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TRANSFORMING LIVES THROUGH
CELL AND GENE THERAPY
Annual report and accounts 2022
Contents
STRATEGIC REPORT
Our purpose
Chair’s statement
Operational highlights delivered in 2022
Market overview
Group at a glance
Business model
Client portfolio
The group’s stakeholders
Stakeholder case study
2022 performance review
Management team
Financial review
Environmental, social and governance (ESG)
— Sustainability report
— Analysis of material ESG issues
— Our people
— Community
— Innovation
— Supply chain
— Environmental
Principal risks, uncertainties and risk management
CORPORATE
GOVERNANCE
Board of Directors
Corporate Governance Report
Audit Committee Report
Nomination Committee Report
Directors’ Remuneration Report
Directors’ Report
FINANCIAL
STATEMENTS
Independent Auditors’ Report
Consolidated statement of comprehensive income
Statement of financial positions
Statements of cash flows
Statements of changes in equity attributable
to owners of the parent
Notes to the consolidated financial statements
OTHER INFORMATION
Glossary
Advisors and contact details
2
4
6
8
10
11
12
14
18
20
26
28
40
40
42
43
48
49
51
52
64
70
72
78
85
89
115
122
134
135
136
137
138
179
182
Terminology
This report uses financial reporting
definitions, and terminology specific
to both science and Oxford
Biomedica. An explanation of these
can be found in the glossary on pages
179 to 181.
1
OXFORD BIOMEDICA IN BRIEF
A QUALITY AND
INNOVATION-LED
VIRAL VECTOR CDMO
FOCUSED ON DELIVERING
LIFE CHANGING THERAPIES
TO PATIENTS
One of the original pioneers in cell and gene therapy, Oxford Biomedica plc and its
subsidiaries (the Group) has more than 25 years of experience in viral vectors; the
driving force behind the majority of gene therapies. Oxford Biomedica collaborates
with some of the world’s most innovative pharmaceutical and biotechnology
companies, providing viral vector development and manufacturing expertise in
lentivirus, adeno-associated virus (AAV) and adenoviral vectors. Oxford Biomedica’s
world-class capabilities span from early-stage development to commercialisation.
These capabilities are supported by robust quality-assurance systems, analytical
methods and depth of regulatory expertise.
Oxford Biomedica is headquartered in Oxford, UK. It has locations across
Oxfordshire, UK and a US-based subsidiary, Oxford Biomedica Solutions LLC
(Oxford Biomedica Solutions), based near Boston, MA, US.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 2
OUR PURPOSE
TRANSFORMING LIVES
THROUGH CELL AND GENE
THERAPY
Read more about our culture and values
— In this report
Sustainability report, page 40
— On our website
www.oxb.com/environmental-social-governance-esg
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
3
STRATEGIC
REPORT
Contents
Our purpose
Chair’s statement
Operational highlights delivered in 2022
Market overview
Group at a glance
Business model
Client portfolio
The group’s stakeholders
Stakeholder case study
2022 performance review
Management team
Financial review
Environmental, social and governance (ESG)
— Sustainability report
— Analysis of material ESG issues
— Our people
— Community
— Innovation
— Supply chain
— Environmental
Principal risks, uncertainties and risk management
2
4
6
8
10
11
12
14
18
20
26
28
40
40
42
43
48
49
51
52
64
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Strategic ReportCorporate GovernanceGroup Financial Statements 4
CHAIR’S
STATEMENT
We are committed to delivering
innovative services to our clients,
partnering with them to develop
and deliver new cell and gene therapies
that transform patients’ lives.
Dr. Roch Doliveux
Chair
Commitment to our purpose of transforming
lives through cell and gene therapy
In 2022, Oxford Biomedica made significant progress towards
establishing a global leadership position in viral vector development
and supply. We broadened our viral vector CDMO offering and
expanded our business into the US and into new viral vector
types, building on our recognised expertise in lentiviral vectors.
Our transformational deal with Homology Medicines, Inc.
(Homology Medicines) allowed us to capitalise on our successful
work developing and producing the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine and immediately took us into the
fast-growing AAV market with our first US-based business, Oxford
Biomedica Solutions. With this move we expanded our innovative
development and manufacturing expertise, enabling more biotech
and pharma clients to deliver life-saving therapies to patients.
Importantly, in November 2022, we announced that Dr. Frank Mathias
would join us as our new Chief Executive Officer. Frank’s experience
and track record of success running both an innovative biopharma
company and a high-performing CDMO will be key to the Group
as we build on our leading position and cell and gene therapy
continues on its rapid growth trajectory.
Enhancing our position as a global quality and
innovation-led CDMO
Viral vectors are the most established and powerful delivery
mechanism for cell and gene therapies. As the driving force behind
the majority of approved gene therapy trials, viral vectors unlock
the possibility of safe and targeted one-time treatments.
Over the last year, Oxford Biomedica has expanded its viral vector
capabilities into all key viral vector types including lentivirus,
adenovirus and AAV. Our AAV business has grown from strength
to strength already, with five clients at the end of 2022, exceeding
our initial expectations. In late 2022, we also significantly upgraded
our commercial organisation with new key hires. The momentum
we are seeing in business development activities across lentivirus,
AAV and adenoviruses validates client confidence in the business,
team, and our capabilities. With the lentiviral vector and AAV
manufacturing markets poised for projected 27% and 28% CAGRs
respectively from 2018–2026 (Source: Mordor Intelligence,
2021), our expansion into the US AAV market and the growing
lentivirus segment will enable our success in our aim for market
leadership in viral vector CDMO services. Despite the challenging
macroeconomic backdrop, we have a strong and diversified
business development pipeline, and our business has continued
to thrive with new client agreements and expanded remits from
existing clients. Our annual revenues and number of clients have
more than doubled since 2017, with 18 clients (including three
added post period) now across multiple viral vector types.
Looking to the future, we have positioned ourselves to capitalise
on the expected wave of cell and gene therapy approvals. It is
estimated that there could be up to 14 cell and gene therapy
regulatory decisions in 2023 in the US alone (Source: Alliance
for Regenerative Medicine). Furthermore, favourable regulatory
tailwinds with regard to efficiencies in underlying manufacturing
processes lead us to believe there will be a step-up in appetite
for cell and gene therapy approvals and a need to make the
manufacturing process for gene therapies more efficient. To ensure
that we are efficiently and properly resourced for future growth,
we have right-sized our business while maintaining our financial
strength. We are in a strong cash position, ending 2022 with our
strongest ever year-end cash position, which allows us to respond
effectively to the external environment and position ourselves for
continued success, as we build our market share in anticipation
of the expected demand for quality, innovation-led viral vector
manufacturing capabilities.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 5
Over the last year, Oxford Biomedica has expanded its viral
vector capabilities into all key viral vector types including
lentivirus, adenovirus and AAV.
Governance
Throughout the year, we made significant strides in strengthening
and diversifying our leadership team and Board, ensuring that
we are well-positioned to drive the Company through its next
phase of growth. After more than 13 years of dedicated service and
leadership to Oxford Biomedica, and following the announcement
of our AAV acquisition in the US, John Dawson stepped down
as Chief Executive Officer and I assumed the role of Interim CEO,
in addition to my existing role as Chair, to ensure continuity.
Furthermore, we are proud of the progress we made to diversify
the Board during the year, which now comprises 40% women,
collectively possess a diverse range of skills and expertise, and
come from a variety of ethnic and societal backgrounds.
Growing a sustainable business for our employees,
clients and patients
At Oxford Biomedica, we are committed to upholding our values
of integrity, inspiration, and innovation, embedded in everything
we do. This includes a responsible and sustainable approach
to our business, managing people, engaging with communities,
protecting the environment and governing our operations. We
are proud of our inclusion in the FTSE4Good index in 2022, in
recognition of our commitment to responsible business practices.
We empower our diverse and inclusive workforce to find innovative
solutions that benefit our business and the patients we serve. We
are dedicated to continuously improving our processes to minimise
our impact on the planet and engage with our communities to
create partnerships that benefit everyone.
The future: delivering on our mission of enabling our
clients to deliver life-changing therapies to patients
Having sharpened our strategic focus to be a quality and
innovation-led CDMO, we have decided to fund our therapeutics
portfolio externally, to realise the transformational potential of our
gene therapeutics assets that have emanated from our lentiviral
platform.
I am looking forward to continuing to work with Dr. Frank Mathias,
our new CEO. Under Frank’s leadership, we will make further
investments in scalability and leverage automation to deliver even
more innovative services to our biopharma clients enabling them to
discover and deliver therapies that transform patients’ lives.
Our focus will remain on client acquisition, innovation, people, and
most importantly, improving the lives of patients in need.
We have a clear strategy and vision for a successful, sustainable,
long-term future at Oxford Biomedica as it continues to build
as a world-leading quality and innovation-led viral vector CDMO.
As we look forward, we are more excited than ever to continue
delivering on our mission of enabling our clients to deliver life-
changing therapies to patients around the world.
Dr. Roch Doliveux
Chair
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 6
OPERATIONAL HIGHLIGHTS
DELIVERED IN 2022
Established Oxford
Biomedica Solutions
Continued momentum
in partner agreements
Vaccine manufacturing
— In July 2022, Oxford
— In March 2022, Oxford
Biomedica entered into an
agreement with Homology
Medicines to establish Oxford
Biomedica Solutions, an
innovative service provider
and AAV product developer
with complete end-to-end
chemistry, manufacturing
and controls capabilities and
expertise, from preclinical
development through to
clinical drug supply.
— Under the agreement,
Oxford Biomedica acquired
an 80% ownership interest
in the newly formed AAV-
focused manufacturing
and innovation business for
US$130 million (£97 million)
cash consideration, and a
US$50 million (£38.2 million)
capital injection into Oxford
Biomedica Solutions to fund
the entity to break even.
— Significantly increased client
base with 13 new or expanded
client relationships across
lentiviral vectors and AAV
(including three post-period).
LentiVector® platform
— In July 2022, Oxford
Biomedica announced it had
amended and expanded the
original License and Clinical
Supply Agreement signed
with Juno Therapeutics,
Inc. (Juno) a wholly owned
subsidiary of Bristol Myers
Squibb Company, to
include two new viral vector
programmes.
— In January 2022, Oxford
Biomedica announced
a License and Supply
Agreement with Philadelphia,
US-based Cabaletta Bio
(Cabaletta) for their lead
product candidate, DSG3-
CAART, currently being
investigated in a pivotal
Phase 2 study.
— In July 2022, Oxford
Biomedica announced a
new Licence and Supply
Agreement with a US-based
private biotechnology
company advancing a new
generation of adoptive cell
therapies, for their lead
CAR-T programme.
— In September 2022, Oxford
Biomedica announced
a further Licence and
Supply Agreement with an
undisclosed US-based late-
stage cell and gene therapy
company, for their lead
programme, a cell-based
therapy targeting a rare
indication.
Biomedica announced the
signing of a new three-
year Master Services and
Development Agreement
with AstraZeneca UK
Ltd (AstraZeneca) to
facilitate potential future
manufacturing opportunities
for the Oxford AstraZeneca
COVID-19 vaccine.
— In 2022, Oxford Biomedica
signed a 10-year MSDA
with Serum Life Sciences
Ltd (Serum), a subsidiary of
Serum Institute of India, for
the manufacture of a variety
of vaccine and protein-based
therapeutic products.
AAV
— In 2022, Oxford Biomedica
Solutions signed agreements
with four U.S. based
biotechnology companies,
in addition to Homology
Medicines, to provide its full
platform offering to support
the new clients’ pre-clinical
gene therapy programmes.
— Post-period end, in 2023,
Oxford Biomedica Solutions
signed additional agreements
with three new clients.
Platform Innovation
— Process C, which utilises
perfusion-mode production
was proven and rolled
out at 200L scale in
GMP, with several clients
adopting or evaluating the
next-generation lentiviral
manufacturing platform due
to the evident gains in vector
quantity and quality it affords.
Therapeutics
— The Group has reviewed
strategic options and is
now exploring external
funding opportunities for
its therapeutics portfolio to
realise the potential of its
innovative and differentiated
programmes that address
unmet medical needs.
Setting firm foundations
for growth
— In March 2022, the Group
entered into an US$85 million
(£64.9 million) short-term
loan facility with Oaktree
Capital Management, L.P.
(Oaktree) to finance a portion
of the transaction with
Homology Medicines to
establish Oxford Biomedica
Solutions.
— In October 2022, the Group
refinanced the US$85 million
(£64.9 million) loan facility
and the Company partially
repaid the outstanding
amounts and amended the
facility into a new senior
secured US$50 million
(£42.9 million) four-year
term loan facility provided
by Oaktree.
— In November 2022,
the Group completed the
sale and leaseback of its
Windrush Court facility in
Oxford to Kadans Science
Partner (Kadans) for
£60 million, exceeding the
£55 million which the Group
was initially seeking.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
7
Corporate
and organisational
development
— In January 2022, John Dawson
stepped down as CEO after
13 years and simultaneously
Dr. Roch Doliveux assumed
the role of Interim CEO,
in addition to his existing role
as Chair.
— Post-period end, in March
2023 the Group welcomed
Dr. Frank Mathias as CEO and
Dr. Roch Doliveux stepped
down as Interim CEO and
resumed as Chair.
— Namrata Patel was appointed
to the Board as an Independent
Non-Executive Director,
bringing a wealth of
international experience
in manufacturing and
end-to-end supply chain
management.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 8
MARKET
OVERVIEW
Cell and gene therapies are bringing
a new wave of breakthroughs in
medicines and creating a new paradigm
for healthcare where there are few
treatment options and no cures.
Since the approval of Kymriah® in 2017,
the cell and gene therapy market
has continued to grow strongly with
the number of cell and gene therapy
candidates in development growing
from 652 in 2015 to 2,817 in 2022,
and the majority of big pharma are now
active in the space (Source: Citeline,
2023; McKinsey & Company, 2020).
There are currently 28 cell and gene therapies approved by the FDA
targeting a broad range of disease indications, and it is estimated
that there could be up to 14 regulatory decisions expected in the US
in 2023 alone. Viral vectors play a critical role in the delivery of cell
and gene therapies to patients, but due to insufficient manufacturing
capacity and a leap in clinical progress since 2015, a coming wave of
near-term approvals will exacerbate the already limited viral vector
supply. (Source: Alliance for Regenerative Medicine, 2023).
Lentivirus
The Group has capabilities across all key vector types with its
LentiVector® platform focusing on lentiviral vectors.
The number of clinical trials are seen as a leading indicator of future
potential CDMO deal flow, and in the period from 2015 to 2022 the
lentiviral vector clinical trials saw a 23% CAGR, growing from 17 in
2015 to 74 in 2022. (Source: Citeline, 2022).
Adeno-associated virus (AAV)
AAV is the most widely used vector for areas outside of oncology
and vaccines, with 70% of gene therapies using it. The AAV sector
saw a 32% CAGR in clinical trial initiations between 2015 and 2022,
growing from 7 to 49 respectively.
Adenovirus
Adenoviral vectors are commonly utilised in vaccines due to their
ability to generate a strong immune response, their versatility, as
well as their ability to be produced quickly and on a large scale.
The adenoviral vector supply market saw a 24% CAGR in clinical
trial initiations between 2015 to 2022, growing from 28 to 125
respectively. The increase in 2020 and 2021 was driven by clinical
trials for vaccines for COVID-19, which accounted for 36 clinical
trial initiations in 2020 and 194 in 2021. In contrast, the number of
trials for COVID-19 decreased by 81% from 194 in 2021 to 37 in
2022. (Source: Citeline, 2023).
Number of cell and gene therapy
candidates in development
7
1
8
2
3
2
5
2
8
2
0
2
3
2
6
1
8
5
2
1
5
4
0
1
3,000
2,000
1,000
2
1
9
2
5
6
0
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
(Source: Citeline, 2023)
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
CELL AND GENE THERAPY
CANDIDATES IN
DEVELOPMENT
The number of cell and gene therapy
candidates in development grew
from 652 in 2015 to 2,817 in 2022
+2,165
AAV USAGE
Outside of oncology
and vaccines, 70%
gene therapies currently
use AAV
MARKETED
PRODUCTS
There are currently
28 cell and gene therapies
approved and marketed
in international markets
targeting a broad range
of disease indications
ADENOVIRAL
VECTOR SUPPLY
The adenoviral vector supply
market saw a 24% CAGR
in clinical trial initiations
between 2015 to 2022
9
28
70%
24%
LENTIVIRAL
VECTOR SUPPLY
Since 2015 the lentiviral
vector supply market has
witnessed a 23% CAGR in
clinical trial initiations
APPROVALS
Approvals for cell and gene
therapies are gathering pace.
It is estimated that there
could be up to 14 regulatory
decisions expected in the US
in 2023 alone
23%
+14
Clinical trial initiations by vector type
250
200
150
100
50
0
6
7
4
7
9
5
9
4
2
4
3
2
9
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
7
1
5
1
0
2
6
7
5
1
0
2
6
1
0
2
2
1
7
1
0
2
4
2
8
1
0
2
9
9
1
0
2
7
1
0
2
0
2
2
5 2
1
1
2
0
2
2
2
0
2
7
6
5
1
0
2
6
1
0
2
Lenti
γγ-Retro
8
3
0
2
0
2
9
4
9
4
1
2
0
2
2
2
0
2
1
2
7
1
0
2
8
2
4
2
8
1
0
2
9
1
0
2
AAV
8
2
5
1
0
2
0
2
8
1
6
1
0
2
7
1
0
2
6
1
8
1
0
2
7
3
9
1
0
2
Adeno
Source: Citeline, 2023
Note: This data includes Open, Planned, Completed and Closed trials, and excludes Terminated trials
8
3
2
5
2
1
2
6
0
2
0
2
1
2
0
2
2
2
0
2
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 10
GROUP AT A GLANCE
Large pharma and
innovative biotech
clients include:
WHO IS OXFORD BIOMEDICA?
— Oxford Biomedica is a quality and innovation-
led CDMO and leader in viral vectors, enabling
the delivery of life-saving cell and gene
therapies to patients
— Vector agnostic with innovative capabilities
spanning lentivirus, adenovirus and AAV
— Proprietary platform technology protected
by IP, patents and know-how
— Multiple partnerships with leading companies
and proven commercial supply capabilities;
approvals spanning over 30 countries
— Sole global supplier of lentiviral vector for
Novartis’ Kymriah®
— Manufacturer of >100m doses of the
adenovirus-based Oxford AstraZeneca
COVID-19 vaccine
Key stats
30+
Client programmes
904
Number of
employees*
18
Number of clients
(including three added
post-period)
9
Number of facilities
*
As at 31 December 2022, including
140 employees in Boston, US.
WHERE IS OXFORD BIOMEDICA BASED?
Facilities and locations
At the end of 2022, Oxford
Biomedica had nine facilities
spread over eight sites across
Oxford, UK; Dublin, Ireland and
Boston, US. The Group’s Boston,
US, facility was added in March
2022 with the establishment of
Oxford Biomedica Solutions,
which has expanded Oxford
Biomedica’s footprint into the US.
5
6
7
9
1
2 3
4
8
Oxbox, Oxford, UK (1)
— 4,180 m2 (45,000 ft2) of commercial
(MHRA) manufacturing space
— 4 x GMP production suites
— 2 x fill finish suites
– Warehousing, cold chain, QC
laboratories
— Fit out of 20,000 ft2 fallow area is
now in design phase and will provide
2 x 2000L GMP further production
suites
Windrush Court, Oxford, UK (2)
— State of the art laboratories totalling
2,970 m2 (32,000 ft2).
— Home to the analytical services
group and process research and
development
Windrush Innovation Centre,
Oxford, UK (3)
— Future dedicated innovation hub
— Currently office space with planned
project to generate 2,970 m2 (32,000
ft2) of new research laboratories
Harrow House and Chancery
Gate, Oxford, UK (5)
— 370 m2 (4,000 ft2) of commercial
(FDA/MHRA) manufacturing space
— 2 x GMP production suites
— Microbiology QC laboratory
Corporate Head Office, Oxford,
UK (6)
— Located on an 11,000 ft2 site within
Oxford Business Park
— Houses SET and various support
functions
Wallingford warehouse (7)
— 4,181 m2 (45,000 ft2) of warehouse
space
— Dedicated storage space for ambient
raw materials
Patriots Park, Boston, MA, US (8)
— Facility size c.8,450m2 (91,000 ft2)
— 2 x GMP production suites with
potential for expansion
Yarnton, Oxford, UK (4)
— 1,700 m2 (18,300 ft2) of commercial
(FDA/MHRA) manufacturing space
— 1 x GMP production suite, satellite
warehouse and microbiology QC
laboratory
Earlsfort Terrace, Dublin,
Ireland (9)
— Located in offices within Dublin’s
city centre
— Base for quality assurance staff
to release product within the EU
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 11
BUSINESS MODEL
A QUALITY AND INNOVATION-LED VIRAL VECTOR CDMO
Illustrative Oxford Biomedica revenue streams from viral vector development process
Cell line
and process
development
Pilot scale
production
Early stage
clinical supply
Late stage, process
characterisation
and validation
Commercial
product supply
and fill / finish
Potential upfront
Licence fee ($–$$$)
Development revenues
$
$
–
$$$
–
Size of batches*
Up to 5L
Up to 50L
50 to 200L
200 to 1,000L
200 to 1,000L
Bioprocessing revenues
–
$
$ – $$
$$
$$$
Milestones(s)
Royalties
Development & Commercial Milestones ($–$$$)
Low single digit
royalties of sales
Financial reporting
Collaboration agreements refers to all revenue generating
contractual arrangements with clients.
Illustration of potential Oxford Biomedica revenue streams throughout the product
development process. The timing of Oxford Biomedica revenue recognition
from executed contracts will vary depending on agreements with partners.
* Batches dependent on type of therapeutic product and viral vector
Using innovation and
development to drive
industrialisation
Innovation and development
across all viral vector classes
are core to the Group’s goal
of industrialising viral vector
manufacturing. By industrialising
viral vector production, reducing
costs and improving quality
through innovation, the Group
is broadening the therapeutic
indications that are amenable
to treatment with cell and gene
therapy. It is expected that the
reduction in cost will help drive
more projects through clinical
development and ultimately
adoption by payors into
indications where there are a far
greater number of patients, by
bringing down the overall cost
per patient.
Providing innovative
process development and
manufacturing services in
a fast-growing sector
The Group provides innovative
process development and
manufacturing services to
pharmaceutical and biotech
companies in the fast-growing
cell and gene therapy sector.
The Group’s world-leading
viral vector manufacturing
expertise in lentiviral vectors,
AAV and adenoviral vectors
means that it is able to develop
and manufacture commercially
scalable cell and gene therapy
products for its clients across
a broad range of therapeutic
areas.
Gene Therapeutics
The Group has leveraged
its expertise to develop a
product portfolio of innovative
IP-protected cell and gene
therapeutics focused on in vivo
lentiviral vector gene therapy
(see diagram on page 13). These
innovative and differentiated
programmes are targeted on
assets which utilise the unique
qualities of lentiviral vectors for
generating in vivo CAR-T cells
and treating conditions that
address unmet medical needs.
The Group has reviewed
strategic options and is now
exploring external funding
opportunities for its therapeutics
portfolio.
Proprietary platform and
world leading industry
expertise delivering
revenues
The Group’s proprietary
LentiVector® platform is the first
commercially approved lentiviral
based gene delivery system, and
the IP, patents and know-how,
along with over 25 years of
expertise in applying its platform
technology for both in vivo and
ex vivo therapies has made the
Group not only a pioneer in the
field, but also the global leader
that it is today.
The platform innovations
and arising IP are built into
agreements with clients to
support them in bringing
their cell and gene therapies
to market. Revenue is
then generated from
commercial development
fees, bioprocessing activities,
milestone payments and royalty
streams (see diagram above).
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
12
CLIENT PORTFOLIO
CDMO portfolio at a glance
Cell line, process development and pilot scale production¹ 17+
Early stage clinical supply
Late stage, process characterisation and validation
Commercial product supply and fill / finish
As at 31 December 2022
¹
Includes undisclosed stage programmes
CDMO portfolio¹
The Group receives multiple revenue streams from work with
clients including licence fees, process development fees and
milestones, bioprocessing revenues and royalties on sales once
a therapy has reached the market.
11
1
2
8
>30
By the end of 2022, Oxford Biomedica
was working on >30 client programmes
across early and late stage with large
pharma and innovative biotechs.
Portfolio
Product
Kymriah®
2nd CAR-T
3rd CAR-T
4th CAR-T
5th CAR-T
1st CAR-T/TCR-T
2nd CAR-T/TCR-T
3rd CAR-T/TCR-T
4th CAR-T/TCR-T
5th CAR-T/TCR-T
6th CAR-T/TCR-T
OTL-201
Other
CAR-T
CART-ddBCMA
2nd CAR-T
DSG3-CAART
TCR-T
Commercial
Client
Indication
Stage
r/r ALL, r/r DLBCL, r/r FL
Cancer (multiple)
Cancer (multiple)
Cancer (multiple)
Cancer (multiple)
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Phase I
Phase I
Phase I
Pre-clinical
Pre-clinical
Pre-clinical
Pre-clinical
Pre-clinical
Undisclosed
Undisclosed
MPS-IIIA (Sanfilippo syndrome type A)
Phase I/II
Undisclosed
Cancer (multiple)
r/r Multiple myeloma
Pre-clinical
Pre-clinical
Undisclosed
Pre-clinical
Mucosal Pemphigus Vulgaris (mPV)
Undisclosed
Cell therapy
Undisclosed
Rare indication (undisclosed)
CAR-T
Undisclosed
Undisclosed
BI 3720931
COVID-19 vaccine
Cystic Fibrosis
SARS-CoV-2
Pre-clinical
¹ CDMO pipeline as at 31 December 2022. Excludes AAV client programmes
Read more about the Group’s CDMO portfolio on page 20.
Phase II
Phase I
Phase I
Phase I
Phase III
Commercial
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 13
Gene therapeutics pipeline
5
At the end of 2022, Oxford Biomedica had
five programmes in its gene therapeutics
pipeline.
OXB proprietary unencumbered products
Product
OXB-302
OXB-40X
OXB-40Y
OXB-40Z
Indication
Stage
Acute Myeloid Leukaemia
Undisclosed liver indication
Undisclosed liver indication
Undisclosed liver indication
Pre-clinical
Pre-clinical
Pre-clinical
Pre-clinical
Axo-Lenti-PD1
Parkinson’s disease
Phase II
¹
Sio Gene Therapies (Sio) returned the rights to Axo-Lenti-PD to the Group in March 2022.
The Group continues to explore outlicensing opportunities for this asset.
Read more about the Group’s gene therapeutics pipeline on page 23.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 14
THE GROUP’S STAKEHOLDERS
The Board believes that, to maximise value and secure long-term success, the Directors must take account
of what is important to key stakeholders. This is best achieved through proactive and effective engagement.
s172 Companies Act 2006
The following table identifies the Group’s key stakeholder groups, material issues and how the Group engages with them.
Each stakeholder group requires a tailored engagement approach to foster effective and mutually beneficial relationships.
By understanding the Group’s stakeholders, the Board factors the potential impact of decisions into boardroom discussions
and considers stakeholders needs and concerns, in accordance with s172 of the Companies Act 2006 (as shown in the case study
on pages 18 and 19). The Group works effectively with its employees, clients and suppliers, to make a positive contribution to local
communities and achieve long-term sustainable returns for its investors. Acting in a fair and responsible manner is a core element
of the Group’s business practice as seen in the Environmental, Social and Governance (ESG) report on pages 40 and 63.
Stakeholders
Patients
The Group works on the development
of innovative products either by
itself, or with clients to provide life-
changing treatments to patients.
Employees
The Group has an experienced,
diverse and dedicated workforce,
which it recognises as a key asset
of the business. Therefore, it is
important that the Group continues
to create the right environment to
encourage and create opportunities
for individuals and teams to realise
their full potential.
How the Board and the wider Group engages
Material issues identified
Addressing material issues in 2022 highlights
Further links
The Clinical Development department, the Chief Scientific Officer, the Chief
Technical Officer and the Scientific, Technology and Advisory Committee (STAC)
consults with key clinical opinion leaders, patient advocacy groups and regulatory
experts to design safe clinical trials for patients in 2022. The Chief Scientific
Officer, the Chief Technical Officer and STAC regularly update the Board on the
results of such consultations. The Group is able to scale-up its manufacturing
capacity to access a broad patient population in line with partner demand.
— Patient safety
— Thousands of patients treated with the Group’s lentiviral vectors
p. 63 Clinical trials and ethics
— Well-designed clinical trials
— Introduction of fill/finish capabilities at Oxbox enabling the Group to broaden the Scope of its commercial scale
p. 18 S,172 fill/finish case study
— Progress product candidates to
the market as quickly as possible
expertise and to roll out its expanded capabilities to new and existing clients ultimately benefiting patients
(see S.172 case study on page 18).
The Group has an open, collaborative and inclusive management structure and
engages regularly with employees. The Group does this through the regular
appraisal process, structured career conversations, management development
programmes, employee surveys, webinars and webcasts, digital sharing platforms,
company presentations, town hall meetings, site visits by Board members, email
briefings and newsletters and its wellbeing programme.
Employee engagement is frequently measured and the Group has designated
Stuart Henderson as the Board’s representative for gathering the views of the
workforce and overseeing employee engagement. Mr Henderson attends a
number of Workforce Engagement Panel meetings per year to obtain employee
feedback on key issues and to facilitate two-way communication between the
Board and employees, with the objective of improving Board decision-making.
— Opportunities for development
and progression
— Health, safety and wellbeing
— Opportunity to share ideas and
make a difference
— Equality, Diversity and Inclusion
— Leadership and development
— Change management
— Cost of living
Clients
The continued performance of
the Group’s business would not be
possible without understanding the
needs and future aspirations of its
clients. Many clients have come to
the Group as their businesses have
moved into the cell and gene therapy
sector, which is testament to the
Group’s expertise and leadership in
the sector. In addition, the Group’s
manufacturing expertise has attracted
a broader partner base.
The Group’s Client Programme and Alliance Management department and the
Business Development team, the Chief Scientific Officer, the Chief Technical
Officer, the Chief Operations Officer and the Chief Financial Officer regularly
communicates with existing partners to discuss their goals and incorporate them
into the Group’s schedules/strategy. The Group does this through meetings,
engagement events and forums. This active engagement ultimately ensures that
the Group meets their clients needs and assists them in achieving their business
goals.
— Understand clients’ needs to
refine expertise
— Deliver to meet clients’ business
goals
— Offer expert manufacturing
capabilities to clients
The Chief Commercial Officer presents a regular update on the Group’s client
relationships at each Board meeting.
— Workforce Engagement Panel held nine meetings in 2022.
p. 43 People and wellbeing
— Stuart Henderson, the Board’s designated representative, attended two Workforce Engagement Panel meetings and
p. 96 Executive annual bonus,
has presented feedback to the Board arising from employee surveys and Workforce Engagement Panel discussions.
organisation and staff
During 2022, Mr Henderson participated in Workforce Engagement Panel discussions relating to, inter alia, employee
recognition, CEO recruitment and social engagement. The Chair and Vice Chair of the Workforce Engagement Panel
also presented to the Board during 2022 on two occasions, providing an update to the Board on the topics discussed
by the panel and allowing an opportunity for the Board to ask questions regarding the panel’s activities.
p. 45 Equality, Diversity and Inclusion
p. 44 Workforce Engagement Panel
— Consulting with the Workforce Engagement Panel regarding proposals for collecting diversity data as part of the
Company’s broader Equality, Diversity and Inclusion agenda, and seeking input into the focus areas needed to
implement year 2 of the 3-year plan to drive an inclusive and diverse culture within the Group.
— Continued roll-out of the management development programme with additional training delivered to line managers
to improve their understanding of the Group’s policies to ensure consistency and best practice.
— Continued leadership development with a series of facilitated away days including a focus on change management.
— Consulting with the Workforce Engagement Panel regarding the right-sizing of Group’s headcount following the
easing of the COVID-19 pandemic.
— Discussing and generating ideas to improve social engagement for all employees.
— Cost of living – management decided to make a cost-of-living payment of £1,200 to all UK based employees with
a base annual salary of under £50,000, payable in two tranches in December 2022 and February 2023. This payment
was made to 482 employees (63% of the employee population).
— By understanding clients’ needs and meeting their expectations, the Group was able to establish new client relationships.
p. 20 Performance review
— Progressed programmes with existing clients in line with agreements.
p. 96 Executive annual bonus
— Process C, which utilises perfusion-mode production, has been rolled out at 200L scale in GMP, with several clients
adopting the next-generation lentiviral manufacturing platform.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
15
Key stakeholders
The Group has identified seven key stakeholders
through a workshop facilitated by an external
specialist consultant and these are as follows:
Patients
Employees
Clients
Local communities
Suppliers
Regulators
Shareholders
Stakeholders
Patients
Employees
Clients
How the Board and the wider Group engages
Material issues identified
Addressing material issues in 2022 highlights
Further links
The Group works on the development
The Clinical Development department, the Chief Scientific Officer, the Chief
— Patient safety
— Thousands of patients treated with the Group’s lentiviral vectors
p. 63 Clinical trials and ethics
of innovative products either by
Technical Officer and the Scientific, Technology and Advisory Committee (STAC)
itself, or with clients to provide life-
consults with key clinical opinion leaders, patient advocacy groups and regulatory
changing treatments to patients.
experts to design safe clinical trials for patients in 2022. The Chief Scientific
Officer, the Chief Technical Officer and STAC regularly update the Board on the
results of such consultations. The Group is able to scale-up its manufacturing
capacity to access a broad patient population in line with partner demand.
— Progress product candidates to
the market as quickly as possible
— Well-designed clinical trials
— Introduction of fill/finish capabilities at Oxbox enabling the Group to broaden the Scope of its commercial scale
p. 18 S,172 fill/finish case study
expertise and to roll out its expanded capabilities to new and existing clients ultimately benefiting patients
(see S.172 case study on page 18).
The Group has an experienced,
diverse and dedicated workforce,
which it recognises as a key asset
of the business. Therefore, it is
The Group has an open, collaborative and inclusive management structure and
— Opportunities for development
engages regularly with employees. The Group does this through the regular
and progression
appraisal process, structured career conversations, management development
programmes, employee surveys, webinars and webcasts, digital sharing platforms,
— Health, safety and wellbeing
important that the Group continues
company presentations, town hall meetings, site visits by Board members, email
to create the right environment to
briefings and newsletters and its wellbeing programme.
encourage and create opportunities
for individuals and teams to realise
their full potential.
Employee engagement is frequently measured and the Group has designated
Stuart Henderson as the Board’s representative for gathering the views of the
workforce and overseeing employee engagement. Mr Henderson attends a
number of Workforce Engagement Panel meetings per year to obtain employee
feedback on key issues and to facilitate two-way communication between the
Board and employees, with the objective of improving Board decision-making.
— Opportunity to share ideas and
make a difference
— Equality, Diversity and Inclusion
— Leadership and development
— Change management
— Cost of living
p. 43 People and wellbeing
p. 96 Executive annual bonus,
organisation and staff
p. 45 Equality, Diversity and Inclusion
p. 44 Workforce Engagement Panel
— Workforce Engagement Panel held nine meetings in 2022.
— Stuart Henderson, the Board’s designated representative, attended two Workforce Engagement Panel meetings and
has presented feedback to the Board arising from employee surveys and Workforce Engagement Panel discussions.
During 2022, Mr Henderson participated in Workforce Engagement Panel discussions relating to, inter alia, employee
recognition, CEO recruitment and social engagement. The Chair and Vice Chair of the Workforce Engagement Panel
also presented to the Board during 2022 on two occasions, providing an update to the Board on the topics discussed
by the panel and allowing an opportunity for the Board to ask questions regarding the panel’s activities.
— Consulting with the Workforce Engagement Panel regarding proposals for collecting diversity data as part of the
Company’s broader Equality, Diversity and Inclusion agenda, and seeking input into the focus areas needed to
implement year 2 of the 3-year plan to drive an inclusive and diverse culture within the Group.
— Continued roll-out of the management development programme with additional training delivered to line managers
to improve their understanding of the Group’s policies to ensure consistency and best practice.
— Continued leadership development with a series of facilitated away days including a focus on change management.
— Consulting with the Workforce Engagement Panel regarding the right-sizing of Group’s headcount following the
easing of the COVID-19 pandemic.
— Discussing and generating ideas to improve social engagement for all employees.
— Cost of living – management decided to make a cost-of-living payment of £1,200 to all UK based employees with
a base annual salary of under £50,000, payable in two tranches in December 2022 and February 2023. This payment
was made to 482 employees (63% of the employee population).
The continued performance of
The Group’s Client Programme and Alliance Management department and the
— Understand clients’ needs to
— By understanding clients’ needs and meeting their expectations, the Group was able to establish new client relationships.
p. 20 Performance review
— Progressed programmes with existing clients in line with agreements.
p. 96 Executive annual bonus
— Process C, which utilises perfusion-mode production, has been rolled out at 200L scale in GMP, with several clients
adopting the next-generation lentiviral manufacturing platform.
the Group’s business would not be
Business Development team, the Chief Scientific Officer, the Chief Technical
refine expertise
possible without understanding the
Officer, the Chief Operations Officer and the Chief Financial Officer regularly
needs and future aspirations of its
clients. Many clients have come to
the Group as their businesses have
communicates with existing partners to discuss their goals and incorporate them
into the Group’s schedules/strategy. The Group does this through meetings,
engagement events and forums. This active engagement ultimately ensures that
moved into the cell and gene therapy
the Group meets their clients needs and assists them in achieving their business
— Deliver to meet clients’ business
goals
— Offer expert manufacturing
capabilities to clients
sector, which is testament to the
Group’s expertise and leadership in
the sector. In addition, the Group’s
manufacturing expertise has attracted
a broader partner base.
goals.
The Chief Commercial Officer presents a regular update on the Group’s client
relationships at each Board meeting.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
16
THE GROUP’S STAKEHOLDERS (CONTINUED)
Stakeholders
How the Board and the wider Group engages
Material issues identified
Addressing material issues in 2022 highlights
Local communities
The Group is committed to supporting
the communities in which it operates,
including local businesses, residents,
schools and the wider public.
Suppliers
The Group buys many items from key
suppliers and outsources some of its
activities to third-party suppliers and
providers. As a result, it is crucial that
the Group develops strong working
relationships with the Group’s
suppliers, so the Group can enhance
the efficiency of the business and
create value.
Regulators
The Group engages with the local community not only through the planning
process but also through the Group’s “Helping Hands” forum, with volunteering,
fundraising and charity work. The Group operates a formal apprenticeship
programme and employees of the Group attend schools and careers fairs and
provide work experience opportunities. The Group liaises with industry bodies and
government organisations to enhance the positive impact the Group has on the
communities and sector in which it operates. The Board is kept updated on the
various community initiatives.
— Apprenticeships
— School and careers events
— Fundraising for charity
— Volunteer for local charities /
organisations
— Five apprenticeships offered in 2022.
— Outreach programme in STEM subjects.
— £7,068 in employee fundraising for local Oxford charity.
— Collaborative Training Partnership programme with Oxford University and University College London launched.
p. 49 Innovation
Through effective collaboration, the Group aims to build long-term relationships
with its suppliers so that both parties benefit. The business development team,
operations team, Chief Operations Officer and Chief Financial Officer have regular
supplier meetings and business reviews and in 2022 the Group formalised its
Supplier Code of Conduct. The team reports any concerns regarding suppliers
and the broader supply chain to the Board in a timely manner.
— Long term partnerships
— Collaborative approach
— Open terms of business
— Quality audits performed by the Group on its suppliers.
— Due diligence performed by the Group on its suppliers which included regular audits on certain suppliers and quarterly
business reviews covering the top 5-6 suppliers.
— Procurement and supplier functions enhanced to interact with suppliers more effectively.
— Development of a Supplier Code of Conduct. This Code of Conduct now exists for all suppliers to view with the next
steps being to roll this out to major suppliers over the course of 2023.
p. 63 Modern Slavery and code
of conduct
p. 51 Supply chain
The Group operates in a highly
regulated environment and it is
important that it engages with the
regulators as required.
The Chief Scientific Officer, Chief Technical Officer, Chief Operations Officer and
General Counsel are in contact with government regulatory bodies on a regular
basis and attend industry forums. The Group has compliance audits performed by
both government regulatory bodies and by its clients.
The General Counsel arranges for annual Corporate Governance updates to
the Board from external advisers and provides other regulatory updates as
appropriate.
— Engage with regulators in a timely
— One audit by a Government regulatory body, including approval of new fill/finish facility.
manner
— Ensure GMP regulatory
compliance
— Protect proprietary company
information and knowhow
— Continuity of product supply
chain into EU post Brexit
— Compliance with the Corporate
Governance Code
— Preparation of drug master files and product specification files.
— GMP inspection and regulatory training for employees and Directors.
— Regular review of the Corporate Governance Code.
Shareholders
The Group’s shareholders play
an important role in monitoring
and safeguarding the governance
of the Group.
Through the Group’s investor relations programme, which includes regular
updates to the Board on one-to-one meetings with investors and investor
roadshows as well as the Group’s Annual General Meeting (AGM), the Group
ensures shareholder views are brought into the Boardroom and are considered
in its decision-making. There was a representative of one major shareholder
on the Board for the duration of 2022. The Group engages with shareholders
via the Annual report and accounts and via RNS announcements and the
corporate website.
— Corporate governance
— Business ethics
— Strategy and business model
— Financial performance
— Regular meetings/calls with the investor community held virtually and in person in 2022.
p. 90 Remuneration – annual bonus
— Shareholders were invited to listen and attend the AGM and vote by proxy or in person when attending.
Further links
p. 43 People
p. 48 Community
p. 48 Charity
p. 67 Regulatory risk
p. 69 Governance
p. 40 ESG
and LTIP
p. 69 Governance
p. 40 ESG
p. 28 Financial review
p. 133 Financials
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Stakeholders
How the Board and the wider Group engages
Material issues identified
Addressing material issues in 2022 highlights
The Group is committed to supporting
The Group engages with the local community not only through the planning
— Apprenticeships
— Five apprenticeships offered in 2022.
— Outreach programme in STEM subjects.
17
Further links
p. 43 People
p. 48 Community
— Collaborative Training Partnership programme with Oxford University and University College London launched.
p. 49 Innovation
— £7,068 in employee fundraising for local Oxford charity.
p. 48 Charity
The Group buys many items from key
Through effective collaboration, the Group aims to build long-term relationships
— Long term partnerships
— Quality audits performed by the Group on its suppliers.
suppliers and outsources some of its
with its suppliers so that both parties benefit. The business development team,
activities to third-party suppliers and
operations team, Chief Operations Officer and Chief Financial Officer have regular
providers. As a result, it is crucial that
supplier meetings and business reviews and in 2022 the Group formalised its
the Group develops strong working
Supplier Code of Conduct. The team reports any concerns regarding suppliers
relationships with the Group’s
and the broader supply chain to the Board in a timely manner.
— Collaborative approach
— Open terms of business
— Due diligence performed by the Group on its suppliers which included regular audits on certain suppliers and quarterly
business reviews covering the top 5-6 suppliers.
— Procurement and supplier functions enhanced to interact with suppliers more effectively.
— Development of a Supplier Code of Conduct. This Code of Conduct now exists for all suppliers to view with the next
steps being to roll this out to major suppliers over the course of 2023.
The Chief Scientific Officer, Chief Technical Officer, Chief Operations Officer and
— Engage with regulators in a timely
— One audit by a Government regulatory body, including approval of new fill/finish facility.
important that it engages with the
basis and attend industry forums. The Group has compliance audits performed by
regulators as required.
both government regulatory bodies and by its clients.
General Counsel are in contact with government regulatory bodies on a regular
manner
The General Counsel arranges for annual Corporate Governance updates to
the Board from external advisers and provides other regulatory updates as
appropriate.
— Preparation of drug master files and product specification files.
— GMP inspection and regulatory training for employees and Directors.
— Regular review of the Corporate Governance Code.
— Ensure GMP regulatory
compliance
— Protect proprietary company
information and knowhow
— Continuity of product supply
chain into EU post Brexit
— Compliance with the Corporate
Governance Code
p. 63 Modern Slavery and code
of conduct
p. 51 Supply chain
p. 67 Regulatory risk
p. 69 Governance
p. 40 ESG
Through the Group’s investor relations programme, which includes regular
— Corporate governance
— Regular meetings/calls with the investor community held virtually and in person in 2022.
p. 90 Remuneration – annual bonus
updates to the Board on one-to-one meetings with investors and investor
roadshows as well as the Group’s Annual General Meeting (AGM), the Group
ensures shareholder views are brought into the Boardroom and are considered
in its decision-making. There was a representative of one major shareholder
on the Board for the duration of 2022. The Group engages with shareholders
via the Annual report and accounts and via RNS announcements and the
corporate website.
— Business ethics
— Strategy and business model
— Financial performance
— Shareholders were invited to listen and attend the AGM and vote by proxy or in person when attending.
and LTIP
p. 69 Governance
p. 40 ESG
p. 28 Financial review
p. 133 Financials
the communities in which it operates,
process but also through the Group’s “Helping Hands” forum, with volunteering,
including local businesses, residents,
fundraising and charity work. The Group operates a formal apprenticeship
schools and the wider public.
programme and employees of the Group attend schools and careers fairs and
provide work experience opportunities. The Group liaises with industry bodies and
government organisations to enhance the positive impact the Group has on the
communities and sector in which it operates. The Board is kept updated on the
various community initiatives.
— School and careers events
— Fundraising for charity
— Volunteer for local charities /
organisations
Local communities
Suppliers
suppliers, so the Group can enhance
the efficiency of the business and
create value.
Regulators
The Group operates in a highly
regulated environment and it is
Shareholders
The Group’s shareholders play
an important role in monitoring
and safeguarding the governance
of the Group.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
18
THE GROUP’S STAKEHOLDERS (CONTINUED)
STAKEHOLDER
CASE STUDY
Proposal to offer fill/finish services to clients
During 2022, the Group submitted
an application for MHRA approval
for the introduction of fill/finish
services at its Oxbox manufacturing
site. Approval was received in the
second half of 2022.
The Board charged management
to consider and report on the impact
that the decision to bring fill/finish
processes in-house would have
on the stakeholders. The Board
considered and challenged
management’s analysis.
Employees
Consideration was given to the effect that
the process of undergoing MHRA inspection
in order to obtain approval for fill/finish
services would have on the Group’s
employees. It was noted that the expected
impact on employees would be felt in
terms of the increased workload for key
employees involved in the inspection under
a tight timeframe. Notwithstanding this, in
balancing such increased workload against
the expected benefits to other stakeholder
groups, the Board concluded that it
would be possible to effectively mitigate
the impact upon employees in order to
facilitate the positive impact that offering
fill/finish services would bring to the wider
stakeholder population.
Patient population and clients
The Board considered the impact that
the introduction of fill/finish services
to Oxford Biomedica’s existing viral vector
manufacturing offering would have on
the wider patient population and clients
and assessed whether it would bring
benefits to these stakeholders.
The Board concluded that the introduction
of fill/finish at Oxbox would enable
the Group to broaden the Scope of its
commercial scale expertise, roll out its
expanded portfolio of capabilities to existing
clients, and to support with marketing
activities targeting prospective clients.
Importantly, the Board believed that offering
fill/finish services in-house would facilitate
the achievement of the Group’s goal
of becoming a global viral vector leader,
providing treatments to patients and
solutions to its clients.
The Board also considered that it would
provide additional benefits to clients and the
wider patient population by allowing the
Group to offer an end-to-end manufacturing
process rather than relying on outsourcing,
thereby reducing the risk of products being
damaged or lost in transit to third party
fill/finish providers and onward shipment
to external storage providers.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
19
Local communities
The Board considered whether the
commencement of fill/finish services
would have any positive or negative
effect on local communities. The Board
concluded that it would have a positive
impact in terms of providing future job
security for Oxford Biomedica employees
in Oxford and in the creation of future
jobs supporting the fill/finish processes
at Oxbox. The Board also noted that
the environmental impact would be reduced
by removing the need to ship vector
substance and then vector product from
Oxford Biomedica to a third party filling
contractor and a third party storage provider.
Shareholders
The Board considered how the in-house
fill/finish offering would affect the Group’s
shareholders and assessed whether it was
in the shareholders’ best interests to proceed
with the MHRA application. The Board
believed that being able to offer clients
fill/finish processes in-house would align
with Oxford Biomedica’s publicly stated
strategy and facilitate the Group’s goal
of becoming a global viral vector leader.
In addition, the Board believed that having
in-house fill/finish capabilities would attract
further work from existing and potential
clients, which was expected to have a
positive impact on future Group revenues.
Following due discussion and consideration,
the Board concluded that it was in the best
interests of the Group’s stakeholders, taken
as a whole, to proceed with the submission
of the application for MHRA approval and
with offering fill/finish services to existing
and potential clients.
Supply chain and regulators
The Board assessed the effect that the
decision to bring fill/finish in-house was
expected to have on the Group’s suppliers
and existing supply chain, as well as on its
relationships and dealings with regulators.
The Board decided that the Group’s
suppliers would not be significantly affected
by the introduction of fill/finish services
and that, although there would be some
additional pressure on the supply chain,
this could be effectively mitigated by using
the Group’s Wallingford site as warehouse
space for an increased strategic level of
inventory which, it was expected, would
further allow the Group to negotiate better
pricing by discussing larger volume orders
with suppliers. With regard to the Group’s
existing suppliers of fill/finish services, the
Board recognised that the decision to bring
fill/finish operations in-house would result
in a loss of revenue for such suppliers.
Notwithstanding this, the Board noted that
such suppliers provided services to a wide
variety of other clients and therefore any
resulting impact on them was expected to
be short-term in nature.
The Board recognised the additional
regulatory workload and increased need
for compliance with the MHRA to ensure
the application received the necessary
approvals. The Board concluded that
increased engagement with the MHRA
would assist the Group in building its
relationships with UK regulators.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Strategic ReportCorporate GovernanceGroup Financial Statements 20
2022
PERFORMANCE
REVIEW
Introduction
2022 was a significant year for Oxford
Biomedica, as the Group expanded
internationally and made its first
strategic acquisition, entering the
larger and fast-growing adjacent AAV
market. The core business performed
strongly, validating the Group’s
position in the market as a leading
quality and innovation-led CDMO.
This success is testament to the Group’s
world-class capabilities spanning
early-stage development through
to commercialisation.
4
In 2022, Oxford Biomedica Solutions
signed agreements with four new,
undisclosed, U.S. based biotechnology
companies.
Oxford Biomedica Solutions: US-based AAV
manufacturing and innovation business
In January 2022, Oxford Biomedica announced that it had
entered into an agreement with Homology Medicines to establish
Oxford Biomedica Solutions, an innovative service provider and
AAV product developer with complete end-to-end chemistry,
manufacturing, and controls capabilities and expertise, from
pre-clinical development through to clinical drug supply. The
91,000 sq. ft. facility is located near Boston, US. The transaction
completed on 10 March 2022 and was immediately accretive
to the Group’s revenues.
