Oxford Biomedica plc (OXB) Earnings Call Transcript & Summary

Thank you so much for the introduction, and hello, everyone. Thank you also for joining us today for OXB interim results briefing for the first half of 2020. As already mentioned, I'm delighted to be joined by 2 of my colleagues, who most of you know already, our Chief Financial Officer, Dr. Lucy Crabtree; and our Chief Business Officer, Dr. Sebastien Ribault. Next slide, please. So I just asked you to consider here, as always, the disclaimer and move to the next slide. Thank you. Before we begin, let me briefly take you through today's agenda. I will start with an update on the business and the progress we are making against our strategic priorities. Sebastien then will cover our commercial performance, including the continued demand for our services and the development of our client portfolio. And Lucy finally will follow with a review of our financial results and the outlook. I will then return for some closing remarks before we open the call for questions, which will be moderated by Sophia. With that, let me begin with the business update and the next slide, please. So before turning to our first half performance, I would like to reaffirm that OXB long-term fundamentals and growth strategy remained unchanged. Our confidence is underpinned by the strength of the cell and gene therapy market, we our maturing and diversifying client pipeline and the commercial momentum we are also experiencing. As can be seen on the right-hand side of this slide, it's also supported by strong foundations. More than 30 years of experience, 50 current clients, 59 client programs and over 1,000 GMP batches manufactured to date. So to reiterate our full year '26 guidance remains unchanged at GBP 180 million to GBP 200 million, around GBP 168 million of forecasted 26 revenues are already covered by contracted client orders. Our 2027 targets also remain unchanged. We plan for year-on-year revenue growth of 25% to 30% and at least double-digit EBITDA margins. Lucy will certainly provide more details on this later during the call. Now looking further ahead, we remain focused on our ambition to deliver approximately GBP 500 million in revenue by 2030 with long-term EBITDA margins approaching about 30%. So before moving on, I would like to briefly address the recent reports on utilities and some part clinical trials for autoimmune diseases. First and foremost, these events are devastating for those affected both patients and families. However, I would like to make it absolutely clear that we have not seen any related issues in the few programs we are involved in and as a result, our overlook remains unaffected. Next slide, please. I would like to highlight the strong commercial momentum we have seen during the first half of 2026, which continues to underpin our confidence in our long-term growth ambitions. We have continued to expand our client base, signing 17 new clients during the first half, which is more than 30% of the total number signed during the whole year of 2025. Today, this has increased further to 21, sorry, 21 demonstrating sustained market demand for our CDMO services. The fact is already because we signed another new client overnight. Our commercial pipeline stood at 73 million at the half year, a 30% year-over-year increase and at again, in GBP 659 million at the end of August. This movement from end of June to end of August is very positive indicator as it reflects the successful conversion of opportunities into signed client orders rather than any reduction in underlying demand. This conversion has strengthened our visibility of future revenues. Constructed orders increased from GBP 97 million at the half year to GBP 127 million by the end of August, while revenue backlog grew from GBP 193 million to -- let's say, GBP 299 million exactly over the same period. We continue to see maturation across our portfolio with 9 programs having reached late-stage development of commercial stage by the half year. As client programs progress towards higher-value stages that provides further opportunities to deepen our relationship and support sustainable revenue growth. Our expanding client base, improving revenue visibility and mature potent portfolio all reinforce our confidence in our ambition to deliver around GBP 500 million or approximately $670 million at the current exchange rate of revenue by 2030. Sebastien and Lucy will discuss this in more details. Let's move please to the next slide. about our global footprint. I would like to conclude my section with this slide which captures the core message very simply. OXB is at the right market, with the right services at the right time. Our global footprint positions us to capture growth across the world's leading cell and gene therapy market. while giving clients access to an integrated network, spanning the U.K., the U.S. and France. Today, that network includes 5 facility in Oxford, 2 in the United States, and 2 in France. Over recent years, we have strengthened the footprint through targeted investment in our existing site as well as selective acquisitions that expand our capabilities and capacity in line with growing client demand. In the U.S., the acquisition of Durham in North Carolina has significantly strengthened our position in the world's largest cell and gene therapy market, where we see strong demand for commercial manufacturing. Together with Bedford, it gives us a full end-to-end offering in the U.S. from process and analytical development through to GMP manufacturing and commercial supply. Going to Europe, our sites in Oxford, Leon and Saboo plays up at the heart of one of the world's leading centers for cell, gene therapy research and innovation, supported by a centralized approval process across European countries. This combination of U.S. scale and European debt makes our global footprint an important enabler of our growth strategy. Additionally, in August, we welcomed Eric Schmidhauser to OXB as our new Chief Operating Officer. Eric brings the wealth of CDMO experience to HP and will lead our global exploration as we continue our focus on operational excellence and delivery of a world-class service to our clients. As shown here on the right-hand side of the slide, we believe OXB is well positioned to outperform the outsourced LNG therapy market with our target of 25% to 30% year-on-year revenue growth. So to return to where I started, OXB is definitely, in my view, is the right market with the right services at the right time. Next slide, please. I want to finish with good news. Before we discuss our own performance, let's take this moment to consider the environment in which we are operating, given that the news in our sector this year has been very encouraging. This net short on '26 headlines shows new approvals coming through positive clinical data with ours and fresh capital flowing back into the industry. Three things stand out for me here. Firstly, regulators continue to work full cell and gene therapies, and the process is now well established. Secondly, click data continues to validate the science across an ever wider range of indications. And finally, thirdly, funding has returned. After a couple of difficult years, investors are making cell and gene therapy developers again. So the market is moving in our direction. And therefore, I will now hand over to Sebastien, who will provide you more details on our commercial performance and the opportunities ahead. Sebastien, the floor is yours or the screen in this case, is yours.

