Oxford Biomedica.

Cyan in response to your questions "What I find hard to understand is despite a steady flow of consistantly good news this companies share price remains surprisingly low.Why?, and How would the market react to a failure of a lead product?" I advise as follows:

1) In respect of the low share price, refer to my posting No. 36 (30/12/2001)above and specifically the comments dated 19/12/2001 therein, that were a response to a similar question posted by KennethRich. In addition, I was subsequently reminded by another poster that one should factor in the recent large sell off of OXB shares by troubled Equitable Life.

2) In respect of product failure, the risk profile of OXB has been specifically shaped to minimise dependance on any one product, and because all products have potentially large markets, it would only take success of one product for the Company to succeed. Also factor in the safety margin provided by cash of about £36 million and the potential of the Gene Discovery Division to provide a steady income (as yet unproved), both of which reduce the risk profile. Indeed, Alan Kingsman has stated he regards the risk profile of OXB to be lower than other gene therapy companies.

The Beeson Gregory report (August 2001) provides a table (reproduced below)indicating the percentage of discounted cash company value attributable to each of sixteen listed products. The Modex collaboration should now be omitted from this list but an allowance should be included for the nerve regeneration programme. Interestingly, the table does not include a value for the technology and patent portfolio, but this obviously has substantial worth. No figure is included for revenues upon launch, which could obviously be substantial. The calculation includes an allowance for the potential failure rate of pharmaceutical products.

Product...........Indication.................. Value Inc. Risk (£m)........% Company Value

MetXia............Breast cancer......................23.59..............................7.4
MetXia............Ovarian cancer......................9.85..............................3.1
MetXia VM ......Cancer................................9.49..............................3.0
MetXia MG......Cancer................................11.32.............................3.6
ProSavin.........Parkinson’s..........................83.2..............................26.1
ImmStat..........Angiogenic Factors..................12.43..............................3.9
PAD/CAD........Cardiovascular disease................4.75..............................1.5
TroVax............Colorectal cancer..................34.13............................10.7
TroVax Vet......Cancer................................4.44.............................1.4
TroVaxDC........Cancer................................39.87............................12.5
BetOvac MG....Ovarian cancer..........................2.03............................. 0.6
Modex collaboration..Diabetes.........................12.18.............................3.8
TroVax.............Imaging............................2.01.............................0.6
OBA1 Ant........Cancer therapy........................13.61.............................4.3
Procastat.........Prostrate cancer...................8.24.............................2.6
Drug & Gene Discovery................................47.5.............................14.9
Net Assets inc. Cash..................................72.71

NPV (£m).............................................£318.73...........................100%
NPV per share (p)......................................151p


(Note, the company is currently trading at a substantial discount to its estimated NPV of 151p).

Q.

(Not an instruction to buy, sell or hold).