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Oxford BioMedica Risk-sharing in cystic fibrosis gene-therapy

Hardman & Co Report Report DownloadsOxford BioMedica (LON:OXB) is a specialist, advanced-therapy, lentivirus vector biopharma company. It offers vector manufacturing and development services and has a proprietary drug pipeline. In addition to LentiVector® service contracts, OXB receives royalties on commercial therapies developed by its partners using the LentiVector platform. A partnership deal structure was established with Novartis for KymriahPPPTM in 2017,PP followed by a collaboration with Bioverativ in February 2018 and by out-licensing its Parkinson’s disease gene-therapy to Axovant in June 2018. In August, OXB announced a second 2018 collaboration agreement, for cystic fibrosis gene-therapy.

Strategy: OXB has four strategic objectives: delivery of process development (PD) services that embed its technology in partners’ commercial products; commercial manufacture of lentiviral vector; out-licensing of proprietary candidates; and investment in R&D and the LentiVector platform.

New partnership: the collaboration to develop a cystic fibrosis (CF) gene-therapy involves technology transfer by OXB of a lentivirus-based gene-therapy from the CF Gene Therapy Consortium/Imperial Innovations to OXB’s platform. Separately, Boehringer Ingelheim has signed an option to license the therapy.

Promise in CF: As a severe genetic disorder affecting over 70,000 people and with few licensed treatments, CF represents a huge unmet need for which an effective gene-therapy would represent a paradigm shift. This partnered, discovery-stage therapy has potential to be first-in-class, if successful.

Risks: OXB’s mid-term sales model and its ability to pay off debt are dependent on successful progress of partners’ clinical trials and commercialisation of LentiVector-enabled products, for receipt of bioprocessing milestones and royalty payments. All gene-therapy candidates are subject to significant clinical risk.

Investment summary: Oxford BioMedica is at a very interesting juncture. Heavy investment in state-of-the-art GMP manufacturing facilities for production of gene-therapy vector has resulted in supply agreements with Novartis, Bioverativ, AXON, and now in CF, on top of existing partnerships – positioning the group on the road to significant bioprocessing service income, milestones, and royalties.