Under the agreement, Oxford Biomedica US, Inc. acquired
an 80% ownership interest in the newly formed AAV-focused
manufacturing and innovation business for a US$130 million
(£97 million) cash consideration, and a US$50 million (£38.2 million)
capital injection into Oxford Biomedica Solutions to fund the
entity to break even.
Following the transaction, the Group immediately benefited from
a three-year Manufacturing and Supply agreement with Homology
Medicines as a preferred partner, which provided for minimum
contracted revenue of c.US$25 million (£21 million) for Oxford
Biomedica Solutions for the first twelve months post-completion.
Oxford Biomedica Solutions is targeting double-digit growth in AAV
manufacturing and clinical development revenues through services
provided to Homology Medicines, as well as existing and new
clients during 2023.
Oxford Biomedica Solutions is led by Tim Kelly, Chief Executive
Officer and Chair of its Board of Directors. The business has
a robust business development pipeline and in 2022 signed
agreements with four new, undisclosed, U.S. based biotechnology
companies, exceeding the previously stated target of two by the
end of 2022.
Post-period end, in 2023, Oxford Biomedica Solutions signed
additional agreements with three new clients.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 21
Juno Therapeutics, Inc. (a wholly owned subsidiary
of Bristol Myers Squibb Company)
Oxford Biomedica has continued to build on its partnership with
Juno Therapeutics, Inc. (a wholly-owned subsidiary of Bristol Myers
Squibb Company), which started in 2020. In July 2022, the Group
announced it had amended and expanded the original License and
Clinical Supply Agreement signed with Juno to include two new
viral vector programmes. This latest agreement demonstrates the
Group’s ability to expand work with existing partners and took the
total number of programmes that it is working on with Bristol Myers
Squibb to six.
Novartis
The Group continues its strong and long-term relationship with
Novartis as its sole global supplier of lentiviral vector for Kymriah®
(tisagenlecleucel, formerly CTL019).
Kymriah®, which is designed to be a one-time treatment, was
the first ever FDA-approved CAR-T cell therapy and in May 2022
expanded into a third indication, after its approval from the FDA
and European Commission for the treatment of adult patients
with relapsed or refractory follicular lymphoma , following two or
more lines of systemic therapy. This is the third B-cell malignancy
indication for Kymriah®, joining approvals in indications in children
and young adults with r/r paediatric and young adult acute
lymphoblastic leukaemia (ALL), and r/r adult diffuse large B-cell
lymphoma. In June 2022, Novartis announced five-year Kymriah®
data showing durable remission and long-term survival maintained
in children and young adults with advanced B-cell ALL.
Kymriah® is available in more than 400 qualified treatment centres
in 30 countries having coverage for at least one indication.
The Group is currently working with Novartis on four partner
programmes, in addition to Kymriah®.
Vaccine manufacturing
Oxford Biomedica continued to manufacture the Oxford AstraZeneca
COVID-19 vaccine at the Group’s Oxbox facility during 2022,
with manufacture of COVID-19 vaccines completing in the last
quarter of 2022. In July 2022, the Group announced the signing
of a new three-year Master Services and Development Agreement
(MSDA) with AstraZeneca to facilitate potential future vaccine
manufacturing opportunities on an as needed basis beyond 2022.
Oxford Biomedica has signed a 10-year MSDA with Serum Life
Sciences Ltd (Serum, a subsidiary of Serum Institute of India), for the
manufacture of a variety of vaccine and protein-based therapeutic
products. This agreement follows on from the Memorandum of
Understanding agreed with Serum in 2021. The MSDA allows for
Serum to access the Group’s Oxbox facility to manufacture a variety
of vaccines at scales of up to 1,000L.
Serum is also able to secure exclusive access to one of the two
new large scale multi 2,000L facilities in the second phase of Oxbox
facility expansion for a period of 10 years from facility readiness.
Serum will be required to commit to a minimum order value over
the relevant period in order to secure exclusive access to the new
large-scale suite.
Cabaletta
In January 2022, Oxford Biomedica announced a License and
Supply Agreement with Philadelphia, US-based Cabaletta Bio for
their lead product candidate, DSG3-CAART. DSG3-CAART is being
evaluated in the DesCAARTes™ Phase I clinical trial as a potential
treatment for patients with Mucosal Pemphigus Vulgaris and
is designed to selectively target and kill the B cells that produce
DSG3 antibodies while preserving the healthy B cells critical to
immune function.
In late 2022, Cabaletta released six-month clinical and translation
data from cohorts A1 through A4 and 28-day safety and persistence
data from cohorts A1 through A5.
The Group continues its strong
and long-term relationship with
Novartis as its sole global supplier
of lentiviral vector for Kymriah®.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 22
2022 PERFORMANCE REVIEW (CONTINUED)
Further client updates
In July 2022, Oxford Biomedica announced a new Licence
and Supply Agreement with an undisclosed US-based private
biotechnology company advancing a new generation of adoptive
cell therapies. The Licence and Supply Agreement grants the
new client a non-exclusive licence to utilise Oxford Biomedica’s
LentiVector® platform for its application in their lead CAR-T
programme, and puts in place a three-year Clinical Supply
Agreement.
In September 2022, Oxford Biomedica announced a further Licence
and Supply Agreement with an undisclosed US-based late-stage
cell and gene therapy company. The Licence and Supply Agreement
grants the new client a non-exclusive licence to utilise Oxford
Biomedica’s LentiVector® platform for its application in their lead
programme, a cell-based therapy targeting a rare indication,
putting into place a five-year clinical supply arrangement.
The Group continues to actively progress its collaborations
with Boehringer Ingelheim, Immatics, Arcellx, Orchard and Beam
Therapeutics with the combined revenues from these client
relationships expected to contribute meaningfully towards the
total bioprocessing and commercial development revenues
in the current financial year.
In December 2022, Arcellx announced a global strategic
collaboration with Kite Pharma to co-develop and co-commercialise
CART-ddBCMA, Arcellx’s lead late-stage product candidate.
CART-ddBCMA is currently being investigated in a pivotal Phase 2
study and has been granted Fast Track, Orphan Drug, and
Regenerative Medicine Advanced Therapy Designations by the FDA.
Innovation and platform development
Innovation and the development of the platform are core to
the Group’s goal of industrialising viral vector manufacturing,
not just with lentiviral vectors but across all viral vector classes.
By industrialising viral vector production, reducing costs and
improving quality through innovation, the Group seeks to broaden
the therapeutic indications that are amenable to treatment with
cell and gene therapy. It is expected that the reduction in cost
per dose brought about through the Group’s combined platform
and process innovation will help drive more projects successfully
through clinical development and ultimately adoption by payors
into indications where there are a far greater number of patients,
by bringing down the overall cost per patient treated.
Multiple elements of IP and innovation are relevant across all viral
vector classes. Development of the Group’s technologies such as
TRiPSystem™, SecNuc™, LentiStable™ and U1 and U2, along with the
corresponding IP, continue to move ahead. In addition, the Group
is utilising automation and the use of robotics, artificial intelligence
and machine learning to further drive productivity and capacity
improvements. One example is the successful development and
implementation of automated methods for both the replication
competent lentivirus assay and the titre (TU/mL) assay, enhancing
method robustness, providing additional capabilities to meet
future capacity needs whilst ensuring continuous improvement
of platform analytics. The Group is expecting to launch a fourth
generation of lentiviral vectors in the second quarter of 2023 which
will enable higher expression, have additional safety features and
a larger capacity to deliver greater amounts of DNA.
Process C, which utilises perfusion-mode production, as opposed
to the more typical batch-mode production, coupled with
improvements in downstream processing into the manufacturing
process has been proven and rolled out at 200L scale in GMP
during 2022. Process C works together with production enhancers
(such as U1, U2) and has resulted in process improvements by as
much as tenfold, without the need for an increase in bioreactor size,
and yielding significantly more lentiviral vector per batch. The Group
has begun to offer Process C commercially, with several clients
adopting or evaluating the next-generation lentiviral manufacturing
platform due to the evident gains in vector quantity and quality
it affords.
Innovation and the development
of the platform are core to the
Group’s goal of industrialising
viral vector manufacturing, not
just with lentiviral vectors but
across all viral vector classes.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 23
Gene therapeutics pipeline
Dr. Ravi Rao joined Oxford Biomedica as Chief Medical Officer
in April 2022, with responsibility for assessing and developing
the Group’s therapeutic product strategy. The Group has
reviewed strategic options and is now exploring external funding
opportunities for its therapeutics portfolio to realise the potential
of its innovative and differentiated programmes to address unmet
medical needs. It is anticipated that this will allow the Group to
maintain a long-term economic interest in a number of therapeutic
products. No costs associated with the therapeutics portfolio are
expected to be carried by the Group post 2023.
The global rights to AXO-Lenti-PD, which the Group had licensed
to Sio Gene Therapies (Sio) were returned to the Group in
March 2022, following Sio’s decision to deprioritise the programme
due to resourcing constraints. The Group continues to explore
out-licensing opportunities for this asset.
In July 2022, the Group announced that it had initiated a
new project with Orchard utilising the Company’s proprietary
LentiStable™ technology. As part of the project, Oxford Biomedica’s
LentiStable™ technology platform will be used to develop a producer
cell line capable of stably expressing lentiviral vectors. Orchard is
exploring the technology to increase the manufacturing efficiency
and scalability of their investigational haematopoietic stem cell
(HSC) gene therapy in development for the potential treatment of
mucopolysaccharidosis type I Hurler syndrome (MPS-IH).
The Group continues development work in the area of in vivo
CAR-T, which the Group believes would offer greater patient access
and superior efficacy compared to existing treatment options.
Business development and CDMO pipeline
Oxford Biomedica continues to have strong new business
momentum and demand for its expertise and services, demonstrated
by the addition of 11 new clients (majority in AAV) since the end
of 2021, taking the Group’s total number of clients to 18 (including
three added post-period). This compares to six clients at the end
of 2017, when the Group was solely focused on lentiviral vectors.
The Group’s CDMO portfolio currently comprises more than
30 programmes for its clients.
In November 2022, the Group welcomed a new Chief Commercial
Officer, Dr. Sébastien Ribault, to lead the Commercial and Business
Development team with a focus on the expansion of the Group’s
client base, complementing the nature of the Group’s CDMO business.
Dr. Ribault has over 25 years of experience across the biotechnology
industry and CDMO space, and was previously at Merck Life Sciences,
where he was Vice President & Head of Biologics and Viral
Vector CDMO.
Under the leadership of Dr. Ribault, the Commercial team now
consists of Commercial Operations, Business Development
and Licensing specialists in multiple locations across the US, UK
and Europe.
Process C works together with
production enhancers (such as U1,
U2) and has resulted in process
improvements by as much
as tenfold, without the need for
an increase in bioreactor size,
and yielding significantly more
lentiviral vector per batch.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 24
2022 PERFORMANCE REVIEW (CONTINUED)
Facilities and capacity expansion
As part of the transaction to establish Oxford Biomedica Solutions,
the Group acquired the leasehold to a state-of-the-art AAV
manufacturing facility based near Boston. The facility covers
approximately 91,000 sq. ft including GMP space for drug
substance, drug product, QC testing, quality and warehousing,
with three 500L single-use bioreactors with proven scalability
to 2,000L for commercial supply.
Short-term loan facility
In March 2022, the Group entered into an US$85 million (£64.9 million)
secured short-term loan facility with Oaktree. The proceeds were
used by the Group, together with the Group’s existing cash, to finance
a portion of the transaction with Homology Medicines to establish
Oxford Biomedica Solutions. The loan carried an interest rate of
8.5% with the principal amount due at the facility’s maturity date in
March 2023.
Oxbox, the Group’s largest manufacturing facility spanning
84,000 sq. ft received MHRA approval for its fill finish suite
in August 2022, bringing this previously outsourced function
in-house. This high quality, state-of-the art value-added
capability is now being rolled out to clients.
The second phase of Oxbox development is expected to provide
additional flexible manufacturing capacity for a variety of viral
vector-based products, including cell and gene therapy products,
vaccines, and other advanced therapeutics up to 2,000L scale.
Design work for this next phase of Oxbox development is
progressing, with the proceeds from the £50 million investment
from Serum funding the development.
With regard to the planned redevelopment of the Windrush
Innovation Centre into next generation laboratory facilities, the
Group is currently conducting a review of required capacity and
alternative laboratory options.
In November 2022, the Group completed the sale and leaseback
of its Windrush Court facility in Oxford to Kadans for £60 million,
exceeding the £55 million which the Group was initially seeking.
Kadans has granted Oxford Biomedica an occupational lease
of the facility for 15 years.
To ensure the Group has sufficient warehouse capacity to
meet expected near-term commercial development from both
current and future potential clients, the Group has entered into a
lease agreement in respect of a new 45,000 sq. ft warehouse in
Wallingford, Oxfordshire to store ambient raw materials. The first
phase of fit-out is complete, with the site expected to be ready for
occupation in the second quarter of 2023.
In October 2022, the Group refinanced this US$85 million
(£64.9 million) loan facility and the Company partially repaid
the outstanding amounts and amended the facility into a new
senior secured US$50 million (£42.9 million) four-year term loan
facility provided by Oaktree. The loan carries a variable interest
rate, which is capped at 10.25% per annum. The refinanced facility
also carries the option for Oxford Biomedica, subject to customary
conditions and available for a three-year period, to drawdown a
further US$25 million (£21.5 million) from Oaktree to fund certain
permitted acquisitions.
Corporate and organisational development
During the period, new appointments were made across the Board
and the Senior Executive Team, adding further expertise to ensure
that the Group’s leadership is well positioned to drive the next
phase of growth.
In January 2022, John Dawson stepped down as CEO after 13 years
and simultaneously Dr. Roch Doliveux assumed the role of Interim
CEO, in addition to his existing role as Chair. John Dawson stepped
down from the Board at the AGM in May 2022 and remained an
adviser to the Company throughout the year. Post-period end,
in March 2023 the Group welcomed Dr. Frank Mathias as CEO and
Dr. Roch Doliveux stepped down as Interim CEO and resumed
as Chair. Dr. Mathias brings world-class innovation and CDMO
experience to Oxford Biomedica, and joined the Group from
Rentschler Biopharma SE, where he had served as CEO since 2016.
In April 2022, Namrata Patel was appointed to the Board as an
Independent Non-Executive Director. Ms. Patel brings a wealth
of international experience in manufacturing and end-to-end
supply chain management with experience in the commercialised
regulated industry as well as a wealth of sustainability experience.
Post period-end, Dr. Siyamak (Sam) Rasty informed the Board that
he will not be standing for re-election at the Company’s AGM in
June 2023. Dr. Rasty joined the Board in December 2020 and is a
member of the Scientific and Technology Advisory Committee
and was a member of the Audit Committee until December 2021.
The Group has acquired the
leasehold of a new 45,000 sq ft
warehouse in Wallingford,
Oxfordshire to store ambient
raw materials. The first phase
of fit-out is complete, with the
site expected to be ready for
occupation in the second quarter
of 2023.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report Strategic Report
Governance
Group financial statements
25
TRANSFORMING LIVES
ENHANCING OUR
POSITION AS A
GLOBAL QUALITY AND
INNOVATION-LED CDMO
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Strategic ReportCorporate GovernanceGroup Financial Statements 26
MANAGEMENT TEAM
Roch Doliveux
Chair
Dr. Roch Doliveux was appointed
to the Board as Non-Executive Chair
in June 2020. Dr. Doliveux also
became Interim Chief Executive Officer
from January 2022 until March 2023,
following the Company’s announcement
of John Dawson’s intention to retire
as Chief Executive Officer and the
acquisition of the AAV business in the
US. Dr. Doliveux is currently Chair of
the Board of Directors at Pierre Fabre
S.A. and Vice Chair of Pierre Fabre
Participations. Dr. Doliveux was previously
the Chief Executive Officer of UCB S.A.
for ten years during which time he
transformed the company from a
diversified chemical group into a global
biopharmaceutical leader. He was a
member of the Board of UCB from
2002 – 2015 and from 2017 – 2021.
In addition, Dr. Doliveux was a member
of the Board of Stryker from 2010 –
2020 and Chair of the Compensation
Committee from 2016 – 2020. He also
chaired the Board of Vlerick Business
School from 2013 – 2017, the Board of
IMI, the largest healthcare public-private
partnership in the world from 2012 –
2015 and GLG Institute from 2016 – 2022.
Dr. Doliveux is a Veterinary Surgeon by
training and has an MBA from INSEAD.
Stuart Paynter
Chief Financial Officer
Stuart Paynter joined the Board
in August 2017 as Chief Financial
Officer. Mr Paynter has over 22 years’
experience in the pharmaceutical
and healthcare sectors. He qualified
as a chartered accountant with
Haines Watts before moving to EDS.
Mr Paynter subsequently joined
Steris and worked in a variety of roles
within the healthcare and life sciences
divisions prior to becoming the
European Finance Director. Mr Paynter
then moved to Shire Pharmaceuticals
where he became the Senior Director
of Finance Business Partnering for all
business outside of the US, transitioning
to a corporate finance role before
becoming the Global Head of Internal
Audit. Prior to joining Oxford Biomedica,
Mr Paynter was Head of Finance Business
Partnering at De La Rue plc. He is a
member of the Institute of Chartered
Accountants in England and Wales.
Sébastien Ribault
Chief Commercial Officer
Dr. Sébastien Ribault joined Oxford
Biomedica in November 2022 as
Chief Commercial Officer. He has
over 25 years of experience across
the biotechnology industry and CDMO
space. Dr. Ribault was previously
at Merck Life Sciences where he was
Vice President & Head of Biologics
and Viral Vector CDMO, leading Merck’s
CDMO expansion project, establishing
the Services business case and helping
to establish the Life Science Services
business unit. Prior to his 17 years with
Merck KGaA, Dr. Ribault was a
Gene Therapy Development Scientist
at Transgene and Head of the R&D
Laboratory at Hemosystem. He has a
PhD in Molecular and Cellular Biology
from the University of Strasbourg.
Kyriacos Mitrophanous
Chief Scientific Officer
Dr. Kyriacos Mitrophanous joined
Oxford Biomedica in 1997. He has over
20 years of lentiviral vector experience
covering a range of technical disciplines,
including the development of cell
and gene therapies, delivery platform
technologies, bioprocessing and
analytics. Dr. Mitrophanous is a
recognised world-class expert in the
field, a named inventor on numerous
lentiviral vector patents and an author
of a number of key papers. In his
current role, he is responsible for the
development of Oxford Biomedica’s
new product candidates and LentiVector®
platform. He holds a PhD in Molecular
Biology from University College London
and has conducted post-doctoral
research at the University of Oxford.
James Miskin
Chief Technical Officer
Dr. James Miskin joined Oxford
Biomedica in 2000. He has more
than 22 years’ experience in cell
and gene therapy, 17 of which have
been in the GxP (good practice)
environment. In his current role,
Dr. Miskin has overall responsibility
for Oxford Biomedica’s Quality
systems, analytical testing and lentiviral
based bioprocessing development, as
well as client programmes and alliance
management. He is also a named
inventor on several patents in the field.
Dr. Miskin holds a Bachelor of Science
degree and a PhD in Molecular Biology
from the University of Leeds and
subsequently conducted post-doctoral
research at The Pirbright Institute
for a number of years. He is a member
of the UK BioIndustry Association
Manufacturing Advisory Committee
and is the Advanced Therapies
workstream lead for The Medicines
Manufacturing Industry Partnership.
Nick Page
Chief Operations Officer
Nick Page joined Oxford Biomedica
in April 2018. Prior to joining, Mr Page
held a number of senior operational
leadership positions in the pharmaceutical
industry, most recently as Platform
Head of Anti-infectives within Novartis.
His 40+ years of industry experience
include API, Solid oral dose, Sterile, and
Radiopharmaceutical manufacturing
in various organisations encompassing
innovative, generic and contract
manufacturing. During his career,
Mr Page spent several years working
in China and India as well as in
global roles. He originally qualified
as a Chartered Chemist and also
has an MBA from The Open University.
Ravi Rao
Chief Medical Officer
Dr. Ravi Rao joined the Senior Executive
Team in April 2022. He divides his time
between his role at Oxford Biomedica
and roles he has at SV Health Investors
and Sitryx. Dr. Rao brings long standing
bio pharmaceutical and translation
experience from early stage through
to launch and life cycle across multiple
therapeutic areas with different treatment
modalities. Most recently, Dr. Rao was
Head of R&D and Chief Medical Officer
at Swedish Orphan Biovitrum, where he
oversaw the development and approval
of multiple medicines in rare diseases
across immunology and haematology.
Dr. Rao began his biopharmaceutical
career at Roche Pharmaceuticals and
subsequently held senior positions
in R&D at GlaxoSmithKline and as Chief
Medical Officer at Aeglea Biotherapeutics.
He was previously an academic at
Imperial College and a post-doctoral
fellow at Harvard University specialising
in immunology. Dr. Rao received
his medical degree from Cambridge
University and his PhD from Imperial
College. He is a member of the Royal
College of Physicians and an Honorary
Member of the Faculty of Pharmaceutical
Medicine. He is also an independent
board director of DBV Technologies.
Tim Kelly
Chief Executive Officer,
Oxford Biomedica Solutions
Tim Kelly joined as Chief Executive
Officer of Oxford Biomedica Solutions
and Chair of its Board of Directors
in March 2022. Mr Kelly is also part
of the Senior Executive Team. Mr Kelly
has over 20 years’ experience in global
product development and manufacturing
which he gained whilst working for
a range of pharmaceutical companies
in Europe and the US. Prior to joining
Oxford Biomedica Solutions, Mr Kelly
was Chief Operating Officer at
Homology Medicines, Inc. Mr Kelly has
an MBA from Troy University as well
as a BSc with emphasis in Engineering
Mechanics from the United States
Air Force Academy.
Natalie Walter
General Counsel
Natalie Walter joined Oxford Biomedica
in May 2019 as General Counsel
having worked as a consultant for
the Company since May 2018. She
has over 20 years’ experience as a
corporate lawyer advising life sciences
companies, including Oxford Biomedica,
on a range of business and transactional
issues, equity capital markets transactions,
mergers and acquisitions and corporate
governance. Ms Walter has worked for
a number of UK and US law firms, as
well as working at Lehman Brothers as
a Director and Legal Counsel for the
Equity Capital Markets division. She was
most recently a Partner with Covington
& Burling LLP. Ms Walter also sits on the
Board of C4X Discovery Holdings plc
as a Non-Executive Director.
Matthew Treagus
Chief Information Officer
Matthew Treagus joined Oxford
Biomedica in August 2021 as Chief
Information Officer, having worked
as a consultant with the Company since
2019. He has over 30 years’ experience
of applying technology to support
growth, innovation and efficiency.
Mr Treagus was a co-founder of AKQA,
a digital services business, now part
of WPP Group plc, a pioneer of the
internet services industry. Most recently,
he was a Partner at Baringa Partners LLP
with responsibilities in the Customer
and Digital team working across the
Retail, Financial Services and Energy
sectors. Mr Treagus ran his own
consultancy business for 12 years
advising a diverse set of clients,
including Oxford Biomedica. He has
also served as Interim CIO at Save
the Children UK.
Lisa James
Chief People Officer
Lisa James joined the Senior Executive
Team as Chief People Officer in
April 2022, having worked with Oxford
Biomedica since 2016. She joined
Oxford Biomedica as HR Manager
and during her seven-year tenure
was promoted to Head of HR Delivery
and VP HR Business Partnering and
Development. Previously, Ms James
worked as HR Manager for a European
third-party High-Tech Logistics
organisation, specialising in medical
devices. Ms James has over 13 years’
experience in Human Resources
and a CIPD Level 7 Advanced Diploma
in Human Resource Management.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 27
Roch Doliveux
Chair
Stuart Paynter
Chief Financial Officer
Sébastien Ribault
Chief Commercial Officer
Kyriacos Mitrophanous
Chief Scientific Officer
James Miskin
Chief Technical Officer
Nick Page
Chief Operations Officer
Ravi Rao
Chief Medical Officer
Tim Kelly
Chief Executive Officer of Oxford
Biomedica Solutions
Natalie Walter
General Counsel
Matthew Treagus
Chief Information Officer
and Chief of Staff
Lisa James
Chief People Officer
Dr. Frank Mathias
Chief Executive Officer
Full biographies for the Board of
Directors can be found on pages 70
and 71.
Dr. Frank Mathias
Chief Executive Officer
Dr. Mathias joined the Board as Chief
Executive Officer in March 2023.
Further biographical details relating to
Dr. Mathias are set out on page 71.
Helen Stephenson-Ellis
Former Chief People Officer
Helen Stephenson-Ellis served as a
permanent member of the Senior
Executive Team from July 2018. She
stepped down in April 2022.
John Dawson
Former Chief Executive Officer
John Dawson served as Chief Executive
Officer from October 2008 and
stepped down as a Director at the AGM
in May 2022.
Dave Backer
Former Chief Commercial Officer
Dave Backer served as a permanent
member of the Senior Executive team
from September 2021 and stepped
down in August 2022.
Dr. Jason Slingsby
Former Chief Business and Corporate
Development Officer
Dr. Slingsby served as a permanent
member of the Senior Executive Team
from February 2015 and stepped down
in April 2023.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 28
FINANCIAL
REVIEW
During 2022, the Group continued
to focus on growing the underlying
business by attracting new clients,
expanding offerings with existing
clients and expansion through
acquisition of technologies,
capabilities and clients.
Setting firm foundations for growth
In 2022, the Group expanded its capabilities beyond lentiviral
vectors and evolved into a multi-vector, quality and innovation-
led CDMO. Oxford Biomedica is incredibly proud of its work in
producing the Oxford AstraZeneca COVID-19 vaccine and the
lives that were saved in this effort, which afforded the Group the
opportunity to broaden its viral vector CDMO offering and expand
the business into the US. During 2022, the Group continued to
focus on growing the underlying business by attracting new clients,
expanding offerings with existing clients and expansion through
acquisition of technologies, capabilities and clients.
In March 2022, the Group acquired an 80% ownership interest
in Oxford Biomedica Solutions, an AAV-focused manufacturing
and innovation business for US$180 million (£137.4 million),
with Homology Medicines retaining a 20% ownership stake.
Concurrently with the Oxford Biomedica Solutions transaction,
the Group entered into a manufacturing and supply agreement
with Homology Medicines. Subsequently four new AAV client
agreements were signed in 2022, exceeding the previously stated
target of two for the year, which are expected to generate further
revenues in the future. Oxford Biomedica Solutions generated
revenues of £23.7 million in the year since completion of the
transaction in March 2022.
Throughout 2022 the Group continued to form new client
relationships whilst also expanding existing client agreements.
The Group is currently working with 18 clients (including three
added post-period) compared to 10 clients at the end of 2021.
Lentiviral vector manufacturing volumes have continued their
post-pandemic upward trajectory, with revenues from the core
LentiVector® business achieving strong double-digit revenue
growth compared to 2021. As expected, COVID-19 vaccine
bioprocessing volumes were lower reflecting the exceptional
results achieved in 2021 when vaccine manufacturing was at full
pace during the pandemic.
During the period, the Group announced new or expanded licence
and supply agreements with Cabaletta, Juno, two undisclosed
US-based private biotechnology companies, and four new AAV
clients, in addition to Homology Medicines. These agreements are
expected to bolster the Group’s development and manufacturing
pipeline over the coming years. In June, the Group also expanded
its original supply and development agreement with AstraZeneca
to facilitate potential future manufacturing opportunities for the
AstraZeneca COVID-19 vaccine on an as-needed basis beyond 2022.
Stuart Paynter
Chief Financial Officer
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
Year-end headcount
900
800
700
600
500
400
300
200
100
0
180
160
140
120
100
80
60
40
20
0
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
Revenue
£m
Licence, milestones and grants
(light tints)
Bioprocessing and process
development (dark tints)
29
The Group achieved total revenues of £140.0 million and an
Operating EBITDA¹ profit of £1.6 million in 2022 compared to
revenues of £142.8 million and an Operating EBITDA profit of
£35.9 million in the prior year. Total revenues were broadly flat
compared to the prior year despite lower COVID-19 vaccine
bioprocessing volumes, due to revenues achieved by Oxford
Biomedica Solutions in 2022. At a cost level, there was an increase
in operating expenditure as a result of increased personnel and
other operational expenditure incurred due to the consolidation of
Oxford Biomedica Solutions, acquisition-related due diligence costs
of £5.1 million and inflationary operational cost increases including
employee salary increases to help ensure the Group continues
to attract and retain high quality employees. Oxford Biomedica
Solutions’ operating expenditure continues to be fully funded from
the US$50.0 million (£38.2 million) capital injection into the new
business.
In order to fund the Oxford Biomedica Solutions transaction,
the Group raised gross proceeds of £80.0 million through a
placing of shares, and secured a short-term loan facility of
US$85.0 million (£64.9 million) which was repayable 12 months
after the closing date. In October, the Group repaid US$35 million
of the US$85 million short term loan facility as part of extending
the relationship with Oaktree via a new four-year term loan facility
of US$50 million. Interest is payable quarterly and the principal
outstanding amount is repayable at the end of the four-year
term. The Group also secured the option to draw down a further
US$25 million from Oaktree to fund certain permitted acquisitions.
The Group ended the year with its strongest-ever year-end cash
position. Throughout the year, the Group has been strategically
investing in the future growth of the business while also taking
proactive steps to manage operating costs, particularly given
the easing of the COVID-19 pandemic, which had required the
Group to increase employee numbers significantly to help meet
demand. This included right-sizing its employee base, which
was successfully completed without the need for compulsory
redundancies, as well as a headcount freeze for non-critical hires,
further supporting the Group’s cost management efforts.
In November, the Group completed a sale and leaseback of its
Windrush Court facility for £60 million to Kadans Science Partner.
The sale proceeds of £60 million exceeded the target offer
figure of £55 million that the Group previously announced it was
seeking. Under the agreement, Kadans have granted the Group
an occupational lease of the property for 15 years at a rent of
£3.5 million per annum rising to £4.7 million per annum after five
years, with a market rent review at 10 years. In the year the Group
has recognised a profit on the sale of £21.4 million, a right of use
asset of £5.9 million and a lease liability of £35.6 million.
The Group’s balance sheet expanded with the establishment of
Oxford Biomedica Solutions through the recognition of identifiable
net assets of £133.2 million. The transaction was funded through a
combination of £77.0 million of net equity raised in two tranches, and
drawing down the Oaktree loan of US$85.0 million (£64.9 million).
The transaction also involved the recognition of a put option liability
of US$51.1 million (£39.0 million) that, if exercised, requires the Group
to acquire the remaining 20% of Oxford Biomedica Solutions from
Homology Medicines. Further, as a result of the sale and leaseback of
the Windrush Court facility, the Group’s cash position strengthened
to £141.3 million at the end of December 2022.
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation,
revaluation of investments and assets at fair value through profit and loss, and
Share Based Payments) is a non-GAAP measure often used as a surrogate for
operational cash flow as it excludes from operating profit or loss all non-cash
items, including the charge for share based payments. However, deferred
bonus share option charges are not added back to operating profits in
the determination of Operating EBITDA as they may be paid in cash upon
the instruction of the Remuneration Committee. A reconciliation to GAAP
measures is provided on page 34.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
30
FINANCIAL REVIEW (CONTINUED)
SELECTED HIGHLIGHTS OF THE
GROUP’S FINANCIAL RESULTS
TOTAL REVENUES
OPERATING LOSS
Total revenues were broadly in line with the prior year due to revenues
recognised by Oxford Biomedica Solutions, despite lower COVID-19
vaccine bioprocessing volumes; total revenue decreased by 2% to
£140.0 million (2021: £142.8 million).
Operating loss of £30.2 million (2021 operating profit of £20.8 million)
decreased as a result of the lower levels of vaccine manufactured
for AstraZeneca, consolidation of the investment in Oxford Biomedica
Solutions and one-off acquisition-related due diligence costs of
£5.1 million.
£140.0m
BIOPROCESSING AND COMMERCIAL
DEVELOPMENT REVENUE
Revenues from the underlying bioprocessing and commercial
development ² activities were maintained at £128.1 million (2021:
£128.4 million) driven by an anticipated reduction in COVID-19 vaccine
manufacturing revenues offset by an increase in revenues from
lentiviral vector and AAV commercial development and manufacturing
activities. This included aggregate vaccine revenues in excess of
£40.0 million. £128.1m
REVENUES FROM MILESTONES,
LICENCES AND ROYALTIES
Revenues from milestones, licences and royalties ², which, in the
prior year, included recognition of a £4.0 million licence fee
from Boehringer Ingelheim, decreased by 17% to £11.9 million
(2021: £14.4 million); this decrease was driven by lower licence
fees from new partner programmes.
£30.2m
PLATFORM DIVISION
The Platform division made an Operating EBITDA¹ profit of
£11.7 million (2021: £45.3 million profit) and an operating loss
of £17.9 million (2021: £31.4 million profit) helped by the profit
on the sale of the Windrush Court facility of £21.4 million.
£11.7m
CASH
Cash at 31 December 2022 was £141.3 million (2021:£108.9 million)
and £139.1 million at 31 March 2022; Net cash at 31 December 2022
was £101.5 million.
£11.9m
£141.3m
OPERATING EBITDA¹
Operating EBITDA¹ profit of £1.6 million (2021 Operating EBITDA profit
of £35.9 million) decreased as a result of the lower levels of vaccine
manufactured for AstraZeneca, consolidation of the investment in
Oxford Biomedica Solutions and one-off acquisition-related due
diligence costs of £5.1 million.
£1.6m
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation,
revaluation of investments and assets at fair value through profit and loss, and
Share Based Payments) is a non-GAAP measure often used as a surrogate for
operational cash flow as it excludes from operating profit or loss all non-cash
items, including the charge for share based payments. However, deferred bonus
share option charges are not added back to operating profits in the determination
of Operating EBITDA as they may be paid in cash upon the instruction of the
Remuneration Committee. A reconciliation to GAAP measures is provided
on page 34.
² Please refer to page 32 where a reconciliation to GAAP measures is provided.
50
40
30
20
10
0
–10
–20
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
Cash (used in)/generated from operations
£m
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 31
Selected highlights of the Group’s financial results are as follows:
— Total revenues were broadly in line with the prior year due to revenues recognised by Oxford Biomedica Solutions, offset by lower
COVID-19 vaccine bioprocessing volumes; total revenue decreased by 2% to £140.0 million (2021: £142.8 million).
— Revenues from the underlying bioprocessing and commercial development activities ² were maintained at £128.1 million (2021:
£128.4 million) driven by an anticipated reduction in COVID-19 vaccine manufacturing revenues offset by an increase in revenues from
lentiviral vector and AAV commercial development and manufacturing activities. This included aggregate vaccine revenues in excess of
£40.0 million.
— Revenues from milestones, licences and royalties ², which, in the prior year, included recognition of a £4.0 million license fee from
Boehringer Ingelheim, decreased by 17% to £11.9 million (2021: £14.4 million); this decrease was driven by lower license fees from new
partner programmes.
— The launch of Oxford Biomedica Solutions, enabling entry into the fast-growing AAV market whilst also establishing a key strategic
presence in the US, drove an increase in operating expenses to £123.0 million (2021: £62.5 million) which included one-off
acquisition-related costs. Active cost control initiatives were initiated to reduce the Group’s operating cost base as the COVID-19
pandemic eased.
— Operating EBITDA¹ and operating profit benefited from a profit on sale of the Windrush Court facility of £21.4 million.
— Operating EBITDA¹ profit and operating loss of £1.6 million and £30.2 million respectively (2021 Operating EBITDA profit and
operating profit of £35.9 million and £20.8 million respectively) decreased as a result of the lower levels of vaccine manufactured
for AstraZeneca, consolidation of the investment in Oxford Biomedica Solutions and one-off acquisition-related due diligence
costs of £5.1 million.
— The Platform division made an Operating EBITDA¹ profit of £11.7 million (2021: £45.3 million profit) and an operating loss of
£17.9 million (2021: £31.4 million profit) helped by the profit on the sale of the Windrush Court building of £21.4 million, whilst the
Product division made an Operating EBITDA loss of £10.0 million (2021: £9.4 million loss) and an operating loss of £12.3 million
(2021: £10.6 million loss).
— Cash burn of £33.0 million in 2022 (2021: £16.0 million cash inflow) reflected decreased cash inflows from vaccine production,
increased capital expenditure and operational cash flows, and due diligence fees paid in connection to the Homology Medicines
transaction.
— Gross proceeds of £80.0 million (net proceeds £77.0 million) were raised through a placing of shares, and the Group secured
a short-term loan facility of US$85.0 million (£64.9 million). Subsequently, in October, the Group repaid US$35 million and entered
into a new four-year term loan facility of US$50 million (2021: £108.9 million).
— Cash at 31 December 2022 was £141.3 million (2021:£108.9 million) and £139.1 million at 31 March 2023; Net cash at 31 December 2022
was £101.5 million.
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge
for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as they may
be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 34.
² Please refer to page 32 where a reconciliation to GAAP measures is provided.
Key Financial and Non-Financial Performance Indicators
The Group evaluates its performance by making use of alternative performance measures as part of its Key Financial Performance
Indicators (refer to the table at the top of the next page). The Group believes that these Non-GAAP measures, together with the relevant
GAAP measures, provide a comprehensive, accurate reflection of the Group’s performance over time. The Board has taken the decision
that the Key Financial Performance Indicators against which the business will be assessed are Revenue, Operating EBITDA and Operating
profit/(loss). The figures presented within this section for prior years are those reported in the Annual report and accounts for those years
and have not been restated where a change in accounting standards may have required this.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
32
FINANCIAL REVIEW (CONTINUED)
£m
Revenue
Bioprocessing/commercial development
Licences, milestones and royalties
Operations
Operating EBITDA¹
Operating (loss)/profit
Cash flow
Cash (used in)/generated from operations
Capex²
Cash (burn)/inflow ³
Financing
Cash
Loan
Non-Financial Key Indicators
Headcount
Year-end
Average
2022
128.1
11.9
140.0
1.6
(30.2)
(13.2)
16.3
(33.0)
141.3
39.8
904
929
2021
128.4
14.4
142.8
35.9
20.8
24.5
9.5
16.0
108.9
–
815
759
2020
68.5
19.2
87.7
7.3
(5.7)
(3.9)
13.4
(7.8)
46.7
–
673
609
2019
47.3
16.8
64.1
(5.2)
(14.5)
(6.6)
25.8
(26.3)
16.2
–
554
500
2018
40.5
26.3
66.8
13.4
13.9
9.2
10.1
(1.9)
32.2
41.2
432
377
¹
²
³
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as
they may be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 34.
This is Purchases of property, plant and equipment as per the cash flow statement which excludes additions to Right-of-use assets. A reconciliation to GAAP measures is
provided on page 135.
Cash burn/(inflow) is net cash generated from operations plus net interest paid plus capital expenditure. A reconciliation to GAAP measures is provided on page 35.
Revenue
The Group’s revenues decreased by 2% to £140.0 million (2021 £142.8 million). Revenues generated from bioprocessing/commercial
development were maintained at £128.1 million (2021: £128.4 million) despite a decrease in the volume of vaccine batches manufactured
for AstraZeneca. This was partially offset by an increase in revenues from lentiviral vector and AAV commercial development and
manufacturing activities. Bioprocessing and commercial development activities performed on behalf of the Group’s other clients have
increased due to increased development and manufacturing activities performed on behalf of Boehringer Ingelheim, Juno, Arcellx,
Homology Medicines and other new clients.
Revenues from licence fees, milestones and royalties of £11.9 million (2021: £14.4 million), decreased by 17% when compared to prior
year. In 2021 a licence fee from Boehringer Ingelheim of £4.0 million was recognised.
Operating EBITDA
£m
Revenue
Other income
Gain on sale of property
Total expenses³
Operating EBITDA¹
Non cash items²
Operating (loss)/profit
2022
140.0
2.3
21.4
(162.0)
1.6
(31.8)
(30.2)
2021
142.8
0.9
–
(107.8)
35.9
(15.1)
20.8
2020
87.7
0.8
–
(81.2)
7.3
(13.0)
(5.7)
2019
64.1
0.9
–
(70.2)
(5.2)
(9.3)
(14.5)
2018
66.8
1.1
–
(54.5)
13.4
0.5
13.9
¹
²
³
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as
they may be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 34.
Non-cash items include depreciation, amortisation, revaluation of investments, fair value adjustments of available-for-sale assets and the share based payment charge. A
reconciliation to GAAP measures is provided on page 34.
Total expenses are operational expenses including cost of goods incurred by the Group. A reconciliation to GAAP measures is provided on page 33.
Revenue decreased by 2% in 2022 whilst the Group’s cost base grew by 50% to £162.0 million due to an increase in operational spend
due to the consolidation of the results of Oxford Biomedica Solutions, as well as inflationary increases and acquisition-related due
diligence costs of £5.1 million. The Group benefited from a profit on the sale of its Windrush Court facility of £21.4 million in a sale and
leaseback transaction. The Operating EBITDA profit of £1.6 million is therefore £34.3 million lower than the £35.9 million Operating
EBITDA profit generated in 2021 as a result of the decrease in revenues, profit on sale of building and an increased cost base.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
33
Total Expenses
In order to provide the users of the accounts with a more detailed explanation of the reasons for the year on year movements of
the Group’s operational expenses included within Operating EBITDA, the Group has added together research and development,
bioprocessing and administrative costs and has removed depreciation, amortisation and the share option charge as these are non-cash
items which do not form part of the Operating EBITDA alternative performance measure. As Operating profit/(loss) is assessed separately
as a key financial performance measure, the year on year movement in these non-cash items is then individually analysed and explained
specifically in the Operating and Net profit/(loss) section. Expense items included within Total Expenses are then categorised according to
their relevant nature with the year on year movement explained in the second table.
£m
Research and development¹,⁴
Bioprocessing costs⁴
Administrative expenses⁴,⁵
Operating expenses
Depreciation
Amortisation
Share option charge
Adjusted Operating Expenses²
Cost of sales
Total Expenses³
2022
60.9
33.9
28.2
123.0
(20.3)
(6.1)
(5.4)
91.2
70.8
162.0
2021
40.2
7.2
15.1
62.5
(12.4)
–
(2.5)
47.6
60.2
107.8
2020
29.7
10.7
11.3
51.7
(9.8)
–
(2.4)
39.5
41.7
81.2
2019
22.6
7.4
11.9
41.9
(5.8)
–
(1.6)
34.5
35.7
70.2
2018
18.0
1.2
7.4
26.6
(4.3)
–
(1.1)
21.2
33.3
54.5
Includes the RDEC tax credit.
¹
² Research, development, bioprocessing and administrative expenses excluding depreciation, amortisation and the share option charge.
³ Cost of goods plus research, development, bioprocessing and administrative expenses excluding depreciation, amortisation and the share option charge.
⁴
⁵
Includes operational expenditure for Oxford Biomedica Solutions from March 2022 onwards.
Included £5.1 million in one-off acquisition-related due diligence costs relating to the transaction to acquire Oxford Biomedica Solutions.
£m
Raw materials, consumables and other external
bioprocessing costs
Manpower-related
External R&D expenditure
Due diligence costs
Other costs
RDEC tax credit
Total expenses¹
2022
45.6
84.4
3.6
5.1
27.8
(4.5)
162.0
2021
34.2
55.0
2.5
1.2
20.0
(5.1)
107.8
2020
2019
2018
22.0
45.3
1.4
–
17.1
(4.6)
81.2
22.8
35.2
1.4
–
12.0
(1.2)
70.2
18.3
26.7
1.9
–
7.6
–
54.5
¹ Total expenses are operational expenses including cost of goods incurred by the Group. A reconciliation to GAAP measures is provided above.
— Raw materials, consumables and other external bioprocessing costs have increased as a result of increased LentiVector® batch
manufacturing and also materials used by Oxford Biomedica Solutions during 2022, as compared to 2021.
— The increase in manpower-related costs is due to the increase in the average headcount from 759 in 2021 to 929 in 2022 primarily
as a result of 124 employees gained as part of the transaction to establish Oxford Biomedica Solutions but also reflecting employee
salary increases.
— External R&D expenditure increased as a result of additional research and development project spend incurred in both the platform
and product divisions.
— Due diligence costs in both years relate to the establishment of Oxford Biomedica Solutions.
— Other costs were higher as a result of the inclusion of the administrative expenditure of Oxford Biomedica Solutions, and inflationary
increases.
— The RDEC credit has decreased to £4.5 million (2021: £5.1 million) due to a decrease in the level of eligible research and development
expenditure, mainly employee costs and raw materials.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 34
FINANCIAL REVIEW (CONTINUED)
Operating and Net profit/(loss)
£m
Operating EBITDA¹
Depreciation, Amortisation and share option charge
Change in fair value of assets at fair value
through profit and loss
Operating (loss)/ profit
Interest
Forex
Taxation
Net (loss)/profit
2022
1.6
(31.8)
–
(30.2)
(7.8)
(8.0)
0.8
(45.2)
2021
35.9
(14.9)
(0.2)
20.8
(0.9)
–
(0.9)
19.0
2020
7.3
(12.2)
(0.8)
(5.7)
(0.8)
–
0.3
(6.2)
2019
(5.2)
(7.4)
(1.9)
(14.5)
(5.4)
(1.0)
4.8
(16.1)
2018
13.4
(5.5)
6.2
13.9
(6.2)
(2.7)
2.5
7.5
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as
they may be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided above.
In arriving at Operating (loss)/profit it is necessary to deduct from Operating EBITDA the non-cash items referred to above. The
depreciation (£20.3 million) and amortisation (£6.1 million) charge was higher in 2022 due to acquisition of the fixed assets of Oxford
Biomedica Solutions, as well as amortisation of intangible assets recognised as a result of the acquisition of Oxford Biomedica Solutions
in March 2022. The share option charge increased by £2.9 million due to the increased employee headcount of the Group, mainly as a
result of the Oxford Biomedica Solutions acquisition.
The impact of these charges resulted in an operating loss of £30.2 million in 2022 compared to a profit of £20.8 million in the prior year.
The interest charge increased by £6.9 million largely due to interest charges on the Oaktree loan, as well as IFRS 16 interest on the lease
liability related to the Oxford Biomedica Solutions Boston facility. Forex increased by £8.0 million due to foreign exchange movements
on the Oaktree loan. The corporation tax expense in 2022 decreased as the corporation tax charge in 2022 is limited to the notional tax
charge on the RDEC tax credit included within research and development costs and the release of the deferred tax on the Oxford Biomedica
Solutions intangible assets arising on acquisition.
Other Comprehensive Income
The Group recognised other comprehensive income in 2022 of £10.6 million (2021: nil) in relation to movements on the foreign currency
translation reserve. The translation reserve comprises all foreign currency differences arising from the translation of the financial statements
of foreign operations, including gains arising from monetary items that, in substance, form part of the net investment in foreign operations.
Segmental analysis
The Group reports its results within two segments, namely:
I. the ‘Platform’ segment which includes the revenue generating bioprocessing and process development activities for third parties
(i.e. the client programmes CDMO business), and internal technology projects to develop new potentially saleable technology, improve
the Group’s current processes, and bring development and manufacturing costs down within the LentiVector® and AAV platforms.
II. the ‘Product’ segment, which includes the costs of research and development of new gene therapeutic product candidates.
£m
2022
Revenue
Operating EBITDA¹
Operating (loss)/profit
2021
Revenue
Operating EBITDA¹
Operating profit/(loss)
Platform
Product
139.9
11.7
(17.9)
142.7
45.3
31.4
0.1
(10.0)
(12.3)
0.1
(9.4)
(10.6)
Total
140.0
1.6
(30.2)
142.8
35.9
20.8
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA
as they may be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 34.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
35
In 2022 the Platform segment experienced a decrease in revenue of 2% from £142.7 million to £139.9 million due to the lower volumes
of vaccine batches manufactured for AstraZeneca partly offset by increased manufacturing volumes for lentiviral and AAV clients.
Commercial development revenues increased due to activities performed on behalf of existing clients Arcellx, Boehringer Ingelheim,
Homology Medicines and other clients. Operating results were negatively impacted by the lower revenues as well as Oxford Biomedica
Solutions’ operational expenditure in the period since they were acquired, but positively impacted by a gain of £21.4 million on the sale
and leaseback of the Windrush Court facility.
The Product segment has generated revenues of £0.1 million (2021: £0.1 million) and an Operating EBITDA loss and operating loss of
£10.0 million and £12.3 million respectively (2021: loss of £9.4 million and £10.6 million respectively). Product operating expenses were
higher due to increased research, development and pre-clinical product expenditure, but also increased manpower costs.
In the first quarter of 2023, the Senior Executive Team has re-assessed the reporting segments to reflect the way the business will be
managed in future. Management reporting is currently being reworked to align with these new segments going forward and the Group
expects to be able to report on these new segments during 2023 and thereafter. No changes from the current basis have been reflected in
the 2022 Annual report and accounts.
Cash flow
The Group held £141.3 million of cash at 31 December 2022, having begun the year with £108.9 million. Significant movements across the
year are explained below.
£m
Operating (loss)/profit
Non-cash items¹ included in operating loss
Operating EBITDA²
Working capital movement ⁵
Cash (used in)/generated from operations
R&D tax credit received
Net cash (used in)/generated from operations
Interest paid, less received
Sale of investment asset
Capex³
Cash (burn)/inflow⁴
Acquisition of subsidiary
Sale of building
Net proceeds from financing ⁶
Movement in year⁷
2022
(30.2)
31.8
1.6
(14.8)
(13.2)
0.6
(12.6)
(4.1)
–
(16.3)
(33.0)
(99.2)
60.0
104.6
32.4
2021
20.8
15.1
35.9
(11.4)
24.5
1.0
25.5
–
–
(9.5)
16.0
–
–
46.2
62.2
2020
(5.7)
13.0
7.3
(11.2)
(3.9)
7.0
3.1
–
2.5
(13.4)
(7.8)
–
–
38.3
30.5
2019
(14.5)
9.3
(5.2)
(1.4)
(6.6)
3.1
(3.5)
(3.3)
6.3
(25.8)
(26.3)
–
–
10.3
(16.0)
2018
13.9
(0.5)
13.4
(4.2)
9.2
3.7
12.9
(4.7)
–
(10.1)
(1.9)
–
–
19.8
17.9
¹
²
³
Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based Payments.
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA
as they may be paid in cash upon the instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 34.
This is Purchases of property, plant and equipment as per the cash flow statement which excludes additions to Right-of-use assets. A reconciliation to GAAP measures
is provided on page 136.
⁴ Cash (burn)/inflow is net cash generated from operations plus net interest paid plus capital expenditure.
⁵
The working capital movement includes the movement in trade and other receivables (–£17.9 million), trade and other payables (+£17.0 million), deferred income
(–£0.7 million), contract liabilities (+£5.9 million), inventory (+£0.7 million), as well as adding the amortisation of loan fees (+£0.6 million), the deferred bonus portion
of the share option charge (+£1.0 million), and the gain on sale and leaseback (+21.4 million) as outlined on page 174.
Net proceeds from financing consists of Proceeds from issue of ordinary share capital, Costs of share issues, Payment of lease liabilities, Loans received, Other direct
costs in relation to leases and Loan arrangement fees as outlined on page 136.
The movement in the year is made up out of the net increase in cash and cash equivalents of £29.5 million and the effect of movements in exchange rates on cash held
of £2.8 million.
