TIDMOXB
RNS Number : 6529J
Oxford Biomedica PLC
13 September 2016
OXFORD BIOMEDICA PLC
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2016
Oxford, UK - 13 September 2016: Oxford BioMedica plc (LSE: OXB),
("OXB" or "the Group") a leading gene and cell therapy group, today
announces interim results for the six months ended 30 June
2016.
HIGHLIGHTS (including post-period end):
OPERATIONAL
State-of-the-art bioprocessing facilities
- Capacity expansion of bioprocessing and laboratory facilities
now complete and approved for GMP vector manufacture
Partnering activities continuing to build
- Novartis contract progressing well, contributing to 184%
growth in first half Group revenues - multiple confirmed purchase
orders through to Q2 2017
- Second CAR-T programme for undisclosed indication underway with Novartis
- New IP licence and expanded collaboration agreement signed with Immune Design
- R&D collaboration signed with Green Cross LabCell to
identify and develop gene modified natural killer (NK) cell-based
therapeutics
Good progress across product development programmes
- OXB to capture value of clinical products via out-licensing or spin out approach
- OXB-102 and OXB-202 will be ready to start Phase I/II studies
within next 6-9 months, subject to successfully out-licensing or
spinning out these products
- OXB-302 pre-clinical studies expected to complete by end of 2016
- SAR422459 (for Stargardt Disease), licensed to Sanofi, has entered Phase IIa development
- Novartis still on course to file CTL019 BLA in early 2017,
with approval expected mid-2017 due to Breakthrough Therapy
designation
FINANCIAL
- Revenue increased by 184% to GBP12.5 million (H1 2015: GBP4.4
million) due in large part to Novartis contract
- R&D, bioprocessing and administrative costs of GBP16.1 million (H1 2015: GBP11.7 million)
- Operating loss of GBP6.9 million (H1 2015: GBP8.3 million)
- Capital expenditure GBP6.0 million (H1 2015: GBP4.6 million)
- Cash of GBP11.9 million (31 December 2015: GBP9.4 million)
which includes the $10 million (GBP7.6 million) ring-fenced under
the Oberland loan agreement
- Fundraising of GBP10.0 million net of expenses announced
separately today. In February 2016, the Group also raised a net
GBP7.5 million through a 5% placing
Commenting on today's announcement, John Dawson, Chief Executive
Officer at Oxford BioMedica, said: "With world-class facilities,
expertise and a broad intellectual property position, Oxford
BioMedica is a leading gene and cell therapy company. Our
unrivalled expertise in the bioprocessing and production of
lentiviral vector makes us an ideal partner for the increasing
number of potential companies wishing to use this exciting
technology in clinical studies and, in due course, commercial
therapeutics.
"Oxford BioMedica's wholly-owned priority product programmes
have progressed well during the period. In order to advance the
clinical assets as expeditiously as possible whilst still capturing
value for shareholders, the Group has decided to employ an external
funding approach, via spin outs or out-licensing partnerships.
Based on this approach, the proceeds raised in today's fundraising
will enable us to build upon our strong position by furthering the
development and enhancement of our proprietary lentiviral vector
delivery platform technology as we look to maximise bioprocessing
revenues."
This announcement contains inside information.
Conference call for analysts
A briefing for analysts will be held at 12pm GMT on 13 September
2016 at the offices of Consilium
Strategic Communications, 41 Lothbury, London, EC2R 7HG. There
will be a simultaneous live conference call with Q&A and the
presentation will be available on the Group's website at
www.oxfordbiomedica.co.uk.
Please visit the website approximately 10 minutes before the
conference call to download the presentation slides. Conference
call details:
Participant dial-in: 08006940257
International dial-in: +44 (0) 1452 555566
Participant code: 81099223
An audio replay file will be made available shortly afterwards
via the Group's website: www.oxfordbiomedica.co.uk
For further information, please contact:
Oxford BioMedica plc: Tel: +44 (0)1865 783 000
John Dawson, Chief Executive Officer
Tim Watts, Chief Financial Officer
Financial PR Enquiries: Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Matthew Neal / Chris Welsh / Laura
Thornton
Consilium Strategic Communications
OVERVIEW
Oxford BioMedica has continued to make steady progress in the
first half of 2016 towards implementing the Group's strategic
priorities.
Forefront of lentiviral vector bioprocessing
The Group has established a leading platform for lentiviral
vector bioprocessing, having significant know-how including
proprietary analytical methods as well as purpose-built facilities
which provide control over the entire lentiviral vector
manufacturing process. The expansion of the Group's bioprocessing
and laboratory facilities was completed in the first six months of
the year and the Medicines and Healthcare Products Regulatory
Agency (MHRA) has approved these state-of-the-art facilities for
the manufacture, analysis and release of GMP quality lentiviral
vector for use in clinical studies. These facilities provide the
capacity and expertise to support activities for Novartis, Immune
Design and other future partners.
Work under the Novartis contract has progressed well and, with
the new Yarnton facility becoming available early in 2016,
bioprocessing revenues have grown substantially compared to the
same period in 2015. Excellent progress has also been made in
developing the next-generation vector production processes and in
the next six months the Group is expecting to manufacture several
vector batches for Novartis using its new proprietary 200 litre
serum-free suspension process in single-use bioreactors.
