Oxford Biomedica plc (OXB) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to Oxford Biomedica's Half Year Results Analyst Meeting and Conference Call for the 6 Months Ending 30 June 2021. We're delighted to see many of you in person today to talk through what hopefully you will agree is a strong set of results. [Operator Instructions] And the presentation is being recorded. [Operator Instructions] To discuss in more detail, I would like to introduce the presenters on the call today. We have our CEO, John Dawson; our CFO, Stuart Paynter; and our Chief Scientific Officer, Kyri Mitrophanous. With that, I would like to hand over to John.

Thank you very much. And I'll first say, it's great to see you all face to face. It's been a while since we've been able to do this. It has a lot more impact when we do it sitting with you. Of course, the guys on the phone, it's great to have them there as well. It's a pleasure to have you all here to talk about our results for the 6 months, to the 30 June 2021. And during the presentation, I'll be making forward-looking statements, which cannot be relied upon. So we have delivered a record first half. We're really, really pleased with that. Before I go into some of that, I'd like to flip back into a couple of things about Oxford Biomedica. I'd like to thank the staff back at base for their tireless commitments and what they've done to allow us to move forward and get these results. And also let me think about how really proud we all should be of Oxford Biomedica about fighting the pandemic and also saving so many lives, so that's where I'd start. But after that, I wanted to take you through what's happened in those 6 months, which we believe to be very successful for the company. Revenue grew by 139% to GBP81 million, with EBITDA of GBP27 million, and that was a slight negative in the same period last year, so a big step forward, and really impressive number, and I really do like is bioprocessing growing by 224% over the year previously. We continue the large-scale manufacture of the AZ vaccine, proving that we can switch working from the LentiVector to other vaccines. That's so important to us to be able to work with adenos, and you'll become aware in the presentation as we go through it, we have ambitions to be vector agnostic going forward. Our partner programs have continued to progress through development, including a new 3-year agreement with Boehringer Ingelheim, and we got planning permission for Windrush Innovation Centre to move forward there, to be the hub for next generation of platform developments. And you'll be aware today as well, we have an investment from the Serum Institute of India, with GBP50 million, that will allow us then to push forward and also invest in the second phase of our Oxbox building. During the period, we also strengthened the Board and we welcomed Professor Dame Kay Davies and Dr. Michael Hayden to the Board there, strengthening our scientific and translational expertise. Next slide, please. If we go to our Strategy slides, you will see some subtle changes to that, leveraging our viral vector expertise. And here we are starting to talk about the fact we're now going to be vector agnostic moving or turning to adenos, but also into AAVs going forward. The 4 key pillars of the business still remains the same: IP, patents and know-how, they're still really important to us; facilities, we will be talking about our expansions and our improvements to the buildings and activities going forward: expertise, the growth continues. I'll take you back to 2014, we had 60 people; end of '17, 323; end of the half year, 744, which is very spectacular growth, and every person has played a part in making OXB's first half of the year so good. And our USP, our proposition for selling to our customers is the quality systems. Everybody, both large pharma and biotechs need those to be able to drive businesses forward in the manner they want to. Think about our CDMO business on the left-hand side of the page, we now have 17 partner programs. I'll cover that, who we work with in later in the presentation, but this brings us multiple revenue streams. First of all, process development fees, incentives, bioprocessing revenues and of course royalties. On the right-hand side of the page, we talk about our gene therapeutics, our proprietary pipeline. We have 6 of those, and one is out-licensed to Sio, our Parkinson's drug, AXO-Lenti-PD, and the 5 are unencumbered at this point in time, and Kyri will cover those in a bit of depth later on in the presentation. Let me take you to Slide 5, a very important slide in the deck today. This shows you how we want to expand our CDMO business going forward. The colors there, I will take you through them; integrating vectors, the blue, the Mauve, the Adenos, and the green, the AAVs. If we think about 2020 as an example, working in Adenos and integrating vectors, we think about that because that has a potential market of outsourced global manufacturing for viral vectors of $600 million or so. Adding AAV to that by 2026, then there is a potential market of $2.8 billion, and we do believe we are perfectly placed now to move from being lenti-based only to being vector agnostic. This will allow us to move forward and take this market share that we think we can take, because we can make the AAV virus going forward, but also we have a lot of technology which has proven to work with Lenti so far, which we believe