⁶
⁷
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 36
FINANCIAL REVIEW (CONTINUED)
— The negative working capital movement of £14.8 million is driven mainly by adding back the profit on the sale of the Windrush Court
facility of £21.4 million offset by an increase in trade payables and contract liabilities due to the acquisition of Oxford Biomedica Solutions
and a decrease in trade and other receivables.
— Interest paid less interest received increased by £4.1 million due to interest paid on the Oaktree loan.
— The Group received £0.6 million from an SME R&D tax claim related to the 2020 financial year.
— Purchases of property, plant and equipment increased from £9.5 million to £16.3 million, mainly as a result of the purchase of
manufacturing and laboratory equipment required by Oxford Biomedica Solutions for its activities.
— The Group acquired an 80% ownership stake in Oxford Biomedica Solutions for £99.2 million net of cash acquired.
— The Group sold its Windrush Court facility in a sale and leaseback transaction, receiving net proceeds of £60.0 million.
— The net proceeds from financing during 2022 was £104.6 million, consisting of £77.0 million equity share placement in two tranches,
£33.4million in loans received from Oaktree, share option equity issued of £0.2 million and foreign exchange gains on cash held of
£2.8 million, reduced by lease payments of £4.2 million and loan arrangement fees of £4.6 million in the year.
— The result of the above movements is a net increase in cash of £32.4 million from £108.9 million to £141.3 million.
Statement of financial position review
The most notable items on the Statement of financial position, including changes from 31 December 2021, are as follows:
— Intangible assets increased from £0.1 million to £105.9 million due mainly to £102.9 million of technology assets and £0.6 million of
goodwill acquired as part of the acquisition of Oxford Biomedica Solutions.
— Property, plant and equipment has increased by £64.0 million to £133.8 million due to £58.9 million of property plant and equipment
acquired as part of the transaction to establish Oxford Biomedica Solutions, £29.3 million of capital expenditure incurred, positive
foreign exchange movements of £4.9 million, offset by depreciation of £20.3 million, change in estimate of £1.3 million and
£7.5 million as a result of the disposal of the Windrush Court facility.
— Inventories have increased from £9.5 million to £12.6 million due to inventory balances held by Oxford Biomedica Solutions at year end.
— Trade and other receivables increased from £44.7 million to £61.6 million due to invoices raised at year end for contracted
bioprocessing and process development activities.
— Trade and other payables have increased from £19.1 million at the start of the year to £36.6 million due to the inclusion of the trade
and other payables of Oxford Biomedica Solutions.
— Contract liabilities increased from £12.6 million in 2021 to £18.4 million due to invoices raised at the end of 2022 for future process
development activities.
— Deferred Income decreased from £2.7 million in 2021 to £2.0 million due to the release of amounts deferred as part of the Innovate
UK capex grant funding.
— Provisions increased by £2.2 million as a result of the recognition of an decreased liability for the costs of restoring existing properties
to their original state, as well as the recognition of a liability for the costs of restoring the newly leased Windrush Court head office and
laboratories, and Wallingford warehouse property to its original state at the end of the lease term.
— Lease liabilities increased by £65.2 million to £74.5 million due to the inclusion of the lease liabilities for Windrush Court, as part of the
sale and leaseback of the building, the Bedford, Massachusetts, property lease as part of the acquisition of Oxford Biomedica Solutions,
and the new Wallingford warehouse lease.
— Loans have increased from £nil to £39.8 million as the Group entered into a 4 year US$50 million loan facility with Oaktree in October,
after repaying US$35 million of the initial one year US$85 million (£64.9 million ) loan entered into in March 2022.
— Put option liability – the Group has recognised a liability of £38.2 million for the put option to acquire the remaining 20% of
Oxford Biomedica Solutions that it does not already own.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 37
Financial outlook
The Group is building a quality and innovation-led, high growth, global viral vector leader, operating across all viral vector types. To achieve
this, the Group is targeting new client relationships for lentiviral vector and AAV while also broadening existing client relationships. Oxford
Biomedica has a strong, diversified and growing business development pipeline and has seen a strong increase in pipeline opportunities in
the last quarter, giving the Group confidence in growth prospects.
In 2023, the Group is targeting double digit growth in lentiviral vector manufacturing and commercial development revenues driven by the
successful progression, development and expansion of existing client programmes. Further, the Group is expecting to secure multiple new
agreements across both lentiviral vector and AAV.
Oxford Biomedica Solutions is targeting double-digit growth in AAV manufacturing and clinical development revenues through services
provided to existing and new clients.
Overall, the Group expects total revenues to be marginally lower in 2023 than 2022 due to the cessation of COVID-19 vaccine
manufacturing which generated in excess of £40 million of revenues in 2022. However, the Group expects to deliver strong double-digit
growth in both lentiviral vector and AAV related revenues in 2023.
Cost of goods, which includes material costs and the transfer of bioprocessing manpower and overheads, is expected to be at similar
levels to 2022, with the impact of marginally lower revenues offset by ongoing inflationary pressures. Bioprocessing and research and
development costs are expected to increase due to the full year impact of Oxford Biomedica Solutions. Administrative expenditure is
expected to decrease due to one-off costs related to the Oxford Biomedica Solutions transaction not recurring and successful cost
containment measures.
Oxford Biomedica Solutions continues to be funded through the Group’s US$50 million (£38.2 million) capital injection into the business
in March 2022 and is expected to break even on an Operating EBITDA basis during 2025 as previously indicated. As a result of the financial
consolidation of this initially loss-making part of the Group, the Group expects to deliver an Operating EBITDA loss in 2023.
With the significant revenue growth targeted in the Group’s viral vector business, the cost base has been right-sized to anticipate future
growth and the Group maintains a strong balance sheet. Progress is being made on potential external funding for the therapeutics
portfolio. No costs associated with the therapeutics portfolio are expected to be carried by the Group after 2023.
Capex levels are expected to be similar to those incurred in 2022 with the Group taking a suitably cautious approach to planning
significant new projects. The Group will continue to invest in new technologies in order to maintain its competitive edge in lentiviral
vectors, and to continue to build a leading position in AAV.
Building on its leading position in lentiviral vectors, the Group aims to ultimately have a market leading position in the viral vector
outsourced supply market across all key vector types, with long term revenue growth rates exceeding the broader market.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 38
FINANCIAL REVIEW (CONTINUED)
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the strategic report and notes to these financial
statements.
The Group made a loss for the year ended 31 December 2022 of £45.2 million and consumed net cash flows from operating activities for
the year of £12.6 million. The Group also:
— raised £77.0 million (net of £3 million of share issue cost) in cash from an equity fundraise in January and March 2022;
— entered into a one year US$85 million (£63 million) loan facility with Oaktree as part of the acquisition of Oxford Biomedica Solutions
in March 2022 which was then converted into a four-year term loan facility together with repayment of US$35 million of the initial
principal amount in October 2022;
— during November 2022, sold its Windrush Court facility in a sale and leaseback transaction for £60 million to Kadans, whilst also
agreeing an occupational lease of the property for 15 years; and
— ended the year with cash and cash equivalents of £141.3 million.
In considering the basis of preparation of the Annual report and accounts, the Directors have prepared cash flow forecasts for a period
of at least 12 months from the date of approval of these financial statements, based in the first instance on the Group’s 2023 annual
budget and forecasts for 2024. The Directors have undertaken a rigorous assessment of this base case forecast and have also assessed
the potential impact from the principal risks and uncertainties outlined in the strategic report of the Group’s Annual report and accounts,
taking into consideration the magnitude and likelihood of these risks and uncertainties occurring to prepare a downside scenario with
associated mitigated actions.
The cash flow forecast prepared for the severe but plausible downside scenario with mitigating actions assumes the following:
— Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the LentiVector®
platform and AAV businesses;
— Significant decreases in forecasted existing client milestone and royalty revenues;
— The product development spin out strategy taking longer, or ultimately being unsuccessful; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its clients including expected revenues from existing
clients under long term contracts.
Under both the base case and mitigated downside scenario, the Group and parent company has sufficient cash resources to continue in
operation for a period of at least 12 months from the date of approval of these financial statements.
In the event of the downside scenarios crystallising, the Group would continue to meet its existing loan covenants until June 2024
without taking any mitigating actions, but the Board has mitigating actions in place that are entirely within its control that would enable
the Group to reduce its spend within a reasonably short time-frame to increase its cash covenant headroom as required by the loan
facility with Oaktree Capital Management. The Board has confidence in the Group’s ability to continue as a going concern for the
following reasons:
— The Group has cash balances of £141.3 million at the end of December 2022 and £139.1 million at the end of March 2023;
— Approximately two thirds of 2023 forecasted revenues are covered by binding purchase orders which give certainty to revenues over
the next 12 months;
— The Group’s history of being able to access capital markets including raising £77 million of equity during 2022;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure and operational
purposes, as recently evidenced by the US$85 million one-year facility and US$50 million replacement four-year facility obtained with
Oaktree;
— The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully entering
into new and expanding existing Client agreements with AstraZeneca, Juno Therapeutics (a wholly owned subsidiary of Bristol Myers
Squibb Company), Homology Medicines and multiple other new partners over the last twelve months.
Taking account of the matters described above, the Directors are confident that the Group and parent company will have sufficient
funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Stuart Paynter
Chief Financial Officer
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report OBJECTIVES SET FOR 2023
The Group’s corporate objectives are set out in the table
below. In addition to these Corporate objectives, the Group
sets annual ESG objectives, which involve every part of the
business. Details of the ESG Objectives for 2023 are set out
in the five pillars for responsible business on pages 40 to 63.
Objective
Headlines
Growth
Achieve the 2023 budget.
— Hit revenue, EBITDA and cash balance targets as set out in the Group’s 2023 budget.
Order Book / Backlog.
— Acquire new clients.
— Expand partner relationships with new projects.
Productivity.
— Focus on efficiency and value-adding tasks to increase output and improve margin.
Client Satisfaction.
— Focus on delivering solutions to clients.
— Bringing great teams and innovative technologies to bear on client problems.
Proposition.
— Increase the Group’s service catalogue to better meet needs of existing clients.
— Raise awareness in market and communicate value proposition to target segments.
Innovation
People
Corporate
Technology and Platform.
— Directly connect research and development activity with client challenges, and market needs
across all vector types: safety, quality, capacity, yield, transgene expression and COGs.
Collaboration.
— Share knowledge across functions and sites to invent, innovate and commercialise Oxford Biomedica’s
science where it accelerates solutions for clients or advances the Group’s technology platforms.
People.
— Connect people to the Group’s purpose.
— Provide a clear vision and strategy in pursuit of it.
— Every employee must become an advocate and promoter for Oxford Biomedica’s business.
Development.
— Give every employee the opportunity to develop and make their greatest contribution.
Retention.
— Retain the Group’s highest performers and core capability to deliver to clients.
39
Weighting
40%
20%
20%
Establish TherapyCo.
— Unleash the value of the Oxford Biomedica product programmes.
— Create an in vivo CAR-T, and potentially liver, therapeutics business funded and operated independently,
in which Oxford Biomedica will be a strategic shareholder.
20%
Brexit Preparedness.
— Mitigate risk of Brexit in Oxford Biomedica’s abilities to continue to serve clients without interruption.
Investors.
— Strengthen relationship with US and other high-quality institutional shareholders in confirmation of the Group’s
strategic shift to a 100% CDMO business.
Environment.
— Make material progress on Oxford Biomedica’s long-range commitments.
Note: The Remuneration Committee has overriding discretion over the assessment of the achievement of the above objectives and can determine the extent to which
each is met, partially met or exceeded. The Remuneration Committee will also take into consideration the circumstances in which the objectives were achieved,
for example, the market conditions or if achieved on time and to budget.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
40
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
SUSTAINABILITY
REPORT
The Group’s ESG mission is to deliver
life changing therapies to patients in an
ethical and socially responsible way.
Five pillars
of Responsible
Business
Oxford Biomedica’s ESG mission
Oxford Biomedica’s ESG mission is to deliver life-changing
gene therapies to patients in an ethical and socially responsible
way. This mission has become firmly embedded, both in terms
of the areas of focus of the business, but also how the Group
does business.
During 2022, Oxford Biomedica continued to focus on ways
to increase sustainability initiatives across the Group, and
continued to build momentum in its mission-led approach
to incorporate sustainable practices in regular, day-to-day
business activities.
The Group’s commitment to responsible business practices
were recognised with inclusion in the FTSE4Good index
in June 2022. Created by the global index provider FTSE
Russell, the FTSE4Good Index Series is designed to measure
the performance of companies demonstrating strong ESG
practices. The FTSE4Good indices are used by a wide variety
of market participants to create and assess responsible
investment funds and other products.
People
Innovation
Community
Supply Chain
Environment
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
4141
Values
Oxford Biomedica’s three values govern the way that the Group
does business, how the Group works together and the interactions
the Group has with all its stakeholders.
Oxford Biomedica’s values and the associated behaviours are
embedded throughout its people processes, including recruitment
practices, seeking evidence that job candidates share the Group’s
values upon appointment. The values are an important feature in
the Group’s reward principles, whilst its performance management
processes ensure values behaviours are measured so they are
appropriately recognised and rewarded.
Each year the Group celebrates employees who consistently
demonstrate the Company values via its annual ‘Living our Values
Awards’ ceremony. Employees have the opportunity to nominate
colleagues who have achieved great things by living the Company
values for individual and team awards.
Oxford Biomedica’s ESG Committee
The Group’s ESG Committee is responsible for the governance
and oversight of the ESG commitments. The ESG Committee
had previously been led by the CEO who chaired the committee
meetings and reported to the Board. Following John Dawson’s
decision to step down as CEO in January 2022, Nick Page – in his
capacity as Chief Operations Officer – assumed the role of Chair
of the ESG Committee. Following the Group’s newly appointed
CEO, Dr. Frank Mathias, joining the Board in March 2023,
the ESG Committee will continue to be chaired by Mr Page, with
Dr. Mathias in regular attendance.
The ESG Committee is responsible for tracking progress against
the objectives and providing regular progress reports to the Senior
Executive Team every quarter. Progress updates are also shared in
all-company meetings, and to the Board.
Deliver innovation
We deliver ground-breaking scientific
excellence by nurturing exceptional
talent. Together, we continually
improve by generating new ideas and
creative ways of working to bring about
better solutions for patients.
Be inspiring
We succeed together through our
passion, commitment and teamwork.
Through our actions and behaviours,
we create an environment which
positively challenges, engages and
excites us.
Have integrity
We always do the right thing. Whatever
the situation and consequences,
we do what’s right for employees,
patients and clients. We make objective
decisions and can be trusted to deliver
on our commitments.
Our
Values
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Strategic ReportCorporate GovernanceGroup Financial Statements 42
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
ANALYSIS OF MATERIAL
ESG ISSUES
The Group conducted an analysis to identify and prioritise ESG-related
issues that are most critical to the organisation, as described in the
diagram below. This analysis was used to create the five pillars for the
Group’s ESG strategy.
t
n
a
v
e
l
e
r
t
s
o
M
l
s
r
e
d
o
h
e
k
a
t
s
o
t
e
c
n
a
t
r
o
p
m
I
ESG materiality matrix
19
18
20
1
3
17
11
12
13
6
2
5
8
4
7
9
10
14
15
16
Assessed impact on Oxford Biomedica’s business
Most impact
People
5 Employee safety and wellbeing
8 Talent attraction and retention
15 Anti-bribery and corruption
19 Brexit
Community
3
Outreach, engagement and
early talent development
14 Human rights and labour
standards
20 Transparent reporting and
communications
Responsible Innovation
1
Intellectual property, product
and technological innovation
2 Product safety
4 Privacy and data security
6 Regulatory compliance
7 Business continuity
13 Ethical supplier standards
16 Animal testing
17 Ethics
18 Clinical trial conduct
Environment
9 Waste and recycling
10 Water use and water effluent
11 Energy use and climate change
12 Single use plastics
ESG ratings
Our commitment to responsible
business practices has been
recognised with Prime status
(as of 25 June 2021).
ISS is one of the world’s leading rating
agencies for sustainable investments.
Prime status is awarded to companies
with an ESG performance above
the sector-specific Prime threshold,
which means that they fulfil ambitious
absolute performance requirements.
The Company has been included in
the FTSE4Good index since 2022. The
FTSE4Good Index Series is designed to
measure the performance of companies
demonstrating strong Environmental,
Social and Governance (ESG) practices.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
OUR PEOPLE
2022 HIGHLIGHTS
2022 ESG People objectives –
what we achieved:
Deliver on year one actions from the
three-year Equality, Diversity and
Inclusion (“ED&I”) plan
Continue employee engagement
activity and expand to cover new
topics
90%
90%
Introduce further wellbeing initiatives
to ensure the Group is offering
something for everyone
100%
2023 FOCUS
2023 ESG People objectives:
Raise awareness, commitment and involvement with
Oxford Biomedica’s ED&I plan throughout the business and
deliver Year 2 actions (data, policies, awareness, Employee
Resource Groups).
Implement and track 2023 ‘Your Voice’ Group-wide and
functional action plans, and continue to connect people to
Oxford Biomedica’s purpose and patients.
Continue to build on early careers activity with engagement
with universities and schools and develop an inclusive work
experience programme.
43
Health and safety
Being able to deliver the Group’s products and services both in a
safe and sustainable manner is the number one priority. Through
the systematic evaluation of all activities, the Group ensures that
significant risks are identified and controlled to minimise the risk to
employees and anyone else who may be affected by the Group’s
acts or omissions. The Group endeavours to maintain its facilities
and equipment to the highest standards.
The Group has continued to develop its Health and Safety
Management System in 2022. The system, which includes incident
reporting and management, action tracking, risk assessment
and the Group’s Health and Safety Policies and Procedures has
experienced an evolution in the way metrics are tracked and
communicated. The most notable improvements to the metrics are
linked to the incident investigations completion and risk assessment
review and read completion monitoring. The introduction of
Heath and Safety for Managers Training has added an improved
competency for the majority of senior leadership in all aspects of
the safety management system in 2022. The Group’s emphasis
on strong governance training will continue into 2023. The Group
continues to focus on the output of the Safety Climate Survey,
engaging with staff and their Safety Representatives to identify
improvements revolving around eight factors that contribute to a
positive safety culture. The eight factors are:
— Accident and near miss reporting;
— Organisational commitment;
— Health and Safety oriented behaviours;
— Health and Safety trust;
— Usability of procedures;
— Engagement in Health and Safety;
— Peer group attitude; and
— Resources for Health and Safety.
The Group’s revision of its management of fire evacuations has
been fully rolled out to all UK-based sites, introducing electronic
roll call and training 40+ managers to support new command and
control structure. The Group’s Health Surveillance programme
and systems have been improved, with the result that the Group
can now provide better metrics to managers and a more targeted,
rather than a blanket, approach.
The Group has improved its permit to work system by prescribing a
more risk-based approach to the control of tasks, in line with HSE
Guidance. A greater amount of training has been integrated for the
demands of competency required to authorise diverse types of
activity.
The attitude and behaviour of the Senior Executive Team (SET)
is critical to Oxford Biomedica’s safety culture. The SET has
helped to promote positive approaches to health and safety by
leading by example, communicating effectively and engaging
with staff, encouraging a learning culture, promoting a “just,
no-blame culture”, and tracking and monitoring progress to fight
complacency. The Group has continued to promote this through
2022 with SET visits around the sites at Oxford Biomedica.
The Group continues to have a first-class safety record and has
continued the trend of having no major injuries. Health and Safety
is a standing item on the Board’s agenda, and there is a quarterly
Safety Committee chaired by a member of the SET. The Group is
committed to meet both the letter and spirit of all Health and Safety
regulation and best practice.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 44
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
Engagement
Employee voice is a key part of how the Group engages with its
people and talent across the business. In April 2022, the Group
thanked its first Workforce Engagement Panel (WEP) and elected
16 new representatives from across the business. The newly
elected panel are passionate about raising topics that are important
to employees from across the business and act as a conduit
between employees and SET / the Board.
The new WEP met nine times in 2022, with two meetings attended
by the WEP Board designated representative, Stuart Henderson.
Following feedback from the first annual all employee engagement
survey ‘Your Voice’, the SET committed to improving the frequency
of communication with employees and have established a regular
fortnightly SET Q&A briefing. These sessions provide SET with
a platform to share business updates and is an open forum for
employees to ask any questions they would like. To date these
have been well received.
In September 2022, the Group announced the Board’s updated
strategy and direction as an innovation-led CDMO business, with
plans to seek external funding for its gene therapeutics pipeline.
To provide an opportunity to consult and communicate with
employees during this time of organisational change, the WEP
conducted more regular ad-hoc meetings and shared thoughts
and feedback from employees across the business. This has been
well received, ensuring employees have a voice throughout this
process.
Towards the end of 2022, the Group launched its annual all-
employee engagement survey ‘Your Voice’ to provide a further
opportunity for employees to share their views. The survey
was also launched to colleagues in Boston, providing a wider
range of employee feedback on which to take action in 2023.
Alongside efforts to seek employee feedback, the Group has
continued to provide recognition opportunities for employees,
through the annual values and long service awards. In 2023,
the Group will strengthen its informal recognition offering by
introducing a new process designed to provide employees
and managers with a more regular opportunity to reward and
recognise the valuable contributions of their colleagues.
Aside from the WEP and ‘Your Voice’ engagement surveys, in July
2022, the Group launched a stay interview initiative, designed to
provide a more regular opportunity to seek employees’ feedback
and identify the reasons that they choose to remain with the
organisation. Employees across a wide population were selected
at random to discuss their thoughts and ideas on their experience
working with the Group. This increased the volume of feedback
obtained from the business and also provided an opportunity for
employees to engage with members of the HR team on a regular
basis. Although still in the early stages, the insights gained from
this have already provided a further resource for the Group in
understanding areas which are operating well, as well as areas
where improvements can be made. Coupled with feedback
from the ‘Your Voice’ engagement survey in late 2022, the Group
expects to have a diverse range of data from which to draw upon
for any relevant changes in 2023.
The Group has launched a stay interview
initiative, designed to provide a more
regular opportunity to seek employees’
feedback and identify the reasons that
they choose to remain with the organisation.
The Group has continued
to provide recognition
opportunities for
employees, through the
annual values and long
service awards.
x9
The WEP met nine times in 2022,
with two meetings attended by the
WEP Board designated representative,
Stuart Henderson.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 45
Throughout 2023, the Group
will implement and embed
a set of inclusive people
policies that embrace diversity
and aim to create a sense of
belonging in the workplace,
including a menopause
policy and transgender
equality policy.
Employees by gender
Work in progress
Board including Non-Executive Directors
Male
Female
Senior managers and direct reports
Male
Female
All other employees
Male
Female
Equality, Diversity and Inclusion (ED&I)
Throughout 2022, the Group has continued its commitment to
building a more inclusive organisation where all forms of diversity
are celebrated. In 2022, the Group focused on the year one
objectives of the three-year ED&I plan. This was created from the
recommendation report following diagnostic work undertaken in
2021 which involved data gathering and analysis, policy review and
enhancement, opportunities to celebrate diversity, and education
and awareness raising.
During the year, the Group formed an ED&I Working Group, a
group of volunteers who make sure that the Group applies equality
and diversity principles within the Scope of the ED&I project plan.
Ensuring that everyone, no matter their background or who they
are, are seen, heard and supported. Oxford Biomedica volunteers
actively promote and aspire to advance the culture of inclusion
through intentional, positive and conscious efforts that benefit
people and Oxford Biomedica as a whole.
In addition, the Group worked with HR data specialists and ED&I
advisers to establish the ED&I data it will collect and report on to
monitor or progress. The Group has defined its data statement and
continues to seek advice from counsel around good practice in
gathering and storing data in line with applicable laws and regulation.
The Group has researched and created a set of inclusive people
policies that embrace diversity and aim to create a sense of
belonging in the workplace. Throughout 2023, the Group
will implement and embed the policies designed, including a
menopause policy and transgender equality policy.
The Group also aims to build engagement and increase activities
through the introduction of Employee Resource Groups and
celebratory and learning events to deepen understanding and build
psychological safety on a range of ED&I themes.
Male
Female
Total
% Male % Female
Board including
Non-Executive Directors
Senior managers and
direct reports
All other employees
Total
6
32
381
419
4
10
60%
40%
25
455
484
57
836
903
56%
46%
46%
44%
54%
54%
Group headcount as at 31 December 2022.
Gender Pay Gap
The Gender Pay Gap report was submitted to the UK Government
Equalities Office in the first quarter of 2023 and a copy of the report
can be found on the Company’s website (www.oxb.com). Following
three consecutive years of decrease in pay gap (2022: 17.65%;
2021: 11.5%; 2020: 18.0%; 2019: 21.7%), in 2022, the gender pay gap
increased. The Group’s management is confident that the gender
pay gap does not stem from paying men and women differently
for the same or equivalent work but is likely to be the result of the
dispersal of genders across roles within the Group and the salaries
that these roles attract, particularly at the executive level.
The increase in pay gap from 2021 is primarily a result of a larger
proportion of newly recruited female employees into lower graded
professional, technical and operations roles. Whilst it is encouraging
that more females are being recruited into more traditionally
male dominated roles, this has impacted the average hourly pay
for women in the Group. In addition, the senior executive level of
the Group and higher paid roles, continues to be predominantly
populated by men, and the number of men at this level has
increased in 2022 to 8, compared to 2 females (2021: 6:2). This has
drawn the overall average hourly pay of males upward, increasing
the overall gender pay gap.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
46
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
There has also been a small increase in the mean gender bonus
gap, to 47.89% (2021: 44.9%), where there had initially been an
improvement following the launch of a company wide bonus
scheme, where all employees are now eligible, (subject to service
criteria). The gap is in part caused by the basis for calculating actual
salaries, which does not consider part-time workers, where 85%
of part-time employees within the Group are women. This is in
addition to the overall composition of men and women at the
senior executive level, where these roles attract a higher bonus.
The Group is committed to addressing its gender pay gap through
the continued focus on ED&I, an ongoing review of the Group’s
reward principles and their application, and by providing continued
development opportunities to help all employees achieve their
full potential including the Group’s successful Management
Development and Mentoring programmes. In 2023, the Group
will further review its career development policies and practices to
ensure transparency and inclusivity.
As part of the ED&I action plan, the Group plans to implement
several new policies to support women in the workplace, including
the introduction of a Menopause Policy and review of its parental
policies. The Group intends to set up Employee Resource Groups
to champion and support Diversity and Inclusion across the
business and is considering one such group to focus on supporting
and empowering women, with an emphasis on encouraging
women in leadership.
Health and Wellbeing
The health and wellbeing of all employees is of the utmost
importance. The Group’s aim is to help employees feel good
at work and at home by fostering a positive health culture.
Empowering colleagues to take personal accountability for their
physical, emotional, mental and financial wellbeing is important and
the Group supports colleagues by providing access to a number of
benefits, wellbeing resources and initiatives throughout the year.
In 2022, the Group’s wellbeing strategy continued to focus on
mental wellbeing, as well as offering support in other areas such as
financial and physical wellbeing. Regular updates and information
have been provided to employees on a range of topics, with
options for attending webinars, listening to podcast recordings and
making use of specific resources all available.
During the period under review, the Group continued to monitor
the local situation with regard to COVID-19 and made COVID-19
tests available for those who felt unwell at work. Regular updates
were also issued to employees as the Group recognises its ongoing
responsibility to the health, safety and wellbeing of all employees. The
Group continued its roll out of its new ‘ways of working’ policy by
moving to a more hybrid working approach, enabling teams to take
advantage of the opportunity to work from home where possible but
prioritising in person interactions to support business needs.
Early in 2022, the Group promoted Wellbeing at Work by inviting
its benefits providers to deliver presentations and briefing sessions
to employees. This enabled employees to make informed
decisions about how their benefits package could best support
them and their families, as well as helping employees to find
out more information on the wide range of benefits on offer at
Oxford Biomedica. Following this, a stress awareness webinar was
delivered by an external speaker, focusing on tools and techniques
to manage stress.
Later in 2022, the Group recognised Mental Health Awareness
Week, with the national theme for the year being loneliness.
Employees were encouraged to consider how they could support
one another during times of loneliness and the importance of
reaching out and connecting with colleagues. Focus was also given
over the summer months to sun awareness, advising employees of
how to stay safe in the sun.
The Group’s wellbeing strategy has
continued to focus on mental wellbeing,
as well as offering support in other areas
such as financial and physical wellbeing.
The Group promoted
Wellbeing at Work by
inviting its benefits providers
to deliver presentations
and briefing sessions to
employees. This enabled
employees to make
informed decisions about
how their benefits package
could best support them
and their families.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 47
£1,200
Approximately 63% of the workforce
received a £1,200 cost of living payment,
paid in two instalments of £600.
203
A total of 203 managers have completed
the Group’s Management Development
Programme (MDP) with MDP alumni given
the opportunity to attend a Growth
Mindset Workshop.
During the latter half of 2022, specific emphasis has been placed
on financial wellbeing given the difficult economic climate. The
Group partnered with its pension provider, Hargreaves Lansdown,
to deliver a series of webinars on budget and debt management,
supporting employees to better understand how they can manage
their money. This was coupled with the promotion of BUPA’s
Silvercloud mental wellbeing platform programme, ‘Space from
Money Worries’, which is a modular programme delivered over
9 weeks, designed to help employees understand the relationship
between money and their mental health. As a further commitment
to the Group’s support of its employees and in recognition of the
difficult economic conditions, approximately 63% of the workforce
received a £1,200 cost of living payment, paid in two instalments
of £600 in December 2022 and February 2023.
In 2023, the Group will look to further expand its wellbeing offering,
with consideration being given to introducing a wellbeing programme
designed to cover a wide range of topics throughout the year.
Learning and development
Considerable progress was made in terms of learning and
development at Oxford Biomedica during 2022. The Group
sustained momentum around its existing learning offerings whilst
introducing a number of new initiatives. The key objective of these
changes was to make meaningful and impactful development
opportunities accessible to employees.
To date, a total of 203 managers have completed the Group’s
Management Development Programme (MDP) with MDP alumni
given the opportunity to attend a Growth Mindset Workshop.
Additionally, the Group introduced a new training programme for
managers, called “Manager Toolkit,” designed to provide managers
with the knowledge to handle practical day to day people-related
actions. Through this programme, the Group provided training
to over 100 managers, and intends to offer this training to the rest
of its managers in 2023.
To make learning accessible to employees, the Group partnered
with a digital learning platform which offers a range of courses now
including Compliance, Quality, Bioprocesses and Management.
Feedback from users was positive and the Group intends to make
the platform available for the rest of the employees.
In 2022, the Group strengthened its Early Careers Programme in a
number of ways. The three pillars of the Early Careers Programme are:
a) build a quality future talent pipeline for Oxford Biomedica;
b) differentiate the Oxford Biomedica brand; and
c) give back to the community by designing engagement with
schools/universities, which will inspire students and enable them
to make informed career choices.
The key initiatives undertaken during 2022 were:
— A 2-day work experience opportunity was designed and
deployed for the children of employees in secondary education;
— Partner schools were identified and an impactful engagement
plan is being created; and
— Engagement with the apprentices, their managers, and training
providers were strengthened.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 48
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
COMMUNITY
2022 HIGHLIGHTS
2022 ESG Community objectives –
what we achieved:
Continue to fundraise for chosen
Group charities – Oxfordshire Mind
and Homeless Oxfordshire
100%
Launch the community volunteering
policy
100%
Continue to build local educational
establishment/early careers links
100%
2023 FOCUS
2023 ESG Community objectives:
Continue to fundraise for chosen Group charities
Build on the Group volunteering policy launched in 2022
to increase employee involvement in local community
volunteering
Continue to build local educational establishment/early
career links
The Group continues to build and strengthen its involvement
in the local community, recognising the value of being a good
local citizen and delivering positive benefits to the community.
Throughout the year, the Group continued to develop its
apprenticeship scheme, supporting science education and offering
an alternative route to the traditional university pathway. The Group
behaves as a responsible neighbour, complying with national and
local laws and regulations, particularly with regard to emissions,
waste, property planning, and the traffic impact caused by
employees. To help minimise the traffic impact on the community,
the Group has continued to provide a range of transport initiatives
including a well-established cycle to work scheme and bike
shelters, whilst the Group’s Flexible Working Policy has reduced
the number of journeys to and from work by giving employees the
option to work from home.
Apprenticeship scheme
As part of the Group’s focus on delivering local benefits and
providing high skilled jobs to the local community, the Group has
an apprenticeship scheme in collaboration with the Advanced
Therapies Apprenticeship Community and multiple training
providers. In 2022, the Group added an additional five apprentices
with 37 apprenticeships running throughout the year. The
apprentices include school leavers from the local community who
are enrolled on a training scheme in the highly skilled areas of
Manufacturing and Analytical testing. The Group is committed to
supporting the apprentices through in-post learning, training, and
expanding the scheme in the future.
In recognition of the Group’s early career flagship programme,
providing university accredited qualifications, industry experience,
and a salary to apprentices, the Group was awarded “Apprenticeship
Employer of the Year 2022” in the Oxfordshire Apprenticeship Awards.
Charitable giving
Fundraising efforts for the Group’s nominated charities,
Oxfordshire Mind (Registered Charity No. 261476) and Homeless
Oxfordshire (Registered Charity No. 297806), selected through an
employee vote, continued during the year. As part of the Group’s
commitment to provide support to these local charities, a group of
employee volunteers, known as the Helping Hands team, organised
a series of fundraising events including, a summer concert, a raffle,
a bake sale, and a football tournament. In 2022, a total of £7,063
was raised for nominated charities, and the Group donated £1,000
to two local primary schools.
In 2022, the Group continued to run ‘payroll giving’, providing
employees with the opportunity to support UK-registered charities
in a tax-efficient manner through monthly payroll contributions.
Volunteering
The Group has furthered its efforts to encourage employees to get
involved in community work and make a difference in their local
communities. The introduction of a community volunteering activity
scheme allows employees to request up to seven hours of paid time
off for volunteering each year. Throughout the year, 20 volunteering
days were taken, with employees volunteering in several areas,
including local litter picking, Earth’s Trust land management, and the
Royal British Legion Poppy Appeal. The Group regards community
projects as a great way to meet people, develop new friendships,
and most importantly improve employee wellbeing.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report INNOVATION
2022 HIGHLIGHTS
2022 ESG Innovation objectives –
what we achieved:
Promote science and increase
knowledge sharing through increased
public engagement
100%
Deliver greater economy by
maximising productivity at scale and
reducing environmental impact
Continue to build strong academic
collaborations through support for
the ABViP programme
100%
100%
2023 FOCUS
2023 ESG Innovation objectives:
Increase public engagement through participation in
school and university outreach programmes and continued
support for the ABViP programme
Innovation in scaled down and digitised platforms to
intensify R&D activities while minimising resource utilisation
Continue to deliver on maximising productivity at scale and
reducing environmental impact
49
The Group is committed to delivering life-changing cell and gene
therapies to patients in an ethical and responsible way. This will be
achieved by practicing and delivering ethical, relevant and sustainable
innovation. The Innovation pillar has three key strategic aims:
— To ensure all research and innovation by the Group maintains
the highest ethical standards;
— To deliver innovation that is relevant and understandable so its
implications can be easily assessed; and
— To foster and encourage a culture of innovation to build
a sustainable future for the Group and the wider community.
Commitment to ensuring all research and innovation
at the Group maintains the highest ethical standards
The Group’s commitment to achieving the highest ethical
standards has historically been embedded in all research and
development activities and has continued to shape the Group’s
platform innovation in 2022. This objective underpins the Group’s
overall ESG mission to deliver life-changing gene therapies to
patients in an ethical and socially responsible way.
In 2022, an ethical review process for the New Technology
and New Product Committees was implemented, building on
the former ethical review process for research and innovation
activities, and representing a formalised inclusion of ethical review
considerations. In 2022, an additional focus of the New Technology
Committee was on identifying and prioritising innovation around
process intensification to produce therapeutic viral vectors in
sufficient quantities to meet clinical and commercial demands
in a more economical and environmentally sustainable way.
Innovation tools to support delivering greater economy
In 2020, the Group developed three new tools for innovation to
aid the innovation process. During the course of 2022, the Group
continued to implement these tools:
— A technology roadmap designed to ensure the smooth and
timely progression of new technologies to commercialisation is
now in place and has been applied to six development projects;
— A new technology profile to document the key stages and
decision points of the technology development process; and
— A decision matrix scoring which will evaluate promising
technologies and to officially transition them to governance
by the New Technology Committee.
These tools have been used to prioritise and expedite the process
of commercialising new programmes and technologies and allow
the Group to track the development process with greater clarity and
granularity. This has resulted in the formation of coordinated cross
functional project teams focused on the delivery of technologies
from research and development to commercial application.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 50
Promoting science and increase knowledge sharing
through increased public engagement
In 2022, the Group continued to work with In2Science who help
children from disadvantaged backgrounds enter STEM subjects
in higher education. The group sponsored five students during
the year with Oxford Biomedica employees also participating
in mentoring sessions to offer insights and guidance on pursuing
a career in STEM industries.
Continued strong academic collaborations and support
of studentship programmes
The Group continues to work to promote science and build strong
academic collaborations. The Group continued to support PhD/
DPhil studentships through Advanced Bioscience of Viral Products
(ABViP). This multidisciplinary training programme will help foster
the next generation of bioscience leaders and advance research
in the area of viral vectors for future gene therapies and vaccines.
The programme is led by Oxford Biomedica and involves both UCL
and University of Oxford as academic institutions. ABViP will train
a cohort of 24 PhD/DPhil students over the course of 2022, 2023
and 2024, with 7 students enrolled onto the programme in 2022.
The Group intends to continue to support outreach programmes
such as In2Science, to promote STEM careers as a viable route for
school children from demographics that have a low representation
in higher education, particularly in STEM subjects. The Group is also
committed to ensuring the BBSRC CTP programme is a success
and fully engage with academic partners and the research council
to ensure the best support is provided for the next generation of
research leaders coming through the programme.
An additional focus of the New
Technology Committee was on
identifying and prioritising innovation
around process intensification to
produce therapeutic viral vectors in
sufficient quantities to meet clinical
and commercial demands in a more
economical and environmentally
sustainable way.
The Group’s commitment to
achieving the highest ethical
standards has historically
been embedded in all
research and development
activities and has continued
to shape the Group’s
platform innovation in 2022.
24
ABViP will train a cohort of 24 PhD/DPhil
students over the course of 2022, 2023
and 2024, with 7 students enrolled onto
the programme in 2022.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 51
The Group is fully committed to responsible supply chain
management, and work continued to progress throughout 2022
to build a supply chain that aligns with the Group’s commitment
to sustainability whilst delivering commercial benefit. A supplier
code of conduct has been rolled out and published on the
Group’s website, detailing the Group’s overall approach to supplier
engagement and the standards it expects its suppliers to adopt.
The Group’s supplier code of conduct follows a continuous
improvement approach that advances supplier performance
over time, and includes the Group’s conduct commitments and
its expectations of suppliers in relation to bribery and corruption,
animal welfare, child labour, data privacy and protection. Also
included in the supplier code of conduct is information pertaining
to health and safety practices, governance and management
systems, human rights matters, environmental practices and related
management systems. The Group’s robust processes and controls
ensure that all elements of the its supply chain are managed
responsibly.
Full details of the Group’s ESG pillars, including the supplier code
of conduct, can be found on our ESG website at www.oxb.com.
SUPPLY CHAIN
2022 HIGHLIGHTS
2022 ESG Supply Chain objectives –
what we achieved:
To incorporate the new supplier code
of conduct for suppliers into all new
contractual supply relationships
100%
To publish the new code of conduct
on the Group’s website including the
Group’s supply chain requirements
100%
2023 FOCUS
2023 ESG Supply Chain objectives:
To hold quarterly face-to-face meetings with key suppliers
to review their compliance with the supplier code of conduct.
To develop and issue a supplier code of conduct
questionnaire for all GMP suppliers to assess their
compliance with the supplier code of conduct
The Group’s supplier code
of conduct follows a
continuous improvement
approach that advances
supplier performance
over time.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
52
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
ENVIRONMENTAL
2022 HIGHLIGHTS
2022 ESG Environment objectives –
what we achieved:
Aim to reduce the volume of paper
used and offset paper usage by
planting trees (become “paper
neutral”)
Increase recycling by 5%
Develop net zero plan for CO₂ by
2040 and meet the Group’s TCFD
metrics
Gain affiliation to an external
agency e.g. SBTI, “My Green Lab”
to assist with the Group’s 10+ year
sustainability plan
100%
100%
50%
50%
2023 FOCUS
2023 ESG Environment objectives:
Develop net zero plan for CO₂ by 2040 and meet the
Group’s TCFD metrics
Baseline the Group’s extended value change Scope 3
emissions
Inclusion of Oxford Biomedica Solutions within Scope 1, 2
and 3 monitoring and appointment of representatives from
Oxford Biomedica Solutions to the ESG Committee
Environmental policies and initiatives
The Group fully recognises its responsibility to minimise the impact
of its activities on the global environment, its neighbours and the
local community. The Group’s Environmental Management System
(EMS) has continued to evolve and grow with the organisation. The
Group has undertaken a targeted internal environmental review
against environmental performance data to enable more effective
performance monitoring. The Group has worked with interested
parties including utility providers, waste operators and suppliers in
order to provide more transparent data for collection. The Group
complies with all environmental regulations, including those relating to
environmental permits and consents, waste disposal and discharges.
The Group continues to work towards reducing its carbon footprint
(see pages 53 to 55 for further information as regards the Group’s
Streamlined Energy and Carbon Reporting (SECR) activities). As
part of the Group’s 2022 Environmental pillar initiatives, the Group
has focused on waste stream efficiency by engaging with waste
operators through audit and employees through awareness events
and internal promotion. The result has been a proportional increase
in recycling of 6%, mainly due to lab-based recycling, and a more
streamlined collection service across all waste streams. The Group
endeavours to perform at the top of the waste hierarchy where
possible and has created an internal spare equipment page to
promote reuse of redundant equipment across lab-based groups.
Following the Group’s success in paper reduction in 2021, 2022
has seen increased incentives to reduce usage even further with
the purchase of tablets for lab settings and the introduction of tree
planting to offset the amount of paper consumed and processing
emissions created by the Group’s annual consumption. The
Group has started pre-planning for phase 2 of the construction
for its Oxbox site and has started to engage in the first stages
of Building Research Establishment Environmental Assessment
Method (BREEAM) certification in order to work to the highest
environmental standards during construction, with the goal for
Oxbox to become resource-efficient, post construction.
The Group has engaged with expert advisors to create science-
based alignment in the upcoming net zero plan for CO2 emissions
by 2040. In 2022, energy audits were carried out at all UK
sites in order to understand Scope 1 and 2 demand and gain
recommendations for reduction measures. Alongside this work,
Scope 3 baselining was undertaken during 2022 in order to gain a
full appreciation of the Group’s emissions and inform targeting. The
Group’s aim is to have finished the net zero plan in 2023.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 53
Energy and carbon action
In 2022 the following Energy Savings Initiatives were undertaken:
— Lighting substitution at the Oxbox site, including the installation
of passive infra-red sensors, saving an estimated 52,000KWh per
annum and 10 tCO₂e.
— Focus on cold storage with entry into the International Freezer
challenge. Three freezers of redundant samples were discarded,
saving extra unit demand.
— IT appliance “Turn It Off” campaign promoted by Environmental
Representatives.
— Energy audits performed by a specialist third party as part of the
net zero strategy and future initiative potential.
— The first and second floors of the Windrush Innovation Centre
air-handling units have been switched off whilst the area is
under redevelopment.
2022 ESG Environmental results
The methodology used to calculate the Greenhouse Gas (GHG)
emissions is in accordance with the requirements of the following
standards:
— World Resources Institute (WRI) GHG Protocol (revised version);
— Defra’s Environmental Reporting Guidelines: Including
Streamlined Energy and Carbon Reporting requirements (March
2019); and
— UK office emissions have been calculated using DEFRA 2022
conversion factors.
Transportation has been another environmental aspect that has
received a great deal of attention in 2022. The Group has acquired
the leasehold of a new 45,000 sq. ft warehouse in Wallingford,
Oxfordshire, to bulk store long life consumables, therefore
decreasing the overall frequency of freight. The site is expected
to be ready for occupation in the second quarter of 2023 and the
results of this are expected to be seen in the 2023 environmental
report. With regard to employee commuting, the Group has
commissioned the installation of 14 electric vehicle charging points,
whilst developing a framework for further future installations.
Following the establishment of Oxford Biomedica Solutions in
2022, the Group plans to appoint representatives from the Oxford
Biomedica Solutions team to join its ESG Committee and is aiming
to integrate their environmental performance data with UK-based
monitoring during 2023.
The Group has high levels of engagement from employees on
environmental sustainability activities, and actively encourages
employee engagement and involvement in improving the Group’s
environmental performance. Multi-department environmental
representatives support the Group’s sustainability initiatives and in
2022 they facilitated the promotion of reduced utility consumption
through intranet posts and on-site electrical appliance “switch it
off” initiatives. The biggest impact of 2022 in this regard was the
substitution of plant room lighting at Oxbox, making an annual
saving of 10 tonnes CO2.
Work to gain affiliation to an external agency to assist with the
Groups 10+ year sustainability plan is ongoing. Throughout the
year, the Group engaged with a number of agencies, including SBTI
and MyGreenLab, and expect affiliation in 2023.
The Group’s SECR Compliant Directors statement
2022 SECR Performance
The Group’s carbon footprint for the 2022 reporting year has been
calculated based on the environmental impact across Scope 1,
2 and 3 (selected categories) emission sources across all sites of
operation. The emissions are presented on both a location and
market basis, as this is compulsory under the SECR. On a location
basis, the Group’s emissions are 4,475 tCO₂e, which represents an
average impact of 5.5 tCO₂e per full time employee (FTE), and on
a market basis the Group’s emissions are 2,935 tCO₂e. Emission
intensity metrics used are on an employee basis, which will be
monitored to track performance in subsequent environmental
disclosures.
The Group has made significant efforts to improve data collection
processes and data quality during 2022. As a result, base year
emissions have been restated in order to reflect a more accurate
comparison with the performance of subsequent years and to provide
a valid assessment of progress against targets. More specifically, waste
emissions have been restated using actual mass based data, provided
by the Group’s waste operators, expelling the need for the Group to
use conversion factors used in the past. The Group has demonstrated
an actual reduction of waste emissions of 10% in 2022.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 54
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
Following an operational control approach to defining the Group’s organisational boundary, the Group calculated GHG emissions
from business activities falling within the reporting period of January 2022 to December 2022. The reporting period of January 2021
to December 2021 is included for comparison purposes.
Energy and carbon disclosures for the reporting period 1 January 2022 – 31 December 2022
Scope 1
Total Scope 1
Scope 2
Total Scope 2 (Market Based)
Total Scope 2 (Location Based)
Scope 3³
Emissions Source
Natural gas
Other Fuel Types
Fleet
Refrigerants
Processing emissions
Electricity (Market Based)
Electricity (Location Based)
Electricity transmission and distribution
Water
Employee cars
Rail
Public Transport
Business flights
Paper
Waste & Recycling
Employee commuting
Total Scope 3
Total (Market Based)
Total (Location Based)
Total Energy Usage (kWh)4
Nomaliser
tCO2e per FTE
Global Emissions tCO₂e
2020¹
1,144
13
18
-
14
1,189
719
2,202
719
2,202
186
16
3
0.7
0.2
212
6
16
960
1,400
3,308
4,791
15,827,438
6.6
2021²
1,242
14
13
55
14
1,338
426
2,293
426
2,293
198
5
2
0.8
1.4
109
4
16
1,157
1,493
3,257
5,124
17,613,049
5.9
2022²
879
7
9
23
48
966
256
1,796
256
1,796
158
4
6
1.4
2.0
448
3
16
1,075
1,713
2,935
4,475
14,049,362
5.5
Percentage change
to 2021
(%)
–29%
–50%
–31%
–58%
243%
–28%
–40%
–22%
–40%
–22%
–20%
–20%
200%
75%
43%
311%
–25%
–0%
–7%
15%
–10%
–13%
–20%
–7%
¹ 2020 emissions have been restated in 2022 due to receipt of updated actual data and to include additional emission sources.
² 2021 emissions have been restated in 2022 due to receipt of updated actual data and to include additional emission sources.
³ Emissions have been rounded to one decimal place when less than 2 tCO2e to allow for more accurate comparisons year on year.
⁴ Energy reporting includes kWh from Scope 1, Scope 2 and Scope 3 employee cars only (as required by the SECR regulation).
2021 and 2022 – UK versus Global energy and carbon disclosures comparison
Emissions (tCO2e)
Total (Location Based)
Total Energy Usage (kWh)
2021
2022
UK
4,828
16,247,328
Global
(excl. UK)
297
1,365,721
UK
4,263
13,107,000
Global
(excl. UK)
213
942,362
Percentage change to 2021 (%)
Global
(excl. UK)
–28%
–31%
UK
–12%
–19%
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 55
CO2
CH4
N2O
HFCs
PFCs
SF3
NF3
Scope 2:
Indirect
Scope 1:
Direct
Scope 3:
Indirect
Scope 3:
Indirect
Upstream activities
Reporting company
Downstream activities
Scope 2 –
Indirect
Purchased electricity,
steam, heating and
cooling for own use
Scope 1 –
Direct
Company facilities
Company vehicles
Scope 3 –
Indirect
Purchased goods and
services
Capital goods
Fuel and energy related
activities
Transportation and
distribution
Waste generated in
operations
Business travel
Employee commuting
Leased assets
Scope 3 –
Indirect
Transportation and
distribution
Processing of solid
products
Use of sold products
End of life treatment of
sold products
Leased assets
Franchises
Investments
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
56
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
Taskforce for Climate-related Financial Disclosure (TCFD)
The Group supports the TCFD framework and committed in the 2021 Annual report and accounts
to refine its risk assessment methodology in order to ensure that the climate risks associated with the
Group can be fully integrated into business planning. This commitment extends beyond the Group’s
operational sites to also include five key suppliers. The following table sets out the required disclosures
and explains where in this Annual report and accounts the various disclosures can be found. The Group
is pleased to confirm that the disclosures in the Annual report and accounts are consistent with the
TCFD recommendations, save for the assessment of the impact of climate-related risks and opportunities
on the Group’s financial planning and the completion of the review into all material Scope 3 emission
categories, both of which remain on-going following the acquisition and subsequent integration of
Oxford Biomedica Solutions and which the Group expects to conclude during the 2023 financial year.
Furthermore, the Group is working with an external expert advisor to ensure alignment of its targets with
the Science based Targets Initiative (SBTI) and also expects this process to conclude in 2023.
TCFD Recommendation
The Group’s Approach
Governance
Disclose the organisation’s governance
around climate-related risks and
opportunities.
– Describe the Board’s oversight of
climate-related risks and opportunities
described
– Describe management’s role in assessing
and managing climate-related risks and
opportunities
Strategy
Disclose the actual and potential impacts
of climate related risks and opportunities
on the Group’s business, strategy and
financial planning where information is
material.
– Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium and
long term
– Describe the impact of climate-
related risks and opportunities on the
organisation’s business, strategy, and
financial planning
– Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario
The Board of Directors is responsible for overseeing the effective management of the Group’s climate-related risks and
opportunities. The Board is supported in this effort by the SET – a cross-functional group of individuals who work to
advance these objectives within their respective areas of expertise. The Group’s CEO is responsible to the Board for the
management, development, and performance of the business, including climate-related risks and opportunities and
the Group’s Net Zero by 2040 commitment. The Group has an established ESG Committee to monitor the execution
of its sustainability strategy, establish goals and targets related to climate-related risks and opportunities, oversee
communication of its sustainability activities with stakeholders and provide input to the Board and other Committees
on sustainability matters. The ESG Committee had previously been chaired by the CEO, however, in 2022 following
John Dawson’s retirement, the Group’s ESG Committee was chaired by Nick Page in his capacity as COO. Following
the appointment of Dr. Frank Mathias as the Group’s CEO in March 2023, the ESG Committee will continue to be
chaired by Mr Page, with Dr. Mathias in regular attendance. The ESG Committee serves as a supportive entity for both
the Board and the SET and met on three occasions in 2022 for an update on progress regarding the Group’s Climate
Strategy, TCFD and other ESG targets. During 2022, the Group COO and Head of Investor Relations gave presentations
to the Board on work completed in relation to waste management and recycling, energy efficiency, carbon removals
and flood risk at the Boston site.
In addition, the Group has commenced a review of its Environmental Policy, in order to more accurately describe the
arrangements surrounding climate risk governance and monitoring – this is a key area of focus for 2023. A strategic
Environmental Representative group was established in 2021 to support the delivery of sustainability and climate
strategies. The sustainability group meets every month and makes suggestions for sustainability actions to be taken at
Oxford Biomedica, which are then publicised across the Group.
Environmental due diligence was undertaken prior to the Oxford Biomedica Solutions acquisition. Subsequent
to this, increased climate scenario screening has been undertaken in connection with the TCFD disclosures in this
Annual report and accounts. Any future acquisitions proposed by the Group will be integrated into the Group’s
ESG Committee and net zero strategy, in line with the approach taken by the Group following the acquisition of
Oxford Biomedica Solutions.
In 2022, the Group assessed the potential risk of material, physical climate impact across all sites of operation. These
potential impacts were mapped against risk posed by the geography of the Group’s sites using relevant environmental
modelling tools. The risk posed was ultimately low with the exception of potential high risk associated with Dublin, with
regard to water stress, and Boston, with regard to flood risk. The risk of water stress associated with Dublin does not
pose a threat to the Group, as its current operations in Dublin are solely office-based and are therefore not water reliant.
Flood risk at Boston is assessed and managed by the local environmental management system. The Group also expanded
physical climate risk assessment to include the Group’s top five suppliers, identified through capital expenditure and
reliance within the supply chain. Annual extreme weather damages and 1-in-100 year damages rose using the “middle of
the road” scenario and above for both Netherlands (where two of the Group’s major suppliers are located) and UK based
sites and suppliers across medium and long term timeframes.
The Group also worked with an expert advisor to undertake a qualitative transitional risk assessment with the use
of expert opinion and research within the pharmaceutical industry and economic commentary. The most prominent
transitional risk factors centre on the growing pressure to decarbonise operations and supply chains in anticipation
of (a) the possibility of Government mandated carbon pricing (including levies placed on cross border sales into the EU
market through upcoming Carbon Border Adjustment Mechanism (CBAM) legislation), and (b) shifting investor appetite
for decarbonised portfolios due to Green Asset Ratio and Green Lending Ratio disclosure requirements affecting the
financial services and asset management sectors. During 2022, the Group continued its review into all material Scope 3
emission categories in order to develop a Scope 3 emission baseline against the Group’s baseline year of 2020. The
Group expects to complete this process in 2023. The Group also undertook energy audits at all sites in 2022 in order
to inform a science based target route and applicable initiative milestones to net zero. The Group defines meeting
net zero as reducing Scope 1, 2 and 3 emissions by 90 – 95% against the Group’s baseline year of 2020. In addition,
residual emissions must be compensated by utilising carbon removals, for example tree planting.
The Group has identified flood risk as the most material climate risk to current operations. Accordingly, as shown
in the risk management section of this table below, the Group is prioritising a review of both the Boston site
and supplier flood risk management in 2023. The Group has modelled a 2°C or lower scenario across all material
identified climate risks. The findings are set out in the table on page 58 and identify flood risk and water stress
as being the most significant.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 57
TCFD Recommendation
The Group’s Approach
Risk Management
Disclose how the organisation identifies,
assesses and manages climate-related
risks.
– Describe the organisation’s processes for
identifying and assessing climate-related
risks
– Describe the organisation’s process for
managing climate-related risks
– Describe how processes for identifying,
assessing and managing climate-related
risks are integrated into the organisation’s
overall risk management
In 2022, the Group considered a variety of climate scenarios and categorised them as optimistic (NGFS net zero
2050 median, SSP2 RCP4.5), middle of the road “current policies” (NGFS current policies median, SSP2 RCP8.5) and
pessimistic (RCP8.5, SSP3 RCP8.5). This range of climate scenarios has been chosen to provide increased confidence
in the assessment by consulting multiple reputable models. Each climate aspect has then been assessed using these
scenario models and split into 3 distinct time horizons, short term (up to 2030), medium term (2031-2050) and long
term (2051-2100). For each physical risk aspect a specific assessment was made using climate impact data from ISMIP
(Inter-Sectoral Impact Model Intercomparison Project), CLIMADA, CMIP5 GCM data, WRI Aqueduct Global Maps
3.0, HydroBASINS database, The Pfafstetter system, FEMA Analysis, NOAA inundation maps and LOCA Statistically
Downscaled CMIP5 Projections for North America. Transitional risks underwent a qualitative analysis using expert
analysis, research within the pharmaceutical sector and economic commentary.
The climate related risks disclosed are not unique to the Group, and are applicable across the pharmaceutical sector.
The Group is well versed in climate risk management and has implemented its decarbonisation pathway towards net
zero in order to reduce the likelihood of a more severe further climate scenario materialising. Details of the pathway
can be seen in the targets and metrics section of this TCFD report on page 62. The Group also focuses on operational
resilience at a local site level through building management practices and with the use of an environmental
management system. The supply chain is under periodic analysis for increased resilience, which was increased further
in 2022 with the lease of the 45,000m2 Wallingford warehouse, enabling greater carrying capacity.
The materiality matrix set out on page 42 demonstrates key environmental aspects of the Group’s operations that are
fixed with short term targets, and monitored through the governance structure set out above. Flood risk has been
identified as the most material climate risk to the Group’s operations and value chain, as the that risk is relatively high
already, before climate change is even taken into account. As a result, flood risk management will be reviewed for
both the Boston site and for the Group’s suppliers based in the Netherlands in 2023.
Metrics and Targets
Disclose the metrics and targets to assess
and manage relevant climate-related risks
and opportunities where such information
is material.
The Group has chosen a reasonable selection of metrics to facilitate its assessment of climate-related risks and
opportunities in line with Group strategy and risk management processes. Further details regarding these metrics,
together with the reasons for their selection, are disclosed in the metrics and targets section of this TCFD report on
page 61.
– Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process;
– Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and related risks; and
– Describe the targets used to manage
climate-related risks and opportunities
and performance against targets
The Group’s Environmental, Social and Governance Report outlines its various environmental metrics and targets on
page 61, including the following key objectives: minimising waste generation and encouraging a circular economy,
optimising energy usage, decreasing the use of packaging materials, particularly plastics, and sourcing materials from
sustainable suppliers. Of the targets set out on page 62, the Group has already achieved its target of a 10% reduction in
Scope 1 and 2 GHG emissions and also now successfully sources 10% of its energy from renewable sources. In addition,
the Group has made material progress towards gaining affiliation with My Green Lab and, in 2022, the Group invested in
nature-based solutions such as tree-planting to minimise paper consumption. In 2023, the Group will focus on achieving
reduction in plastic consumption and packaging waste and will assess the viability of substituting its fleet for electric
vehicles. The Group’s Scope 1, 2, and 3 GHG emissions are also disclosed in the Environmental, Social, and Governance
report in the SECR section on pages 53 to 55. The global increase in energy prices has further pushed Scope 1 and 2
emission savings to the forefront of the Group’s agenda and the Group is focused on further progressing Scope 1 and 2
emission savings in 2023.
The Group has a clear pathway to net zero described in the targets and metrics section of this TCFD report on page 62.
A partnership with an expert advisor, RPS Group, was created in 2022 in order to ensure alignment with the science-based
consensus and practicality of these targets moving forward. The report on this assessment is due in 2023. Some targets
may alter slightly but it is expected that they will be increasingly robust as the Group commits to the Science based
Target Initiative.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 58
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
TCFD Scenario Analysis
Climate risks are, by their nature, dynamic, geographically asymmetrical, and likely to evolve in different ways depending on a range of
conditions and variables. In accordance with TCFD recommendations, the Group has undertaken a detailed analysis to clarify what the
potential impacts of future climate scenarios may be across short, medium, and long-term time horizons. Specialist expertise has been
engaged to guide this effort, to govern the selection of appropriate metrics suited to the factors at hand, and finally to interpret findings in
a manner which is circumspect and appropriately qualified.
The scenario analysis procedure has been driven using carefully selected datasets derived from the latest Intergovernmental Panel on
Climate Change (IPCC) climate models.
A range of climate models and scenarios have been used to provide (a) the best possible data coverage and (b) a balanced assessment of
optimistic, pessimistic and ‘middle of the range’ trajectories.
Climate Scenarios used:
Optimistic
Middle of the Road “Current Policies”
Pessimistic
Time Horizons used:
Short term
Up to 2030
(in 5 year increments)
Set 1
NGFS net zero
2050 median
NGFS current
policies median
RCP8.5 median
Set 2
SSP2 RCP 4.5 (optimistic)
SSP2 RCP 8.5
(business as usual)
SSP3 RCP 8.5 (pessimistic)
Medium term
2031–2050
(in 5 year increments)
Long term
2051–2100
(in 5 year increments)
The time horizons chosen have been selected to analyse the range of risks to be expected when linked to global performance against
decarbonisation. Whilst modelling further into the future may reduce accuracy, the Group aims to be diligent and has chosen the
subsequent climate scenarios for their breadth of future possibility. The Group is aware that for transitional risk inputs, such as legislation,
the shorter term horizon yields more value, whilst physical risks are a longer term eventuality.
Climate change and strategy for physical risks
In 2020 and 2021, the Group’s facilities services conducted a screening study of future climate scenarios to explore the Group’s physical
climate-related risks (floods, water scarcity, extreme heat, strong winds and wildfires). These scenarios were applied to material Oxford
Biomedica sites and key suppliers, with predictions extended out to the medium/long term. In 2022, the Group extended both the
aspects of physical risk and the climate assessments to all sites, including the targeted Boston site.
1-in-100-Year Expected Damage from Tropical Cyclones Daily Minimum Air Temperature
Annual Expected Damage from Tropical Cyclones
Annual Expected Damage from River Floods
Annual Maximum River Flood Depth
Daily Maximum Air Temperature
Riverine flood risk
Land fraction annually exposed to Heatwaves
Land fraction annually exposed to River Floods
Maximum of Daily River Discharge
Mean Air Temperature
Coastal flood risk
Precipitation
Relative Humidity
Specific Humidity
Water stress, supply & demand
Groundwater table decline
Drought risk
In addition to the Group’s own facilities, physical climate scenarios were evaluated in relation to a selection of five key suppliers in order to
provide an indication of the potential for indirect contagion from factors upstream in the value chain. The risk levels in relation to suppliers
were then adjusted according to a measure of the Group’s relative dependency on those suppliers. The main aspects of potential risk
were assessed as follows:
Risk Factor
Extreme Weather
Flood Risk
Heat Stress
Water Stress
Result of Analysis
Annual Expected Damages and 1-in-100-year Damage are expected to rise significantly in middle-of-
the-road “current polices” and pessimistic climate scenario models for the Netherlands (where two of the
Group’s major suppliers are located) and the UK.
Notable flood risk concerns arise in relation to the US site at 1 Patriots Park, Bedford, MA. The FEMA Flood
risk analysis for that location indicates the risk of a major flood at least 26% in 30 years before accounting for
climate change. Models project that this property has about a 51% chance of a significant pluvial or fluvial
flood over 4 feet deep before 2050.
This is significant in all geographies but especially in the US.
Levels are generally expected to decline slightly or remain relatively flat in most regions except for the
Netherlands where two of the Group’s major suppliers are located. Notably, water stress levels in Dublin at
the Balheary site are extremely high. The impact of this on the Group’s current operations within Dublin will
be low because it is a solely office-based footprint.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
59
In order to address resilience against these risks the Group will, through 2023/2024, perform extended deep dive climate assessments at
all higher risk sites, with a particular focus on flood risk in Boston. In the same timeframe, the Group will approach assessed suppliers for
mitigation against risk and extend climate assessments beyond the top five suppliers to increase knowledge of their resilience and that of
the Group’s goods network.
Climate change and strategy for transitional risks and opportunities
The Group’s exposure to risks and opportunities relating to climate change is influenced by a variety of factors that extend beyond the
physical impacts of climate change and include potential regulatory, technological and reputational factors, alongside the potential for
changing competition dynamics in target markets. Transitional risks also involve pressure from investors and stakeholders to reduce the
emissions footprint of business operations and those of the extended value chain.
The approach to assessment of transitional factors differs from that applied in the case of physical risk. Judgement plays a more
significant role, not due to a lack of relevant metrics proxies, but rather because the ‘superabundance’ of potentially relevant data renders
the use of 2 or 3 key metrics unacceptably reductive. Moreover, the assessment of transitional risk therefore leans to some extent on the
balance of expert opinion, research and economic commentary to assign various transitional risks as low, medium or high respectively.
The aspects chosen were as follows:
Shifting disease vectors
Market risks
Reputational risks
Legal Liability
Climate change can lead to changes in global disease vectors, thereby altering the distribution and
prevalence of certain diseases. This translates to both risks and opportunities: warmer temperatures may
extend the range of disease-carrying insects, such as mosquitoes, leading to an increased risk of diseases
like malaria and Zika virus.
These changes in disease vectors can create risks and opportunities for pharmaceutical companies;
creating new demand for certain vaccines or treatments in certain areas.
Changes in partner preferences or investor demand for products that are more sustainable may affect the
demand for and price of pharmaceuticals. Increasing partner interest in the company emissions profile
also highlights attendant reputational risks.
Reputational risks associated with the emissions profile of the pharmaceutical sector as a whole may alter
the Taxonomy classifications applied to the Group’s securities.
Pharmaceutical companies may face liability for their greenhouse gas emissions or for the environmental
impacts of their products.
Cost of raw materials & energy
Changes in the availability or cost of raw materials or other inputs used in the production of
pharmaceuticals may affect the cost and competitiveness of these products.
Regulation
Regulation is a key transitional risk for the pharmaceutical sector, as changes in regulations or policies
related to climate change may affect the way pharmaceutical companies operate and may also affect the
demand for their products.
— Regulatory changes related to the use of certain raw materials or chemicals in the production of
pharmaceuticals may affect the availability or cost of these inputs, which could in turn affect the cost
and competitiveness of the finished products.
— There is increasing focus on the environmental impacts of pharmaceuticals, including the potential for
drugs to enter the environment and harm wildlife or ecosystems. Governments may introduce regulations
to address these impacts, which could affect the way pharmaceutical companies operate:
— In the European Union, the European Medicines Agency has published guidance on the
environmental risk assessment of medicinal products. This guidance provides recommendations for
pharmaceutical companies on how to assess and mitigate the potential environmental impacts of
their products.
— In the United States, the Environmental Protection Agency has proposed a rule that would require
pharmaceutical companies to report on the environmental impacts of their products, including the
potential for drugs to enter the environment and harm wildlife or ecosystems.
— In Canada, the federal government has launched a public consultation on the environmental
impacts of pharmaceuticals. The consultation is seeking input from stakeholders on how to reduce
the environmental footprint of pharmaceuticals, including through the development of more
sustainable manufacturing processes and the use of environmentally-friendly raw materials.
— In the United Kingdom, the Department for Environment, Food and Rural Affairs has launched a
consultation on the environmental impacts of pharmaceuticals and personal care products. The
consultation is seeking input on how to reduce the release of these products into the environment,
including through the development of more sustainable production processes and the use of
alternative raw materials.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
60
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
Decarbonisation is the most prominent transitional risk factor
centred on the growing pressure to decarbonise operations and
supply chains in anticipation of (a) the possibility of government
mandated carbon pricing (including levies placed on cross border
sales into the EU market through upcoming CBAM legislation), and
(b) shifting investor appetite for decarbonised portfolios due to
Green Asset Ratio and Green Lending Ratio disclosure requirements
affecting the financial services and asset management sectors.
There are both financial risks associated with decarbonisation
(through exposure to carbon pricing and energy price
inflation), and growing reputational risks that are coupled to the
pharmaceutical sector as a whole. A 2019 report published by
McMaster University highlighted that while emissions intensity
(measured in tonnes CO2e per US$M revenue) is highly varied
(sometimes varying by a multiple of 5x), the pharmaceutical sector
as a whole is more emission intensive than the automotive industry.
The sector-wide challenge of decarbonisation is compounded
due to geographically extended supply chains that require global
transportation. According to the 2020 Medicines Shortage Report
from the European Parliament, 60–80% of active pharmaceutical
ingredients are produced in either India or China. The Group started
Scope 3 analysis of its extended value chain in 2022 with the aim
of producing a final baseline and hot spots of emission reduction
opportunities in 2023. The overall targets for decarbonisation can
be seen in the following targets and metrics section.
The Group recognises the effectiveness of internal drivers for the
reduction of certain consumption patterns. Local tree planting was
commissioned in 2022 to remove carbon from the environment
and reduce emissions created in paper processing. This activity
has supplemented Group-wide paper reduction across business
activities. The Group also joined the International Freezer Challenge
in 2022 which is targeted at efficient cold storage management,
the changes made would save the Group an estimated 60,000KWh
annually. The Group has entered the challenge again in 2023
and has extended it to more laboratories. In addition, 2022 saw
increased focus surrounding the circular economy as recycling
was introduced to the labs and, as a result, received a boost of 6%
weighting within waste operations.
Local tree planting was
commissioned in 2022 to
remove carbon from the
environment and reduce
emissions created in paper
processing.
6%
2022 saw increased focus surrounding
the circular economy as recycling was
introduced to the labs and, as a result,
received a boost of 6% weighting within
waste operations.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 61
Targets and metrics
Where a given metric has been applied, the Group has disclosed a comprehensive rationalisation
explaining why the particular metric was selected:
Risk factor
Metric used as proxy
Explanation of why these particular metrics have been used
Extreme Weather (Physical – acute)
— 1-in-100-Year Expected Damage
from Tropical Cyclones
In most cases the following have been used as proxy metrics for assessing the risk
of extreme weather
— Annual Expected Damage from
— 1-in-100-Year Expected Damage from Tropical Cyclones
Tropical Cyclones
— Annual Expected Damage from Tropical Cyclones
While there are other metrics that are relevant to extreme weather, these are
deemed to be the most useful as they provide the best aggregation of overall/
combined risk levels from this particular climate factor.
Flood Risk (Physical – acute)
— Annual Expected Damage from
River Floods
In most cases the following have been used as proxy metrics for assessing
regional flood risk
— Distance from projected flood
— Annual Expect Damage from River Floods
plains
— Distance from projected flood plains
Heat Stress (Physical – chronic)
— Daily Maximum Air Temperature
— Daily Minimum Air Temperature
— Mean Air Temperature
While there are other metrics that are relevant to regional flood risk, these have
been deemed to be the most useful as they provide the best aggregation of
overall/combined risk levels from this particular climate factor.
Where possible location specific data has been sourced for flood risk to provide a
more granular assessment that reflects likely conditions on the ground at each site.
In most cases the following have been used as proxy metrics for assessing heat
stress
— Daily Maximum Air Temperature
— Daily Minimum Air Temperature
— Mean Air Temperature
While there are other metrics that are relevant to heat stress, these have been
deemed to be the most useful as they provide the best aggregation of overall/
combined risk levels from this particular climate factor.
Humidity (Physical – chronic)
— Relative Humidity
— Specific Humidity
The risk from humidity can be presented through more direct metrics without the
need for proxies.
Water Resource (Physical – chronic)
— Water Stress
— Water Supply
— Water Demand
Where available, the following have been used as proxy metrics for the
assessment of risks that relate to the availability of water
— Water Stress
— Water Supply
— Water Demand
While there are other metrics that are relevant to the availability of water as a
resource, these have been deemed to be the most useful as they provide the best
aggregation of overall/combined risk levels from this particular climate factor.
Transitional Risks (Transitional –
chronic)
— Vaccine Demand
— Labour Availability
— Reputation of Pharma Sector as a
whole
— Standing Water (relevant to risk of
mosquito disease vectors)
The assessment of transitional risk factors is inherently more speculative than is
the case for physical risk. Judgement plays a more significant role not due to lack
of relevant proxies, but rather because the superabundance of potentially relevant
data makes it prohibitively difficult to isolate 2 or 3 key metrics as representative.
Sector specific research and economic commentary is relied on to assign various
transitional risks as low, medium or high respectively.
The only exception to this is the use of specific metrics for standing water which
provide a more direct reflection of the risk of rising disease vectors associated
with mosquitos.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 62
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG)
A decarbonisation pathway has been mapped out by the Group
that recognises the need for changes in working practices to
maximise energy efficiency; investment in renewable energy;
increase in life cycle thinking and a circular economy; and
investment in appropriate offsetting for residual emissions.
The Group is committed to:
— Achieving net zero greenhouse gas (GHG) emissions across all
operations by 2040; and
— Building resilience by managing the physical (sites, supply chain)
and transitional (regulatory, market and product) risks and
opportunities from climate change in the value chain through
adaptation and business continuity planning.
Near-term targets (short to medium):
— Maintain paper neutrality by continuing to invest in local tree
planting in 2023;
— Gain affiliation to My Green Lab to assist with the Group’s long
term sustainability plan in 2023;
— 5% reduction in packaging waste, and 20% increase in plastic
recycling by 2027;
— Achieve 10% reduction in Scope 1 and Scope 2 GHG emissions
by the beginning of 2027 from 2020 baseline;
— 10% of electric energy to be fully renewable (non-carbon based)
by 2027; and
— Switch to 100% fully electric vehicles used by the Group on site
by the end of 2027.
Long-term targets:
— 100% of electric energy to be renewable by 2032;
— 10% reduction in packaging waste by 2032; and
— Achieve 50% reduction in Scope 1 and Scope 2 GHG emissions
by the beginning of 2032 from 2020 baseline;
— Achieve 100% reduction (net zero) in Scope 1 and Scope 2 GHG
emissions by the beginning of 2040 from 2020 baseline.
Remuneration
In 2022, to incentivise delivery of the Group’s ESG priorities, the
delivery of the net zero commitment was included in executive
incentive arrangements as part of the Corporate objectives, with
an overall ESG weighting of 10%. In addition, included in the 2023
Corporate objectives is an environmental objective.
The Group is committed to
achieving net zero greenhouse
gas (GHG) emissions across all
operations by 2040.
100%
Long-term targets include achieving
100% reduction (net zero) in Scope 1 and
Scope 2 GHG emissions by the beginning
of 2040 from 2020 baseline.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report 63
Oxford Biomedica’s standard operating procedures and the
legislative framework also covers the risk assessment procedures of
the company’s trials. These assessments include consideration of
any specific risks to the patient population proposed for the clinical
trials especially if any trial were to include vulnerable patients.
Oxford Biomedica is committed to transparency, and information
on ongoing clinical trials is provided on the website. Relevant trials
in the EU and EEA are automatically posted on the EU Clinical
Trials Register (www.clinicaltrialsregister.eu) and Oxford Biomedica
discloses its trials on a US government-sponsored website (www.
clinicaltrials.gov).
Human rights and anti-slavery
Oxford Biomedica fully respects human rights and conducts its
business in accordance with the letter and spirit of UK Human
Rights legislation and the UK Modern Slavery Act 2015. The
Board of Directors has approved a Modern Slavery Transparency
Statement in compliance with section 54 of the UK Modern Slavery
Act, which can be downloaded from the Group’s website www.
oxb.com. Many of Oxford Biomedica’s facilities are located in the
UK, where its policies accord with human rights regulations and its
supply chain operates in territories with strong commitments to
human rights safeguarding. Oxford Biomedica Solutions is based
in the US and is committed to ensuring its business practices are
conducted in compliance with all applicable federal and state
legislation in relation to the preservation of human rights and
prevention of human trafficking.
Animal testing
It is a regulatory requirement that all new therapeutic products
must be appropriately tested for safety before they are administered
to patients, and there is currently no alternative to using animal
models as part of this process.
Oxford Biomedica is committed to following the principles of the
three “Rs” in safety testing: replacement, refinement, and reduction
of animal testing. These principles ensure that animal testing is only
employed when necessary and where there are no alternatives.
This includes the following strategies:
(i) Minimising the use of animal models by cross-referring
LentiVector® platform data packages for regulatory authorities.
(ii) Optimising in vitro work with models with multiple
configurations, with only the best candidates being moved
to in vivo.
(iii) Maximising the use of cell lines, human organoids and making
use of primary tissue where possible in R&D work to reduce the
need for in vivo testing.
In addition to this, Oxford Biomedica only works with Contract
Research Organisations (CROs) that are accredited to international
ethical bodies. Each institution has an internal ethical review of the
preclinical work to be conducted (Institutional Animal Care and
Usage Committee), and the CROs have international accreditation
with AAALAC (Association for Assessment and Accreditation of
Laboratory Animal Care).
The New Product Committee approves preclinical projects
reviewing design and animal numbers, and includes ethical review
considerations. A formalised ethical review process for the New
Product Committee was drafted and implemented in 2022.
Governance Integrity and Ethics
Oxford Biomedica is committed to the highest standards of ethical
conduct and integrity in its business activities in the UK, US and
overseas.
Anti-bribery
Oxford Biomedica’s policy on preventing and prohibiting bribery is in
full accordance with the UK Bribery Act 2010 as well as other relevant
overseas legislation and all employees receive training in this matter.
Oxford Biomedica does not tolerate any form of bribery by, or of, its
employees, agents or consultants or any person or body acting on its
behalf. Senior management is committed to implementing effective
measures to prevent, monitor and eliminate bribery.
During 2021, an anti-bribery and anti-corruption review was
undertaken by an independent external consultant. The consultant
reviewed the current policies and procedures and met with
the Board and 17 members of the senior management team
within Oxford Biomedica to understand how such policies
and procedures were implemented. The consultant found
that there was a strong culture of “doing the right thing” within
Oxford Biomedica. Following the review, revisions were made to
existing policies and procedures to enhance oversight and risk
management and additional training was arranged for employees
during the course of 2022, which took place through an online
learning portal.
Oxford Biomedica Solutions is committed to complying with the
U.S. Foreign Corrupt Practices Act and other applicable anti-
corruption laws and has an employee-facing policy to maintain
compliance with such laws.
Whistleblowing
Oxford Biomedica’s compliance activities include the prevention
and detection of misconduct through policy implementation,
training and monitoring. As part of this effort, Oxford Biomedica
employees are encouraged to report suspected cases of
misconduct in confidence and without fear of retaliation. Concerns
and allegations are thoroughly investigated with disciplinary action
taken where necessary, up to and including dismissal and reporting
to relevant authorities.
An anonymous confidential reporting channel is provided for both
UK and US-based employees, and there are procedures in place to
protect whistle-blowers.
Clinical trials
Oxford Biomedica instils transparency, safety and ethics in all
aspects of its business, including the design and conduct of its
clinical trials. Oxford Biomedica’s trials are designed with patient
safety as a paramount concern and the protocols are agreed
with the relevant national regulatory authorities, as well as local
ethics committees and institutional review boards at clinical
trial sites, before any patients are treated. Oxford Biomedica has
standard operating procedures in place under a controlled Quality
Management System to ensure compliance with appropriate
legislation for Good Clinical Practice (GCP) as well as the
internationally accepted guidelines for the conduct of ethical
clinical trials, specifically ICH-GCP and the Declaration of Helsinki.
Quality Assurance (QA) audits are undertaken to give independent
assurance that the practices and procedures undertaken for Oxford
Biomedica’s clinical trials are in accordance with the relevant
legislation and guidelines thereby providing assurance that the data
and reported results are credible and accurate, and that the rights,
integrity, and confidentiality of trial patients are protected. The QA
function at Oxford Biomedica puts in place an annual GCP risk-
based audit strategy which is reviewed on a quarterly basis.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements 64
PRINCIPAL RISKS, UNCERTAINTIES
AND RISK MANAGEMENT
The Group is exposed to a range of risks. Some of them are specific to the Group’s current operations, others are common to all
biopharmaceutical and CDMO companies. The Directors have carried out a robust assessment of the emerging and principal risks facing
the Group, including those which could threaten its business model, future performance, solvency or liquidity.
The Group operates in the cell and gene therapy biotechnology sector which, by its nature, is relatively high risk compared with other
industry sectors. Following the 2022 Board strategic review, the strategy of the Group is focused on being a quality and innovation-led
CDMO. The Group is now exploring external funding opportunities to realise the potential of the Group’s gene therapeutics pipeline
and, as such, the risks associated with product development have been de-emphasised in this risk report. There are significant financial
and development and manufacturing risks in cell and gene therapy sector, and the regulatory authorities have shown caution in their
regulation of such products.
Risk assessment and evaluation is an integral and well-established part of the Group’s management processes. The Group’s risk
management framework, described below, incorporates the implementation of a mitigation strategy, each tailored to the specific risk in
question.
Risk management framework
The Group’s risk management framework is as follows:
— Board of Directors – the Board has overall responsibility for risk management, determining the Group’s risk tolerance, and for
ensuring the maintenance of a sound system of internal control. The Board are provided with a risk report from the Risk Management
Committee as part of its Board materials at each of its formal meetings, of which there at least six annually. However, twice a year
a full presentation to the Board on risk is provided by the Risk Management Committee. The risk management processes are the
responsibility of the SET with emerging risks identified by horizon scanning and discussed at the Risk Management Committee as
described below in “Emerging Risks”. The Audit Committee monitors the processes and their implementation as well as reviewing the
Group’s internal financial controls and the internal control systems. The Audit Committee also monitors the integrity of the financial
statements of the Group and any formal announcements relating to the Group’s financial performance, reviewing significant financial
reporting judgements contained in them.
— Senior Executive Team (SET) – During 2022, the SET generally met every week, with once monthly-extended SET sessions to discuss
current business issues and consider relevant risks. At least twice a year, the SET meets with representatives from the Risk Management
Committee to consider the operational risk management processes and risks identified.
— Key management committees – the Group currently has three key management sub-committees which meet monthly and through
which much of the day-to-day business is managed. These are the extended Operational Leadership Team (which incorporates
the Quality and Manufacturing Operations Committee), the Product Development Committee and the Technical Development
Committee. SET members attend these meetings and risk management is a key feature of each sub-committee.
— Risk Management Committee (RMC) – the Group has a RMC comprising senior managers from each area of the business and was
chaired by the Chief of Staff in 2022 but is now chaired by the Director of Financial Controls. This group meets quarterly with a remit
to identify and assess risks in the business and to consider mitigation and risk management steps that can be taken. The risk register is
regularly reviewed by the SET and key risks are highlighted to the Board at each formal meeting.
— Standard Operating Procedures (SOP) – all areas of the business have well established SOPs which are required be followed to
minimise the risks inherent in the Group’s business operations. Where these are required for GMP, GCP and GLP any deviations from
the SOPs must be identified and investigated. Compliance with such SOPs are routinely subject to audit by the relevant regulators and
partners. Other SOPs, such as financial processes, are also subject to audits.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report Emerging risks
Emerging risks are ‘new’ risks that may challenge the Group in the future. These risks have
the potential to occur at some point in the future but are unlikely to impact the business
during the next year. The outcome of such risks is often more uncertain. These emerging risks
may begin to evolve rapidly or simply not materialise at all. The Group monitors its business
activities both in the external and internal environment for new, emerging and changing risks
to ensure these are managed appropriately. Emerging risks are identified both internally and
externally via horizon scanning and are discussed at the RMC. Emerging risks continue to be
monitored as part of our ongoing risk management processes outlined above.
Principal Risks
Risk Category and Principal risks
Context and potential impact
Mitigation actions
65
Strategy key
Accelerate
Innovation
Be a Great
Place to Work
Deliver Growth
and Leadership
Achieve Group
Financial Targets
Trend key
Increasing risk
Unchanged
Decreasing risk
New
Trend versus
prior year
Commercialisation risks
Failure or delays in the execution
of the business plan of
Oxford Biomedica Solutions
A failure to execute on the business plan for
Oxford Biomedica Solutions or achieve the
level of sales anticipated could materially impact
the business and the success of the Group.
— The Group has taken steps to mitigate this
risk through implementation of a detailed
post-transaction alignment plan to support
integration and providing ongoing support
to deliver on the business plan for Oxford
Biomedica Solutions. The CEO of Oxford
Biomedica Solutions has been appointed
to the SET and provides regular updates
to the SET and the Board.
Move into AAV sector
Collaborator and partner
Strategic decision to move into AAV sector
carries significant risk to the Group associated
with moving into a new viral vector without
prior specialist experience.
— This has been mitigated by the establishment
of Oxford Biomedica Solutions in the US
with Homology Medicines who have
extensive pre-existing experience and an
established track record in the AAV sector.
The Group has entered into several
collaborations and partnerships involving the
development of product candidates by clients
in which the Group has a financial interest
through IP licenses. Failure of the Group’s clients
to continue to develop the relevant product
candidates for any reason could result
in the Group losing potential revenues.
— The Group looks to mitigate this risk through
maintaining a close relationship with its clients
via steering group meetings that look at
candidate selection and progression.
Rapid technical change
The cell and gene sector is characterised by
rapidly changing technologies and significant
competition. Advances in other technologies
in the sector could undermine the Group’s
commercial prospects.
— The Group looks to mitigate this risk through
a horizon scanning project to identify the
competition and technology advances in the
sector. The Group looks to develop either
in-house or via in-licensing new technologies
for the Group’s platform.
Product development spin out
In line with the Group’s strategy, the Group
is looking to spin out certain of its in-house
product development programmes into an
externally funded vehicle. The Group may be
unsuccessful in its efforts which could affect
the Group’s finances and reputation.
— The Group has enhanced its business and
commercial function within the Group
and is putting significant resources behind
the effort to find good strategic investors
for the proposed spin out.
Vector strategy
The Group is dependent on lentiviral vector
partnerships for revenues.
— The Group has mitigated the risk by
expanding into other viral vector areas
including adenovirus and AAV.
— Mitigation was exemplified via the Group’s
establishment in early 2022 of Oxford
Biomedica Solutions, its US-based subsidiary
for AAV manufacturing and innovation.
The risk has
been reduced by
becoming vector
agnostic working in
AAV and adenoviral
vectors in addition
to lentiviral vectors
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
66
PRINCIPAL RISKS, UNCERTAINTIES AND RISK MANAGEMENT (CONTINUED)
Risk Category and Principal risks
Context and potential impact
Mitigation actions
Supply chain and business execution risks
Third party suppliers and
supply chain
The Group relies on third parties, sometimes
sole suppliers, for the supply of raw materials
and certain out-sourced services. If such
suppliers are unable to successfully meet their
supply chain commitments to the Group, it
could harm the Group’s business.
Out-sourcing of fill/finish.
Bioprocessing failure
Failure in information technology
or cyber security
The Group receives significant revenues
from bioprocessing lentiviral vectors, AAV
vectors and adenovirus-based vaccines for
third parties. Bioprocessing of viral vectors is
complex and batches may fail to meet the
required specification due to contamination or
inadequate yield. Failure to deliver batches to
the required specifications may lead to loss of
revenues.
Cyber-attacks seeking to compromise the
confidentiality, integrity and availability of
IT systems and the data held on them are a
continuing risk to the Group. Compromised
confidentiality, integrity and availability of the
Group’s assets resulting from a cyber-attack
would impact the Group’s ability to deliver
to clients and ultimately its financial
performance and damage the Group’s
reputation.
Failure to attract, develop,
engage and retain a diverse,
talented and capable workforce
The Group depends on recruiting and retaining
highly skilled employees to deliver its objectives
and meet its partner needs. The market for such
employees is increasingly competitive and failure
to recruit or to retain employees with required
skills and experience could adversely affect the
Group’s performance.
Trend versus
prior year
The risk has been
reduced by using
a stockholding
strategy and
controlling the
fill/finish process
in house. The
Group’s Wallingford
warehouse will
reduce supplier
uncertainty. As part
of the strategic
review, Oxford
Biomedica are
performing a deep
dive on supplier
activity to ensure it
orders and procures
extra materials to
mitigate known
supplier changes
with premises,
systems, materials.
To mitigate
“unknown” supplier
issues, the strategic
inventory review will
identify materials
that have been
problematic in the
past.
— The Group looks to mitigate the supply chain
risks in the UK by sourcing second suppliers
and evaluating the correct inventory levels
of critical material supplies through strategic
inventory reviews.
— The Group has asked key suppliers to hold
stocks in UK warehouses to cover any
immediate supply issues. This increased
stock level is being evaluated and the new
Wallingford warehouse hub for ambient raw
materials will enable the Group to store extra
raw materials.
— The Group plans to mirror this approach
of mitigating supply chain risk in the US by
ensuring that Oxford Biomedica Solutions
continues to stockpile several months’ worth
of critical material supplies and identify
second sources of supplies.
— In 2022, the Group successfully brought fill/
finish processes in-house. The MHRA gave
approval in September 2022 for the fill/finish
suite, which will give the Group more control
over the fill/finish process for clients. By
bringing fill/finish in-house, the risk, cost and
environmental impact were all reduced by
removing the need to ship vector substance
and then vector product from Oxford
Biomedica to a third party filling contractor
and a third party storage provider. Storage of
all vector product manufactured in house will
remain under Oxford Biomedica control and
is monitored until shipped to the partner.
— The Group mitigates the risk of failing to meet
required specifications by investing in high
quality facilities, equipment and employees
and in quality management systems.
— The Group mitigates the risk of cyber-
attacks by ensuring that it has robust security
monitoring and end-point protection in place
to provide early detection of hostile activity.
— Following the establishment of Oxford
Biomedica Solutions, the Group has worked
to ensure its US-based IT systems have the
same level of end-point protection and
support staff competency in place.
— The Group has worked to mitigate the impact
of a cyber-attack by developing robust
disaster and data recovery plans.
— The Group has put in place a competitive
rewards and incentivisation package and
seeks to regularly engage with employees
in order to create an attractive working
environment.
— The Group also conducts benchmarking
reviews to ensure that the remuneration
package offered to employees is comparable
with competing employers in the relevant
jurisdiction.
Growing multi-
faceted cyber threat
Strong competition
for talent. Complex
workforce
dynamics due to
legacy COVID-19
pandemic-related
disruption
and uncertainty in
the biotech financial
market
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
67
Trend versus
prior year
Greater exposure
to US interests
Risk Category and Principal risks
Context and potential impact
Mitigation actions
Legal, regulatory and compliance risks
Adverse outcome of litigation
and/or governmental investigations
and regulatory inspections
IP and patent protection
Economic and financial risks
Climate change
The Group’s business operations are subject
to a wide range of laws, rules and regulations.
Due to the establishment of Oxford Biomedica
Solutions in the US in March 2022, the Group
now has greater exposure to US regulatory
bodies. Any failure to comply with these laws,
rules and regulations may result in the Group
being investigated by relevant government
agencies and authorities and/or in legal
proceedings being filed against the Group.
The Group’s bioprocessing and analytical
facilities are subject to regular inspections and
approval by regulators and clients. Failure to
comply with the standards required could result
in production operations being suspended until
the issues are rectified with the potential loss of
revenue.
The Group may be unable to obtain, defend and
enforce IP that protects its business activities and
may experience competition from third parties.
Third party patents may emerge containing
claims that impact the Group’s freedom to
operate.
The Group has assessed the impact of climate
change and concluded that there is likely to
be some minor future financial risk, which need
to be managed but none that would materially
impact the Group’s forecast or budget.
The Group expects that the impacts are likely
to be weather related disruption at internal
manufacturing sites and to the Group’s
suppliers, with the prospect of increased costs of
resources and fuels.
The Group has identified flood risk at the Boston
site and a key supplier in the Netherlands as
areas that require further flood risk assessment.
For more information, please see the TCFD
report on pages 58 to 59.
— The Group has an established compliance
framework and has developed a strong ethical
and compliance-focused culture amongst its
employees.
— The Group uses professional advisors to
provide appropriate guidance and advice
tailored to both the UK and the US market and
applicable laws and regulations, to minimise
any resulting risk that may arise.
— The Group looks to mitigate the risk of failure
arising from regulatory inspections through
investment in high quality facilities, equipment
and employees and, in particular, in quality
management processes.
— The Board prioritises strategic management of
the Group’s IP portfolio and monitors actions
to boost such portfolio.
— The Group has a dedicated team which
actively manages IP rights and any IP litigation.
— The Group has adopted a strategy of
performing freedom to operate searches early
to identify future possible issues.
— The Group targets sustainability aspects
through use of the Sustainable Accounting
Standards Board materiality finder, for the
biotechnology and pharmaceutical industry,
and additional internally determined critical
environmental aspects.
— The Group plans to continue to develop its
business continuity plans with alternative sites
and a second sourcing strategy to manage
the potential impact of these risks, should
they materialise.
— Risks relating to internal operations and
supply chain disruption from physical climate
related damage is assessed in the TCFD
report – this includes the need for further
flood risk assessments at the Boston site and
at a key supplier in the Netherlands. Specific
threat assessments, for example flood risk, are
being carried out as a result. Whilst the pool
of suppliers for the pharmaceutical industry
is relatively small, where high dependency
and risk is displayed, the Group will work with
those suppliers to mitigate disruption risk.
— The Group is currently aligning the net zero
carbon reduction pathway to the science
based consensus. Critical aspects targeted
and monitored under the Environmental
Management System include utility
consumption, purchased goods selection,
circular economy promotion and reduction
of waste.
— The Group also has a dedicated ESG
Committee which meets on a quarterly basis.
Further details can be found on page 56.
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic ReportStrategic ReportCorporate GovernanceGroup Financial Statements
68
PRINCIPAL RISKS, UNCERTAINTIES AND RISK MANAGEMENT (CONTINUED)
Trend versus
prior year
Devaluation of
sterling versus dollar
Risk Category and Principal risks
Context and potential impact
Mitigation actions
Economic and financial risks continued
Foreign currency exposure
and loan facility
Product liability and insurance risk
War in Ukraine and COVID-19
— Following the establishment of Oxford
Biomedica Solutions, the Group expects
that the proportion of income received in
US dollars and expenditure incurred in US
dollars will increase significantly. This risk will
be partly offset by dollar balances held by the
Group.
— The Group’s cash balances were
predominantly held in pounds Sterling, but
the Group does keep dollar balances to cover
net dollar expenditure over a forward-looking
12 month period. The Group’s Treasury
Policy permits cash balances to be held in
other currencies to hedge foreseen foreign
currency expenses. The Group keeps this
unhedged position under constant review.
— With regard to the Oaktree loan agreement,
compliance with this agreement is monitored
by the legal department regularly.
— The Group monitors these potential claims on
an ongoing basis and undertakes mitigating
actions, which include taking expert advice
on the validity of claims and using insurance
coverage against claims to cover any loss as
required.
— The Group is currently able to obtain
insurance cover. There can be no assurance
that any future necessary insurance cover will
be available to the Group at an acceptable
cost, if at all, or that, in the event of any claim,
the level of insurance carried by the Group
now or in the future will be adequate, or that a
product liability or other claim would not have
a material and adverse effect on the Group’s
future profitability and financial condition.
— The Group has sought to minimise the risk
arising from energy costs and the security of
long-term energy supply with long term fixed
contracts.
— The Group actively monitors services
provided for clients to ensure, where possible,
inflationary cost increases are mitigated.
Sterling has devalued versus the dollar over a
12 month period leading to increased levels
of expenditure to service dollar denominated
supplier spend, interest and loan financing costs.
In October 2022, the Group refinanced the
US$85 million secured 12-month loan facility
from funds managed by Oaktree announced
previously in March 2022. Under the terms
of the refinancing, the Group partially repaid
the outstanding amounts under the previous
short-term loan facility and negotiated a new
senior secured four-year term loan facility
provided by Oaktree in a principal amount of
US$50 million. The Group also secured the
option, subject to customary conditions and
available for a three-year period, to drawdown
a further US$25 million from Oaktree to fund
certain permitted acquisitions. Failure to comply
with the terms of the loan agreement with
Oaktree could potentially place the Group in
default, which could adversely affect the Group’s
business operations, financial position and
prospects.
In carrying out its activities the Group potentially
faces contractual and statutory claims or other
types of claims from clients, suppliers and/or
investors.
The Group is exposed to potential product
liability risks that are inherent in the research,
pre-clinical and clinical evaluation,
bioprocessing, marketing and use of
pharmaceutical products.
Inflationary cost pressures have accelerated in
the wake of the COVID-19 pandemic and the
war in Ukraine and are expected to impact the
Group’s operational expenditures, giving rise to
an increased risk that the Group may not be able
to pass on resulting price rises to clients.
Further, there is a risk that such cost pressures
will negatively impact the Group’s clients and
could result in a reduction in revenues from
clients, including revenues from clients under
long term contracts.
In addition, the risk to the security of the Group’s
supply of energy has increased considering the
impact of the war in Ukraine and the resulting
Russian sanctions.
The Strategic Report on pages 2 to 68 was approved by the Board on 25 April 2023 and signed on its behalf by:
Dr. Roch Doliveux
Chair
Oxford Biomedica plc | Annual report and accounts 2022 | Strategic Report
Strategic Report
Corporate Governance
Financial Statements
69
CORPORATE
GOVERNANCE
Contents
Board of Directors
Corporate Governance Report
Audit Committee Report
Nomination Committee Report
Directors’ Remuneration Report
Directors’ Report
Independent Auditors’ Report
70
72
78
85
89
115
122
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance
70
BOARD OF DIRECTORS
At the end of 2022 the Board comprised the following Directors:
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Stuart Paynter
Dr. Michael Hayden
Dr. Roch Doliveux
Stuart Henderson
Stuart Paynter
Chair
(Interim Chief Executive Officer January 2022 –
March 2023)
Dr. Roch Doliveux was appointed to the Board as
Non-Executive Chair in June 2020. Dr. Doliveux also
became Interim Chief Executive Officer from January
2022 until March 2023, following the Company’s
announcement of John Dawson’s intention to retire
as Chief Executive Officer and the acquisition of the
AAV business in the US.
Dr. Doliveux is currently Chair of the Board of
Directors at Pierre Fabre S.A. and Vice Chair of
Pierre Fabre Participations. He was previously the
Chief Executive Officer of UCB S.A. for ten years
during which time he transformed the company
from a diversified chemical group into a global
biopharmaceutical leader. He was a member of the
Board of UCB from 2002 – 2015 and from 2017 – 2021.
In addition, Dr. Doliveux was a member of the
Board of Stryker from 2010 – 2020 and Chair of the
Compensation Committee from 2016 – 2020. He also
chaired the Board of Vlerick Business School from
2013 – 2017, the Board of IMI, the largest healthcare
public-private partnership in the world from
2012 – 2015 and GLG Institute from 2016 – 2022.
Dr. Doliveux is a Veterinary Surgeon by training and
has an MBA from INSEAD.
Appointment:
— Appointed as Non-Executive Director and Chair
in June 2020.
— Appointed as Interim Chief Executive Officer in
January 2022 until March 2023.
Committee membership:
— Nomination Committee (Chair).
— Remuneration Committee (Dr. Doliveux did
not serve as a member of the Remuneration
Committee whilst he served as Interim Chief
Executive Officer).
Relevant skills:
— Corporate strategy.
— Corporate governance.
— Investor relations.
Vice Chair
Stuart Henderson was appointed to the Board as
a Non-Executive Director and Chair of the Audit
Committee in June 2016. He became Deputy Chair
and Senior Independent Director in June 2020. In
March 2023, Mr Henderson became Vice Chair when
the role of Deputy Chair and Senior Independent
Director was divided into two roles. Mr Henderson is
also the designated Director by the Board to oversee
engagement between the Board and the workforce.
Previously, Mr Henderson was a partner at Deloitte,
where he was Head of European Healthcare and
Life Sciences. Prior to this he was a Partner at
Arthur Andersen.
Mr Henderson has extensive audit and transaction
experience and has worked with life sciences
businesses for over 35 years. Mr Henderson is a
former Director of the Babraham Institute, Biocity
Group Limited, Norwich Research Partners LLP
and OneNucleus (the Life Sciences trade body for
Cambridge and London), and a former Non-Executive
Director of Cell Therapy Catapult Limited.
Appointment:
— Appointed a Director in June 2016.
Committee membership:
— Audit Committee (Chair).
— Remuneration Committee.
— Nomination Committee.
Relevant skills:
— Audit.
— Corporate governance.
— Corporate finance.
Dr. Heather Preston
Independent Non-Executive Director
Dr. Heather Preston was appointed to the Board as
a Non-Executive Director in March 2018 and was
appointed Chair of the Remuneration Committee in
June 2020.
Dr. Preston is a Senior Advisor to TPG Biotech. She has
over 30 years of experience in healthcare, as a scientist,
physician and management consultant and she has
been an investor in life sciences and biotechnology
for the last 20 years. Dr. Preston holds a degree in
Medicine from the University of Oxford.
Appointment:
— Appointed a Director in March 2018.
Committee membership:
— Remuneration Committee (Chair).
— Audit Committee.
— Nomination Committee.
— Scientific and Technology Advisory Committee.*
Relevant skills:
— Scientific advisory.
— Corporate finance.
— Investor relations.
Chief Financial Officer
Stuart Paynter joined the Board as Chief Financial
Officer in August 2017. Mr Paynter has 22 years’
experience in the pharmaceutical and healthcare
sectors. He qualified as a chartered accountant with
Haines Watts before moving to EDS.
Mr Paynter subsequently joined Steris, and worked
in a variety of roles within the healthcare and life
sciences divisions prior to becoming the European
Finance Director. Mr Paynter then moved to Shire
Pharmaceuticals where he became the Senior Director
of Finance Business Partnering for all business outside
of the US, transitioning to a corporate finance role
before becoming the Global Head of Internal Audit.
Prior to joining Oxford Biomedica Mr Paynter was Head
of Finance Business Partnering at De La Rue plc. He is
a member of the Institute of Chartered Accountants in
England and Wales.
Appointment:
— Appointed a Director and Chief Financial Officer
in August 2017.
Committee membership:
— None.
Dr. Michael Hayden
Non-Executive Director
Dr. Hayden was appointed to the Board as
a Non-Executive Director in July 2021.
