REG - Oxford Biomedica PLC - Interim Results
23/09/2024 07:00
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RNS Number : 2038F Oxford Biomedica PLC 23 September 2024
Press release
OXFORD BIOMEDICA PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
Delivering Pure-Play CDMO Growth Strategy
• Continued execution of "One OXB" strategy with global integration
progressing across UK, US and French operations
• Existing near-term and medium-term financial guidance reiterated,
supported by positive growth trajectory of the business
• Continued strong demand for OXB's CDMO services, with an increase in
number of late stage programmes
- Client portfolio is maturing and now includes 37 clients and 48 programmes
as of September 2024 (September 2023: 24 clients and 41 programmes),
representing a growth of 54% for clients and 17% for programmes year-on-year
- Successfully onboarded multiple new clients, including signing 7
early-stage AAV programmes in the US
- Currently supporting late stage activities for 4 clients preparing for
commercial launch of CAR-T products, compared to 1 late stage programme in
September 2023
• Strong commercial KPIs underpin expected momentum in second half of
2024 and beyond:
- Contracted value of client orders in the first eight months of the year
reflect strong demand for CDMO services at approximately £94 million; this is
supported by a high level of GMP suite utilisation for 2025
- The total potential revenue pipeline grew by 29% from $438 million to $565
million, since the start of the year (as of 13 September 2024)
• Post-period end, Dr. Lucinda Crabtree joined as CFO on 2 September;
transition process well-progressed
Oxford, UK - 23 September 2024:OXB (LSE: OXB), a quality and innovation-led
cell and gene therapy CDMO, today announces interim results for the six months
ended 30 June 2024.
Dr. Frank Mathias, OXB's Chief Executive Officer, said: "The first half of
2024 has been a period of significant progress for OXB as we continue to
execute our multi-vector, multi-site 'One OXB' strategy.
"The integration of our global network of sites is progressing well,
delivering operational benefits that enhance our ability to meet diverse
client needs and accelerate project timelines. We've experienced strong demand
across our viral vector services, with particularly robust revenue growth in
lentiviral vector manufacturing. Importantly, we're also seeing encouraging
progress in AAV, including the signing of several new early stage programmes
in the US.
"Our commercial momentum is strong across all our key regions - the UK, US and
France. We're particularly pleased with the growth in our late-stage
programmes, now supporting late stage activities for four clients preparing
for commercial launch of CAR-T products.
"The positive trajectory of our key performance indicators, including our
growing revenue backlog and the high level of GMP suite reservations for 2025,
gives us confidence in our future performance. These metrics reflect the
increasing maturity of our client programmes and the growing demand for our
services in the cell and gene therapy sector.
"As we look ahead, we remain focused on further integrating our operations and
growing our global portfolio of clients and projects across all stages of
clinical development. I'm proud of the OXB team whose expertise and dedication
are driving our achievements, enabling our clients to deliver life-changing
therapies to patients and create long-term value for our shareholders."
FINANCIAL HIGHLIGHTS (including post-period events)
• Double-digit revenue growth; total revenues increased by 18% to £50.8
million (H1 2023: £43.1 million). Organic revenue growth was 38%. Organic
growth excludes the impact of the acquisition of OXB France and the loss of
revenues from Homology Medicines, Inc ("Homology").
• Revenue growth was driven by higher levels of manufacturing and
commercial development activity, including:
• New client acquisition and revenue growth in lentiviral vector
manufacturing as a result of an increase in the number of batches manufactured
and clients transitioning to Process C, OXB's best-in-class perfusion
bioreactor process for lentiviral vector manufacturing.
• New contributions from OXB France following the acquisition of ABL
Europe in January 2024, total revenues in France of £5.7 million in H1 2024.
• Offset by a decline in US revenues due to Homology ceasing clinical
activities, revenues from Homology in H1 2024 were £0.2 million (H1 2023:
£12.9 million).
• Lower cost base as a result of the 2023 reorganisation:
• Operating EBITDA loss of £(20.3) million (H1 2023: £(33.7 million)
and operating loss of £(32.2) million (H1 2023: £(50.7) million).
• Sufficient capital to achieve current strategic plan:
• Cash at 30 June 2024 was £81.4 million (31 Dec 2023: £103.7
million); Net cash was £41.7 million (31 Dec 2023: £65.2 million).
• Commercial KPIs underpin expected momentum for the second half of 2024
and beyond:
• The contracted value of client orders1 signed during the first 8
months of 2024 was approximately £94 million as at 31 August 2024.
• Revenue backlog(2) as at 31 August 2024 stood at approximately £120
million, compared to £94 million at 31 December 2023. This is the amount of
future revenue available to earn from current orders.
OUTLOOK AND FINANCIAL GUIDANCE
• The Group reiterates its existing near-term and medium-term financial
guidance communicated to the market:
- 2024 total Group revenues of between £126 million and £134 million, with
a three-year revenue CAGR of more than 35% for 2023-2026.
- Low double-digit Operating EBITDA loss in 2024, including the impact of
the acquisition of OXB France and investment in talent to support increased
late stage client activity in 2025.
- The Group expects to achieve Operating EBITDA margins in excess of 20% by
the end of 2026, and to be profitable on an EBITDA level in 2025.
1 Contracted value of client orders represent the value of customer orders for
which the customer has signed a financial commitment, whereby any changes to
agreed values will be subject to either change orders or cancellation fees.
2 Revenue backlog represents ordered CDMO revenues available to earn. It is
calculated on a cumulative basis by adding new contracted client orders less
the value of revenues already recognised or no longer available after project
scope adjustments or cancellations.
Analyst briefing
OXB's management team, led by Dr. Frank Mathias, CEO, Dr. Lucinda Crabtree,
CFO and Dr. Sebastien Ribault, CBO will be hosting a briefing and Q&A
session for analysts at 13:00 BST / 8:00 EST today, 23 September, at Chartered
Accountants Hall, One Moorgate Place, London EC2R 6EA, United Kingdom.
A live webcast of the presentation will be available via this link
(https://stream.brrmedia.co.uk/broadcast/66e03a15c4e82a866fe30cc5) . The
presentation will be available on OXB's website at www.oxb.com
(http://www.oxb.com/)
If you would like to dial in to the call and ask a question during the live
Q&A, please email OXB@icrhealthcare.com (mailto:OXB@icrhealthcare.com)
Notes
Unless otherwise defined, terms used in this announcement shall have the same
meaning as those used in the Annual report and accounts.
Enquiries
Oxford Biomedica plc T: +44 (0)1865 509 737/ E: ir@oxb.com (mailto:ir@oxb.com)
Sophia Bolhassan, Head of Investor Relations
ICR Consilium T: +44 (0)20 3709 5700 / E: OXB@icrhealthcare.com
(mailto:OXB@icrhealthcare.com)
Mary-Jane Elliott
Angela Gray
Davide Salvi
RBC Capital Markets (Joint Corporate Brokers): T: +44 (0)20 7653 4000
Rupert Walford
Kathryn Deegan
JP Morgan (Joint Corporate Brokers): T: +44 (0)207 1347329
James Mitford
Manita Shinh
Jem de los Santos
About OXB
OXB (LSE: OXB) is a quality and innovation-led contract development and
manufacturing organisation (CDMO) in cell and gene therapy 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, OXB has more than 25
years of experience in viral vectors; the driving force behind the majority of
cell and gene therapies. OXB 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), adenovirus and other viral vector types. OXB'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.
OXB offers a vast number of unique technologies for viral vector
manufacturing, including a 4th generation lentiviral vector system (the
Tetravecta™ system), dual plasmid system for AAV production, suspension and
perfusion process using process enhancers and stable producer and packaging
cell lines.
OXB, a FTSE4Good constituent, is headquartered in Oxford, UK. It has
bioprocessing and manufacturing facilities across Oxfordshire, UK, Lyon and
Strasbourg, France and near Boston, MA, US. Learn more
at www.oxb.com (http://www.oxb.com) , and follow us on LinkedIn
(https://www.linkedin.com/company/oxford-biomedica) and YouTube.
(https://www.youtube.com/oxfordbiomedica)
Overview
In the first half of 2024 Oxford Biomedica plc ("OXB" or "the Group") remained
firmly focused on the execution of its new multi-vector multi-site "One OXB"
strategy, laying the foundations for further sustainable growth. Despite the
challenges of continuing unfavourable global economic conditions, this
strategy is gaining traction. This is demonstrated by the high demand for
OXB's CDMO services across all key viral vector types, alongside strong
commercial KPIs. These factors underpin expected momentum for the second half
of 2024 and beyond.
To align with the new focus of the business, OXB made several strategic
updates to its Board and senior leadership team including the post-period end
appointment of Lucinda (Lucy) Crabtree as the new Chief Financial Officer.
Smoothly taking over from Stuart Paynter, Lucy Crabtree has already begun
working closely with Frank Mathias and the rest of the leadership team to
execute the new OXB strategy.
OXB has continued to gain market share in the rapidly growing cell and gene
therapy market. The contracted value of client orders signed during 2024 stood
at approximately £94 million as of 31 August 2024, including an increase in
orders signed towards the end of the first half of 2024 and continuing
momentum post-period end. OXB expects strong cadence of new orders to continue
in the second half of 2024 and beyond, underpinned by a strong business
development pipeline, with a high level of GMP suite utilisation for 2025
giving increased visibility.
Operational Review
CDMO Services
Demand for OXB's CDMO services remains strong across all key viral vector
types, with an expected increase in AAV and adenovirus-based programmes. OXB
has capitalised on this demand, growing and diversifying its
CDMO portfolio throughout the year. The Group has successfully onboarded
multiple new clients, including signing 7 early stage AAV programmes in the
US. Concurrently, existing client programmes have advanced, with the Group
supporting late stage activities for 4 clients as they prepare for the
commercial launch of CAR-T products and subsequent Biologics License
Application (BLA) submissions. Approximately a quarter of OXB's clients are
working with the Group on more than one programme, underscoring the strength
and embedded commercial opportunity of these relationships.
