Oxford Biomedica plc Preliminary results for the year ended 31 December 2020
Oxford Biomedica plc
Preliminary results for the year ended 31 December 2020
Saving Lives
Oxford, UK – 15 April 2021: Oxford Biomedica plc (LSE: OXB), (“OXB” or “the Group”), a leading cell and gene therapy group, today announces its preliminary results for the year ended 31 December 2020.
John Dawson, Chief Executive Officer of Oxford Biomedica, said:
“I am truly proud of the Group’s achievements over the period. We not only secured major new partnerships, brought the Oxbox manufacturing facility online in record time and responded to the challenges of the pandemic, but the team has also been able to rapidly work with AstraZeneca to provide a vaccine solution for COVID-19. This is a true testament to the world-class calibre and dedication of our staff in the year that the Group also gained entry to the FTSE250. Looking to the future, with the continued tide of growth in cell and gene therapy, coupled with the Group’s leadership position in the lentiviral vector field, we are well positioned to advance both our own proprietary pipeline and that of our current and future partners’ programmes. I would like to thank all of Oxford Biomedica’s employees for their hard work throughout 2020 and our shareholders and partners for their continued support, and I look forward to a successful 2021.”
FINANCIAL HIGHLIGHTS
- Total revenues increased by 37% to £87.7 million (2019: Revenue of £64.1 million)
- Bioprocessing and commercial development revenues increased by 45% to £68.5 million (2019: £47.3 million) with double digit growth across both activities, driven by new customers AstraZeneca, Beam Therapeutics and Juno/BMS
- Revenues from licences, milestones & royalties increased to £19.2 million (2019: £16.8 million) due to the recognition of a £7.8 million ($10 million) licence fee from Juno/BMS as well as other licence fees, milestones and royalties from customers
- Operating expenses1 increased by less than revenues, growing by 23% in the year to £51.7 million (2019: £41.9 million) aided by the move to the lower cost bioreactor manufacturing process
- Operating EBITDA2 profit of £7.3 million (2019: £5.2 million loss), marginally above guided range
- Operating loss incurred of £5.7 million (2019: £14.5 million loss)
- The platform segment generated an operating profit of £2.0 million ( 2019: 20.2 million loss) whilst the Product segment made a loss of £7.7 million ( 2019: £5.7 million profit)
- Capital expenditure decreased to £13.4 million (2019: £25.8 million) mainly reflecting the Windrush Court laboratory conversion and equipment purchases and leasehold improvements at Oxbox
- Cash of £46.7 million at 31 December 2020 (2019: £16.2 million) and £65.9 million at 31 March 2021
- Cash used in operations of £3.9 million in 2020 (2019: £6.6 million) decreased as a result of the increased revenues as explained above, offset by further operational investments required
- Successful £38.3 million (net) equity fundraise in June 2020 to exploit the growth in the cell and gene therapy market
1. Operating expenses is made up out of Bioprocessing expenses, Research and development expenses and Administrative expenses. A reconciliation to GAAP measures is provided on page 15.
2. Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit & 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 16.
OPERATIONAL HIGHLIGHTS
Juno Therapeutics / Bristol Myers Squibb partnership
- New licence and five-year clinical supply agreement with Juno Therapeutics/Bristol Myers Squibb for multiple CAR-T and TCR-T programmes, signed in March. A £7.8 million ($10 million) upfront payment was recognised by the Group and up to $217 million could be paid in development, regulatory and sales related milestones in addition to undisclosed process development, scale up and batch revenues, and with an undisclosed royalty on sales
COVID-19 vaccine partnership with AstraZeneca
- The Group is a key manufacturer of the Oxford AstraZeneca COVID-19 vaccine, AZD1222. Having signed an initial agreement in May, in September the Group signed an 18-month supply agreement under a three-year master supply and development agreement for the large-scale manufacture of the Oxford AstraZeneca COVID-19 vaccine. The Group received a £15 million capacity reservation fee with additional revenue in excess of £35 million expected by the end of
2021
- By the fourth quarter, the Group was manufacturing the Oxford AstraZeneca COVID-19 vaccine in three suites at 1000L scale ahead of the MHRA granting emergency use for the Oxford AstraZeneca COVID-19 vaccine in December
Novartis partnership
- Collaboration with Novartis continued to strengthen with a sixth vector construct added in the first quarter of 2020, with partnership having been previously extended by five years in December 2019
- The roll out of Kymriah® continues to accelerate in relapsed and refractory B-cell acute lymphoblastic leukaemia and relapsed and refractory diffuse large B-cell lymphoma with reimbursement approved in 28 countries in at least one indication in over 300 qualified treatment centres
Other partnership updates
- In July, the Group signed a three-year clinical supply agreement with Sio Gene Therapies for the manufacture and supply of Parkinson’s disease gene therapy programme AXO-Lenti-PD, building on the worldwide licence agreement signed between the two companies in June 2018
- In August, the Group signed a development, manufacture and licence agreement with Beam Therapeutics for next generation CAR-T programmes including a three-year clinical supply agreement