He was previously the President of Global R&D and
Chief Scientific Officer at Teva Pharmaceuticals
Industries Ltd. and has co-founded five biotechnology
companies: Prilenia Therapeutics B.V., NeuroVir
Therapeutics Inc., Xenon Pharmaceuticals Inc., Aspreva
Pharmaceuticals Corp and 89bio, Inc. He currently
serves as CEO of Prilenia Therapeutics and represents
private and public (Ionis Pharmaceuticals Inc.,
AbCellera Biologics Inc. and 89Bio Inc.) companies
at board level. Dr. Hayden has focused his research
primarily on translational medicine, including genetics
of diabetes, lipoprotein disorders, Huntington’s disease,
predictive and personalised medicine, and drug
development, and has authored approximately 900
peer-reviewed publications and invited submissions.
Appointment:
— Appointed a Director in July 2021.
Committee membership:
— Science and Technology Advisory Committee.*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 71
Robert Ghenchev
Catherine Moukheibir
Professor Dame Kay Davies
Namrata Patel
Dr. Siyamak (Sam) Rasty
Robert Ghenchev
Professor Dame Kay Davies
Dr. Siyamak (Sam) Rasty
Non-Executive Director
Robert Ghenchev was appointed to the Board as
a Non-Executive Director in June 2019.
Mr Ghenchev is currently Head of Growth Equity at
Novo Holdings. Prior to joining Novo Holdings, he
was an investment banker at Moelis & Company and
Deutsche Bank in London. Mr Ghenchev has deep
corporate finance experience advising life science
companies on a wide range of issues. He holds a
J.Hons. B.A. degree in Finance and Economics from
McGill University and a M.Sc. degree in Financial
Economics from the University of Oxford.
Appointment:
— Appointed a Director in June 2019.
Committee membership:
— None.
Relevant skills:
— Corporate finance.
— Investor relations.
Catherine Moukheibir
Independent Non-Executive Director
Catherine Moukheibir was appointed to the Board as
a Non-Executive Director in December 2021.
Over the course of her career Ms Moukheibir has
served in senior executive roles and board positions
including at Kymab Limited, Innate Pharma S.A,
Ablynx N.V, Genkyotex S.A, MedDay Pharmaceuticals,
Zealand Pharma A/S, Zeltia S.A., and Creabilis. Prior
to that, she was the CFO of Movetis N.V, overseeing
the company’s IPO on Euronext and subsequent sale
to Shire Pharmaceuticals. She started her career in
investment banking and capital markets working in
the US and London. Ms Moukheibir holds an MBA
and a Masters in Economics from Yale University.
Ms Moukheibir has extensive international experience
in finance, capital markets and life sciences and is
currently serving as a Non-Executive board member
with various companies, both listed (Biotalys,
Ironwood Pharmaceuticals, Inc and MoonLake
Therapeutics), and privately owned (CMR Surgical
Limited, Asceneuron SA. DNA Script and Noema
Pharma).
Appointment:
— Appointed a Director in December 2021.
Committee membership:
— Audit Committee.
Relevant skills:
— Corporate finance.
— Corporate strategy.
Senior Independent Director
Professor Dame Kay Davies was appointed to the
Board as a Non-Executive Director in March 2021.
In March 2023, Professor Davies became Senior
Independent Director when the role of Deputy Chair
and Senior Independent Director was divided into
two roles.
Professor Davies is a world-leading human geneticist
with a research focus on the molecular analysis of
neuromuscular and neurological disease. She is
currently Professor of Anatomy Emeritus and Co-
Director of MDUK Oxford Neuromuscular Centre
at the University of Oxford. She was co-founder
of Summit Therapeutics Plc, a spinout from her
research activities. Professor Davies also sits on the
Board of UCB S.A. and was appointed a governor of
the Welcome Trust in 2008, serving as Deputy Chair
between 2013 and 2017. Professor Davies has a BA
in Chemistry and a D.Phil. in Biochemistry from the
University of Oxford.
Appointment:
— Appointed a Director in March 2021.
Committee membership:
— Remuneration Committee.
— Nomination Committee.
— Science and Technology Advisory Committee
(Chair).*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
Namrata Patel
Independent Non-Executive Director
Namrata Patel was appointed to Oxford Biomedica’s
Board as an Independent Non-Executive Director in
April 2022.
Ms Patel has extensive international experience
in manufacturing and end to end Supply Chain
management, as well as experience in the
commercialised regulated industry. She has held
positions of increasing seniority in major blue
chip companies including Coca Cola, W H Smith
Office Supplies, Gillette, and currently leads the
Global Beauty Sector Supply Chain in Procter &
Gamble, playing a key role in delivering their 2040
Sustainability Ambition Goals. She holds a Masters
in Logistics and Management from the Cranfield
School of Management, and a BA Hons in Public
Administration from the University of South Wales,
Mid Glamorgan.
Appointment:
— Appointed a Director in April 2022.
Committee membership:
— None.
Relevant skills:
— Corporate finance.
— Investor relations.
Independent Non-Executive Director
Dr. Siyamak (Sam) Rasty was appointed to the Board
as a Non-Executive Director in December 2020.
Dr. Rasty was most recently President, Chief Executive
Officer and Board Director at PlateletBio, a US-based
pioneering cell therapy company. Previously, he served
as Chief Operating Officer at Homology Medicines,
Inc., a genetic medicines company that he helped
launch in 2016 and transform into an established,
fully integrated public gene therapy and gene editing
company. Prior to joining Homology Medicines, he
held senior positions at Shire Pharmaceuticals, Endo
Pharmaceuticals and at GlaxoSmithKline.
Dr. Rasty holds a Ph.D. in Biochemistry from Louisiana
State University, where he focused on transcriptional
regulation of lentiviruses, completed a postdoctoral
fellowship at the University of Pittsburgh School
of Medicine, and received an MBA from Villanova
University.
Post period-end, Dr. Rasty informed the Board that he
will not be standing for re-election at the Company’s
AGM in June 2023.
Appointment:
— Appointed a Director in December 2020.
Committee membership:
— Audit Committee (until December 2021).
— Scientific and Technology Advisory Committee.*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
Post period-end, the Board was delighted to
welcome Dr. Mathias to the Board as Chief Executive
Officer in March 2023.
Dr. Frank Mathias
Chief Executive Officer
Dr. Frank Mathias joined Oxford Biomedica’s Board
in March 2023. Dr. Mathias was previously the CEO
of Rentschler Biopharma SE, which he successfully
developed into a leading global, full-service CDMO.
Prior to this, Dr. Mathias was CEO of Medigene AG,
a publicly listed immuno-oncology company
focusing on the development of T-cell-based cancer
therapies. Over the course of his 30-year career,
Dr. Mathias has also served in senior roles at leading
global pharmaceutical companies including Amgen,
Servier and Hoechst AG, and in 2019 was awarded
the title of “EY Entrepreneur of the Year” in Germany.
Dr. Mathias is a pharmacist by training and completed
his Doctorate in Pharmacy at Paris VI University.
*
The Science and Technology Advisory Committee
(STAC) is a committee comprising four external
scientific advisors, SET members and Board members.
The STAC is chaired by Professor Dame Kay Davies.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements
72
CORPORATE GOVERNANCE REPORT
Dear Shareholder
I am pleased to present Oxford Biomedica’s Corporate Governance Report for 2022.
Corporate Governance continues to be an important area of focus for the Board. The Board believes that good Corporate Governance is
essential for the long-term success of the business and this is ultimately the responsibility of the Board and its Committees.
In January 2022, the Company announced that John Dawson intended to retire from his role as Chief Executive Officer and he stepped
down as a Director in May 2022. At the request of the Board, I assumed the role of Interim Chief Executive Officer of the Company in
January 2022 and an external search consultancy was appointed to commence the formal process to appoint a successor. In November
2022, the Company was delighted to announce that Dr. Frank Mathias would become Chief Executive Officer from March 2023 to lead
the Group through its next phase of growth. Dr. Mathias brings world-class innovation and CDMO experience to Oxford Biomedica, and
joins us from Rentschler Biopharma SE, where he served as their CEO since 2016. The appointment of Dr. Mathias has been a significant
step in embedding our strategic focus as a quality and innovation-led CDMO.
At the end of 2022, the Board comprised 40% women, in compliance with the requirements of the Listing Rules. Furthermore, the Board
is pleased to confirm that it has met the recommendations of the Parker Review on Ethnic Diversity and also meets the requirements of
the Listing Rules with regard to ethnic diversity in boardrooms (see page 86 for further information).
The Board was pleased to engage more fully with the Company’s stakeholders in 2022 than in the immediately preceding years due
to the COVID-19 pandemic. We held our AGM as a combined physical and electronic meeting, encouraging shareholders to vote by
proxy in advance and inviting questions to be submitted to the Board in advance by post or email. These questions and our responses
were made available on our website. The Board is looking forward to continuing to return to a more normal level of engagement with
shareholders, employees and other stakeholders in 2023.
Oxford Biomedica achieved significant progress in 2022, with revenues from the core (excluding COVID-19 vaccine manufacturing)
business achieving double digit revenue growth compared to 2021. Lentiviral vector manufacturing volumes have continued their post
pandemic upward trajectory, and performance at Oxford Biomedica Solutions has been strong, with four new AAV partner agreements
signed by the year end, in addition to Homology Medicines, exceeding the originally stated target of two. The Board paid particular
attention to ensuring that the Group’s strategy continues to be appropriate by holding a one-day strategy review meeting in September
2022. The strategy review ensured that management focused on delivering the Group’s key priorities operating as a quality and
innovation-led CDMO, whilst managing the key risks facing the Group and considering how good corporate governance can contribute
towards delivering the Group’s strategy.
In November 2022, the Company Secretary conducted an internal evaluation of the Board’s performance covering the period from
January 2022 to the fourth quarter of 2022. The review process comprised the completion of an anonymised questionnaire covering
the various aspects of Board activities and Committees. The resulting report was discussed at the Board meetings in January and
March 2023 and the Board plans to implement appropriate changes based on the outcome of the report.
The following pages set out in more detail the activities and major matters considered by the Board in 2022.
Dr. Roch Doliveux
Chair ¹
¹
Dr. Roch Doliveux served as Interim Chief Executive Officer alongside his duties as Chair from January 2022 until March 2023,
when Dr. Frank Mathias assumed the role of Chief Executive Officer
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 73
Corporate Governance Framework
The Board and the Senior Executive Team and their respective sub-committees during the period under review, are set out below:
The Board
Chair – Dr. Roch Doliveux
SET
Interim CEO –
Dr. Roch Doliveux¹
Audit Committee
Chair – Stuart Henderson
Remuneration Committee
Chair – Dr. Heather Preston
Nomination Committee
Chair – Dr. Roch Doliveux
PDC
TDC
eOLT
CDC ²
RMC
Science and Technology
Advisory Committee
Chair – Prof. Kay Davies
SET – Senior Executive Team
PDC – Product Development Committee
TDC – Technical Development Committee
eOLT – Extended Operations Leadership Team (incorporates the Quality, Manufacturing and Operations Committee)
CDC – Commercial Development Committee²
RMC – Risk Management Committee
¹
²
Dr. Roch Doliveux served as Interim Chief Executive Officer alongside his duties as Chair from January 2022 until March 2023, when Dr. Frank Mathias assumed the role
of Chief Executive Officer
The CDC was formally disbanded in the fourth quarter of 2022 and has been succeeded by the newly constituted Portfolio of Sales Committee
At the request of the Board, Dr. Roch Doliveux acted as Interim CEO whilst remaining in his position as Chair after John Dawson
announced his intention to retire in January 2022. Dr. Doliveux remained in post until Dr. Frank Mathias assumed the role of CEO in March
2023. Dr. Doliveux was not a member of the Remuneration Committee whilst he served as Interim CEO but was invited to join meetings
as an observer.
The Board
The Board is collectively responsible for promoting the success of the Group by directing and supervising the Group’s activities to create
shareholder value. In doing so, it ensures that there are robust corporate governance and risk management processes in place. The Board
comprises both Non-Executive and Executive Directors and provides the forum for external and independent review and challenge
to the Executives. Following Board changes during 2022, the Board comprised nine Non-Executive Directors and one Executive Director
at year-end. Robert Ghenchev and Dr. Michael Hayden were considered not to be independent Non-Executive Directors.
The Board’s powers and responsibilities are set out in the Company’s articles of association and it has a formal schedule of matters
reserved for the Board’s approval.
The Board also takes a close interest in Quality, Health, Safety and Environment and Risk Management. Each of these areas prepare
reports for the Board ahead of each Board meeting.
The Chair sets the agenda for the Board meeting in consultation with the Chief Executive Officer and the Company Secretary. Board
papers, covering the agenda and taking into account items relating to the Board’s responsibilities under s172 of the Companies Act
2006, are circulated several days ahead of each meeting. Regular Board papers cover reports from the Chief Financial Officer on Finance
and Investor Relations; the Chief Operations Officer on Safety, Health and Environment and Operations; the Chief Technical Officer on
Quality, Process Research and Development, Client Programmes and Alliance Management and Analytical Services; the Chief Scientific
Officer on Research; the Chief Medical Officer on the external funding opportunities for the Group’s therapeutics portfolio and regulatory
matters; the Chief Business and Commercial Development officer on Business and Corporate Development; the Chief Commercial
Officer on Commercial CDMO activities; the Chief Information Officer on Cyber security, Digital Strategy and Business Change Projects;
the Chief People Officer on Human Resources; the Oxford Biomedica Solutions CEO on the Oxford Biomedica Solutions business;
and a Risk Management Report.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 74
CORPORATE GOVERNANCE REPORT (CONTINUED)
Factoring stakeholder engagement into Board decisions
By thoroughly understanding the Group’s key stakeholder groups, the Group can factor their needs and concerns into Boardroom
discussions (further information on the Group’s stakeholders is on pages 14 to 19). The Board’s procedures have been updated to require
a stakeholder impact analysis to be completed for all material decisions requiring its approval that could impact on one or more of its
stakeholder groups. The stakeholder impact analysis assists the Directors in performing their duties under s172 of the Companies Act 2006
and provides the Board with assurance that the potential impacts on its stakeholders are being carefully considered by management when
developing plans for Board approval.
The stakeholder impact analysis identifies:
— Potential benefits and areas of concern for each stakeholder group;
— The procedures and plans being implemented to mitigate against any areas of concern; and
— Who is responsible for ensuring the mitigation plans are being effectively implemented.
By way of example, the fill/finish case study (pages 18 to 19) illustrates how the Board considered the potential impact of the decision to
introduce fill/finish at the Oxbox manufacturing site on each stakeholder group as well as stakeholder needs and concerns, in accordance
with s172 of the Companies Act 2006.
Until John Dawson stepped down as CEO in January 2022, there was a clear division of responsibilities between the Chair and Chief
Executive Officer. Following John Dawson’s decision to step down, Dr. Roch Doliveux acted as Interim Chief Executive Officer whilst the
Company undertook a search for a new Chief Executive Officer. Following Dr. Frank Matthias’ appointment as CEO in March 2023 there
was once again a clear division of responsibilities between the Chair and Chief Executive Officer.
Certain responsibilities are delegated to three Board Committees – the Audit, Nomination and Remuneration Committees. These
Committees operate under clearly defined terms of reference, which are disclosed on the Group’s website (www.oxb.com). In addition,
the Company has an advisory committee, the Science and Technology Advisory Committee (STAC) which comprises four external
scientific advisors, members of the SET and of the Board. The STAC is chaired by Professor Dame Kay Davies and has clearly defined
terms of reference, which are also disclosed on the Group’s website (www.oxb.com).
Reports from the Audit and Nomination Committees are included in this section and the Directors’ Remuneration Report is on pages 89
to 114 incorporating the Remuneration Committee report.
At the end of 2022, the Board comprised the following Directors, whose biographies are set out on pages 70 to 71.
— Dr. Roch Doliveux who was appointed Non-Executive Chair of the Board and Chair of Nomination Committee in June 2020.
Dr. Doliveux met the independence criteria recommended by the Corporate Governance Code at the time of his appointment.
Dr. Doliveux acted as Interim CEO from January 2022 until Dr. Frank Matthias joined as CEO in March 2023.
— Stuart Paynter who was appointed as Chief Financial Officer of the Group in August 2017.
— Stuart Henderson who was appointed as a Non-Executive Director in June 2016. Mr Henderson is Chair of the Audit Committee and
the designated Board representative for the Workforce Engagement Panel. Mr Henderson was appointed Senior Independent Director
and Deputy Chair following the 2021 AGM until the separation of the roles in March 2023 following which Mr Henderson continues
to act as Vice Chair. Mr Henderson is considered to be independent.
— Dr. Heather Preston who was appointed as a Non-Executive Director in March 2018. Dr. Preston is Chair of Remuneration Committee
and is considered to be independent.
— Robert Ghenchev who was appointed as a Non-Executive Director in June 2019. Mr Ghenchev is Managing Partner and Head of
Growth Equity at Novo Holdings, which is a 10.4% investor in the Group, and as such he is not considered independent under the
Corporate Governance Code.
— Dr. Sam Rasty who was appointed as a Non-Executive Director in December 2020. Dr. Sam Rasty is considered to be independent.
Dr. Rasty has informed the Board that he will not be seeking re-election at the Company’s forthcoming 2023 AGM.
— Professor Dame Kay Davies who was appointed as a Non-Executive Director in March 2021. Professor Davies is considered
independent. Professor Davies also acts as Chair of the Science and Technology Advisory Committee, an advisory committee to the
Board and was appointed Senior Independent Director to the Board in March 2023.
— Dr. Michael Hayden who was appointed as a Non-Executive Director in July 2021. Dr. Hayden is not currently considered to be
independent, having previously provided consultancy services to the Board. However, in accordance with the Corporate Governance
Code, the Board hope to deem Dr. Hayden independent in July 2024.
— Catherine Moukheibir who was appointed as a Non-Executive Director in December 2021. Ms Moukheibir is considered to be
independent.
— Namrata Patel who was appointed as a Non-Executive Director in April 2022. Ms Patel is considered to be independent.
During the year, John Dawson stepped down as CEO in January 2022 and retired from the Board in May 2022. Since the year-end,
Dr. Frank Mathias joined the Group and the Board in March 2023 as Chief Executive Officer.
Each Director is provided with an appropriate induction on appointment.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 75
All Directors and the Board and its Committees have access to advice and the services of the Company Secretary, and to external
professional advisers as required. The appointment and removal of the Company Secretary is a matter for the Board as a whole to consider.
Board meetings
The Board meets regularly, with meeting dates agreed for each year in advance. During 2022, there were six regular Board meetings
(on two occasions the meeting took place over two days). The attendance of individual Directors at Board and Committee meetings
was as follows:
John Dawson¹
Professor Dame Kay Davies
Dr. Roch Doliveux ²
Robert Ghenchev
Dr. Michael Hayden
Stuart Henderson
Catherine Moukheibir
Namrata Patel ³
Stuart Paynter
Dr. Heather Preston
Dr. Sam Rasty
Regular Board
Possible
3
6
6
6
6
6
6
4
6
6
6
Attended
3
6
6
6
6 ⁴
6
6
4
6
6
6
Audit Committee
Possible
Attended
Remuneration Committee
Attended
Possible
Nomination Committee
Possible
Attended
18
18*
18
18
18
18*
18
18
14
14
14
14
14
14
1*
1*
14
1*
1*
14
1*
3
3
3
3
3
3*
3
¹
²
³
⁴
*
John Dawson retired from the Board in May 2022.
Dr. Roch Doliveux acting as Interim CEO was not considered independent.
Namrata Patel was appointed in April 2022.
Michael Hayden sent apologies for the second day of the September board meeting, which took place over two days.
Attended as an observer
In addition to the above regular meetings, the Board (or an appointed sub-committee of the Board) met on fifteen other occasions
to consider specific ad hoc matters including, inter alia, the approval of the 2021 financial statements, the interim 2022 financial results,
succession planning and the acquisition of an 80% ownership interest in Oxford Biomedica Solutions.
The Chair holds meetings after each regular Board meeting with Non-Executive Directors, without the Executive Directors in attendance.
Board activity during 2022
Board matters during 2022 included:
— Routinely recurring items such as: the approval of the 2022 financial budget; the 2022 corporate objectives; performance of 2021
corporate objectives; the preliminary results and Annual report and accounts; the interim results announcement; and review of the
basis for the Group’s related going concern disclosures;
— A review of the Group’s strategy, conducted in September;
— Reviewing the integration of the Oxford Biomedica Solutions business;
— Reviewing business development opportunities including partnering and collaboration transactions;
— Reviewing the Group’s strategy relating to external funding opportunities for its therapeutics portfolio;
— The appointment of Namrata Patel as a Non-Executive Director;
— The appointment of Dr. Frank Mathias as CEO;
— Ongoing reviews of the Group’s risk management processes and key risks;
— Reports on Health, Safety and Environment;
— The Group’s activities surrounding workforce engagement;
— Completion of an internal evaluation on Board effectiveness;
— Reviewing the implications of ESG, climate change and the ongoing COVID-19 pandemic;
— On-going review of cyber risks;
— On-going review of the Groups intellectual property position; and
— Review of employee retention statistics.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 76
CORPORATE GOVERNANCE REPORT (CONTINUED)
Re-election of Directors
In accordance with the articles of association and to ensure compliance with the Corporate Governance Code all Directors are subject to
annual re-election.
In line with the Corporate Governance Code, Dr. Roch Doliveux, Stuart Paynter, Stuart Henderson, Dr. Heather Preston, Robert Ghenchev,
Professor Dame Kay Davies, Dr. Michael Hayden, Catherine Moukheibir and Namrata Patel will retire and be subject to re-election at the
AGM in 2023. Dr. Frank Mathias shall stand for appointment by the shareholders for the first time. Dr. Sam Rasty has informed the Board
that he will not seek re-election at the AGM in 2023.
Communication with shareholders
The Board recognises the importance of effective communication with shareholders and potential investors. The primary points of contact
during 2022 were the Interim Chief Executive Officer and Chief Financial Officer but the Chair, Senior Independent Director and Chair
of the Remuneration Committee are also available for meetings with investors, if required. Since Dr. Frank Mathias joined the Board as Chief
Executive Officer in March 2023, he has also acted as a primary point of contact. Novo Holdings (10.4% shareholder), continues to be
represented on the Board by Robert Ghenchev, which ensures a clear channel of communication with Novo Holdings during the year.
The Group has engaged with shareholders and potential investors through the various channels below:
Meetings with existing shareholders
Dr. Roch Doliveux and Stuart Paynter met with major shareholders during 2022.
Stuart Henderson as Chair of the Audit Committee and Dr. Heather Preston as Chair of the
Remuneration Committee also met with major shareholders.
2022 Annual General Meeting
Meetings with potential investors
Results announcements and presentations
The 2022 AGM was held on 27 May 2022 as a combined physical and electronic meeting. Save
for such persons nominated by the Chair of the meeting in order to establish a quorum, Directors
and Shareholders were encouraged not to attend the AGM in person due to continued advice
and restrictions on the numbers of attendees in light of the COVID-19 pandemic. Directors and
Shareholders were invited to attend the AGM virtually, which lasted around 30 minutes. The AGM
included a Q&A session after the meeting closed with the answers posted on the Group’s website
(questions to the Group were submitted in advance of the meeting).
During 2022, Stuart Paynter regularly made presentations and met potential investors on a
one-to-one basis or virtually at investor conferences in Europe and the US. In addition, Dr. Roch
Doliveux (Interim CEO and Chair) also met with a number of investors throughout the year. The
Group conducted investor roadshows periodically, which provided further opportunities to meet
potential investors. Since his appointment as CEO in March 2023, Dr. Frank Mathias has assumed
primary responsibility for meetings with potential investors, alongside Stuart Paynter.
The Group announced its 2021 full year performance and financial results in April 2022, and its
2022 half year interim results in September 2022, through RNS announcements accompanied
by analyst conference calls which are accessible to all shareholders and recordings of which
were made available on the Group’s website.
2021 Annual report
The Group published its 2021 Annual report and accounts in April 2022.
Website
The Group’s website http://www.oxb.com contains details of the Group’s activities as well
as copies of regulatory announcements and press releases, copies of the Group’s financial
statements, and terms of reference for the Board Committees. Investors and others can
subscribe to an e-mail alert service, which provides notifications of announcements.
Investor relations
The Group endeavours to respond to all enquiries from shareholders and potential investors
received through its enquiry inbox ir@oxb.com.
Social media
The Group uses LinkedIn and Twitter to alert followers to Company news flow.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 77
The Senior Executive Team (SET) and its committees
Operational management is conducted by the Executive Directors who, together with Dr. James Miskin, Dr. Kyriacos Mitrophanous,
Nick Page, Dr. Jason Slingsby (stepped down April 2023), Helen Stephenson-Ellis (stepped down April 2022), Natalie Walter, Matthew Treagus;
Dave Backer (stepped down in September 2022); Tim Kelly (joined March 2022), Lisa James (joined April 2022), Dr. Ravi Rao (joined April
2022) and Dr. Sébastien Ribault (joined October 2022) formed the Senior Executive Team (SET) during 2022. During 2022, the SET met
every week, had a once-a-week update meeting and had an extended SET meeting every month, with the agenda covering the full range
of activities of the Group, including financial performance, organisational and employment matters, risk management and Safety, Health
and Environment.
There are three SET sub-committees covering the major business operational areas. During 2022, these sub-committees met monthly,
except for the Product Development Committee and were attended by SET members and other relevant senior managers from the
business. These sub-committees are:
— Product Development Committee (PDC) – covering the development of new cell and gene therapy products from initial concept
through to clinical development;
— Technical Development Committee (TDC) – covering the development of new and improved assays and production and other
processes, including cell and vector engineering; and
— Extended Operational Leadership Team (eOLT) – incorporates the Quality and Manufacturing Operations Committee and covers
quality, operational and manufacturing matters.
Within their area of responsibility these committees cover objective and target setting, monitoring performance against targets, ensuring
compliance with GxP and other relevant requirements, monitoring expenditure against budget and risk management.
There are three other important committees:
— Commercial Development Committee (CDC) – which covers the external opportunities to out-license and in-license technology
or product candidates and to generate partnership opportunities for manufacturing and product development. Following the strategic
decision to focus on being a quality and innovation-led CDMO, the CDC was succeeded by a newly constituted Portfolio of Sales
Committee in the fourth quarter of 2022;
— Risk Management Committee (RMC) – this committee comprises senior managers from all parts of the business. The committee
meets at least quarterly to identify and assess risks facing the business and to propose risk mitigation and management actions; and
— Science And Technology Committee (STAC) – this committee is Chaired by Professor Dame Kay Davies and comprises four external
scientific advisors, SET members and Board members. The committee met as required to review and assess new technology and
product opportunities. STAC provides an external independent view of assets to SET and the Board.
Important matters from all of these committees are referred to the SET.
Risk management
The Board is responsible for determining the nature and extent of the risks it is willing to take in achieving the objectives of the Group and
it reviews current key risks at every Board meeting. The Audit Committee monitors the conduct of the risk management processes within
the Group whilst the SET is accountable for those processes, identifying the risks facing the Group and formulating risk mitigation plans.
The active involvement of the Executive Directors in the management sub-committees allows them to monitor and assess significant
business, operational, financial, compliance and other risks.
The Board’s assessment of the prospects of the Group, its expectation that the Group will be able to continue in operation and meet its
liabilities as they fall due, and the viability statement, are set out on page 118.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 78
AUDIT COMMITTEE REPORT
During 2022, the Audit Committee comprised Stuart Henderson (Chair), Dr. Heather Preston and Catherine Moukheibir. Provision 24
of the Corporate Governance Code recommends the Audit Committee to comprise at least three Independent Non-Executive Directors
and the Company complied with this during 2022. Mr Henderson, Dr. Preston and Ms Moukheibir all have relevant experience, which
qualified them for membership of the Audit Committee and, in Stuart Henderson’s case, to be Chair of the Audit Committee. Their
experience is set out in their brief biographies on pages 70 and 71.
The role of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities by reviewing and monitoring:
— The integrity of the financial and narrative statements and other financial information provided to shareholders;
— The internal controls and risk management for the Company and its subsidiaries (together, the Group);
— The internal and external audit process and auditors; and
— The processes for compliance with laws, regulations and ethical codes of practice.
Key activities:
Statutory reporting
In relation to the financial statements, the Audit Committee ensures that the Group provides accurate and timely financial results that
reflect the relevant accounting standards and judgements appropriately. This includes assisting the Board with oversight of the quality
and integrity of the Group’s financial reporting and accounting policies and practices and the Group’s status as a going concern and
longer-term prospects and viability, including the appropriateness of a three-year period assessment reflecting the dynamic and changing
environment in which the Group operates (see pages 117 and 119). The Audit Committee reviewed and recommended the approval
of the 2021 preliminary results and 2021 Annual report and accounts, the 2022 interim financial statements, the Group’s 2022 preliminary
results and this Annual report and accounts.
As part of its review of the financial statements, the Audit Committee considered, and challenged as appropriate, the accounting policies
and significant judgements and estimates underpinning the financial statements. Details regarding the significant financial reporting
matters and how they were addressed by the Audit Committee are set out later in this report.
Risk management
On behalf of the Board, the Audit Committee oversees the risk management strategy and appetite, the appropriateness and effectiveness
of internal control processes, and Corporate Governance Code compliance.
At least annually, the Chair of the Risk Management Committee (RMC) presents the Audit Committee with an update on the significant
current and emerging risks including, inter alia, the ongoing war in Ukraine, and the reputational and financial risks related to the launch,
alignment and financial and operational success of Oxford Biomedica Solutions, and the associated steps that the Group takes to mitigate
such risks via updates from the RMC. Further details of these risks can be found on pages 64 and 68 of the Annual report and accounts.
During 2022, the RMC extended the Corporate Risk Register to include potential scenarios where fraud could arise across the Group.
The Audit Committee reviewed and had the opportunity to provide feedback on the identified high and medium risk scenarios.
Internal control
The Directors are responsible for the Group’s system of internal control and for reviewing its effectiveness. The system is designed
to manage, rather than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable, and not absolute,
assurance against material misstatement or loss. At least annually, the Group Financial Controller, or Director of Financial Controls,
presents the Audit Committee with an update on control activity performed during the year, including financial, operational and
compliance controls. The status of the finance function transformation was reviewed at the April 2022 and November 2022 Audit
Committee meetings. Based on its review, the Audit Committee has concluded that the system of internal control provides a reasonable
basis for signing off the Annual report and accounts.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 79
The main features of the internal control process which apply to the Group’s financial reporting processes include:
— A detailed review process of the Annual report and accounts, including review by the SET and the Board;
— Preparation of accounting papers for significant accounting and judgemental issues and review by the Group Financial Controller,
Chief Financial Officer and the Audit Committee;
— Performance of an annual assessment of the risk of financial fraud and misstatement within the financial statements and accounting
records, and assessment of the appropriateness of controls in place to mitigate the risks identified to an acceptable level;
— Preparation of detailed going concern and viability assessment papers and cash flow forecasts by the Head of Financial Planning and
Analysis, with subsequent detailed review and approval by the Chief Financial Officer and the Board;
— Organisation of the finance function such that monthly management results and externally reported financial statements are subject
to thorough review by the Group Financial Controller, Head of Financial Planning and Analysis and the Chief Financial Officer;
— Performance of control procedures over revenues, journals and key statement of financial position accounts which have been
assessed to have the greatest risk of misstatement; and
— Clear separation of duties and detailed authorisation limits within the financial processes such as approval of invoices, purchase orders,
payroll and disbursements.
The Group is in the process of implementing a finance function transformation strategy to enhance the internal control environment,
ahead of expected corporate governance reforms published in the UK Government’s Department for Business, Energy & Industrial
Strategy (BEIS) White Paper “Restoring trust in audit and corporate governance”. During 2022, the UK Government confirmed a draft Audit
Reform Bill on its 2022/23 legislative agenda.
The implementation of the transformation strategy has made good progress during 2022 and has achieved the following:
— Completed a partnership with a professional services firm to review and update the internal control policies, procedures, and process
flowcharts over financial reporting;
— Launch of a risk and controls library, managing the key risks and mitigating controls across the end-to-end financial reporting process;
— Performance of monthly monitoring and testing of the Group’s financial control framework, with escalation in place on key operating
financial controls;
— Undertaken extensive housekeeping improvements to the financial reporting process, including bringing all balance sheet
reconciliations up-to-date; clearing down long-aged balances within the GRNI (goods received but not invoiced) and expense
ledgers; improving the efficiency of managing prepayments, invoice processing, fixed assets and expense claims;
— Continued to develop accounting processes to ensure the timely and accurate integration of the financial reporting of Oxford
Biomedica Solutions into the Group;
— Recognised the importance and risks associated with manual spreadsheets, by ensuring key spreadsheets supporting financial
reporting comply with spreadsheet control principles;
— Created a fraud risk register, to complement the corporate risk register, capturing material fraud risks to the group, and an assessment
of the mitigating controls; and
— Reported regularly to the Audit Committee on progress of the transformation strategy.
Over the next 12 months, the finance transformation project will continue to deliver strengthened controls and efficiencies across the
financial reporting processes.
Compliance
The Audit Committee supports the Board in discharging its responsibilities in relation to whistleblowing, ethical behaviour, and the
prevention of bribery, fraud, and adherence to modern slavery legislation.
External audit
The Audit Committee considers the audit scope and auditor’s fees, auditor independence and non-audit fees, as well as update reports,
management letter observations and effectiveness reviews.
Annual evaluation for an Internal audit function
The Group does not currently operate an Internal Audit function, although on an annual basis the Audit Committee considers the need
for such a function. Upon the completion of the finance function transformation referred to above, the Audit Committee will consider the
commission of an annual third-party internal audit review of the effectiveness of key controls on a cyclical basis.
In the absence of an Internal Audit function, the Audit Committee receives an update from either the Group Financial Controller or the
Director of Financial Controls regarding control activity performed during the year, as explained in the internal control section on page 78.
Other governance matters
The Audit Committee considers its effectiveness on a stand-alone basis, as a detailed sub-set of the Board effectiveness review. Each year
the Audit Committee considers its terms of reference and recommends any changes it deems necessary or beneficial to the Board.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 80
AUDIT COMMITTEE REPORT (CONTINUED)
Meetings held:
The Audit Committee met three times in 2022. The key items for discussion and review were as follows:
— 19 April 2022 – to review the 2021 audit findings and consider the auditors’ report. The Audit Committee reviewed all the material
accounting and estimation judgments likely to have a material impact on the financial statements. The auditors reported on their
significant risk areas of audit focus including bioprocessing contract revenue recognition, going concern, and the audit approach to
the launch of Oxford Biomedica Solutions. The Audit Committee approved the disclosure of the prior period restatement for inclusion
in the accounts. The Audit Committee noted progress on the finance function transformation project. A risk report was presented and
the Audit Committee noted new risks, as identified above.
— 8 September 2022 – to review the 2022 interim results as well as discussed the audit strategy and plan for 2022. The auditors reported
on the status of their review of areas of audit focus, including changes to materiality levels, contract revenue recognition, fraudulent
revenue recognition and management override of controls. In relation to their review of the launch of Oxford Biomedica Solutions,
the auditors reported on the judgements made and benchmarking over the valuation of intangible assets and goodwill, and their
assessment of deferred tax liability. The auditors agreed that the adoption of the going concern basis was appropriate.
— 17 November 2022 – to review risk management, insurance strategy, tax strategy, treasury policy and the financial control environment
and related controls. Key risks, including risk register updates, were also highlighted to the Audit Committee. The 2022/2023
insurance strategy was discussed and agreed, including discussions around directors and officers, errors and omissions insurance
and cyber insurance. The Audit Committee also agreed the tax strategy. The Audit Committee approved the current treasury policy
and discussed the progress on the Group’s strategy of enhancing its financial control environment and related controls.
As noted in the Corporate Governance report, the Chair of the Audit Committee often meets shareholders during the AGM, and is always
available to discuss Audit Committee matters with shareholders throughout the year. It is intended that significant shareholders will
be informed of the Group’s decision to change auditor and the Chair of the Audit Committee will engage with those shareholders at the
appropriate time.
Key judgements and estimates considered within the financial statements:
The Audit Committee considered the following key judgements and estimates during the year. As part of these considerations,
the Committee received updates from management and from the external auditors.
Issue
Contract revenues:
identification of performance
obligations, allocation
of revenue and timing
of revenue recognition
How the issue was addressed by the committee
The Group identified three key areas of judgement within the collaboration agreements entered into during the
period as follows: (i) in relation to the number of distinct performance obligations contained within each collaboration
agreement; (ii) the fair value allocation of revenue to each performance obligation; and (iii) the timing of revenue
recognition based on the achievement of the relevant performance obligation. The sales royalties contained within
the collaboration agreements qualify for the royalty exemption available under IFRS 15 and will only be recognised
as the underlying sales are made even though the performance obligation, in terms of the technology license, has
already been met.
The judgements with regards to the number of distinct performance obligations and the fair value allocation of
revenue to each performance obligation takes place on a contract-by-contract basis across numerous contracts
entered into by the Group. As these judgements take place across numerous contracts, each with different
characteristics, it is not practical to provide a quantitative analysis of the impact of applying different judgements.
Modification of Oaktree
loan agreement
On 10 March 2022, the Group entered into and drew down an US$85 million loan facility agreement with Oaktree
under a one year facility agreement maturing in 2023 with a nominal interest rate on the loan of 8.5%. On 7 October
2022, US$35 million was repaid and the term was extended to October 2026, with a variable interest rate of 10.25%.
The Audit Committee determined that the modification of the loan facility is not a substantial modification and
therefore will be recognised as a non-substantial modification to the existing loan, with the loan being restated
to its present value and subsequently at amortised cost under the effective interest rate method. This was
determined on the basis of a quantitative test performed as required by IFRS 9 resulting in a 3% change to the net
present value of the remaining cash flows when compared to the original cash flows under the original terms.
This was determined on the basis of the quantitative test performed as required by IFRS 9 resulting in a 3% change to
the net present value of the remaining cash flows when compared to the original cash flows under the original terms.
Management has also performed a qualitative assessment to identify substantial differences in terms that by nature
were not captured by the quantitative assessment.
In considering the qualitative factors, Management has considered the payment terms, options, change in other
terms and collaterals. Based on the quantitative and qualitative assessment, Management has determined that
the modification of the loan does not meet the substantial modification criteria.
If the Group had concluded that the amendment constituted a significant modification, this accounting
treatment would have resulted in the recognition of a loss of £1,391,000, recognition of legal fees of £439,000
and an increase in the loan balance of £409,000 on 7 October 2022.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 81
Issue
Percentage of completion
of bioprocessing batch
revenues
How the issue was addressed by the committee
Bioprocessing of clinical/commercial product for clients is recognised on a percentage of completion basis over
time as the processes are carried out. Progress is determined based on the achievement of verifiable stages of
the bioprocessing process. Revenues are recognised on a percentage of completion basis and as such require
estimation in terms of the assessment of the correct stage of completion including the expected costs of
completion for that specific bioprocessing batch.
The value of the revenue recognised with regards to the bioprocessing batches which remain in progress at
period end is £32.0 million. If the assessed percentage of completion was 10 percentage points higher or lower,
revenue recognised in the period would have been £3.9 million higher or lower.
Percentage of completion
of fixed price process
development revenues
As it satisfies its performance obligations, the Group recognises revenue and the related contract asset
with regards to fixed price process development work packages. Revenues are recognised on a percentage of
completion basis and as such require estimation in terms of the assessment of the correct percentage
of completion for that specific process development work package.
The value of the revenue recognised and the related contract asset raised with regards to the work packages which
remain in progress at period end is £8,179,000. If the assessed percentage of completion was 10 percentage points
higher or lower, revenue recognised in the period would have been £818,000 higher or lower.
Provision for out of
specification bioprocessing
batches
Bioprocessing of clinical/commercial product for clients is recognised on a percentage of completion basis over
time as the processes are carried out. Progress is determined based on the achievement of verifiable stages of
the process.
As the Oxford Biomedica (UK) Ltd has now been bioprocessing product across a number of years, and also
in a commercial capacity, the Oxford Biomedica (UK) Ltd has assessed the need to include an estimate of
bioprocessed product for which revenue has previously been recognised and which may be reversed should
the product go out of specification during the remaining period over which the product is bioprocessed. In
calculating this estimate the Oxford Biomedica (UK) Ltd has looked at historical rates of out of specification
batches across the last four years and has applied the percentage of out of specification batches to total batches
produced across the assessed period to the revenue recognised on batches which have not yet completed the
bioprocessing process at period end.
This estimate, based on the historical average percentage, may be significantly higher or lower depending on the
number of bioprocessing batches actually going out of specification in future. If the historical average percentage
had been 10% higher or lower, the estimate would be £259,000 higher or lower. The estimate will increase or
decrease based on the number of bioprocessing batches undertaken, the percentage of completion of those
bioprocessing batches, and the number of batches which go out of specification over the assessment period.
Consequently, bioprocessing revenue of £2,592,000 (2021: £769,000) has not been recognised during 2022
with the corresponding credit to contract liabilities (note 19). This revenue will be recognised as the batches
complete bioprocessing.
No provision for out of specification batches has been raised for Oxford Biomedica Solutions as management
has concluded that, based on review of analytical testing results received after year end, no bioprocessing batch
was deemed to be at risk of failure to meet specifications.
The estimated useful life of developed technology acquired by the Group is 15 years, as the Group expects the
technology to generate cash flows for a total of 15 years. The estimate of 15 years is based on management’s
experience of the time period over which the technology acquired as part of the launch of Oxford Biomedica
Solutions will become fully obsolete. Over time as the platform technology is improved, parts of the technology
become obsolete as they are superseded by new technology until after 15 years the original technology is
expected to have been fully replaced by newer/improved technology.
If the estimated useful life of the assets had been 10 years, the estimated amortisation for the year ended
31 December 2022 would be £3,036,000 higher (2021: nil); whilst, if the estimated useful life of the assets had
been 20 years, the estimated amortisation for the year ended 31 December 2022 would be £1,518,000 million
lower (2021: nil).
Amortisation of intangible
assets (developed technology)
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 82
AUDIT COMMITTEE REPORT (CONTINUED)
Issue
Sale and leaseback:
lease liability discount rate
How the issue was addressed by the committee
During November 2022, the Group sold its Windrush Court facility to Kadans for a cash consideration of £60 million
in a sale and leaseback transaction (see note 33). A key estimate identified within the sale and leaseback agreement
was the incremental borrowing rate used to discount the lease liability cash flows back to their present value to
determine the lease liability at year end.
As the rate implicit in the lease is not readily determinable, the Group’s incremental borrowing rate was based on
the information available at the commencement date in determining the discount rate used to calculate the present
value of lease payments. The rate has been determined using previously available information on borrowing rate as
well as indicative borrowing rate that would be available to the Group based on the value, currency and borrowing
term provided by financial institutions, adjusted for company and market specific factors. Estimation uncertainty is
involved in selecting an appropriate rate, and the rate selected for each lease will have an impact on the value of the
lease liability and corresponding right-of-use asset in the consolidated statement of financial positions.
If the estimated lease liability discount rate had been one percentage higher or lower, the gain recognised on the
sale of the Windrush Court facility would have been £1,775,000 higher or lower (2021: nil) with the other side of
the entry decreasing or increasing the lease liability by £2,027,000 (2021: £nil) and decreasing or increasing right
of use assets by a £253,000 (2021: £nil).
Valuation of put option liability On 10 March 2022, the Group recognised a put option liability to acquire the remaining 20% of Oxford Biomedica
Solutions that it doesn’t already own, from Homology Medicines. The fair value of the option at the date of
acquisition was assessed to be £39.0 million. As at 31 December 2022, the fair value of the put option liability was
£38.2 million (2021: nil).
The Group estimates the value of the put liability using a Monte Carlo simulation which calculates the expected
future exercise value of the put option, taking into consideration Oxford Biomedica Solutions’ forecasted
revenues over the period up until the expected exercise date along with the expected volatility of those revenues
over that same period. The expected future exercise value is then discounted to the present using a discount rate
in order to capture the counter party risk of the expected payment.
Key estimation uncertainty inputs which directly impact the valuation of the put liability are assessed to be:
— Revenues of Oxford Biomedica Solutions – the revenues of Oxford Biomedica Solutions are based on the
management approved forecast up until the end of the option period. Should the forecast change or the
actual results vary, this may impact the value of the put option liability;
— Expected volatility of revenues – should the expected volatility of Oxford Biomedica Solutions revenues vary,
this may impact the value of the put option liability; and
— Discount rate – the discount rate may be impacted by economic and market factors, as well as changes to the
risk free rate of return which impacts debt borrowing rates. Should the discount rate calculated by management
be adjusted, this may impact the value of the put option. Management has calculated the discount rate based on
the risk free rate, the expected return from similar companies and the Group’s cost of debt.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 83
Other estimates
The accounting for the following matter involved a high-level of estimation during the year. However, as the acquisition accounting is
considered final, this matter is not considered a major source of estimation uncertainty with a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
Issue
Valuation of acquired
intangible assets
How the issue was addressed by the committee
As part of the acquisition accounting for the acquisition of Oxford Biomedica Solutions in 2022, we have
performed an assessment on the identification, fair value, and expected useful economic lives of acquired
intangible assets such as developed technology assets at the date of acquisition. The fair value attributed to
intangible assets arising on acquisition is recognised in accordance with IAS 38 Intangible assets and is based on
a number of estimates.
The acquired identifiable assets and liabilities have been recognised at their fair values at acquisition date and in
accordance with the Group’s accounting policies. The fair value of the developed technologies intangible asset is
considered a key estimate subject to estimation uncertainty.
Below are the details for the valuation methodologies used for the intangible assets.
Acquired developed technology has been valued using the multi-period excess earnings method (MPEEM)
method, valued at £102.8 million, The MPEEM method considers the present value of net cash flows expected to
be generated by the client relationships, by excluding any cash flows related to contributory assets.
Management considers the weighted average return on assets and discount rates as critical estimates as a reasonably
possible change to these assumptions in aggregation, or in isolation, will have an impact on the consolidated
financial statements. The weighted average return on assets and discount rate used by management in the valuation
of the developed technology is 17.3% and 20% respectively. Below are the various sensitivities of weighted average
return on assets and discount rates and their impact on the related intangible assets.
Sensitivities
Discount rate
17%
18%
19%
Weighted average
rate of return
15.0%
15.8%
16.5%
Adjusted Developed
technology value
£’m
121.8
113.5
106.0
Impact
£’m
19.0
10.7
3.2
Upon identification of these key judgements and estimates, management provided the Audit Committee with a detailed update on
the nature, reasoning behind and risk of misstatement of these key accounting items, estimates and judgements, including any related
accounting papers and other supporting documents. Any significant change to the method of calculation of these issues, or the
judgement or estimates involved, is flagged to the Audit Committee, with regular updates being provided until such time as these are
finalised prior to release of the year end or interim results. The committee challenged each of the judgements and estimates and the
range of possible alternatives are as disclosed above. The committee determined that the judgements and estimates made in the financial
statements accurately reflect the performance and position of the business in the year.
The Group’s external auditor has reported to the Audit Committee that they have reviewed the assumptions and methods used in
calculating these key accounting items, estimates and judgements, as well as performing detailed testing of the year end position, and
found these significant issues to be appropriately accounted for.
Having provided appropriate challenge to management and the external auditor, the Audit Committee has concluded that these key
judgements and estimates have been appropriately accounted for.
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AUDIT COMMITTEE REPORT (CONTINUED)
COVID-19:
The Group, and it’s employees, have experienced how a successful flexible-working model has demonstrated improved cost savings,
productivity and engagement. As most of the internal controls implemented by the business are system based, this has not had a
detrimental impact on the control environment. The Group continues to develop the remote working facilities in place for its employees.
External audit:
The Group intends to welcome PricewaterhouseCoopers LLP (PwC) who, subject to shareholder approval at the Company’s AGM, replace
KPMG LLP who were appointed in 2018 as independent auditors. PwC’s forthcoming appointment followed a competitive tender between
two firms (PwC and Ernst & Young LLP) during 2022. KPMG LLP will continue in office until the conclusion of the Company’s AGM.
The audit tender was led by the Chair of the Audit Committee with support from various members of the finance function. A robust
process was carried out, following a common set of criteria for evaluating the proposals, including:
— Audit approach and quality;
— The lead partner and their audit team;
— Sector experience;
— Approach to resolving issues in matters of judgement; and
— Values alignment and cultural fit.
Shareholders are due to consider a resolution to appoint PwC at the Company’s AGM in June 2023. Under the direction of the Audit
Partner, and working closely with the Group, PwC have implemented a comprehensive audit transition plan. As a tender for audit services
was completed in 2022, there are no forthcoming plans to conduct a fresh tender for audit services.
The Audit Committee regularly reviews the role of the external auditor and the scope of their audit. The Audit Committee considers the
effectiveness of the external auditor on an ongoing basis during the year, considering, among other things, its independence, objectivity,
appropriate mindset and professional scepticism, through its own observations and interactions with the external auditor, and having
regard to the following:
— Experience and expertise of the external auditor in their direct communication with, and support to, the Audit Committee;
— Content, quality of insights and value of their reports;
— Fulfilment of the agreed external audit plan;
— Robustness and perceptiveness of the external auditor in their handling of key accounting and audit judgements;
— The interaction between management and the external auditor, including ensuring that management dedicates sufficient time
to the audit process;
— Provision of non-audit services, as set out below; and
— Other relevant UK professional and regulatory requirements.
Up to the release of the 2022 financial statements, KPMG contributed a further independent perspective on certain aspects of the Group’s
financial control systems arising from their normal audit procedures and reported these to the Audit Committee.
The process for approving all non-audit work provided by the external auditor is overseen by the Audit Committee in order to safeguard
the objectivity and independence of the auditor, and in compliance with regulatory and ethical guidance. If KPMG (or their successors,
PwC) were to be chosen to provide non-audit services it would be the result of their demonstrating the relevant skills and experience to
make it an appropriate supplier to undertake the work in a cost-effective manner. The Group’s policy for non-audit services reflects the
regulations that prohibit the provision of certain non-audit services, such as payroll services, by the external auditor and introduces a cap
on non-audit fees. In line with the regulations, the Group is required to cap the level of non-audit fees paid to its external auditor and has
done this at 10% of the audit fees paid in the previous financial year.
With the exception of fees paid in respect of the auditors’ review of the Group’s interim financial statements, there were no non-audit
fees received by KPMG in 2022. The non-audit fees policy is compliant with ethical Standards for Auditors. In 2022, KPMG received total
fees of £1.08 million (2021: £0.5 million) which is an increase of £0.58 million versus the previous period. Fees paid to KPMG are set out
in note 7 to the financial statements.
Fair, balanced and understandable statement:
The Audit Committee considered this Annual report and accounts, taken as a whole, and concluded that the disclosures, as well as the
processes and controls underlying its production, were appropriate and recommended to the Board that the Annual report and accounts
is fair, balanced and understandable while providing the necessary information to assess the Group’s position and performance, business
model and strategy.
Stuart Henderson
Audit Committee Chair
25 April 2023
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance NOMINATION COMMITTEE REPORT
85
The Nomination Committee, which is chaired by Dr. Roch Doliveux, in his capacity as the Company’s Chair, leads the process for making
appointments to the Board and succession planning, and comprises Stuart Henderson, Dr. Heather Preston and Professor Dame Kay
Davies. All Nomination Committee members, apart from Dr. Doliveux during 2022 (due to Dr. Doliveux holding the roles of Chair and
Interim CEO) were deemed Independent Non-Executive Directors. Since Dr. Frank Mathias assumed the role of CEO in March 2023,
all Nomination Committee members are now deemed Independent Non-Executive Directors. The primary duties of the Nomination
Committee are set out in its written terms of reference, a copy of which is available on the Group’s website.
