Oxford Bio Medica Funded Through To Value Inflection Points

The recent fund-raising, coupled with the Sanofi (SNY) opt-in payment, means Oxford BioMedica (OXB.L) is well funded and permits the development of its flexible LentiVector gene-delivery technology through to several value inflection points. ProSavin, to correct the dopamine depletion of Parkinson’s disease, may be the most advanced project, but it is the earlier-stage ocular programmes that elicit most interest. The promising data means management is increasingly prioritising this area and re-positioning the business accordingly.


Ocular projects are the main focus
The LentiVector gene-delivery platform is well suited to ophthalmic indications, with a single administration offering the potential of a permanent benefit. There are six projects in various stages of development, with Sanofi collaborating on four programmes targeting specific indications (having recently opted in for StarGen and UshStat). A number of Phase I/II trials are underway, with further data expected to be reported during Q412. RetinoStat, for age-related macular degeneration, has the largest commercial potential and will be the focus of attention.

Manufacturing site now fully approved
The new LentiVector production facility is now fully operational, marking a material de-risking of the whole technology. Direct control of the manufacturing process is seen as a major advantage in partnering discussions, with additional benefits from the cost savings (compared to outsourcing) and the potential to capture more of the value chain. Additionally, management has not ruled out using any spare capacity for third-party manufacture, since the extra income would be welcome, but emphasises that in-house production remains the principal focus.

Valuation: Risk-adjusted NPV of £62.5m
Oxford BioMedica’s investment case rests principally on the successful development of its ocular programmes in collaboration with Sanofi, notably the potential opt-in to development/commercialisation licences for RetinoStat and EncroStat, and on securing partners/funding for ProSavin and TroVax. Our valuation of £62.5m is based on the rNPV model of the R&D pipeline. We employ conservative assumptions and include only late-stage or highly visible assets, leaving upside potential for earlier-stage programmes and the financial benefits arising from the in-house production facility.

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