- Post period end in March 2021, the Group announced that Sanofi had given notice that they intend to terminate the 2018 collaboration and licence agreement for the process development and manufacturing of lentiviral vectors to treat haemophilia. The Group expects the impact on revenue will be negligible over the coming 24 month period
- Post period end in April 2021, the Group signed a three-year development and supply agreement with Boehringer Ingelheim for the manufacture and supply of viral vectors, building on the partnership that started in 2018
Facilities and capacity expansion
- By October 2020, the MHRA had approved all four suites in the first phase of development of Oxbox, the Group’s new 84,000 sq. ft. manufacturing facility. Three suites are producing the Oxford AstraZeneca COVID-19 vaccine at 1000L scale and one suite added to the existing capabilities of producing lentiviral vector-based products for the Group’s partners at 200L scale
- Building work at Windrush Court to convert office space into GMP laboratories progressed throughout the year, with the first of the laboratories completed by the end of 2020
- Opening of the new Corporate Head Office on new site within the Oxford Business Park
Corporate Governance and Organisational Progress
- In June, the Group welcomed Dr Roch Doliveux as Non-Executive Chairman, following the retirement of prior Chair, Dr. Lorenzo Tallarigo
- The Group has made significant strides forward in its commitment to best practice in Corporate Governance and diversification of talent on the Board. In November, Dr. Sam Rasty was appointed to the Board as an Independent Non-Executive Director. Post period-end in February, the Group announced the appointment of Professor Dame Kay Davies as an Independent Non-Executive Director and Martin Diggle stepped down as a Non-Independent Director after nine years. Dr. Andrew Heath will not be standing for re-election at the 2021 AGM having served on the Board since 2010
Analyst briefing
Management will be hosting a briefing for analysts via conference call and webcast at 13:00 BST (8:00 ET) on 15 April 2021.
A live webcast of the presentation will be available via this link.
If you would like to dial-in to the call and ask a question during the live Q&A, please follow this link to register and receive dial-in details.
Enquiries: | |
Oxford Biomedica plc John Dawson, Chief Executive Officer Stuart Paynter, Chief Financial Officer Catherine Isted, Head of Corporate Development & IR | T: +44 (0)1865 783 000 T: +44 (0)1865 783 000 T: +44 (0)1865 954 161 / E: ir@oxb.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, fully integrated, cell and gene 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, CNS disorders and liver diseases. The Group has also entered into a number of partnerships, including with Novartis, Bristol Myers Squibb, Sio Gene Therapies, Orchard Therapeutics, Santen, Beam 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. Additionally the group has signed a 3 year master supply and development agreement with AstraZeneca for large-scale manufacturing of the adenoviral based COVID-19 vaccine, AZD1222. Oxford Biomedica is based across several locations in Oxfordshire, UK and employs more than 670 people. Further information is available at www.oxb.com
CHAIRMAN’S STATEMENT
A Purpose of which to be Proud
Our Purpose
It is with great pride that I present my first statement as the Chair of Oxford Biomedica (OXB). I was first attracted to the Company by its strong purpose and great technology. Saving patients’ lives is what the healthcare industry strives to do and OXB is delivering on that promise in both its cell and gene therapy work, and now with the manufacture of the Oxford AstraZeneca COVID-19 vaccine. Cell and gene therapies have the potential to be curative for many untreated diseases and to be able to play my part in realising this potential is my duty.
It has been a challenging time to assume my role, as our organisation has found new ways of working. Face to face contact has been kept to a minimum for the right reasons, and I thank the Board and the wider OXB team, key opinion leaders and investors for helping me to gain an in-depth understanding of the business. It’s inspiring to me that OXB is now a key part of the global effort to return life to normality, and I am looking forward to supplementing the relationships built online with in-person discussions.
I could not be more proud to lead the Company’s Board through its next phase of growth.
Our Culture
Underlying the purpose of OXB is a strong culture. The pandemic response has both tested and fortified that culture. We pride ourselves on our core values including delivering innovation with integrity.
Our ability to deliver the Oxford AstraZeneca COVID-19 vaccine in the most challenging of circumstances given global demand, has impressed me and has demonstrated that these values run deep through our organisation. This has been achieved whilst continuing to execute the underlying Group strategy, and I give my admiration and appreciation to the team for continuing to deliver on all fronts whilst adapting to new working environments.
Utilising our capabilities to play our part against one of the biggest challenges humankind has recently faced is inspirational and all stakeholders of OXB are, justifiably, proud to be involved in this effort.
During the year we also implemented a Group-wide bonus scheme to ensure all staff benefit from the Group achieving its objectives.
