Oxford Biomedica plc (OXB) Earnings Call Transcript & Summary

Good morning and good afternoon, ladies and gentlemen, and welcome to Oxford BioMedica's Annual General Meeting. [Operator Instructions]. And this meeting will be recorded. I will now hand over to our first speaker for today, Dr. Lorenzo Tallarigo. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen, and welcome to the Annual General Meeting of Oxford BioMedica. I'm Lorenzo Tallarigo, Chairman of the Board of your company. Firstly, I would like to excuse my absence at the physical meeting today, which is due, as you may know, to the ongoing travel restriction and stay-at-home measures as a result of the COVID-19 pandemic. John Dawson, CEO, will lead the formal part of today's AGM. But before he does, I would like to take the opportunity to say a few words. As you all know, I informed the group of my decision to retire from the Board of Oxford BioMedica in March this year. I'm immensely proud of the achievements that have been made over the past 4 years since I have been Chairman of the Board. During which time, the group has been transformed into a market-leading gene and cell therapy company. When I joined the Board of Oxford BioMedica at the start of 2016, the group had a market capitalization of approximately GBP 170 million, and we had just over 200 employees. Today, we have a market capitalization of approximately GBP 620 million and have recently been admitted into the FTSE 250, while at the same time, we now employ more than 550 people. Throughout this period of sustained growth, the group has defined and executed on its strategy by harnessing its expertise and know-how with lentiviral vectors to build a sector-leading vector delivery platform, which the group leverages to develop in vivo and ex vivo products, both in-house and with partners. We were the first FDA-approved manufacturer of lentiviral vectors, which was key to our partnership with Novartis and our work on Kymriah, which is saving the lives of patients around the world. Just this year, we have signed 2 key new partnership, a new license and clinical supply agreement with Juno Therapeutics, a Bristol-Myers Squibb company, for their CAR-T and TCR-T programs in oncology, and we also joined the fight against COVID-19 by signing a 1-year clinical and commercial supply agreement with AstraZeneca for the GMP manufacture of the adenovirus vector-based COVID-19 vaccine candidate, AZ1222. In addition to these most recent deals, in the past 4 years, we have also signed an agreement with Sanofi, Orchard Therapeutics, Santen, Boehringer Ingelheim, the UK Cystic Fibrosis Gene Therapy Consortium and the Imperial Innovations. At the same time, signing partnership for access to our platform, the group also successfully out-licensed in 2019 -- in '18, one of our products, OXB-102 for the treatment of Parkinson's disease for just above $800 million with Axovant Gene Therapies. Financially, the group has also seen a transformation. Revenue have grown from GBP 18.8 million at the end of 2015 to just above GBP 64 million at the end of 2019. And importantly, in 2019, the group became debt-free. Further, on 19 June this year, the group successfully raised GBP 40 million before expenses, with the demand for shares exceeding the availability by twofold, demonstrating the current strength and attractiveness of the group. The reason for Oxford BioMedica coming so far so quickly is down to the dedication and talent across the group, and this includes the senior management team, but also through the scientists at the start of their careers and the many other employees that keep it moving day-to-day. This has been probably the most fulfilling experience, [ brining talent that I'd like to ] know all these exceptional good people which have worked so far, so hard, so long with the company. And alongside this great team, the strength and complexity of the underlying size and the facility now in place means that all the best key ingredients are there to make a great company. I will now hand over to the Chief Executive, John Dawson, in Oxford, for the formal part of the meeting. John?

