CTL019 approval likely in pALL, ad-com positive

Oxford BioMedica 25 July 2017 Update
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Oxford BioMedica

CTL019 approval likely in pALL, ad-com positive

CTL019 update

Pharma & biotech

25 July 2017

Price

9.10p

Market cap

£282m

Net debt (£m) at end December 2016

19.1

Shares in issue

3,088.4m

Free float

83%

Code

OXB

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

71.7

85.7

108.2

Rel (local)

73.6

78.7

85.6

52-week high/low

10.8p

3.0p

Business description

Oxford BioMedica (OXB) has a leading position in gene-based therapy. The lenti-vector technology is wide ranging and underpins much of the development pipeline, notably OXB-102, OXB-202 and OXB-302. OXB’s manufacturing expertise is gaining valuable commercial traction.

Next events

CTL019 approval in B-ALL

Q417

CTL019 BLA in DLBCL

H217

Further partnership deals

2017/18

Licensing deals/spin-outs

2017/18

Analysts

Dr Daniel Wilkinson

+44 (0)20 3077 5700

Dr Susie Jana

+44 (0)20 3077 5734

Oxford BioMedica is a research client of Edison Investment Research Limited

With a probable approval for Novartis’s CTL019 (tisagenlecleucel) (OXB manufacture a key component) in both paediatric ALL and DLBCL on the horizon, Oxford BioMedica (OXB) is in position to crystallise a potentially significant revenue stream. Building on the original 2014 agreement with Novartis, the new commercial supply agreement for CTL019 includes $10m upfront and in excess of $90m in additional revenue over the next three years. Additionally, the company has refinanced its Oberland facility with Oaktree Capital Management to the tune of $55m (c $10m undrawn) on improved terms. Our valuation has increased to £251.6m (8.15p/share) vs £208.5m (6.75p/share), mainly as a result of updating CTL019 assumptions.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/15

15.9

(16.6)

(0.49)

0.0

N/A

N/A

12/16

27.8

(20.0)

(0.59)

0.0

N/A

N/A

12/17e

40.2

(5.5)

(0.05)

0.0

N/A

N/A

12/18e

43.8

0.5

0.15

0.0

60.7

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

CTL019 ad-com unanimous but cautious on safety

Novartis has filed its lead CAR-T CTL019 (OXB manufacture a key component) with the FDA for approval in paediatric ALL patients. At the FDA advisory committee (ad-com) on 12 July, CTL019 was reviewed by independent experts and unanimously recommended for approval; while multiple concerns were raised with regard to its long-term safety, we believe approval later this year is likely (PDUFA date: 3 October). We anticipate launch in the US and Europe for paediatric ALL by the year end.

Novartis deal: Confirms commitment to supply chain

OXB’s recent agreement with Novartis for the commercial and clinical supply of lentiviral vectors used to generate CTL019 builds on the original contract signed in October 2014. In addition to the $10m upfront, fee it could provide in excess of $90m in the next three years. OXB is the sole supplier of the lentiviral vector and the deal comes ahead of the anticipated clinical launch of CTL019. OXB will also receive undisclosed royalties on potential future sales of Novartis’s CAR-T products.

Refinancing: Better terms reflect new strength

OXB recently announced the creation of a new $55m debt facility with Oaktree Capital Management to redeem the existing debt facility (FY16 results represented a net fair value of £34.4m). Improved deal terms (the potential cost of the loan is 11.5% compared to 15% previously) will aid OXB as it looks to become profitable.

Valuation: CTL019 core to near-term value

We value OXB at £251.6m (8.15p/share) vs £208.5m (6.75p/share) previously. We have rolled forward and updated our model, notably in relation to CTL019 assumptions. We note that the price of CTL019, the royalty rate received from Novartis and penetration rates all have a material impact on our valuation.