Our Strategy
OXB continues to deliver on its core strategy of being the leading provider of lentiviral based vectors for cell and gene therapy companies, growing our customer base and service. Significant progress has been made in 2020 both in new technologies and new customers such as Juno Therapeutics/Bristol Myers Squibb and Beam Therapeutics. Our successful work on the adenovirus based Oxford AstraZeneca COVID-19 vaccine has also demonstrated our ability to also broaden our Contract Development and Manufacturing Organisation (CDMO) to more viral vectors.
Significant value to stakeholders can also be provided by applying our knowledge to our own therapeutic products. The Board realises that the re-balancing of the Group towards products in this way is not easy, as we wish to first build on the CDMO momentum, but given the medical need and the number of nascent technologies and therapeutic programmes using lentiviral based vectors, we are committed to making it happen over time and as opportunities arise.
The continued innovation of OXB’s platform is key to providing solutions for both partners and patients. We will accelerate this effort, and retain and build upon our leadership role in this space.
It is also clear, through our Oxford AstraZeneca COVID-19 vaccine efforts, that our manufacturing capabilities and state of the art facilities are inherently valuable, and there is the opportunity to leverage these capabilities and facilities to help more partners. We shall be pursuing more partnerships in these adjacencies.
Governance
The role of boards in ensuring the societal impact, sustainability and viability of businesses has never been more critical than in the uncertain times of 2020. I joined the Board in June 2020, and would like to thank Dr. Lorenzo Tallarigo for his stewardship of the Board prior to this time, culminating with OXB entering the FTSE250 index.
The level of engagement and collegiality in all Board members is impressive as we have been delivering upon our commitment to both strengthen the capabilities on the Board and increase diversity.
To that end, I am delighted to welcome both Dr. Sam Rasty and Professor Dame Kay Davies to the Board. Sam’s contributions have already been very insightful and I know Kay will also add significant insights and enormous value to the Board. Meanwhile, Dr. Andrew Heath is retiring from the Board and I wish to thank him for his guidance and defining role on the Board over the past 10 years. After 9 years on the Board, Martin Diggle has also stepped down as a Non-Executive Director, but remains invested in our journey as a supportive shareholder. I thank Martin for his relentless support of OXB at several defining moments over his tenure.
We continue to assess the capabilities needed at Board level to set and deliver strategy, apply best in class governance practices and ensure succession plans are in place, and we will look to strengthen these capabilities and diversity, where appropriate.
The Future
We enter 2021 and beyond with a rapid growth, a proven strategy, experienced leadership and financial strength which gives me great confidence to continue to succeed in our mission to deliver lifesaving therapies to patients and continue to help in the fight against the pandemic.
We continue to push the boundaries of our platform technologies, and develop the capabilities of the Group and my thanks go to all the staff at OXB for the very important work that each of them are doing. I also thank our customers for their trust, our suppliers who have responded with resilience to the demands we have placed upon them, and our shareholders for their support.
We are in the initial phase of the cell and gene therapy revolution in healthcare and OXB is particularly well positioned to play a major role in this rapidly expanding field. I look forward to enabling OXB to fulfil its potential.
Dr. Roch Doliveux
Chair
CHIEF EXECUTIVE OFFICER’S AND 2020 PERFORMANCE REVIEW
Introduction
2020 was an unprecedented year globally. The challenges borne by the COVID-19 virus were managed well by the Group and, due to our world-leadership position in lentiviral vectors and the strength and expertise of our staff, the Group thrived. The Group’s model is now focused on the provision of its cell and gene therapy CDMO offering coupled with its own proprietary product development.
The Group’s number of partner programmes grew by 54% from 13 to 20 in the year, adding Juno/Bristol Myers Squibb and Beam Therapeutics to the list of cell and gene therapy leaders that the Group collaborates with. In the period Novartis and Sio Gene Therapies also extended their partnerships with the Group.
Outside of cell and gene therapy, the Group’s work with Oxford University and then AstraZeneca has been historic. The Group has successfully brought three extra manufacturing suites online for vaccine production and has rapidly scaled the manufacturing of AZD1222, an adenovirus-based vaccine, to 1000L scale, in under nine months.
Financially, the Group, which entered the FTSE250 this year, had a strong year with revenues increasing by 37% to £87.7 million driven by strong growth in commercial development and bioprocessing revenues. In addition, our market capitalisation has more than doubled from a 12 month average capitalisation of c.£350 million in 2018 to over £750 million currently. The oversubscribed £40 million gross fundraise in June gave the Group the ability to progress its planned expansion projects and invest in both sides of the Group, to capitalise on its world leading position and the opportunities that present themselves in the fast growing cell and gene therapy market.
CDMO – Partner Programmes
Juno Therapeutics / Bristol Myers Squibb Partnership
In March, the Group announced it had entered into a major new licence and five-year clinical supply agreement with Juno Therapeutics Inc. (a wholly owned subsidiary of Bristol Myers Squibb Inc.), one of the major innovators in the cell and gene therapy field. The deal is worth up to $227 million for multiple CAR-T and TCR-T programmes in oncology and other indications. There are currently four active programmes in development.