Thank you, Lorenzo. Before we proceed with the formal business of the AGM, I'd like to say a few words about procedure. As you are all aware, U.K. government enacted stay-at-home measures, which were implemented as part of the package of measures to combat the COVID-19 pandemic. These stay-home measures prohibit public gatherings of more than 2 people, except where such gathering is essential for work purposes. Attendance at a meeting of a company does not meet this criterion and therefore, shareholders are not allowed to attend this meeting. The Board and the Chairman of the meeting may implement such arrangements as the Board or the Chairman think appropriate to ensure that this AGM is orderly and safe. Therefore, in exercise with the powers under common law and in accordance with the company's articles of association, the Board and the Chairman made a [indiscernible] shareholders who wish to attend the AGM in contravention of the government's stay-at-home measures. The company has also taken steps to ensure that the AGM is quorumed, a quoram being 2 members is present. With respect to the Board, Stuart Paynter, the CFO, is here with me and Lorenzo Tallarigo. Andrew Heath, Stuart Henderson, Heather Preston, Martin Diggle and Robert Ghenchev are also on the line. Unlike previously -- years, this year, there will be no Board presentation or live Q&A following the formal business of the meeting. Instead, shareholders were asked to e-mail questions to us ahead of the meeting. The questions in response to such questions will be made available on the Oxford website after we have concluded the meeting. I'd now like to start the formal proceedings of this Annual General Meeting. The notice of meeting, together with the annual report and accounts, was posted to shareholders on 22nd of May 2020. Accordingly, the requisite of notice of the meeting has been given. I propose, therefore, that with your consent, notice of meeting should be taken as read. Please note that Resolution 4 of notice of the AGM is withdrawn. Resolution 4 had proposed the reappointment of Dr. Lorenzo Tallarigo. The notice of AGM explained Dr. Tallarigo had informed the Board of his intention to retire, but will continue as Chairman until the search of his replacement has been completed. On the 1st of June 2020, we announced that Dr. Roch Doliveux would be appointed as the new Chairman from 24th of June. As such, Dr. Tallarigo is no longer standing for reappointment and Resolution 4 in the notice of AGM is therefore withdrawn. As shareholders will not be voting in-person, all shareholders were asked to vote by proxy in accordance with the instructions in the notice of the AGM. I will propose each resolution in turn having briefly summarized its content, and I will then call for a vote on a show of hands. A breakdown of the proxy votes that we've received prior to the meeting will be read out after each vote. Results of the voting and details of proxies received prior to the meeting will also be announced for the regulatory information service and published on our website after the meeting. We will now proceed to vote on resolutions, which I'll formally propose to the meeting [indiscernible] of each of the resolutions is set out in the notice of meeting, a copy of which you've all received. Resolutions 1 to 13, excluding the withdrawn Resolution 4, are proposed as ordinary resolutions and each require a simple majority of votes casted in favor in order to be passed. Resolution 7 -- sorry, 14 to 17 are proposed as special resolutions, which require not less than 70% of the votes -- 75% of the votes casted in favor in order to be passed. And moving to Resolution 1. Proposed Resolution 1 in annex of meeting as an ordinary resolution to receive and adopt the company's annual report and accounts for the financial year ended December 31, 2019, the directors' report and report of the independent auditors on those accounts. I'll now put Resolution 1 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

All those against, please raise their hands. [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority, and the proxy votes received were as follows: 49,841,735 in favor, 917 at the Chairman's discretion, 0 against and 113,171 withheld. To Resolution 2. Proposed Resolution 2 in the notice of meeting as an ordinary resolution to receive directors' remuneration report and report of the independent auditors are also being part of the remuneration report, excluding directors' remuneration policy for the financial year ended 31/12/19. I will now put Resolution 2 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

All those who wish to abstain, please raise their hands. [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 48,970,356 in favor, 917 at the Chairman's discretion and 909,694 against. Resolution 3. Our proposed Resolution 3 in the notice of meeting as an ordinary resolution to appoint Robert Ghenchev as a director of the company. I will now put Resolution 3 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. Proxy votes received were as follows: 47,679,014 in favor, 917 at the Chairman's discretion, 2,202,867 against and 73,024 withheld. On to Resolution 4. As I mentioned earlier, Resolution 4 in the notice of AGM proposing a bid from Dr. Tallarigo has been withdrawn. On to Resolution 5. Resolutions 5 to 10 concern the reelection of all the remaining directors, each of whom are retiring in accordance with the recommendations of the revised UK Corporate Governance Code published by the Financial Reporting Council in July 2019, and all of whom will be subject to annual reelection. As the proposal on Resolution 5 relates to myself, I'll now hand over to Mr. Stuart Paynter to propose the next resolution.

Thank you, John. I propose Resolution 5 in the notice of meeting as an ordinary resolution to reappoint John Dawson as a Director of the company. I will now put Resolution 5 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 49,752,319 in favor, 917 at the Chairman's discretion, 131,635 against, 70,953 withheld. I will now hand back to John for the remainder of the resolutions.

Thank you, Stuart. On to Resolution 6. I'll now propose Resolution 6 in the notice of the meeting as an ordinary resolution to reappoint Stuart Paynter as a Director of the company. I'll now propose Resolution 6 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 49,752,640 in favor, 917 at the Chairman's discretion, 132,230 against and 70,953 withheld. Resolution 7, I'll now propose Resolution 7 in the notice of meeting as an ordinary resolution to reappoint Dr. Heath as a Director. I'll now put Resolution 7 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

All those who wish to abstain, please raise their hands. [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 46,661,012 in favor, 917 at the Chairman's discretion, 3,222,941 against and 70,953 withheld. Resolution 8. I'll now propose Resolution 8 in the notice of meeting as an ordinary resolution to reappoint Martin Diggle as a director. I'll now put Resolution 8 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

