Oxford Biomedica (LSE:OXB) — Investor Presentation

0:00 Good morning, and welcome to the OXFORD BIOMEDICA PLC Investor Presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged and can be submitted anytime by the Q and A tab situated on the right hand corner of your screen. Just simply type in your question and press send. Company may not be in a position to answer every question received during the meeting itself. However, can review your questions submitted there and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to the OXFORD BIOMEDICA PLC team. Good morning. Good morning, everyone. I'm Frank Matthias, CEO of the company. So thank you, all of you, joining us today in this, investor presentation, which is, I have to say, the first on on this platform. So I'm joined by, our chief financial officer, doctor Lucy Quetri, and we have also with us our chief business officer, doctor Sebastian Ribaud.

0:52 I'm I'm really delighted, to present to you today, and we will be discussing our interim results for the first half of twenty twenty six. So I'm I'm aware that probably, at least some of you have seen our full briefing earlier this week. It was on on Tuesday. So we will just provide you with a a more shortened presentation, but this gives us more opportunity to be able to ask to answer all your questions. So if you want to look for the full briefing, you can watch out on our website. If I can go to the next slide, this is, yeah. Please consider the disclaimer. As always, this is my next slide.

1:40 We didn't show that on Tuesdays. It's up for those of you that might be less familiar. I wanted to start to show you a slide to make it clear what our company OXB is doing and the crucial role we play in delivering life changing therapies to patients. So these slides explain quickly what cell and gene therapy is and where OXB comes into the picture. So as a core, these therapies are about fixing diseases at their biological source. Instead of just treating symptoms, they aim to correct, they aim to replace, they aim to add what's not working inside the body cells. And here, OXB plays a central role by providing vial vectors, and you see this in the middle of the slides, which you can think as, something like a delivery vehicle that safely brings new genetic, instruction into the cells, be it for cell or be it for gene therapies.

2:44 So if we move to the next slide Thank you. This is before we start to go into more details about our performance. Just to, we to remember you that, also, OXB fundamentals didn't change over the last months despite a lot of discussions that have, taking place. What you see here that the strong, we continue to have a very strong cell and gene therapy market opportunity. We see our, pipeline to continue to mature to diversify, and that's why we were able to reiterate our guidance we have given in the summer, meaning 180 to £200,000,000 for the full year 2026, and we expect year to year growth of something between 2530% for 2027.

3:43 So this was mentioned in the summer, and this remains unchanged. We expect also at least double digit EBITDA margins for the full year 2027, and we continue to have a a strong ambition of achieving something around £500,000,000 by 2030, which is something at the current exchange level, something around 600, $50,000,000. And all this is backed by, our numbers that you can see on the right hand side. We have more than thirty years of experience. We have currently 50 current clients and running something about 60 programs, having done more than 1,000 batch over the last years.

4:33 So if we go to the next one, I would like to really highlight the strong commercial momentum we have been seeing during the first half of twenty twenty six, which continues to underpin in indeed our confidence in our long term growth ambitions. So we have continued, as you can see here, to expand our client base, signing 17 new clients during the first half year. This is more than 30% more over the full year 2025. You see under bracket here that we are already at 21 on these slides. Indeed, we signed another client this week, so we are currently at 22 new clients. If we look at our pipeline value, which stands at $713,000,000 at a half year, a 30% year over year increase towards last year.

5:29 And under brackets, you see that, we have now $60.60 660,000,000, in the pipeline. This movement from the end of June to end of August is a very positive indicator indeed as it reflects the successful conversion of our opportunities into signed client orders. And you see it, in the next here, contracted orders by the end of June at £97,000,000 and at the end of August at already 127,000,000. Since then, it has continued to increase, also. Revenue backlog, 193,000,000, pounds. At the end of, June, end of, August, we were around £200,000,000.

6:16 So we continue to see a maturation across our portfolio with now nine programs having reached late stage development or commercial stage by the half year. So as a client program continue to progress to high value stages, they provide further opportunities to deepen our relationship and support sustainable revenue growth. That's why we are so confident about about our ambition, of £500,000,000 in 2030. If we go to the next slide, here, I would like to conclude my section with, indeed this slide.