Under the terms of the agreement Oxford Biomedica received and recognised a £7.8 million ($10 million) licence fee and announced OXB could potentially receive up to $86 million in development and regulatory milestones and up to a further $131 million in sales-based milestone payments as well as undisclosed royalties on sales. In addition, the Group will receive undisclosed process development, scale up and batch revenues for these programmes. As part of the agreement Oxford Biomedica will provide Juno Therapeutics access to its new approved manufacturing facility, Oxbox.
COVID-19 Vaccine production and Partnership with AstraZeneca
The Group’s initial involvement with the Oxford AstraZeneca COVID-19 vaccine was in April 2020 when the Group joined a consortium led by the Oxford University, Jenner Institute, to rapidly develop, scale and manufacture a potential vaccine for COVID-19, ChAdOx1 nCOV-19.
Shortly afterwards, AstraZeneca entered into an agreement with Oxford University for the global development and distribution of the vaccine, renaming the programme AZD1222. In May, the Group entered into an initial one year clinical and commercial supply agreement with AstraZeneca to GMP manufacture the adenovirus vector-based COVID-19 vaccine candidate. This initial agreement required the Group to manufacture a small number of batches as the programme progressed through development.
In June, the Group signed a five-year collaboration agreement with VMIC (Vaccines Manufacturing and Innovation Centre) to enable the rapid manufacture of viral vector based vaccines. As part of the agreement VMIC provided equipment for 1000L scale production in two GMP manufacturing suites in Oxbox to further scale up production of AZD1222. The Group is currently engaged in discussions with VMIC regarding the purchasing of this equipment to allow for longer term use, which would require a capital outlay of £3.8 million to be paid in 2021.
Following positive data readouts from the early clinical trials of AZD1222, in September, the Group announced a second agreement with AstraZeneca which consisted of an 18-month supply agreement under a three-year master supply and development agreement for the large-scale manufacture of AZD1222. This agreement was for up to three manufacturing suites running at 1000L scale. The Group was paid a £15 million capacity reservation fee and expects to receive additional revenue in excess of £35 million until the end of 2021.
By October, the Group received approval from the MHRA for the third of its three 1000L suites for the purpose of vaccine production. To be able to cope with the heightened demand, new extended shift patterns were introduced to maximise vaccine production and for the first time in the Group’s history, production continued through Christmas and New Year to ensure the maximum number of batches were able to be delivered in the early part of 2021.
At the end of December 2020, the MHRA approved the Oxford AstraZeneca COVID-19 vaccine for emergency use in the UK and manufacturing continues at full pace to maximise production of vaccine from the Group’s facilities.
Novartis Partner Progress
Following the extension of the Novartis collaboration In December 2019 by a further five years and expansion of the number of vector constructs (including Kymriah®) from two to five, the partnership was further expanded with a sixth vector construct added in the first quarter of 2020. The Group continues to be Novartis’ sole global supplier of lentiviral vector for Kymriah® (tisagenlecleucel, formerly CTL019).
Global roll out of Kymriah® in both relapsed or refractory B-cell acute lymphoblastic leukaemia (r/r ALL) and relapsed or refractory diffuse large B-cell lymphoma (r/r DLBCL) indications continues at pace with more than 28 countries worldwide having approved reimbursement in at least one indication in over 300 qualified treatment centres. Kymriah® continues to build momentum showing 71% growth for the full year 2020 over 2019, with sales of $474 million.
Indication expansion of Kymriah® continued to progress well and in December, Novartis announced positive data from the Phase II ELARA trial of Kymriah® in patients with relapsed or refractory follicular lymphoma, with the filing in this indication anticipated in the US in the second half of 2021. Novartis also plans to file Kymriah® for extended use in patients with r/r DLBCL in first relapse in the second half of 2021.
The Group continues to progress other partner programmes with Novartis and will update the market when further data is available.
Beam Therapeutics
In August, the Group signed a development, manufacture and license agreement with Beam Therapeutics (Beam), a pioneering biotech company which utilises base editing to develop precision genetic medicines. The agreement grants Beam a non-exclusive license to Oxford Biomedica’s LentiVector® platform for its application in next generation CAR-T programmes in oncology, and also puts in place a three-year clinical supply agreement.
Under the terms of the Agreement, the Group could receive additional licence fees, as well as payments related to development and manufacturing of lentiviral vectors for use in clinical trials, and certain development and regulatory milestones. In addition, the Group will receive an undisclosed royalty on the net sales of products sold by Beam that utilise the Group’s LentiVector® platform.
Further partner updates
In May, Orchard Therapeutics (Orchard) announced a new strategic plan with an emphasis on neurometabolic disorders, such as their MPS-IIIA (OLT-201) programme, while reducing investment on other programmes such as ADA-SCID (OTL-101). OLT-201 is moving ahead in clinical trials with interim data from their proof-of-concept study expected to be released in 2021.
