You might define Oxford Biomedica (OXB) as a smaller biotech company. You might call it a leading company in gene therapy and immunotherapy - as the company does on its website. Or you might just say it's a roller-coaster ride.
For investors, it's been an interesting few years, with the shares rocketing to over 50p in 2007, then slumping to just 5p after bad news on TroVax, OXB's cancer treatment. Then earlier this month the shares were off again, hitting 20p as news of a successful clinical trial for its Parkinson's disease therapy, ProSavin, came in.
Where next? The exuberance over the ProSavin results is probably excessive - indeed, the shares have come back to 14p on profit taking. The Phase II data on ProSavin does show improvement after the second dose received by patients, and an even higher dose will be trialled shortly. But the sample size is small. That doesn't mean only a hundred, or only fifty... it means three. And it was an open label trial, so there may be some placebo effect. [1]
So let's restrain our excitement, and instead take a look at what the company's got that makes it interesting. It actually has three areas of operations, though all the recent news has focused on two of them. There's the Parkinson's disease treatment - research based on gene therapy for the central nervous system; there's cancer vaccines, and thirdly there's ocular diseases, such as age-related macular degeneration, for which OXB is also developing treatments. So the company has quite a broadly based pipeline, though many of the drugs are at an early stage of development - it's not a one-trick pony.
Of course development companies burn cash. So it's good to see that OXB has substantial cash reserves - £35m net cash, which management reckons will finance operations through to the year 2012 [2] . That comes from a deal done with Sanofi earlier this year, which also contributes funding for research and development, helping out cash flow.
There is a risk attached to the Sanofi Adventis relationship, of course. Sanofi is backing two of OXB's three product areas, and almost all the company's revenue comes from Sanofi milestone payments. If Sanofi ever loses faith in their continued progress, it could pull the rug out from under OXB's feet. But so far, it has been highly…