Thank you, Frank. Good morning, good afternoon, everyone. Very happy to be with you today for this presentation. If we could move to the first slide of the commercial section, please. Frank finished with a comment on the market. I'm going to start with the market, and there are multiple ways to look at the market in which we operate. We usually look at the market by geography, by type of vector, by client segments, but I decided today to show you the market by therapeutic areas, by type of indication. Looking at the graph here, you see the multiple indications where we are surrounding cell and gene therapy. And as you can see at the very bottom, OXB is active on multiple indications. Obviously, very active in the oncology space, where you have almost half of the assets of the CGT field, but also working on the central nervous system, ophthalmology, dermatology unit. We're working across the board since we can offer development and manufacturing of multiple factors. It's not a surprise to see here in dark blue, or in light blue that the lenti vectors and AAV vectors are making the majority of the vectors are used across the different therapeutic areas. The number of CGT assets, if we compare year-on-year, continue to grow. The market is healthy. We were at 2,155 assets in Q2 2025. We were at 2,217 assets in Q2 2026. Moderate growth, if we look at the number of assets only. But if we are looking at the number of assets, that we qualify as late-stage activities, Phase II, Phase III and preregistration. The growth there is 18% year-on-year. So it's not only showing that the market is healthy. and that the number of assets grows, but it's showing that the market is maturing, and we see more and more assets in late-stage activities where the Phase I has been successful. So there is a good indication that the treatment looks safe, although it's not the end of the clinical study and working more on efficacy. To talk a bit more about where OXB is active. We're going to look on the next slide at the number of programs that we handle in Durham. We were at 44 programs active at OMV in September 2025. were at 59% in September 2026. And actually, if we had updated in the slide this morning, we would be -- we wanted to show you here how the portfolio of active projects evolved in 1 year. And you see first this pinch call and with the new programs [indiscernible] new programs on boarded in 1 year and 1 programs that were finished for multiple reasons that we see is still on the right. Funding constraints is part of the reason the clinical studies can be data readout and the efficacy being substandard or at the very bottom of the list here some safety concerns -- are also part of the clinical readouts. All in all, we see a 34% increase in the number of programs that we have the massive increase in the number of AV projects, as it was already discussed during our Capital Markets Day event. But we continue to grow the number of active projects, both on Latin AV and also in other type of vector. I just want to quickly mention MVA mess and a few others. On the next slide, we'll see a different view of the number of active programs. And you see that in the early-stage category at the very top of the left of the slide, we move from 40 to 50 active programs from March '26 to September '26. So a lot of new in nature, a lot of programs that we have started. And you see at the top right some new names that we have not disclosed before, Braindchild Bio being one here, [indiscernible] share therapies being another one. There are many others, but we selected a few here. number of active programs in late stage has also increased between March and September from 5 to 6 number of commercial programs being stable. And we're talking about the market maturity before when we look at portfolio of active program at OXB, we see a different level of maturity as well. And I'm very happy to report here that when we look at the programs that we have in late stage, we see that in the next 12 months, Q4'26, Q1 '27, Q3 27 twice. We'll see some of these late-stage programs reaching the stage of BLA submission. It's great for OXB. It means we are preparing for a commercial launch. And based on the first clinical data we've seen on these programs, we're very happy to see that patients will have access to new treatments relatedly even. Type of indication, diverse, very much like what I showed on my first slide, oncology, multiple program, obviously, but also dermatology, neurology and ophthalmology. Looking not at the portfolio anymore, but the pipeline of opportunity in the next slide, we'll see that the pipeline is diversifying. And that's something that started a couple of years ago. But it's good to see that we're reaching a stay to their first on the left, where the number of AV opportunities equal the number of lenti opportunities during many years, during many years, we had a vast majority of lenti opportunities. We're now in September 2026 was more or less the same number of AAVs opportunity. And the biggest change for OXB in the middle is this $289 million of opportunities for AAV programs versus $265 for the [indiscernible] programs. So it's the very first time in the company's history that the volume of opportunities on the AV side is above the volume of opportunity on the lenti side. The pipeline in general grew 24%. If we compare year-on-year, and we obviously have lots of situation as we onboard new opportunity, but also signed opportunities which can disappear from the pipeline and the into the backlog and the portfolio of active programs. Second biggest change, something that we have already discussed at Capital Markets Day is the split of programs between the geographies. If we look only at Q3 2025 versus Q3 2026, the volume of