In January, OXB completed the acquisition of ABL Europe SAS, now renamed
Oxford Biomedica (France) SAS ("OXB France"), significantly enhancing the
Group's capacity to meet growing client demand. This move has transformed
OXB's operational footprint, which now spans three key regions: UK, US and
France, and solidified OXB's position as a world-leading quality and
innovation-led CDMO in the cell and gene therapy field. The acquisition has
also expanded OXB's capabilities significantly, complementing its established
expertise in Adenovirus, Lentiviral vectors and AAV with OXB France's advanced
capabilities in Pox viruses, including MVA and Vaccinia.
The integration of OXB France is significantly progressed, with the site
already delivering process development and GMP manufacturing for clients
across multiple vector types.
The resulting multi-vector, multi-site model is already demonstrating
significant operational benefits alongside commercial benefits. A key
operational advantage is the Group's ability to seamlessly allocate projects
across its international network of facilities. This cross-border
collaboration enables OXB to:
• Optimise resource utilisation across all sites
• Balance workloads efficiently
• Leverage specialised expertise from different locations
• Manage multiple work packages simultaneously
• Increase flexibility in line with client preferences
As a result, the Group has enhanced its capacity to meet diverse client needs
and accelerate project timelines.
This expanded operational model, combined with OXB's strong track record,
expertise and know-how in manufacturing viral vectors, strengthens the Group's
position as a leading CDMO in the cell and gene therapy sector.
Programme stage September 20231 September 20242
24 clients 37 clients
41 client programmes 48 client programmes
Pre-clinical through to early stage clinical 393 42
Late stage clinical 1 4
Commercial agreements 1 2
1 As per the H1 2023 results release
2 As of this results release (includes post-period events)
3 Includes undisclosed stage programmes
Business Development
OXB has continued to strengthen its business development activities throughout
2024. The Group's focus on utilising its multi-viral vector CDMO capabilities
to broaden its client base and deepen existing client
relationships has started to deliver results, reflecting sustained demand for
OXB's services from a diverse range of pharmaceutical and biotechnology
companies.
The contracted value of client orders signed during 2024 was approximately
£94 million as at 31 August 2024. Clients transitioning from early stage
manufacturing to late stage and commercial activities have moved from a batch
reservation model to a binding forecast model, providing increased revenue
visibility for late stage client programmes.
The Group tracks its pipeline of potential revenue opportunities through a
rigorous internally developed process.
The total potential revenue pipeline grew by 29% from $438 million at the
start of year to $565 million as of 13 September 2024. Growth has also been
seen in the risk adjusted pipeline (adjusted for conversion probability)
demonstrating OXB's increased efficiency in progressing potential commercial
opportunities.
The pipeline is well-balanced, with approximately half representing potential
revenue opportunities with existing clients. It includes opportunities across
all stages of development, including commercial manufacturing.
Innovation
The Group focuses on client-centric innovation that addresses the unique
challenges of cell and gene therapy. By enhancing viral vector production, the
Group is not only industrialising the process, but also achieving higher
productivity, better quality and lower costs, thereby benefiting clients and
ultimately patients. This combination of platform and process innovation is
expected to significantly reduce the cost per dose, accelerating clinical
development and expanding patient access to these therapies.
At the start of the year, the Group launched the inAAVate™ platform, which
offers a proprietary 'plug and play'
Dual-Plasmid system for transient transfection, as well as a standard triple
transfection system for AAV-based gene therapies. The inAAVate™ platform has
demonstrated cell culture titre to over 1E15 vg/L for multiple serotypes
across multiple genomes, and shown a significant increase in AAV vector
productivity and quality with >50% full capsids in the bioreactor and
>90% full capsids in the final drug substance. The Dual-Plasmid system,
together with the Group's proprietary transfection process has been
successfully scaled up to 2,000L with multiple GMP runs at 500L scale, and
represents a high-quality platform with industry-leading productivity to
enable successful AAV product development.
Additionally, the Group has developed additive technologies that are already
being used in GMP for client programmes (U1) or expected later in the second
half of 2024 / first half of 2025 (I3A). These allow for an increase
in the number of lentiviral particles generated and an improvement in their
potency such that less vector has to be used to achieve the same benefit; a
continuing challenge for the industry.
Corporate & Organisational Development
The Group has undergone changes in its Board composition and leadership team
during the period, better aligning the Board's skills and expertise with its
focus as a pure-play cell and gene therapy CDMO.
In March 2024, Peter Soelkner joined the Board as a Non-Executive Director.
Mr. Soelkner brings over 30 years of experience in the global pharmaceutical
services industry, with significant CDMO expertise. He is currently
Managing Director of Vetter Pharma, where he has helped grow revenues from
$200 million to more than $1 billion over the past 15 years.
Catherine Moukheibir and Dr. Michael Hayden did not stand for re-election at
the June 2024 Annual General Meeting, as part of the Group's efforts to
streamline the Board while bolstering its CDMO expertise. Dr. Hayden continues
to serve as an adviser to the Science and Technology Advisory Committee.
In July 2024, Laurence Espinasse was appointed as a Non-Executive Director.
Ms. Espinasse brings more than two decades of experience across the legal and
healthcare sectors and currently serves as the General Counsel and Compliance
Officer at Institut Mérieux SA ("Institut Mérieux").
On 17 July 2024, post-period, the Group announced the appointment of Dr.
Lucinda (Lucy) Crabtree as Chief Financial Officer (CFO) and Board member,
effective 2 September 2024. Dr. Crabtree brings extensive experience in the
biopharmaceutical and investment sectors, having previously served as CFO at
MorphoSys AG and Autolus Therapeutics. Concurrently, Stuart Paynter stepped
down as CFO and from the Board after almost seven years
of service.
One OXB: integrated global CDMO strategy
The Group has made significant progress with the integration of its global
network of sites under its new multi-vector multi-site strategy as a pure-play
CDMO. The Group continues to deliver on the 20 "One OXB"
workstreams, improving efficiency of operations, retaining talent and focusing
on client-centric innovation, aiming for full integration by the end of 2025.
Key achievements include:
• Successfully transferring its lentiviral vector capabilities to its
Bedford, Massachusetts site, with rollout to US clients underway and plans to
enable OXB's French sites to provide similar lentiviral vector services by the
end of 2024.
• Developing a new product introduction process that significantly
speeds up clients' transition from clinical stages to GMP manufacturing. This
new process is expected to significantly reduce internal resource usage and
shorten the time needed to transfer new products onto OXB's platform.
• Extending the Sales and Operations Planning (S&OP) process to
French sites, following successful implementation in the UK and US. This
allows the Group to use a systematic and consistent approach to deciding where
to best allocate client projects according to key criteria such as delivery
and business impact.
Post-period end in September, the Group announced the launch of its new
corporate brand. As part of this rebrand, the Group has rebranded as OXB,
unveiling a more modern and recognisable visual identity that reflects the
global nature of the Group's operations and its transformation into a
pure-play cell and gene therapy CDMO.
Acquisition of ABL Europe from Institut Merieux
In September 2023, OXB announced its intention to acquire ABL Europe from
Institut Mérieux, for a deal value of €15 million (including €10 million
of post-completion cash funding in ABL Europe from Institut Mérieux). Under
IFRS 3: Business Combinations, accounting, the fair value of the shares paid
as consideration was €6.6m, which
comprises the shares issued of 3,149,374 at the acquisition date share price
of 180.6p. ABL Europe, renamed OXB France post the acquisition, is a pure-play
European CDMO with specialised expertise in the development and manufacturing
of viral vectors for biotech and biopharma companies including viruses for
cell and gene therapy, oncolytic viruses and vaccine candidates.
The transaction completed on 29 January 2024, providing the Group with
bioprocessing and manufacturing facilities in the EU, through sites in Lyon
and Strasbourg, France. This strategic acquisition increases access to
EU-based clients and broadens the Group's international development,
manufacturing and testing presence, whilst increasing its capacity in process
and analytical development and early stage manufacturing, with over 1,800m2of
GMP manufacturing space. The addition of the sites in France brings more than
100 CDMO experts to the Group and adds expertise in Pox viruses, including MVA
and Vaccinia, to OXB's client offering.
On 18 June 2024, TSGH SAS, a subsidiary of Institut Mérieux, invested €20
million (£16.9 million) through the subscription of 5,201,107 new ordinary
shares at a price of 325p per share.
Following this subscription, the acquisition, and previous market purchases,
Institut Mérieux now holds a 10.9% stake in OXB, making it a major, long-term
shareholder and further underpinning its conviction in OXB's strategy.
Environmental, Social & Governance
The Group remains committed to its role as a responsible business and its ESG
mission to deliver life-changing cell and gene therapies to patients in an
ethical and socially responsible way. The ESG strategy has been reviewed to
reflect OXB's strategic reset as a pure-play CDMO. As a result of this review,
OXB will focus on four pillars: People; Community; Environment and Supply
Chain.
The Group's newly formed Environment, Social, Governance and Risk (" ESGR")
Committee is responsible for the governance and oversight of all of OXB's ESG
commitments and reports to the Corporate Executive Team (CET) and ultimately
to the Board. The ESGR Committee is chaired by Thierry Cournez, the Group's
Chief Operating Officer.
Namrata Patel, Independent Non-Executive Director is responsible for providing
strategic insight and practical solutions to shape and achieve objectives with
regards to the Group's sustainability strategy and presents progress updates
to the Audit Committee and the Board.
Full details on our ESG pillars can be found on our ESG webpage at www.oxb.com
Financial review
The Group has made significant progress under its new multi-vector multi-site
strategy as a pure-play CDMO during the first six months of 2024. This
included the acquisition of OXB France, the successful transfer of OXB's
lentiviral vector capabilities to its Bedford, MA site and the continued
integration of its global network of
sites. Following the discontinuation of its Product segment at the end of
2023, the Group now operates solely as a pure-play CDMO. Consequently, for
2024, the Group reports as a single segment.
