Shares of OXB (LSE: OXB), a cell and gene therapy CDMO, experienced a sharp decline today, falling over 7% despite a seemingly positive full-year trading update.
The market’s reaction adds to the recent pullback, which has seen the shares decline 18.9% in the last month.
OXB reported revenues at the upper end of its guidance, expecting £166-169 million for FY 2025, a 30% increase from £128.8 million in FY 2024. This growth underscores the company’s successful execution of its pure-play CDMO strategy and strong demand for its viral vector services.
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The company also achieved EBITDA profitability, a significant milestone compared to the £(15.3) million loss in FY 2024.
However, the profitability picture is nuanced. The FY 2025 Operating EBITDA profitability is expected to be in the mid-to-high single-digit £ million, including a one-time gain from the acquisition of the Durham, NC facility.
Excluding this gain, underlying Operating EBITDA profit is expected to be in the low single-digit £ million. This reliance on a non-recurring gain to achieve profitability may be a cause for concern among investors.
The company’s contracted value of client orders increased by 20% to £224 million, up from £186 million in the previous year.
Revenue backlog also saw a significant increase, reaching approximately £204 million as of December 31, 2025, compared to £150 million at the end of 2024. This indicates strong future revenue visibility and sustained demand for OXB’s services.
OXB closed the year with a strong balance sheet, featuring a gross cash position of £96.9 million and a net cash position of £55.4 million. A c.£60 million equity raise in August 2025 and a new four-year loan facility of up to $125 million with Oaktree further strengthened the company’s financial position, providing liquidity for planned capacity expansion.
The company reiterated its short- and medium-term financial guidance, projecting FY 2026 revenues between £220-240 million. OXB anticipates 25-30% year-on-year revenue growth in 2027 and 2028, with Operating EBITDA margin expected to exceed 10% in FY 2026 and reach at least 20% for FY 2027.
Driver Breakdown:
- Revenue Growth: Sustained demand for viral vector services driving top-line expansion.
- EBITDA Profitability: Transition to positive EBITDA, albeit influenced by non-recurring gains.
- Contracted Orders: Increase in contracted value reflecting strong commercial momentum.
Dr. Frank Mathias, Chief Executive Officer of OXB, commented that 2025 was a milestone year, where the company successfully executed its pure-play CDMO strategy and expects to deliver an outstanding full-year performance with continued strong revenue growth and EBITDA-level profitability.
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