and momentum in the cell and gene therapy space continues to build. Oxford Biomedica is fortunate with its scientific excellence and world-leading position to be ideally placed to take advantage of this burgeoning industry. I look forward to the future with much confidence and optimism.
Dr Lorenzo Tallarigo
CHIEF EXECUTIVE OFFICER’S REVIEW
In the past year we have witnessed a transformation of the gene and cell therapy industry in which life-changing, curative treatment has become a therapeutic reality for many patients - and where Oxford Biomedica has played a central role.
Against this backdrop, I am delighted to report on the successful delivery of our of partnering and in-house development strategy, both leveraging our lentiviral vector platform. With Oxford Biomedica’s strengthened financial position, I am now able to plan for the future with confidence to maximise the opportunity we see ahead.
As we stand today, the opportunities to create value from our business model are many, however, I am cognisant that our greatest challenge is to ensure that we maintain our leading position and respond effectively to sector developments while keeping a clear focus on our strategic imperatives. That is why, for 2019, I have set out six company objectives to help drive performance. These objectives are focused on financial performance, manufacturing and the platform, technology innovation, the therapeutic pipeline, operational delivery and workforce development. They will ensure that our people remain focused on our strategy and will help us to manage our growth in a sustainable way to deliver long-term benefits for our shareholders.
I am pleased to report a strong financial performance and positive cash generation in 2018 following significant commercial and operational achievements. Gross income of £67.9 million increased by 72 percent in the year driven by £18.3 million in licence income, largely from the Axovant Sciences (now Axovant Gene Therapies) and Bioverativ (now part of Sanofi) deals, and by increased development services provided to our customers. Positive cash flow before financing was £2.8 million, an improvement of £1.8 million on the previous year, reflecting the significantly improved trading performance. We ended the year with cash of £32.2 million reflecting our stronger financial position and the placing to raise £20.5 million (gross) in March 2018.
Delivering the strategy
We continued to support Novartis though its submissions, launches and commercialisation of Kymriah (tisagenlecleucel) in the US, EU, Canada, Australia and other territories, which are ongoing. Kymriah is a ground-breaking one-time chimeric antigen receptor T cell (CAR-T) therapy that uses a patient's own T cells to fight cancer. It represents the first ever approval of a commercial product incorporating Oxford Biomedica’s LentiVector platform.
Our landmark agreement with Axovant Sciences, worth up to $842.5 million for OXB-102, our internally developed gene therapy for Parkinson’s disease, is evidence of our strategy in action. If successful, it has the potential to generate significant revenues, both now and longer term, not only due to development, regulatory and sales milestones but also from tiered royalties on net sales of 7-10 per cent.
OXB-102, renamed AXO-Lenti-PD, is an investigational gene therapy that enables the expression of a set of three critical enzymes required for end-to-end dopamine synthesis in the brain. It is expected to provide patient benefit for many years following a single administration, should it be successful. Axovant Sciences commenced a phase 1/2 clinical study in October 2018, with the first patients having now been dosed and initial data expected in 2019.
Our $105 million collaboration and licence agreement with Bioverativ (now part of Sanofi) for the development and manufacturing of lentiviral vectors to treat haemophilia continues to advance under its new ownership as part of the Sanofi team. We were encouraged by recent comments from Sanofi that gene therapies with the potential to cure life-threatening conditions are a key area and one in which the company is seeking to expand. We are ready to support the new partner for our previously-licensed ophthalmology programmes, SAR422459 for Stargardt disease and SAR421869 for Usher’s Syndrome type 1b, following Sanofi’s recent portfolio review.
In our third partnership agreement of the year, we established a collaboration with the UK Cystic Fibrosis Gene Therapy Consortium, Boehringer Ingelheim and Imperial Innovations to develop a novel inhaled gene therapy for cystic fibrosis. The agreement demonstrates the versatility of our LentiVector platform and represents a new therapeutic area for Oxford Biomedica.