Selected highlights of the Group's financial results are as follows:
• Total revenues increased by 18% to £50.8 million (H1 2023: £43.1
million). Organic revenue growth was 38%. Organic growth excludes the impact
of the acquisition of OXB France and the loss of revenues from Homology.
• Revenue growth was driven by higher levels of manufacturing and
commercial development activity, including:
- New client acquisition and revenue growth in lentiviral vector
manufacturing.
- New contributions from OXB France following the acquisition of ABL Europe
in January 2024; total revenues in France of £5.7 million in H1 2024.
- Offset by a decline in US revenues due to Homology ceasing clinical
activities, revenues from Homology in H1 2024 were £0.2 million (H1 2023:
£12.9 million).
• Revenues from bioprocessing and commercial development activities
increased by 15% to £46.9 million (OXB France £5.7 million) (H1 2023: £40.6
million). This was driven by double digit revenue growth in lentiviral vector
manufacturing as a result of an increase in the number of batches manufactured
and clients transitioning to Process C, OXB's best-in-class perfusion
bioreactor process for lentiviral vector manufacturing.
• Revenues from milestones, licences and royalties increased by 56% to
£3.9 million (H1 2023: £2.5 million); due to completion of a client
milestone in relation to first patient dosing in a pivotal clinical trial.
• Acquisition of ABL Europe from Institut Mérieux for a fair value
consideration of €6.6 million by means of a share-for-share exchange
increasing net assets of the Group by £7.4 million and giving rise to a
bargain purchase gain of
£1.7 million. Refer to note 19.
• Refinancing ($30 million cash) completed of Oxford Biomedica (US) LLC
("OXB US") at 26 June 2024, resulting in an increase in ownership by OXB and
dilution of Q32 Bio Inc ("Q32 Bio") (which acquired Homology in March 2024).
OXB's ownership of OXB US as a result has increased to 90% from 80%.
• Operating EBITDA loss of £(20.3) million (H1 2023: £(33.7) million)
and operating loss of £(32.2) million (OXB France (£4.4) million) (H1 2023:
£(50.7) million). Reduced operating EBITDA loss as a result of the increase
in revenues and the impact of the 2023 reorganisation lowering the overall
cost base.
• Cash(burn) of £(43.6) million (H1 2023: £(10.2) million) arising
principally from operating loss and the absence of positive one-off working
capital movements which occured in the first half of 2023.
• Cash at 30 June 2024 was £81.4 million (31 Dec 2023: £103.7
million); Net cash was £41.7 million (31 Dec 2023: £65.2 million).
Key financial indicators
The Group evaluates its performance inter alia 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 a comprehensive, 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 in this section for prior years are those reported in the Interim
Reports for those years.
£'m H1 2024 H1 2023
Revenue
Bioprocessing/ commercial development 46.9 40.6
Licences, milestones and royalties 3.9 2.5
Total revenue 50.8 43.1
Operations
Operating EBITDA1 (20.3) (33.7)
Operating (loss) (32.2) (50.7)
Cash Flow
Cash (used in) operations (39.2) (5.4)
Capex2 (4.8) (4.9)
Cash (burn)3 (43.6) (10.2)
Financing
Cash 81.4 129.4
Loan 39.7 90.1
Non-Financial Key Indicators
Headcount
Half Year4 834 891
Average4 845 891
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation,
revaluation of investments and 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 based payments. However,
deferred bonus share option charges are not added back to operating profits in
the determination of Operating EBITDA as they may be paid in cash upon the
instruction of the Remuneration Committee. A reconciliation to GAAP measures
is provided on page 12.
2 This is purchases of property, plant and equipment as per the cash flow
statement which excludes additions to right-of-use assets.
3 Cash burn is net cash consumed from operations plus net interest plus
capital expenditure. A reconciliation to GAAP measures is provided on page 13.
4 Includes approx 130 heads as part of the acquisition of OXB France.
Revenue
£'m H1 2024 H1 2023
Revenue
Bioprocessing/ commercial development 46.9 40.6
Licences, milestones and royalties 3.9 2.5
Total revenue 50.8 43.1
The Group's revenues increased by 18% to £50.8 million (H1 2023: £43.1
million) with organic revenue growth of 38%, excluding the impact of the
acquisition of OXB France and the loss of revenues from Homology.
Revenues from bioprocessing and commercial development activities increased by
15% to £46.9 million (H1 2023:
£40.6 million) driven by new client acquisition and revenue growth in
lentiviral vector manufacturing as a result of an increase in the number of
batches manufactured, and clients transitioning to Process C, OXB's
best-in-class perfusion bioreactor process for lentiviral vector manufacturing
and £5.7 million of revenue from OXB France post-acquisition. This was offset
by a decline in US revenues due to Homology ceasing clinical activities.
Revenues from Homology in H1 2024 were £0.2 million (H1 2023: £12.9
million).
Revenues from milestones, licences and royalties increased by 56% to £3.9
million (H1 2023: £2.5 million); due to completion of a client milestone in
relation to first patient dosing in a pivotal clinical trial.
Operating EBITDA
£'m H1 2024 H1 2023
Revenue 50.8 43.1
Other income 3.2 1.4
Gain on sale of property - 0.5
Total expenses1 (74.4) (78.7)
Operating EBITDA2 (20.3) (33.7)
Non cash items3 (11.9) (17.0)
Operating (loss)/profit (32.2) (50.7)
1 Total expenses are operational expenses including cost of goods incurred by
the Group. A reconciliation to GAAP measures is provided on page 11.
2 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation,
revaluation of investments and 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 based payments. However,
deferred bonus share option charges are not added back to operating profits in
the determination of Operating EBITDA as they may be paid in cash upon the
instruction of the Remuneration Committee. A reconciliation to GAAP measures
is provided on page 12.
3 Non-cash items include depreciation, amortisation, revaluation of
investments, fair value adjustments of available-for-sale assets and the
share-based payment charge.
Operating EBITDA loss of £(20.3) million (H1 2023: £(33.7) million) and
operating loss of £(32.2) million (H1 2023:
£(50.7) million) arose as a result of the increase in revenues and the
ongoing impact of the 2023 restructure lowering the overall cost base.
In 2024, the Group benefited, in Other Income, from a £1.7 million one-off
gain as a result of the fair value of the French acquisition. In 2023, the
Group benefited from a one-off profit on sale of its Harrow House facility of
£0.5 million in a sale and lease back transaction. Other operating income
also includes sub lease rental income £1.2 million and grant income to
further develop supply chain capabilities of £0.2 million.
Total Expenses
In order to provide the users of the accounts with a more detailed explanation
of the reasons for the year on year movements of the Group's operational
expenses included within Operating EBITDA, the Group has added together
research and development, bioprocessing and administrative costs and has
removed depreciation, amortisation and the share option charge as these are
non-cash items which do not form part of the Operating EBITDA alternative
performance measure.
As Operating (loss) is assessed separately as a key financial performance
measure, the year on year movement in these non-cash items is then
individually analysed and explained specifically in the Operating and Net
(loss) section. Expense items included within Total Expenses are then
categorised according to their relevant nature with the year on year movement
explained in the second table.
£'m H1 2024 H1 2023
Research and development1 15.8 31.4
Bioprocessing costs 23.6 30.3
Administrative expenses 14.1 12.9
Operating expenses 53.5 74.6
Depreciation, Amortisation and share option charge (11.9) (17.0)
Adjusted Operating expenses2 41.6 57.6
Cost of sales 32.8 21.1
Total Expenses3 74.4 78.7
1 Includes the RDEC tax credit.
2 Research, development, bioprocessing and administrative expenses excluding
depreciation, amortisation and the share option charge.
3 Cost of goods plus research, development, bioprocessing and administrative
expenses excluding depreciation, amortisation and the share option charge.
Revenue increased by 18% in H1 2024 whilst the Group's cost base decreased by
6% to £(74.4) million. 2024 has seen a decrease in gross margin to 35% (H1
2023: 51%) due to client and product mix and the timing of client product
lifecycles to support future commercial launches.
There was a decrease of £16.0 million (28%) in adjusted operating expenditure
in H1 2024 to £41.6 million (H1 2023:
£57.6 million) reflecting the impact of the streamlining of roles, synergies
achieved from the move to a site-based model; including £5.6 million savings
from the closure of the Product division and £3.3 million reduction in
amortisation and depreciation in 2024, primarily driven by the impact of the
2023 impairment of OXB US assets following the decision by Homology to cease
clinical activities.
Administration costs have increased by £1.2 million primarily driven by the
larger Group post acquisition of OXB France, changes in Group management and
cost inflation.
The table below shows total expenses by type of expenditure (excluding
depreciation, amortisation and other non-cash items):
£'m H1 2024 H1 2023
Raw materials, consumables and other external bioprocessing costs 20.4 15.9
Manpower-related 40.0 47.1
External R&D expenditure 0.3 1.5
Other costs 16.6 16.7
RDEC Credit (2.9) (2.5)
Total Expenses1 74.4 78.7
1 Total expenses are operational expenses including cost of goods incurred by
the Group. A reconciliation to GAAP measures is provided on page 11.
• Raw materials, consumables and other external bioprocessing costs used
in lentivector and AAV batch manufacturing and development have increased in
line with increased activities.
• The decrease in manpower-related costs is due to the restructuring
completed at the end of 2023 with the loss of approximately 200 roles across
the UK and the US business, offset by the addition of approximately 130 roles
in the French business.
• External R&D expenditure decreased significantly as a result of
the closure of the product division in the second half of 2023.
• Other costs were higher as a result of the inclusion of the
administrative expenditure of OXB France and inflationary increases.
• The RDEC credit has increased to £2.9 million (H1 2023: £2.5
million) due to an increase in qualifying activity.
