PramBigear
29 May '18 - 21:17 - 196 of 205
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AGM Report
Generally, as might be expected, there was a pretty happy and relaxed atmosphere. Certainly the ‘happiest’ I have encountered since the Trovax ‘deal days’.
The Chairman opened the meeting and allowed ‘general questions’.
This was the commonly expressed ‘Capital raising complaint’. This breaks down into”
- why do it” (“needed the funds to finance the Novartis deal”).
- “Why not give existing shareholders the same opportunities and rights” (We took advantage of market conditions at that time”).
During this exchange we learned that Oaktree Capital did get warrants and that they have not yet exercised them.
The questioner asked if individual shareholders could have similar opportunity to obtain warrants (“We note your request”).
The usual business of the AGM: Remuneration; re-appointment of directors; approval of auditors; and even the ‘special resolutions overriding the shareholder protection of the Companies Act (Giving the directors right to increase and authorise share capital, waive pre-emption rights, reduce notice of meetings to 14 days). All passed without debate or disapproval.
John Dawson Presentation.
Before my notes it is worth rehearsing the points posted by Marcus, from post #170, my comments from the meeting in brackets.
The Company estimates the lentiviral vector bioprocessing market was worth around $200m in 2017 and will grow to $800m in 2026
• Oxford BioMedica estimates it currently has ca. 15% of global market share that includes academia and industrial market participants
• Oxford BioMedica believes it can grow its market share to 25% to 30% with new facilities to be funded from proceeds of the placing (So $200m to $300m from manufacturing alone)
• Potential milestone and royalty receipts are in addition to these estimates which are for bioprocessing revenues (Royalties are higher for newer deals. For example royalties on Bioverativ are double those from Novartis. In fact although royalties are less than manufacturing profit at present this is expected to reverse as time progresses.)
Expect gross income to continue to grow strongly • 3 GMP suites and laboratories fully operational (“Lots of partners already and we expect a lot more”, Sanofi, Novartis, Bioverativ, Glaxo, etc. and they are meeting and progressing many more. The implication was that they can and are picking and choosing.
• Multiple revenue generating partners with potential for further new partnerships in 2018 (including expansion of business with GlxoSmithKline)
• Bioverativ $5 million license payment received as part of agreement
• Kymriah royalty income expected to grow strongly across the year (“including Novartis 2nd indication which OXB can’t tell you but look at Novartis report online and you can see what it is”)
OXB-102 Phase I/II clinical study to be initiated in H1 2018
• Partnering discussions ongoing for in-house priority development programmes (Impression given that there IS a partner in late stage discussion but to ensure he commits they are finalising the trial protocol and have agreed internally to take the phase ½ forward in the second half of this year if the partner doesn’t).
Some particularly interesting comments made during the above presentation:-
- “We are cash flow positive and can fund all operations to the end of 2019, including capex.”
- “Lots of people coming to see us since Kymriah approved”
- “We have a broad pattern of working with partners (excitedly…) we have learned a lot from discussions with partners and potential partners which we take back to the company.”
- They agree there are many competitors able to produce a lentivector, but none to the same quality and volume as OXB. OXB have to thank Novartis for their assistance and guidance in development of ‘quality systems’ (which few, if any can match).
- “ ‘CNS’ (sorry, I can’t figure what that is!), Lung and Liver all require huge volumes of Lenti by their nature. Few can do that. “
- “We are some years ahead of our competitors”
In particular Bioverativ will require huge amounts of Lenti for their project (I don’t understand why) and here is where our technology is ‘disruptive’.
• Using current manufacturing one dose would cost $4m to produce…. Impossible;
• Our 200ltr production improves this by a factor of 10…. Makes dose $400k still too high;
• But our TriP technology improves that by another factor of 10…. $40k!
The impression given is that no-one else can do that.
SPIN OUT projects
John recognised that “we tick all the boxes for Lenti, but we need a ‘Big Tick’ for this. It is coming!”
John had made a low key comment about spinning out Ophthalmology products, he said it hastily, and I may not have caught the right tone or facts. I think he said to a US partner….. However,…
Peter Nolan is retiring during the next year. He is key, and two people are replacing him over time. In a chat with him after the meeting he told me that although he was retiring, he expected to be busy for months to come as he was working on a partnering project with ophthalmic products? I wonder? A US company, or Sanofi? After all, the latter already have two of the products.
NEWFLOW
All 2nd half year.
Novartis 2nd Car-T indication;
Orchard to file their BLA;
Bioverativ clinical progress (worth $100m over 3 years to OXB, but don’t yet know the rate of progress);
More Lenti manufacturing deals (presumably to be executed 2019 as Novartis will take almost all current production);
Parkinson OXB 102 spin out;
Glaxo expansion of deals.
QUESTIONS
Capacity?
OK now to end 2019, new facility then comes on-line and doubles it.
Capital?
The $19.3m raised earlier is earmarked for the production expansion. “No need to raise cash for operations”.
Trovax?
“No longer working on it”.
Royalties?
“2014 painted a picture of royalties being a big thing. That is not true yet, but it will be.”
People?
Most of current spend is to meet manufacturing and royalty needs.
Hope I haven’t missed too much!
Pram