7:01 OXB for me is in the right market. OXB offers the right services at the right time. And you see that our global footprint positions us to capture growth across the world's leading cell and gene therapy markets while giving access to our clients to an integrated network spanning The UK, The US, and France. Today's network includes five facilities in Oxford, two in The United States, and two in France. Over the recent years, we have strengthened these footprints who are targeted investment in our existing site as selective acquisitions that expand our capabilities and capacities in line with, client demand. So in The US, acquisition of Durham, last year in North Carolina has, for sure, certainly strengthened our position as a world larger cell and gene market where we see strong demand now for commercial manufacturing. This was an acquisition of fully FDA approved commercial site.

8:12 Together with, the site near Boston and Bedford, it gives us now a full end to end offering in The US from process, from analytical developments through to GMP manufacturing and commercial supply. We are also in Europe, as as you know, with our sites in in Oxford, Lyon, and Strasbourg. This place us in the heart of one of the world's leading center for cell and gene therapy, research and innovation, supported by a centralized approval process, as we all know, across European countries. Additional, I have to mention that in August, we welcomed our new chief operating officer, Eric Schmidt. Eric brings the wealth of, CDMO experience to OXB and will lead our global operation as we continue our focus on operation excellence and delivery of a world class service to our clients. And finally, on the right hand side, you can see that, the market the outsourced energy in TerapiMAX are outsourced to CDMOs, is supposed to continue to grow, and that's why we are also so confident, in our future. If we go to the next slide, which will be the final slide, on my side, it's, just to to show you that, we continue to consider the environment in which we are operating has been very positive. We have seen

9:42 a lot of good news, in the last months. This just this is just a snapshot, but it shows that we have seen new approvals coming through. We have seen positive clinical data readouts. We have seen fresh capital flowing back into our industry. So these three things stands out for me. First, firstly, regulators continue to approve cell and gene therapies, and the process is now well established, I would say. Secondly, clinical data continues to validate the science across an ever wider range of indication as Sebastian will show you later. And thirdly, funding has obviously returned after a couple of, difficult years. Investors are backing cell and gene therapies developers again.

10:33 Now having said that, I I pass it to my colleague, Sebastian, for a few datas on our commercial performance. Sebastian? Thank you, Frank. Yeah. We can move into the commercial update and and go directly to the first slide in in the section. Just wanted to highlight here the evolution of the portfolio of active programs that we have at at OXB. We're today at well, Frank said it. We signed a a new program this week, so it's actually not anymore 59, but 60 clients programs on which we work with a split 50 of these 60 programs well, 51 of these 60 programs at early stage, six in late stage, and three at the commercial stage at the very bottom left of the slide.

11:24 It's a nice evolution in comparison to what we could see in April 2024 or even April 2025, an increase in the programs at early stage, but even a more significant increase of programs between late stage and commercial. If I compare April 24 to September 26, five total programs between late stage and commercial to be compared to nine program today between late stage and commercial. And it's not just that we have late stage program. We have a very good visibility on when these programs are likely to be commercial products that we routinely manufacture. You see here the submission dates communicated by our clients to us, BLA submission dates.

12:14 In the next twelve months, at least five of of these six programs will have a BLA submitted. First one in q four twenty twenty six, last one in q three twenty twenty seven. One of them is a holding submission, so that's why it's difficult to put a date on it. Although we believe that sometimes in 2027, the BLA submission will move to BLA approval based on the recent clinical data, and it should be a new commercial product in 2028 at the latest. We cover with all these programs at BLS admission stage, multiple indications, oncology, multiple programs, but also dermatology, neurology, and ophthalmology.

13:02 It's important for OXFORD BIOMEDICA to be positioned with multiple vectors on multiple indication because we all know that the failure rate in clinical studies is extremely high. So we wanna make sure that we don't have all our eggs in the same basket, and we're not exposed to one single indication. As you can see it here, that's not the case. Moving to the next slide, I'm talking about making sure that the pipeline is diversified enough. You will see here pictures of the pipeline in terms of number of opportunities by vector starting on the left. And you see that for the first time in the OXFORD BIOMEDICA history, we have as many opportunities in the AV space than in the Lanti space. 42% for each vector.