All those who wish to abstain, please raise their hands. [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 47,680,935 in favor, 917 at the Chairman's discretion, 2,203,017 against and 70,953 withheld. Resolution 9. I'll now propose Resolution 9 in the notice of meeting as an ordinary resolution to reappoint Stuart Henderson as a director. I'll now put Resolution 9 to the meeting on a show of hands. All those in favor, please raise their hands. [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 48,322,433 in favor, 917 at the Chairman's discretion, 1,561,520 against and 70,953 withheld. Resolution 10. I'll now propose Resolution 10 in the notice of meeting as an ordinary resolution to reappoint Dr. Heather Preston as director. I will now put Resolution 10 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy votes received were as follows: 48,322,702 in favor, 917 at the Chairman's discretion, 1,561,277 against and 70,927 withheld. On to Resolution 11. I propose Resolution 11 in the notice of meeting as an ordinary resolution to reappoint KPMG LLP as auditors of the company from the conclusion of the meeting until conclusion of the next AGM of the company at which accounts are laid. I will now put Resolution 11 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

All those against, please raise their hands. [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 49,872,224 in favor, 917 at the Chairman's discretion, 7,169 against and 73,513 withheld. Resolution 12. Proposed Resolution 12 in the notice of meeting as an ordinary resolution to authorize the audit committee for and on behalf of the Board to determine the auditors' remuneration. I will now put Resolution 12 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 49,871,544 in favor, 917 at the Chairman's discretion, 9,284 against and 74,078 withheld. Resolution 13. Proposed Resolution 13 in the notice of meeting as an ordinary resolution concerning the directors' authority to allot shares and to grant rights to subscribe or to convert any securities, such as -- and to allot further equity securities in the amount set out in the resolution. The Companies Act 2006 prohibits directors from allotting shares, unless authorized to do so by the company in the general meeting, and there is no [indiscernible] to seek from the shareholders a general authority to allot shares in order to enable directors the ability to take advantage of any opportunities which may arise. The authority is limited to 2/3 of the company's issued share capital, of which 1 of those third is reserved for votes issued in accordance with the guidelines of the Investment Association. This authority will, unless amended, replaced or revoked, expire 15 months after the date of the passing of this resolution or at the conclusion of the next AGM of the company, whichever occurs first. I'll now put Resolution 13 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

All those against, please raise their hands. [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 47,858,386 in favor, 917 at the Chairman's discretion, 592,553 against and 1,530,967 withheld. Resolution 14. I'll propose Resolution 14 in the notice of meeting as a special resolution for the disapplication of statutory preemption rights in relation to, first, allotment of new equity shares following a rights issue or other preemptive offer in order to deal with any illegal, regulatory and practical problems. Secondly, the allotment of new equity shares for cash up to a maximum nominal amount of GBP 1,924,626, which represents 5% of the company's issued share capital. This disapplication authority expires 15 months after the date of the passing of this resolution or at the conclusion of the next AGM of the company, whichever occurs first. I will now put Resolution 14 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 48,112,773 in favor, 917 at the Chairman's discretion, 336,725 against and 1,505,408 withheld. Resolution 15. Proposed Resolution 15 in the notice of meeting as a special resolution with the disapplication of the statutory preemption rights in relation to allotment of new equity shares for cash up to a maximum normal amount of GBP 1,924,626, which represents 5% of the company's issued share capital in addition to the 5% in Resolution 14. In connection with an acquisition or specified capital investment, which reflects guidance released by the Pre-Emption Group. It is the company's intention that this authority would only be used in connection with an acquisition or specified capital investment, which the company would announce at the same time as it announced the issue of any shares in reliance on such authority. This disapplication authority expires 15 months after the date of the passing of resolution or at the conclusion of next AGM, whichever occurs first. I will now put Resolution 15 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 48,111,711 in favor, 917 at the Chairman's discretion, 337,790 against, 1,505,405 withheld. Resolution 16. Our proposed Resolution 16 in the notice of meeting is a special resolution that was affecting the close of the meeting, the articles association produced at the meeting be adopted as the articles of association of the company in substitution for and to the exclusion of the company's existing articles. I will now put Resolution 16 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

Will all those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 49,878,294 in favor, 917 at Chairman's discretion, 1,370 against, 75,242 withheld. Resolution 17. Our proposed Resolution 17 in notice of meeting as a special resolution to enable the company in accordance with its articles of association to hold a general meeting other than an Annual General Meeting on not less than 14 days' notice. I will now put Resolution 17 to the meeting on a show of hands. Will all those in favor, please raise their hands? [Voting]

All those against, please raise their hands? [Voting]

Will all those who wish to abstain, please raise their hands? [Voting]

I declare the resolution carried by the necessary majority. The proxy of votes received were as follows: 49,177,732 in favor, 917 at the Chairman's discretion, 705,017 against and 72,157 withheld. Ladies and gentlemen, that concludes all of today's formal business. On behalf of the Board, I'd like to thank you for your attendance, albeit not in person today. And I declare the Annual General Meeting closed.