In the first half of 2016 the Group entered into two new
partnerships underpinned by its proprietary LentiVector(R)
platform. The first is with Immune Design, supporting their LV305
programme, an in vivo approach to activate the T-cell immune
system; and the second is a research collaboration with Green Cross
LabCell to identify and develop gene modified natural killer (NK)
cell-based therapeutics. The Group expects to enter further
partnering contracts over the next few months.
In-house development pipeline
The 2015 Annual Report referred to the portfolio review which
had recently been completed resulting in three priority assets
being identified for development focus. These priority product
programmes have advanced well during the first six months of 2016.
Taking into account the balance of risk and reward in the context
of the substantial investment required over the next two to three
years to conduct the Phase I/II studies, the Group has decided that
the optimal development model for the current wholly-owned in-house
clinical product candidates is to spin them out into one or more
product-focused special purpose vehicles (SPVs) with dedicated
externally-sourced funding or to out-license them. This approach
aims to ensure that the Group's priority clinical assets are
advanced via external funding as expeditiously as possible whilst
Oxford BioMedica captures value via a potential combination of
upfront payments and/or equity stakes, development milestones and
royalties. In addition, it is also the intention that the terms of
the SPV or out-licencing agreements would require the partner to
contract back to the Group any further vector engineering or
process development that is required and also the manufacturing
requirements for clinical studies and commercialisation. The
development status of the three priority products follows in the
Operational Review. Using its LentiVector(R) platform the Group
will continue to invest in its early-stage and pre-clinical
pipeline to generate further valuable new product candidates. It
will also still invest in lentiviral vector technology to ensure
that the Group retains its leadership position, which will help
maximise bioprocessing revenues.
Operational Review
LentiVector(R) leadership position
Bioprocessing and process development
In January 2016, the Group brought into production the new
state-of-the-art GMP bioprocessing facility at Yarnton, Oxford, and
it is now producing CTL019 vector batches for Novartis in both its
original Harrow House clean room and at Yarnton. This additional
capacity has led to significant revenue growth in the first half of
2016 compared with the same period in 2015. Process development
activities are also continuing for Novartis as envisaged by the
October 2014 contract, as well as for Immune Design and other
customers.
The expansion of the Harrow House facility, by adding a second
clean room suite ("GMP2"), and the new laboratory complex in
Windrush Court have also been completed and both facilities have
now received approval for the bioprocessing of clinical material.
GMP2 is dedicated to serum-free, single use, 200 litre
bioreactor-based production of lentiviral vector, the next
generation process for vector manufacture.
Most of the Group's employees are now based at Windrush Court,
Harrow House and the Yarnton site and the Group will finally vacate
its original Medawar Centre facility by the end of October
2016.
LentiVector(R) platform developments
The Group believes that it has compelling evidence demonstrating
the long-term efficacy of the vectors that the LentiVector(R)
platform offers. In May 2016, the Group announced data from the
ongoing follow-up of patients treated in the OXB-101 (Parkinson's
Disease) and OXB-201 (Wet Age-related Macular Degeneration)
clinical studies. These data indicate ground-breaking long-term
four-year sustained and, in the OXB-201 study, dose-dependent gene
expression from the Group's LentiVector(R) delivery platform. In
the OXB-101 Phase I/II study 15 advanced Parkinson's Disease
patients were treated in three dose cohorts. OXB-101 demonstrated a
favourable safety profile and a statistically significant
improvement in motor function relative to baseline at six and 12
months post-treatment. The most recent follow-up data shows that
the majority of patients continue to experience benefit in motor
function relative to baseline over the four years since treatment.
The OXB-201 follow-up data demonstrates that LentiVector(R) gene
expression is dose-dependent and has continued without significant
decline for more than four years. The Board believes that these
data provide clear evidence that the Group's LentiVector(R)
platform has the potential to deliver long term, potentially
life-long, benefit to patients and they provide encouraging support
for the potential of the Group's product programmes. The Group will
continue to monitor these patients.
The Group is also investing in further development of its
LentiVector(R) platform to improve the volume and yield that can be
obtained from the manufacturing processes and to improve the
efficacy of the vectors when they transduce target cells. This work
will add to the Group's know-how and help to retain its leadership
in lentiviral vector expertise. In the second half of 2016 the
Group plans to produce several batches of lentiviral vector
manufactured serum-free in suspension in single use 200 litre
bioreactors. Data from 50 litre pilot studies shows that this new
proprietary process is ten to twenty times more productive than the
adherent cell factory process. This improvement in productivity
would mean that the manufacturing cost of a patient dose is
significantly reduced and also that therapies requiring much larger
quantities of vector become feasible.
Status of current wholly-owned clinical assets
Good progress has been made with the Group's three priority
programmes over the last six months:
-- Preparations have continued for the Phase I/II clinical
studies of both OXB-102 (Parkinson's Disease) and OXB-202 (corneal
graft rejection).
-- The OXB-102 study protocol approval is underway in the UK and
it is anticipated that the first patient could commence treatment
early in 2017, with the French regulatory submission potentially
towards the end of 2016.