will work also with AAV to allow us that advantages going into that area. And we have many reasons why we think we can build on this going forward, many reasons why we think we are good at this particular area. We have various different resources for our viral vector CDMO, big pharma validation of our technologies and our capabilities, Novartis, Juno/BMS, AstraZeneca, and Boehringer Ingelheim. We've got proven commercial supplies into 38 countries, and great relationships with lots of regulatory authorities being the FDA, EMA and MHRA too. Our teams are world-class in the industry. We have a great delivery track record, great technical expertise, proven deal-making, and of course, the best relationship management with our customers. We have established operational infrastructure, which we will leverage going forward. We could look at here especially quality systems, GMP capabilities, and analytics and we believe we can do a great job with our partners with those going forward in all types of vectors. And also kind of lots of credit for the team though in seeing the opportunities when to invest and when to get new premises, Yarnton and Oxbox being the examples of that. The Phase 2 of Oxbox, now we can do that with the investment today, means that we can be in the right place and the right time to capitalize upon the growing cell and gene therapy markets going forward. Next slide, please. I will now move to CDMO side of the business, the customer-centric side and talk to you about what's going on there. Next slide, please. Slide 8. I want to talk firstly about our work with COVID-19, the vaccine with AstraZeneca. We continue to make large-scale manufacturer efforts there with the AZ COVID-19 vaccine. And in May, AZ committed to more batches from us, resulting in the Group restating their expectations of what we could make from this particular deal by the end of 2021 to more than GBP100 million. In the period, we also purchased several bioreactors and other things in VMIC to allow us to have longer-term usage which have been lent to us previously. Moving on to Boehringer Ingelheim. In April, we signed a new deal with them, a 3-year development and supply agreement for the manufacture and supply of various types of viral vectors. Under the terms of this agreement, we are going to manufacture GMP batches for BI to support the development of viral vectors. Of course, the key for making this work for the future is building for the future. And we have seen the headline in the past, build it and they will come, that's been proven so far for us and now we plan to invest in the second phase of Oxbox. Building work continues at Windrush Court to convert office space into GMP-grade laboratories to meet expected demand in the short term in commercial development and analytics. Of course, fill/finish A, we plan to complete that by the end of the year and have it validated in the first half of 2022. Next slide, please. Another graphical format here of how we are presenting our CMO business by customer. You can see there we have 6 drugs we are working on with Novartis. Kymriah in the market with 2 indications, 2 more coming, relapsed/refractory follicular lymphoma and relapsed/refractory progressive Hodgkin lymphoma coming in the latter half of this year. And again, we now have 30 markets being served by Kymriah across 325 treatment centers around the world. Moving to Sio, they are moving to trials again probably in the first half of 2022, and we have a great partnership program with BMS, sport drugs company. We expect that to move back to be more drugs as we go into the future. Next slide, please. Orchard had a strategic review of what they're doing. They have handed back ADA SCID to their original academic inventor. We are working with them to see how we can help them for the future. We have Beam Therapeutics, a very exciting company, and new generation of CARs coming through at the moment. We are very happy to be working with them. We've spoken already about Boehringer and the cystic fibrosis partnership there, them in the U.K. Cystic Fibrosis Gene Therapy Consortium, a very exciting program there, which we are driving forward aggressively. And also, of course, at the bottom we talk about AZ vaccine, which we've been doing now for about 18 months. And again, we scaled up that to 1,000 liters in doing that, viral vectors, and that was something we hadn't done before, so it's a great success for the companies to carry that off. The slide here, the next slide, Slide 11, on the vaccine partnership, and the big point about this slide as I've spoken about it a lot already is the commitment for further batches going forward in '21 to give us that total cumulative revenue of about GBP100 million by the end of '21 there. As you might imagine, we are talking extensively with AZ currently about what happens in the future years, '22, '23, and beyond. We will update the market as we have more information on that. Next slide, please. The Boehringer deal, again, we are very excited about that new one 3-year development partnership, again working on various viral vectors and we can say here that the CF gene therapy product is in preclinical development, working hard with that, and this is us stepping out of our normal workforce. It is inhaled lenti and first one we worked on this. It's very exciting and something we're driving forward very aggressively. I'll now pass to Kyri to talk about platform and products.