opportunities -- the relative volume of opportunities in the U.S. was at 24% of the pipeline, 40% a year after. The French opportunity is 13% of the pipeline, 24% of the pipeline today. And obviously, with these 2 geographies delivering both Lenti and AV, we could expect that there would be a linked to the growth of the AAV segment. The site in U.K. is serving today lending clients and not AAVs, which explains why we don't see a very significant growth in U.K. versus the other geographies where we are actively and happily filling the capacity with the new AAV products. On the next slide, and I will be relatively short on that one. I just wanted to share something that I hadn't changed versus the last time I presented that slide. it's the conversion of the opportunities into time contract, and I won't elaborate on all the numbers here. Since for each category, the biggest variation versus what I presented at Capital Markets Day is 1 person. So we're very stable on our conversion from proposal to contract rated to negotiation and then finally to contract and very, very stable, a sign that our business is healthy and that our negotiations are progressing very nicely. On the next slide, we'll see the evolution, not only of the pipeline, but also of the signed orders from 2022 onwards and up to September 2026, very significant growth of the pipeline, 126% from 2022 to today, and we continue to see the order only increasing. You have the numbers here until September '26. We've already commented at Capital Markets Day that we were seeing our existing clients signing small pieces by small pieces. So we have a number of opportunities where we've not signed yet the GMP activities that are planned at the beginning of next year, and that's the reason why we're still very optimistic about the volume of order for the year, knowing what's in front of us and how many things are currently very actively negotiated. And if I was actually updating the number of signed orders as of today would already have increased, although we finalized that a couple of days ago. There were several times in similar forms, the question of our exposure to big clients. Good to see the evolution of the pipeline between September '25 and September '26. And see that as of today, our largest opportunity in the pipeline is 6% of the pipeline value and 71% of the same pipeline value is about 200 different opportunities. So our exposure was more important in the past. We can see that pipeline lines, the biggest 7 clients was only 51% to 71%. So as expected, with the diversification of the client base, we've mitigated the concentration risk. I will move now to OXB versus competition. We talk about OXB versus the markets we talk about way yesterday versus OXB, but I wanted to compare the growth of the company. to our main competitors that we've listed here. We've obviously listed the competitors for which we have access to the numbers. On the period of 2023 to 2025 in pink, the OXB growth was [ 88%. ] And if we look at what we expect to be the growth 2023 to 2026 in total, taking the middle of our guidance range, we expect to be at 112% growth. This is paying us far ahead of competition. I won't enable just now in the multiple reasons why. But on the next slide, we'll find some of the reasons why today, OXB is seen as a very solid partner for companies. We selected 2 of our clients, Cabaletta Bio and Brainchild Bio. Very happy to see that both actually have great news, Cabaletta on the clinical side, about a quarter ago showed that they are excellent clinical results on their CAR-T therapy for autoimmune disease. They needed a developer, but they also needed a manufacturer, and that's exactly what they found with OXB, an established track record of delivering programs through development, clinical and commercial activities and experienced teams and a collaborative culture. Brainchild is one of the new names that we're disclosing today. CAR-T as well, but CNS tumors, very different from autoimmune. They need deep lentivector expertise and again, a proven track record and commercial experience, that we are providing them. People are coming to us because of the track record in development, because of the technology that we can provide that are giving us the opportunity to support programs in multiple indications and with multiple vectors. And because we have a pragmatic approach to problem solving, if I read well, the comments we have in our current customer service. Last slide for me, will be a high-level summary of what we are discussing today. The market is healthy. It continues to expand and it continues to mature. AAV is still the fastest-growing vector segment, and we expect to see growing 25% year-on-year over the next 5 years. All vectors can be used in multiple indications. That's the reason why we have a multisite, multifactor strategy. Our portfolio of programs increased very significantly, as we've seen across all the vectors we have in the portfolio, and we've grown an early and late-stage program. On this late-stage program, we expect them to reach BLS submission within the next 12 months. Great news for the patients, great news for these biotechs that we serve and great news for OSV as well. The commercial program can be delivered from Oxford in the U.K., North Carolina in the U.S.A. in U.S.A. We have an A&P business when we look at the pipeline that continues to expand. Our AAV opportunities like the AAV on the market exceeds the number of lentis. And finally, the geographical mix reflects the network's growing majority -- we can work as a network. We can deliver programs for multiple sites in parallel the lead of interest for our clients will continue to deliver that strategy. I'm going to close here and hand over to my colleague, Lucy.