-- The protocol for the OXB-202 study, which would initially be
carried out in the UK, is being finalised and treatment could
commence in the first half of 2017.
-- The pre-clinical work on OXB-302 (CAR-T 5T4) is on track to
be completed by the end of the year. It continues to progress well
through its pre-clinical studies and is showing signs of activity
against a range of tumours both in vivo and in vitro.
The Board recognises that to progress these product candidates
through their Phase I/II clinical studies over the next two to
three years would absorb significant financial resources.
Therefore, to optimise shareholder value, the Board has decided
that the Group should out-license or spinout these programmes so
that it benefits from their progress through potential combinations
of upfront receipts, equity stakes, development milestones and
royalties.
Partners' products
Sanofi has recently disclosed that SAR422459 (for the treatment
of Stargardt Disease), which was licensed from the Group in 2014,
has entered Phase IIa development. The Group is entitled to future
development milestones and royalties on this product.
Novartis has also recently re-confirmed their intention to file
a BLA for CTL019 in early 2017. Since the Group has been the sole
supplier to Novartis of the lentiviral vector for the CTL019
clinical study, the Board is confident that the Group will become
Novartis' supplier for the commercial launch of the product,
expected in the second half of 2017, at which point royalties will
also be receivable on the product sales.
Early stage/pre-clinical strategy
The Group continues to invest in earlier stage gene and cell
therapy product concepts, in some cases with partners such as Green
Cross LabCell, with the intention of identifying new potential
product candidates for clinical development which could be
considered for out-licensing or to be spun out. Therapeutic areas
which the Group is exploring include ocular, CNS and respiratory
indications as well as the research collaboration work with Green
Cross LabCell to identify and develop gene modified natural killer
(NK) cell-based therapeutics.
Impact of EU referendum
On 23 June 2016 the UK held a referendum the result of which
means the UK will leave the European Union ("Brexit"). Although the
Directors do not consider that the Brexit vote will have a material
impact on the Group's operational activities, it has added to stock
market and foreign exchange market volatility and the pound
sterling has weakened significantly following the vote. A weaker
pound sterling results in a higher reported debt and interest
charges as the Oberland loan is denominated in US dollars. However,
this is off-set to some extent as some of the Group's revenues are
denominated in US dollars and these will benefit when converted
into pounds sterling.
Financial Review
Income statement
Gross income - the aggregate of Revenue and Other Operating
Income - was GBP14.0 million in H1 2016, nearly 2.5 times greater
than the GBP5.8 million in H1 2015.
GBP'000 H1 2016 H1 2015
------------------------ -------- --------
Revenue 12,485 4,382
Other Operating Income 1,536 1,439
-------- --------
Gross income 14,021 5,821
------------------------ -------- --------
Note - Other Operating Income includes process development
income arising from the October 2014 Novartis collaboration as well
as grant income. This is because process development income under
the 2014 contract is essentially the reimbursement by Novartis of
R&D costs incurred in developing IP which Oxford BioMedica will
own.
The largest driver of the growth has been the revenues generated
from bioprocessing clinical batches of CTL019 for Novartis. This is
mainly due to the fact that, in 2016, the Group has been
manufacturing CTL019 in two suites, using the new clean room
facility at Yarnton from the start of the year as well as the
original Harrow House suite but also partly because in 2015
manufacture for Novartis at the Group's Harrow House site did not
begin immediately as the Group manufactured a batch of OXB-102 at
the start of the year. Other factors contributing to the growth in
Gross Income are higher process development fees, milestones
received from Novartis for achieving process development targets,
and higher licence income due largely to the receipt of an upfront
payment under the terms of the licence agreement with Immune Design
announced in March 2016. Since the period end, the Group has
received a number of firm purchase orders for bioprocessing batches
of lentiviral vector later this year and in the first half of
2017.
GBP'000 H1 2016 H1 2015
--------------------------------------- --------- ---------
Gross income 14,021 5,821
Cost of sales (4,851) (2,385)
R&D, bioprocessing and administrative
costs (16,112) (11,708)
--------- ---------
Operating loss (6,942) (8,272)
--------------------------------------- --------- ---------
The increase in cost of sales from GBP2.4 million to GBP4.9
million was caused entirely by the increase in bioprocessing
volumes. The resulting gross margin percentage on bioprocessing
remained in line with the previous year.
In aggregate R&D, bioprocessing costs and administrative
expenses in H1 2016 were GBP16.1 million, GBP4.4 million higher
than the GBP11.7 million in H1 2015. Around GBP2.3 million of this
increase was caused by higher payroll costs as the Group employed
an average of 240 employees in H1 2016 compared with 169 in H1
2015. GBP0.6 million of the increase was caused by increased
external R&D expenditure on clinical and development projects.
Depreciation has increased by GBP0.9 million as the Group has now
brought on line the new bioprocessing and laboratory facilities. A
further GBP0.4 million increase represented the additional costs of
occupying the new Windrush Court and Yarnton sites whilst still
having a presence in the Medawar Centre. The Medawar Centre is now
being vacated and the rental and service charge costs will cease in
October 2016. Legal and professional fees on new commercial
contracts and strategic projects caused additional expenditure of
GBP0.4 million, largely off-set by currency gains of GBP0.2 million
on cash, receivables and payables denominated in foreign
currencies.
