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Research: Healthcare
Oxford BioMedica has today announced a significant agreement with Novartis for the ongoing commercial and clinical supply of lentiviral vectors used to produce CTL019, confirming its status as a major component of Novartis’ future CAR-T plans. The agreement is an extension of the October 2014 collaboration and comes in anticipation of the launch of CTL019 in H217. In deal terms, OXB will receive a $10m upfront payment and could potentially receive $100m+ from Novartis over the next three years. Our forecasts and valuation are under review (in our last published outlook we noted peak royalties of £12.4m). We await the outcome of CTL019’s FDA advisory committee meeting (12 July) to shed more light on its path to approval and likely commercial success.
Written by
Oxford BioMedica |
Lentiviral vector supply for CTL019 driving revenue growth |
Flash Note |
Pharma & Biotech |
6 July 2017 |
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Business description
Analysts
Oxford BioMedica is a research client of Edison Investment Research Limited |
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Oxford BioMedica has today announced a significant agreement with Novartis for the ongoing commercial and clinical supply of lentiviral vectors used to produce CTL019, confirming its status as a major component of Novartis’ future CAR-T plans. The agreement is an extension of the October 2014 collaboration and comes in anticipation of the launch of CTL019 in H217. In deal terms, OXB will receive a $10m upfront payment and could potentially receive $100m+ from Novartis over the next three years. Our forecasts and valuation are under review (in our last published outlook we noted peak royalties of £12.4m). We await the outcome of CTL019’s FDA advisory committee meeting (12 July) to shed more light on its path to approval and likely commercial success.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
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 |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
12/18e |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments
OXB’s agreement with Novartis for the commercial and clinical supply of lentiviral vectors used to generate CTL019 (tisagenlecleucel) and other undisclosed CAR-T products builds on the original contract in October 2014 (the supply agreement announced today is for three years, extendable to five years). OXB is the sole supplier of the lentiviral vector for the CTL019 clinical study, and the extension of the deal comes ahead of the anticipated clinical launch of CTL019 (FDA approval expected in H2 2017 in paediatric-ALL). OXB will additionally receive undisclosed royalties on potential future sales of Novartis’s CAR-T products including CTL019. In a separate press release last week, OXB announced the refinancing of the Oberland capital facility with a $55m debt facility from Oaktree Capital Management – Strategic Credit Strategy (“Oaktree”). 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 repayable no later than 29 June 2020 although it may be repaid, at the group’s discretion, at any time subject to early prepayment fees and an exit fee.
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Disclaimer
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Excluding Euro 2016 revenues, underlying Q217 daily net gaming revenues (NGR) grew 15%, providing further evidence of GVC’s position as a leading online gaming operator. As showcased during a recent capital markets day, the integration of bwin.party has surpassed management’s initial expectations, with positive KPIs across all divisions. Growth has been achieved through leveraging the powerful proprietary platform and reinvigorating leading brands. Customer migrations should be complete by year end and €125m cost synergies are on track. We have nudged up our 2017 and 2018 forecasts, although we recognise that comparatives into H217 will become tougher. With a robust growth profile, the stock trades towards the top of its peers, at 9.9x EV/EBITDA and 12.5x P/E for 2018e.