Oxford Biomedica : Earnings Document

Press release

Oxford Biomedica plc

Preliminary results for the year ended 31 December 2020

Saving Lives

Oxford, UK - 15 April 2021: Oxford Biomedica plc (LSE: OXB), ("OXB" or "the Group"), a leading cell and gene therapy group, today announces its preliminary results for the year ended 31 December 2020.

John Dawson, Chief Executive Officer of Oxford Biomedica, said:

"I am truly proud of the Group's achievements over the period. We not only secured major new partnerships, brought the Oxbox manufacturing facility online in record time and responded to the challenges of the pandemic, but the team has also been able to rapidly work with AstraZeneca to provide a vaccine solution for COVID-19. This is a true testament to the world-class calibre and dedication of our staff in the year that the Group also gained entry to the FTSE250. Looking to the future, with the continued tide of growth in cell and gene therapy, coupled with the Group's leadership position in the lentiviral vector field, we are well positioned to advance both our own proprietary pipeline and that of our current and future partners' programmes. I would like to thank all of Oxford Biomedica's employees for their hard work throughout 2020 and our shareholders and partners for their continued support, and I look forward to a successful 2021."

FINANCIAL HIGHLIGHTS

• Total revenues increased by 37% to £87.7 million (2019: Revenue of £64.1 million)
• Bioprocessing and commercial development revenues increased by 45% to £68.5 million (2019: £47.3 million) with double digit growth across both activities, driven by new customers AstraZeneca, Beam Therapeutics and Juno/BMS
• Revenues from licences, milestones & royalties increased to £19.2 million (2019: £16.8 million) due to the recognition of a £7.8 million ($10 million) licence fee from Juno/BMS as well as other licence fees, milestones and royalties from customers
• Operating expenses1 increased by less than revenues, growing by 23% in the year to £51.7 million (2019: £41.9 million) aided by the move to the lower cost bioreactor manufacturing process
• Operating EBITDA2 profit of £7.3 million (2019: £5.2 million loss), marginally above guided range
• Operating loss incurred of £5.7 million (2019: £14.5 million loss)
• The platform segment generated an operating profit of £2.0 million ( 2019: 20.2 million loss) whilst
  the Product segment made a loss of £7.7 million ( 2019: £5.7 million profit)
• Capital expenditure decreased to £13.4 million (2019: £25.8 million) mainly reflecting the Windrush Court laboratory conversion and equipment purchases and leasehold improvements at Oxbox
• Cash of £46.7 million at 31 December 2020 (2019: £16.2 million) and £65.9 million at 31 March 2021
• Cash used in operations of £3.9 million in 2020 (2019: £6.6 million) decreased as a result of the increased revenues as explained above, offset by further operational investments required
• Successful £38.3 million (net) equity fundraise in June 2020 to exploit the growth in the cell and gene therapy market

1. Operating expenses is made up out of Bioprocessing expenses, Research and development expenses and Administrative expenses. A reconciliation to GAAP measures is provided on page 15.
2. Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit & loss, and Share Based Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share options. A reconciliation to GAAP measures is provided on page 16.

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OPERATIONAL HIGHLIGHTS

Juno Therapeutics / Bristol Myers Squibb partnership

• New licence and five-year clinical supply agreement with Juno Therapeutics/Bristol Myers Squibb for multiple CAR-T and TCR-T programmes, signed in March. A £7.8 million ($10 million) upfront payment was recognised by the Group and up to $217 million could be paid in development, regulatory and sales related milestones in addition to undisclosed process development, scale up and batch revenues, and with an undisclosed royalty on sales

COVID-19 vaccine partnership with AstraZeneca

• The Group is a key manufacturer of the Oxford AstraZeneca COVID-19 vaccine, AZD1222. Having signed an initial agreement in May, in September the Group signed an 18-month supply agreement under a three-year master supply and development agreement for the large-scale manufacture of the Oxford AstraZeneca COVID-19 vaccine. The Group received a £15 million capacity reservation fee with additional revenue in excess of £35 million expected by the end of 2021
• By the fourth quarter, the Group was manufacturing the Oxford AstraZeneca COVID-19 vaccine in three suites at 1000L scale ahead of the MHRA granting emergency use for the Oxford AstraZeneca COVID-19 vaccine in December

Novartis partnership

• Collaboration with Novartis continued to strengthen with a sixth vector construct added in the first quarter of 2020, with partnership having been previously extended by five years in December 2019
• The roll out of Kymriah® continues to accelerate in relapsed and refractory B-cell acute lymphoblastic leukaemia and relapsed and refractory diffuse large B-cell lymphoma with reimbursement approved in 28 countries in at least one indication in over 300 qualified treatment centres