As a result of the higher gross income being partially offset by
the increase in costs the operating loss in H1 2016 was GBP6.9
million, GBP1.4 million lower than the GBP8.3 million operating
loss in 2015. Adjusting for non-cash items (depreciation and
amortisation), the EBITDA loss has improved by GBP2.1 million from
GBP7.6 million in H1 2015 to GBP5.5 million in H1 2016.
GBP'000 H1 2016 H1 2015
------------------------------- -------- --------
Operating loss (6,942) (8,272)
Depreciation and amortisation 1,467 632
EBITDA (5,475) (7,640)
------------------------------- -------- --------
Finance costs of GBP5.0 million include an underlying cost of
GBP2.4 million comprising the current cash interest cost on the
GBP31.3 million Oberland loan facility plus the amortisation of the
final repayment cost. The amortisation is based on the repayment
being made in April 2022 and incorporates the true-up required to
provide Oberland with the 15% Internal Rate of Return (IRR)
required under the loan agreement. In addition the finance costs in
H1 2016 have been impacted by a currency revaluation of GBP2.6
million caused by the sudden fall in sterling against the US dollar
following the outcome of the EU referendum.
The R&D tax credit of GBP2.6 million includes GBP0.7 million
in respect of the amount by which the final amount received in June
2016 for 2015 exceeded the estimate included in the 2015 financial
statements.
Segmental analysis
The Group began showing its activities in two segments in the
2015 Annual Report, for the full twelve months of 2015. The
segments are a) "Partnering", which covers that part of the
business which generates revenues by providing process development
and bioprocessing services to 3rd parties, and b) "R&D", which
contains the proprietary R&D expenditure incurred on product
development, including early stage and pre-clinical concepts, and
technical development of the LentiVector(R) platform.
The segmental analysis for the six months to 30 June 2016 is set
out below. Equivalent analysis for the first half of 2015 is not
available.
GBP'000 Partnering R&D Total
-------------- ----------- -------- --------
Gross income 12,660 1,361 14,021
EBITDA 39 (5,514) (5,475)
Operating
loss (947) (5,995) (6,942)
-------------- ----------- -------- --------
The segmental results for the full year 2015 were as
follows:
GBP'000 Partnering R&D Total
-------------- ----------- --------- ---------
Gross income 16,286 2,485 18,771
EBITDA (2,938) (9,518) (12,456)
Operating
loss (3,938) (10,145) (14,083)
-------------- ----------- --------- ---------
The results for the first half of 2016 demonstrate that, with
the higher bioprocessing volumes and revenues now possible with the
increased capacity, the Partnering business is reaching the point
where it can start to generate positive cash flow which can be used
to offset the investment in the Group's R&D. The Group expects
net investment in R&D in the second half of 2016 to continue at
around the same level as in the first half. In 2017 R&D is
expected to decline by between 20 per cent. to 30 per cent. As the
financing of clinical stage programmes is transferred to third
parties in line with the decision to out-license or spin out
clinical stage product development.
Employee numbers
The Group employed an average of 240 employees during the first
half of 2016 (169 in the first half of 2015), and there were 252
employed at 30 June 2016 (231 at 31 December 2015).
Balance sheet
Property, plant and equipment increased from GBP24.4 million to
GBP29.1 million in the first six months of 2016. Additions of
GBP6.0 million, predominantly clean room and laboratory
developments to the freehold buildings at Harrow House and Windrush
Court were off-set by a GBP1.3 million depreciation charge.
Within current assets, trade and other receivables have fallen
from GBP10.9 million to GBP6.7 million and the current tax asset
from GBP2.7 million to GBP1.9 million; whilst inventory of GBP2.8
million is broadly the same as at the start of the year.
Within current liabilities, trade and other payables have fallen
by GBP1.7 million from GBP9.3 million to GBP7.6 million, while
deferred income has risen from GBP3.0 million to GBP4.4 million,
caused by the increase in bioprocessing volumes.
The loan balance, which is denominated in US dollars, has risen
by GBP4.0 million caused predominantly by the devaluation of
sterling against the US dollar following the outcome of the EU
referendum vote.
Cash
GBP'000 2016 2015
------------------------------ -------- ---------
EBITDA (5,475) (7,640)
Working capital 4,007 (1,273)
-------- ---------
Cash used in operations (1,468) (8,913)
Interest paid, less received (1,713) (298)
R&D tax credit received 3,437 (5)
-------- ---------
Net cash generated/(used) in
operating activities 256 (9,216)
Capital expenditure (5,983) (4,644)
-------- ---------
Cash burn (5,727) (13,860)
------------------------------ -------- ---------
As discussed above, the EBITDA loss for the first six months of
2016 was GBP5.5 million, reduced from GBP7.6 million in the same
period of 2015. Working capital inflows of GBP4.0 million,
predominantly due to reductions in receivables combined with the
receipt of the 2015 R&D tax credit in June 2015 combined to
create a small positive cash generated in operating activities,
despite the GBP1.7 million interest cash cost. This compares
favourably with H1 2015 in which there was a working capital
outflow and the 2014 R&D tax credit was not received until
August 2015.