Thanks, Sebastien. So if we move to the next slide, please. I'm very pleased to take you through our H1 2026 financial performance. This has been a half year of continued momentum across the business with our manufacturing, in particular, driving an increase in revenue, our pipeline growing and converting into new revenue and the impact of continued cost discipline, supporting improved operating EBITDA on the same period last year despite some headwinds and one-off costs, which we've now addressed. If we start with revenue, our growth through H1 2026 reflects the ongoing demand we are seeing for our services with half year revenue increasing by 10% versus last year on a constant currency basis to GBP 80.2 million. Looking at this in a little more detail. manufacturing revenues increased by 20% with more clinical and commercial launch catches. Development revenues were marginally up 1% with increases in process characterization and validation activity. Procurement Services revenues were broadly flat at GBP 8.4 million and licenses and royalties were lower at GBP 1.2 million as [indiscernible] matures. Turning to profitability. We delivered an improvement on 2025 -- sorry, the previous slide. with the stronger revenues and disciplined cost control. Operating EBITDA improved by GBP 0.5 million to a loss of GBP 7.8 million compared with the loss of GBP 8.3 million last year. Adjusted EBITDA, which excludes GBP 6.3 million of one-off costs and foreign exchange gains of GBP 1 million improved by GBP 1.4 million to a loss of GBP 2.5 million, from a comparative loss of GBP 3.9 million for the same period this year -- last year, sorry. We reported GBP 7.6 million of impairment of property, plant and equipment relating to our France site. This is a result of the lower near-term revenue expectations as described in our trading update. As mentioned earlier by Sebastien, we have high conviction in the strength of the pipeline and for that reason, we remain confident in the long-term growth potential in France. Looking next to the balance sheet on the same slide, we ended the period with cash of GBP 75.3 million and net cash of GBP 21.4 million, reflecting a net outflow of GBP 34.3 million from December, around half of it working capital timing, partly offset by the $15 million drawdown under the Oaktree facility in March 2026. Next slide, please. I'd like to take a closer look at the relationship between revenue and costs. The overarching message here is that despite one-off factors such as product client mix effects and a higher share of lower-margin plasma-related revenue in this half driving the lower gross margin in H1 2026, our OpEx is stable as our revenues grow. Revenues grew by GBP 6.8 million, while total expenses were up GBP 5.2 million or 7% on an adjusted basis, reflecting both the ongoing demand for our world-class services and our continued cost discipline as the business scales. Manpower and site costs are relatively flat, while corporate costs increased by around GBP 1 billion, driven primarily by compliance activities as the business grows and a lower RDEC. This demonstrates that we have a scaling platform, which is coming through in the increase in revenues versus this time last year. Next one, please. We ended the half with a cash position of GBP 75.3 million, which takes into account a number of negative working capital movements in the cash flow totaling GBP 16 million, for example, inventory build and lower accruals. However, for H2, we expect to benefit from the release of some of this working capital in our period of higher output. Looking at this in more detail, there are several factors supporting our confidence in our year-end cash position. We are anticipating the inventory build we saw in H1, over half of the GBP 16 million of working capital seen in this slide to convert into H2 production. Our accruals are set to normalize due to the comparative year-end timing offset by other movements as a result of high activity. Furthermore, given the network deal is largely complete, we expect one-off costs to normalize and our CapEx run rate to land safely within our guidance of around GBP 50 million in aggregate for 2026 and 2027 with the approximately GBP 7 million spent in H1. As we look to cash in, we expect our R&D tax credits for full year 2025 to land in H2 bolstering our cash position. And of course, looking at our revenue, given our growing number of contracted client programs and robust pipeline of opportunities, we are well placed to deliver on our revenues. As such, with circa GBP 168 million of our 2026 revenue already contracted we expect our revenue to be weighted towards H2 in line with this. Turning to guidance. Next slide, please. Our August guidance update was primarily driven by timing-related factors. However, as Frank and Sebastien have already shared, the underlying demand in our services is strong, and our long-term strategy and expectations remain unchanged. Regards to the August guidance update, I wanted to share some context to this. Firstly, we saw client programs defer the delay due to changes in client strategy or clinical data. This is not unusual in biotech and with our increasingly diversified client base and broad pipeline of opportunities, we are creating a robust business that can weather these changes. We also saw a change in client ordering with some clients taking a more staged approach to ordering work packages, extending the time to full realization of the full contract value. In addition, one larger client experienced a change in approval pathway, again, impacting the ordering of work packages. As with the prior point, our continued diversification of our clients and pipeline will bring resilience to these short-term impacts. Finally, our Durham operations saw a delay of around 