13:55 The rest of the 18% of the pipeline are being allocated to different type of vectors, adenoviruses, MVA, other type of vaccines, but also measles and a few other vectors. If we're moving to the graph in the middle now, not only we have roughly the same amount of AV and Lanti opportunities, but, again, for the very first time in the company history, we have a volume with AV that is above the land t volume of opportunities. $289,000,000 of AV opportunities as of now versus 265 millions for the Lanti opportunities. It shows that OXB is finally very well positioned as an AV player.

14:43 That was the rationale of the acquisition of our site in Bedford, Massachusetts. And we do that deliver AAV not only from Bedford, but from as well, where we've finished successfully the first GMP batch recently. But we've also tech transferred the AAV platform to our sites in France, and we have started the first AE programs in France with the first GMP batch in the next coming not even weeks, but but days now. So that that was a key objective in the OXB strategy to reposition the company as a multi site, multi vector company. And we see from the data in the pipeline, but also the volume of orders, a number of new products in the AV space that it's been successful.

15:29 The last data point here that I want to discuss with you is the graph that we have on the right where you see the evolution of the pipeline by geography. In q three twenty twenty five, the volume of opportunities allocated for execution on The US sites was 24%. 19% of the opportunities for Bedford, 5% of the opportunity for Bedford and beyond. If we move now one year after q three twenty twenty six, about 40% of the pipeline is for execution in the in The US, with DIOM only being 23% of this 40% volume. We knew that DIOM was going to be a game changer. We see it here in the pipeline. We see it every day through execution.

16:20 I was there with Frank last week, seeing the volume of activity that we've already embodied and the projections for the next years, indeed, having commercial scale manufacturing in The US, able to deliver AV and lenti was key for the company, and we see that the effects are already visible in the pipeline. More or less the same situation in France that moved from 13% in q three twenty five to 24% in in q three twenty six, reflecting the effective tech transfer of the Lanti platform from UK to France and the transfer of the AV platform from US to France as well. This being said, we still have a lot of volume for The UK sites where, as a reminder, we deliver only lentiviruses, which explains why the other sides grow today faster because we have more vectors that we can deliver on these geographies.

17:17 On the next slide, we'll see the conversion rate for the company. It's just an an element of comparison versus what we had already disclosed back in June during our capital markets day event. We see only per category 1% maximum variation of our conversion rates from proposal to contract, from contract drafting to contract sign, or last but not least, from end of negotiation to the final contract. It's obvious for everyone that's if it's an existing client, the conversion rate is expected to be above. But I think important to emphasize here that 85% from the very initial proposal to the signed contract or 96% from the final contract draft to the conclusion is an excellent result in the CDMO space and shows that the customer satisfaction at OXB is extremely high.

18:22 So very, very good result on on this on this conversion rates and overall on the client relationship and the attractiveness of the company from the clients. If we now move to the next slide, which will be my last slide, wanted to recap why companies work with OXB. Two different client profiles here. A relationship that has been there for a few years already with the Caballetta BIOM, a five years history developing and and manufacturing for Caballetta, a CAR T program in the autoimmune space. Extremely successful. Cabaretta disclosed results in q two showing that this program is advancing extremely well.

19:13 What they needed was viral vector and specifically lenti vector manufacturing expertise, execution on time in full at clinical and commercial scale, which we could provide from the site in in Oxford. That's why they selected OXB. We have the track record of delivery. We have the ability to support the commercial programs. Versus one of our new names here in this presentation, branch bio, we started the execution on one of our European sites showing that the tech transfer of the platform was very effective and could be used by client. Clinical stage biotech, they recently raised more than a $100,000,000 for pivotal phase two, progressing very quickly into the clinical stage. They also needed lengthy viral vector expertise and proven track record, which we have which we have provided.