Post period end in March 2021, the Group announced that Sanofi had given notice that they intend to terminate the 2018 collaboration and licence agreement for the process development and manufacturing of lentiviral vectors to treat haemophilia. The Group expects the impact on revenue will be negligible over the coming 24 month period.
The Group’s partnership with Boehringer Ingelheim and the UK Cystic Fibrosis Gene Therapy Consortium also continued to progress through development. In April 2021, post period end, the Group signed a three-year development and supply agreement with Boehringer Ingelheim for the manufacture and supply of viral vectors, building on the partnership that started in 2018.
Proprietary Product Development
Sio Gene Therapies (formally Axovant Gene Therapies)
Following the initial worldwide licence agreement signed in June 2018, in July 2020 the Group signed a three-year clinical supply agreement with Sio Gene Therapies (Sio) for the manufacture and supply of Parkinson’s disease gene therapy programme AXO-Lenti-PD. Under the terms of the agreement, the Group will manufacture GMP batches for Sio to support the ongoing and future clinical development of AXO-Lenti-PD.
Sio is currently conducting a Phase 2 SUNRISE-PD trial with AXO-Lenti-PD. In October, Sio announced positive six-month follow up data from the second cohort of the trial, showing a 21-point mean improvement in UPDRS Part III ‘OFF’ score, a 40% improvement from baseline based on the two evaluable patients in the study. AXO-Lenti-PD continued to be shown to be well-tolerated with no treatment-related serious adverse events at six months.
Unencumbered proprietary pipeline programmes
In the first quarter of 2020 the Group undertook an internal pipeline review to prioritise where pre-clinical investment will be made on its wholly-owned early-stage pipeline assets. The current portfolio consists of five programmes targeting a number of indications in ophthalmology, oncology, liver and CNS disorders.
OXB-302 (CART-5T4) is currently the Group’s priority candidate and targets haematological tumours. The 5T4 antigen has been shown to be highly expressed on various haematological tumours as well as most solid tumours with restricted expression on normal tissues. The Group continues to advance pre-clinical work on OXB-302 as the Group gets the programme ready for entry into the clinic.
OXB-203, currently in pre-clinical studies, is targeting Wet AMD and uses the Group’s technology to deliver a gene to express afibercept (a VEGF-trap). This programme builds on the demonstrated long term gene expression data seen with its predecessor OXB-201. In addition, the Group is continuing preclinical work on OXB-204 (LCA10) and OXB-103 (ALS) and a new preclinical program, OXB-401 (liver indication) was initiated.
Sanofi – Ocular assets
In June, the Group announced it had been informed by Sanofi that it intended to return the rights to ophthalmology programmes SAR422459 for Stargardt’s disease and SAR421869 for Usher Syndrome type 1b. This process is still on-going and, once returned, the Group will undertake its own internal evaluation to determine the potential future for these programmes and decide whether to commit further resources to them.
Research Collaborations
During the year, Oxford Biomedica entered into two CAR-T research collaboration, firstly one with Papyrus Therapeutics Inc. (Papyrus) then one with PhoreMost Limited (PhoreMost) later in the year.
The Group signed the research collaboration agreement with Papyrus, an emerging biopharmaceutical company developing novel extracellular tumour suppressor therapies for the treatment of cancer, in August. This early stage collaboration will assess what impact and potential therapeutic benefit Papyrus’ PYTX-002, a potential first-in-class gene replacement therapy, may confer on a CAR-T cell therapy developed by the Group, initially in preclinical in vivo models of solid tumours.
In November, the Group entered into a gene therapy discovery collaboration with PhoreMost to develop next-generation CAR-T cell therapies with improved efficacy and durability. This will use PhoreMost’s SITESEEKER platform to identify active peptides to be deployed within the Group’s LentiVector® delivery system.
Both of these early stage collaborations highlight the continued focus on the developments of the Group’s proprietary pipeline.
Innovation and LentiVector® platform development
Innovation and the development of the platform are core to the Group’s goal of industrialising lentiviral vectors. By industrialising lentiviral vector production and reducing the cost through innovation, the Group will open up therapeutic indications that are currently inaccessible in the field of cell and gene therapy due to the amount (and therefore cost) of the vector needed to address these targets. In addition, the reduction in cost will help drive adoption by payors into indications where there are far larger numbers of patients, by potentially bringing down the overall cost per patient treated.
Development of technologies such as TRiPSystem™, SecNuc™, LentiStable™ and most recently U1 and U2, along with the corresponding IP, continue to move ahead. In addition, the Group is utilising automation and the use of robotics to further drive productivity improvements and is collaborating with Microsoft in an exciting project using artificial intelligence and machine learning to improve yields and quality of next generation vectors.
Facilities and Capacity Expansion
Post completion of the building phase of the new 84,000 sqft manufacturing facility (Oxbox) at the end of 2019, the Group received MHRA regulatory approval for the first two suites and supporting areas such as the warehouse, cold chain facilities and QC laboratories, in May 2020. The first partner batches were being produced within Oxbox by the end of the second quarter.