FDA advisory panel: Efficacy clear, safety the focus

OXB provides a critical component (lentiviral vector) of Novartis’s T- cell therapy CTL019 (tisagenlecleucel). CTL019 is known as a chimeric antigen receptor T-cell (CAR-T), a new generation of therapies that aim to engineer a patient’s immune system to fight their cancer. This process is complex and requires both significant expertise and manufacturing capabilities. Novartis has submitted a biologics license application (BLA) to the FDA for the treatment of relapsed/refractory paediatric ALL (r/r pALL) patients (EU submission expected shortly). Additionally, Novartis expects to file a BLA in DLBCL in both the US and EU shortly. A potential FDA approval in pALL is expected in the autumn (PDUFA action date: 3 October), with an EU approval and approval in DLBCL (in both regions) potentially by year end. Key to this approval process was the recent FDA advisory committee meeting (ad-com), which invited independent experts to pass their guidance of CTL019 in pALL. The 10 person committee voted unanimously in recommending approval based primarily on data from the Phase II ELIANA trial (study B2020). Assuming a positive PFUDA meeting, CTL019 would be the first ever CAR-T approved.

Viral vectors: Places OXB on the global stage

OXB has developed and can manufacture engineered HIV (part of the lentivirus family, modified to be safe) to genetically modify a patient’s T-cells to target cancer. OXB provides this lentiviral vector to Novartis, which utilises it in its manufacturing process to treat patients. While the technology is in its infancy, the approach has had clinical success in blood cancers like acute lymphoblastic leukaemia (ALL) and diffuse large B-cell lymphoma (DLBCL).

One of the core focuses of the ad-com panel was to better understand the long-term safety of a genetically modified cell. Two points raised in the ad-com were insertional mutagenesis and the creation of replication competent lentiviral vector. The lentiviral vector technology that OXB utilise is based on a third-generation vector system where accessory genes are removed and the genome is split among plasmids. This makes the vector replicant incompetent, preventing the virus used to modify the T-cells from spreading to healthy cells in the body. In 13+ vector lots and 72+ patient-specific CTL019 lots that have been tested there has been no positive reading for replicant-positive lentivirus, validating OXB’s technology as safe.

Insertional mutagenesis, where insertion of the gene may cause a change in activity of host genes through mutation, disruption or changes in activity is a long-term cause for concern as it could lead to new cancers. OXB has designed its vectors in a way to minimise this possibility; they lack enhancer sequences and as such are less likely to activate nearby genes. To date there has been no vector-associated leukaemia with CTL019 or any other vector-modified products. Based on data to date, we believe that OXB’s viral vector technology in CTL019 is robust and, while a long-term study (Novartis plans a 15-year registry study) will monitor for these side effects, we believe they are not of significant concern, a point highlighted by the unanimous vote in favour of CTL019 by the advisory committee.

Efficacy never in doubt, adverse event management key

The efficacy of CTL019 (tisagenlecleucel) was not a core focus of the ad-com, as its efficacy is clearly evident. In the ELIANA trial, the overall response rate (set at three months) was 82.5% (n=52/63) (95% CI: 70.9, 91.0), with 40 of those patients experiencing a complete remission (CR) with complete blood count recovery and the remaining 12 experiencing complete remission without blood count recovery (CRi). All complete responses were minimal residual disease (MRD) negative in the bone marrow, indicating complete eradication of the cancer cells. Median duration of response (DOR) has not yet been reached (median follow-up of 4.8 months). The estimated relapse-free rate among responders at six months was 75.4% (95% CI: 57.2, 86.7). At the data cut-off date (23 November 2016), 11 of the 52 subjects relapsed after treatment with CTL019 and a further two relapsed after treatment with both CTL019 and another cancer therapy. 22 remain in remission at data cut-off.

