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Oxford BioMedica shares up, in talks to buy ABL Europe but loss widens

20th Sep 2023 12:21

(Alliance News) - Oxford BioMedica PLC on Wednesday said loss widened in the first half of 2023 as revenue fell, while it noted being in exclusive talks to buy ABL Europe from Institut Merieux SA for EUR15 million.

Shares in Oxford BioMedica were up 10% to 266.05 pence each in London on Wednesday at midday.

In the six months that ended June 30, the Oxfordshire, England-based gene and cell therapy group said pretax loss widened to GBP52.3 million from GBP27.4 million a year earlier.

This was because revenue fell 33% to GBP43.1 million from GBP64.0 million, while bioprocessing costs more than doubled to GBP30.3 million from GBP12.4 million and research & development costs rose 15% to GBP31.4 million from GBP27.3 million.

"I am fully focused on sustainable growth and our path to profitability - accelerating us to being a pure-play [contract development and manufacturing organisation]. With the cell and gene therapy industry at an inflection point, I believe that we are in the right market at the right time, and well-equipped to succeed with our highly skilled workforce and leading-edge technology," said Chief Executive Officer Frank Mathias.

"This has required a transformation and a change of mindset. We are adapting our structure and processes to better serve our clients and work more efficiently. We will now work together as one company with aligned operations from our headquarters here in Oxford, UK, a footprint in the US, and will offer multiple vector types from our multiple sites."

Also on Wednesday, Oxford Biomedica said it entered into exclusive negotiations to acquire ABL Europe as part of its planned "pure-play CDMO transformation".

The terms of the proposed transaction include a consideration of EUR15 million, including the value of EUR10 million of pre-completion cash funding in ABL Europe in exchange for Oxford Biomedica shares at an issue price of not less than 407.4 pence per share.

This is alongside an additional EUR20 million of committed future funding from Institut Merieux to ABL Europe via subscribing to Oxford Biomedica shares. This would be timed at Oxford Biomedica's discretion and pricing at the 30-day volume-weighted average share price to the day before the date of the subscription.

Oxford Biomedica also said Institut Merieux would become one of its major shareholders.

CEO Mathias commented: "As part of our transformation into a pure-play CDMO in 2023, this potential acquisition augments our position as a world-leading quality and innovation-led CDMO in the cell and gene therapy field. ABL Europe offers the opportunity to gain a footprint in the EU and free up Oxford Biomedica's capacity to meet increasing client demand, as well as significantly increasing our capabilities and flexibility for clients.

"Our goal is to deliver excellent client experiences and accelerate the time it takes for our clients to get their products to market. We are excited about the possibility of welcoming ABL Europe staff to our group and Institut Merieux as a long-term shareholder and turn to 2024 with great excitement and confidence."

Institut Merieux CEO Michel Baguenault added: "We are giving ABL Europe's teams and its French sites new development prospects and access to innovative technologies that will enable them to broaden their offering to biopharmaceutical companies. As a reference shareholder in Oxford Biomedica, and in keeping with its public health mission, Institut Merieux intends to support the company's development in fields of activity that present major challenges for patients."

By Greg Rosenvinge, Alliance News reporter

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