The Nomination Committee met 14 times in 2022 on an ad hoc basis in order to discuss the search for a new CEO, additional Non-
Executive Directors and general succession planning. In January 2022, John Dawson notified the Group that he intended to retire
as a Director at the next AGM having provided more than 13 years of dedicated service and leadership to the Group. Mr Dawson
stepped down as CEO in January 2022 and did not stand for re-election as a Director at the AGM in May 2022. Following Mr Dawson’s
announcement of his retirement, the Board initiated a search with an external search consultancy, Egon Zehnder, for his successor
and asked Dr. Doliveux to act as Interim CEO whilst remaining in his position as Chair. In November 2022, the Board was delighted to
announce the appointment of Dr. Frank Mathias as CEO. Dr. Mathias joined the Group in March 2023. The Company and the Directors
have no connections with Egon Zehnder.
In addition, in April 2022, the Company was pleased to announce that the Board had been further strengthened by the appointment
of Namrata Patel as an Independent Non-Executive Director, Ms Patel’s appointment brings a wealth of international experience in
manufacturing and end-to-end supply chain with experience in a commercialised regulated industry as well as a wealth of sustainability
experience to the Board. The appointment followed a search conducted by an external search consultancy, Spencer Stuart, specifically
targeting the selection of female and ethnically diverse candidates. The Company and the Directors have no connections with Spencer Stuart.
Board succession planning
During 2022, the Board reviewed the succession plans for both its composition and that of its Committees and the continued
development of the Board. As noted above, the Board conducted searches with external search consultants during 2022 for a CEO
and an additional Independent Non-Executive Director, successfully announcing the appointment of Namrata Patel as Independent
Non-Executive Director in April 2022 and Dr. Frank Mathias as CEO in November 2022.
Following the announcement of Dr. Frank Mathias as CEO, the Board noted that upon Dr. Mathias joining the Group in 2023, the Board
would not be in compliance with the forthcoming requirement set out in Listing Rule 9.8.6(9)(a)(i) that the Board comprise 40% women.
The requirement applies for reporting periods commencing 1 April 2022 and accordingly, at the end of 2022, the Board commenced
a search for an additional Independent Non-Executive Director targeting the selection of female and ethnically diverse candidates to join
the Board, with an external search consultancy, Koenig Associates. The Company and the Directors have no connections with Koenig
Associates.
In addition, in January 2023, Dr. Sam Rasty informed the Board that he would not be standing for re-election at the AGM in June 2023.
As part of its succession planning, the Nomination Committee identified that in order to meet the forthcoming recommendations for reporting
periods commencing 1 April 2022 set out in Listing Rule 9.8.6(9)(a)(ii) and also the recommendations of the FTSE Women Leaders Review,
a woman should hold a senior position on the Board. Following the Company’s announcement of the appointment of Dr. Mathias as CEO,
in order to prepare for this new requirement, the Nomination Committee decided to split the role of Deputy Chair and Senior Independent
Director into two roles and appointing Dame Professor Kay Davies as the Senior Independent Director and appointing Stuart Henderson
as Vice Chair with effect from 22 March 2023. Professor Davies also acts as Chair of the Science and Technology Advisory Committee, an
advisory committee to the Board. In accordance with the Corporate Governance Code a description of the responsibilities of the Chair, Vice
Chair, CEO, Senior Independent Director, the Board and its Committees can be found on the Company’s website.
As at 31 December 2022, the Company was, and continues to be, in compliance with the forthcoming recommendations set out in
Listing Rule 9.8.6(9)(a)(iii) that at least one individual on the Board is from a minority ethnic background. In addition, the Company also
met the recommendation with regard to 40% of the Board comprised of women.
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NOMINATION COMMITTEE REPORT (CONTINUED)
Workforce Engagement Panel and Designated Non-Executive Director
In compliance with Corporate Governance Code, the Group has an established Workforce Engagement Panel (WEP) comprising
employees from all levels and functions across the Group. The purpose of the WEP is to enable employees to discuss issues of importance
to them and ensure that senior leaders and the Board hear the views of the workforce. Stuart Henderson was appointed as the designated
Board representative, to oversee engagement between the Board and the workforce (further information on the WEP can be found on
page 44). The WEP met nine times during 2022 and Mr Henderson attended two of those meetings during 2022. The Chair and Vice Chair
of the WEP also presented to the Board during 2022 on two occasions. Topics covered by the WEP during 2022 included the results of
the Company-wide employee engagement survey, “Your Voice”; employee recognition programme; social engagement and activities for
employees; equality, diversity and inclusion initiatives; and the CEO recruitment process.
During the year, the WEP was pleased to welcome two additional representatives from Oxford Biomedica Solutions and the process for
appointment of WEP representatives was revised to allow for panel representatives to be elected by employees.
Board evaluation
Following an externally-facilitated evaluation of the Board’s performance in 2021, in December 2022, the Company Secretary conducted
an internal evaluation of the Board’s performance covering the period from January 2022 to the fourth quarter of 2022. The review
process comprised the completion of an anonymous questionnaire covering the various aspects of the activities of the Board and its
Committees. Post period-end, the resulting report was discussed at the first two Board meetings in 2023. Board members valued the
feedback of their peers and the Board as drawn up an action plan to implement appropriate changes based on the discussions of the
report, including suggestions provided by Board members regarding the onboarding and integration of the new CEO. The Board intends
to continue to comply with the Corporate Governance Code guidance that the evaluation should be externally facilitated at least every
three years and expects to commission the next externally facilitated review in 2024.
Diversity and Inclusion
The Group recognises the importance of diversity and is committed to encouraging equality and diversity among its workforce. The
Group aims to create an inclusive working environment based on merit, fairness and respect to enable it to attract and retain the most
talented people from all backgrounds and cultures. The Group is also working to achieve a diverse Board and, just as importantly, diverse
management teams. Appointments to the Board are based on merit taking into account suitability for the role, composition and balance
of the Board to ensure that the Group has the right mix of skills, experience, independence, knowledge and consideration of the Group’s
strategic objectives.
The Nomination Committee has a formal and rigorous appointment process involving most if not all Board members and makes
recommendations based on the capabilities of individual candidates, having due regard for the benefits of diversity with no restrictions
on age, gender, religion, ethnic background, whose competencies will enhance the Board.
The Group supports the principles of the FTSE Women Leaders Review on gender balance in FTSE leadership. In order to strengthen
and diversify the Board, the Board initiated a search for an additional Independent Non-Executive Director targeting the selection of
female and ethnically diverse candidates and was delighted to welcome Namrata Patel to the Board as an Independent Non-Executive
Director in April 2022. Following Ms Patel’s appointment, the Board comprised 36% women in April 2022 and 40% women from May
2022 (following John Dawson’s retirement) until the end of the year. Following Dr. Frank Mathias’ appointment to the Board in March
2023, this ratio changed and for a short period the Board will comprise 36% women until the conclusion of the Company’s 2023 AGM at
which point Dr Sam Rasty will not stand for re-election and the Board will again comprise 40% women. Consequently, as at 31 December
2022 the Board was in compliance with both the recommendations of the FTSE Women Leaders Review and also the forthcoming
requirement set out in Listing Rule 9.8.6(9)(a)(i) that the Board comprise 40% women. The Remuneration Committee comprised 66%
women, the Nomination Committee comprised 50% women and the Audit Committee comprised 66% women in 2022. In addition, both
the Remuneration Committee and the Science and Technology Advisory Committee are chaired by women.
The Group believes that members of the Board and senior management should collectively possess a diverse range of skills, expertise
and should come from a diverse range of ethnic and societal backgrounds. In terms of the next level of management, as at 31 December
2022, the SET, excluding the Executive Directors, totalled ten, of which there were two female members. In the gender pay gap report
for 2022 (for the full report see the Group’s website www.oxb.com), the Group had more females (54%) than males (46%) at the Head of
Department level and senior management level, thereby meeting the FTSE Women Leaders Review’s recommendation that 40% of senior
leadership roles (defined as the SET and their direct reports) be held by women at the end of 2025. Part of the Group’s strategy will be to
maintain and improve on the targets, so that the objectives of the FTSE Women Leaders Review will continue to be met during 2023/2024.
The Board is aware of the recommendations of the Parker Review on Ethnic Diversity (Parker Review). The Parker Review set a target for
FTSE 250 companies to have at least one Board member from a minority ethnic background by 2024. Whilst during the first 3 months
of 2022 none of the serving Board members identified as belonging to an ethnic minority, the Nomination Committee had initiated a
search during 2021 for an additional Independent Non-Executive Director. The search targeted female and ethnically diverse candidates,
whilst taking into account suitability for the role to ensure that the Group has the right mix of skills, experience, independence and
knowledge for the Group’s strategic objectives. In April 2022, the Group welcomed Namrata Patel to the Board, further strengthening
and diversifying the Board and aligning the Board’s composition with both the recommendations of the Parker Review and also the
forthcoming recommendation set out in Listing Rule 9.8.6(9)(a)(iii) that at least one individual of the board of directors is from a minority
ethnic background.
As noted above, as at 31 December 2022, the Group met the forthcoming recommendations set out in Listing Rule 9.8.6(9) with regard to
the representation of female and minority ethnic groups on its Board. Further to this, in line with the forthcoming requirements of Listing
Rule 9.8.6(10) the Group has collated numerical data on the ethnic background and the gender identity or sex of the individuals on the
Board and in its SET as at 31 December 2022, as set out in the following tables.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 87
Sex of Board and SET members
Men
Women
Number of
Board members
Percentage of
the Board
6
4
60%
40%
Number of
senior positions
on the Board (CEO,
CFO, SID and Chair)
4
0¹
Number in executive
management
9
2
Percentage of
executive
management
81.81%
18.18%
¹
Post period-end the Nomination Committee appointed Dame Professor Kay Davies as the Senior Independent Director.
Ethnic background of Board and SET members
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board (CEO,
CFO, SID and Chair)
Number in executive
management
Percentage of
executive
management
White British or other
White (including
minority-white groups)
Asian/Asian British
9
1
90%
10%
4
–
10
1
91%
9%
The reference date used by the Group for the collection of the data set out above is the Company’s year-end (31 December).
Dr. Frank Mathias joined the Company on 27 March 2023. The Group collects information on board diversity using the same fields and
classifications as set out in the Listing Rules. The data was collected in February 2023 and forms the basis of the disclosures made in this
Annual report and accounts.
Compliance with the Code
The Group considers that it was largely in compliance with the terms of the Corporate Governance Code during 2022 but acknowledges
that it did not comply in full throughout the year. The Group has set out in this Corporate Governance Report how it has applied the
principles of the Corporate Governance Code and notes that it was in full compliance with the Corporate Governance Code, save as set
out below (with reference to the Corporate Governance Code provisions):
Provision 3 – Committee Chair
engagement with shareholders
on significant matters related
to their areas of responsibility
The Chair engaged with shareholders throughout the year which included at the year-end and half year
results presentations and also engaged with significant shareholders as regards CEO succession.
The Chair of the Audit Committee and the Chair of the Remuneration Committee reached out and met
with a number of shareholders ahead of the AGM and intend to reach out to shareholders ahead of the
upcoming AGM. Both the Chair of the Audit Committee and the Chair of the Remuneration Committee
are always available to discuss matters with shareholders throughout the year. Shareholders will be
informed of the Group’s decision to change auditor and the Chair of the Audit Committee will be happy
to discuss with major shareholders the process by which PwC were appointed.
Provision 9 – The roles of chair
and chief executive should not be
exercised by the same individual
Following John Dawson’s announcement that he would step down as CEO at the end of January 2022
and retire from the Board at the 2022 AGM, the Board (following consultation with major shareholders)
asked Dr. Roch Doliveux to act as Interim CEO whilst remaining as Chair until a new CEO was appointed.
In accordance with the provisions of the Corporate Governance Code, the decision to appoint
Dr. Doliveux as Interim Chair was only taken following consultation with the Company’s major
shareholders and explained to all shareholders at the time. The Board’s decision to appoint Dr. Doliveux
was based on the need for an Interim CEO with a proven track record of leading a global company whilst
the search for a new permanent CEO commenced. As a result, no risks associated with non-compliance
with the Corporate Governance Code were identified as the appointment was short term in nature.
Dr. Doliveux stood down when Dr. Frank Mathias joined the Group on 27 March 2023.
Provision 38 – The pension
contribution rates for Executive
Directors should be aligned with
those available for the workforce
During 2022, the Executive Directors received a 15% pension contribution (or cash allowance) unlike the
wider workforce who received a 7.5% pension contribution. However, in line with Provision 38 of the
Corporate Governance Code, since 31 December 2022, the Executive Directors have had their pension
contributions reduced to 7.5% to align with the wider workforce.
Provision 41 – Engagement with the
workforce to explain how Executive
pay aligns with the wider Company
pay policy
Post period-end, the Group engaged with the workforce at a meeting of the WEP in March 2023 to
explain how Executive pay aligns with the wider Group pay policy. In particular, the WEP received
a briefing on the role of the Remuneration Committee and the key highlights from the 2021–2024
Remuneration Policy, including the underlying context for increases in base pay and adjustments to the
maximum bonus and long term incentive (share based) opportunity. In addition, WEP members received
information relating to recent trends in executive pay and the WEP members were given the opportunity
to provide feedback and discuss the topic with their respective wider teams.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 88
NOMINATION COMMITTEE REPORT (CONTINUED)
Compliance with the Listing Rules
The Group considers that it was largely in compliance with the Listing Rules during 2022 but acknowledges that it did not comply in full
throughout the year. The Group has set out in this Corporate Governance Report how it has complied with the Listing Rules, save as set
out below.
9.8.6(9)(a), (b), (c) and (d)
During the first quarter of 2022, the Board comprised three women and seven men (30% women).
Following Namrata Patel’s appointment, the Board comprised 36% women in April and May 2022
and 40% women from May 2022 (following John Dawson’s retirement) until the end of the year.
Consequently, as at 31 December 2022 the Board was in compliance with both the recommendations of
the FTSE Women Leaders Review and also the forthcoming requirement set out in Listing Rule 9.8.6(9)(a)
(i) that the Board comprise 40% women.
Whilst none of the senior Board positions was held by a woman during the year ended 31 December
2022, post-period end in order to comply with the forthcoming requirement set out in Listing Rule
9.8.6(9)(a)(ii) and following the Company’s announcement of the appointment of Dr. Frank Mathias as
CEO, the Nomination Committee decided to split the role of Deputy Chair and Senior Independent
Director into two separate roles appointing Dame Professor Kay Davies as the Senior Independent
Director and appointing Stuart Henderson as Vice Chair with effect from 22 March 2023.
Whilst during the first 3 months of 2022 none of the serving Board members identified as belonging
to a minority ethnic group, in April 2022, the Group welcomed Namrata Patel to the Board, further
strengthening and diversifying the Board and aligning the Board’s composition with the forthcoming
requirement set out in Listing Rule 9.8.6(9)(a)(iii) that at least one individual the Board of Directors is from
a minority ethnic background.
Share capital
The information about the share capital required by Article 10 of the Takeover Directive is set out in the Directors’ Report on page 116.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance DIRECTORS’ REMUNERATION REPORT
Annual statement from the Remuneration Committee Chair
89
Dear Shareholder
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended 31 December 2022.
This report, which is subject to an advisory shareholder vote at the 2023 AGM, explains the work of the Remuneration Committee, how
we have implemented our Remuneration Policy (the Policy) in 2022 and how we intend to apply it in 2023.
For ease of reference, a summary of the key elements of the Policy is included on pages 107 to 110. The full Policy as approved at the
AGM on 27 May 2021 is included in the Directors’ Remuneration Report for the year ended 31 December 2020, which is available on the
Company’s website at www.oxb.com.
2022 remuneration in the context of our business performance and outcomes for our key stakeholders
In 2022, we made significant progress towards establishing our global leadership in viral sector development and supply. We broadened
our viral sector CDMO offering and expanded our business into the US and into new viral vector types. Our AAV business has grown from
strength to strength already, with five clients at the end of 2022. In addition, we are proud that our commitment to responsible business
practices was recognised with inclusion in the FTSE4Good index in June 2022. Further details of our operational highlights in 2022 are set
out on pages 6 to 7.
The Remuneration Committee considers that the outcomes for bonuses and LTIPs described in this Directors’ Remuneration Report are a
fair reflection of that performance during 2022 and the past three years, and are appropriate in the context of the stakeholder experience.
As a result, the Remuneration Committee determined those outcomes to be appropriate.
The Remuneration Committee recognised the impact of the economic climate on employees within the Group and were fully supportive
of management’s decision to make a cost of living payment of £1,200 to all employees with a base salary of under £50,000, payable
in two tranches in December 2022 and February 2023. In total, the payments were made to 482 employees, representing 63% of our
employee population.
2022 Executive Director Remuneration and Variable Pay Outcomes
Fixed pay
John Dawson’s salary and Stuart Paynter’s salary were increased by 3% to £468,650 and by 10% to £341,000 respectively with effect from
1 January 2022. As set out in the Remuneration Report last year, the 10% increase to Mr Paynter’s salary was aligned with the increases
for the wider Senior Executive Team, and within the range of increases for the wider workforce as a whole (excluding promotions).
The increase took into account the permanent increase in the scope and complexity of his role in light of the establishment of Oxford
Biomedica Solutions. The 3% increase for Mr Dawson was agreed before his intention to retire was announced and was within the range
of increases for the wider workforce as a whole (excluding promotions).
Dr. Roch Doliveux served as Interim CEO with effect from 28 January 2022 until 27 March 2023. As we reported last year, Dr. Doliveux
did not participate in any variable remuneration or pension arrangement for 2022. Dr. Frank Mathias’ appointment was announced in
November 2022 with a start date of March 2023, resulting in Dr. Doliveux’s tenure as Interim CEO being significantly longer than was
originally envisaged. This significantly increased the amount of time which Dr. Doliveux was required to devote to the role during the
year. Dr. Doliveux’s additional time commitments during the year included time spent on the Oxford Biomedica Solutions transaction
and other corporate development activities. The longer than anticipated period as Interim CEO also required Dr. Doliveux to commit
more time to engagement with clients and employees, including Town Halls and other employee briefings. Dr. Doliveux was also heavily
involved in leading the right-sizing of our business to ensure that we are efficiently and properly resourced for future growth. Given
these additional time commitments associated with this longer period, the Remuneration Committee agreed that Dr. Doliveux should
receive an additional fee of £225,000 in respect of 2022. However, in order to ensure alignment with shareholders, the after tax amount
of this additional fee will be applied in the acquisition of shares at market value. No additional fee will be payable for 2023 and he will
not participate in any variable remuneration or pension arrangement for any part of 2023. Dr. Doliveux’s total remuneration for 2022 is
included in the Executive Directors single total figure of remuneration table on page 95.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 90
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Remuneration arrangements connected with John Dawson’s retirement
John Dawson stepped down as CEO on 28 January 2022 and retired from the Board on 27 May 2022. As we reported last year,
Mr Dawson remained an employee as an adviser to the Group for the remainder of 2022 and left the Group on 17 January 2023.
The remuneration in the Executive Directors single total figure of remuneration table on page 95 refers to Mr Dawson’s remuneration
earned to 27 May 2022.
The treatment of Mr Dawson’s existing share awards was described in the 2021 Directors’ Remuneration Report; further information
is included later in this report as required by the regulations.
Annual bonus
The 2022 annual bonus was subject to financial and non-financial performance measures aligned with key strategic priorities.
Mr Paynter’s bonus was based 80% on Group objectives and 20% on personal objectives. Mr Dawson’s bonus was based solely on Group
objectives and was earned on a pro-rata basis for the period to his retirement from the Board on 27 May 2022.
Reflecting the strong performance over the year, Mr Dawson earned a bonus of 129% of salary and Mr Paynter earned a bonus of 126%
of salary. 50% of the bonus earned will be deferred into shares. Further details are set out on page 99.
Long-term incentives vesting by reference to performance in 2022
In line with the requirements of the reporting regulations, the total single figure of remuneration for 2022 includes the vesting outturn
for the following LTIP awards.
Grant
18 April 2019
Performance Condition
50%: revenue growth targets measured
over the three years ending 31 December 2021.
Vesting outturn
Estimated vesting outturn of 100% included in the 2021
single total figure of remuneration. This vesting outturn
was confirmed when the award vested in April 2022.
50%: share price targets assessed
over the three year period to 17 April 2022.
This element lapsed in April 2022 as the threshold
level of share price performance was not achieved.
26 June 2020
50%: revenue growth targets measured
over the three years ending 31 December 2022.
Estimated vesting outturn of 100% included in the
2022 single total figure of remuneration. This vesting
outturn will be confirmed when the award vests in
June 2023.
50%: share price targets assessed
over the three year period to 25 June 2023.
The vesting value of the share price performance
element of the 2020 LTIP award will be included
in the single total figure of remuneration for 2023.
Further details of the performance targets and outturns are set out on pages 100 to 101. In line with the Corporate Governance Code, the 2019
and 2020 LTIP awards are subject to a further two year holding period following the three year vesting period before they can be exercised.
We reported last year that it was our intention to scale back Mr Paynter’s LTIP award for 2022 to 155% of salary from the usual 175% of
salary taking into account best practice and investor guidance. We applied this scale back when the awards were granted in April 2022.
As explained above, neither Dr. Doliveux nor Mr Dawson received an LTIP award in respect of 2022. For Mr Paynter’s LTIP award granted
in 2022, the performance measures were weighted 40% relative Total Shareholder Return (TSR); 40% revenue growth; and 20% strategic
milestones. Further details are set out on pages 100 to 101.
Our approach to Directors’ Remuneration in 2023
The Directors’ Remuneration Policy approved at the 2021 AGM will continue to apply in 2023. We have summarised below the way in
which it will be implemented.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 91
New CEO
As reported on page 5, in September 2022 the Group announced the Board’s updated strategy and direction as a quality and innovation-led
CDMO business. We were subsequently delighted to announce on 22 November 2022 that Dr. Frank Mathias would join as our new CEO
with effect from March 2023. Dr. Mathias brings world-class innovation and CDMO experience to Oxford Biomedica and his appointment
has been a significant step in embedding our strategic focus. Dr. Mathias’ remuneration arrangements, which are in line with the Directors’
Remuneration Policy approved at the 2021 AGM and reflect his experience and track record of success running both an innovative biopharma
company and a high-performing CDMO, will be key to the Group as we build on our leading position and cell and gene therapy continues
on its rapid growth trajectory. Dr. Mathias’ overall package also takes into account market reference points noting that our competitive
market for talent is not limited to the UK. A summary of Dr. Mathias’ overall remuneration package is set out below. No “buy-out” awards
have been granted in respect of remuneration forfeited at his former employer as a result of joining Oxford Biomedica.
Salary
Pension
£610,000.
7.5% of salary – in line with the wider workforce and the Directors’ Remuneration Policy approved at the 2021
AGM as it applies for all Executive Directors with effect from 1 January 2023.
Annual Bonus
150% of salary as with the former CEO. Ordinarily, 50% of any bonus to be deferred into shares vesting over
a three year period.
LTIP
Benefits
200% of salary as with the former CEO. Vesting subject to performance over three years with the awards then
subject to a further two year holding period.
Dr. Mathias will be eligible to receive benefits in line with Oxford Biomedica’s usual practice. In order to secure
the recruitment, it was also agreed that he will receive an additional annual allowance of £35,000; this additional
allowance will not be taken into account for the purposes of pension, bonus or LTIP.
Executive Directors
Dr. Roch Doliveux ceased to be Interim CEO when Dr. Frank Mathias joined the Group in March 2023. Dr. Doliveux will not receive any
pension or participate in any variable remuneration in respect of 2023. His fee has reverted to the previous level of £225,000 and no
additional fee will be paid in respect of the additional time commitment associated with his role as Interim CEO in the first quarter of the year.
Base salary
Dr. Mathias’ salary has been set at £610,000 as referred to above.
With effect from 1 January 2023 Mr Paynter’s salary has been increased to £351,230. This reflects an increase
of 3%, within the range of increases awarded to the wider workforce and below the Group’s overall 5% budget
for salary increases.
Pension
As noted above, Dr. Mathias’ pension provision from appointment is 7.5% of salary. In line with the Directors’
Remuneration Policy approved in 2021, Mr Paynter’s pension provision has been reduced from 15% to 7.5%
of salary in line with the wider workforce with effect from 1 January 2023.
Annual bonus
For 2023, Dr. Mathias and Mr Paynter will be eligible to earn a bonus of up to 150% of salary.
Dr. Mathias’ bonus will be pro-rated for his period of service in 2023.
50% of any bonus earned will be delivered in the form of deferred shares.
The performance measures and targets will be disclosed in the 2023 Directors’ Remuneration Report to the
extent they are not commercially sensitive.
LTIP
It is intended that the 2023 LTIP awards will be granted in the 42 days following the announcement of the Group’s
full year results. In accordance with the approach for other new joiners to the business, the number of shares
subject to Dr. Mathias’ award will based on the five day average share price prior to grant. The Remuneration
Committee will finalise the quantum of Mr Paynter’s grant when the award is granted having regard to share price
performance at that time.
The performance conditions are summarised below.
A two year holding period will apply following the three-year performance period.
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Performance conditions and targets for 2023 Performance Shares Award under the LTIP
For the grants to be made in 2023, it is intended that the performance measures will be weighted 40% Relative TSR; 40% revenue growth;
and 20% strategic goals.
Measure
Relative TSR
Weighting
40%
Approach
Vesting based on the Company’s TSR over a three-year performance period relative
to the TSR performance of comparator companies.
As with the awards granted in 2022, threshold vesting (25%) will require median
performance, maximum vesting will require upper quartile performance, and TSR
will be assessed over a three-year period from the date of grant with a three month
averaging period.
For the 2023 awards we have decided to use a different comparator group,
reflecting our positioning as a quality and innovation-led CDMO. The comparator
group for the 2023 awards will be the companies in the S&P 1500 Pharma Biotech
and Life Sciences index and the STOXX Europe TM Pharma & Biotech index.
Revenue Growth
40%
Threshold vesting 25%: 15% CAGR per annum over a three-year performance period
Maximum vesting: 30% CAGR per annum over a three-year performance period.
Strategic milestones
20%
Underpin
Applies to the whole award
The strategic measure and targets are commercially sensitive and will be
disclosed when this is no longer the case, and no later than when the awards vest.
The measure will be aligned with the Group’s strategy with the level of vesting
determined by reference to the achievements, with 25% vesting for delivery of
a threshold milestone.
Consistent with previous awards, the whole award will be subject to an underpin
such that it will only vest to the extent that the Remuneration Committee considers
the overall performance of the business over the performance period justifies it.
As disclosed in previous Remuneration Reports, in future years, the share price/TSR measure may be substituted for a measure based
on the profitability of the CDMO, once we have further refined our segmental reporting. It is our current intention that up to 30% of the
overall long term incentive opportunity may be based on the delivery of specific strategic milestones in the future.
Non-Executive Directors
No increases are proposed to Non-Executive Director fees for 2023. However, as announced on 20 February 2023 and as further
discussed in the Corporate Governance Code on page 85, with effect from 27 March 2023 a newly created role of Vice-Chair has been
established, and for which, reflecting the time commitments, a fee of £10,000 will apply.
Fee element
Base fee
Additional fee for holding the office of Senior Independent Director
Additional fee for holding the position of Vice-Chair
Additional fee for holding the position of Chair of the Remuneration Committee
Additional fee for holding the position of Chair of the Audit Committee
Base fee uplift which may be paid to Non-Executive Directors based outside the UK to recognise the additional
time commitment (including but not limited to the additional expected time commitment for travel to the UK as
well as the additional time commitment where the Non-Executive Director is based in a different time zone).
2023 level
£65,000
£10,000
£10,000
£10,000
£10,000
£15,000
In line with the Policy approved by shareholders at the 2021 AGM, Non-Executive Directors recruited from or based in the United
States each receive an additional fee of £50,000 per annum. This additional fee is payable subject to their agreement that the after tax
amount of this additional fee will be applied in the acquisition of shares at market value which must be retained for at least 12 months
from acquisition. This seeks to address the significant gap to market practice in the United States that we face when attracting and
retaining Non-Executive Directors in competition with, or from, NASDAQ listed businesses where equity awards are an ongoing feature
of the overall package. This also provides alignment with shareholders whilst ensuring that our Non-Executive Directors continue to be
independent. This additional fee is currently paid to Dr. Heather Preston, Dr. Michael Hayden, Dr. Sam Rasty and Catherine Moukheibir.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance
93
Other matters
As noted above, the Remuneration Committee supported the cost of living payments proposed by management. These payments
were targeted at the lower paid members of the Group’s workforce. Further information on the payments made and the population
that received the payments can be found in the s.172 statement on pages 14 to 15.
Stakeholder engagement
As detailed on page 44, the Group has an established Workforce Engagement Panel (WEP) comprising employees from all levels and
functions across the Group, including employees of Oxford Biomedica Solutions. The WEP sessions have provided an upward channel
for views, comments and debate, as well as an opportunity to provide feedback on our ED&I practices, reward principles and employee
benefits package, future ways of working, employee training programmes, wellbeing practices and how Executive pay aligns with the
wider Group pay policy.
The Company also engages directly with major shareholders and their representative bodies, where the Remuneration Committee
considers there to be material changes to the Policy or our Executive remuneration framework. During 2023 and early 2024, the
Remuneration Committee will consult with shareholders in relation to the new Directors’ Remuneration Policy for which approval will
be sought at the 2024 AGM in line with the usual three year timetable.
Conclusion
The decisions made as regards remuneration earned in respect of 2022 and the proposals for 2023 demonstrate our commitment
to ensuring that Executives’ reward is aligned with performance and the outcomes for all our stakeholders.
We look forward to receiving your support at our 2023 AGM, where I will be available to respond to any questions that shareholders
may have on this report, or our intended approach to reward for 2023.
Dr. Heather Preston
Chair, Remuneration Committee
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 94
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Alignment of the Directors’ Remuneration Policy with the 2018 Corporate Governance Code
In determining the Directors’ Remuneration Policy, the Remuneration Committee took into account the principles of clarity, simplicity,
risk, predictability, proportionality and alignment to culture, as set out in the Corporate Governance Code.
Principle
Clarity: Remuneration arrangements should be transparent and
promote effective engagement with shareholders and the workforce.
The Remuneration Committee engages regularly with Executives,
shareholders and their representative bodies in order to explain the
approach to Executive pay.
Simplicity: Remuneration structures should avoid complexity and
their rationale and operation should be easy to understand.
The purpose, structure and strategic alignment of each element of pay
has been clearly laid out in the Remuneration Policy.
Risk: Remuneration arrangements should ensure reputational and
other risks from excessive rewards, and behavioural risks that can
arise from target-based incentive plans, are identified and mitigated.
Both the annual bonus and LTIP are subject to malus and clawback
provisions. This allows the Remuneration Committee to have appropriate
regard to risk considerations. Annual bonus deferral and the application
of the two-year holding period to awards under the LTIP provide
longer term alignment with shareholders’ interests. The Remuneration
Committee also has discretion to override formulaic outcomes, which
may not accurately reflect the underlying performance of the Group.
Predictability: The range of possible values of rewards to individual
directors and other limits or discretions should be identified and
explained at the time of approving the policy.
Details of the range of possible values of rewards and other limits
or discretions can be found in the full Directors’ Remuneration Policy
included in the 2020 Annual report and accounts.
Proportionality: The link between individual awards, the delivery
of strategy and the long-term performance of the company should
be clear. Outcomes should not reward poor performance.
Alignment to Culture: Incentive schemes should drive behaviours
consistent with company purpose, values and strategy.
The Remuneration Committee believes total remuneration should
fairly reflect performance of the Executive Directors and the Group as
a whole, taking into account underlying performance and shareholder
experience. The Remuneration Committee considers the approach
to wider workforce pay and policies when determining Directors’
remuneration to ensure that it is appropriate in this context.
The Group’s values are: ’Have integrity’, ’Be inspiring’ and ’Deliver
innovation’. These three values govern the way that the Group does
business, how the Group works together and the interactions the Group
has with all its stakeholders. The Group’s values are an important factor
in measuring performance, and the Group recognises and rewards
adherence to the values. Executive Directors are rewarded on both what
they deliver and how that is delivered, which reinforces the Group’s
purpose and values.
Annual report on remuneration
In this report:
— Nil or nominal cost shares awards under the Company’s LTIP are referred to as “Performance Shares Awards”; and
— An “Overseas Executive Director” means any Executive Director appointed after 1 January 2021 in respect of which appointment,
in the opinion of the Remuneration Committee, the Company is competing for talent with US competitors (including NASDAQ listed
US biotechnology businesses) including but not limited to Executive Directors recruited from or based in the US and having regard
to the fact that over 80% of cell and gene therapy is based in the United States, that United States’ regulatory requirements are critical
to the future success of the Group and that the United States’ market has the largest commercial potential for the Group.
Remuneration Committee role and members
The responsibilities of the Remuneration Committee are set out in its terms of reference which are available on the Group’s website
and include:
— Recommending to the Board the policy and framework for the remuneration of the Executive Directors.
The remuneration of the Non-Executive Directors is a matter for the Board;
— Approval of individual remuneration packages for the Chair, the Executive Directors and the Senior Executive Team
(including the Company Secretary);
— Approval of annual performance incentive plans and bonuses payable;
— Approval of Performance Shares Awards for Executive Directors and the Senior Executive Team
(including the Company Secretary); and
— Approval of awards granted to all employees under the Group’s share plans.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 95
The Remuneration Committee members during 2022 comprised Dr. Heather Preston (Chair), Stuart Henderson, and Professor Dame
Kay Davies. Other Directors are invited to attend meetings on an agenda driven basis. Following the appointment of Dr. Frank Mathias
as CEO with effect from 27 March 2023, Dr. Roch Doliveux has re-joined the Remuneration Committee.
Remuneration Committee activities during 2022
During 2022, the Remuneration Committee met 18 times. The main activities and decisions were as follows:
— Considering the level of bonus payable to Executive Directors in respect of 2021 in light of performance
against the Group’s 2021 objectives. The outcome of these discussions was reported in the 2021 Annual report and accounts.
— Approving the corporate objectives for 2022.
— Discussing and then approving the exit package and final terms for John Dawson, the Group’s previous CEO.
— Approving the reward package for the Group’s incoming CEO.
— Approving the reward package for the Group’s Chief People Officer, Chief Medical Officer and Chief Commercial Officer.
— Considering and then approving the 2022 salary adjustments in line with the wider workforce increases and the 2021 bonuses
for SET members, including Executive Directors.
— Considering and then granting options to employees under the Group’s Long Term Incentive Plan (including both
Performance Shares Awards and, for below Board members of staff, Restricted Stock Awards) and Deferred Bonus Plan.
— Approving the share-based remuneration structure for Oxford Biomedica Solutions.
— Approving an invitation to all employees to participate in the Group’s 2022 share-save scheme.
— Confirming that the share price performance conditions for the 2019 grant of options had been met.
Single total figure of remuneration
(audited)
Executive Directors
The following table shows the single total figure of remuneration for 2022 for the Executive Directors and comparative figures for 2021.
During 2022, Dr. Roch Doliveux was Non-Executive Chair for part of the year and Interim CEO for part of the year. His total remuneration for
2022 has been disclosed in the table below.
2022
John Dawson¹
Stuart Paynter
Dr. Roch Doliveux⁶
Total
2021
John Dawson
Stuart Paynter
Dr. Roch Doliveux⁷
Total
Salary
£’000
189
341
450
980
Salary
£’000
455
310
N/A
765
Benefits²
£’000
5
11
–
16
Benefits²
£’000
11
11
N/A
22
Bonus
£’000
243
429
–
672
Bonus
£’000
573
387
N/A
960
LTIP³
£’000
101
56
–
157
LTIP⁴
£’000
721
336
N/A
1,057
Pension⁵
£’000
28
51
–
79
Pension⁵
£’000
68
47
N/A
115
Total
£’000
566
888
450
1,904
Total fixed
Remuneration
222
403
450
1,075
Total variable
remuneration
344
485
–
829
Total
£’000
1,828
1,091
N/A
2,919
Total fixed
Remuneration
534
368
N/A
902
Total variable
remuneration
1,294
723
N/A
2,017
¹
Mr Dawson retired from the Board with effect from 27 May 2022 but continued as an employee and adviser to the Group until 17 January 2023. The remuneration in
the table above for 2022 reflects his remuneration earned to 27 May 2022, including his bonus for 2022 which was earned on a pro-rata basis for the period to this date;
Mr Dawson did not earn a bonus in respect of the remainder of the financial year.
² Benefits comprise medical insurance and the provision of a car allowance.
³
This comprises the portion of the Performance Shares Awards granted in 2020 which vest by reference to performance to 31 December 2022. The portion of the
Performance Shares Awards granted under the LTIP in 2019 with a performance condition based on share price performance assessed to 17 April 2022 lapsed in
April 2022 as the threshold level of share price performance was not achieved. Further information is included on page 100.
The performance criteria, performance against them and details of the calculations of the values included in the single total figure of remuneration table are set out
on pages 100 to 101.
⁴ This comprises:
(a) the Performance Shares Awards granted under the LTIP in 2018 which vested on 11 August 2021; and
(b) the portion of the Performance Shares Awards granted in 2019 which vested by reference to performance to 31 December 2021.
The relevant performance criteria and the performance against them are set out on pages 116 and 117 of the 2021 Directors’ Remuneration Report. In the 2021 Directors’
Remuneration Report, the values were calculated by reference to: (i) the share price at vesting of 1358p in the case of the Performance Shares Awards granted under the LTIP
in 2018; and (ii) the average share price over October, November and December 2021 of 1384.94p in the case of the Performance Shares Awards granted under the LTIP
in 2019 and an estimated vesting outturn of 100%. The Remuneration Committee confirmed the vesting outturn of 100% on 28 March 2022 and in line with the applicable
regulations, the values above have been updated for the Performance Shares Awards granted under the LTIP in 2019 to reflect the price of 559p at vesting on 23 April 2022.
Pension contributions are made into the Group’s defined contribution scheme, or at the election of the Director, as a cash allowance in lieu of a company pension
contribution – Mr Dawson and Mr Paynter elected to receive such a cash allowance.
Dr. Doliveux’s fee for 2022 includes the additional £225,000 paid to him in recognition of the additional time commitments from 28 January 2022 to 31 December 2022
as described on page 89.
⁵
⁶
7 Dr. Doliveux did not perform an Executive role during 2021 therefore received no Executive remuneration during 2021.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements
96
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
2022 Annual Bonus
Each of Mr John Dawson and Mr Stuart Paynter was eligible to earn a bonus of up to 150% of salary for 2022, subject to the satisfaction
of performance objectives, with Mr Dawson’s bonus earned on a pro-rata basis for the period up to 27 May 2022.
Dr. Roch Doliveux was not eligible to earn a bonus for 2022.
Mr Dawson’s bonus was based solely on Group objectives. Mr Paynter’s bonus was based on Group objectives as regards 80% of the
opportunity and personal objectives as regards 20% of the opportunity.
In January 2023, the Remuneration Committee met to consider the achievement of the 2022 objectives and the extent to which bonuses
were earned for 2022.
Group objectives element
Performance against the applicable Group objectives for 2022 was as follows:
Objective and headline
Weighting Performance assessed
Align the Group’s two locations for delivery to client
To deliver to Homology Medicines as agreed
and make them a satisfied client.
The Group delivered a seamless transition of services to Homology
Medicines throughout the formation of Oxford Biomedica Solutions.
Homology Medicines batches, technical deliverables and revenue were
all achieved as per the plan.
To focus on change and best practice in
Oxford Biomedica Solutions for service
of AAV development and GMP manufacture.
Oxford Biomedica Solutions has transitioned from an in-house technical
operations team to a service-organisation, servicing multiple clients with
its AAV technology, of which Homology Medicines is one.
Assessment
against
objective
% of
bonus
awarded
To integrate back-office staff and systems
to reduce demands for overhead costs.
20%
Expenditure has been limited in back-office colleagues and systems.
Focus has been on business development and onboarding the new AAV
clients which Oxford Biomedica Solutions has attracted in 2022.
16%
To preserve the culture and capabilities
of Oxford Biomedica Solutions.
For Oxford Biomedica Solutions to operate
independently of Homology Medicines and
exit transitional services in a timely manner.
Deliver on client commitments
The Oxford Biomedica Solutions team have continued to operate in their
own style whilst taking account of the Group’s goals. The Boston site scored
highly in The Group’s annual “Your Voice” employee survey. Retention
remains consistent with levels prior to transaction.
Oxford Biomedica Solutions has established its own capabilities for all
support functions where it was previously reliant on Homology Medicines
providing those services under a transitional arrangement. Homology
Medicines continue to host some core IT systems, which will transition
at the opportune time in vendor contracts.
To service the Group’s clients to achieve agreed
milestones and decision gates as agreed.
The Group met several contractual milestone deliverables with payments
triggered against these as agreed with clients.
To maintain the Net Promoter Score (NPS)
score of >40.
10%
Oxford Biomedica ran a client satisfaction survey during 2022
and achieved a strong net promoter score, greater than 40.
10%
To ensure the fill and finish A suite at Oxbox is in
use by clients in 2022.
Fill/finish was completed, validated and approved for use by the UK MHRA.
A number of client batches were delivered through the fill/finish suite in
Q4 2022.
Key
Exceeded
Partially met
Met
Did not meet
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 97
Assessment
against
objective
% of
bonus
awarded
Objective and headline
Weighting Performance assessed
Achieve the 2022 budget
To achieve revenue targets as set by the budget
approved by the Board.
The financial year 2022 Group revenue budget was not achieved,
partially due to the reduction in AZ vaccine revenue.
To achieve EBITDA targets as set by the budget
approved by the Board.
The financial year 2022 Group EBITDA was exceeded, as the shortfall in
revenues was more than offset by reductions in costs achieved by active
cost management and the gain on the sale of Windrush Court.
To achieve cash flow targets as set by the budget
approved by the Board.
Cash flow and cash-on-hand performed significantly above target as a result
of the sale and leaseback of Windrush Court . There was also some deferred
investment activity and a continued cautious approach to cash management.
To achieve a target goal of sales for new projects
recognised in 2022.
30%
The target for sales for new projects recognised in 2022 was not fully met,
despite securing several new projects, partly due to their timing, but also
ambitious targets being set.
20%
To sign two contracts for AAV development
programmes and GMP manufacturing.
The Group secured 4 new AAV clients in 2022, in addition to Homology
Medicines, so exceeded this target.
To enter 2023 with 60% of forecast revenues
booked.
The Group entered 2023 with booked revenues as a percentage of the
revenue target which did not meet the 60% objective.
To maintain on budget delivery of planned
2022-23 strategic projects such as Windrush
Innovation Centre (WIC), the Oxbox fallow
area and digitisation projects.
Innovate the Group’s AAV and lentiviral platforms
Strategic projects have made progress in a timely manner. The major
laboratory and manufacturing facilities investments are at a detail design
stage. Timelines and expenditures have been purposefully constrained.
To achieve five new inventions.
The Group has achieved more than five discrete inventions in 2022 and has
made filings to protect these.
To launch Process C to the market.
Process C is an active part of client work today both in development and
in GMP production, and is enjoying significant interest from prospects and
clients alike.
To exemplify a Group invention in a GMP setting.
A Group invention has been exemplified in a GMP setting.
To demonstrate Process D (stable cell lines)
in the platform manufacturing process.
10%
Process D has been demonstrated to be effective in the platform
manufacturing process with two exemplar stable cell lines.
10%
To demonstrate proof of principle for in vivo
CAR-T products.
To launch the Collaborative Training
Partnerships (CTP) programme in the fourth
quarter of 2022.
Chart the Group’s path to products
To establish a strategy with delivery milestones
for the products at the Group.
Proof-of-principle work was completed with encouraging results.
The CTP programme has been launched successfully in collaboration with
the University of Oxford and University College London in 2022. The initial
cohort, comprising a total of 7 funded projects which were selected by the
CTP board and enjoyed a very healthy number of high quality applicants for
all 7 projects that were progressed to cohort initiation. Significant progress
was also made for cohort 2, where a total of 9 projects have been selected.
A clear strategy for the formation and funding of TherapyCo was set
in 2022. A team under the leadership of the Chief Medical Officer has
established focused therapeutic areas and identified an in vivo CAR-T
candidate for that business.
To complete the efficacy evaluation of OXB-302.
Evaluation of OXB-302 was completed and further development was halted.
10%
10%
To initiate pre-clinical development for one
indication.
Pre-clinical development is initiated and ongoing.
Nominate/identify an in vivo CAR-T candidate.
An in vivo CAR-T candidate has been identified as part of the TherapyCo
formation and funding strategy.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 98
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Objective and headline
Weighting Performance assessed
Strengthen the Group’s leadership and change capability
Assessment
against
objective
% of
bonus
awarded
To increase employee retention and satisfaction
as measured through employee survey.
To demonstrate an engrained approach to
Equality, Diversity and Inclusion (“ED&I”)
through confirmation and communication
of the three-year plan.
To strengthen governance of change initiatives
and CAPEX investments.
To create space and capabilities for strategic
thinking for the senior leadership team.
To deliver on the year two of the three-year
learning and development plan.
Achieve the Group’s ESG priorities
For environmental impact: to establish a
roadmap to net zero CO2 by 2040.
Due to the Group’s right-sizing activity, this objective was no longer relevant
as some attrition was helpful to achieve headcount reductions. The Group
focussed on ensuring this activity was managed in a way that employees
impacted were well supported. A “Your Voice” employee engagement survey
was undertaken in December in both Oxford and Boston locations.
The three-year ED&I plan was communicated and year one actions
implemented successfully. These included setting up an EDI working group
who met regularly during the year, identifying data collection methods to
allow greater reporting and monitoring abilities and drafting a set of new
inclusive people policies that embrace diversity and aim to create a sense
of belonging in the workplace.
10%
10%
A senior leader session was held to review company values and discuss
behaviours needed to drive a culture of high performance. In addition,
all senior leaders attended a two-day training session focussed on leading
teams and change. Discussions also focussed on how leadership can take
a more focussed view on governance of major initiatives with new processes
established to prioritise activities and see them through to completion.
2022 saw the launch of three management development plan cohorts, a
manager toolkit training designed and implemented, digital learning content
piloted in multiple areas of the business, micro learning sessions launched
to support apprentices and a discovery day programme designed and
delivered to support early careers engagement.
The Group, with help from the ESG Committee, set out a clear roadmap
to net zero CO2 emissions by 2040 in the second half of 2022. A supplier
code of conduct was also launched.
Reduce packaging waste and volume of
hazardous waste.
In line with the Group’s long-term target, work continues with regard
to reducing packaging waste by 2032. As regards liquid hazardous waste,
the Group reduced the volume of waste by 49%.
Meet Task Force on Climate-related financial
Disclosures metric targets.
For employee engagement: build on Workforce
Engagement Panel success to bring employee
views into change initiatives and business
decision making.
10%
For governance: holistic approach to risk
management to improve key decisions.
The Group reviewed it’s disclosures with regard to TCFD and sought expert
input to develop an updated statement incorporating, amongst other things,
physical risks that could impact the Group’s Boston site. In addition, the
Group assessed the top five suppliers to the Group and their reliance against
physical climate risks.
Further information can be found in the Group’s TCFD statement in the ESG
Report on pages 56 to 62.
New employee representatives were elected for the Group Workforce
Engagement Panel, and new initiatives included continuous improvement
projects, the launch of an informal recognition and employee engagement
programme and an improved company communications mindset. Two
colleagues from the Group’s Boston site were asked to represent Oxford
Biomedica Solutions on the WEP. In the final quarter of 2022, the Group
launched its “Your Voice” survey enabling colleagues to share their views.
The Group’s business continuity, crisis management and crisis
communications plans were updated to ensure that they reflect today’s
environment. In addition, the Group implemented a transformation
project specifically for the finance function to enhance the internal control
environment – further details can be found in the Audit Committee report
on pages 78 to 84.
Ensure environmental, quality and cyber security
is thought about in all business activity.
The Group’s senior leaders take a proactive and progressive stance
on environment, quality and cyber matters. New initiatives and systems
consider these drivers and “design-in” thinking to the solutions.
In aggregate, the Group objectives were achieved as to 86%.
10%
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 99
Personal objectives element – Stuart Paynter
The personal element of the bonus for Mr Paynter was assessed by reference to the achievement of clear personal objectives and targets,
which supported the strategic objectives of the business. The objectives and targets are considered by the Group to be commercially
sensitive, as they will give the Group’s competitors insight into its strategic plans, and so are not disclosed in detail. However, the principal
areas of his personal objectives related to strengthening controls within the business, focusing investor relations activities in the US,
supporting the CEO transition and refinancing the 1 year term loan from Oaktree.
The Remuneration Committee undertook a robust assessment of the achievements of Mr Paynter with respect to his personal objectives,
and based on achievements against those objectives determined that they were satisfied as to 15% such that a bonus of 22.5% of salary
was earned by reference to these objectives.
Overall bonus outturn
Accordingly, bonuses earned by John Dawson and Stuart Paynter in respect of 2022 were:
— Mr Dawson: £243,480 (129% of salary); and
— Mr Paynter: £428,637 (126% of salary).
The Remuneration Committee reviewed performance against the annual bonus out-turn and concluded the overall bonus payments
to be appropriate. The bonuses will be paid 50% in cash and 50% in deferred share awards.
The deferred share awards are not subject to further performance targets and will become exercisable in three equal instalments on
the first three anniversaries of the award date.
Non-Executive Directors
The following table shows the single total figures of remuneration for 2022 for the Non-Executive Directors and comparative figures
for 2021. During 2022, Dr. Roch Doliveux was Non-Executive Chair for part of the year and Interim CEO for part of the year. We have
disclosed his remuneration in the table for Executive Directors on page 95. Because the Non-Executive Directors do not receive any
remuneration other than fees, no separate totals are included in the table below. Robert Ghenchev elected to receive no fees for his
services as Director.
Fees (audited)
Dr. Roch Doliveux¹
Dr. Andrew Heath²
Stuart Henderson
Dr. Heather Preston
Dr. Sam Rasty
Professor Dame Kay Davies³
Dr. Michael Hayden³
Catherine Moukheibir³
Namrata Patel³
Total
2022
£’000
–
–
85
140⁴
130⁴
65
130⁴
140⁴
47
737
2021
£’000
225
26
85
140⁴
130⁴
54
83⁴
4
n/a
747
¹ Dr. Roch Doliveux’s remuneration for 2022 is included in the Executive Directors single total figure of remuneration table on page 95.
² Dr. Andrew Heath stepped down from the Board on 27 May 2021. In the table above his fees for 2021 are his fees to the date on which he stepped down from the Board.
³
Professor Dame Davies was appointed to the Board with effect from 1 March 2021. Dr. Michael Hayden was appointed to the Board with effect from 15 July 2021.
Ms Moukheibir was appointed to the Board with effect from 14 December 2021. Namrata Patel was appointed to the Board with effect from 13 April 2022.