Capital expenditure was GBP6.0 million in the first six months
of 2016, compared with GBP4.6 million in the first six months of
2015, as the Group completed its capacity expansion programme,
The Group's cash resources at 1 January 2016 were GBP9.4
million. In February 2016 the Group raised a net GBP7.5 million
from a placing of 5% of the share capital so that, combined with
the cash burn of GBP5.7 million the cash resources at 30 June 2016
were GBP11.9 million which includes the $10 million (GBP7.6
million) ring-fenced under the Oberland loan agreement.
Financial outlook
The Board is pleased with the Group's performance to date and
the Group continues to trade in-line with management expectations.
Bioprocessing activity in the second half of 2016 is likely to be
slightly higher than in the first six months as the second GMP
suite in Harrow House comes on line and starts to produce
bioreactor batches.
To support this, and future expected activity, headcount has
reached 252 at 30 June 2016, with only modest further growth
expected in the next six months. Overall the Group expects to
continue to grow revenues in the second half of 2016, compared to
the equivalent period in 2015, from a mix of bioprocessing and
process development activities, and further performance incentives
from Novartis and another customer. Second half gross income is
therefore likely to be similar to or slightly greater than for the
first six months.
Having completed the capacity expansion programme, capital
expenditure should be minimal in the next six months. The Group now
expects to enter further partnering contracts over the next few
months which would increase the utilisation of the facilities.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are those
set out in the 2015 Annual Report & Accounts which is available
on the Group's website at www.oxfordbiomedica.co.uk. The principal
risks and uncertainties remain the same for the second six months
of the year.
Going concern
The Group has today announced a fundraise of GBP11.5 million
(GBP10.0 million net of expenses). The Directors are of the opinion
that, taking into account existing cash balances and the net
proceeds of the fundraise, the Group has sufficient working capital
for its present requirements, that is for at least 12 months from
the date of this announcement. The Directors therefore consider it
appropriate to adopt the going concern basis of accounting in
preparing the interim financial information.
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2016
Six months Six months
ended 30 June ended 30
2016 June 2015
Notes GBP'000 GBP'000
----------------------------- ------ --------------- -----------
Revenue 12,485 4,382
Cost of sales (4,851) (2,385)
------------------------------------- --------------- -----------
Gross profit 7,634 1,997
Research, development
and bioprocessing costs (12,740) (9,201)
Administrative expenses (3,372) (2,507)
Other operating income 1,536 1,439
------------------------------------- --------------- -----------
Operating loss (6,942) 8,272
Finance income 4 20
Finance costs (5,017) (348)
------------------------------------- --------------- -----------
Loss before tax (11,955) (8,600)
Taxation 2,566 2,475
------------------------------------- --------------- -----------
Loss and total comprehensive
expense for the period (9,389) (6,125)
Basic loss and diluted
loss per ordinary share (0.35p) (0.24p)
------------------------------------- --------------- -----------
The notes on pages 14 to 20 form part of this financial
information.
Consolidated Balance Sheet
as at 30 June 2016
30 June 31 December
2016 2015
Notes GBP'000 GBP'000
------------------------------ ----- --------- -----------
Assets
Non-current assets
Intangible assets 1,571 1,743
Property, plant and equipment 7 29,084 24,396
30,655 26,139
------------------------------ ----- --------- -----------
Current assets
Inventory 8 2,841 2,706
Trade and other receivables 9 6,708 10,930
Current tax assets 1,850 2,721
Cash and cash equivalents 10 11,910 9,355
------------------------------ ----- --------- -----------
23,309 25,712
------------------------------ ----- --------- -----------
Current liabilities
Trade and other payables 11 7,588 9,286
Deferred income 12 4,393 3,045
Provisions 14 836 838
------------------------------ ----- --------- -----------
12,817 13,169
------------------------------ ----- --------- -----------
Net current assets 10,492 12,543
------------------------------ ----- --------- -----------
Non-current liabilities
Loans 13 31,324 27,255
Provisions 14 542 533
------------------------------ ----- --------- -----------
31,866 27,788
------------------------------ ----- --------- -----------
Net assets 9,281 10,894
------------------------------ ----- --------- -----------
Shareholders' equity
Share capital 15 27,032 25,741
Share premium 15 147,898 141,677
Merger reserve 2,291 2,291
Treasury reserve (102) (102)
Accumulated losses (167,838) (158,713)
------------------------------ ----- --------- -----------
Total equity 9,281 10,894
------------------------------ ----- --------- -----------
The notes on pages 14 to 20 form part of this financial
information.
