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Oxford Biomedica Share Price Has Fallen 11.2% in One Month. So What’s Next?

Updated: 23 Nov 2021

Oxford BioMedica plc (LON: OXB) share price has fallen 11.2% in the past month, as shown on the daily price chart shown below. As a result, most investors wonder what’s next for the biotechnology company.

Well, the company’s recent downtrend seems to mimic the downtrend witnessed in AstraZeneca’s share price after releasing its third-quarter earnings results on 12 November 2021.

Investors quickly faulted the company for saying that it intends to generate a profit on its COVID-19 vaccine sales to repeat customers and those ordering booster shots. Instead, the company said that it would only keep selling the vaccines at cost to developing countries.

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A significant selloff in AstraZeneca shares followed the announcements causing Oxford Biomedica, which manufactures some COVID-19 vaccines for the leading pharma company, to extend their losses.

Investors are worried that as vaccine orders taper off in the next year, Oxford Biomedica will lose a significant portion of its revenues, given that it generated £81.3 million in revenues during the first half of its financial year ended 30 June 2021.

Only a tiny fraction of the company’s revenues were generated from other sources such as its LentiVector drug development platform, licensed out to other pharmaceutical companies and earning the company royalty and milestone payments.

The drug development platform holds significant promise for Oxford Biomedica once COVID-91 sales start declining. Still, the company has to do a lot more to increase its revenues from the platform, which were just £5.7 million, having dropped from last year’s £10.6 million.

Falling revenues from the LentiVector platform are a bad sign for the company. However, there is still time to engineer a turnaround by licensing the technology out to other firms interested in developing new drugs based on the platform.

Oxford Biomedica could secure more manufacturing contracts from other firms to replace the revenue likely to be lost once CVOID-19 vaccine sales and demand starts declining. OXB shares are currently trading at a support zone that could trigger a move higher if it holds.

Investors should watch the company’s share price over the next few days t see if a new rally phase shall begin if the support level holds. However, nothing is guaranteed in the markets, and we could easily see the level broken or the shares trade sideways.

*This is not investment advice. Always do your due diligence before making investment decisions.

Oxford Biomedica share price.

IG chart of Oxford Biomedica share price 23-11-2021
Source: IG

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