Oxford Biomedica (OXB): Driving innovation in a thriving CGT industry

 Edison Investment Research Limited

Oxford Biomedica (OXB) is one of few global lentiviral vector manufacturers with capacity in a thriving cell and gene 
therapy industry, and its FY20 results highlight strong operational progress throughout the business. OXB boasts a 
diversified revenue base; and FY20 benefited from new deals including Juno/BMS covering multiple CAR-T programmes, as 
well as increased bioprocessing and commercial development activities for several customers including Novartis and the 
AZN COVID-19 vaccine. Post period, OXB upgraded its financial guidance for the COVID-19 vaccine supply agreement with 
AZN to in excess of GBP100m by end FY21. In the long term, much value resides in OXB's ability to develop and monetise 
its own CGT assets, which are progressing towards the clinic. Bolt on acquisitions that complement the pipeline or 
enhance technology capabilities represent further opportunities. We value OXB at GBP846m or 1,027p/share. 
 
We increase our valuation of OXB to GBP846m or 1,027p/share, vs GBP711m or 892p/share previously. The main source of uplift 
is the increased expectations of revenue generated from the AZN agreement, which we include for 2021-23. We remove the 
Sanofi/Bioverativ partnership, delay AXO-Lenti-PD launch by two years to 2026 and update our assumptions for the 
terminal value. Our valuation does not capture the group's ability to deliver on new customers and expand existing 
partnerships. Our model reflects net cash of GBP65.9m (31 March 2021). 

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