Operating (loss) and net (loss)
£'m H1 2024 H1 2023
Operating EBITDA1 (20.3) (33.7)
Depreciation, Amortisation and share option charge (11.9) (17.0)
Operating (loss) (32.2) (50.7)
Interest (3.1) (3.4)
Foreign exchange on loans (0.4) 1.7
Taxation (0.7) (0.3)
Net (loss) (36.4) (52.7)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation,
Amortisation, revaluation of investments and 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 based payments.
However, deferred bonus share option charges are not added back to operating
profits in the determination of Operating EBITDA as they may be paid in cash
upon the instruction of the Remuneration Committee.
In arriving at Operating (loss) it is necessary to deduct from Operating
EBITDA the non-cash items referred to above. The depreciation (£10.2 million)
and amortisation (£1.3 million) charges are both lower in 2024 post the 2023
impairment of OXB US assets driven by the decision by Homology to cease
clinical activities. The share option charge decreased by £1.9 million due to
the employee restructuring, as well as the non-vesting of certain share
options with performance conditions.
The impact of these charges resulted in an operating loss H1 2024 of £(32.2)
million in 2024 compared to H1 2023 loss of £(50.7) million in the prior
year.
H1 2024 net interest and foreign exchange charge increased by £1.8 million
partly as result of £1.7 million gain in respect of the Oaktree loan being
replaced by losses (£0.4 million) in 2024. In addition, lower group cash
balances reduced interest received (£0.5 million) and the additional leases
as a result of the acquisition of OXB France.
Other Comprehensive Income
The Group recognised a loss within other comprehensive income in H1 2024 of
£0.2 million (H1 2023: £4.6 million expense) in relation to movements on the
foreign currency translation reserve.
The translation reserve comprises all foreign currency differences arising
from the translation of the financial statements of foreign operations,
including gains arising from monetary items that in substance form part of the
net investment in foreign operations.
Cash flow
£'m H1 2024 H1 2023
Operating (loss) (32.2) (50.7)
Non-cash items included in operating loss1 11.9 17.0
Operating EBITDA2 (20.3) (33.7)
Non - cash gain (1.7) -
Working capital movement3 (17.2) 24.8
Cash (used in) operations (39.2) (8.9)
R&D tax credit received - 3.5
Net Cash (used in) operations (39.2) (5.4)
Net interest 0.4 0.1
Capex4 (4.8) (4.9)
Net cash (burn)5 (43.6) (10.2)
1 Depreciation, Amortisation, revaluation of investments and assets at
fair value through profit and loss, and Share Based Payments.
2 Operating EBITDA (Earnings Before Interest, Tax, Depreciation,
Amortisation, Impairment, revaluation of investments and 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 based
payments. However, deferred bonus share option charges are not added back to
operating profits in the determination of Operating EBITDA as they may be paid
in cash upon the instruction of the Remuneration Committee. A reconciliation
to GAAP measures is provided on page 12.
3 This is Changes in working capital as laid out in: Cash flow from
operating activities on page 31
4 This is Purchases of property, plant and equipment as per the cash flow
statement which excludes additions to Right-of-use assets.
5 Cash burn is net cash consumed from operations plus net interest plus
capital expenditure.
The Group held £81.4 million of cash at 30 June 2024, having begun the year
with £103.7 million. Significant movements across the year are explained
below:
• The negative working capital movement of £17.2 million arose
principally due to increased manufacturing activity which has reduced contract
liabilities relating to batch deposits by £6.2 million and increased trade
receivables by £12.6 million.
• The Group received the 2021 RDEC tax credit in January 2023, £3.5
million and the 2022 RDEC tax credit in October 2023, £4.0 million therefore
there is no RDEC receipt in H1 2024 as expected.
• Purchases of property, plant and equipment remained stable at £4.8
million, as the Group restricted its capex spend to replacement requirements
except for some highly strategic and specifically approved projects.
• The Group benefited from £9.0 million net cash on acquisition of OXB
France.
• The net inflows from financing during 2024 was £10.0 million,
consisting of proceeds from a share issue of
£17.0 million by Institut Mérieux and share option exercises offset by lease
and loan payments of £5.0 million and £2.2 million respectively, lease
payments have increased due to the sale and leaseback of the Group's Harrow
House and Windrush Court facilities and the additional leases within OXB
France.
• The result of the above movements is a net decrease of £21.9 million
which, together with a negative movement in foreign currency balances of £0.4
million, leads to a decrease in cash from £103.7 million to £81.4 million.
Statement of financial position
The most notable items on the Statement of financial position, including
changes from 31 December 2023, are as follows:
• Intangible assets decreased from £31.0 million to £30.0 million due
to amortisation of £1.3 million, offset by foreign exchange movements of
£0.3 million;
• Property, plant and equipment has decreased by £4.1 million from
£75.7 million to £71.6 million due to depreciation of £10.2 million;
disposals of £1.8 million and FX and other impacts £0.8 million. Offset by
capital expenditure of £4.8 million on mainly plant and equipment and OXB
France acquisition of £3.9 million;
• Inventories have increased from £12.9 million to £16.6 million,
partly driven by the addition of OXB France and an increase in UK inventory in
preparation for the H2 2024 activity;
• Trade and other receivables increased from £24.7 million at the start
of the year to £40.8 million mainly as a result of higher levels of client
activity and the addition of OXB France.
• Trade and other payables have increased from £17.8 million at the
start of the year to £26.9 million due to the addition of OXB France and
higher levels of activity driving increased trade creditors to respond to
increased client activity;
• Contract liabilities decreased from £26.1 million in 2023 to £24.0
million due to utilisation of batch deposits invoiced in advance for the goods
and services being provided by the Group in the period;
• Provisions increased to £8.6 million, an increase of £0.1 million as
a result of an increase in the estimate of restoring the existing properties
to their original state;
• Lease liabilities decreased from £72.9 million to £70.6 million due
to the derecognition of the lease liability on the Corporate office and lease
payments made by the Group during the period more than offsetting the
additions as a result of OXB France;
• The loan balance has increased by the acquisition of a working capital
loan in OXB France of £0.8 million and the dollar denominated loan has
increased to £39.0 million ($50 million) due to foreign currency movements
and interest in the period; and
• Put option liability to acquire the remaining 10% of OXB US that the
Group doesn't already own has decreased from £9.3 million at 31 December 2023
to £2.8 million due to a decrease in the value at which the option is
expected to be exercised and a reduction in the share ownership to 10%.
Financial outlook
Near-term outlook
As previously communicated, revenues are expected to be second-half weighted,
with contracted client orders providing a high degree of visibility. The Group
reiterates revenue guidance for the full year within the £126 million to
£134 million range.
OXB expects a low double-digit Operating EBITDA loss for the full year 2024.
As previously communicated, 2024 Operating EBITDA includes a mid to high
single digit loss from OXB France, which was fully funded by cash received
from Institut Mérieux prior to completion of the acquisition, as well as
additional technical and operational hires to support an increase in
late-stage client activity expected in 2025.
The Group's revenue backlog as at 31 August 2024 stood at approximately £120
million, compared to £94 million at 31 December 2023. This is the amount of
future revenue available to earn from current orders. The contracted value of
client orders signed during 2024 was approximately £94 million as at 31
August 2024.
Capital expenditure for 2024 is expected to be limited to maintenance capex
required as well as modest spend
on certain key capital expenditure projects, including transfer of the Group's
lentiviral vector capabilities into its US and France sites.
Financial metric 2024 guidance
Revenue £126m to £134m
Operating EBITDA Low double-digit loss
Medium term financial guidance
Building on its leading position in lentiviral vectors, the Group aims to
ultimately have a market leading position in the viral vector outsourced
supply market across all key vector types. OXB reiterates its medium-term
financial
guidance of a three-year revenue CAGR in excess of 35% for 2023-2026, to be
profitable on an Operating EBITDA level in 2025, with Operating EBITDA margins
in excess of 20% by the end of 2026.
Financial metric Medium-term guidance
Revenue CAGR (2023-2026) >35%
2025 Operating EBITDA Profitable
Operating EBITDA margins >20% by end of 2026
Principal risks and uncertainties
Risk assessment and evaluation is an integral and well-established part of the
Group's management processes. The Group has continued to employ mitigating
actions during the first six months of the financial year, each tailored to
the specific risk in question. As such, principal risks are not expected to
change in respect of the second six months of the financial year, and remain
appropriate to the Group.
OXB continues to monitor going concern, as set-out on page 16 & 22
(#_bookmark0) , and the risk that OXB fails in the execution of its new
multi-vector multi-site "One OXB" strategy remain key risks. The Group also
remains alert to the continuing emerging risks relating to cyber, legal,
regulatory and compliance. As noted above, OXB employs strategies to manage
and mitigate these risks.
Details of the Group's principal risks and uncertainties can be found on pages
68 to 71 of the 2023 Annual Report and Accounts which is available on the
Group's website at https://oxb.com/ (https://oxb.com/) .
Commercialisation risks
• OXB fails in its strategy to become a quality and innovation-led
pure-play CDMO
• Failure of plans with collaborators and clients
• Unable to keep up with rapid technological change
• Failure to adapt to the move into a new multi-vector multi-site
business
Supply chain and business execution risks
• Failure of key third party suppliers
• Bioprocessing failure due to batches that do not meet the required
specification
• Cyber-attacks and failures in IT infrastructure and security
• Failure to attract, develop and retain talented and capable workforce
Legal, regulatory and compliance risks
• Adverse outcomes of litigation and governmental investigations
• Adverse outcomes of regulatory inspections
• Infringement of intellectual property
Economic and financial risks
• Impacts of climate change
• Exposure to foreign currency fluctuations
• Product liability claims
• On-going macroeconomic and geopolitical events
Going concern
The financial position of the Group, its cash flows and liquidity position are
described in the Financial Statements and notes to these financial statements
section of these accounts.