When looking at approved FDA therapies for r/r ALL we see how significant the efficacy of CTL019 is. Most recently Blincyto (blinatumomab), a bispecific CD19-directed, CD3 T-cell engager (BiTE) was approved in 2014. An open-label study (MT103-205) tested Blincyto in paediatric patients who had relapsed or were refractory to a range of treatments. It demonstrated a complete response (CR) of 17.1% (n=12/70, 95% CI: 9.2, 28.0). An additional 11 patients (15.7%) had complete remission with partial blood count recovery (CRi). In total 32.9% of patients had a CR or CRi (n=23/70, 95% CI: 22.1, 45.1). Median duration of response (time before relapse) was six months (range: 0.5-16.4) in the combined group. Blincyto prescribing information includes a black box warning for cytokine release syndrome and neurological toxicities.

While trial comparisons should be undertaken with caution, the substantial difference in complete responders (either with or without complete blood count recovery) between Blincyto and CTL019 is evident. Going forward, duration of response will be a key metric for CTL019, which will likely inform both pricing and treatment paradigms.

While efficacy has been remarkable, severe adverse events (SAEs), predominantly cytokine release syndrome and neurotoxicity, have been a serious cause for concern in many patients. In the ELIANA trial 69% of patients had a SAE in the first eight weeks after CTL019 infusion. While dose, disease burden and CAR-T construct (antibody fragment or co-stimulatory domain used) is theorised by some to predict the severity of side effects (and also the efficacy), Novartis clinically has no evidence that could point to any one component as being a key factor. Unlike some other CD19 CAR-Ts, notably the now cancelled JCAR015 from Juno Therapeutics, no cases of cerebral oedema have occurred with CTL019. It is thought that this may be due to the selection of the 4-1BB co-stimulatory domain by Novartis, while competitors Kite Pharmaceuticals and Juno utilise a CD28 domain. However, cases of cerebral oedema have occurred in patients treated with CAR-Ts containing the 4-1BB domain, indicating that a combination of factors is likely to be at play, including cancer type, starting T-cell populations and viral vector utilised.

Cytokine release syndrome (CRS), the other common adverse event associated with CAR-Ts, is a systemic inflammatory response that can be severe and sometimes fatal. However, it is significantly more manageable than neurotoxicity. One approach which is gaining traction is the utilisation of tocilizumab (an antibody that targets inflammatory cytokine IL-6) to dampen down CRS. Importantly, Novartis noted that it could be utilised prophylactically to minimise CRS without any noticeable effect on efficacy.

Oxford BioMedica’s manufacturing ready to deliver

For both Novartis and OXB, manufacturing will be a key limiting factor in delivering CTL019. Never before has a commercial medical product (if approved by the FDA and/or EMA) required the removal, modification and re-administration of a patient’s immune cells. This is a labour-intensive technique that requires significant capabilities at all stages. Novartis is aiming for a 22-day manufacturing process (multiple patients have died while waiting for injection of CTL019, further highlighting both the need of the patient population and ideally a shorter manufacturing time) from extracting a patient’s cells to re-administrating them. To enable this, Novartis needs OXB’s lentiviral vectors, which take several months to manufacture. Once made, these are delivered to Novartis, which stores them to use later to modify multiple patient cell batches. Three vector batches were utilised to treat all 88 patients in the ELIANA Phase II trial. These vectors were produced via its Process A procedure and would not be able to produce the required vector volumes to meet any potential future commercial demand beyond paediatric ALL. As such, OXB has invested in and is gradually moving its manufacturing over to its Process B procedure. This involves the use of bioreactors, which the company states will improve productivity at least tenfold. This will put OXB at the forefront of lentiviral manufacturing, as few if any companies globally possess the ability to manufacture on that scale.

Pipeline update

An internal review in April 2016 led to the prioritisation of three internally developed pipeline assets: OXB-102 (Parkinson’s disease – Phase I/II), OXB-202 (corneal graft rejection – Phase I/II) and OXB-302 (cancer, multiple types – preclinical), which could deliver the best potential economic returns. The goal for each is to be advanced to at least proof-of-concept in humans via out-licensing or through the formation of externally funded SPVs. OXB will look to obtain value through upfront payments, equity stakes or developmental milestones and from royalties on sales.

