OXB reported FY19 total revenues of £64.1m (-4% y-o-y from £66.8m). Licence fees, milestone and royalty (LMR) revenue were reported at £16.8m in FY19, as FY18 (£26.3m) benefited from large upfront payment contributions on signing the Axovant and Sanofi (Bioverativ) partnerships. LMR revenue in FY19 comprised an £11.5m ($15m) milestone from Axovant and, although undisclosed, we assume the majority of the remainder is £5.3m in royalties for Kymriah.
Bioprocessing/commercial development revenues, which are historically more predictable, grew to £47.3m (+17%, £40.5m in FY18), driven by growth in Novartis’s bioprocessing volumes (notably for Kymriah) and from increased commercial development services and greater volume of development activity provided to new customers (UK Cystic Fibrosis Gene Therapy Consortium, Axovant and Santen). Novartis-related revenues now represent approximately 50% of group revenues, highlighting the diversification of customer base and revenue streams.
R&D and bioprocessing costs increased to £22.6m (FY18: £18.0m) and £7.4m (FY18: £1.2m) respectively in FY19. For R&D, this was a result of increased investments in commercial and technical projects, while the increase in bioprocessing costs is a result of headcount, facility costs and related spend on OxBox. Costs were also affected by downtime at the Yarnton bioprocessing facility (switch from Process A to B), where associated downtime costs were accounted for in bioprocessing costs rather than as COGS (as no goods were produced in the downtime). We currently include forecast bioprocessing costs in our R&D line. COGS were reported at £35.7m in FY19 (£33.3m FY18 restated) and this line now reflects reallocation of costs, which were previously consolidated with research, development and bioprocessing costs. Administrative costs rose to £11.9.m (vs £7.4m in FY18), reflecting the significant increase in employees to support expansion of the business.
Finance costs decreased to £6.5m (FY18: £9.0m), mainly due to a lower interest charge of £5.4m (FY18: £6.2m) as the Oaktree Capital Management loan was repaid at the end of June 2019. R&D tax credits increased to £4.8m (FY18: £2.5m), reflecting an increase in R&D expenditure, both in terms of headcount and materials. Capital expenditure in FY19 was £25.8m (vs £10.1m in FY18), driven mainly by the ongoing build and fit of OxBox that completed in December and expansion of the business as a whole. We expect this to drop significantly in FY20.
Gross and net cash was £16.2m at 31 December 2019 (£17.2m at 30 April 2020). We forecast £76.5m in total revenues and a £8.0m operating loss in FY20, but note that multiple sensitivities remain around this figure, including cost sensitivities in R&D, facilities and personnel, in addition to revenue sensitivities with regard to Kymriah sales growth, the extent of bioprocessing revenue, milestone payments and the execution of any new deals.