Thank you, John. Good afternoon, everyone. I am so pleased to be here today. As John said, it's been quite a year. Today, I'm going to share with you our recent innovations around the platform. These are focused on realizing the potential of the lentiviral vectors to revolutionize medicine and also I want to explain how we are applying these learnings to other vector systems such as Adeno and how we're looking to expand into AAV in the future. Then I'll describe how we are strengthening our product pipeline, first, with the continued development of OXB-302 for acute myeloid leukemia; and second, with the application of lentiviral vectors to modify the liver for therapeutic benefits. Next slide, please. So we have a clear goal here to industrialize the production of viral vectors. Our expertise, IP, and investments make us world-leading producers of lentiviral vectors. We have now leveraged this expertise into other vector platforms, as seen with our very successful manufacture of the Oxford AstraZeneca COVID-19 vaccine. As John said, our long-term goal is to become vector agnostic and to that end, we're bringing in other vector systems including AAV into our GMP facility. To become vector agnostic, we're innovating and developing our capabilities. We've made great progress, particularly related to our vector production by improving the amount of vector we generate and the quality that we can make, we're opening up new therapeutic indications. Our new process, Process C is up and running, giving better quantity and quality of vector and this incorporates various elements, including perfusion and additives such as U1. Process C, now entering GMP production and we will roll this out for our partners next year. We expect Process D to follow a year later and the innovation here is to use producer cell lines, which have much better scalability benefits. We continue to invest in high throughput automation and robotics which reduces time to batch release by enabling faster screening, analytical testing, and streamlining our production. In addition, we are developing an exciting new innovation, the generation of CAR-T cells in vivo. Currently, CAR T-cells are generated by taking blood from patients, isolating the white blood cells, the T-cells, genetically modifying them, then expanding them, freezing them, then testing. And once they pass all those tests, they can be administered back into the patients. This is all done in GMP cell facilities, and these facilities are limited in number and this makes it a difficult and expensive process to run. The CAR-T cells when put back into the patients are highly effective. They seek out cancer cells. They kill them and then reproduce and expand. So within a few weeks, the CAR-T cells are able to clear the cancer from patients and we've seen remarkable efficacy with the Kymriah and Breyanzi products for example. The aim with in vivo CAR-T therapy is to remove the need for ex-vivo cell processing by directly administering the lentiviral vector into the patient. We expect them to be able to treat many more patients and to be able to treat as a first- or second-line, rather than the third or fourth line, which should give increased better clinical outcomes. Finally, in order to do all these activities we are expanding our labs. We're building state-of-the-art labs in our Windrush Innovation Center and moving in in 2023. Let's move on to the next slide. So this shows our proprietary platform innovation. First, we have capabilities. This is shown on the top right. So we develop vectors that allow optimal expression of the gene of interest to fine-tune the therapeutic effects and we are developing targeted vectors to be able to genetically modify specific cell types. Second, we have scale and this is shown on the bottom right. We have a pipeline of innovations, which we are implementing in our bioreactors to improve yield and quality. For Process C, these technologies include perfusion, this increases titer and also removes impurities before they enter downstream purification. We have also additives such as U1 and U2 and these increase the number of vector particles generated and the number of active particles generated. We're also looking at other additives and technologies, but I can't talk about those today, but we can talk about those in the future. I also want to highlight Process D. So this is using producer cell lines. It's on the bottom of this slide. Producer cell lines have the advantage of being A, it's more easily scalable, and have increased productivity and I think they represent the next stage in the industrialization of lentiviral vectors. And finally, we have analytics, automation and artificial intelligence, which is on the left-hand side of the slide. The secret to innovation is really understanding what's happening inside cells, what's happening inside vector particles, especially during production. Technologies like transcriptomics and proteomics give us a window into the bioreactor and inside the cell and we're using automation to analyze more samples, process, and more processing data more quickly, which allows for faster batch release. All these activities generate a lot more information and we use AI and machine learning to be able to understand what's happening. This allows us then to increase components that boost yield and quality and cut back on those that don't. So let's move on to the products. Next slide, please. Next slide. So AXO-Lenti-PD. So work for AXO-Lenti-PD is now progressing well, following prior third-party fill and finish issues. 2 further batches have been manufactured and are undergoing certification. Enrolment of patients in the AXO-Lenti-PD clinical program is expected to resume in 2022. We have undertaken an internal review of our preclinical programs. This is ongoing, but I'll share with you some of our latest thinking. Our lead clinical product candidate OXB-302, for the treatment of acute myeloid leukemia is on course for IND submission in 2023, and we're developing a new set of products to target the liver that play to the strength of lentiviral vectors. The liver is a continually dividing organ because lentiviral vectors integrate, if the cell device, if the genetic modification is retained. This means that a one-off treatment could give the lifelong benefit. A liver gene therapy, you require a lot of high quality lentiviral vector and Biomedica is very good at doing that. To ensure that we adequately resource this new pipeline, we are de-prioritizing a number of the other programs such as OXB-203, OXB-204 and OXB-103. We expect the internal review to complete by the end of the year. If you go to the next slide, so this is -- this is our product pipeline. We have AXO-Lenti-PD for Parkinson's disease, which is in Phase 2. OXB -302 for acute myeloid leukemia, which is in advanced preclinical and new liver products are in preclinical prioritization to identify the most appropriate products to develop first. We are determined to get this right, as we expect many more liver products to follow in the future. Today, I'm just going to focus on OXB-302. So if going to the next slide, OXB-302 is our CAR-T treatment for AML targeting the antigen 5T4. 5T4 is a great target for CAR-T therapy, which is expressed on most cancer cells including AML, while its expression is highly restricted on normal tissue. It's a second generation CAR-T product, utilizing lentiviral vectors that we've been manufacturing with our Process C, giving us superior vector quality and quantity. We've adjusted the lentiviral vector, portable and culturing conditions to give us more potent CAR-T cells and we've demonstrated potency with this vector in vitro and in vivo for solid and liquid tumors. I am confident that this has high commercial potential, and not only for AML but for other cancers as well. To summarize, we have 3 strong product lines. A product for the treatment of Parkinson's disease; OXB-302 for AML and new liver products to come, all manufactured on a world class platform, which I'm confident, we'll stay ahead of the competition because of our expertise, our IP and the investments we're making in this area. I'll now hand over to Stuart.