The Group made a loss after tax for the 6-month period ended 30 June 2024 of
£36.4 million, and consumed net cash flows from operating activities for the
same period of £39.2 million. The Group also:
• Closed the acquisition of ABL Europe (renamed OXB France) in January
2024 which included €10 million of post-completion cash funding from
Institut Mérieux; and
• Ended the period with cash and cash equivalents of £81.4 million.
In considering the basis of preparation of the H1 2024 Report and half-year
accounts, the Directors have prepared cash flow forecasts for the period to 31
December 2025, being a period of at least 12 months from the date of approval
of these financial statements. The base case assumes trading in H2 2024 will
be significantly stronger than H1 2024 in line with the trading update made on
8 August, with a gradual increase in revenues consistent with the +35%
compound annual growth rate target over the FY23 to FY26 period previously
given, driven by the conversion of the existing sales pipeline into revenues,
and new business achieved through growth in the market. 80% of 2024 base case
forecasted revenues are covered by binding purchase orders and rolling client
forecasts which give a level of confidence in the revenues forecast over the
next 12 months. Furthermore, the Group has proven its ability to continue to
be successful in winning new clients and building its brand as demonstrated by
successfully entering into new client agreements with multiple new clients
over the last 6 months.
The Directors have undertaken a rigorous assessment of the forecasts in the
base case scenario and assessed identified downside risks. A severe but
plausible downside scenario was modelled which includes:
• Commercial challenges leading to a substantial manufacturing and
development revenue downside affecting both the LentiVector® platform and AAV
businesses;
• No revenues from new clients;
• Decreases in forecasted existing client milestones and removal of any
future licence revenues; and
• The potential impacts of a downturn in the biotechnology sector on the
Group and its clients including expected revenues from existing clients under
long term arrangements.
Under the severe but plausible downside scenario, revenues would be 15% below
the forecast for 2024 and 48% below the forecast for 2025. The Group would
continue to meet their existing loan covenants until May 2025 without taking
any mitigating actions.
However, in the event that revenues track towards the severe but plausible
downside scenario, the Group will take mitigating actions by the end of Q4
2024 that include rationalisation of facilities and rightsizing the workforce.
The Group also has the ability to control capital expenditure costs and lower
other operational spend, as necessary.
Under both the base case and severe but plausible downside scenario with
mitigations, the Group has sufficient cash resources to continue in operation
for the period to 31 December 2025.
Taking account of the matters described above, the Directors are confident
that the Group has sufficient funds to continue to meet their liabilities as
they fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial statements on a
going concern basis.
Lucinda Crabtree
Chief Financial Officer
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2024 (Unaudited)
Six months Six months
ended 30 June 2024 ended 30 June 2023
Notes £'000 £'000
Continuing operations
Revenue 4 (#_bookmark1) 50,806 43,061
Cost of sales (32,851) (21,122)
Gross profit 17,955 21,939
Research and development costs (15,764) (31,417)
Bioprocessing costs (23,595) (30,314)
Administration expenses (14,073) (12,838)
Other operating income 3,241 1,402
Gain on sale and leaseback - 472
Change in fair value of available for sale assets (2) 8
Operating (loss) (32,238) (50,748)
Finance income 6 (#_bookmark2) 1,759 2,217
Finance costs 6 (#_bookmark2) (5,257) (3,813)
(Loss) before tax (35,736) (52,344)
Taxation (663) (317)
(Loss) for the period (36,399) (52,661)
Other comprehensive income
Foreign currency translation differences (164) (4,640)
Other comprehensive income (164) (4,640)
Total comprehensive (expense) (36,563) (57,301)
(Loss) attributable to:
Owners of the Company (32,485) (47,956)
Non-controlling interest (3,914) (4,705)
(36,399) (52,661)
Total comprehensive income attributable to:
Owners of the Company (32,603) (51,349)
Non-controlling interest (3,960) (5,952)
(36,563) (57,301)
Basic and Diluted (loss) per ordinary share (30.88) (49.74)
Consolidated Statement of Financial Position
As at 30 June 2024 (Unaudited)
31 December
30 June 2024 2023
Notes £'000 £'000
Assets
Non-current assets
Intangible assets & goodwill 7 (#_bookmark3) 29,991 30,981
Property, plant and equipment 8 (#_bookmark4) 71,596 75,692
Trade and other receivables 10 (#_bookmark6) 4,506 4,340
106,093 111,013
Current assets
Inventories 9 (#_bookmark5) 16,569 12,872
Trade and other receivables 10 (#_bookmark6) 40,831 24,741
Deferred tax 69 -
Cash and cash equivalents 11 (#_bookmark7) 81,409 103,716
138,878 141,329
Current liabilities
Trade and other payables 12 (#_bookmark8) 26,921 17,802
Provisions 14 (#_bookmark10) 208 747
Contract liabilities 23,995 21,598
Deferred income 440 514
Loans 15 557 -
Lease liabilities 13 (#_bookmark9) 4,260 3,654
Put option liability 16 (#_bookmark12) 2,768 -
59,149 44,315
Net current assets 79,729 97,014
Non-current liabilities
Provisions 14 (#_bookmark10) 8,421 7,710
Contract liabilities - 4,494
Deferred income 691 837
Loans 15 (#_bookmark11) 39,183 38,534
Lease liabilities 13 (#_bookmark9) 66,307 69,270
Put option liability 16 (#_bookmark12) - 9,348
114,602 130,193
Net assets 71,220 77,834
Equity attributable to owners of the parent
Ordinary shares 17 (#_bookmark13) 52,654 48,403
Share premium account 17 (#_bookmark13) 394,831 380,333
Other reserves 8,839 (1,812)
Accumulated losses (390,064) (352,918)
Equity attributable to owners of the Company 66,260 74,006
Non-controlling interest 4,960 3,828
Total equity 71,220 77,834
Consolidated Statement of Cash Flows
for the six months ended 30 June 2024 (Unaudited)
Six months Six months
ended 30 June 2024 ended 30 June 2023
Notes £'000 £'000
Cash flows from operating activities
Cash consumed in operations 18 (#_bookmark14) (39,199) (8,916)
Tax credit received - 3,502
Net cash used in operating activities (39,199) (5,414)
Cash flows from investing activities
Acquisition of subsidiary, cash acquired 19 (#_bookmark15) 9,004 -
Purchases of property, plant and equipment 8 (#_bookmark4) (4,813) (4,854)
Proceeds on disposal of property, plant and equipment 8 (#_bookmark4) 636 4,420
Interest received 2,459 2,217
Net cash generated from investing activities 7,286 1,783
Cash flows from financing activities
Proceeds from issue of ordinary share capital 16,993 422
Interest paid 15 (#_bookmark11) (2,037) (2,094)
Payment of lease liabilities 13 (#_bookmark9) (2,514) (2,222)
Payment of lease liabilities interest 13 (#_bookmark9) (2,476) (2,999)
Loans paid (183) -
Net cash generated / (used in) from financing activities 9,783 (6,893)
Net decrease in cash and cash equivalents (22,130) (10,524)
Cash and cash equivalents at 1 January 103,716 141,285
Movement in foreign currency balances (177) (1,331)
Cash and cash equivalents at 30 June 81,409 129,430
Statement of Changes in Equity Attributable to Owners of the Parent
for the six months ended 30 June 2024 (Unaudited)
Reserves
Share premium account Non- controlling interest
Ordinary shares Other Equity Accumulated losses Total equity
Merger Translation Total
Group Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 48,132 379,953 2,291 (35,003) 7,825 (198,545) 204,653 31,539 236,192
Loss for period - - - - - (47,956) (47,956) (4,705) (52,661)
Foreign currency translation differences - - - - (3,393) - (3,393) (1,247) (4,640)
Other comprehensive income - - - - (3,393) - (3,393) (1,247) (4,640)
Total comprehensive income for the period - - - - (3,393) (47,956) (51,349) (5,952) (57,301)
Transactions with owners:
Share options
Proceeds from shares issued 128 294 - - - - 422 - 422
Value of employee services - - - - - 2,073 2,073 460 2,533
Total contributions 128 294 - - - 2,073 2,495 460 2,955
Changes in ownership interests: -
Put Option revaluation - - - 16,310 - - 16,310 - 16,310
At 30 June 2023 48,260 380,247 2,291 (18,693) 4,432 (244,428) 172,109 26,047 198,156
Loss for period - - - - - (109,534) (109,534) (21,967) (131,501)
Foreign currency translation differences - - - - (476) - (476) (191) (667)
Total comprehensive income for the period - - - - (476) (109,534) (110,011) (22,158) (132,168)
Transactions with owners:
Share options
Proceeds from shares issued 143 86 - - - - 229 - 229
Value of employee services - - - - - 1,044 1,044 (61) 983
Total contributions 143 86 - - - 1,044 1,273 (61) 1,212
Changes in ownership interests: -
Put Option revaluation - - - 10,634 - - 10,634 - 10,634
At 31 December 2023 48,403 380,333 2,291 (8,059) 3,956 (352,918) 74,006 3,828 77,834
Loss for period - - - - - (32,485) (32,485) (3,914) (36,399)
Foreign currency translation differences - - - - (118) - (118) (46) (164)
Total comprehensive income for the period - - - - (118) (32,485) (32,603) (3,960) (36,562)
Transactions with owners:
Share options
Proceeds from shares issued 4,251 14,498 4,126 - - - 22,875 - 22,875
Value of employee services - - - - - 416 416 15 431
Total contributions 4,251 14,498 4,126 - - 416 23,291 15 23,306
Changes in ownership interests: -
Decrease in NCI interest (5,077) (5,077) 5,077 -
Put Option revaluation - - - 6,643 - - 6,643 - 6,643
At 30 June 2024 52,654 394,831 6,417 (1,416) 3,838 (390,064) 66,260 4,960 71,220
Notes to the Financial Information
1 General information and basis of preparation
This condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the UK, as well
as the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority.