Consolidated Statement of Cash Flows
for the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
Notes GBP'000 GBP'000
--------------------------- ----- ---------- ----------
Cash flows from operating
activities
Cash used in operations 16 (1,468) (8,913)
Tax credit received 3,437 -
Interest paid (1,718) (321)
Overseas tax paid - (5)
--------------------------- ----- ---------- ----------
Net cash used in operating
activities 251 (9,239)
--------------------------- ----- ---------- ----------
Cash flows from investing
activities
Purchases of property,
plant and equipment (5,983) (4,644)
Net maturity of available - -
for sale investments
Interest received 5 23
--------------------------- ----- ---------- ----------
Net cash generated by
investing activities (5,978) (4,621)
--------------------------- ----- ---------- ----------
Cash flows from financing
activities
Loans received / repaid 13 - 15,107
Proceeds from issue of
ordinary share capital 8,101 87
Costs of share issues (589) -
Net cash generated by
financing activities 7,512 15,194
--------------------------- ----- ---------- ----------
Net increase in cash and
cash equivalents 1,785 1,334
Cash and cash equivalents
at 1 January 9,355 14,195
Effects of exchange rate
changes 770 (413)
Cash and cash equivalents
at period end 10 11,910 15,116
--------------------------- ----- ---------- ----------
The notes on pages 14 to 20 form part of this financial
information.
Statement of Changes in Equity Attributable to Owners of the
Parent
for the six months ended 30 June 2016
Share Share Merger Treasury Accumulated
capital premium reserve reserve Other reserves Losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
At 1 January 2015 25,659 141,615 2,291 (226) (682) (145,618) 23,039
Six months ended
30 June 2015:
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Exchange adjustments - - - - - - -
Loss for the period - - - - - (6,125) (6,125)
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Total comprehensive
expense for the period - - - - - (6,125) (6,125)
Transactions with
owners:
Share options
Value of employee
services - - - - - 254 254
Issue of shares excluding
options 27 60 - - - - 87
Vesting of deferred
share award - - - 124 - (124) -
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
At 30 June 2015 25,686 141,675 2,291 (102) (682) (151,613) 17,255
Six months ended
31 December 2015:
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Exchange adjustments - - - - - - -
Loss for the period - - - - - (6,894) (6,894)
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Total comprehensive
expense for the period - - - - - (6,894) (6,894)
Transactions with
owners:
Share options
Value of employee
services - - - - - 476 476
Issue of shares excluding
options 55 2 - - - - 57
Liquidation of BioMedica
Inc. - - - - 682 (682) -
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
At 31 December 2015 25,741 141,677 2,291 (102) - (158,713) 10,894
Six months ended
30 June 2016:
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Exchange adjustments - - - - - - -
Loss for the period - - - - - (9,389) (9,389)
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
Total comprehensive
expense for the period - - - - - (9,389) (9,389)
Transactions with
owners:
Share options
Proceeds from shares
issues 7 12 - - - - 19
Value of employee
services - - - - - 263 263
Issue of shares excluding
options 1,284 6,798 - - - - 8,082
Cost of share issues - (589) - - - - (589)
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
At 30 June 2016 27,032 147,898 2,291 (102) - (167,838) 9,281
-------------------------- -------- -------- -------- -------- -------------- ----------- --------
The notes on pages 14 to 20 form part of this financial
information.
Notes to the Financial Information
1. General information and basis of preparation
These condensed consolidated interim financial statements for
the six months ended 30 June 2016 have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 Interim Financial Reporting as adopted by
the European Union. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2015.
These condensed consolidated interim financial statements do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
December 2015 were approved by the Board of Directors on 27 April
2016 and have been delivered to the Registrar of Companies. The
report of the Auditors on the 2015 accounts was unqualified.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 12 September 2016. They have
not been audited.
The Company is a public limited company incorporated and
domiciled in the UK. The Company is listed on the London Stock
Exchange.
2. Going concern
The Group has today announced a fundraise of GBP11.5 million
(GBP10.0 million net of expenses). The Directors are of the opinion
that, taking into account existing cash balances and the net
proceeds of the fundraise, the Group has sufficient working capital
for its present requirements, that is for at least 12 months from
the date of this announcement. The Directors therefore consider it
appropriate to adopt the going concern basis of accounting in
preparing the interim financial information.
3. Accounting policies
The accounting policies applied in these interim financial
statements are consistent with those of the annual financial
statements for the year ended 31 December 2015, as described in
those annual financial statements.
Accounting developments
The Directors have considered all new standards, amendments to
standards and interpretations which are mandatory for the first
time for the financial year beginning 1 January 2016 and there are
none which impact the group in the period.
Use of estimates and assumptions
In applying the Group's accounting policies, management is
required to make judgements and assumptions concerning the future
in a number of areas. Actual results may be different from those
estimated using these judgements and assumptions.
In preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were in the
same areas as those that applied to the consolidated financial
statements for the year ended 31 December 2015. Specifically these
are revenue recognition, intangible asset impairment, and going
concern.
Seasonality
The Group's operations are not subject to seasonal
fluctuations.
4. Segmental analysis
The chief operating decision-maker has been identified as the
Senior Executive Team (SET), comprising the Executive Directors,
Chief Scientific Officer and Chief Technical Officer. In previous
years the Group has reported only one business segment, that of
biotechnology research and development, and the related
bioprocessing activities. With the evolution of the business since
the signing of the Novartis contracts in October 2014, the SET now
monitors the performance of the Group in two business segments:
(i) Partnering - providing lentiviral vector bioprocessing and
process development services to partners;
(ii) R&D - the development of in-vivo and ex-vivo gene and
cell therapy products which are owned by the Group, and the
development of lentivirus-related platform technology which can
improve the efficacy of therapeutic products or the bioprocessing
processes. Included within this category is clinical and
pre-clinical product development and also the development of
technical intellectual property.