Following on from the agreement with VMIC for equipment for the two further suites, the MHRA approved the third and fourth manufacturing suites in September and October, respectively. This meant that by early in the fourth quarter of 2020, Oxbox had four suites approved and manufacturing was underway; one at 200L scale for the Groups LentiVector® platform partners and three at 1000L scale for the Oxford AstraZeneca COVID-19 vaccine.
The instalment of the equipment for the first fill/finish suite is progressing well and is expected to be completed and approved during 2021. This first phase of development fits out approximately 45,000 sq. ft. with the remaining fallow area available for flexible expansion in the future.
In January 2021, the Group was delighted to host the Prime Minister, the Rt. Hon Boris Johnson MP, to formally open the Group’s Oxbox manufacturing facility.
Building work is also currently being undertaken at Windrush Court to convert office space into GMP laboratories to meet the expected near term demand in commercial development and analytics. The conversion of the first of these areas to laboratories was completed by the end of 2020 and is now operational. A further area within Windrush Court will be converted during the course of 2021 and work will also start on the development of the Windrush Innovation Centre (WIC) a dedicated building for both platform and proprietary product innovation.
In the first half of 2020, a lease was taken on a new 11,000 sq. ft. site within the Oxford Business Park, close to Oxbox, as a new Corporate Head Office to house the Senior Executive Team and various support functions.
Investment progress
In June 2020, the Group successfully completed a £40 million equity fundraising which included new and existing investors, with net proceeds of £38.3 million. The proceeds of the equity fundraising provided funding to enable the Group to continue to exploit the significant opportunities in the growing cell and gene therapy market both with current and future partners. The fundraise also strengthened the Group’s cash positioning allowing it to remain at the forefront of innovation of lentiviral technology and progress towards the Group’s goal of industrialising lentiviral vectors and further develop its own propriety products. It also provided additional resources to be used for the Group’s involvement in the Oxford AstraZeneca COVID-19 vaccine or other vaccine candidates as required.
Organisational Progress
In the past 12 months the Group has made significant progress in its commitment to best practice in Corporate Governance and the diversification of talent on the Board.
In June, the Group announced the appointment of Dr. Roch Doliveux as Non-executive Chair following the retirement of former Chair, Dr. Lorenzo Tallarigo. Dr. Doliveux was previously the Chief Executive Officer of UCB SA for ten years during which time he transformed the Company from a diversified chemical group into a global biopharmaceutical leader and he is currently the Chair of the Board of Directors at Pierre Fabre S.A and a Non-Executive Director at Stryker Corporation and UCB SA.
In November, Dr. Sam Rasty was appointed to the board as an Independent Non-Executive Director, and brings invaluable experience in building and growing successful gene therapy companies. Post period end, in February 2021, the Group announced the appointment to the board as of 1 March of Professor Dame Kay Davies as an Independent Non-Executive Director. Kay is a world-renowned geneticist and Professor at Oxford University. At the same time as Kay’s appointment, it was announced the Martin Diggle, a Partner at Vulpes Investment Management would step down from the Board as a Non-Executive Director after nearly nine years. Dr. Andrew Heath will not be standing for re-election at the 2021 AGM having served on the board since 2010.
During the year, the wider Oxford Biomedica team also continued to grow, reflecting the expansion of the business and the extra employees recruited as part of the scale of vaccine manufacture for AstraZeneca. Headcount increased by over 20% reaching 673 at the end of the year, compared with 554 at the end of 2019.
Environmental, Social and Governance
The Group remains committed to its role as a responsible business having developed a strategy over the past few years which is now deeply embedded in everything that the Group does. Throughout 2020, the Group particularly focussed on the wellbeing of our staff with the introduction of a number of initiatives, including, workshops and access to mental health professionals. We were delighted to receive the “Commitment to Workforce Wellbeing” award from Oxfordshire Mind, in recognition of our various initiatives.
Outlook
With the growth in partner programmes during 2020, the Group expects an increase in underlying LentiVector® platform based revenues in 2021 from both bioprocessing and commercial development activities. In addition, following approval of the Oxford AstraZeneca COVID-19 vaccine and with production at the Oxbox manufacturing facilities progressing well, subject to the continued manufacture of the vaccine, the Group expects total cumulative revenues from this programme to be in excess of £50 million by the end of 2021. It is therefore expected that revenues for the Group should grow strongly in 2021.
At an Operating EBITDA level, the Group also expects an increase from 2020, albeit at a more modest rate than revenues due to increased R&D spend as we invest for the future.
Discussions and feasibility studies are ongoing with various potential cell and gene therapy partners and the Group aims to increase not only the number of partners but also the number of programmes worked on by existing partners during the course of 2021.
Looking to 2021 and beyond, with the Group’s ever increasing number of partners programmes and continued broader market growth in cell and gene therapy, the future has never looked more exciting and the Group is well positioned to maximise the opportunities ahead.