Product candidates that fall outside the priority programme (OXB-201 for wet age-related macular degeneration and OXB-301 for multiple cancers) will only be progressed once suitable opportunities, like partnering, enable reduced investment from OXB.

The group will continue to invest in earlier-stage gene and cell therapy concepts (eg in ocular, central nervous system and respiratory indications) with the aim of identifying new candidates for further development via out-licensing or spin-outs.

We note that SAR422459 (licensed to Sanofi) for Stargardt disease has progressed into Phase II development.

Valuation

Our valuation has increased to 8.15p/share (£251.6m) vs 6.75p/share previously (£208.5m). This increase has been driven mainly by changes in our CTL019 assumptions and rolling forward our model. Our assumptions for OXB’s pipeline remain unchanged. We note Novartis’ ability to drive penetration of its treatment (mainly in the larger indication, DLBCL), its pricing of CTL019 and the royalty rate OXB receives all have a significant effect on our valuation. We believe significant upside for OXB could come from other partnerships as additional companies are likely to be attracted by OXB’s expertise and its ability to commercially produce the lentiviral vector. However, at this time the ability to predict the scope and timing of any deals is difficult and not included in our valuation.

Exhibit 1: OXB sum-of-the-parts valuation

Product(s)

Indication

Partner

Status

Probability of success

Estimated launch year

Estimated maximum royalty or margin

Estimated peak sales ($m)

NPV (£m)

rNPV (£m)

rNPV/ share (p)

OXB-102

Parkinson's disease

 

Phase I/II

20%

2024

15%

$1,048.1

142.1

28.4

0.92

OXB-202

Corneal graft rejection

 

Phase I/II

20%

2026

15%

$381.3

39.9

8.0

0.26

OXB-201

Wet AMD

 

Phase I/II

20%

2026

15%

$337.5

53.0

10.6

0.34

OXB-301

Cancer (multiple)

 

Phase I/II

20%

2024

15%

$360.0

33.6

6.7

0.22

SAR422459 (StarGen)

Stargardt disease

Sanofi

Phase IIa

25%

2021

7%

$337.5

35.0

8.7

0.28

SAR421869 (UshStat)

Usher syndrome type 1B

Sanofi

Phase I/II

20%

2023

7%

$45.0

4.5

0.9

0.03

Manufacturing for all collaborations (predominately CTL-019) 

Various

 

100%

 

40% operating margin

$21.6

63.3

63.3

2.05

Licence income & IP milestones (predominately CTL019) 

Various

 

100%

 

100% operating margin

 

144.0

144.0

4.67

Less net debt as of 31 December 2016 

 

 

 

 

 

(19.1)

(19.1)

(0.62)

Total

 

 

 

 

 

 

 

496.3

251.6

8.15

Source: Edison Investment Research

For CTL019 we have updated our EU population numbers conservatively to include the top five countries (by GDP) as we feel these are more likely to be initially targeted. We have increased the age range in ALL to include young adults. Based on the impressive efficacy data in both the ELIANA (r/r pALL) and JULIET trial (r/r DLBCL), we have increased our peak penetration rates (35% in DLBCL and 50% in ALL). We expect lower penetration rates in DLBCL compared to ALL, as we anticipate increased competition (Kite Pharmaceuticals likely first to market). In pALL, competitors are at least 18 months behind and we expect Novartis to gain significant market share. We have increased the expected price of CTL019 to £300k based on market sentiment and have altered our royalty rate, which now at peak is 2%. We anticipate launch of CTL019 for pALL in autumn this year (PDUFA action date: 3 October 2017) and in DLBCL at year end. We note that DLBCL represents the majority of revenue in both manufacturing and royalties due to the significantly larger patient population. Our core CTL019 assumptions can be seen in Exhibit 2. A key unknown factor which materially affects our valuation remains the royalty rate OXB receives from Novartis. We note that a 1% peak royalty rate lowers our overall valuation to £182.7m (5.92p/share), while a 3% peak royalty rate increases our valuation to £320.6m (10.38p/share). Please see our previous notes for a more in-depth look into our overall valuation metrics.