20:09 Same rationale of why they selected OXB. Different stages with Cabaleta, we're discussing commercial introduction. With branched bio, we have been discussing so far the early stages. But when I look at the comments and when I look at the fact that they accepted to be mentioned on the slides, same experience for the two customers. So whether it's a long standing relationship or a new one, the client centricity at OXB really means something, and I think that's the reason why we are well differentiated from competition. I'm gonna stop here for today and hand over to my colleague, Lucy Crabtree, for the bio financial update. Thank you, Sebastian. I'm very pleased to take you through our h one twenty twenty six financial performance.

20:59 This has been a half year of continued momentum across the business with our manufacturing in particular driving an increase in revenue, our pipeline growing and converting into new revenue, and the impact of continued cost discipline supporting improved operating EBITDA on the same period last year. If we start with revenue, our growth through h one twenty twenty six reflects the ongoing demand we are seeing for our services with half year revenue increasing by 10% versus last year on a constant currency basis to £80,200,000. Looking at this in a little more detail, manufacturing revenues increased by 20% with more clinical and commercial launch batches. Development revenues were marginally up 1% with increases in process characterization and validation activity.

21:44 Procurement services revenues were broadly flat to £8,400,000, and licenses and royalties were lower at £1,200,000 as Kymriah matures. Looking forward, our full year 2026 revenue guidance is a 180 to £200,000,000 with a £168,000,000 of forecasted revenue already covered by contracted orders. Turning to profitability, we delivered an improvement on 2025 with the stronger revenues and disciplined cost control. Our OpEx has remained fairly stable as our revenues have grown. This resulted in operating EBITDA improving by £500,000 to a loss of $7.7800000 pounds compared with a loss of £8,300,000 last year. Adjusted EBITDA, which excludes one off costs and foreign exchange gains, improved by £1,400,000 to a loss of £2,500,000 from a comparative loss of £3,900,000 for the same period last year.

22:42 On our balance sheet, we ended the half with a cash position of £75,300,000, which takes into account a number of negative working capital movements in the cash flow totaling £16,000,000 for for example, inventory build and lower accruals. However, for h two, we expect to benefit from a lease of some from a release of some of this working capital in our period of higher output. Turning to the next slide. The market fundamentals, as shared earlier by Frank and Sebastian, are robust. We see a market CAGR of 18%, and the AAV opportunities in the pipeline are gathering pace. As we look at how OXB is primed to take advantage of this, we estimate we are currently at approximately 6% market share. And with our world class service offering, we firmly believe we are well very well positioned to grow this.

23:33 Our modest market growth assumptions place us at a low double digit digit percentage market share for twenty twenty twenty thirty. As Sebastian has already covered in our interim financial results, we reported 50 preclinical and early stage client programs, up from 37 a year ago. As assets progress through the clinic, we expect this will be fueled and and will fuel our late late stage and commercial programs. Moving down the funnel of our later of our current later stage programs, we have expected BLA submission dates over the next twelve months or so, and we expect these to progress into commercial stage manufacturing. In addition, our excellent service offering is also seeing further late stage programs being added to the pipeline, representing another growth opportunity beyond the maturation funnel you see before you.

24:22 The growth is very much underpinned by the traction seen in the market as described by Sebastian earlier. These are the factors that are driving our continued confidence in our strategy and our ambition to reach circa 500,000,000 of revenue by 2030. Turning to the next slides and moving on to costs and how we are improving operating leverage across the business, we have defined six levers across the cost base. Firstly, our increase in utilization is converting fixed manufacturing costs into operating leverage as the business scales. From a procurement standpoint, we have an associated team and strategy now in place that are focused on creating efficiencies and sourcing. For corporate activities, as revenue scale, we we are already seeing administration costs lower with the progress seen in h one twenty twenty six expected to continue.

25:12 From a network optimization perspective, we are ensuring each site is aligned to core to a core strength to ensure our capabilities and network are optimized appropriately. On commercial mix, a shift to late stage in commercial programs, improving volumes, price, and unit unit economics will also create operating leverage within the business. And finally, we are focused on improving our pro platform productivity, lowering cost per batch, and improving margin. We believe these measures will drive our 2027 margin to at least double digits with an ambition of circa 30% by twenty thirty thirty one, which I will go into in more detail on the next slide. As shared at the Capital Markets Day in June and during our results earlier this week, we are still very much focused and on the same trajectory towards an EBITDA margin approaching 30% by twenty thirty thirty one.