This includes the additional fee of £50,000 payable to Non-Executive Directors recruited from or based in the United States. The after tax amount of this additional fee
was used to acquire shares at market value.
⁴
Aggregate Directors’ emoluments
Salaries
Benefits
Pension/cash alternative
LTIP
Bonuses
Non-Executive Directors fees
Total
2022
£’000
980
16
79
157
672
737
2,641
2021
£’000
765
22
115
1,057
960
747
3,666
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 100
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Performance Shares Awards granted under the LTIP and vesting in respect of performance in 2022
(audited)
2019 Awards
Performance Shares Awards were granted under the LTIP on 18 April 2019 to John Dawson and Stuart Paynter when the share price was
704.6p. The performance conditions were based on growth in revenue between 2018 and 2021 as regards 50% of the award and growth
in share price over the three years starting with the date of grant as regards 50% of the award.
The revenue performance condition was assessed following the end of 2021 and in the 2021 Directors’ Remuneration Report, the vesting
was estimated to be 100%, but with final vesting to be confirmed in 2022 following the end of the share price performance period.
The Remuneration Committee confirmed the vesting outturn of 100% on 28 March 2022.
Accordingly, the value included in the 2021 single total figure of remuneration in respect of this element of the 2019 awards has been
updated to reflect the price at vesting.
The share price performance condition was as follows:
Compound annual growth rate of the company’s share price
over the three-year period starting with the date of grant¹
Less than 10%
10% (i.e. 33% over 3 years)
Between 10% and 17.5%
17.5% or more (i.e. 63% over 3 years)
Percentage of the award subject to the share price
measure that will vest
0%
25%
Calculated on a straight line basis between 25% and 100%
100%
¹
The starting price is 704.6p being the average share price over the five business days preceding the date of grant.
Over the three-year performance period, the compound annual growth rate of the Company’s share price was –9%. Because the
threshold level of share price performance was not achieved, this element of the 2019 awards lapsed. Accordingly, no value is included
in the 2022 single total figure of remuneration in respect of this element of the 2019 awards.
2020 Awards
Performance Shares Awards were granted under the LTIP on 26 June 2020 to John Dawson and Stuart Paynter when the share price was
760p. The performance conditions were based on growth in revenue between 2019 and 2022 as regards 50% of the award and growth
in share price over the three years starting with the date of grant as regards 50% of the award.
The share price performance condition will be assessed in June 2023 and the vesting outturn in respect of that element will be confirmed
in the 2023 Directors’ Remuneration Report.
The revenue growth performance condition was as follows:
Compound annual growth rate of the company’s revenue
between 2019 and 2022
Less than 15%
15% (i.e. 52.1% over 3 years)
Between 15% and 24%
24% or more (i.e. 90.7% over 3 years)
Percentage of the award subject to the share price measure
that will vest
0%
25%
Calculated on a straight-line basis between 25% and 100%
100%
Over the three-year performance period, the compound annual growth rate of the Group’s revenue was 29.9% resulting in an estimated
vesting outturn of 100%.
For the purposes of the single total figure of remuneration table the value of these awards is calculated as follows.
Executive Director
John Dawson
Stuart Paynter
Shares subject to award
70,805
31,500
Shares subject to the
revenue performance
condition¹
35,402
15,750
Estimated vesting
outturn of the elements
of the awards subject
to the revenue
performance condition
100%
100%
Estimated number
of shares that will vest
by reference to the
revenue performance
condition¹,²
28,519
15,750
Value of the shares
included in the
single total figure
of remuneration ³
101,477
56,043
¹
²
³
As noted above, the share price performance condition will be assessed in June 2023 so that only the element of the award subject to the revenue performance
condition is included in this table.
In the case of Mr Dawson, this is the estimated number of shares that will vest which are attributable to his service in the performance period as a Director up until
27 May 2022.
The awards will not vest until the share price performance condition has been assessed. In line with the applicable regulations, the share price for these purposes
is taken to be the average share price over October, November and December 2022, being 356p. As that average share price is less than the share price at the date
of grant of the awards (760p), the value is not split between that attributable to the share price at grant and that attributable to growth in share price.
The awards are also subject to a performance underpin, such that they would vest only to the extent that the Remuneration Committee
considers that the overall performance of the business across the period justifies it. The Remuneration Committee will review
performance against this underpin following the end of the share price performance period.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 101
Performance Shares Awards granted under the LTIP during 2022
(audited)
On 29 April 2022, Stuart Paynter was awarded a Performance Shares Award under the LTIP as follows:
Stuart Paynter
Basis of award (% of salary)
155%
Number of shares under award
96,100
Face value of grant
£528,550
As noted in the statement from the Remuneration Committee Chair, Stuart Paynter’s LTIP award for 2022 was scaled back to 155%
of salary. The number of shares under award was calculated by reference to the average share price of 550p in the five business days
prior to the date of the award. Neither John Dawson nor Dr. Roch Doliveux received an LTIP award in respect of 2022.
Mr Paynter’s award is a nil cost option and is subject to a three-year vesting period. It is subject to the achievement of the performance
conditions based on relative Total Shareholder Return, growth in revenue and strategic milestones set out below.
TSR and Revenue performance conditions
Vesting amount
0%
25%
100%
TSR¹ – relative TSR performance
(40% of the award)
Below median
Median
Upper quartile
Revenue² – compound annual growth rate
(40% of the award)
Less than 15%
15%
30%
¹
Company’s TSR over a three-year performance period relative to the TSR performance of companies in the NASDAQ Biotechnology Index. TSR will be assessed over
a three-year period from the date of grant of the awards, with a three-month averaging period applied.
² Assessed over the three financial-year performance period 2022 – 2024.
Strategic milestones performance conditions (20% of the award)
The measures and targets relating to these performance conditions are commercially sensitive and will be disclosed when this is no
longer the case, and no later than when the awards vest. The measures are aligned with the Group’s strategy with the level of vesting
determined by reference to the achievements, with 25% vesting for delivery of a threshold milestone.
A performance underpin also applies, such that the award will only vest to the extent that the Remuneration Committee considers that
the overall performance of the business across the period justifies it.
Although the award will vest following the assessment of the performance period (subject to satisfaction of the performance conditions),
it cannot be exercised until the end of a further holding period of two years.
Statement of Directors’ shareholding and share interests
(audited)
The Remuneration Committee has adopted a shareholding guideline for the Executive Directors, which specifies a shareholding
equivalent to 200% of base salary. Because Dr. Roch Doliveux was appointed as CEO on an interim basis, he is not subject to this
guideline. As John Dawson retired from the Board in May 2022 his satisfaction of the guideline at 31 December is not stated; in line
with the Directors’ Remuneration Policy certain of his incentive awards remain subject to post-cessation shareholding rules.
The value of the shares as at 31 December 2022 has been determined based on a share price of 442.50p (being the prevailing closing
share price on 30 December 2022). Under this criteria Mr Paynter is working towards meeting this guideline.
The interests in shares of the Directors who served during the year as at 31 December 2022 were as set out below. Consistent with
the approach to the single total figure of remuneration, we have included Dr. Doliveux in the Non-Executive Directors section.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 102
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Shares held outright
Vested but
unexercised options
Deferred bonus plan
not yet exercisable
Unvested Performance
Shares Awards subject to
performance conditions
Executive Directors
John Dawson¹
Stuart Paynter
Non-Executive Directors
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Robert Ghenchev²
Dr. Sam Rasty
Professor Dame Kay Davies
Dr. Michael Hayden
Catherine Moukheibir
Namrata Patel
2022
203,551
14,657
335,675
9,862
11,614
–
11,614
–
11,289
11,846
7,500
2021
90,343
10,742
2022
544,404
172,057
2021
553,820
101,462
2022
73,467
46,349
2021
46,349
26,582
2022
151,265
175,566
2021
224,001
111,824
125,000
8,862
2,235
–
2,235
–
1,910
–
n/a
¹ Mr Dawson retired from the Board on 27 May 2022.
² Mr Ghenchev is Head of Growth Equity at Novo Holdings which has a holding of 8,253,000 shares.
Reflecting best practice, the Remuneration Committee has adopted, with effect from 1 January 2019, a post-cessation shareholding
guideline, as set out in the Directors’ Remuneration Policy.
During 2022 the following options have vested and lapsed:
LTIP
John Dawson
Stuart Paynter
Deferred bonus
John Dawson
Stuart Paynter
Unvested at
1 January 2022
224,001
111,824
Vesting during
2022
36,368
16,179
Lapsed during
2022
36,368
16,179
Awarded during
2022
–
96,100
Unvested at
31 December
2022¹
151,265
175,566
Not exercisable at
1 January 2022
46,350
26,132
Becomes
exercisable
during 2022
25,001
14,954
Awarded during
2022
52,118
35,171
Not exercisable
at 31 December
2022¹
73,467
46,349
¹
In the case of Mr Dawson the figures are stated as at 27 May 2022, the date on which he retired from the Board.
During 2022, John Dawson exercised options over 132,000 shares. Stuart Paynter did not exercise any options in 2022. John Dawson
and Stuart Paynter did not exercise any options in 2021.
Payment to past Directors and payments for loss of office
(audited)
As reported in the 2021 Directors’ Remuneration, John Dawson retired from the Board on 27 May 2022 and from the Group on
17 January 2023. His remuneration to 27 May 2022 was £566,000 and is included in the single total figure of remuneration table on
page 95, including his bonus earned to that date (which is his full bonus for the year) and the pro-rata portion of his LTIPs vesting
by reference to performance in the year. From 28 May 2022 until 17 January 2023, Mr Dawson continued to receive his salary, pension
and benefits. Information in relation to the treatment of Mr Dawson’s incentive awards in connection with his retirement was included
on page 106 of the 2021 Directors’ Remuneration Report. No other payments to past directors or payments for loss of office were made
in the year.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance
103
Performance graph and comparison with CEO’s remuneration
The chart below illustrates the Company’s TSR performance since January 2013 relative to the FTSE all-share index, the FTSE350 Pharma
and Biotech index and the NASDAQ Biotech index. The FTSE all-share index has been selected because it represents a broad-based
measure of investment return from equities. The FTSE350 Pharma and Biotech index, comprising Pharma and biotech companies listed in
the UK and are constituents of the FTSE350 index, and the NASDAQ Biotech index in the United States (NASDAQ Biotech) market, provide
further benchmarks that are more specific comparators.
Key:
Oxford Biomedica plc
FTSE all-share index
FTSE 350 Pharma and Biotech index
NASDAQ Biotech index
1.600
1.400
1.200
1.000
800
600
400
200
0
Dec 12
Dec 13
Dec 14
Dec 15
Dec 16
Dec 17
Dec 18
Dec 19
Dec 20
Dec 21
Dec 22
CEO’s remuneration in last ten years
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
John
Dawson²
Roch
Doliveux²
CEO’s total single figure
of remuneration
LTIP vesting
Annual bonus
£’000
% of
maximum
% of
maximum
468
680
732
653
811
1,311
1,220
1,258
1,828
104
417
0%
0%
100%
50%
25%
80%
100%
62%
42%¹
50%
N/A
30%
75%
42%
50%
85%
92%
70%
85%
84%
86%
N/A
¹
²
The vesting percentage has been calculated by calculating the weighted average vesting percentage of the 2018 LTIP award and the revenue element of the 2019 LTIP award.
In 2022, Dr. Doliveux was interim CEO from 28 January 2022. Therefore, the CEO’s total single figure of remuneration is shown separately for Mr Dawson’s remuneration
from 1 January 2022 to 27 January 2022 (calculated on a pro-rata basis) and Dr. Doliveux’s remuneration from 28 January 2022 until 31 December 2022 (calculated
on a pro-rata basis). Dr. Doliveux did not participate in an LTIP that vested by reference to performance in 2022 or the 2022 annual bonus or any pension arrangement.
For Mr Dawson: (1) the LTIP vesting has been calculated by the weighted average vesting percentage of the share price element of the 2019 LTIP award and the revenue
element of the 2020 LTIP award in which Mr Dawson participated; and (2) the annual bonus is calculated by reference to Mr Dawson’s bonus.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 104
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Percentage change in remuneration of Directors and employees
The table below shows the percentage change in salary/fees, benefits and bonus between 2019, 2020, 2021 and 2022 for the Directors.
Ms Namrata Patel was appointed during 2022 and, accordingly, has been excluded from the table below. Robert Ghenchev did not
receive any remuneration for his role, and accordingly has been excluded from the table below. The average percentage change in the
same elements of remuneration over the same period are in respect of a comparator group of employees. The regulations require
that the comparator group is all employees of the Company; however, as the Company (Oxford Biomedica Plc) has no employees and
for consistency with prior years the Remuneration Committee has chosen as the comparator group all those employees other than
the Directors who were employed by Oxford Biomedica UK Ltd throughout the whole of the relevant years.
Year
John Dawson¹
Stuart Paynter
Dr. Roch Doliveux ²
Stuart Henderson
Dr. Heather Preston
Dr. Sam Rasty³
Professor Dame Kay
Davies⁴
Dr. Michael Hayden⁴
Catherine
Moukheibir⁴
Namrata Patel
Comparator
employee group
2021/22
% change
–58
10
100
0
0
0
Salary/Fees
2020/21
% change
6
30
89
27
109
1,757
2019/20
% change
5
5
N/A
3
3
N/A
2021/22
% change
–60
0
N/A
N/A
N/A
N/A
Benefits
2020/21
% change
0
0
–
–
–
–
2019/20
% change
0
0
N/A
–
–
N/A
2021/22
% change
–58
11
N/A
N/A
N/A
N/A
Bonus
2020/21
% change
25
47
–
–
–
–
2019/20
% change
27
28
N/A
–
–
N/A
20
57
3,400
N/A
11
N/A
N/A
N/A
N/A
8
N/A
N/A
N/A
N/A
9
N/A
N/A
N/A
N/A
(10)
N/A
N/A
N/A
N/A
9
N/A
N/A
N/A
N/A
11
N/A
N/A
N/A
N/A
11
N/A
N/A
N/A
N/A
22
N/A
N/A
N/A
N/A
98
¹
²
John Dawson retired from the Board on 27 May 2022 and his remuneration for this disclosure is that earned to that date. The reduction in his remuneration between
2021 and 2022 reflects that 2022 was a part year only.
Dr. Doliveux was appointed as a Director in June 2020. The increase in his fees between 2020 and 2021 reflects that 2020 was a part year only. The increase in
Dr. Doliveux’s fees between 2021 and 2022 reflect the payment of an additional fee in respect of 2022 having regard to his additional time commitments in 2022,
as described on page 89.
³ Dr. Rasty was appointed as Director in December 2020. The increase in his fees between 2020 and 2021 reflects that 2020 was a part year only.
⁴
Professor Dame Davies, Dr. Hayden and Ms Moukheibir were appointed to the Board in 2021. The increase in their fees between 2021 and 2022 reflects that 2021
was a part year only.
CEO’s pay ratio
The table below sets out the CEO’s pay ratio at the 25th, median and 75th percentile employee within the organisation. The Group used
Option A as defined in The Companies (Miscellaneous Reporting) Regulations 2018, as this calculation methodology for the ratios was
considered to be the most accurate method. The 25th, median and 75th percentile pay ratios were calculated using the full-time equivalent
remuneration for all UK employees as at the end of 2018, 2019, 2020, 2021 and 2022 respectively. In 2022, Dr. Roch Doliveux was interim
CEO from 28 January 2022. Given the significant proportion of the year for which he was interim CEO, the CEO’s remuneration for 2022
is his remuneration, albeit for the full year and not only for the period from 28 January.
Employees’ involvement in the Group’s performance is encouraged, with all employees eligible to participate in the Company’s all-employee
share plan. From 2020 all eligible employees (previously only certain employees) may participate in discretionary bonus schemes. The Group
aims to provide a competitive remuneration package which is appropriate to promote the long-term success of the Group and to apply this
policy fairly and consistently to attract and motivate employees. The Group considers the median pay ratio to be consistent with the Group’s
wider policies on employee pay, reward and progression. As noted above, given the significant proportion of the year for which Dr. Doliveux
was interim CEO, the 2022 ratios are calculated by reference to his remuneration (for the full year); the reduction in the ratios compared
to 2021 reflects that Dr. Doliveux does not participate in any variable pay arrangement.
Financial year
2018
2019
2020
2021
2022
Method
Option A
Option A
Option A
Option A
Option A
25th percentile pay ratio
1:48
1:42
1:40
1:59
1:13
Median pay ratio
1:37
1:32
1:30
1:44
1:10
75th percentile pay ratio
1:27
1:24
1:23
1:32
1:7
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance Pay details for the individuals are set out below:
2018
Salary (£’000)
Total remuneration (£’000)
2019
Salary (£’000)
Total remuneration (£’000)
2020
Salary (£’000)
Total remuneration (£’000)
2021
Salary (£’000)
Total remuneration (£’000)
2022
Salary (£’000)
Total remuneration (£’000)
CEO
£380
£1,311
CEO
£410
£1,220
CEO
£431
£1,258
CEO
£455
£1,828
CEO
£450
£450
25th percentile
£25
£27
25th percentile
£26
£29
25th percentile
£28
£31
25th percentile
£27
£31
25th percentile
£31
£36
Median
£32
£35
Median
£35
£38
Median
£37
£42
Median
£36
£42
Median
£40
£46
105
75th percentile
£44
£48
75th percentile
£45
£50
75th percentile
£47
£55
75th percentile
£50
£57
75th percentile
£54
£62
Relative importance of spend on pay
The chart below illustrates the spend on employee remuneration compared with the Group’s key cash measures. Since the Group does
not make dividend or other distributions, these have not been included in the table.
The Group’s key cash measures were chosen by the Directors because they illustrate very clearly the importance of employee
remuneration as a fundamental element of operational spend and activities, as well as the continued investment of the business in
its people. The key cash measure amounts were identified as being:
200
150
100
m
£
50
0
-50
Staff pay
Non-payroll costs
Cash generated from / (used in)
operations
Net cash inflow/(burn)
Cash revenues
2020
2021
2022
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 106
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Approach to Directors’ Remuneration in 2023
The Company’s approach to Directors’ Remuneration in 2023 is set out in the statement from the Remuneration Committee Chair on
pages 89 to 93.
Statement of voting at AGM
At the 2022 AGM, the 2021 Directors’ Remuneration Report was approved by shareholders as follows:
Resolution
Approval of the Directors’
Remuneration Report
Votes for
(including
discretionary)
% for
Votes against
% against
Total votes cast
(excluding votes
withheld)
Votes withheld
(abstentions)
57,808,878
80.73
13,801,220
19.27%
71,610,098
834,739
At the 2021 AGM, the 2020 Directors’ Remuneration Policy was approved by shareholders as follows:
Resolution
Approval of the Directors’
Remuneration Policy
Votes for
(including
discretionary)
% for
Votes against
% against
Total votes cast
(excluding votes
withheld)
Votes withheld
(abstentions)
46,437,980
80.95%
10,926,461
19.05%
57,364,441
1,039,205
Advisers to the Remuneration Committee
Deloitte LLP acted as adviser to the Remuneration Committee during 2022. Deloitte is a founding member of the Remuneration
Consultants Group and adheres to its Code of Conduct in relation to Executive remuneration consulting in the UK. Deloitte’s fees for
advice to the Remuneration Committee during 2022 were £31,000 plus VAT. The advice received from Deloitte LLP was both objective
and independent. Deloitte also advised the Group on below Board remuneration, on the operation of its share plans, on the design
of a sales incentive plan, on corporate tax and related matters, on the tax treatment of internationally mobile employees, and on the
tax treatment of non-UK resident Directors during 2022.
The Remuneration Committee reviewed the potential conflicts of interest and the safeguards against them and is satisfied that Deloitte
does not have any such interests or connections with the Group that may impair independence.
Dr. Heather Preston
Chair, Remuneration Committee
25 April 2023
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 107
Directors’ Remuneration Policy
We have included below the parts of the Directors’ Remuneration Policy that we think shareholders will find most useful, but with the
table of service contracts updated to reflect the current circumstances and certain date specific references updated. The full Policy
as approved at the AGM on 27 May 2021 is included in the Company’s Directors’ Remuneration Report for the year ended 31 December
2020, which is available on the Company’s website at www.oxb.com.
Policy table
Component and purpose
Operation
Maximum potential
Performance targets and metrics
Executive Directors
Base salary
To provide a base salary which
is sufficient to attract and retain
Executive Directors of a suitable
calibre.
While no formal performance conditions
apply, an individual’s performance in role
is taken into account in determining any
salary increase.
Base salaries are initially set by
reference to market information
at the time of appointment and
taking into account the experience
and previous package of the new
Executive Director. Base salaries are
normally reviewed annually taking
into account a number of factors
which may include (but are not limited
to): underlying Group performance;
role, experience and individual
performance; competitive salary
levels and market forces; and pay and
conditions elsewhere in the Group.
Any changes are normally effective
from 1 January.
While there is no maximum salary,
increases will normally be in line with
the level of salary increase awarded (in
percentage of salary terms) to other
employees in the Group.
Salary increases above this level may be
awarded in appropriate circumstances,
such as, but not limited to:
− where an Executive Director has
been promoted or has had a change
in scope or responsibility;
− to reflect an individual’s development
or performance in role (e.g. to align a
newly appointed Executive Director’s
salary with the market over time);
− where there has been a change in
market practice; or
− where there has been a change
in size and/or complexity of the
business.
Such increases may be implemented
over such time period as the
Remuneration Committee deems
appropriate.
There is no predetermined maximum
but the totals are reviewed annually
by the Remuneration Committee.
Not applicable.
Benefits
To provide benefits on a market
competitive basis.
Benefits are provided in line with
market practice and may include
medical insurance (including for the
Executive Director’s spouse or partner
and dependants), life assurance,
permanent health insurance, provision
of a company car or a car allowance,
assistance with the preparation of tax
returns, tax equalisation arrangements,
other benefits consistent with those
typically offered in their country of
residence and other appropriate benefits
determined by the Remuneration
Committee. Additional benefits may
be provided based on individual
circumstances, including the location
of the Executive Director. These may
include, for example, travel expenses.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 108
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Component and purpose
Operation
Maximum potential
Performance targets and metrics
Retirement benefits
To provide funding for retirement.
Sharesave scheme
To create alignment with the Group
and promote a sense of ownership.
The Group operates a defined
contribution scheme for all employees,
including Executive Directors. In
appropriate circumstances, such
as where contributions exceed the
annual or lifetime allowance, Executive
Directors may be permitted to take a
cash supplement instead of some or
all of the contributions to a pension
plan. Non-UK national Executive
Directors may be permitted to
participate in home country pension
arrangements where appropriate.
Executive Directors are entitled to
participate in a tax qualifying all
employee Sharesave scheme under
which they may make monthly savings
contributions over a period
of three or five years linked to the
grant of an option over the Company’s
shares with an option price which
can be at a discount of up to 20% to
the market value of shares at grant
(or such other discount as may be
permitted by the applicable legislation
from time to time).
Executive Directors will be able to
participate on the same basis as other
qualifying employees in any other
all-employee share scheme adopted
by the Group.
Any Executive Director appointed
before 1 January 2021.
Not applicable.
A maximum employer contribution
or cash supplement (or combination
thereof):
− of 15% of base salary up to
31 December 2022; and
− with effect from 1 January 2023, not
exceeding the contribution available
to the wider workforce (currently
7.5%).
Any Executive Director appointed after
1 January 2021.
A maximum employer contribution
or cash supplement (or combination
thereof) not exceeding the
contribution available to the wider
workforce (currently 7.5%).
For the Sharesave scheme,
participation limits and the level of
discount permitted in setting the
exercise price are those set by the UK
tax authorities from time to time.
For any other all-employee share plan,
the maximum will be determined in
accordance with the plan rules and
will be the same as for other qualifying
employees.
Not subject to performance measures in
line with usual practice.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance Component and purpose
Operation
Maximum potential
Performance targets and metrics
109
Any Overseas Executive Director
The maximum bonus opportunity is
200% of base salary.
Any Executive Director appointed
before 1 January 2021 and any
Executive Director appointed after that
date who is not an Overseas Executive
Director
The maximum bonus opportunity
is 150% of base salary.
The performance metrics may be based
on financial or strategic objectives (which
may include ESG metrics and individual
objectives). Metrics and targets are set
by the Remuneration Committee taking
into account the strategic needs of the
business. Financial objectives are typically
assessed over a financial year, but may
be assessed over part of the year.
Given the nature of the business, these
objectives and metrics may change
significantly each year.
There is no minimum bonus earned
if threshold performance is not met.
For financial metrics, up to 50% of
the maximum which may be earned
for a metric is earned for on-target
performance, rising to 100% for meeting
or exceeding the maximum level of
performance. For strategic objectives,
the bonus will be earned between 0%
and 100% based on the Remuneration
Committee’s assessment of the extent
to which the objective has been achieved.
Annual bonus
To incentivise and reward delivery
of the Group’s objectives.
Delivery of part of the bonus in
deferred shares aligns the incentive
package with shareholders’ interests.
Bonus targets and measures are
typically reviewed annually and
any pay-out is determined by the
Remuneration Committee after
the year end.
The Remuneration Committee has
discretion to amend the pay-out
should: (1) any potential pay-out not
reflect the Remuneration Committee’s
assessment of overall performance; (2)
any potential pay-out be inappropriate
in the context of circumstances that
were unexpected or unforeseen at the
start of the performance period; or
(3) there be any other reason why an
amendment is appropriate.
Ordinarily, 50% of the bonus is
delivered as cash and 50% is delivered
in deferred shares.
The Remuneration Committee may
permit or require the deferral of
a greater proportion of any bonus
earned.
Deferred shares ordinarily become
exercisable in three equal instalments
on the first, second and third
anniversaries of the award. The
deferred shares are not subject to
further performance targets.
Additional shares may be awarded in
respect of deferred shares to reflect
the value of dividends over the deferral
period. These dividend equivalents may
assume the reinvestment of dividends
into shares on a cumulative basis.
Recovery provisions apply as
summarised on the next page.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 110
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Component and purpose
Operation
Maximum potential
Performance targets and metrics
Long Term Incentives
To augment shareholder alignment
by providing Executive Directors with
longer term interests in shares whilst
requiring challenging performance
before the awards vest.
Any Overseas Executive Director.
The maximum Performance Shares
Award in respect of a financial year
is 500% of base salary.
Any Executive Director appointed
before 1 January 2021 and any
Executive Director appointed after
that date who is not an Overseas
Executive Director.
The maximum Performance Shares
Award is:
− 175% of base salary in respect of
a financial year for an Executive
Director other than the CEO; and
− 200% of base salary in respect of
a financial year for the CEO.
At the discretion of the Remuneration
Committee, annual grants of nil
or nominal cost shares awards
(“Performance Shares Awards”) which
vest subject to the achievement of
performance targets, typically assessed
over a three-year performance period.
Holding period
Vested shares will be subject to a
holding period of two years after
vesting before they are “released”.
The holding period will be structured
either on the basis that: (1) the
Executive Director is not entitled to
acquire shares until the end of it; or
(2) the Executive Director is entitled
to acquire shares following vesting
but that (other than as regards sales
to cover tax liabilities and any exercise
price) the Executive Director is not
able to dispose of those shares until
the end of it.
Dividend equivalents
Additional shares may be awarded in
respect of any Performance Shares
Award to reflect the value of dividends
over the period between the grant
and the date on which the Executive
Director is first able to acquire
the vested shares. These dividend
equivalents may assume the
reinvestment of dividends into shares
on a cumulative basis.
Recovery provisions apply as
summarised below.
Performance conditions will be
based on financial measures or the
achievement of strategic objectives
(which may include ESG metrics).
Financial measures may include (but
are not limited to) share price and
revenue measures.
The Remuneration Committee has
discretion to amend the formulaic
vesting out-turn should: (1) any
formulaic output not reflect the
Remuneration Committee’s assessment
of overall performance; (2) any
formulaic output be inappropriate
in the context of circumstances that
were unexpected or unforeseen at
the date of grant; or (3) there be any
other reason why an amendment
is appropriate.
For the achievement of threshold
performance in respect of a financial
measure, up to 25% of the award
will vest rising to 100% of the award
vesting for achieving or exceeding
maximum performance; for below
threshold performance, none of the
award will vest.
For strategic measures, vesting will be
determined between 0% and 100%
depending upon the Remuneration
Committee’s assessment of the extent
to which the measure has been
achieved.
Notes to the policy table
Recovery provisions
The annual bonus and long-term incentive awards are subject to malus and clawback provisions as follows:
Annual bonus:
For up to two years following the payment of an annual bonus award the Remuneration Committee may require the repayment of some
or all of the cash award in the relevant circumstances (clawback). Deferred bonus awards which have not yet become exercisable may be
cancelled or reduced in the relevant circumstances (malus). For up to one year following the first instalment of deferred shares becoming
exercisable, the Remuneration Committee may require the repayment of some or all of the deferred shares in the relevant circumstances
(clawback).
Long term incentive awards:
The Remuneration Committee has the right to reduce, cancel or impose further conditions on unvested awards in the relevant
circumstances (malus). For up to two years following the vesting of a long term incentive award the Remuneration Committee may
require the repayment of some or all of the award in the relevant circumstances (clawback).
Circumstances in which malus and/or clawback may be applied malus or clawback may be applied in the event of:
— A material misstatement of the Group’s financial results;
— An error in the information or assumptions on which the award was granted or vests including an error in assessing any applicable
performance conditions;
— A material failure of risk management by the Group;
— Serious reputational damage to the Group;
— Material misconduct on the part of the participant; or
— Material corporate failure.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 111
Share ownership guidelines
To align Executives with shareholders and provide an ongoing incentive for continued performance, the Remuneration Committee has
adopted formal share ownership guidelines, which apply both during and after employment.
Shareholding guidelines during employment
Executive Directors are required to build and maintain a minimum level of shareholding equal to their normal annual LTIP opportunity.
Executive Directors will be required to retain half of any post-tax (and if relevant, post exercise price) awards which vest under the long-
term incentive plans, and half of any post-tax deferred shares becoming exercisable under the annual bonus, until the share ownership
guideline has been satisfied. Shares which are fully owned with no outstanding vesting criteria count towards the shareholding guideline
together with deferred annual bonus shares and shares subject to Performance Shares Awards which have vested but which are in a
holding period (in each case, on a net of tax basis).
Shareholding requirement after employment
Shares are subject to this requirement only if they are acquired from long term incentive or deferred bonus awards granted after 1 January
2019. Following employment, an Executive Director must retain such of the relevant shares as have a value at cessation equal to their
in-service shareholding requirement, with the required holding tapering to zero over a two-year period. If the Executive Director holds
less than the required number of relevant shares at any time, they will be required to retain all of those shares.
Performance targets and metrics
Performance targets for the annual bonus are set by the Remuneration Committee after taking into account the strategic needs of the
business. A key component of the Group’s strategy is to develop cell and gene therapy products from pre- clinical proof of concept
through to the end of Phase I or Phase II clinical studies before partnering or out-licencing. Annual bonus targets for a particular year are
therefore likely to include specific product development targets depending on the stage of development of each opportunity. The annual
bonus objectives are also likely to include targets related to generating recurring revenues such as from manufacturing or development
services to third parties.
The performance metrics for long term incentives are determined to ensure that the most appropriate targets are set for the Group’s
situation at the time. The approach to performance measures for the awards to be granted in 2023 is set out on page 92. It is the
Group’s current intention that up to 30% of the overall long term incentive opportunity may be based on the delivery of specific strategic
milestones in the future. It is intended that there will continue to be a performance underpin, such that the awards will only vest to
the extent that the Remuneration Committee considers that the overall performance of the business across the period justifies it.
The Remuneration Committee retains the ability to adjust or set different performance measures if events occur (such as a change
in strategy, a material acquisition and/or a divestment of a Group business, or a change in prevailing market conditions) which cause
the Remuneration Committee to determine that the measures are no longer appropriate, and that amendment is required so that they
achieve their original purpose.
Operation of share plans
Awards and options may be adjusted in the event of a variation of share capital or other relevant event in accordance with the rules of the
applicable share plan. The Group’s share plans may be operated in accordance with their terms, including that awards may be granted as
cash based awards over a notional number of shares, and that share awards may be settled in whole or in part in cash at the election of
the Remuneration Committee; the Remuneration Committee would only use these cash provisions for operational flexibility, for example
if a regulatory restriction in any territory prevented the Company from offering shares to an Executive Director. Where a long-term
incentive award is granted as a “Market Value Option” as referred to in the “Approach to recruitment remuneration” section below, it may
be settled on the basis that the participant receives for nil-cost a number of shares with a market value equal to the “gain” at exercise in
the vested shares.
Differences in remuneration policy for all employees
The structure of the reward package for the wider employee population is based on the principle that it should be sufficient to attract and
retain the best talent and be competitive within the biotech sector, remunerating employees for their contribution linked to the Group’s
holistic performance.
All employees receive a base salary and are entitled to participate in benefits, including the Group’s defined contribution pension scheme
to which the Group contributes.
In 2020, the Group introduced a Group-wide cash bonus scheme which will give employees at all levels the opportunity to share in the
success of the Group by receiving a cash bonus linked to their grade level and their own personal performance. The maximum bonus
receivable varies between the participating employees. 50% of the bonuses of the Executive Directors’ and Senior Executive Team are
delivered in deferred shares, whereas all other staff receive 100% of their bonuses in cash.
Where possible, the Group also encourages employee share ownership through a number of share plans that allow employees to benefit
from the Group’s success. Generally speaking, a much higher proportion of total remuneration for the Executive Directors is linked to
business performance, compared to the rest of the employee population, so that remuneration will increase or decrease in line with
business performance and to align the interests of Executive Directors and shareholders.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 112
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Consideration of employment conditions elsewhere in the Group
Each year the Remuneration Committee is briefed on the structure and quantum of the all-employee remuneration framework as well as
throughout the year being informed about the context, challenges and opportunities relating to the remuneration of the wider workforce
to enable the Remuneration Committee to consider the broader employee context when making Executive remuneration decisions.
The Chief Executive Officer determines the overall salary increases and bonuses for all employees, other than the Executive Directors,
the Senior Executive Team and Company Secretary which are subject to the approval of the Remuneration Committee. The Group is
committed to offering highly competitive reward packages for all employees. Every year, the Group benchmarks salaries and benefits
against the local biotech and pharmaceutical market which informs the decision making process. The Chief Executive Officer discusses
the overall increase in payroll cost and the total amount to be paid in bonuses with the Chair of the Remuneration Committee before
implementing the salary increases and bonuses.
The Remuneration Committee spent considerable time in the second half of 2020 formulating this Remuneration Policy (set out on
pages 107 to 110) which included canvassing the views of shareholders. Post consultation the Remuneration Committee engaged with
the workforce on the Policy and Executive pay via the WEP in compliance with Provision 41 of the Corporate Governance Code.
Component and purpose
Non-Executive Directors
Non-Executive Directors’ fees and benefits
To compensate Non-Executive Directors for
their services to the Group.
Operation
Maximum potential
The Chair’s fees are set by the Remuneration
Committee.
The fees of other Non-Executive Directors are
determined by the Board.
There is no overall maximum, but fees are
set taking into account the responsibilities
of the role and expected time commitment.
Base fee and additional fees
The Chair and Non-Executive Directors may
be eligible to receive benefits such as the
use of secretarial support, assistance with the
preparation of tax returns, or other benefits
that may be appropriate.
Non-Executive Directors receive a base fee, with
additional fees for chairing Board Committees
and holding the office of Senior Independent
Director. Supplementary fees may be paid for
other responsibilities or time commitments.
Travel and accommodation expenses in
connection with attendance by the Chair and
Non-Executive Directors at Board meetings
(and any tax thereon) are paid by the Company.
The Chair and Non-Executive Directors do not
participate in any of the Group’s incentive plans
and do not receive pension contributions.
Additional fees for Non-Executive Directors
based outside the UK
An additional fee may be paid to any Non-
Executive Director outside the UK to recognise
the additional time commitment associated with
their role.
An additional fee of up to £50,000 per annum
may be paid to any Non-Executive Director
recruited from or based in the United States
to reflect market levels of remuneration in the
United States for Non-Executive Directors,
subject to their agreement that the after tax
amount of this additional fee will be applied in
the acquisition of shares at market value which
must be retained for at least 12 months from
acquisition.
Service contracts and policy on payment for loss of office
Executive Directors’ service contracts are subject to 12 months’ notice from both the Group and from the Director. Executive Directors
may be required to work during the notice period or be paid in lieu of notice if not required to work for the full notice period.
The details of service contracts and letters of appointment of those who served as Directors during the year are:
Service contracts
John Dawson¹
Frank Mathias²
Stuart Paynter
10 October 2008
27 March 2023
29 August 2017
Contract date
Unexpired term
at 31 December 2022
N/A
N/A
N/A
N/A
N/A
12 months
Notice period
12 month
12 month
12 months
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 113
Letters of appointment
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Robert Ghenchev
Dr. Sam Rasty
Professor Dame Kay Davis
Dr. Michael Hayden
Catherine Moukheibir
Namrata Patel
Date of appointment
24 June 2020
1 June 2016
15 March 2018
24 June 2019
1 December 2020
1 March 2021
15 July 2021
14 December 2021
13 April 2022
Unexpired term
at 31 December 2022
Notice period
5 months
29 months
3 months
N/A
11 months
14 months
19 months
23 months
28 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
¹
John Dawson retired from the Board on 27 May 2022.
² Dr. Frank Mathias joined the Board on 27 March 2023.
All Directors are subject to re-election by shareholders on an annual basis.
The principles on which the determination of payments for loss of office will be approached are set out below:
Policy
Payment in lieu of notice
Annual Bonus
Contractual termination payments may not exceed the Director’s current salary and benefits
(including pension contributions and any applicable salary supplement) for the notice period.
Alternatively, the Company may continue to provide the relevant benefits.
This will be at the discretion of the Remuneration Committee on an individual basis and the decision as
to whether or not to award a bonus in full or in part will be dependent on a number of factors, including
the circumstances of the individual’s departure and their contribution to the business during the bonus
period in question. Any bonus amounts paid will typically be pro-rated for time in service during the
bonus period and will, subject to performance, be paid at the usual time (although the Remuneration
Committee retains discretion to pay the bonus earlier in appropriate circumstances). The Remuneration
Committee has discretion to pay the whole of any bonus earned for the year of departure and preceding
year in cash.
Deferred Bonus Awards
The extent to which any unvested award will vest will be determined in accordance with the applicable
share plan rules.
Unvested awards will normally lapse on cessation of employment. However, if a participant leaves due
to death, ill-health, injury, disability, the sale of his employer or any other reason at the discretion of the
Remuneration Committee, the Remuneration Committee shall determine whether the award will vest at
cessation or at the normal date. In either case, this will be determined by the Remuneration Committee,
taking into account, unless the Remuneration Committee determines otherwise, the period of time
elapsed from the date of grant to the date of cessation relative to the deferral period. Awards may then
be exercised during such period as the Remuneration Committee determines. Awards which have already
become exercisable at the date of cessation may be exercised for such period as the Remuneration
Committee determines.
Long Term Incentives
The treatment of long term incentive awards will be determined in accordance with the applicable share
plan rules.
Unvested awards
Unvested long term incentive awards will normally lapse on cessation of employment. However, if a
participant leaves due to death, ill-health, injury, disability, the sale of his employer or any other reason at
the discretion of the Remuneration Committee, the Remuneration Committee shall determine whether
the award will vest at cessation or continue until the end of the performance period. In either case, the
extent of vesting will be determined by the Remuneration Committee taking into account the extent
to which the performance condition is satisfied and, unless the Remuneration Committee determines
otherwise, the period of time elapsed from the date of grant to the date of cessation relative to the
performance period. If the award continues, the holding period will ordinarily apply until its originally
anticipated end date, although the Remuneration Committee has discretion to release the award at an
earlier date.
Vested awards in a holding period
If an Executive Director ceases employment with the Group after an award has vested but before the end
of its holding period, the award will continue to the end of the holding period (unless the cessation is for
summary dismissal, in which case it will lapse). The award will be released to the extent it has vested by
reference to the performance conditions. The Remuneration Committee retains discretion to release the
award at cessation.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 114
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Policy
Change of control
Unvested awards
Other payments
The extent to which unvested deferred bonus awards and long term incentive awards will vest will be
determined in accordance with the rules of the relevant plan.
− Deferred bonus awards will vest in full in the event of a takeover, merger or other relevant corporate event.
− Long term incentive awards will vest early on a takeover, merger or other relevant corporate event. The
Remuneration Committee will determine the level of vesting taking into account the extent to which
the performance condition is satisfied and, unless the Remuneration Committee determines otherwise,
the period of time elapsed from the date of grant to the date of the relevant event relative to the
performance period.
Vested awards in a holding period
Vested long term incentive awards will be released on a takeover, merger or other relevant corporate
event to the extent they have vested by reference to the performance conditions.
Payments may be made either in the event of a loss of office or a change of control under the Sharesave
scheme, which is governed by its rules and the legislation relating to such tax qualifying plans. There is
no discretionary treatment for leavers or on a change of control under this scheme.
In appropriate circumstances, payments may also be made in respect of accrued holiday, outplacement
and legal fees and any other all-employee share plan.
In cases where an Executive Director was recruited from outside the UK and has been relocated to
the UK as part of their appointment, the Company will pay reasonable repatriation costs for leavers at
the Remuneration Committee’s discretion. The Remuneration Committee retains discretion to make
additional exit payments where such payments are made in good faith in discharge of an existing
legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or
compromise of any claim arising in connection with the termination of a Director’s office or employment.
Where a ’buyout’ or other award is made in connection with recruitment, the leaver provisions would
be determined no later than the time of the award.
The Directors’ Remuneration Report is approved by the Remuneration Committee and the Board and signed on their behalf.
Dr. Heather Preston
Chair, Remuneration Committee
25 April 2023
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance DIRECTORS’ REPORT
for the year ended 31 December 2022
115
The Directors present their Annual report and audited consolidated financial statements (Annual report and accounts) for the year ended
31 December 2022 as set out on pages 134 to 137. This report should be read in conjunction with the Corporate Governance Report
on pages 72 to 88. Discussions regarding financial information contained in this Annual report and accounts may contain forward-
looking statements with respect to certain of the plans, current goals and expectations relating to the future financial condition, business
performance and results of the Group and Company. By their nature, all forward looking statements involve risk and uncertainty because
they relate to future events and circumstances that are beyond the control of the Group and Company. Readers are cautioned that, as a
result, the actual future financial condition, business performance and results of the Group may differ materially from the plans, goals and
expectations expressed or implied in such forward-looking statements.
Strategic Report
The Strategic Report, including the outlook for 2023 on page 37, is on pages 2 to 68. The Directors consider that the Annual report and
accounts, taken as a whole, are fair, balanced and understandable. In reaching this conclusion, the Audit Committee initially discussed
the requirements with the Group’s auditors when discussing the strategy for the 2022 audit, and the full Board have had an opportunity
to review and comment on the contents of the report. Since the Board met six times for routine meetings in 2022 the Directors consider
that they are sufficiently well informed to be able to make this judgement.
Key financial performance indicators (KPIs)
Key financial performance indicators are outlined in the Chief Financial Officer’s review on pages 28 to 38.
Corporate Governance
The Group’s statement on corporate governance is included in the Corporate Governance Report on pages 72 to 88, which forms part
of this Directors’ Report.
Risk management
The Group’s exposure to risks is set out on pages 64 to 68 (Principal risks, uncertainties and risk management) and on page 150
(note 3: financial risk management).
Dividends
The Directors do not recommend payment of a dividend (2021: £nil).
Directors
Details of the Directors of the Company who were in office during the year and up to the date of signing the financial statements are
detailed on pages 70 to 71 and page 74. The contracts of employment of the Executive Directors are each subject to a twelve month
notice period. The Directors’ remuneration and their interests in the share capital of the Company as at 31 December 2022 are disclosed
in the Directors’ Remuneration Report on pages 89 to 114.
Appointment and replacement of Directors
Directors may be appointed by an ordinary resolution at any general meeting of shareholders, or may be appointed by the existing
Directors, provided that any Director so appointed shall retire at the next AGM and may offer themselves for re-election. In order to
ensure that the Company complies with the Corporate Governance Code all Directors will retire at each AGM and may offer themselves
for re-election. Any Director may appoint another Director or another person approved by the other Directors as an alternate Director.
Directors’ third-party indemnity provision
The Group maintains a qualifying third-party indemnity insurance policy to provide cover for legal action against its Directors. This was
in force throughout 2022 and up to the date of approval of the financial statements.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 116
DIRECTORS’ REPORT (CONTINUED)
Share capital
Structure of the Company’s capital
At 31 December 2022, the Company had 96,264,245 ordinary shares in issue, all allotted and fully paid. There are no restrictions on the
transfer of shares in the Company or on voting rights. All shares are admitted to trading on the premium segment of the main market
of the London Stock Exchange.
Rights to issue and buy back shares
Each year at the AGM the Directors seek rights to allot shares. The authority, when granted, lasts for 15 months or until the conclusion
of the next AGM if sooner. At the last AGM held at the Group’s offices and by webcast on 27 May 2022, authority was given to allot
up to 32,201,408 shares (that number being one third of total issued share capital of the Company at the time), subject to the normal
pre-emption rights reserved to shareholders contained in the Companies Act 2006, and to allot up to a further 32,201,408 shares,
solely in a rights issue. Authority was also given, subject to certain conditions, to waive pre-emption rights over up to 9,606,420 shares,
being 10% of the shares then in issue. No rights have been granted to the Directors to buy back shares.
Substantial shareholdings
At 15 March 2023, the latest practicable date prior to approval of the Directors’ Report, the Company had been notified of the following
shareholdings amounting to 3% or more of the ordinary share capital of the Company.
Shareholder
Novo Holdings
Vulpes Investment Management
Liontrust Asset Management
M&G Investment
Global Alpha Capital Management
Nine Ten Capital
Serum Life Sciences Ltd (UK)
Vanguard group Inc.
Hargreaves Lansdown Asset Management
Vitruvian Partners
Mr S.M.H. Shah
Number of ordinary shares
9,998,802
9,626,085
8,044,568
5,067,751
3,880,863
3,387,228
3,382,950
3,156,491
3,031,200
3,004,567
2,910,383
Percentage of issued share capital
10.4%
9.9%
8.6%
5.8%
4.0%
3.5%
3.5%
3.3%
3.2%
3.1%
3.0%
No other person has reported an interest in the ordinary shares of the Company required to be notified to the Company. No person holds
shares carrying special rights with regard to control of the Company.
Research and development
The Group’s strategy is centered on being an innovative CDMO. Research and development activities are focussed on making improvements
to viral vector systems, the way in which they are manufactured and the way in which they are analysed with the aim being to increase yield
and quality through science and process engineering including developing new technologies and automation where possible.
Employees
In accordance with s172 of the Companies Act 2006, the Group communicates and consults regularly with employees throughout
the year. The Group has established a Workforce Engagement Panel comprising employees representing all levels and functions across
the Group. In addition, the Group has designated Board representative, Stuart Henderson, for gathering the views of the workforce
and overseeing employee engagement between the Board and the workforce. Employees’ involvement in the Group’s performance
is encouraged, with all employees eligible to participate in the Group’s Sharesave Scheme. All employees who have completed probation
are eligible to participate in discretionary bonus schemes. For further details on how the Group engaged with its employees, including
keeping employees informed of matters of concern and awareness of the financial and economic factors affecting the performance
of the Group, please see the Group’s Stakeholders section of the Strategic Report for Employees on pages 14 to 15.
The Group’s aim for all members of staff and applicants for employment is to fit the qualifications, aptitude and ability of each individual
to the appropriate job, and to provide equal opportunity regardless of sex, religion or ethnic origin. The Group is committed to
recognising and supporting the skills and experiences of individuals with disabilities (both visible and invisible) during the hiring process
and continuing throughout employees’ careers and development.
Further details on employees, health and safety, environmental matters and corporate social responsibility are in the ESG statement
on pages 40 to 63.
Financial instruments and related matters
Included in note 3, on pages 150 to 151, are the Group’s financial risk factors and policies and an indication of the Group’s exposure
to certain risks. Those elements of that note form part of this report and are incorporated by reference.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 117
Employee share schemes
The Group has established an Employee Benefit Trust (EBT) to hold shares purchased in order to settle shares awarded to Executive
Directors and other senior managers under the 2013 Deferred Bonus Plan. As at 31 December 2022, the EBT held 16,350 shares with
a value of £72,000 on which all the related options have vested. The EBT also administers the 2015 Deferred Bonus Plan in as far as
subscribing for and applying the share capital for nil cost options in the Company exercised by senior management. Settlement of the
funds occurs through the Group. At the end of 2022 bonuses to senior management with a value of £1,029,000 vested and will be
converted to nil cost options during 2023. Refer to note 27 of the consolidated financial statements for further information.
Agreements that take effect, alter, or terminate because of a takeover bid or on change of control
There are no such agreements that the Directors consider are material. There are no agreements providing for compensation for loss
of office for Directors or employees in the event of a takeover bid.
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the strategic report and notes to these financial
statements.
The Group made a loss for the year ended 31 December 2022 of £45.2 million and consumed net cash flows from operating activities
for the year of £12.6 million. The Group also:
— raised £77.0 million (net of £3 million of share issue cost) in cash from an equity fundraise in January and March 2022;
— entered into a one year US$85 million (£63 million) loan facility with Oaktree as part of the acquisition of Oxford Biomedica Solutions
in March 2022 which was then converted into a four-year term loan facility together with repayment of US$35 million of the initial
principal amount in October 2022;
— during November 2022, sold its Windrush Court facility in a sale and leaseback transaction for £60 million to Kadans, whilst also
agreeing an occupational lease of the property for 15 years; and
— ended the year with cash and cash equivalents of £141.3 million.
In considering the basis of preparation of the Annual report and accounts, the Directors have prepared cash flow forecasts for a period
of at least 12 months from the date of approval of these financial statements, based in the first instance on the Group’s 2023 annual
budget and forecasts for 2024. The Directors have undertaken a rigorous assessment of this base case forecast and have also assessed
the potential impact from the principal risks and uncertainties outlined in the strategic report of the Group’s Annual report and accounts,
taking into consideration the magnitude and likelihood of these risks and uncertainties occurring to prepare a downside scenario with
associated mitigated actions.
The cash flow forecast prepared for the severe but plausible downside scenario with mitigating actions assumes the following:
— Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the LentiVector®
platform and AAV businesses;
— Significant decreases in forecasted existing client milestone and royalty revenues;
— The product development spin out strategy taking longer, or ultimately being unsuccessful; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its clients including expected revenues from existing
clients under long term contracts.
Under both the base case and mitigated downside scenario, the Group and parent company has sufficient cash resources to continue
in operation for a period of at least 12 months from the date of approval of these financial statements.