Thank you, Kyri. Good morning, everyone. Good afternoon, everyone, sorry. I'm going to take you through the financials and hand back over to John for outlook and news flow. The financials, I think you'll agree it's quite impressive, but what I want to highlight to you rather than just read through the points is what I think the story tells. So we've got a story of revenue growth, exceptional revenue growth. We've got a story of efficiency, and we've got a story of cash generation and what that leads to. So I mean, John has already mentioned the growth numbers here, but we've grown 139% from H1 last year to H1 this year in total revenues, but all importantly, more than 200% of bioprocessing and commercial development lines. So that is really, really good growth, of course that's fueled by the AstraZeneca vaccine work. What that has led to is because this is a commercial product and we are campaigning this is led to a level of efficiency, which you can see in point 4, a reduction in operating expenses, as we've been able to absorb that into cost of goods. So we've always been saying that when it comes to CDMO, these commercial deals, these commercial manufacturing campaigns are gold, especially in the industry we're in which is still fairly embryonic and there aren't too many commercial products to go for, has enabled us to be really efficient, and as you see, has enabled us to generate significant cash from the CDMO. So we generated more than 23 million from operations in the half year compared to 1 million last year, purely due to the ongoing production of the AstraZeneca vaccine and the efficiencies that allows you to bring. And how has that translated? Well, in terms of the cash balance, more than 60 million at the half year, and of course that doesn't include the 50 million that seem to come from the latest equity investment from Serum Life Sciences. So you can see the financial strength position we find ourselves in, and that's important for a reason I'll take you through in a minute. You'll also see, the capital expenditure number there is relatively low, it's maintenance, we've been busy. Everything is being focused on vaccine manufacture, but you will see that number significantly increase. As we've announced today, we've got the fallow area investment. That's going to be GBP50 million, and then we're also building out the Windrush Innovation Center, which will allow Kyri and his team's future space both non-GMP and GMP in order to innovate and deal with the extra capacity we anticipate. And just lastly on this slide, there was the investment. This morning, John has already taken us -- taking you through some of that. This is a discrete investment in Oxford Biomedica's ability to deliver the facility, we have Oxbox, and build flexible advanced therapy manufacturing capacity. We welcomed as a shareholder they hold, just under 4% and they're going to be extremely supportive going forward. If you just turn one slide, and this is our traditional slide that we're able to show you revenue and operating EBITDA. So the revenue point of view, the top piece, all important. We break down the blue, which is the predictable ongoing revenue streams, against the purple, which is a more lumpy licenses and milestones. And you can see, we're sort of growing our way out of the lumpiness, which was always the promise. That's an extremely strong growth you see there in those last 3.5 years, and we're looking to continue to build that with extra capacity that's going to come online mid to late 2023 with the Oxbox expansion. So that was really, really good growth. We see that there will be some lumpy stuff come with it, but we do like that because that's proof of principle that our IP is still strong, we can still get licenses, and of course, its testament to the work that goes on back in the lab in terms of milestone achievements. So what does that mean to the bottom line? We've always said previously that we will reinvest the money we've made in the CDMO back into innovation in the business. That's still true. All of the stuff that Kyri took you through is fully funded. And we are in the lucky position now that we're actually making enough money. That statement no longer holds true. I mean we've made the commitment to re-segment this business and we will before the end of the year and to make it very clear, where the money is being generated and the investments we're making back into innovation internally. But it also leads us to being generating significant money. The extra market cap we now have gives us the ability to really go out and achieve the things in the external markets, which we need to achieve in order to do some of the strategic things that John mentioned in terms of attacking those new markets. If I just take you to the last slide of mine, which is just a tabular format of what you've just seen. I'll let you read through that, and if you're got any questions, of course we will take those. But let me leave you with 3 things. One, backward looking, one point in time and one forward-looking. So point 1, the backward looking. I will agree this is a really significant set of results for us. Efficiency, cash generation and really a testament to the people in the most difficult circumstances, back in Oxford, who have done the hard work to generate this as well as our partners, both customers and suppliers have worked tirelessly to make this happen. So we thank everyone there. The second point is the point in time. So you can do the math in terms of our cash balances. You can look at the new re-rating we've had both in terms of our [ 50 to 50 ] status in the market cap we hold, which gives us financial strength. We had a really, really strong financial position both in terms of cash balance and in terms of the ability to raise capital. And that leads me to point #3, about the future. With those 2 things previously mentioned, puts us in a really good position to be able to go judiciously and strategically to the marketplace and bring in those innovations and capabilities we need to properly exploit those markets which John took you through earlier in the presentation. We are saying we're going to be vector agnostic and we're going to invest in those things which allow us to achieve that goal and continue this growth story. So with that, I'll hand back to John, for the new slide.

