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14 May 2021
Investec UK Daily: 14/05/2021
Oxford BioMedica plc (OXB:LON), 328 | PZ Cussons Plc (PZC:LON), 105 | Sabre Insurance Group Plc (SBRE:LON), 157 | Sage Group plc (SGE:LON), 1,162 | TheWorks.co.uk plc (WRKS:LON), 25.8 | MJ Hudson Group Plc (MJR:FRA), 0
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Investec UK Daily: 14/05/2021
Oxford BioMedica plc (OXB:LON), 328 | PZ Cussons Plc (PZC:LON), 105 | Sabre Insurance Group Plc (SBRE:LON), 157 | Sage Group plc (SGE:LON), 1,162 | TheWorks.co.uk plc (WRKS:LON), 25.8 | MJ Hudson Group Plc (MJR:FRA), 0
- Published:
14 May 2021 -
Author:
Julian Yates | Roger Phillips | Ben Hunt, CFA | Kate Calvert | Nicola Mallard | Michael Donnelly | Ben Cohen | Alicia Forry, CFA | Dr Jens Lindqvist -
Pages:
9
FY’20 was in line with expectations. FY’20 results on 16th April were in line with our expectations for revenue and adjusted PBT, with a larger than expected RDEC tax credit (£4.6m included in FY’20 R&D spend) offset by higher than expected depreciation. Our EBITDA forecast changes, detailed overleaf, mainly relate to a shift in the timing of milestones and royalties.
Spare capacity at Oxbox. Currently, AZN uses 3 Oxbox cleanrooms for the production of adenoviral vaccine vectors. Encouragingly, a potential migration of manufacturing for Juno and Novartis to Oxbox can be achieved through capacity re-configuration: OXB is not planning to expand Oxbox further without a substantial upfront commitment by AZN or another partner.
We remain uninspired, however, by the proprietary pipeline. In our view, OXB-302’s target (5T4) has already been heavily exploited; OXB-203 targets a competitive indication dominated by Bayer/Regeneron’s Eylea®, with Novartis’ Beovu® and Eylea® biosimilars threatening; and AXO-Lenti-PD carries high risk given the small Phase I/II Part A dataset (2 patients, open-label) and the limited resources of the partner (NASDAQ: SIOX $150m).
Increased confidence in the outlook. Although guidance for FY’21 indicates a further rise in headcount, R&D expenditure and capex, we expect sustainable profitability from FY’21e. Our revised DCF-based valuation (assuming only partner-funded expansion) implies a revised target price of 1,007p, including AXO-Lenti-PD at 80p/share. We move to Hold.