Other partnership updates

• In July, the Group signed a three-year clinical supply agreement with Sio Gene Therapies for the manufacture and supply of Parkinson's disease gene therapy programme AXO-Lenti-PD, building on the worldwide licence agreement signed between the two companies in June 2018
• In August, the Group signed a development, manufacture and licence agreement with Beam Therapeutics for next generation CAR-T programmes including a three-year clinical supply agreement
• Post period end in March 2021, the Group announced that Sanofi had given notice that they intend to terminate the 2018 collaboration and licence agreement for the process development and manufacturing of lentiviral vectors to treat haemophilia. The Group expects the impact on revenue will be negligible over the coming 24 month period
• Post period end in April 2021, the Group signed a three-year development and supply agreement with Boehringer Ingelheim for the manufacture and supply of viral vectors, building on the partnership that started in 2018

Facilities and capacity expansion

• By October 2020, the MHRA had approved all four suites in the first phase of development of Oxbox, the Group's new 84,000 sq. ft. manufacturing facility. Three suites are producing the Oxford AstraZeneca COVID-19 vaccine at 1000L scale and one suite added to the existing capabilities of producing lentiviral vector-based products for the Group's partners at 200L scale
• Building work at Windrush Court to convert office space into GMP laboratories progressed throughout the year, with the first of the laboratories completed by the end of 2020
• Opening of the new Corporate Head Office on new site within the Oxford Business Park

Corporate Governance and Organisational Progress

• In June, the Group welcomed Dr Roch Doliveux as Non-Executive Chairman, following the retirement of prior Chair, Dr. Lorenzo Tallarigo

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• The Group has made significant strides forward in its commitment to best practice in Corporate Governance and diversification of talent on the Board. In November, Dr. Sam Rasty was appointed to the Board as an Independent Non-Executive Director. Post period-end in February, the Group announced the appointment of Professor Dame Kay Davies as an Independent Non- Executive Director and Martin Diggle stepped down as a Non-Independent Director after nine years. Dr. Andrew Heath will not be standing for re-election at the 2021 AGM having served on the Board since 2010

Analyst briefing

Management will be hosting a briefing for analysts via conference call and webcast at 13:00 BST (8:00 ET) on 15 April 2021.

A live webcast of the presentation will be available via this link.

If you would like to dial-in to the call and ask a question during the live Q&A, please follow this link to register and receive dial-indetails.

Enquiries:
Oxford Biomedica plc
John Dawson, Chief Executive Officer	T: +44	(0)1865 783 000
Stuart Paynter, Chief Financial Officer	T: +44	(0)1865 783 000
Catherine Isted, Head of Corporate Development & IR	T: +44	(0)1865 954 161 / E: [e-mail]
Consilium Strategic Communications
Mary-Jane Elliott/Matthew Neal	T: +44	(0)20 3709 5700

About Oxford Biomedica

Oxford Biomedica (LSE:OXB) is a leading, fully integrated, cell and gene therapy group focused on developing life changing treatments for serious diseases. Oxford Biomedica and its subsidiaries (the "Group") have built a sector leading lentiviral vector delivery platform (LentiVector®), which the Group leverages to develop in vivo and ex vivo products both in-house and with partners. The Group has created a valuable proprietary portfolio of gene and cell therapy product candidates in the areas of oncology, ophthalmology, CNS disorders and liver diseases. The Group has also entered into a number of partnerships, including with Novartis, Bristol Myers Squibb, Sio Gene Therapies, Orchard Therapeutics, Santen, Beam Therapeutics, Boehringer Ingelheim, the UK Cystic Fibrosis Gene Therapy Consortium and Imperial Innovations, through which it has long-term economic interests in other potential gene and cell therapy products. Additionally the group has signed a 3 year master supply and development agreement with AstraZeneca for large-scale manufacturing of the adenoviral based COVID-19 vaccine, AZD1222. Oxford Biomedica is based across several locations in Oxfordshire, UK and employs more than 670 people. Further information is available at www.oxb.com

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CHAIRMAN'S STATEMENT

A Purpose of which to be Proud

Our Purpose

It is with great pride that I present my first statement as the Chair of Oxford Biomedica (OXB). I was first attracted to the Company by its strong purpose and great technology. Saving patients' lives is what the healthcare industry strives to do and OXB is delivering on that promise in both its cell and gene therapy work, and now with the manufacture of the Oxford AstraZeneca COVID-19 vaccine. Cell and gene therapies have the potential to be curative for many untreated diseases and to be able to play my part in realising this potential is my duty.