Thank you very much, Joe. I will break it into 2 parts. First of all the CDMO and then the product proprietary pipeline. CDMO slide is quite straightforward. We plan to increase on the drugs we work on by having more drugs with existing partners and having new partners to bring other drugs in. And the name of the game here is having a great relationship in getting more drugs each person we work with. Also, we see a potential expansion of the current 18-month agreement with AZ around the vaccine. For the proprietary pipeline, just going down there, we want to progress the internal candidates into our portfolio and towards the clinic. And secondly, as intense potential updates coming from Sio Gene Therapies about [indiscernible] AXO-Lenti-PD and SUNRISE-PD clinical study. So it's the final slide to talk about the positive outlook for 2021. We expect revenues for the second half to be similar to the first half. Expect total revenues from the AZ deal as it stands at the moment to be in excess of GBP100 million by the end of 2021 and we expect operating EBITDA for the second half of the year to be below that of the first half as a result of an increase in R&D, administrative and bioprocessing cost lines. CapEx will accelerate in the second half of '21 due to the commencement of redevelopment work at Windrush Innovation Center as well as the continued work at Windrush Court on laboratories. We also expect to announce further updates on partnering progress and partnership during the course of '21. And the final comment would be, with the Group's strong financial position and continued broader market growth for cell and gene therapy, Oxford is in a great place to maximize the opportunities ahead as we move into '21 and '22. So at that point in time, I pass back to Sophia.

I'd like to now open up for questions to the room. If you could also mention your name and the organization that you're from for the benefit of those who have dialed in.

It's Amy Walker from Peel Hunt. Congratulations. Great set of results. I have few questions. I will ask them one at a time. You and the Serum Institute are, obviously, both key components of Astra's manufacturing network for the vaccine. I didn't see any reference to Astra in the release this morning. Did they play a part in this? How does Astra fit in if at all to what you've announced this morning?