The annual financial statements of the Group are prepared in accordance with
UK-adopted international accounting standards. As required by the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority, the
condensed set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements
for the year ended 31 December 2023. However, selected explanatory notes are
included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the last annual financial statements.
The financial information set out above does not constitute the Company's
Statutory Accounts. Statutory accounts for the year ended 31 December 2023
were approved by the Board of Directors and have been delivered to the
Registrar of Companies. The report of the auditor (i) was unqualified, (ii)
included no references to any matters
to which the auditor drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
These interim financial statements have been prepared applying consistent
accounting policies to those applied by the Group in the 2023 Annual Report.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 23 September 2024. They have not been audited.
Oxford Biomedica plc, the parent company in the Group, is a public limited
company incorporated and domiciled in the UK and is listed on the London Stock
Exchange.
All material related party transactions in the first six months of 2024 are
described in note 23 (#_bookmark16) of these
interim financial statements. There was no material change in related parties
from those described in the last annual report.
2 Going concern
The financial position of the Group, its cash flows and liquidity position are
described in the Financial Statements and notes to these financial statements
section of these accounts.
The Group made a loss after tax for the 6-month period ended 30 June 2024 of
£36.4 million, and consumed net cash flows from operating activities for the
same period of £39.2 million. The Group also:
• Closed the acquisition of ABL Europe (renamed OXB France) in January
2024 which included €10 million of post-completion cash funding from
Institut Mérieux; and
• Ended the period with cash and cash equivalents of £81.4 million.
In considering the basis of preparation of the H1 2024 Report and half-year
accounts, the Directors have prepared cash flow forecasts for the period to 31
December 2025, being a period of at least 12 months from the date of approval
of these financial statements. The base case assumes trading in H2 2024 will
be significantly stronger than H1 2024 in line with the trading update made on
8 August, with a gradual increase in revenues consistent with the +35%
compound annual growth rate target over the FY23 to FY26 period previously
given, driven by the conversion of the existing sales pipeline into revenues,
and new business achieved through growth in the market. 80% of 2024 base case
forecasted revenues are covered by binding purchase orders and rolling client
forecasts which give a level of confidence in the revenues forecast over the
next 12 months. Furthermore, the Group has proven its ability to continue to
be successful in winning new clients and building its brand as demonstrated by
successfully entering into new client agreements with multiple new clients
over the last 6 months.
The Directors have undertaken a rigorous assessment of the forecasts in the
base case scenario and assessed identified downside risks. A severe but
plausible downside scenario was modelled which includes:
• Commercial challenges leading to a substantial manufacturing and
development revenue downside affecting both the LentiVector® platform and AAV
businesses;
• No revenues from new clients;
• Decreases in forecasted existing client milestones and removal of any
future licence revenues; and
• The potential impacts of a downturn in the biotechnology sector on the
Group and its clients including expected revenues from existing clients under
long term arrangements.
Under the severe but plausible downside scenario, revenues would be 15% below
the forecast for 2024 and 48% below the forecast for 2025. The Group would
continue to meet their existing loan covenants until May 2025 without taking
any mitigating actions.
However, in the event that revenues track towards the severe but plausible
downside scenario, the Group will take mitigating actions by the end of Q4
2024 that include rationalisation of facilities and rightsizing the workforce.
The Group also has the ability to control capital expenditure costs and lower
other operational spend, as necessary.
Under both the base case and severe but plausible downside scenario with
mitigations, the Group has sufficient cash resources to continue in operation
for the period to 31 December 2025.
Taking account of the matters described above, the Directors are confident
that the Group has sufficient funds to continue to meet their liabilities as
they fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial statements on a
going concern basis.
3 Accounting policies
The accounting policies, including the classification of financial
instruments, applied in these interim financial statements are consistent with
those of the annual financial statements for the year ended 31 December 2023,
as described in those financial statements except for the new policies
detailed below:
Business combinations
The Group accounts for business combinations using the acquisition method when
the acquired set of activities and assets meets the definition of a business
and control is transferred to the Group. In determining whether a particular
set of activities and assets is a business, the Group assesses whether the set
of assets and activities acquired includes, at a minimum, an input and
substantive process and whether the acquired set has the ability to produce
outputs. The consideration transferred in the acquisition is generally
measured at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment. Any gain on a bargain
purchase is recognised in profit or loss immediately. Transaction costs are
expensed as incurred, except if related to the issue of debt or equity
securities.
The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
Judgements
Acquisition date of OXB France
The acquisition date of ABL Europe (renamed OXB France) has been deemed to be
29 January 2024 and is the date that control passed to OXB. This is due to
multiple substantive conditions which existed in the Sae and Purchase
Agreement, which were not all fully completed until this date.
Impairment assessment of OXB US Cash Generating Unit (CGU)
OXB US has been identified as a CGU (cash generating unit) of the business.
During 2023, an impairment trigger was identified as it was assessed that the
CGU did not meet the original revenues forecasted as part of the acquisition
and an impairment assessment and adjustment was made at 31 December 2023.
The Group has performed an impairment indicator assessment of OXB US as at 30
June 2024 and determined that there are no triggers which indicate any further
impairment and, as such, a full impairment assessment is not required at 30
June 2024.
Estimations
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below. The nature of estimation means
that actual outcomes could differ from those estimates.
Fair value assumptions on acquisition of OXB France
The estimations for the fair value of the Plant, Property and Equipment has
been made using a Depreciated Replacement Cost. This cost has then been
adjusted for economic obsolescence to determine the fair value adjustments to
the opening acquisition balance sheet, refer to Note 19.
Percentage of completion of bioprocessing batch revenues
Bioprocessing of clinical/commercial product for clients is recognised on a
percentage of completion basis over time as the processes are carried out.
Progress is determined based on the achievement of verifiable stages of the
bioprocessing process. Revenues are recognised on a percentage of completion
basis and as such require judgement in terms of the assessment of the correct
stage of completion including the expected costs of completion for that
specific bioprocessing batch. The value of the revenue recognised with regards
to the bioprocessing batches which remain in progress at period end is £29.3
million. If the assessed percentage
of completion was 10 percentage points higher or lower, revenue recognised in
the period would have been
£3.9 million higher or £3.3 million lower.
Percentage of completion of fixed price process development revenues
As it satisfies its performance obligations the Group recognises revenue and
the related contract asset with regards to fixed price process development
work packages. Revenues are recognised on a percentage of completion basis and
as such require judgement in terms of the assessment of the correct percentage
of completion for that specific process development work package. The value of
the revenue recognised with regards to the work packages which remain in
progress at period end is £18.3 million. If the assessed percentage
of completion was 10 percentage points higher or lower, revenue recognised in
the period would have been
£3.4 million higher or £3.8 million lower.
Provision for out of specification bioprocessing batches
Bioprocessing of clinical/commercial product for clients is recognised on a
percentage of completion basis over time as the processes are carried out.
Progress is determined based on the achievement of verifiable stages of the
process.
As the Group has now been bioprocessing product across a number of years, and
also in a commercial capacity, the Group has assessed the need to include an
estimate of bioprocessed product for which revenue has previously been
recognised and which may be reversed should the product go out of
specification during the remaining period over which the product is
bioprocessed. In calculating this estimate the Group has looked at historical
rates of out of specification batches across the last five years and has
applied the percentage of out of specification batches
to total batches produced across the assessed period to the revenue recognised
on batches which have not yet completed the bioprocessing process at period
end. The Group makes specific provisions for product batches where it is
considered that the average overall historical failure rate does not
adequately cover the perceived risk of revenue recognised on those specific
batches having to be subsequently reversed.
This estimate, based on the historical average percentage as well as certain
specific provisions, may be significantly higher or lower depending on the
number of bioprocessing batches actually going out of specification in future.
The estimate will increase or decrease based on the number of bioprocessing
batches undertaken, the percentage of completion of those bioprocessing
batches and the number of batches which go out of specification over the
assessment period.
Consequently, bioprocessing revenue of £2.8 million (31 December 2023: £1.1
million) has not been recognised during the six months ended 30 June 2024 with
the corresponding credit to contract liabilities. This revenue will be
recognised as the batches complete bioprocessing.
Amortisation of intangibles assets (developed technology)
The estimated useful life of developed technology acquired by the Group is 15
years as the Group expects the technology to generate cash flows for a total
of 15 years. The estimate of 15 years is based on management's experience of
the time period over which the technology acquired as part of the acquisition
of OXB US will become fully obsolete. Over time as the platform technology is
improved, parts of the technology become obsolete as
they are superseded by new technology until after 15 years the original
technology is expected to have been fully replaced by newer/improved
technology.
Following the impairment in December 2023, if the estimated useful life of the
assets had been 10 years, the estimated amortisation for the six months ended
30 June 2024 would be £0.4 million higher (2023: £1.8m); whilst, if the
estimated useful life of the assets had been 20 years, the estimated
amortisation for the six months ended 30 June 2024 would be £0.4 million
lower (H1 2023: £0.9m).
Valuation of put option liability
Where a put option with non-controlling shareholders exists on their equity
interests, a liability for the fair value of the exercise price of the option
is recognised. On 10 March 2022, the Group recognised a put option liability
to acquire the remaining 20% of OXB US that it doesn't already own, from
Homology (now Q32 Bio). As a result of refinancing of OXB US in H1 2024 Q32
Bio's ownership reduced to 10%. The option is subsequently recognised at
amortised cost taking account of adjustments to the present value of the
estimated future contractual cash flows. At 30 June 2024 the put option
liability was adjusted to £2.8 million (Dec 2023: £9.3m).
The Group estimates the value of the put liability using a Monte Carlo
simulation which calculates the expected future exercise value of the put
option, taking into consideration OXB US' forecasted revenues over the period
up until the expected exercise date along with the expected volatility of
those revenues over that same period. The expected future exercise value is
then discounted to the present using a discount rate in order to capture the
counter party risk of the expected payment.