6 months on GMP operational revenues. However, we have now completed the first GMP run and execution is back on track. Now despite these short-term items, the fundamentals of our business remain strong, we are very confident in our long-term strategy and our medium and long-term targets are therefore unchanged. Our full year 2026 revenue guidance is GBP 180 million to GBP 200 million with GBP 168 million of forecasted revenue already covered by contracted orders. Looking to 2027, we are confident in our 25% to 30% year-on-year growth for full year 2027, and we continue to expect we will achieve -- we will reach a least new double-digit percentage EBITDA margins for full year 2027. This is supported by our strong commercial momentum, a diversified client base, I referenced earlier, the expanded high conviction pipeline and the technical excellence and client delivery, my colleagues continue to show day in, day out. Next slide, please. Looking beyond 2027, the fundamentals of our business and our outlook remains very strong, and as such, a GBP 500 million revenue ambition by 2030 are unchanged. The market fundamentals I showed earlier in the presentation are robust. We've seen market CAGR of around 18% and the AAV opportunities in the pipeline are gathering pace. As we look at how OXB is prime to take advantage of this, we estimate we are currently at approximately 6% market share. And with our world-class service offering, we firmly believe we are very well positioned to grow this. Our modest market growth assumptions placed us at low double-digit percentage market share for 2030. We see significant opportunity in our growth across all our sites, in particular, the U.S. with the recent addition of Durham and the continued market momentum in LNG therapies only confirms this. As Sebastien has already covered, we are post period now with 50 preclinical and early-stage client programs, up from 37% a year ago. As assets progress through the clinic, we expect this will fuel our late-stage and commercial programs. Moving down the funnel of our current native date programs. A number of these have expected BLA submission dates over the next 18 months or so and we expect these to progress into commercial stage manufacturing. In addition, our excellent service offering is also seeing further late-stage programs being added to the pipeline, representing another growth opportunity beyond the [indiscernible] plan you see before you. So you can see the market we are addressing, how would work and how the late-stage clinical and commercial stage programs at the bottom could on our illustrative view grow to double-digit late-stage and 5 or more commercial programs in the medium term. This is very much underpinned by the traction seen in the market as described by Sebastien previously. These are the factors that are driving our continued confidence in our strategy and our ambition to reach approximately GBP 500 million of revenue by 2030. Next slide, please. So moving on to costs and how we are improving operating leverage across the business. We have defined 6 levers across the cost base. Our increase in utilization is converting fixed manufacturing costs into operating leverage as the business scales. For example, in H1 2026, around GBP 5 million more of manpower and site costs were absorbed into production as batch volume rose. From a procurement standpoint, we have an associated team and strategy in place that is looking at the approximately GBP 28 million of addressable raw material and external spend in the half, 96% of it in cost of sales, so we can create efficiencies in sourcing going forward. For corporate activities, as revenue scales, we're already seeing administration costs lower with the progress seen in H1 2026 expected to continue. Administration was 18% of revenue in H1 2026 versus 18.6% in H2 2025. We aim to reach a very low double-digit percentage of revenue by 2030 and 2031. Across our network, we ensure each site is aligned to a core strength to ensure our capabilities and network are optimized appropriately. For example, the work we have done to transfer land AAV processes in France and the GMP consolidation at Durham. On commercial mix and shift to late stage in commercial programs, improving volumes, pricing unit economics will also create operating leverage within the business. This year, our late stage in commercial programs have risen to 9, up from 7. Finally, we are focused on improving our platform productivity, lower costs per batch and improving margin. We believe these measures will drive our 27% margin to at least double digits with an addition of 30% margin by 2030 to '31, which I will go into more detail in the next slide. I shared at the Capital Markets Day in June, we are still very much focused on the same trajectory towards an EBITDA margin approaching circa 30% by 2030, '31. End of 2026, we expect to be at mid-single digit, as I've mentioned. And next year, you will see us jump at least double-digit margin with further profitability measures under consideration to support this. The bridge from 1.4% in full year '25 to around 30% at about 28 points. In the most part, this is below gross margin. Cost of sales contributes up to around 1,000 basis points at late stage and commercial programs grow, now 9 from 7 a year ago and its yield and batteries initiatives come through. Operating costs contribute up to 1,000 basis points as utilization rises with the network build complete. Administration contributes around 700 basis points and is already at 18% of revenue from 18.6% a year ago. Commercial and innovation contribute up to 50 basis points each. So the past to around 30% is driven by the whole cost base with signs of continued proven evidence in H1. And with that, I'll hand back to Frank.Thank you all.