Exhibit 2: CTL019 assumptions

r/r pALL

DLBCL

EU (top 5) & US, 25% paediatric/young adult, 0.004% with ALL, 15% failed first and second line, 50% peak penetration, £300k, launch autumn 2017, CTL019 peak sales £158m, 2% peak royalty rate, £3.2m peak royalties.

EU (top 5) & US, 0.02% with NHL, 48% with DLBCL, 35% failed first and second line, 30% peak penetration, £300k price, launch end 2017, CTL019 peak sales £2.1bn, 2% peak royalty rate, £42.5m peak royalties.

r/r pALL

EU (top 5) & US, 25% paediatric/young adult, 0.004% with ALL, 15% failed first and second line, 50% peak penetration, £300k, launch autumn 2017, CTL019 peak sales £158m, 2% peak royalty rate, £3.2m peak royalties.

DLBCL

EU (top 5) & US, 0.02% with NHL, 48% with DLBCL, 35% failed first and second line, 30% peak penetration, £300k price, launch end 2017, CTL019 peak sales £2.1bn, 2% peak royalty rate, £42.5m peak royalties.

Source: Edison Investment Research

Financials

We have updated our forecasts, which now reflect the creation of the new debt facility with Oaktree Capital Management, changes in our CTL019 assumptions and the $10m upfront payment in 2017 from the new supply deal with Novartis. We have adjusted our expectations for CTL019 (outlined in more detail in the valuation section), which has prompted us to revise our revenue expectations upwards in 2017, 2018 and 2019. Our 2018 and 2019 numbers are driven significantly by royalties and manufacturing of CTL019. In addition, we expect revenue from collaborations with Orchard Therapeutics and Green Cross LabCell to contribute meaningfully over this time period. The recently announced supply deal with Novartis consists of a $10m upfront in 2017 and an additional $90m committed over the next three years. Additional undisclosed CAR-T products are included in the deal and the supply agreement can be extended to five years with the agreement of both parties. We maintain our forecasts for R&D and bioprocessing costs, which we believe will see a significant reduction from 2017. This is a reflection of the near-term strategy to out-license or spin out the product portfolio (£21.5m in 2017, £18.5m in 2018 and £17.0m in 2019).

OXB recently announced the creation of a new $55m debt facility with Oaktree Capital Management. This facility has been used to redeem the existing debt facility with Oberland Capital Healthcare which, as last reported in the FY16 results, represented a net fair value of £34.4m. We estimate that c $10m is available to be drawn down when taking into account the original sum. Notably improved deal terms (potential cost of loan 11.5% compared to 15% for the previous Oberland facility) will aid OXB as it looks to become profitable in the near term. The loan is to be paid back by 29 June 2020 and has a 9% interest rate plus US$ Libor (minimum 1%). Subject to achieving certain conditions, the interest rate could drop 0.25% in both the second and third years. Additionally, the company has issued 134m warrants to Oaktree, which can be exercised over the next 10 years at a nominal share price of 1p.