Revenues, other operating income and operating loss by
segment
Operating loss represents our measure of segment profit &
loss as it is a primary measure used for the purpose of making
decisions about allocating resources and assessing performance of
segments.
Partnering R&D Total
GBP'000 GBP'000 GBP'000
============================== ========== ============ =============
Revenue 11,556 929 12,485
Other operating income 1,104 432 1,536
Operating EBITDA 39 (5,514) (5,475)
Depreciation and amortisation (986) (481) (1,467)
Operating loss (947) (5,995) (6,942)
============================== ========== ============ =============
Other operating income includes process development income of
GBP0.8 million and grant income of GBP0.7 million. Grant income of
GBP0.4 million from Innovate UK to fund clinical and pre-clinical
development is included within the R&D segment whilst grant
income of GBP0.3 million from AMSCI (UK Government's Advanced
Manufacturing Supply Chain Initiative) to develop our supply chain
capabilities is included within Partnering. Process development
income is included within the Partnering segment.
Costs are allocated to the segments on a specific basis as far
as is possible. Costs which cannot readily be allocated
specifically are apportioned between the segments using relevant
metrics such as headcount or direct costs.
5. Basic loss and diluted loss per ordinary share
The basic loss per share has been calculated by dividing the
loss for the period by the weighted average number of shares of
2,664,846,105 in issue during the six months ended 30 June 2016
(six months ended 30 June 2015: 2,567,485,430).
As the Group is loss-making, there were no potentially-dilutive
ordinary shares in either period which would serve to increase the
loss per ordinary share. There is therefore no difference between
the loss per ordinary share and the diluted loss per ordinary
share.
6. Finance income and costs
Interest payable consists of interest expense on the Oberland
Loan of GBP2,422,000 (2015: GBP348,000 which includes interest on
the UK Government's Advanced Manufacturing Supply Chain Initiative
loan) and foreign exchange losses on the Oberland loan of
GBP2,595,000 (2015: Nil).
7. Property, plant & equipment
Short Office Manufacturing Assets
Freehold leasehold equipment and Laboratory under
property improvements and computers equipment construction(1) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ------------- -------------- --------------- ---------------- -------
Cost
At 1 January
2016 6,938 7,397 1,374 7,574 9,744 33,027
Additions at
cost - 127 332 1,401 4,123 5,983
Reclassification 13,867 - - - (13,867) -
----------------- --------- ------------- -------------- --------------- ---------------- -------
At 30 June 2016 20,805 7,524 1,706 8,974 - 39,010
----------------- --------- ------------- -------------- --------------- ---------------- -------
Depreciation
At 1 January
2016 921 2,909 753 4,048 - 8,631
Charge for the
period 397 270 146 482 - 1,295
----------------- --------- ------------- -------------- --------------- ---------------- -------
At 30 June 2016 1,318 3,179 899 4,530 - 9,926
----------------- --------- ------------- -------------- --------------- ---------------- -------
Net book amount
at
30 June 2016 19,487 4,345 807 4,445 - 29,084
----------------- --------- ------------- -------------- --------------- ---------------- -------
(1)Assets under construction represents the capitalisation of
construction works at the Harrow House and Yarnton bioprocessing
facilities and the Windrush Court laboratories. These works have
been completed as at 30 June 2016 and the full amount reclassified
into freehold property.
8. Inventory
30 June 31 December
2016 2015
GBP'000 GBP'000
----------------- -------- -----------
Raw materials 2,755 2,217
Work-in-progress 86 489
Inventory 2,841 2,706
----------------- -------- -----------
Inventories constitute raw materials held for commercial
manufacturing purposes, and work-in-progress inventory related to
contractual manufacturing obligations.
9. Trade and other receivables
30 June 31 December
2016 2015
GBP'000 GBP'000
---------------------------------- -------- -----------
Amounts falling due within
one year
Trade receivables 3,842 7,374
Accrued income 1,394 1,155
Other receivables 138 31
Other tax receivable 539 1,522
Prepayments 795 848
---------------------------------- -------- -----------
Total trade and other receivables 6,708 10,930
---------------------------------- -------- -----------
10. Cash and cash equivalents
30 June 31 December
2016 2015
GBP'000 GBP'000
-------------------------------- -------- -----------
Cash at bank and in hand 11,910 9,335
-------------------------------- -------- -----------
Total cash and cash equivalents 11,910 9,335
-------------------------------- -------- -----------
11. Trade and other payables - current
30 June 31 December
2016 2015
GBP'000 GBP'000
------------------------------- -------- -----------
Trade payables 2,575 3,588
Other taxation and social
security 405 384
Other accruals 4,608 5,314
------------------------------- -------- -----------
Total trade and other payables 7,588 9,286
------------------------------- -------- -----------
12. Deferred income - current
30 June 31 December
2016 2015
GBP'000 GBP'000
---------------------- -------- -----------
Total deferred income 4,393 3,045
---------------------- -------- -----------
Deferred income derives from contractual arrangements with
customers.