This is a strategic investment by SII to actually invest in manufacturing capabilities in Oxford Biomedica. We have lots of partners to go work in the future, SII could be one of those, but we have no -- I would not understand that currently.

Okay. And then just to push you a little bit on that, John. Does SII have any -- in terms of financial investments, so they've got the claim over the equity that they're getting as a result of the deal. Is there any other encumbrance on the investments that you make with the money? Do they have first-right refusal over the capacity? Is there anything else to be aware of?

It's a pure equity investment.

Great. Just maybe a bit statistic. So Stuart, you can slap me over the head if I am wrong here, but you raised GBP40 million and that translated into GBP100 million of vaccine revenue. So should we think about this in terms of GBP50 million translates into a minimum of GBP125 million from 2023 onwards? How would you guide us towards thinking about the return on the investment you're about to make with this money?

I'm not going to give forward-looking returns on capital invested, but I think if you look at the past and translate that to future, it will be a similar model, with similar products flowing through. So you can take the past trend in forward forecasting. I don't think you'll be too far away.

Great. And then last one, and I will give someone else a chance. Kyri, I just wondered, could you help me, I don't know very much about in vivo CAR-T. And when Oxford Biomedica talked about gene therapy in the past, there was this distinction around the volume equation, whether volume for gene therapy needed to be a lot bigger than for cell therapy, because you are sticking the stuff into the whole human body, which, just sounds like this is sort of similar too. So would an in vivo CAR-T involve a much bigger volume of vector? And does that have implications for revenues and sort of economics that would be more like a gene therapy than a traditional cell therapy?

They may require more vector than we would use in an ex vivo setting because you're starting with smaller cells and expanding them. If you get the vector right and build in the right technologies, maybe it wouldn't. So it's one of the unknowns. Ultimately, it will mean higher demand for vectors, because the idea would be that if you can treat 1,000 patients, you can treat 10x, or 100x more, because you don't have this GMP limitation of having to do the cell processing in a GMP facility, [indiscernible]. So I would expect a lot more vector would be required because you would be treating a lot more patients. It's more that than the absolute amount per patient.

It's Alistair Campbell from Liberum. Just a couple of questions actually for Kyri, first of all. Obviously, again, we've seen in terms of your focus on liver-directed gene therapy. Again, we've seen some setbacks, particularly with the high dose in gene liver-directed gene therapy over the last couple of months. Roche ranted about it a few weeks ago and this is what they said, look it seems to be dose, which is critical and the quality of the vector is critical. So maybe can you talk a bit more about that and how you can address that? This is first question. And the second question is, is more broader. Just thinking about Kymriah. I was frankly surprised and disappointed that the Belinda study didn't read through. But then sort of from your point of view have you seen any kind of deviation from Novartis in terms of their enthusiasm for Kymriah going forward from here?

So I'll take those questions. So the issues that have been seen have been with using AAV vectors. And in order to achieve the efficacy in some instances, very high doses have been needed. With lentiviral vectors, we are aiming to -- it's a different approach and it's a different vector system and we are targeting it to the liver. We're expecting to be able to dose appropriately to avoid those issues. Lentiviral vectors have bigger capacity. There is no pre-existing immunity and also one of the key aspects to the AAV induced inflammation has been seen with the particular patient population. Some conditions have pre-existing liver conditions -- liver issues, which mean, it's a riskier proposition, while with lenti, there is no previous immunity and we'll pick the conditions carefully. Novartis?

Novartis, yes, I mean it's obviously a setback for them on that trial, but we are working very hard with them. We produce lot of batches for them still and we are seeing Kymriah cells grow. I think it's about 41% half year to half year. So very encouraging and we are working on the drugs with them as well. So we are still seeing encouraging signs and are very excited about the CAR-T in there?

No questions in the room. Operator, are there any questions from the phone lines?

[Operator Instructions] You do have a question waiting and it comes from Joe Pantginis from H.C. Wainwright.

Very nice results. So I guess, I'll go back chronologically in the order here and thank you for all the details Kyri as well. Nice to have you on the call. With regard to your decision to deprioritize 203-204 and 103, is this any asset-based decision or will you consider these assets up for potential licensing?