26:05 End of twenty twenty six, we expect to be at mid single digit, as I've mentioned, and next year will see us jump to at least double digit margin with further profitability measures under consideration to support this. The bridge from 1.4% in 2025 to around 30% is about 28 points, and in the most part sits below gross profit. Cost of sales contributes up to a thousand basis points as late stage and commercial programs grow, now nine from seven a year ago, and as yield and batch release initiatives come through. Operating costs contribute up to a thousand basis points as utilization rises with the network build complete. Administration contributes up to around 700 basis points and is already at 18% of revenue from 18.6 a year ago. Commercial and innovation contribute up to 50 basis points each.

26:53 So the path to around 30% is driven by the whole cost base with signs of continued proven evident in h one. To finish, I wanted to emphasize how excited we are about the future of the business as we continue to grow. We will continue to focus on disciplined execution and cost control as we progress achieving our revenue and profitability ambitions. I'll now hand over to Frank as we come to the end of our presentation. Can we go to the next slide, please, which should be the last one? Yeah. That's that's my last one. By the by the way, that's a slide I I have shown at our capital markets event in in June. And I I wanted to show it again because it it summarized very well the reasons why I personally, but indeed, we all at OXB are so confident about the future of OXB.

27:45 It everything starts with a high medical need, that in the markets that we serve, cell and gene therapies have, as you might know, the potential to transform treatment and offer potentially curative options. So it's not only a treatment of very severe diseases, it's potentially a cure. And that for patients that are suffering from very severe diseases. As the second part, which is also important, I have to mention that we have the strong, skilled, and experienced people on board, and this is confirmed by a lot of our clients always always mentioning to me that you have very good people on board, Frank, not to say the best people in the world for cell and gene therapy, viral vector development and production.

28:37 We have invested a lot, over the last years in, our platforms and technology, helping us now to have the next generation already of platforms and and technology. We can offer multi vector, experience with full end to end offering. Sebastian mentioned about clients. I have to say that we we see a very high client satisfaction, and and Sebastian have shown clearly the strong commercial momentum that we have seen. We have now a global footprint that allows us to operate in a integrated network, us also to serve our clients in a very flexible way and to respond to their needs wherever they are and at whatever stage of development there might be. And importantly enough, and this was shown by Lucy, in her presentation, all this will translate to a clear path to profitability.

29:36 In 2025, we delivered already strong revenues, growth, and operating EBITDA profitability for the first time since we made our strategic refocus, and we have now a clear plan in place to build on that with further growth and margin expansion. So this concludes our presentation for today, and I hope it gives us enough time for your for answering your questions. So let's open our q and a session, please. Fantastic. Thank you very much indeed for your presentation today. Ladies and gentlemen, do please continue to send me your questions just using the q and a tab situated on the right hand corner of your screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you that the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your dashboard.

30:23 I'd now like to hand you over to Sofia. As you can see, we've had a number of questions submitted there. If I may just ask you to read them out and direct them to the team, and I'll pick up from you at the end. Thank you, Paul. We have the first question. Please, could you expand on the delay experience with Durham GMP coming online? Also, you've said previously that you want to acquire teams rather than facilities. But are there any learnings here? You want to answer this, Sebastian? Yeah. Of course. So we did not have delay on the GMP side. The GMP was well in place, and it's actually been confirmed by multiple client audits since we acquired the facility. Multiples, many client audits.

31:10 And even a regulatory inspection that we had recently that confirmed that the GMP status of the facility is exactly where it should be. The delay was linked to the tech transfer of our platform between Bedford where we were running the process development and Durham where we wanted to run the manufacturing activities. It's taken indeed a bit more time without impacting the clients since their main objective was to start clinical studies in September this year, and we've been able to deliver the products at the expected level of of quality before the start of the clinical trial. Any tech transfer includes a certain level of risk.

31:59 Are there any learnings? Yes. That we can confirm that indeed a tech transfer is systematically at risk. And that, as always, Deville is in the details. So we reinforced the presence of Bedford's personal in Durham to make sure that the team in Durham would be supported properly in this first run with the OXB platform that had a very strong impact. Our strategy, and I think it was part of the question, has always been to acquire teams and not just facilities.