We continue to invest in the development of a proprietary pipeline of innovative gene therapies to treat diseases with unmet medical needs, for future out-licensing or spin-out. Following a modest investment in the early development of OXB-102 for Parkinson’s disease and its subsequent out-licensing to Axovant Sciences, we have selected three additional proprietary assets to advance from research through pre-clinical development.
OXB-204 and OXB-208 target inherited retinal diseases, where we have extensive experience from our early focus on ophthalmology indications. OXB-103 is in development for the treatment of amyotrophic lateral sclerosis (ALS), a group of rare, progressive neurological diseases. Our priority in 2019 is to secure preclinical proof of concept for two programmes from our proprietary portfolio.
Our business is underpinned by our world-leading lentiviral vector technology and technology licensing is core to our business model. While our priority is to incorporate technology licences into our broader partnering agreements, we continue to seek additional opportunities to generate licensing income and royalties on future products sales by providing access to our proprietary lentiviral vector technologies, as our platform develops.
To this end, we continue to innovate, refine and enhance our technology as part of our continuous improvement programme. Our new manufacturing technology, known as Transgene Repression in vector Production or TRiP, is designed to increase viral vector yields by several multiples. Universally applicable to any viral vector or vaccine platform – it can be used with lentiviral, adenoviral and adeno-associated virus-based gene therapy – TRiP is an example of how we are innovating to stay ahead of the market and satisfy the demand for efficient, cost-effective gene delivery with viral vectors. Methods for the new system were published in Cell & Gene Therapy Insights in January 2019 and discussions with potential licensees are ongoing.
Our focus for 2019 is to drive the discovery of two new innovative technologies that either open up new product opportunities or support the development of our lentiviral vector platform.
To meet the expected growth in demand for lentiviral vectors, we are investing £20 million in the development of a new 84,000 sqft (7,800 sqm) manufacturing facility. The planned Phase I and 2 expansions will fit out around 45,000 sqft (4,200 sqm) for four GMP clean room suites and two fill/finish suites as well as offices, warehousing and QC laboratories, with space available for future expansion. The new facility will create up to 100 new, highly skilled positions the company over the next two years and is on track for operation in 2020.
Aligned to our values and to further accommodate our growth, we have taken a lease on a fifth facility in Oxford and formed a new discovery and innovation centre. The centre will bring together a multidisciplinary team of research, automation, bioprocessing and process development specialists around a shared purpose: to drive innovations that will lead to new scientific and technical advances to support our pipeline and our platform. The building is located next to our headquarters and is split roughly equally between laboratories and offices. Development of the space is ongoing and it is expected to be ready for occupation in the first half of 2019.
From our roots in Oxford University, Oxford Biomedica now occupies five facilities around Oxford covering around 226,000 sqft, securing the city as a global centre for lentiviral vector development and commercialisation.
Creating a winning culture
Our success as a company is made possible by our talented employees working together for our shared mission: to deliver life-changing gene and cell therapies to patients. That is why being a great place to work is so important to us.
During the year, we experienced growth of 35 per cent in our workforce from 321 to 432 employees, and expect that number to increase to 600 by the end of 2019. To support their development and a foster a positive culture, we introduced three company values: to Have Integrity, Be Inspiring and Deliver Innovation. Together with our mission, these values define our purpose and shape the way our people work together. We have already seen some excellent examples of employees demonstrating these values and during 2019 we will seek to further embed them as they are integrated into our new performance management process.
Looking to the future
It is a privilege to lead this fantastic company through a new era for personalised, gene-based medicine. Given the momentum we are seeing, both within Oxford Biomedica and in the gene and cell industry as a whole, I am confident in our ability to deliver increased revenue growth through our partnering endeavours, and to create value from our therapeutic pipeline to deliver meaningful returns to shareholders.
I would like to say thank you to each and every one of our employees for their contributions to our performance in 2018, and for helping Oxford Biomedica to become the company it is today. I look forward to their continued contributions in 2019 and beyond to achieve our objectives and deliver our strategy.