So yes, we will consider them for licensing 203 for the wet AMD is an attractive product. The others are in early stage of development. We are having discussions of how to pursue that. But can't say anything more than that.

No. Of course, that's fair. And then I guess as you really are building your profile as a company to be the go-to -- increasingly be the go-to guys for various vectors and CDMO in the viral space. Just wanted to focus on AAV for a second. How much work you're doing on your end with regard to, say, capsids and tissue specificity versus the amount of work that your various partners or potential partners might be doing because it's important regard capsid work for tissue specificity?

So in the first instance, I think we would be looking to bringing the standard, some of the standard AAVs and we would be expecting a partner to bring in their particular capsid. We are not looking to offer capsid technology at the moment, as many companies who are looking at lots of different capsids generate it in many different ways. And that maybe something for the future. But for the moment we would be looking to be able to manufacture very large batches of AAV to the highest quality. Some of the IP we've generated over the years can actually read across to AAV and employing of some of that technology may also help the fields in terms of the quality, vector generating and also the P2I ratios that seems to be very important in terms of information and negative effects of any therapy.

Got it. Got it. And then my last question is the applicability or analogy of what you described for process fee with your lentiviral process fees especially being able to increase the number of active particles generated and the purity there that you'd be able to translate that to your AAV process fees, since even based on one of the earlier questions seems to be a major issue, whether it's in liver and whether it's potential read-throughs about why there have been some problems and even some ocular indications?

Yes, I agree with that. I'm not sure which technologies we would end up employing for AAV to give us the maximum benefit, but there is a real need to improve the P2I ratio and some of the issues we've been grappling with lenti can provide solutions across to AAV. So parts of the work we will be doing in the future is to look at that, evaluate that and see which processes to apply.

And your next question comes from Charles Weston from RBC.

Congratulations on the results. Few questions, please. The first one is, it's not about AstraZeneca. If, in theory, you had a large adenovirus manufacturing contract, then how long is the lead time that you need to -- ahead of what you need to order supplies in order to be able to manufacture, what does that lead time look like, please?

So basically, as you were talking, Charles, yes, I mean it would take about 6 months to bring through [ MSAP ], which is the group that would be tasked with doing this, a tech transfer late-stage adeno vaccine. The vaccine with Oxford and AstraZeneca of course is lot quicker because it was all that any one was doing, but standard will be about 6 months and that would give you enough lead time to forward order the raw materials and components you needed to be able to do that.

So in a situation where the tech has been transferred, will it still be a 6 months full lead time for the raw materials?

Typically, to full GMP, yes, it can be done quicker as we did it with the AZ vaccine, and it depends how much global urgency there is to do that. But I think that's probably the quickest tech transfer and GMP production has been done certainly in experience of the people at Oxford Biomedica.

Secondly, one, perhaps for Kyri as well and that relates to the moving to of vector types. First of all, which of the aspects of the IP is directly applicable to non-lenti? And when you look at the -- I guess, the market dynamics within the broader viral vector space and how much M&A there is and how people are spending little money on capacity to buying capacity, is this -- is it more about having that capacity available which wins contracts or -- and a track record? Or is it about specific aspects of IP to differentiate your offering technically in order to win contracts?

So in terms of the second question, there is still a lack of AAV manufacturing capacity. We believe there is a lack of analytical testing and release and Biomedica can help with those. In terms of the technologies that OXB has can already be applied to AAV. For example, the TRiPSystem that we have developed, the SecNuc systems these work directly for AAV to help increase titer and purity. And there's others -- there is additional know-how and other technologies that we're also looking at that we haven't disclosed.

I can add to that, Charles. I'll like just add, when it comes to late-stage assets and potential tech transfer of those in, of course, the process is more or less set at that point. And what they're looking for are those things you referenced, which are track record, MHRA, and FDA approval, those sorts of things. Track record is a commercial manufacturer, which is one of those rare commodities John mentioned earlier. So it really is horses for courses early stage. They may be looking for process development and technologies late stage, which are the mix of which we want to get right. It's just more of the capacity and the track record you mentioned.

And apologies for my greed, but 2 more if I can. First of all, can you provide any color around the pipeline of new business opportunities that you indicated you had in terms of existing clients, such as new clients, lenti versus non-lenti?