Thank you so much. Lucy, see next slide, please. Yes, this one. Thank you so much. So before we come to an end, I would like to show you a slide that I have presented a way at the Capital Market Day in June this year. The reason is because it summarizes Why? And indeed, we all at OXB are so confident about the future of our company. It also explains why we are convinced that we are well positioned for the next phase of growth. As we know, it all starts with a significant unmet medical need in the markets we serve. Cell and gene therapies have the potential to transform treatment and offer potentially curative options for patients with limited treatment options today and that continues to drive strong long-term demand for high-quality biovector manufacturing. Our people are a key differentiator and I can tell you this is confirmed by a lot of clients I spoke to. We have built a highly skilled and experienced team across our network with the scientific, technical and operational expertise we needed to deliver complex program successfully. At the heart of what we do is the investments we have made over the past few years in our platforms, technologies, in our structure in our processes, building deep experience and best-in-class capabilities across all major vector types. And together, this gives us a truly end-to-end offering supporting our clients from early development right through to commercialization with a strong focus on quality and innovation, as well as on real liability and scalability. From a commercial perspective, we are seeing strong momentum as shown by Sebastien with the maturation of line programs into late-stage, clinical and commercial phases, alongside a growing, diversifying and increasing leave high-quality pipeline of new opportunities. That momentum is underpinned by our track record of execution and high client satisfaction, which drives repeat business and long-term partnership. At the same time, our global footprint operates as one integrated network, allowing us to serve clients in a very flexible way and respond to their needs wherever they are and at whatever stage of development they are. And importantly, all of this translate to a clear path supportability, as shown by Lucy in her presentation. In 2025, we delivered strong revenue growth and operating EBITDA profitability for the first time since our strategic refocus. And we have clear plans now to build on that with further growth and margin expansion. So this concludes the slides for today, and I would now like to open up the floor to the Q&A session. So please, operator.