It has been a challenging time to assume my role, as our organisation has found new ways of working. Face to face contact has been kept to a minimum for the right reasons, and I thank the Board and the wider OXB team, key opinion leaders and investors for helping me to gain an in-depth understanding of the business. It's inspiring to me that OXB is now a key part of the global effort to return life to normality, and I am looking forward to supplementing the relationships built online with in-person discussions.

I could not be more proud to lead the Company's Board through its next phase of growth.

Our Culture

Underlying the purpose of OXB is a strong culture. The pandemic response has both tested and fortified that culture. We pride ourselves on our core values including delivering innovation with integrity.

Our ability to deliver the Oxford AstraZeneca COVID-19 vaccine in the most challenging of circumstances given global demand, has impressed me and has demonstrated that these values run deep through our organisation. This has been achieved whilst continuing to execute the underlying Group strategy, and I give my admiration and appreciation to the team for continuing to deliver on all fronts whilst adapting to new working environments.

Utilising our capabilities to play our part against one of the biggest challenges humankind has recently faced is inspirational and all stakeholders of OXB are, justifiably, proud to be involved in this effort.

During the year we also implemented a Group-wide bonus scheme to ensure all staff benefit from the Group achieving its objectives.

Our Strategy

OXB continues to deliver on its core strategy of being the leading provider of lentiviral based vectors for cell and gene therapy companies, growing our customer base and service. Significant progress has been made in 2020 both in new technologies and new customers such as Juno Therapeutics/Bristol Myers Squibb and Beam Therapeutics. Our successful work on the adenovirus based Oxford AstraZeneca COVID-19 vaccine has also demonstrated our ability to also broaden our Contract Development and Manufacturing Organisation (CDMO) to more viral vectors.

Significant value to stakeholders can also be provided by applying our knowledge to our own therapeutic products. The Board realises that the re-balancing of the Group towards products in this way is not easy, as we wish to first build on the CDMO momentum, but given the medical need and the number of nascent technologies and therapeutic programmes using lentiviral based vectors, we are committed to making it happen over time and as opportunities arise.

The continued innovation of OXB's platform is key to providing solutions for both partners and patients. We will accelerate this effort, and retain and build upon our leadership role in this space.

It is also clear, through our Oxford AstraZeneca COVID-19 vaccine efforts, that our manufacturing capabilities and state of the art facilities are inherently valuable, and there is the opportunity to leverage these capabilities and facilities to help more partners. We shall be pursuing more partnerships in these adjacencies.

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Governance

The role of boards in ensuring the societal impact, sustainability and viability of businesses has never been more critical than in the uncertain times of 2020. I joined the Board in June 2020, and would like to thank Dr. Lorenzo Tallarigo for his stewardship of the Board prior to this time, culminating with OXB entering the FTSE250 index.

The level of engagement and collegiality in all Board members is impressive as we have been delivering upon our commitment to both strengthen the capabilities on the Board and increase diversity.

To that end, I am delighted to welcome both Dr. Sam Rasty and Professor Dame Kay Davies to the Board. Sam's contributions have already been very insightful and I know Kay will also add significant insights and enormous value to the Board. Meanwhile, Dr. Andrew Heath is retiring from the Board and I wish to thank him for his guidance and defining role on the Board over the past 10 years. After 9 years on the Board, Martin Diggle has also stepped down as a Non-Executive Director, but remains invested in our journey as a supportive shareholder. I thank Martin for his relentless support of OXB at several defining moments over his tenure.

We continue to assess the capabilities needed at Board level to set and deliver strategy, apply best in class governance practices and ensure succession plans are in place, and we will look to strengthen these capabilities and diversity, where appropriate.

The Future

We enter 2021 and beyond with a rapid growth, a proven strategy, experienced leadership and financial strength which gives me great confidence to continue to succeed in our mission to deliver lifesaving therapies to patients and continue to help in the fight against the pandemic.

We continue to push the boundaries of our platform technologies, and develop the capabilities of the Group and my thanks go to all the staff at OXB for the very important work that each of them are doing. I also thank our customers for their trust, our suppliers who have responded with resilience to the demands we have placed upon them, and our shareholders for their support.

We are in the initial phase of the cell and gene therapy revolution in healthcare and OXB is particularly well positioned to play a major role in this rapidly expanding field. I look forward to enabling OXB to fulfil its potential.

Dr. Roch Doliveux

Chair

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