Chief Executive Officer
Novartis collaboration progress
Oxford Biomedica’s collaboration with Novartis has progressed well following the US approval and launch in 2017 of the chimeric antigen receptor T cell therapy Kymriah (tisagenlecleucel) for the treatment of children and young adults with r/r ALL.
The supplemental BLA to treat adult patients with r/r DLBCL was approved by the US FDA in May 2018. The target patient population for this second indication is considerably larger than the initial ALL indication. Additional regulatory approvals for both indications were received from the European Commission, Health Canada and the Therapeutic Goods Administration of Australia. In September 2018, NHS England announced that children and young adults in England would be able to receive Kymriah for r/r ALL, and the first patients have now been treated. Regulatory review is underway in Japan and the outcome is awaited.
The Group is making good progress with its strategic partnerships, with Orchard Therapeutics adopting the stable producer cell lines in one of their programmes. The Group continued its activities to further grow its portfolio of strategic collaborations with the addition of Bioverativ (now part of Sanofi) and the UK Cystic Fibrosis Gene Therapy Consortium, Boehringer Ingelheim and Imperial Innovations partnership.
The LentiVector® gene delivery platform underpins the Group’s partnering business and is the starting point for its proprietary products.
During the period, the Group continued to prepare the priority programmes for clinical studies and to pursue potential new partnership arrangements. In June 2018, the Group entered into an exclusive worldwide licensing agreement with Axovant Sciences (now Axovant Gene Therapies) to develop and commercialise OXB-102 (now renamed as AXO-Lenti-PD) for Parkinson’s disease, worth up to $842.5 million. This agreement with Axovant Sciences successfully executes on Oxford Biomedica’s pre-stated strategy to externalise product development beyond the end of the pre-clinical phase.
During the second half of 2018 the Group completed the regulatory filings for the planned Phase 1/2 study, the manufacture of a second batch of the vector to ensure sufficient supplies for the study and to prepare the clinical study centres in Cambridge and London, UK for initiation of the study. The Phase 1/2 study for AXO-Lenti-PD, sponsored by Axovant Sciences, is now underway and the first patients have been treated.
Following the out-licensing of the Parkinson’s disease programme, three additional proprietary assets have been selected to advance from research through pre-clinical development. OXB-204 and OXB-208 target inherited retinal diseases, where Oxford Biomedica has extensive experience from its early focus on ophthalmology indications. OXB-103 is in development for the treatment of amyotrophic lateral sclerosis (ALS), a group of rare, progressive neurological diseases.
LentiVector® platform development
Over a number of years we’ve developed and licensed technologies and processes to significantly improve the production of gene therapy products into scalable, serum-free suspension processes. These technical developments enhance potency, purity, yield and efficiency. We have invested significantly in automation and robotics to increase productivity and reduce development timelines.
We have developed the TRiP SystemTM to maximise vector yields and particle purity, and standardise downstream process. The TRiP System substantially limits expression of the transgene in the vector production cell that otherwise may have detrimental effects on vector biogenesis, function or purification. Methods for the new system were published in Cell & Gene Therapy Insights in January 2019 and discussions with potential licensees are ongoing.
We have generated packaging and producer cell lines enabling a simplified and scalable manufacturing process while reducing cost. These advances enhance product quality and reduce the cost of goods for our partners and in-house development programmes.
These developments continue to enhance our partner offering and provide additional revenue-generating opportunities.
Oxford Biomedica is a pioneer and world leader in the field of gene and cell therapy, underpinned by its lentiviral vector delivery system, the LentiVector® platform. The technology is established at commercial scale with three state-of-the-art, custom-built GMP clean rooms and laboratory facilities offering current and next generation LentiVector® platform bioprocessing capabilities, with capacity for in-house platform development work and current partners’ requirements. To support the expected growth in demand for lentiviral vectors, the Group is expanding its manufacturing capacity.