32:45 And indeed, we see from all the clients' audits from the recent regulatory audit and from the success of the engineering run and the GMP run that the team in place is experienced, solid, has the right expertise, and can deliver on multiple on multiple vectors. So that was the right acquisition. That was the right team. We visited them last week. We're obviously there regularly and had a discussion with many of them recently in an internal meeting where we extended congratulations for the for the work done.

33:32 So tech transfer is never is never easy. Difficulty is expected. Outcome finally positive. Well done. Well done to the teams. Thank you. We have another question. Do you think the current challenges seen with in vivo therapies could potentially be addressed satisfactorily by ex vivo, or is cost and time too much of a hurdle? Sebastian, if you don't mind, I think it goes to you. Yeah. I can take it. I'm I'm not exactly sure I fully understand the question because if I compare in vivo and ex vivo, in the ex vivo space, we treated collectively several thousands of patients with commercial products, and the ex vivo space is advanced enough to talk about commercial products. The in vivo space is not not really further than just phase one clinical studies.

34:35 And the latest estimations I add were that fewer than 100 patients had been treated with early phase one clinical product in the in vivo CAR T. So can we talk about difficulties in the in vivo space when we don't even have the results of this first phase one? I'm not sure there are real difficulties in the space. Some early results were positive. But, again, comparing to ex vivo, ex vivo works. Ex vivo is commercialized. We see 2,200 assets in the ex vivo space versus 150 in the in vivo space. So it's very difficult to compare 150 preclinical well, discovery, preclinical phase one data to 2,200 phase one, two, three, preregistration and commercial data where thousands of patients have been treated successfully.

35:36 It doesn't mean that in vivo is facing difficulty. In vivo is going through the very standard cycle of clinical trials, but I have not seen personally any difficulty that was different from what we would expect from any other clinical trial. Thank you. Next question. What is the typical time from signing to recognizing first revenue? I can I can take it, and if Lucy wants to elaborate after? It varies a lot depending on what type of contract we onboard. If you sign a process development activity or a feasibility study, and I signed again one one today, the lead time to start is couple of weeks, and you're gonna recognize the first revenue after a month or so.

36:33 If you're talking about a very complex phase three program tech transfer between signature and the first batch confirming that tech transfer is is okay, You can see as long as nine to twelve months sometimes. So it it really depends what's the type of activity varies between a week and, let's say, three months if the if the contract is is very is very complex. Three months corresponding to activities where the lead time on on raw materials to start the activities, for example, is very important. I mean, to make it simple, process development activities, you're gonna see revenue in the next months.

37:21 GMP manufacturing, you're gonna see very small revenues upfront corresponding to the initial setup. But the real revenue recognition, the first big milestone is gonna be couple of months to couple of quarters after the initiation of the project, meaning the signature. Yeah. And I'll I'll I'll just add that, obviously, you know, the revenue being recognized is really based on the percentage of our completed work for our clients. Thank you. One further question. Will the company please comment on the significant rumors of bid interest in the company which continue to circle? Yes. That's certainly a good question, but you will understand that I cannot comment on this one. The only thing I can tell you is, of course, that we know our duties, and we will always follow good governance rules. So if there is something to be communicated, we would certainly do it in due course.

38:24 I cannot say more. Thank you, Frank. I can confirm there's no other questions on the q and a platform. So over to you, Frank, to close the session. Yes. But then thank you so much. This close, obviously, then our call for today. Thank you to all of you for your time today, for for the good questions you asked during, this, short discussion panel. As always, we continue to to appreciate your support and interest in our business, and we look forward, of course, to update you on our progress as we continue to execute on our strategy and realize our future ambitions. So thank you again for for your your interest and and time today. All the best for all of you. Thank you. Bye bye. Frank, thank you, and thank you to the team for updating investors today. Can I please ask investors not to close the session? You should be automatically redirected to provide your feedback, which I know is very important to the team. It'll only take a few moments to complete, and I'm sure it'll be greatly valued. On behalf of the team, OXFORD BIOMEDICA PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.