Key estimation uncertainty inputs which directly impact the valuation of the
put option liability are assessed to be:
• Revenues of OXB US - the revenues of OXB US are based on the
management approved forecast up until the end of the option period. Should the
forecast change or the actual results vary this may impact the value of the
put option liability.
• Expected volatility of revenues - should the expected volatility of
OXB US's revenues vary, this may impact the value of the put option liability.
• Discount rate - the discount rate may be impacted by economic and
market factors, as well as changes to the risk free rate of return which
impacts debt borrowing rates. Should the discount rate calculated by
management be adjusted, this may impact the value of the put option.
Management has calculated the discount rate based on the risk free rate, the
expected return from similar companies and the Group's cost of debt.
Fair value
Put option liability Increase Decrease
30-Jun-24 £'000s £'000s
Revenues of Oxford Biomedica (US) LLC 20% higher or lower 316 (633)
Discount rate 2% lower or higher - 79
4 Segmental analysis
From December 2023, the composition of the Senior Executive Team (SET) changed
to align with the transformation of the Company to a pure-play CDMO. The SET
became known as the Corporate Executive Team (CET) and became responsible for
the global management of the Company.
In 2023 the SET monitored the performance of the Group in two business
segments:
1. Platform - this segment consists of the revenue generating bioprocessing
and process development activities undertaken for third parties. It also
includes internal technology developments and the costs involved in developing
platform related intellectual property;
2. Product - this segment consists of the clinical and preclinical development
of in vivo and ex-vivo gene and cell therapy products which are owned by the
Group.
During 2023 the Group ceased its Product segment and has concentrated solely
on pure-play CDMO. As such, in 2024, the Group considers there to only be one
segment.
Disaggregation of revenue
Revenue is disaggregated by the type of revenue which is generated by the
commercial arrangement. Revenue shown in the table below is denominated in
sterling and is generated in the UK and US.
For the six months ended 30 June
Platform Product Total
2024 £'000 £'000 £'000
Bioprocessing/ Commercial development 46,859 - 46,859
Licence fees & incentives 3,947 - 3,947
Total 50,806 - 50,806
Platform Product Total
2023 £'000 £'000 £'000
Bioprocessing/ Commercial development 40,446 86 40,532
Licence fees & incentives 2,529 - 2,529
Total 42,975 86 43,061
Revenue by geographical location
Revenue by client location 30 June 2024 30 June 2023
£'000 £'000
UK 4,677 1,292
United States 31,932 29,460
Europe 14,197 12,309
Total revenue 50,806 43,061
In the first half of 2024, 4 clients (H1 2023: 5) each generated more than 10%
of the Group's revenue.
5 Basic earnings and diluted earnings per ordinary share
The basic loss per share of 30.88p (H1 2023: 49.74p) has been calculated by
dividing the loss for the period attributable to the owners of the company by
the weighted average number of shares in issue during the six months ended 30
June 2024, being 105,194,129 (H1 2023: 96,521,209).
As the Group made a loss in the current and prior periods, there were no
potentially dilutive options therefore there is no difference between the
basic loss per ordinary share and the diluted loss per ordinary share.
6 Finance Costs
Six months Six months
ended 30 June 2024 ended 30 June 2023
£'000 £'000
Finance income:
Bank interest receivable 1,759 2,217
Total finance income 1,759 2,217
Finance costs:
Unwinding of discount in provisions (319) (225)
(Loss)/gain on foreign exchange (358) 1,672
Interest payable on loan (2,264) (2,261)
Interest payable on finance leases (2,316) (2,999)
Total finance costs (5,257) (3,813)
Net finance costs (3,498) (1,596)
7 Intangible assets & goodwill
Developed
Goodwill technology Patents Total
Note £'000 £'000 £'000 £'000
Cost
At 1 January 2024 628 105,889 1,811 108,328
Effects of movements in exchange rates - 819 - 819
At 30 June 2024 628 106,708 1,811 109,147
Amortisation and impairment
At 1 January 2024 628 74,914 1,805 77,347
Charge for the period - 1,304 - 1,304
Effects of movements in exchange rates - 505 - 505
At 30 June 2024 628 76,723 1,805 79,156
Net book amount at 30 June 2024 - 29,985 6 29,991
Net book amount at 31 December 2023 - 30,975 6 30,981
The Cash-generating unit (CGU) identified is the manufacturing and process
development operation of OXB US located at the Bedford, Massachusetts site in
the United States. The Group has completed an assessment and determined that
there are no indicators of impairment identified and as such further
impairment of OXB US is not required at 30 June 2024.
Due to a tax deduction not being available on a portion of the developed
technology intangible asset, there is
a deferred tax liability of £2.1 million at June 2024. £7.3 million was
recognised at the acquisition date, reduced to £2.2 million after the
December 2023 impairment, with the liability expected to unwind in line with
the 15 year useful life of the developed technology intangible asset.
8 Property, plant & equipment
Office equipment Bio- processing
and
Freehold Leasehold and Laboratory Right-of-use
property Improvements computers equipment assets Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 - 61,063 10,371 54,960 50,766 177,160
Additions at cost - 229 143 4,440 - 4,812
Acquisitions through - 3,850
business combinations 1,414 205 686 1,545
Disposals - (407) (121) (152) (1,131) (1,811)
Change in Estimate - - - - (747) (747)
Effects of movements in
exchange rates (14) 203 (4) 54 183 422
At 30 June 2024 1,400 61,088 10,594 59,988 50,616 183,686
Depreciation & Impairment
At 1 January 2024 - 33,901 8,182 34,982 24,403 101,468
Impairment - - - - 178 178
Charge for the period 155 3,123 722 4,487 1,691 10,178
Effects of movements in 94
exchange rates (2) 148 6 77 323
Disposals - - 0 (57) - (57)
At 30 June 2024 153 37,172 8,910 39,489 26,366 112,090
Net book amount at
30 June 2024 1,247 23,916 1,684 20,499 24,250 71,596
9 Inventory
30 June 2024 31 Dec 23
£'000 £'000
Raw materials 16,569 12,872
Total Inventory 16,569 12,872
Inventories constitute raw materials held for bioprocessing, research and
development purposes.
During 2024 the Group wrote down £1,188,000 (2023: £781,000) of inventory
which is not expected to be used in production or sold onwards.
10 Trade and other receivables
30 June 2024 31 Dec 23
Current £'000 £'000
Trade receivables 14,829 8,114
Contract assets 10,834 5,228
Other receivables 1,487 2,081
Other tax receivable 9,342 4,962
Prepayments 4,339 4,356
Total trade and other receivables 40,831 24,741
Non-current trade and other receivables constitute other receivables of
£4,506,000 (Dec 23: £4,340,000) which are deposits held in escrow as part of
the Oxbox and Patriot's Park lease arrangements.
11 Cash and cash equivalents
30 June 2024 31 Dec 23
£'000 £'000
Cash at bank and in hand 81,409 103,716
Cash and cash equivalents includes £1.5 million in relation to improvement
works at Harrow House agreed under the sale and leaseback arrangement.
12 Trade and other payables
30 June 2024 31 Dec 23
£'000 £'000
Trade payables 13,007 6,052
Other taxation and social security 1,969 1,478
Accruals 11,945 10,272
Total Trade and other payables 26,921 17,802
13 Leases
The Group leases many assets including Property. Information about leases for
which the Group is a lessee is presented below:
Right-of-use assets
Property Cars IT Total
£'000 £'000 £'000 £'000
Balance at 1 January 2024 26,363 - - 26,363
Acquisitions 1,430 60 54 1,544
Disposals (1,131) - - (1,131)
Impairment of assets (178) - - (178)
Change in estimate (747) - - (747)
Depreciation charge for the period (1,674) (10) (7) (1,691)
Effects of movements in exchange rates 90 - - 90
Balance at 30 June 2024 24,153 50 47 24,250
Lease liabilities
30 June 2024
£'000
Maturity analysis - contractual undiscounted cash flows
Less than one year 9,798
One to five years 41,855
Six to ten years 39,384
More than ten years 17,262
Total undiscounted cash flows 108,299
30 June 2024
£'000
Lease liabilities included in the Statement of Financial Position
Current 4,260
Non-current 66,307
Total lease liabilities at 30 June 2024 70,567
30 June 2024
£'000
Amounts recognised in statement of comprehensive income
Interest on lease liabilities 2,264
Expense relating to short-term leases 224
30 June 2024
£'000
Amounts recognised in the statement of cash flows
Total cash outflow for leases 4,990
14 Provisions
The dilapidations provisions relate to the anticipated costs of restoring the
leasehold Oxbox, Yarnton, Wallingford Warehouse, Windrush Court and Harrow
House properties to their original condition at the end of the lease terms
ending between 2024 and 2037 respectively.
The future anticipated costs of restoring the properties are calculated by
inflating the current expected restoration costs using the 3 year historic UK
Consumer Price Inflation rate, up to the end of the lease term.
15 Loans
30 June 2024 31-Dec-23
£'000 £'000
At 1 January 38,534 39,780
Acquired through business combination 757 -
Interest accrued 2,265 4,570
Interest paid (2,037) (4,136)
Foreign exchange movement 245 (2,003)
Amortised fees 159 323
Loan repayment (183) -
At reporting period end 39,740 38,534
The Oaktree facility, expiring October 2026, was secured by a pledge over
substantially all of the Group's assets. The terms include financial covenants
including holding a minimum of US$20 million cash at all times, restrictions
on the level of indebtedness the Group may enter into or distributions made by
the Group.
As part of the Oaktree loan facility, the Company also has access to draw down
a further US$25 million from Oaktree to fund certain permitted acquisitions,
subject to the same commercial conditions as the amended facility and
available for a three-year period. If this were to be exercised, it would be
assessed against meeting the substantial modification requirements under IFRS
9.