[Operator Instructions] We will now take our first question from Miles Dixon from Peelhunt.

Great. If I could ask 2 questions. Firstly, Lucy, thank you for the update on what happened between the Capital Markets Day and the trading update in August. But could I just ask what's happened since then I see that you talked about Durham being now online, but you also announced an additional program has come in today. Has some of that started to unwind that timing issue that you alluded to. And then secondly, Frank, thank you very much for the comment earlier on about the oncology versus autoimmune. And Sebastien, you clearly alluded to the upcoming pipeline. But can I just ask explicitly about the GBP 500 million guidance for FY '27 that you provided? And at the Capital Markets Day underneath that, there was GBP 200 million for commercial. Can you give us a steer as to if at all any of that was from autoimmune?

Do you want to start, Lucy?

Yes. I'm happy to start and perhaps Sebastian might add some additional color. But I mean the answer to that is yes. I mean as Durham is online, we've got the service offering in place. We started to see pipeline convert revenue or contracted orders and which term will pivot to revenue, and we expect to see that momentum continue together to my earlier comments, but Sebastian, perhaps you'd like to add some comments?

Yes. There's -- I mean there's nothing really that has changed versus Capital Markets Day. We're running the business like I think many management teams are running the CDMO business. So sometimes you have a technical issue like we had in Guam, which delayed the delivery of the first batches. These issues were fixed. The team dynamic is restored. We could keep it in place to make sure that we would have a team that would be able to deliver the next activities. And as for any new facility that you onboard on the network like any integration. You have high and you have lows. So in the laws, we had a delay on some of the activities due to technical issues. And on the high, we have some new programs that we find that we are on void. But -- there isn't a single day without good news. So there isn't a single day without bad news as well. I think it's the life of an organization delivering a very technical and complex projects with pipeline of opportunity where we have 200-plus opportunities every day, you have things that happen. On the autoimmune and what it means in the pipeline, the only 2 programs that we have as part of the GBP 500 million projections are the 2 programs on which we actively work at the moment, namely Cabaletta and Kymriah and we have active discussions with both Cabaletta and Kymriah on how many patients they will treat in the future and what it means in terms of number of aches, except that there is nothing -- the reason why we're very optimistic about the future, and that's public. Both Cabaletta and Kymriah disclosed excellent clinical data that was in June for Cabaletta from what I remember, and they have treated above 100 patients so far. And Kymriah was a little earlier. I think it was end of March, beginning of April where they presented their Phase II data as well. And it's public that there is a Brinston rolling submission.BLA So we have very good reasons to be optimistic on this.

We will now take our next question from James Rosborne of Stifel.

The first one on the client attrition side, which was very helpful actually. I guess how is that compared to sort of previous years? And how do you expect that to be going forward, perhaps versus your period as well. If you do have any importation on that? That's my first question, please.

So I'm looking at the client attrition in 2 very different ways. The first one being the conversion of opportunity into real contracts and conversion rates are the same I'm not sure I made the comment on the slide, but it's plus or minus 1% versus what we communicated at Capital Market then it was very stable compared to the year before. So when I look at the attrition rate on the commercial pipeline, stable. The technical attrition rate reflects the market between 80% and 95% of the project failed for various reasons. So we don't expect the attrition to be different. It's reflecting the clinical data reflecting the funding situation. Well, it's reflecting the market all in all. So I have personally not observed any meaningful difference versus 2025, but I don't expect 2027 to be different. And I don't think that our portfolio of clients is different from the market nature.

Okay. Great. Very clear. And then I guess you mentioned around the late-stage programs on BLAs in the next sort of 12 months. How should we look at current hiring [indiscernible] in terms of that growth outlook and also facilities as well. If they do those are all to come through, I guess, is the question.

I'm not sure I fully got the question, but we have not only active strategy to acquire programs post Phase II because we're one of the few companies with an existing commercial track record, and we can deliver commercial programs from both U.K. and U.S. So for that reason, I expect to see the number of late-stage programs growing in the future because of our commercial go-to-market strategy. But we also expect that some of the programs that are at early phase will move to next page. Actually, as of last week or the week before, one of our early stage clients published that they had raised money and we're moving to pivotal stage 2. So this program will still move from very stage to late stage. I will make a comment that I made about a year ago, our capacity plan and our go-to-market strategy are very aligned. So we don't expect that we will need to increase the existing capacity of the network before the earliest 2029.

Great. And the final one, just on AAV versus lenti. Is there any margin difference between these product lines and also if you are seeing some form of growth beyond lenti, any kind of changes in terms of site management or anything? Or is that within your expectations?