In September 2018, a lease was signed on a new, 84,000 sqft (7,800 sqm) facility near to Oxford Biomedica’s headquarters in Oxford, UK. The planned Phase I and Phase 2 expansion will fit out around 45,000 sqft (4,200 sqm) for four GMP clean room suites and two fill/finish suites as well as offices, warehousing and QC laboratories, with space available for future expansion.
The capacity expansion secures Oxford as a bioprocessing centre for Oxford BioMedica and will create up to 100 new, highly skilled jobs over the next two years. Funded through the successful Placing in March 2018, it will allow Oxford Biomedica to exploit the immediate market opportunity, meet the expected long-term demand and futureproof the Group’s market leading position.
Aligned to the Group’s values, which include delivering innovation, and to further accommodate its growth, a lease was signed on a fifth facility in Oxford. The facility will bring together a multidisciplinary team of research, automation, bioprocessing and process development specialists around a shared purpose: to drive innovations that will lead to new scientific and technical advances to support our pipeline and our platform. The building is located next to Oxford Biomedica’s headquarters and is split roughly equally between laboratories and offices. Development of the space is ongoing and expected to be ready for occupation in the first half of 2019.
Oxford Biomedica now occupies five facilities around Oxford covering around 226,000 sqft, securing the city as a global centre for lentiviral vector development and commercialisation.
Corporate and organisational development
During the first half of 2018, Oxford Biomedica successfully completed a £20.5 million equity fundraising for capacity expansion and fit out. In addition, the Group successfully completed a share capital consolidation in May 2018 to make the shares more attractive to a broader range of institutional investors and other members of the investing public both overseas and in the UK.
To support the increased activities of the Group, the Senior Management Team was augmented during the first half of 2018, with the appointment of a Chief Operations Officer, a Chief People Officer and a Chief Project & Performance Officer.
Peter Nolan retired from his role as Chief Business Officer and stepped down from the Board on 2 July 2018.
During the year, Oxford Biomedica benefitted from the award of two grants by the UK Government’s innovation agency, Innovate UK. To support the Group’s investment in lentiviral vector development, £3 million was awarded for manufacturing, storage and analytical equipment, as well as other items that are essential for the operation of vector GMP facilities. A further £2 million was awarded as part of a total investment of £4 million by Oxford Biomedica to support the formation of a digital framework initiative to streamline the production of next-generation medicines. The aims of both projects are aligned with the UK Government’s Life Sciences Sector Deal to help ensure that the next wave of breakthrough treatments, innovative medical research and technologies, and high skilled jobs are created in Britain.
Oxford Biomedica has made considerable progress in 2018. With the ongoing success of its Novartis collaboration validating its LentiVector platform and partnering credentials, the Group expects its technology leadership to boost its business development activities. The Group intends to expand its portfolio of collaborations, and to attract third-party investment to accelerate the clinical development of its wholly-owned proprietary products.
Oxford Biomedica’s progress during 2018 demonstrates its leading industry position. With the Group’s collaborations supporting its continued growth, Oxford Biomedica is ideally positioned to deliver value to shareholders as a world-leading gene and cell therapy business.
2018 has continued the financial transformation of the Group with significant commercial achievements, and the signing of the Bioverativ (now part of Sanofi), Axovant Sciences and UK Cystic Fibrosis Gene Therapy Consortium agreements announced in February, June and August 2018. This has culminated in the Group achieving its first Operating EBITDA profit and also a profit after taxation of £7.5 million.
