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By Malcolm Stacey | Tuesday 12 June 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello, Share Nappers. It was a long time ago that I sold them, but shares in Oxford BioMedica (OXB) have started doing rather well. And that is becoming more unusual for small pharmaceutical companies. So the firm must be doing something right.
Folks investing in a boutique pharma may help to break down medical barriers, but they take an awful risk. New drugs are rigorously tested and after years of hard work, the new discovery might not get a licence.
This company stayed in my portfolio for many years. During this time I can only remember the share value slowly, but regularly eroding. That irritation may now be in the past.
Oxford has been doing deals with the big corporate boys and girls of the medical world. The American company Axovant has taken up its license for a potential treatment of Parkinson’s Disease. I’m not sure how much the world is aware of just how common this awful condition is. Two of my best friends have been coping with it for years. And they live in hopes of better treatments. Oxford Biomedica is also big in gene therapy. And one of its deals here may be eventually worth £620 million. And that doesn’t include royalty payments which it’s said could, down the line, bring in a cool billion pounds.
This company has been battling to find new cures for yonks and at last the effort seems to be paying off. As I understand it, the trick it uses is to develop remedies at the early stage and then to move them on to pharmaceutical giants which have the wherewithal to finish the job.
Unlike some small British pharmas, this is not a one trick pony. It was my eye surgeon that first brought Oxford to my attention. And now the company has two ophthalmic leads over which it has formed a partnership with Novartis. There are also links with GlaxoSmithKline (GSK).
Oxford has been loss-making, but those losses reduced sharply, according to results in the Spring. And with impressive deals struck now and very probably in the future, well this one could be worth buying?
Let’s chew it over in the Punter’s Return.
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