- Rapid decline for Covid-19 vaccine hits 1H revenues
- Company expects to meet full year revenue expectations
- Hopes pinned on transformational deal
Gene and cell therapy pharma services company Oxford Biomedica (OXB) said first half revenues fell 21% year-on-year to £64 million driven by a 24% reduction in Covid-19 vaccine manufacturing sales to £57.3 million.
The fall in revenues, combined with additional operational expenses related to the January 2022 acquisition of Homology Medicines to spearhead the establishment of the Oxford Biomedica Solutions division, pushed the group into losses.
For the six months to June 2022, Oxford Biomedica reported an operating loss of £19.2 million compared with a profit of £19.7 million in the first half of 2021.
The FTSE 250 company anticipates delivering similar levels of revenues in the second half and reaching ‘broadly break-even operating EBITDA (earnings before interest, taxes, depreciation and amortisation).
This expectation is based on ‘existing binding purchase orders and rolling customer forecasts’, the company said.
The shares dipped 1% to 453.6p, taking the year-to-date share price loss to 63%.
Oxford Biomedica is a key manufacturer of AstraZeneca’s (AZN) Covid-19 vaccine. The decline in demand for vaccines generally and AstraZeneca’s absence in the booster market has resulted in a sharp fall in manufacturing revenues.
TRANSFORMATIONAL DEAL
The $130 million (£97 million) deal to acquire 80% of US-based Homology Medicines transforms the group into a full-service transatlantic CDMO (contract development and manufacturing organisation).
The transaction includes a three-year manufacturing and supply deal as preferred customer with a minimum first year contract value of $25 million (£21 million). The company expects the new division to reach break-even in the first half of 2025.
Oxford Biomedica estimates the outsourced AVV (Adeno-associated virus) supply market will grow to $3.7 billion by 2030. AVV is a type of virus which can be engineered to deliver DNA to target cells.
The company has signed several new CDMO deals in the first half and is working on 20 different programmes.
Numis said while there is good visibility on 2022 revenues the picture for 2023 looks more challenging with a wide consensus range for revenues of between £91 million-to-£146 million. Analysts expect full year 2022 revenues of £128 million.