Exhibit 3: Financial summary

£'000s

2015

2016

2017e

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

15,909

27,776

40,154

43,792

48,317

Cost of Sales

(5,839)

(11,835)

(15,342)

(15,489)

(16,937)

Gross Profit

10,070

15,941

24,812

28,303

31,380

R&D

(20,274)

(24,299)

(21,500)

(18,500)

(17,000)

Other operating income

2,862

3,002

1,000

1,000

1,000

EBITDA

 

(12,456)

(7,638)

2,282

8,124

12,350

Depreciation

(1,264)

(3,340)

(3,719)

(3,365)

(3,056)

Operating profit (before GW and except)

(13,720)

(10,978)

(1,437)

4,760

9,294

Amortisation

(363)

(335)

(268)

(214)

(171)

Exceptionals

0

0

0

0

0

Operating profit

 

(14,083)

(11,313)

(1,704)

4,546

9,123

Net Interest

(2,899)

(8,994)

(4,081)

(4,227)

(4,379)

Other

0

0

0

0

0

Profit Before Tax (norm)

 

(16,619)

(19,972)

(5,518)

532

4,915

Profit Before Tax (reported)

 

(16,982)

(20,307)

(5,786)

318

4,744

Tax

3,963

3,666

4,000

4,000

4,000

Profit After Tax (norm)

(12,656)

(16,306)

(1,518)

4,532

8,915

Profit After Tax (reported)

(13,019)

(16,641)

(1,786)

4,318

8,744

Average Number of Shares Outstanding (m)

2,574

2,778

3,087

3,087

3,087

EPS - normalised (p)

 

(0.49)

(0.59)

(0.05)

0.15

0.29

EPS - reported (p)

 

(0.51)

(0.60)

(0.06)

0.14

0.28

Dividend per share (p)

 

0.00

0.00

0.00

0.00

0.00

Gross Margin (%)

63.3%

57.4%

61.8%

64.6%

64.9%

EBITDA Margin (%)

(78.3%)

(27.5%)

5.7%

18.6%

25.6%

Operating Margin (before GW and except) (%)

(86.2%)

(39.5%)

(3.6%)

10.9%

19.2%

BALANCE SHEET

Fixed Assets

 

26,139

29,501

26,514

23,936

21,709

Intangible Assets

0

657

657

657

657

Intangible Assets

1,743

1,330

1,062

849

678

Tangible Assets

24,396

27,514

24,795

22,430

20,374

Current Assets

 

25,712

27,441

34,376

41,586

53,607

Stocks

2,706

2,202

2,855

2,882

3,151

Debtors

10,930

6,904

2,169

5,772

6,137

Cash

9,355

15,335

26,019

29,598

40,985

Other

2,721

3,000

3,334

3,334

3,334

Current Liabilities

 

(13,169)

(9,316)

(13,821)

(12,861)

(12,594)

Creditors

(9,286)

(6,003)

(10,508)

(9,548)

(9,281)

Provisions

(838)

0

0

0

0

Deferred income

(3,045)

(3,313)

(3,313)

(3,313)

(3,313)

Long Term Liabilities

 

(27,788)

(35,011)

(36,240)

(37,513)

(38,831)

Long term borrowings

(27,255)

(34,389)

(35,618)

(36,891)

(38,209)

Other long term liabilities

(533)

(622)

(622)

(622)

(622)

Net Assets

 

10,894

12,615

10,830

15,148

23,892

CASH FLOW

Operating Cash Flow

 

(14,871)

(5,979)

10,870

3,534

11,448

Net Interest

(1,494)

(3,258)

(2,867)

(2,970)

(3,076)

Tax

3,247

4,131

3,666

4,000

4,000

Capex

(16,716)

(6,458)

(1,000)

(1,000)

(1,000)

Acquisitions/disposals

0

0

0

0

0

Financing

144

17,497

0

0

0

Dividends

0

0

0

0

0

Other

38

47

15

15

15

Net Cash Flow

(29,652)

5,980

10,684

3,580

11,387

Opening net debt/(cash)

 

(13,195)

17,900

19,054

9,599

7,292

HP finance leases initiated

0

0

0

0

0

Other

(1,443)

(7,134)

(1,229)

(1,273)

(1,318)

Closing net debt/(cash)

 

17,900

19,054

9,599

7,293

(2,777)

Source: Oxford BioMedica, Edison Investment Research

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Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Oxford BioMedica and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Oxford BioMedica and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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