John Dawson
Chief Executive Officer
FINANCIAL REVIEW
Operational resilience
2020 has been a period of operational resilience, adaptability and revenue growth for the Group. Whilst the COVID-19 pandemic enforced changes to the Group’s operating methods, with employees working from home where possible, the Group has been able to continue its bioprocessing and commercial development activities throughout the period. This great achievement allowed the Group to generate revenue growth during a very difficult period for businesses across the world. From first joining the Oxford University Jenner Institute consortium in April, the Group ultimately signed an agreement with AstraZeneca in May to develop and bioprocess batches of the Oxford AstraZeneca COVID-19 vaccine, which was then converted into a full commercial supply agreement in September 2020. These additional vaccine bioprocessing batches, together with the new commercial agreements entered into with Juno Therapeutics/Bristol Myers Squibb and Beam Therapeutics earlier in the year, has seen the Group deliver increased commercial activity and revenues throughout 2020.
In the first half of the year the Group obtained MHRA approval for the bioprocessing of batches in two of its suites at its new Oxbox bioprocessing facility. All four cleanroom suites ended up being approved and extensively used in the second half of 2020 to meet both lentiviral vector and adenovirus vaccine clinical and commercial bioprocessing requirements. Construction of the Group’s fill/finish suite was completed during 2020 and this is expected to be brought online during 2021. Once validated and operational the Group will be able to provide its customers with an end-to-end offering. Subject to the impact of the global COVID-19 pandemic on the Group’s financial position, the Group will continue to look to make selective investments in infrastructure to both have the capacity for new customers and to innovate valuable intellectual property to add to the Group’s offering.
The Group has had a very good year in terms of both an increase in commercial activities as well as revenues. Bioprocessing and commercial development revenue increased by 45%, and the Group achieved an Operating EBITDA profit of £7.3 million, with growth driven by the commercial development and bioprocessing activities undertaken for Juno Therapeutics/Bristol Myers Squibb and AstraZeneca. New commercial agreements were signed with Juno Therapeutics/Bristol Myers Squibb, Beam Therapeutics and AstraZeneca, and new research and development collaborations signed with PhoreMost and Papyrus Therapeutics. As a result of the execution of the Juno Therapeutics/Bristol Myers Squibb licence and supply agreement, a licence fee of £7.8 million ($10 million) was recognised in 2020.
The Group also made further significant improvements to its Statement of financial position, raising £40 million of new equity (£38.3 million net of expenses) in June 2020 in order to refurbish its Windrush Innovation Centre and Windrush Court sites, exploit new opportunities in the cell and gene therapy market, and also provide additional resources required for the Oxford AstraZeneca COVID-19 vaccine.
Selected highlights are as follows:
— Total revenues increased by 37% over 2019, and have now increased by 1,524% since 2013 when the revenue generating Platform division was created
— Revenues from the underlying bioprocessing and commercial development business continued its upward trend, growing 45% due to additional activities performed for new customers AstraZeneca, Beam Therapeutics and Juno Therapeutics/Bristol Myers Squibb. Double digit growth was achieved across both activities with revenues from these areas now having increased by 2,183% since 2013
— Revenues from milestones, licences and royalties increased to £19.2 million due to the recognition of a £7.8 million ($10 million) licence fee from Juno Therapeutics/Bristol Myers Squibb as well as various other licence fees, milestones and royalties from customers
— Operating EBITDA1 and operating losses improved by £12.5 million and £8.8 million respectively, with the Group generating an Operating EBITDA1 profit of £7.3 million and an operating loss of £5.7 million
— The Platform division made an Operating EBITDA profit of £13.9 million (2019: £11.7 million loss) and an operating profit of £2.0 million (2019: £20.2 million loss), whilst the Product division made an Operating EBITDA loss of £6.6 million (2019: £6.5 million profit) and an operating loss of £7.7 million (2019: £5.7 million profit)
— Cash used in operations of £3.9 million in 2020 (2019: £6.6 million) decreased as a result of the increased revenues as explained above, offset by further operational investments required
— Gross proceeds of £40.0 million (£38.3 million net of expenses) were raised from new and existing investors through a successful equity fundraising in June 2020
— Cash at 31 December was £46.7 million bolstered by the equity fundraising in the year
1. Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit & 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 16.
Overview
The Group saw a large increase in revenues which was driven by a 45% increase in bioprocessing and commercial development revenues. As a result of the new commercial contract signed with Juno Therapeutics/Bristol Myers Squibb and the vaccine development and bioprocessing contracts signed with AstraZeneca. Double digit growth was seen across both bioprocessing and commercial development activities. Licences, milestones and royalty revenues increased 14% due to the achievement of the £7.8 million Juno Therapeutics/Bristol Myers Squibb licence fee, as well as various milestones and royalties.
