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Oxford BioMedica (OXB) Shares Are Up 44.3% This Year but Seem To Have Topped Out

Updated: 12 Oct 2021

Oxford BioMedica plc (LON: OXB) shares are up 44.3% this year but recently fell from their all-time high of 1672p to their current price. Will the rally continue in the future?

The company recently received a £4.5 million grant award from the British government to sponsor doctoral studies. It will work in collaboration with the Univerity of Oxford and the University College London (UCL).

The UK government grant is intended to train the next generation of bioscience leaders via doctoral studies to fill gaps in the UK’s current crop of skilled researchers in the bioscience of viral products for future cell and gene therapies and vaccines.

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The company recently released its six-month financial results, impressive as its revenues surged 139% to £81.3 million from the £34 million recorded in 2020.

A significant portion of its revenues (£75.6 million) was derived from its bioprocessing and commercial development business, including its manufacturing contract with AstraZeneca.

Oxford BioMedica has a lucrative manufacturing contract with AstraZeneca, where it manufactures the latter’s COVID-19 vaccines, which has been the main driver’s behind the company’s 80%+ rally over the past 12 months.

The company’s other revenue stream comes from license fees and royalties, which are pretty volatile. In addition, they rely on earnings generated by licensing its LentiVector drug development platform to much larger companies.

The biotech company generated profits worth £19.7 million compared to the £5.8 million loss recorded last year. Still, there are lingering concerns about the long-term sustainability of is AstraZeneca COVID-19 manufacturing contract.

The income generated from royalties and license fees is also not very stable. It varies greatly depending on whether it signs new licensing contracts, while the recurring royalty payments depend on the number of drugs developed via LentiVector that reach production stages.

From a technical standpoint, the recent pullback in OXB shares seems like a temporary pullback after a sustained bullish run, which is expected. As a result, the price is likely to consolidate at current levels for a while before the next rally or decline phase begins.

*This is not investment advice.

Oxford Biomedica share price.

IG chart of Oxford Biomedica share price 12-10-2021

Oxford Biomedica shares are up 44.31% this year but seem to have recently topped. Will the rally continue?

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