It's a hard question to answer sitting here. Obviously, we talk to a lot of people. We have a lot of activity. Our BD department is extremely busy. We just hired our first person in U.S. to be our Chief Commercial Officer starting on that purpose in the U.S. in the next couple of weeks as well. So we are expanding very quickly there. But I wouldn't want to go down to talk about who we're talking to or which vector we're talking about.

Okay. And just a short one at the end then, please. You talked about taking programs further forward in terms of your own pipeline historically. Should we therefore not be expecting any near-term out-licensing deals over the next few years as you develop those into the clinic and perhaps into Phase 2 or in Phase 3?

Yes, very good question. I think what we are doing is bring our own platform forward. We continue to follow hybrid strategy. In saying that, we want to take things towards Phase 1/2. But we will look carefully at anything we're working on, and if the right deal came along such as AXO-Lenti-PD, we would think about doing that. So it's all about what you face at a particular time, what you are investing in, how much you're trying to spend. So our ambition is to bring drugs into Phase 1/2, but we have to be sensible and think about when that's right and how to do it.

Operator, are there any more questions from those on the phone lines?

You do have a question coming, yes, from Philippa Gardner from Jefferies.

Just a follow-up to Charles' first question, but the difference, I guess is that this is specifically related to the AstraZeneca contract. I was just wondering, I guess what is -- in order to ensure, I guess, a smooth continued supply beyond the end of the current term, what is the latest state that you would need to have that agreement in place? And if you miss, that would then be an interruption to supply of the vaccine.

The current situation is, as I said before, we are talking from about [ 6 years ] at the moment, but we don't see an issue around continue to have supply and we're working towards making sure that's not the case.

We will go back to the room. Any more questions from those in the room?

It's Max Herrmann of Stifel. Just maybe a bit more on the -- obviously COVID supply, there is obviously uncertainty beyond a certain period what the model be for COVID vaccine. So I just wondered how you manage the risk in the business for that potentiality and capacity as well, given obviously your new expansion plans that you announced today?

Well, 2 or 3 things. First of all, we have a lot of other deals in the pipeline that we haven't be through. Working very hard at those. With AZ, there are things that we are working on going forward as well. So we need to actually have those stepping stones to be able to move forward clearly. But we are certainly giving guidance that there'll be some demand going forward for a period of time. We can't quantify that at this stage, but we don't see ourselves falling off the cliff.

And we talked about this diversified business model, Max, and that diversification brings with it risk mitigation. So as John said, more vector types, more potential customers, more work with existing customers, potential further work on the vaccine side gives us a number of shots on goal and we are judicious in how we add resources into the business. So we are doing it, like I say, pretty judiciously, but obviously to keep up with the growth demand as well. So both in terms of capacity and adding the right people at the right time we think we're getting the balance just right.

It's Alistair again. Just a couple of quick ones. One for Kyri just on OXB-302. You pointed out the second-generation CAR-T products, and obviously, you've got some technologies in there optimizing the potency of the cells. Is this something which is unique to OXB at this stage? Or are these technologies you are already engaging with, for instance, with Bristol-Myers or Novartis?

Yes. So these are technologies we've developed or that we have freedom to operate on. We are looking to improve the CAR-Ts that we generate for ultimately to be used in vivo CAR-T therapy. So we can modify the T-cells to become the right type of T-cell for maximum efficacy inside the patient. We would look to apply these to 302, but that is further down the road. The first clinical trial is to demonstrate the efficacy and potency -- safety and efficacy of targeting 5T4 in this particular indication. So we don't want to wait too long to bring other technologies on.

And I guess the final question from me is, given the trajectory, your modeling suggests the market can grow to basically once OXB is full in a few years' time, or are you thinking about the next step and what that might look like in terms of sort of expansion?

Of course, it's a continuous development of how we think about our planning Phase 2 of Oxbox and then we are already thinking about what we need to offer that, in which location it could be, how we go about it, what are the benefits. If all of that comes into play, it's influenced heavily by who you work with and what vector you work on and before deciding that next big jump, we will be doing a lot of work internally to make sure we are making the right selection.

Thank you. I'll hand over back to John.

Thanks very much. It's been a pleasure to talk to you all today, both on the lines and in the room. And we look forward to talking to you again after the event results. Thank you