Operating costs, including Cost of Sales, grew by 20%, and by 16% when non-cash items1 are excluded. Manpower and facility costs have increased as the Group saw the full year effect of its investments in people, facilities and operations required for the Oxbox bioprocessing facility and the development and manufacture of batches of the Oxford AstraZeneca COVID-19 vaccine. The Group will continue to invest in its people and facilities in 2021 to allow it to meet increasing customer demand for the Group’s bioprocessing and commercial development services. Headcount rose from 554 at December 2019 to 673 at the end of 2020.
The Group made an Operating EBITDA profit of £7.3 million, an improvement of £12.5 million from the prior year. Once non-cash items1 are added back, the Group made an Operating loss of £5.7 million, an improvement of £8.8 million on the prior year.
1. Non-cash items include depreciation, amortisation, revaluation of investments, fair value adjustments of assets held at fair value through profit & loss and the share based payment charge. A reconciliation to GAAP measures is provided on page 16.
Key Financial and Non-Financial Performance Indicators
The Group evaluates its performance by making use of alternative performance measures as part of its Key Financial Performance Indicators (refer to the table below). The Group believes that these Non-GAAP measures, together with the relevant GAAP measures, provide an accurate reflection of the Group’s performance over time. The Board has taken the decision that the Key Financial Performance Indicators against which the business will be assessed are Revenue, Operating EBITDA and Operating profit/(loss). The figures presented within this section for prior years are those reported in the Annual Reports for those years and have not been restated where a change in accounting standards may have required this (e.g. revenue under IFRS 15 during 2018 to 2020 but IAS 18 during 2015 to 2017).
Key Financial and Non-Financial Indicators
Key Financial Performance Indicators | |||||
£m | 2020 | 2019 | 2018 | 2017 | 2016 |
Revenue | |||||
Bioprocessing / commercial development | 68.5 | 47.3 | 40.5 | 31.8 | 22.6 |
Licences, milestones & royalties | 19.2 | 16.8 | 26.3 | 5.8 | 5.2 |
Total Revenues | 87.7 | 64.1 | 66.8 | 37.6 | 27.8 |
Operations | |||||
Operating EBITDA1 | 7.3 | (5.2) | 13.4 | (1.9) | (7.1) |
Operating profit/(loss) | (5.7) | (14.5) | 13.9 | (5.7) | (11.3) |
Cash flow | |||||
Cash (used in) / generated from operations | (3.9) | (6.6) | 9.2 | (1.5) | (5.9) |
Capex2 | 13.4 | 25.8 | 10.1 | 2.0 | 6.4 |
Cash burn3 | 7.8 | 26.3 | 1.9 | 9.8 | 11.5 |
Financing | |||||
Cash | 46.7 | 16.2 | 32.2 | 14.3 | 15.3 |
Loan | - | - | 41.2 | 36.9 | 34.4 |
Non-Financial Key Indicators Headcount | |||||
Year-end | 673 | 554 | 432 | 321 | 256 |
Average | 609 | 500 | 377 | 295 | 247 |
1. Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit & 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 based payments. A reconciliation to GAAP measures is provided on page 16.
2. This is Purchases of property, plant and equipment as per the cash flow statement which excludes additions to Right-of-use assets. A reconciliation to GAAP measures is provided on page 17.
3. Cash burn is net cash generated from operations plus net interest paid plus capital expenditure. A reconciliation to GAAP measures is provided on page 17.
Revenue
Revenue increased by 37% to £87.7 million (2019 £64.1 million). Revenue generated from bioprocessing/commercial development increased by 45% to £68.5 million (from £47.3 million in 2019), and is up 2,183% since 2013. The main contributor to growth in 2020 has been the revenues generated from increased bioprocessing batches produced for AstraZeneca as part of the vaccine manufacturing efforts, and also increased commercial development services provided to new customers Juno Therapeutics/Bristol Myers Squibb, Beam Therapeutics, and AstraZeneca.
Revenues from licence fees, milestones and royalties of £19.2 million (2019: £16.8 million), which included a licence fee from Juno Therapeutics/Bristol Myers Squibb of £7.8 million ($10 million), and other customer licences, milestones and royalties of £11.4 million, increased 14% from the prior year when the £11.5 million ($15 million) Sio Gene Therapies milestone was achieved.
The Group’s customer base and revenue streams have continued to diversify, although the largest portion of its revenues came from its development and supply agreement with AstraZeneca as part of their worldwide COVID-19 vaccine rollout.
£m | 2020 | 2019 | 2018 | 2017 | 2016 |
Revenue | 87.7 | 64.1 | 66.8 | 37.6 | 27.8 |
Operating EBITDA
£m | 2020 | 2019 | 2018 | 2017 | 2016 |
Revenue | 87.7 | 64.1 | 66.8 | 37.6 | 27.8 |
Other income | 0.8 | 0.9 | 1.1 | 1.8 | 3.0 |
By: GlobeNewswire
- 15 Apr 2021
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