Selected highlights are as follows:
- Gross income increased by 72% over 2017, and has now increased by 1,135% since 2013 when the Platform division was created,
- Revenue increased by 78% over 2017, and has now increased by 1,137% since 2013,
- Improved operational results have resulted in Operating EBITDA, Operating EBIDA and Operating profit being converted into profits of £13.4 million, £15.8 million and £13.9 million respectively as opposed to largely losses in 2017,
- Cash generated from operations of £9.2 million in 2018 far exceeded the £1.5 million deployed in 2017 as a result of the Bioverativ and Axovant Sciences licence income received,
- The Platform segment made an Operating EBITDA profit of £9.8 million and an operating profit of £11.4 million
The growth in gross income was largely driven by £18.3 million worth of license income received as a result of the Axovant Sciences and Bioverativ deals, as well as revenues generated from increased commercial development services provided to Orchard Therapeutics, Novartis, Bioverativ and Axovant Sciences. Bioprocessing results in 2018 increased from the prior year with all 3 bioprocessing facilities running continuously during the year and volumes 15% up in 2018.
Operating costs, including Cost of Sales, grew by 27%, and by 32% when depreciation, amortisation and share option payments are excluded. Manpower, materials and subcontracted costs have increased to meet increasing customer demand, both for bioprocessing and commercial development services, but also includes an expectation of future growth in activities in 2019 and beyond. Headcount rose from 321 at December 2017 to 432 at the end of 2018.
The Group has also recognised a revaluation gain of £6 million on our equity investment in Orchard Therapeutics after its IPO at the end of 2018. Our partnership with Orchard Therapeutics has proven to be very successful and has exceeded the expectations set when originally established.
With the signing of 3 new commercial contracts in 2018 we have strengthened our commercial pipeline and diversified our customer base. We will ensure that we continue to foster our current strong customer relationships, whilst continuing the Group’s stated aim of targeting new strategic commercial partnerships to build on the platform of established growth.
We will continue our proven strategy of developing our proprietary products by seeking partnerships for later stage clinical studies.We will continue to assess the financial risk/reward profile of these projects and will seek to provide maximal returns to shareholders accordingly.
Key Financial Performance Indicators
|Licences, milestones grants||27.3||6.8||6.8||6.4|
|Cash generated from/(used in) operations||9.2||(1.5||)||(5.9||)||(14.9||)|
|Normalised cash burn5||1.9||3.0||11.5||29.8|
- Gross income is the aggregate of revenue and other operating income.
- Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments 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.
³ Operating EBIDA is an internal measure used by the Group, defined as Operating EBITDA with the R&D tax credit included. The Board refers to EBIDA periodically as the R&D tax credit is, in essence, a subsidy or grant which offsets the Group's R&D expenditure.
4 Cash burn is net cash generated from operations plus net interest paid plus capital expenditure.
5 Cash burn after excluding accrued interest and early repayment charges paid due to extinguishment of the Oberland facility.
The Group evaluates its performance by making use of a number of alternative performance measures as part of its Key Financial Performance Indicators (refer table above). The Group believes that these Non-GAAP measures, together with relevant GAAP measures, provide an accurate reflection of the Group’s performance over time.
The Board has taken the decision to move away from using Gross Income and Operating EBIDA as Key Financial Performance Indicators and will instead make use of Revenue, Operating EBITDA and Operating Profit.
Gross income increased to £67.9 million providing 72% growth as compared to 2017 (£39.4 million).
Revenue increased by 78% from £37.6 million in 2017 to £66.8 million in 2018.
Income generated from bioprocessing/commercial development increased by 25% to £40.6 million (from £32.6 million in 2017), and is up 464% since 2014. The main contributor to growth has been the revenues generated from increased commercial development services provided to Orchard Therapeutics, Novartis, Bioverativ and Axovant Sciences.
The largest portion of our gross income continues to be derived from our relationship with Novartis, but income generated from partnerships with our other customers continues to grow and now makes up a significant proportion of our gross income, thereby achieving our stated goal of diversifying our customer base.
|Other operating income||1.1||1.8||3.0||2.9|
Operating EBITDA/Operating EBIDA
|Depreciation, amortisation, share option charge||(5.4||)||(6.1||)||(4.2||)||(2.0||)|
|Revaluation of investments||6.0||2.3||-||-|
By: Nasdaq / GlobenewsWire - 23 May 2019Return to news
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