13. Loans
On 1 May 2015, an agreement was entered into with Oberland
Capital for a $50 million loan facility of which $25 million
(GBP16.3 million) was drawn down immediately, and a further $15m
(GBP9.8 million) was drawn down in September 2015.
The Oberland Facility is a loan facility agreement provided by
Oberland Capital Management LLC, to provide funds to invest in the
Group's capacity expansion and for pipeline advancements and
product acquisitions. The loan is repayable not later than 1 May
2022 and may be prepaid at any time. Over the course of the loan
term, interest is payable quarterly at an annual interest rate of
9.5% plus the greater of 1% and three month LIBOR. In addition to
interest, an exit fee is payable upon any repayment of the loan or
part thereof. The Group is also required to pay an additional
amount of 0.35% of annual worldwide net revenues for eight years
commencing 1 April 2017 for each $5 million of loan drawn down over
$30 million. This revenue participation may be retired at any time
upon payment of the exit fee. In the event that the loan is repaid
after the second anniversary of the facility, there may be a
true-up payment payable to Oberland in the event that the aggregate
of the interest payments, revenue participation payments and exit
fee do not in aggregate provide a return of 15% p.a. to
Oberland.
The Group is required under the Oberland Facility to maintain
cash and cash equivalents of not less than $10 million (GBP7.6
million) while the Oberland Facility is outstanding. The loan
facility is secured on the Group's assets.
14. Provisions
The dilapidations provision of GBP1,378,000 (2015: GBP1,371,000)
relates to anticipated costs of restoring the leasehold Medawar and
Yarnton properties in Oxford, UK to their original condition at the
end of the present leases in 2016 and 2024 respectively, discounted
using the rate per the Bank of England nominal yield curve. The
equivalent rate was used in 2015. The provision will be utilised at
the end of the leases if they are not renewed.
15. Share capital and Share premium
At 31 December 2015 and 30 June 2016 the Company had issued
share capital of 2,574,252,580 and 2,703,344,512 ordinary 1p shares
respectively.
On 23 February 2016, the Group announced that it had placed
128,383,528 new ordinary shares in the Company at a price of 6.3
pence per share with both new and existing investors and Directors.
The price of 6.3 pence per share represented a 10% discount to the
closing price of 7.0 pence per share on 22 February 2016. Gross
proceeds from the placing were GBP8.1 million, net proceeds were
GBP7.5 million.
16. Cash flows from operating activities
Reconciliation of loss before tax to net cash used in
operations
Six months Six months
ended ended
30 June 30 June
2016 2015
GBP'000 GBP'000
---------------------------------- ------------ ------------
Continuing operations
Operating loss (6,942) (8,272)
Adjustment for:
Depreciation 1,295 450
Amortisation of intangible
assets 172 182
Charge in relation to employee
share schemes 263 254
Changes in working capital:
(Increase) in inventories (135) (616)
Decrease in trade and other
receivables 4,222 401
(Decrease) in trade and other
payables (1,698) (1,105)
Increase / (decrease) in deferred
income 1,348 (208)
Increase in provisions 7 1
---------------------------------- ------------ ------------
Net cash used in operating
activities (1,468) (8,913)
---------------------------------- ------------ ------------
17. Statement of Directors' responsibilities
The Directors of Oxford BioMedica plc are set out on page 20 of
this report.
The condensed consolidated interim financial statements are the
responsibility of, and have been prepared by, the Directors. The
Directors confirm that they have been prepared in accordance with
the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 'Interim financial reporting' as adopted
by the European Union and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
-- An indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- Material related party transactions in the first six months
and any material change in related-party transactions described in
the last annual report.
By order of the Board
John Dawson
Chief Executive Officer
12 September 2016
Shareholder Information
Directors Corporate Broker
Lorenzo Tallarigo Jefferies Hoare Govett
(Non-executive Chairman) Vintners Place
John Dawson 68 Upper Thames Street
(Chief Executive Officer) London EC4V 3B5
Tim Watts Financial Adviser
(Chief Financial Officer WG Partners
and Company Secretary) 85 Gresham Street
Peter Nolan London EC2V 7NQ
(Chief Business Officer) Registrars
Andrew Heath Capita Asset Services
(Deputy Chairman and The Registry
Senior Independent Director) 34 Beckenham Road
Martin Diggle Beckenham
(Non-executive Director) Kent BR3 4TU
Stuart Henderson Financial and Corporate
(Non-executive director) Communications
Consilium Strategic Communications
41 Lothbury
London EC2R 7HG
Registered Auditors
PricewaterhouseCoopers
LLP
One Reading Central
23 Forbury Road
Reading
RG1 3JH
Solicitors
Covington & Burling LLP
265 Strand
London WC2R 1BH
--------------------------------- ------------------------------------
Registered Office
Oxford BioMedica plc
Windrush Court
Transport Way
Oxford OX4 6LT
United Kingdom
Tel: +44 (0) 1865 783
000
Fax:+44 (0) 1865 783
001
enquiries@oxfordbiomedica.co.uk
www.oxfordbiomedica.co.uk
--------------------------------- ------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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