16 Put option liability
30 June 2024 31-Dec-23
£'000 £'000
At 1 January 9,348 38,182
Revaluation (6,580) (28,834)
At reporting period end 2,768 9,348
In June 2024, the Group increased its ownership by a further 10% to 90% of OXB
US, as a result the put option liability to acquire the remaining 10% has been
revalued.
17 Share capital and Share premium
At 31 December 2023 and 30 June 2024 Oxford Biomedica had an issued share
capital of 96,804,353 and 105,304,986 ordinary 50 pence shares respectively.
150,152 shares were created as a result of the exercise of options by
employees during the period. Between January and June 2024, the Group issued
8,350,481 new ordinary shares to Institut Mérieux.
18 Cash flows from operating activities
Six months Six months
ended 30 June 2024 ended 30 June 2023
£'000 £'000
Continuing operations
Loss before tax (35,736) (52,344)
Adjustment for:
Depreciation 10,178 11,208
Amortisation of intangible assets 1,304 3,627
Loss on disposal of property, plant and equipment - 29
Gain on sale and leaseback - (472)
Net finance costs 3,498 1,596
Charge in relation to employee share schemes 431 2,532
Negative goodwill on acquisition (1,721) -
Other non-cash losses / (gains) 57 (8)
Changes in working capital, net of effects from purchase of controlled
subsidiary:
(Increase)/ decrease in contract assets and trade and other receivables (13,126) 23,991
Decrease/ (increase) in trade and other payables 2,905 (6,536)
(Increase)/ decrease in contract liabilities (6,185) 8,374
Decrease in provisions - 4
(Increase) in inventory (804) (917)
Net cash used in operations (39,199) (8,916)
19 Acquisition of subsidiary
On 29 January 2024, the Group acquired 100% of the shares and voting interests
in ABL Europe, now renamed OXB France. As a result, the Group's equity
interest granted it control of OXB France. The acquisition significantly
enhances the Group's capacity to meet growing client demand. This move has
transformed the Group's operational footprint, which now spans three key
regions: UK, US and France. The acquisition further solidifies OXB's position
as a world-leading quality and innovation-led CDMO in the cell and gene
therapy field. The Group's capabilities have expanded significantly,
complementing its established expertise in Adenovirus,
Lentiviral vectors and AAV with OXB France's advanced capabilities in Pox
viruses, including MVA and Vaccinia.
Included in the identifiable assets and liabilities acquired at the date of
acquisition are inputs, production processes and an organised workforce. The
Group has determined that together the acquired inputs and processes
contribute to the ability to create revenue. The Group has concluded that the
acquired inputs and processes constitute a business.
a. Consideration transferred
On acquisition date the fair value of the shares in OXB plc was 180.6p, this
represents the fair value of the consideration under IFRS 3. 3,149 million
shares were issued giving a consideration of £5.7 million.
Consideration transferred: 30 June 2024
£'000
Fair value of shares in OXB issued to Institut Mérieux 5,700
Total consideration transferred 5,700
b. Acquisition related expenses
The Group incurred acquisition related legal and due diligence expenses of
£1.5 million which is included in Administrative expenses.
c. Identifiable assets acquired and liabilities assumed
Acquired net Fair value
Identifiable assets acquired and liabilities assumed: assets Fair value adj of net assets
£'000 £'000 £'000
Property plant and equipment 8,018 (4,168) 3,850
Intangible assets 832 (832) -
Long term receivables 191 191
Inventory 2,894 - 2,894
Cash and cash equivalents 9,004 - 9,004
Prepayments and accrued income 2,145 - 2,145
Trade and other receivables 1,384 - 1,384
Lease liabilities (1,548) - (1,548)
Payroll and other taxes (2,568) - (2,568)
Other liabilities (7,931) - (7,931)
Total identifiable net assets acquired: 12,421 (5,000) 7,421
d. Goodwill
The acquisition of ABL Europe (renamed OXB France) increases access to
EU-based clients and broadens the Group's international development,
manufacturing and testing presence, whilst increasing its capacity in process
and analytical development and early stage manufacturing. Conversely, the
vendors have been able to dispose of a business that was not profitable for
them. As a result of the mutual benefits of the transaction, the fair value of
the net assets acquired is in excess of the fair value of the shares
transferred as consideration which has created a negative goodwill.
Negative goodwill arising from the acquisition has been recognised through the
profit and loss in other operating income as follows:
Acquired net
Goodwill assets
£'000
Consideration transferred 5,700
Fair value of identifiable assets 7,421
Negative goodwill (1,721)
e. Impact of acquisition
During the period ended 30 June 2024, the acquisition has contributed £5.7
million revenue and pre-tax loss of
£4.4 million. Had the acquisition taken place on 1 Jan 2024, then the revenue
contributed in the period would have been £0.7 million more and a further
£0.9 million loss.
f. Acquired receivables
The fair value of trade and other receivables is £1,384,000 and includes
trade receivables with a fair value of
£1,384,000. The gross contractual amount for trade receivables due is equal
to the fair value.
20 Non-controlling interest ("NCI")
The following table summarises the information relating to the Group's
subsidiary that has material NCI:
31 December
30 June 2024 2023
£'000 £'000
NCI percentage 10% 20%
Non-current assets 64,329 50,282
Current assets 22,076 11,813
Non-current liabilities - (22,479)
Current liabilities (36,802) (20,477)
Net assets 49,603 19,139
Net assets attributable to NCI 4,960 3,828
Revenue 779 26,813
Loss (19,569) (133,361)
OCI (228) (7,190)
Total comprehensive income (19,797) (140,551)
Profit allocated to NCI (3,914) (26,672)
OCI allocated to NCI (46) (1,438)
Cash flows from operating activities (4,432) (15,105)
Cash flows from investment activities (3,704) 3,077
Cash flow from financing activities (dividends to NCI: nil) 21,906 (3,717)
Net increase in cash and cash equivalents 13,770 (15,745)
21 Acquisition of Non-controlling interest
On 26 June 2024, the Group acquired an additional 10% interest in OXB US from
Q32 Bio (which had acquired Homology in March 2024) for $63 million,
increasing its ownership from 80% to 90%, with Q32 Bio holding the remaining
10%. The carrying amount of OXB US NCI's net assets in the Group's
consolidated financial statements on the date of the increase in ownership was
(£0.1 million).
30 June 2024
£'000
Carrying amount of NCI acquired 5,077
Consideration paid to NCI -
Increase in equity attributable to owners of the Company 5,077
The increase in equity attributable to owners of the Company comprised solely
an increase to retained earnings.
22 Capital commitments
At 30 June 2024, the Group had commitments of £603,000 for capital
expenditure for leasehold improvements, plant and equipment not provided in
the financial statements (Dec 2023 £3,476,000).
23 Related party transactions
Transactions Balance outstanding
June 24 June 23 June 24 June 23
£'000 £'000 £'000 £'000
Sales of goods and services
Q32 (2023: Homology) - 12,872 - 7,777
Purchase of services
Q32 (2023: Homology) - 384 - 22
Other
Q32 (2023: Homology) - rental income 294 1,070 271 572
All outstanding balances with related parties are to be settled in cash within
six months of the reporting date. None of the balances are secured.
There are no related party transactions in the period with Institut Mérieux.
24 Statement of Directors' responsibilities
The Directors of Oxford Biomedica plc are set out on page 36 (#_bookmark17) of
this report. We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK.
• the interim management report includes a fair review of the
information required by:
- DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
- DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board
Frank Mathias
CEO
23 September 2024
Independent review report to Oxford Biomedica plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Oxford Biomedica plc's condensed consolidated interim
financial statements (the "interim financial statements") in the Press Release
of Oxford Biomedica plc for the 6 month period ended 30 June 2024 (the
"period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Consolidated Statement of Financial Position as at
30 June 2024;
· the Consolidated Statement of Comprehensive Income for the period
then ended;
· the Consolidated Statement of Cash Flows for the period then ended;
· the Statement of Changes in Equity Attributable to Owners of the
Parent for the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Press Release of Oxford
Biomedica plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Press Release and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Press Release, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Press Release in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Press Release, including the interim
financial statements, the directors are responsible for assessing the group's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Press Release based on our review. Our conclusion, including
our Conclusions relating to going concern, is based on procedures that are
less extensive than audit procedures, as described in the Basis for conclusion
paragraph of this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Reading
23 September 2024
Shareholder information
Directors Joint Corporate Broker RBC Europe Limited 100 Bishopsgate London EC2N 4AA
Dr. Roch Doliveux (Chair)
Financial adviser and Joint Corporate Broker
Dr. Frank Mathias (Chief Executive Officer) J.P. Morgan Securities plc 25 Bank Street
Canary Wharf London
Stuart Henderson (Vice Chair) E14 5JP
Professor Dame Kay Davies (Senior Independent Director) Financial and Corporate Communications
ICR Consilium 85 Gresham St
Laurence Espinasse London EC2V 7NQ
(Non-Executive Director from 24 July 2024)
Registered Independent Auditors
Robert Ghenchev PricewaterhouseCoopers LLP 3 Forbury place
(Non-Executive Director) 23 Forbury Road Reading
RG1 3JH
Namrata P. Patel
(Independent Non-Executive Director) Solicitor
Covington & Burling LLP 22 Bishopsgate
Leone Patterson London EC2N 4BQ
(Independent Non-Executive Director)
Registrars Link Group 10th Floor Central Square
Stuart Paynter 29 Wellington Street Leeds LS1 4DL
(Chief Financial Officer till 2 September 2024)
Company Secretary and Registered Office
Dr. Lucinda Crabtree Natalie Walter Windrush Court Transport Way Oxford OX4 6LT
(Chief Financial Officer from 2 September 2024)
Tel: +44 (0) 1865 783 000
Dr. Heather Preston Fax: +44 (0) 1865 783 001
(Independent Non-Executive Director) enquiries@oxb.com (mailto:enquiries@oxb.com) www.oxb.com (http://www.oxb.com/)
Peter Soelkner
(Independent Non-Executive Director from 15 March 2024)
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