In the event of the downside scenarios crystallising, the Group would continue to meet its existing loan covenants until June 2024
without taking any mitigating actions, but the Board has mitigating actions in place that are entirely within its control that would enable
the Group to reduce its spend within a reasonably short time-frame to increase its cash covenant headroom as required by the loan
facility with Oaktree Capital Management. The Board has confidence in the Group’s ability to continue as a going concern for the
following reasons:
— The Group has cash balances of £141.3 million at the end of December 2022 and £139.1 million at the end of March 2023;
— Approximately two thirds of 2023 forecasted revenues are covered by binding purchase orders which give certainty to revenues over
the next 12 months;
— The Group’s history of being able to access capital markets including raising £77 million of equity during 2022;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure and operational
purposes, as recently evidenced by the US$85 million one-year facility and US$50 million replacement four-year facility obtained
with Oaktree;
— The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully entering
into new and expanding existing client agreements with AstraZeneca, Juno Therapeutics (a wholly owned subsidiary of Bristol Myers
Squibb Company), Homology Medicines and multiple other new partners over the last twelve months.
Taking account of the matters described above, the Directors are confident that the Group and parent company will have sufficient
funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 118
DIRECTORS’ REPORT (CONTINUED)
Viability statement
In performing a viability statement assessment of the prospects of the Group in accordance with the UK Corporate Governance
Code, the Directors have assessed the prospects of the Group over the three years to December 2025. They believe three years to
be appropriate due to the inherent significant uncertainties of forecasting within and beyond this time horizon given the nature of the
business sector in which the Group operates. The assessment has been informed by refreshing, in 2022, the strategy adopted by the
Board in 2016, and the evolution of the business plan over the last twelve months. The outcome of this work has been to develop an
updated long-range plan that covers the viability assessment period which the Board has scrutinised in depth together with its financial
advisors prior to the publication of this statement.
The Group’s strategy is to exploit its platform technologies in lentiviral vector (LentiVector®) and AAV to support the development of
other companies’ cell and gene therapy products. The Group is generating growing cell and gene therapy revenues and other operating
income from licensing its platform technology, generating upfront receipts and royalties, and fees for providing process development
and bioprocessing services to other companies. Over the three years to December 2025 the Directors believe that revenues from
licensing its technology to third parties and from providing process development and bioprocessing services to its partners will be
sufficient to support a sustainable Group.
The following factors are considered both in the formulation of the Group’s strategy, and in the assessment of the Group’s prospects
over the three-year period:
— The principal risks and uncertainties faced by the Group, including emerging risks as they are identified (such as climate change), and
the Group’s response to these;
— The prevailing economic climate and global economy, competitor activity, market dynamics and changing client behaviours;
— The potential short and longer-term economic impact of the war in Ukraine;
— How the Group can best position itself to take advantage of the current opportunities within the cell and gene therapy and adenovirus
markets;
— Opportunities for further technology investment and innovation; and
— The resilience afforded by the Group’s enviable technology platform and innovation capabilities;
Assessment of viability
The Group has experienced a challenging, but successful year in FY22. During this period, the robustness of the Group’s operations and
the long-term nature of its clients’ investments has been proven, and through the inspiring innovation and integrity of employees during
the last twelve months the Group has continued to add new LentiVector® platform clients, while expanding on its existing partnerships.
The Group was also able to successfully raise £77 million in equity finance and to secure a US$85 million debt facility (which was
part repaid and refinanced in October 2022), which allowed it to make its first major US acquisition by taking an 80% stake in Oxford
Biomedica Solutions; to add market leading AAV platform technology, expertise and high quality facilities into its core client offering to
increase its future sales growth potential – during the period Oxford Biomedica Solutions’ client base was expanded by signing four new
undisclosed client agreements, in addition to Homology Medicines. Further during the last 12 months, the Group entered into a sale
and leaseback arrangement of its Windrush Court facility realising £60 million proceeds from the sale. The Group has now entered an
extremely exciting stage in its development focusing its efforts on commercial development and manufacture of cell and gene therapy
products.
The financial viability of the Group has been assessed, taking into account the Group’s current financial position, and assuming the Group
continues to execute on its growth strategy and is able to raise additional equity finance by early 2025 to fund its continuing growth and
purchase the remaining 20% of Oxford Biomedica Solutions. While Management acknowledges the economic and financial risks associated
with the additional equity finance raise, this is considered reasonable because the Group has a strong and supportive shareholder following
and a successful track record of raising equity finance, and because there’s a sufficiently long timeframe over which this needs to be
achieved.. This assessment has been made using long range financial planning assumptions, augmented by the preparation of more detailed
cash flow forecasts over the period that also consider the impact of severe but plausible downside scenarios, including scenarios arising from
the Group’s principal risks as outlined on pages 64 to 68. In modelling these downside scenarios, the Group has considered the principal risks
that are most likely to have a direct and material impact on the viability of the Group. These risks are outlined below. It is important to note
that while each risk could adversely affect the Group’s financial performance, as the Group’s client product portfolio expands its resilience
to individual product setbacks and its reliance on securing individual new products reduces. Hence, the combination of downside risks that
would need to crystallize to make the business unviable becomes increasingly remote. In addition, there are significant upside opportunities
that aren’t assumed in the Group’s financial plans, so the scenarios modelled are considered appropriately balanced.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 119
Scenario
No revenues from new clients
Risk
Commercialisation risk
A substantial downside affecting
the core multi-vector platform business
Commercialisation risk
Supply Chain and business execution risk
Significant decreases in forecasted existing
client milestones and royalties
Commercialisation risk
Description
The Group is unable to attract new clients, or
existing clients do not add additional products
to their existing programmes.
Clients discontinue their existing programmes
or transfer them to other suppliers.
The Group is unable to produce batches
for clients meeting the required specification.
Clients terminate or delay their existing
programmes due to the products under
development not meeting safety and efficacy
requirements.
In addition, Management needs to ensure that costs stay flexible and can be aligned with revenues which can sometimes be lumpy,
or potentially significantly reduce or stop at relatively short notice (e.g. in the case of a vaccine for a pandemic). However, over the last
twelve months the business has demonstrated that it has solid foundations, and the necessary controls in place to successfully manage
its financial resources dynamically and effectively, and with the addition of Oxford Biomedica Solutions, now has a broadened offering
to help mitigate that risk.
As mentioned above, the hypothetical downside scenarios with mitigating actions modelled over the viability period were purposefully
severe whilst remaining realistically plausible, with the aim of creating outcomes that could threaten the viability of the Group. However,
in the event of these scenarios arising, there are various options available to the Group to maintain its liquidity and continue its operations
e.g. (i) accessing external funding; (ii) more radical short term cost reduction actions; and (iii) further reductions to capital expenditure.
Over the three-year viability assessment period, assuming the Group continues to execute its growth strategy it has strong prospects for
revenue growth and raising additional finance arising from its expanding client product portfolio and increasingly broad spectrum
of capabilities and, as such, the Directors are confident in the ongoing viability of the business.
Conclusion
The Directors anticipate that the Group has strong prospects for attracting and fulfilling the demands from more client programmes,
and in doing so being able to continue the recent growth in client activity for the foreseeable future. The Group’s financial forecasts
reflect these assumptions and therefore the Directors have concluded that there is a reasonable expectation, although not a certainty,
that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period to December 2025.
Amendment of the Company’s articles of association
Amendment of the Company’s articles may be made by special resolution at a general meeting of shareholders.
Compliance with Listing Rule 9.8.4R
The Directors have reviewed the requirements of LR 9.8.4R. The majority of these do not apply to the Group but the following are
applicable.
Listing Rule
LR 9.8.4 (5) and (6)
LR 9.8.4 (7) and (8)
Information required
Arrangement under which a Director
has waived current or future emoluments.
Allotment of shares other than to existing
shareholders in proportion to holdings.
Response
Robert Ghenchev elected to receive no fees
for his services as a Director (page 99).
Allotment of shares on exercise of options
by employees under approved share schemes
(note 27, pages 169 to 171).
Allotment of shares in accordance with the
equity fundraise completed in February and
March 2022 (note 25, page 168).
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 120
DIRECTORS’ REPORT (CONTINUED)
Statement of Directors’ responsibilities in respect of the Annual report and accounts
The Directors are responsible for preparing the Annual report and accounts and the Group and parent Company financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under company
law, the directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting
standards and applicable law and have elected to prepare the parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In preparing each of the Group
and parent Company financial statements, the Directors are required to:
— Select suitable accounting policies and then apply them consistently;
— Make judgements and estimates that are reasonable, relevant and reliable;
— State whether they have been prepared in accordance with UK-adopted international accounting standards;
— Assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern; and
— Use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Governance Report that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements will form part of the annual financial
report prepared using the single electronic reporting format under the TD ESEF Regulation. The auditor’s report on these financial
statements provides no assurance over the ESEF format.
Responsibility statement of the Directors in respect of the Annual report and accounts
We confirm that to the best of our knowledge:
— The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as
a whole; and
— The Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and
the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties
that they face.
We consider the Annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy.
Statement as to disclosure of information to auditors
In accordance with s418 of the Companies Act 2006, so far as each Director is aware, there is no relevant audit information of which
the Group and Company’s auditors are unaware, and each Director has taken all the steps that he ought to have taken as a Director
in order to make himself aware of any relevant audit information and to establish that the Group and Company’s auditors are aware of
that information.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 121
Independent auditors
KPMG will retire as the Group’s independent auditors at the conclusion of the Company’s AGM in 2023 and a resolution concerning
the appointment of their replacement, PriceWaterhouseCoopers LLP, will be proposed at the Company’s AGM in 2023.
Greenhouse gas emissions report
Details on greenhouse gas emissions are set out in the ESG Report in the Strategic Report on page 54.
Statement of employee engagement
Details of the actions that have been taken during the financial year in order to keep employees informed of matters of concern and
awareness of the financial and economic factors affecting the performance of the Group is described in Group’s Stakeholders section
of the Strategic Report for Employees on pages 14 to 19.
Statement of engagement with suppliers, clients and others.
The statement of how the Directors have engaged with suppliers, clients and others is described in the Group’s Stakeholders section
of the Strategic Report on pages 14 to 17, with a working example in action on pages 18 to 19.
Annual General Meeting
The AGM will be held on Friday, 23 June 2023 at the Group’s offices at Windrush Court, Transport Way, Oxford, OX4 6LT. The Group
encourages shareholders to attend the AGM by webcast and vote by proxy.
By order of the Board
Stuart Paynter
Director
25 April 2023
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 122
INDEPENDENT AUDITORS’ REPORT
To the members of Oxford Biomedica plc
1. Our opinion is unmodified
We have audited the financial statements of Oxford Biomedica plc (“the Company”) for the year ended 31 December 2022 which
comprise the consolidated statement of comprehensive income, the consolidated and company statements of financial position,
consolidated and company statements of cash flows, the consolidated and company statements of changes in equity attributable
to owners of the parent, and the related notes, including the accounting policies in note 1.
In our opinion:
— the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2022
and of the Group’s loss for the year then ended;
— the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
— the parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006; and
— the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 29 May 2018. The period of total uninterrupted engagement is for the five
financial years ended 31 December 2022. We have fulfilled our ethical responsibilities under, and we remain independent of the Group
in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
Overview
Materiality:
group financial statements as a whole £1,100k (2021: £1,140k) 0.80% (2021: 0.80%) of revenue
Coverage
100% (2021: 100%) of Group revenue
Key audit matters vs 2021
Event driven
New: Valuation of Acquired Intangible Assets
New: Sale and leaseback arrangements
Recurring risks
Contract revenue recognition
Recoverability of parent Company’s investment in and intercompany loans due from subsidiaries
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion
above, together with our key audit procedures to address those matters and, as required for public interest entities, our results from those
procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that
opinion, and we do not provide a separate opinion on these matters.
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123
Contract revenue recognition
Accounting treatment
The risk
Our response
(Customer license revenues and milestones
£11.9 million; 2021: 14.4 million)
Refer to page 78 (Audit Committee Report),
pages 140 (accounting policy) and
page 152, 160 – 161 (financial disclosures).
The Group enters into a number of
multiple element contracts with differing
terms. There are inherent judgements
required to be made by the Group in the
following areas:
We performed the detailed tests below rather than seeking to rely
on any of the Group’s controls because our knowledge of the design
of these controls indicated that we would not be able to obtain the
required evidence to support reliance on controls. Our procedures
included:
− Identification of performance obligations
of the contract, primarily the licence fees
and milestones;
− Assessing the allocation of the total
transaction price to each performance
obligation with reference to their
standalone selling price; and
− Whether revenue for each performance
obligation satisfies the criteria for
recognition over time or at a point in time.
Depending on the outcome of the
judgements made on each of the areas
described above, there is a risk that revenue
is recognised in the wrong period.
Valuation of Acquired Intangible Assets
Subjective valuation
(Acquired Intangible assets £102.9 million)
Refer to page 78 (Audit Committee Report)
and page 150 (critical accounting
judgements and estimates – estimation),
pages 143 – 144 (accounting policy) and
page 156 – 157 (financial disclosures)
As a result of the acquisition of Oxford
Biomedica Solutions LLC, in accordance with
IFRS 3 Business Combinations, the Group
has performed a fair value assessment
of the identified acquired intangible assets.
The valuation of the identified assets and
liabilities requires the group to make an
estimate of the fair value of the acquired
intangibles which is reliant on selection of an
appropriate valuation method and a number
of key observable and unobservable input
assumptions.
There was a high degree of subjectivity in
assessing a number of the assumptions
applied by the Group in the multi-period
excess earnings method used to calculate
the acquisition-date fair value of the acquired
intangible assets, in particular, weighted
average return on assets and discount rate.
The effect of these matters is that. as part of
our risk assessment, we determined that the
valuation of the acquired intangibles has a
high degree of estimation uncertainty, with
a potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole, and possibly many
times that amount. The financial statements
(Note 2) disclose the sensitivity estimated by
the Group.
− Accounting analysis: We evaluated the Group’s revenue accounting
policy against the relevant accounting standard.
− Testing application: We assessed and challenged the directors’
judgements made, in line with accounting policies and with reference
to significant contracts, including:
− Assessment of the goods or services promised in the contract and
whether they are distinct and therefore separate performance
obligations;
− Challenge of the Group’s judgements made through consideration
of the contract terms and based on our knowledge of the entity
and our experience of the industry in which it operates.
− Assessment of the stand-alone selling prices of individual
components, through benchmarking across the other customer
contracts; and
− Assessment of the contract terms against the requirements of
the relevant accounting standard to determine whether the
timing of revenue recognition should be recorded over time or
at a point in time.
Our results: We found the Group’s treatment of license and milestone
revenues derived from contracts entered into to be acceptable (2021:
acceptable).
We performed the tests below rather than seeking to rely on any of
the Group’s controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
procedures described below:
Sensitivity analysis: We assessed the sensitivity of the fair value of the
intangible assets acquired to changes in certain assumptions to identify
if a reasonably possible change in assumptions could materially alter
the valuation.
Methodology Choice: We considered whether the forecasts used
are the most appropriate basis upon which to fair value the acquired
intangible assets and if there were any alternatives available.
Our valuation expertise: We used our own valuation specialists to
assess the completeness of the intangible assets identified and the
valuation methodology applied and challenged key assumptions such
as weighted average return on assets and discount rate based on our
sector expertise.
Assessing valuer credentials: We assessed the external valuer
qualifications and expertise and read its terms of engagement with the
Group to determine whether there were any matters that might have
affected their independence and objectivity or may have imposed
scope limitations upon their work.
Benchmarking assumptions: We compared the Group’s assumptions
to internally and externally derived data in relation to the key inputs
of forecast capital expenditure; market growth; revenue growth and
discount rate.
Historical comparisons: We assessed the accuracy of the forecasting
processes in place for the acquired businesses through comparison
of previous forecasts to actual results
Assessing transparency: We assessed whether the Group’s disclosures
about the sensitivity of the outcome of the fair value assessment to
changes in key assumptions reflected the risks inherent in the valuation
of acquired intangible assets in note 2 of the financial statements.
Our results: We found the Group’s valuation of the intangible assets
acquired to be acceptable.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements 124
INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Sale and Leaseback arrangements
Subjective valuation
The risk
Our response
(Gain on sale and leaseback £27.1 million
and lease liability £32.7 million)
Refer to page 78 (Audit Committee
Report) and page 148 (critical accounting
judgements and estimates – estimation),
pages 142 (accounting policy) and
page 174–175 (financial disclosures)
Recoverability of parent Company’s
investment in and intercompany loans
due from subsidiaries
(£426.9 million; 2021: £273.3 million)
Refer to page 144 (accounting policy) and
pages 158–159, 178 (financial disclosures).
The Group entered into a sale and
leaseback transaction of its manufacturing
facility. The calculation requires the Group
to determine an appropriate discount rate,
which can have a significant impact on the
calculation of the gain on the sale and the
value of the lease liability recognised.
As the interest rate implicit in the lease
could not be readily determined, the
Group have based the discount rate on the
Group’s incremental borrowing rate. The
incremental borrowing rate is based on
unobservable inputs including assumptions
over the Group’s credit risk and risks
specific to the leased asset.
Small changes in the assumptions could
lead to a material change in the gain
recognised on the sale and leaseback and
the valuation of the lease liability.
The effect of these matters is that, as part
of our risk assessment, we determined that
the valuation of the sale and lease back has
a high degree of estimation uncertainty,
with a potential range of reasonable
outcomes greater than our materiality for
the financial statements as a whole, and
possibly many times that amount. The
financial statements (Note 2) disclose the
sensitivity estimated by the Group.
Forecast-based assessment
The carrying amount of the parent
Company’s investment and intercompany
loans due from the trading subsidiaries
represents 85% (2021: 75%) of the parent
Company’s total assets.
Their recoverability is not at a high risk
of significant misstatement or subject to
significant judgement. However, due to the
inherent uncertainty involved in forecasting
and discounting future cash flows, and the
materiality of the balances in the context of
the parent Company financial statements,
this is considered to be the area that had
the greatest effect on our overall parent
Company audit.
We performed the tests below rather than seeking to rely on any of
the Group’s controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
procedures described below:
Sensitivity analysis: We performed a sensitivity analysis over the
assumptions and compared the sensitivity to the recorded value to
identify the key assumptions affecting the valuation.
Our valuation expertise: We used our own valuation specialists to
assess the appropriateness of the incremental borrowing rate including
asset specific adjustments applied and challenged the rate based on
our sector expertise.
Tests of detail: We corroborated the Group’s credit risk assumption
with reference to loan agreements in place and financing
arrangements that the Group could attain based on their credit history.
Benchmarking assumptions: We compared the risk-free rate within
the Director’s calculation of the incremental borrowing rate to market
information including gilts and corporate bonds.
Assessing transparency: We assessed the adequacy of the Group’s
disclosures about the sensitivity of the gain on sale and leaseback and
the valuation of the lease liability to changes in key assumptions.
Our results: We found the gain recognised on the sale and leaseback
transaction and the valuation of the related lease liability to be
acceptable.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the nature of the account balance meant
that detailed testing is inherently the most effective means of obtaining
audit evidence. Our procedures included:
− Comparing values: Comparing the carrying values of the investments
and intercompany loans due from subsidiaries with the net assets
of the relevant subsidiary included within the group consolidation,
to identify whether the net asset values of the subsidiaries, being an
approximation of its minimum recoverable amount, were in excess of
their carrying amount
− Test of detail: For those balances not supported by the net assets of
the relevant subsidiary we obtained the Company’s value in use cash
flow model. We compared the amount derived from this model to
the above carrying amount and assessed the mathematical integrity
of the model.
− Historical comparisons: We assessed cash flow forecasts used in the
value in use model against historical results achieved in the year and
in previous years to assess historical reliability of the forecasts.
− Sensitivity analysis: We performed sensitivity analysis to evaluate
the impact of reasonably possible changes to key assumptions in
the Group’s cash flow forecasts.
Our results: We found the Company’s conclusion that there is no
additional impairment of its investment in and intercompany loans
due from subsidiaries to be acceptable (2021: acceptable).
The bioprocessing revenue contract modification accounting treatment risk has reduced in the year; this is due to there being no
contract modifications taking place during the year. We continue to perform procedures over going concern, as noted in section 5
of this report. However, following the sale and leaseback transaction, which has provided additional cash flow to the entity, we have
not assessed this as one of the most significant risks in our current year audit and, therefore, it is not separately identified as a key audit
matter in our report this year. Therefore, both matters are not separately identified in our report this year as key audit matters.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 125
3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £1,100k (2021: £1,140k), determined with reference to a benchmark
of Group revenue of which it represents 0.80% (2021: 0.80%).
Materiality for the parent Company financial statements as a whole was set at £385k (2021: £395k), determined with reference to a
benchmark of the parent Company total assets, of which it represents 0.11% (2021: 0.21%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 65% (2021: 65%) of materiality for the financial statements as a whole, which equates to £715k
(2021: £741k) for the Group and £250k (2021: £256k) for the parent Company. We applied this percentage in our determination
of performance materiality based on the level of identified misstatements and control deficiencies identified during the prior period.
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £55k (2021: £57k),
in addition to other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s 5 (2021: 2) reporting components, we subjected 4 (2021: 2) to full scope audits for group purposes.
The components within the scope of our work accounted for the percentages illustrated opposite.
For the residual components, we performed analysis at an aggregated group level to re-examine our assessment that there were
no significant risks of material misstatement within these.
The work on all the components, including the audit of the parent Company, was performed by the Group team.
The Group team used component materialites, which ranged from £385k to £990k (2021: £395k to £1,080k), having regard to the mix
of size and risk profile of the Group across the components.
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s internal control
over financial reporting.
£1,110k
Whole financial statements materiality
(2021: £716k)
£715k
Whole financial statements performance materiality
(2021: £741k)
£990k
Range of materiality at
4 components (£385k – £990k)
(2021: £395k – £1,080k)
£55k
Misstatements reported to the audit committee
(2021: £57k)
Revenue
Group materiality
Group revenue
£139,989k (2021: £142,797k)
Group materiality
£1,110k (2021: £1,140k)
100%
(2021 100%)
100
100
Full scope for group audit purposes 2022
Full scope for group audit purposes 2021
Group revenue
100%
(2021 100%)
100
100
100%
(2021 100%)
100
100
Full scope for group audit purposes 2022
Full scope for group audit purposes 2021
Full scope for group audit purposes 2022
Full scope for group audit purposes 2021
Group profit before tax
Group total assets
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126
INDEPENDENT AUDITORS’ REPORT (CONTINUED)
4. The impact of climate change on our audit
In planning our audit, we have considered the potential impact of risks arising from climate change on the Group’s business and
its financial statements. Further information is provided in the Group’s Environment, Social and Governance report which has been
incorporated into the 2022 Annual Report on pages 40–63.
We considered that climate change risks and opportunities have had a limited impact on the Group. There is enhanced narrative in
the Annual Report on climate matters.
As part of our audit we performed a risk assessment of the impact of climate change risk made by the Group in respect of climate change
on the financial statements and our audit approach. In doing this we performed the following:
— Understanding the Group’s processes: we made enquiries to understand the Group’s assessment of the potential impact of climate
change risk on the Group’s Annual Report and Accounts and the Group’s preparedness for this. As a part of this we made enquiries
to understand Group’s risk assessment process as it relates to possible effects of climate change on the Annual Report and Accounts
including the way in which the accounting policies of the Group are updated to reflect climate change risks.
— Annual report narrative: We made enquiries of Group to understand the process by which climate related narrative is developed
including the primary sources of data used and the governance process in place over the narrative. As a part of our procedures, we
read the climate related information in the front half of the Annual Report and considered consistency with the financial statements
and our audit knowledge.
On the basis of the procedures performed above, we concluded that the risk of climate change was not significant. As a result, there was
no material impact from this on our key audit matters.
5. Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the parent
Company or to cease their operations, and as they have concluded that the Group’s and the parent Company’s financial position means
that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their
ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the
going concern period. The risks that we considered most likely to adversely affect the Group’s and Company’s available financial resources
over this period were:
— The impact of macro economic trends on customer activity.
— Impact of future actions, such as reduction in capital and project expenditure, obtaining of additional funding in the form of equity
financing, loan financing or other government finance initiatives.
— Covenant compliance.
We considered whether these risks could plausibly affect the liquidity and covenant compliance in the going concern period by assessing
the directors sensitivities over the level of available financial resources and covenant thresholds indicated by the Group’s financial
forecasts taking account of severe, but plausible adverse effects that could arise from these risks individually and collectively.
Our procedures also included:
— Critically assessing assumptions in base case and downside scenarios relevant to liquidity metrics, in particular in relation to customer
pipeline, inflationary impacts and foreign exchange rate fluctuations by comparing to historical trends in severe economic situations and
overlaying knowledge of the entity’s trading performance to date and our knowledge of the entity and the sector in which it operates.
— We also compared past budgets to actual results to assess the directors’ track record of budgeting accurately.
— We inspected confirmations from the lender on the level of committed financing, the associated covenant requirements and
restrictions on the use of funds.
— We inspected the loan agreements in order to confirm the nature of the associated covenant requirements.
— We considered whether the going concern disclosure in note 1 to the financial statements gives a full and accurate description of the
Directors’ assessment of going concern, including the identified risks, dependencies, and related sensitivities.
— We assessed the completeness of the going concern disclosures.
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127
Our conclusions based on this work:
— we consider that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
— we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s or parent Company’s ability to continue as a going concern for
the going concern period;
— we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements on
the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and
— the related statement under the Listing Rules set out on page 88 is materially consistent with the financial statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the parent
Company will continue in operation.
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
— Enquiring of the directors, other management and the audit committee and inspection of policy documentation as to the Group’s
high-level policies and procedures to prevent and detect fraud, including the Group’s channel for “whistleblowing”, as well as whether
they have knowledge of any actual, suspected or alleged fraud.
— Reading Board, Audit Committee and Remuneration Committee minutes.
— Considering remuneration incentive schemes and performance targets for management and the directors.
— Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards and taking into account possible incentives and pressures to increase the Group’s share price or
earnings trend, our overall knowledge of the control environment and the nature of revenues that involve subjective estimates and
judgements, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue
recognition. In particular the risk that the judgements taken in recognising contract revenue are inappropriate and that bioprocessing and
process development revenues are recorded in the wrong period through the percentage of completion derived at the reporting date,
and the risk that Group management may be in a position to make inappropriate accounting entries.
We did not identify any additional fraud risks.
We performed procedures including:
— Assessing the judgements made by the Group in recognition of contract revenues, as described in more detail in section 2
of our audit report.
— Assessing the accuracy and appropriateness of underlying data and assumptions used to determine the percentage of completion of
bioprocessing batches and process development work packages in progress at the year end reporting date.
— Assessing whether credit notes issued after the year end report date were indicative of inappropriate revenues having been recognised
in the year.
— Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting
documentation. These included those posted with key words included in the description, those posted to seldom used accounts,
those posted to accounts which contain accounting estimates and are made close to the period end, and those posted to unusual
account combinations, including those with entries to revenue and cash with an unexpected double entry.
— Evaluated the business purpose of significant unusual transactions.
— Assessing whether the judgements made in making accounting estimates are indicative of potential bias.
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INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from
our general commercial and sector experience and through discussion with the directors and other management, including legal counsel
(as required by auditing standards), and discussed with the directors and other management, the policies and procedures regarding
compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation
(including related companies legislation) and taxation legislation and we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the
following areas as those most likely to have such an effect: healthcare regulations, such as good manufacturing practice (GMP), good
clinical practice (GCP) and good laboratory practice (GLP) standards for laboratories and manufacturing facilities (through audits by the
MHRA), health and safety, anti-bribery and employment law and certain aspects of company legislation recognising the nature of the
Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of
management, including legal counsel, and the directors and inspection of regulatory and legal correspondence, if any. Therefore if a
breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For
example, the further removed non- compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement.
We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non- compliance with all laws and
regulations.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 129
7. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that
work we have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
— we have not identified material misstatements in the strategic report and the directors’ report;
— in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
— in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
— the directors’ confirmation within the Viability Statement on page 118–119 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency
and liquidity;
— the principal risks, uncertainties and risk management disclosures describing these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated; and
— the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on pages 118–119 under the Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the
Group’s and parent Company’s longer-term viability.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements
130
INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our
audit knowledge:
— the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business
model and strategy;
— the section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these issues were addressed; and
— the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the
UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.
8. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
— adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received
from branches not visited by us; or
— the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
— certain disclosures of directors’ remuneration specified by law are not made; or
— we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate Governance 131
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on pages 120, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of
accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does
not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting
format specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been
prepared in accordance with that format.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
William Smith (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
2 Forbury Place
33 Forbury Road Reading
RG1 3AD
25 April 2023
Oxford Biomedica plc | Annual report and accounts 2022 | Corporate GovernanceStrategic ReportCorporate GovernanceGroup Financial Statements
132
BUILDING ON A LEADING POSITION
THE GROUP AIMS TO
ULTIMATELY HAVE A
MARKET LEADING POSITION
IN THE VIRAL VECTOR
OUTSOURCED SUPPLY
MARKET ACROSS ALL KEY
VECTOR TYPES, WITH LONG
TERM REVENUE GROWTH
RATES EXCEEDING
THE BROADER MARKET
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
133
FINANCIAL
STATEMENTS
Consolidated statement of comprehensive income
Statement of financial positions
Statements of cash flows
Statements of changes in equity attributable
to owners of the parent
Notes to the consolidated financial statements
Glossary
Advisors and contact details
134
135
136
137
138
179
182
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
134
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Research and development costs
Bioprocessing costs
Administrative expenses
Other operating income
Gain on sale and leaseback
Change in fair value of asset held
at fair value through profit and loss
Operating (loss)/ profit
Finance income
Finance costs
(Loss)/profit before tax
Taxation
(Loss)/profit for the period
Other comprehensive
income/(expense)
Items that are or may be reclassified
subsequently to profit or loss
Foreign currency translation
differences
Other comprehensive income
Total comprehensive (expense)/
income
(Loss)/profit attributable to:
Owners of the company
Non-controlling interest
Total comprehensive (expense)/
income attributable to:
Owners of the company
Non-controlling interest
Basic (loss)/ profit per share
Diluted (loss)/profit per share
Note
4
4
13
4
6
6
8
9, 29
36
36
9
9
There was no other comprehensive income or loss.
The profit for the year is attributable to the owners of the parent.
2022
£’000
139,989
(70,808)
69,181
(60,937)
(33,886)
(28,223)
2,307
21,389
(51)
(30,220)
973
(16,729)
(45,976)
817
(45,159)
10,575
10,575
(34,584)
(39,157)
(6,002)
(45,159)
(31,332)
(3,252)
(34,584)
(41.29p)
(41.29p)
2021
£’000
142,797
(60,157)
82,640
(40,189)
(7,233)
(15.152)
867
–
(165)
20,768
–
(888)
19,880
(869)
19,011
–
–
19,011
19,011
–
19,011
19,011
–
19,011
22.77p
22.20p
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
STATEMENT OF FINANCIAL POSITIONS
for the year ended 31 December 2022
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments and loans in subsidiary
Trade and other receivables
Current assets
Inventories
Assets at fair value through profit
and loss
Trade and other receivables
Current tax assets
Cash and cash equivalents
Current liabilities
Trade and other payables
Contract liabilities
Deferred income
Lease liabilities
Deferred Tax
Net current assets
Non-current liabilities
Provisions
Contract Liabilities
Deferred income
Loans
Lease liabilities
Put Option liability
Deferred tax liabilities
Net assets
Equity attributable to owners
of the parent
Ordinary shares
Share premium account
Other reserves
Accumulated losses
Equity attributable
to owners of the Company
Non-controlling interest
Total Equity
Note
11
12
14
16
15
13
16
8
17
18
19
19
33
24
20
19
19
21
33
22
24
25
26
30
29
135
Company
2022
£’000
2021
£’000
–
39,394
341,237
–
380,631
–
–
–
–
19,197
19,197
143
–
–
683
–
826
18,371
2,758
–
–
39,780
34,939
–
–
77,477
321,525
48,132
379,953
26,843
(133,403)
321,525
–
321,525
–
–
181,163
–
181,163
–
–
–
–
61,630
61,630
152
–
–
–
–
152
61,478
–
–
–
–
–
–
–
–
242,641
43,088
307,765
20,372
(128,584)
242,641
–
242,641
Group
2022
£’000
105,886
133,780
–
5,010
244,676
2021
£’000
52
69,728
–
3,605
73,385
12,625
9,521
23
61,571
–
141,285
215,504
36,579
18,370
894
3,295
525
59,663
155,841
8,424
76
1,069
39,780
71,206
38,182
5,588
164,325
236,192
48,132
379,953
(24,887)
(198,545)
204,653
31,539
236,192
74
44,747
558
108,944
163,844
19,058
12,502
894
853
–
33,307
130,537
6,244
92
1,760
–
8,488
–
–
16,584
187,338
43,088
307,765
2,291
(165,806)
187,338
–
187,338
The Company’s registered number is 03252665.
The Company made a loss for the year of £4,804,000 (2021: £2,366,000).
The financial statements on pages 138 to 178 were approved by the Board of Directors on 25 April 2023 and were signed on its behalf by:
Roch Doliveux
Chair
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
136
STATEMENTS OF CASH FLOWS
for the year ended 31 December 2022
Cash flows
from operating activities
Cash generated (used in)/from
operations
Tax credit received
Net cash generated (used in)/from
operating activities
Cash flows from investing activities
Acquisition of subsidiary,
net of cash acquired
Purchases of property, plant
and equipment
Proceeds on disposal of PPE
Loan to subsidiary
Other initial direct costs in relation
to leases
Interest received
Net cash used in investing activities
Cash flows
from financing activities
Proceeds from issue
of ordinary share capital
Costs of share issues
Payment of lease liabilities capital
Payment of lease liabilities interest
Loans received
Loans repaid
Interest paid
Loan arrangement fees
Net cash generated
from financing activities
Net increase in cash
and cash equivalents
Cash and cash equivalents
at 1 January
Effects of movements in
exchange rates on cash held
Cash and cash equivalents
at 31 December
Note
31
12
12
25, 26
26
Group
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
(13,173)
558
24,461
994
10,146
–
( 2,349)
–
(12,615)
25,455
10,146
(2,349)
(99,206)
(16,296)
60,000
–
(1,420)
460
(56,462)
80,154
(2,952)
(1,120)
(3,124)
64,866
(31,424)
(4,554)
(3,224)
–
(9,461)
–
–
–
–
(9,461)
51,600
–
(4,520)
(873)
–
–
–
–
–
–
–
–
(153,603)
(1,420)
–
(155,023)
80,154
(2,952)
–
(422)
64,866
(31,424)
(4,554)
(3,224)
–
–
(11,251)
–
–
(11,251)
51,600
–
–
–
–
–
–
–
98,622
46,207
102,444
51,600
29,545
62,201
(42,433)
38,000
108,944
46,743
61,630
23,630
2,796
–
–
–
17
141,285
108,944
19,197
61,630
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
STATEMENTS OF CHANGES IN EQUITY ATTRIBUTABLE
TO OWNERS OF THE PARENT
for the year ended 31 December 2022
137
Group
At 1 January 2021
Loss for period
Total comprehensive income for the period
Transactions with owners:
Share options
Proceeds from shares issued
Value of employee services
Deferred tax on share options
Issue of shares excluding options
At 31 December 2021
At 1 January 2022
Loss for the period
Foreign currency translation differences
Other comprehensive income
Total comprehensive income for the period
Transactions with owners:
Share options
Ordinary
shares
£’000
41,161
Share
premium
account
£’000
258,017
Note
Merger
£’000
2,291
Reserves
Other
Equity
£’000
–
–
–
–
–
Trans-
lation
£’000
Accu-
mulated
losses
£’000
– (188,723)
19,011
19,011
–
Non-con-
trolling
interest
£’000
Total
equity
£’000
– 112,746
19,011
–
19,011
–
Total
£’000
112,746
19,011
19,011
236
–
–
1,691
1,439
–
–
48,309
43,088 307,765
43,088 307,765
–
–
–
–
–
–
–
–
–
–
–
–
2,291
2,291
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(75)
–
3,523
–
458
–
–
– (165,806)
– (165,806)
(39,157)
–
–
7,825
7,825
–
7,825 (39,157)
1,600
3,523
458
50,000
187,338
187,338
(39,157)
7,825
7,825
(31,332)
–
1,600
–
3,523
–
458
50,000
–
– 187,338
– 187,338
(45,159)
10,575
10,575
(34,584)
(6,002)
2,750
2,750
(3,252)
–
–
–
–
–
–
(29)
5,922
125
–
–
6,018
155
5,922
125
80,000
(2,952)
83,250
155
–
6,471
549
–
125
– 80,000
(2,952)
–
83,799
549
Proceeds from shares issued
Value of employee services
Tax on share options
Issue of shares excluding options
Cost of share issues
Total contributions
Changes in ownership interests:
25, 26, 29
5
–
25, 26
26
106
–
–
4,938
–
5,044
78
–
–
75,062
(2,952)
72,188
Acquisition of subsidiary with NCI
Acquisition of NCI without a change in control
Put Option recognition
Put Option revaluation
At 31 December 2022
–
–
–
–
–
–
–
–
48,132 379,953
–
–
–
–
–
–
(38,996)
3,993
2,291 (35,003)
–
–
–
–
–
400
(38,996)
3,993
7,825 (198,545) 204,653
–
400
–
–
34,642
(400)
–
–
34,642
–
(38,996)
3,993
31,539 236,192
Company
At 1 January 2021
Period ended 31 December 2021:
Loss for the year
Total comprehensive income for the period
Transactions with owners:
Share options
Proceeds from shares issued
Value of employee services
Issue of shares excluding options
At 31 December 2021
Period ended 31 December 2022:
Loss for the period
Total comprehensive income for the period
Transactions with owners:
Share options
Proceeds from shares issued
Value of employee services
Issue of shares excluding options
Cost of share issues
At 31 December 2022
Reserves
Ordinary
shares
£’000
41,161
Share
premium
account
£’000
258,017
Note
Merger
£’000
1,580
Accu-
mulated
Other
losses
Equity
£’000
£’000
15,269 (126,143)
Total
£’000
189,884
–
–
–
–
–
–
–
–
(2,366)
(2,366)
(2,366)
(2,366)
29
236
–
1,691
1,439
–
48,309
43,088 307,765
–
–
–
1,580
–
3,523
–
1,600
3,523
50,000
18,792 (128,584) 242,641
(75)
–
–
–
–
–
–
(4,804)
(4,804)
29
25, 26
26
106
–
4,938
–
78
–
75,062
(2,952)
48,132 379,953
–
–
–
–
1,580
–
6,471
–
–
169
(15)
6,471
–
– 80,000
(2,952)
–
25,263 (133,403) 321,525
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
138
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2022
1, Accounting policies
Oxford Biomedica plc (Oxford Biomedica or the Company) is a public company limited by shares, incorporated and domiciled in England,
and listed on the London Stock Exchange. The consolidated financial statements for the year ended 31 December 2022 comprise the
results of the Company and its subsidiary undertakings (together referred to as the Group).
The Company’s principal subsidiary is Oxford Biomedica (UK) Limited.
The Group is a cell and gene therapy research, development and bioprocessing business providing services to third parties as well as
performing internal research and development for its own purposes. The Group currently has no marketed pharmaceutical products.
Basis of preparation
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been
consistently applied to all the financial years presented, unless otherwise stated.
The Group and parent Company financial statements were prepared in accordance UK-adopted international accounting standards.
As more fully explained in the Directors’ Report on pages 115 to 121 and below, the going concern basis has been adopted in preparing
the financial statements.
A summary of the more important Group accounting policies is set out below.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree
of judgement or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed in note 2.
Measurement convention
The financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value:
— Assets held at fair value through profit & loss
— Put option liability
Non-current assets and disposal groups held for sale are stated at the lower of previous carrying amount and fair value less costs to sell.
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the strategic report and notes to these financial
statements.
The Group made a loss for the year ended 31 December 2022 of £45.2 million and consumed net cash flows from operating activities
for the year of £12.6 million. The Group also:
— raised £77.0 million (net of £3 million of share issue cost) in cash from an equity fundraise in January and March 2022;
— entered into a one year US$85 million (£63 million) loan facility with Oaktree as part of the acquisition of Oxford Biomedica Solutions
in March 2022 which was then converted into a four-year term loan facility together with repayment of US$35 million of the initial
principal amount in October 2022;
— during November 2022, sold its Windrush Court facility in a sale and leaseback transaction for £60 million to Kadans, whilst also
agreeing an occupational lease of the property for 15 years; and
— ended the year with cash and cash equivalents of £141.3 million.
In considering the basis of preparation of the Annual report and accounts, the Directors have prepared cash flow forecasts for a period
of at least 12 months from the date of approval of these financial statements, based in the first instance on the Group’s 2023 annual
budget and forecasts for 2024. The Directors have undertaken a rigorous assessment of this base case forecast and have also assessed
the potential impact from the principal risks and uncertainties outlined in the strategic report of the Group’s Annual report and accounts,
taking into consideration the magnitude and likelihood of these risks and uncertainties occurring to prepare a downside scenario with
associated mitigated actions.
The cash flow forecast prepared for the severe but plausible downside scenario with mitigating actions assumes the following:
— Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the LentiVector®
platform and AAV businesses;
— Significant decreases in forecasted existing client milestone and royalty revenues;
— The product development spin out strategy taking longer, or ultimately being unsuccessful; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its clients including expected revenues from existing
clients under long term contracts.
Under both the base case and mitigated downside scenario, the Group and parent company has sufficient cash resources to continue
in operation for a period of at least 12 months from the date of approval of these financial statements.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 139
In the event of the downside scenarios crystallising, the Group would continue to meet its existing loan covenants until June 2024
without taking any mitigating actions, but the Board has mitigating actions in place that are entirely within its control that would enable
the Group to reduce its spend within a reasonably short time-frame to increase its cash covenant headroom as required by the loan
facility with Oaktree Capital Management. The Board has confidence in the Group’s ability to continue as a going concern for the
following reasons:
— The Group has cash balances of £141.3 million at the end of December 2022 and £139.1 million at the end of March 2023;
— Approximately two thirds of 2023 forecasted revenues are covered by binding purchase orders which give certainty to revenues over
the next 12 months;
— The Group’s history of being able to access capital markets including raising £77 million of equity during 2022;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure and operational
purposes, as recently evidenced by the US$85 million one-year facility and US$50 million replacement four-year facility obtained with
Oaktree;
— The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully entering
into new and expanding existing client agreements with AstraZeneca, Juno Therapeutics (a wholly owned subsidiary of Bristol Myers
Squibb Company), Homology Medicines and multiple other new partners over the last twelve months.
Taking account of the matters described above, the Directors are confident that the Group and parent company will have sufficient
funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Accounting developments
The Group has adopted the following IFRSs in these financial statements:
— Annual Improvements to IFRS Standards 2018–2020
— Property, Plant and Equipment: Proceed before intended use – amendments to IAS16
At the date of authorisation of these Group financial statements, several new, but not yet effective, Standards and amendments to existing
Standards, and Interpretations have been published by the IASB. None of these Standards or amendments to existing Standards has been
adopted early by the Group.
The Directors anticipate that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of
the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they
are not expected to have a material impact on the Group financial statements.
Basis of consolidation
The consolidated financial statements comprise the Company and its subsidiary undertakings for the year to 31 December each year.
Subsidiaries are entities that are directly or indirectly controlled by the Group. Subsidiaries are consolidated from the date at which control
is transferred to the Group. Control exists where the Group has the power to govern the financial and operating policies of the entity
so as to obtain benefits from its activities. The Group does not currently have any associates.
All intragroup transactions and balances are eliminated on consolidation.
Foreign currencies
Foreign currency transactions
The Group’s presentational currency is sterling. Transactions in foreign currencies are translated into sterling at the rate of exchange
ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary items that are measured at fair value in a foreign currency are translated
into functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured at historical
cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally
recognised in profit or loss and presented within operational costs.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into
sterling at the exchanges rates at reporting date. The income and expenses of foreign operations are translated into sterling at the average
exchange rate for the month based on the date of the transaction.
Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation
difference is allocated to NCI.
The assets and liabilities of foreign operations are translated to the Group’s presentational currency, at foreign exchange rates in effect
at the statement of financial position date. The revenue and expenses of foreign operations are translated at an average rate for the year
where this rate approximates to the foreign exchange rates in effect at the dates of the translations. Exchange differences arising from the
translation of foreign operations are reported as an item of other comprehensive income and accumulated in an exchange reserve and
subsequently reclassified to the Consolidated Income Statement on disposal of the net investment.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 140
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Revenue
Revenue comprises income derived from bioprocessing of clinical product for clients, fees charged for providing development services
to clients, product and technology licence transactions, royalties, options, and funded research and development programmes.
Platform
The Group bioprocesses batches on behalf of clients who use this manufactured clinical product for clinical and commercial purposes.
The bioprocessing of a batch creates an asset with no alternative use and the Group has an enforceable right to payment for performance
completed to date, thereby meeting IFRS 15.35. Bioprocessing of clinical/commercial product for clients is therefore recognised on a
percentage of completion basis over time as the processes are carried out using the Input Method under IFRS. Progress is determined
based on the achievement of verifiable stages of the process with incremental adjustments made based on the percentage of completion
of the next unachieved verifiable stage. The gross amount due from clients, on all partnerships with regards to bioprocessing batches in
progress for which costs incurred plus recognised profits exceed progress billings, is presented separately as a contract asset within the
note to Trade and Other receivables as presented in the statement of financial position.
Consideration received in excess of the stage of completion will be deferred until such time as it is appropriate to recognise the revenue.
The Group has determined that its contracts with clients do not contain a significant financing component.
Revenues for providing process development activities to clients are recognised during the period in which the service is rendered on
a percentage of completion basis over time as the processes are carried out. The process development activities are recognized over time
as the activities create an asset that has no alternative use to the Group and the Group has an enforceable right to payment for the work
packages within the process development activity completed to date.
— Oxford Biomedica (UK) Ltd makes use of the output method under IFRS with revenue being recognised based on the achievement
of verifiable stages of the process.
— Oxford Biomedica Solutions makes use of the input method under IFRS with revenue being recognised based on the labour and other
resources expended to provide the services as a percentage of the total expected effort to complete the services.
Technology licences that have been established by the Group have all been determined as “right to use” licences, rather than “right to
access” licences. As such, the revenue from these licences is recognised at the point in time at which the licence transfers to the client.
The granting of the technology licences to the Group’s background intellectual property and know-how constitutes a “right to use”
licence as the Group’s clients are able to conduct development work on the licence independent of the Group. The Group is incentivised
separately for its performance obligations in relation to development work and milestone payments. The criteria for recognising these
technology licences as “right to access” licences has therefore not been met.
Milestones relating to bioprocessing or process development activities have been identified as separate performance obligations as
they involve the transfer of a distinct good or service, determined with reference to conditions stipulated in the relevant agreements
or contracts. Each milestone is determined as either binary or non-binary.
Milestones that are considered to be binary relate to the achievement of specific events rather than the provision of, for example, support.
Milestones related to the achievement of specific deliverables are considered to be binary milestones and will be recognised in full once it
is deemed highly probable that the obligation will be met.
Milestones related to the provision of support services are considered to be non-binary Milestones and are recognised on a percentage of
completion basis, but taking into account the likelihood of achievement of the deliverable. Amounts receivable on delivery of a milestone
performance obligation represents variable consideration and have been allocated to the relevant performance obligation.
Options to technology licences are considered to form part of the technology licence performance obligation and as such are recognised
when the client exercises the option to obtain that licence. Options to technology licences are not considered to be material rights.
Product
Product licences that have been established by the Group have all been determined as “right to use” licences, rather than “right to access”
licences. As such, the revenue from these licences is recognised at the point in time at which the licence transfers to the client.
The granting of the product licences to the Group’s background intellectual property and know-how constitutes a “right to use” licence
as the Group’s clients are able to conduct development work on the licence independent of the Group. The Group is incentivised
separately for its performance obligations in relation to development work and milestone payments. The criteria for recognising these
technology licences as “right to access” licences has therefore not been met.
Amounts receivable in respect of milestone payments are considered to be separate performance obligations which are binary and will
be recognised in full once it is deemed highly probable that the specific performance obligations stipulated in the licence agreement have
been met. Payments linked to “success” such as regulatory filing or approval, or achievement of specified sales volumes, are recognised
in full when the relevant event has occurred.
Non-binary milestones are recognised on a percentage of completion basis in the period in which related costs are incurred, or over
the estimated period to completion of the relevant phase of development or associated clinical trials. Amounts receivable on delivery
of a milestone performance obligation represents variable consideration and have been allocated to the relevant performance obligation.
Royalty revenue is recognised as the underlying commercial sales of the underlying manufactured product occur to third parties of our
contracted clients.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 141
Cost of sales
Cost of sales comprises the cost of bioprocessing clinical product for clients, the cost of client development project activities, and
royalties arising on clients’ licences.
The cost of client development project activities includes the labour costs, overheads and other directly attributable material and third
party costs. Costs are recognised as incurred.
The cost of bioprocessing clinical product for clients includes the raw materials, labour costs, overheads and other directly attributable
third party costs. Costs are recognised as incurred.
The Group’s products and technologies include technology elements that are licensed from third parties. Royalties arising from such
clients’ licences are treated as cost of sales. Where royalties due have not been paid they are included in accruals. Where revenue is
spread over a number of accounting periods, the royalty attributable to the deferred revenue is included in prepayments.
Research, development and bioprocessing
Research, development and bioprocessing expenditure is charged to the statement of comprehensive income in the period in which
it is incurred.
Employee benefit costs
Employee benefit costs, notably holiday pay and contributions to the Group’s defined contribution pension plan, are charged to the
statement of comprehensive income on an accruals basis. The assets of the pension scheme are held separately from those of the Group
in independently administered funds. The Group does not offer any other post-retirement benefits.
Share based payments
The Group’s employee share option schemes, long term incentive plans, a Sharesave scheme and deferred bonus plans allow Group
employees to acquire shares of the Company subject to certain criteria. The fair value of options granted is recognised as an expense of
employment in the statement of comprehensive income with a corresponding increase in equity. The fair value is measured at the date
of grant and spread over the period during which the employees become unconditionally entitled to the options where the options are
not nil cost options. Nil cost options are valued at the market price on the date of grant of the options. The fair value of options granted
under the share option schemes and share save scheme is measured using the Black-Scholes model. The fair value of options granted
under the LTIP schemes, which includes market condition performance criteria, is measured using a Monte Carlo model taking into
account the performance conditions under which the options were granted. The fair value of options granted under the deferred bonus
plan is based on the market value of the underlying shares at the date of grant of these options.
At each financial year end, the Group revises its estimate of the number of options that are expected to become exercisable based on
forfeiture such that at the end of the vesting period the cumulative charge reflects the actual options that have vested, with no charge
for those options which were forfeit prior to vesting. When share options are exercised the proceeds received are credited to equity.
Options over the Company’s shares have been awarded to employees of Oxford Biomedica (UK) Ltd. In accordance with IFRS 2 ’Share-
based Payments’, the expense in respect of these awards is recognised in the subsidiaries’ financial statements. In accordance with IFRS 2
the Company has treated the awards as a capital contribution to the subsidiaries, resulting in an increase in the cost of investment and a
corresponding credit to reserves.
Employee Benefit Trust
The Oxford Biomedica Employee Benefit Trust (EBT) has been set up to hold market-purchased shares to settle the 2013 Deferred Bonus
Share Awards made to Executive Directors and employees. Within the Company financial statements, the investment in the Oxford
Biomedica Employee Trust forms part of the Investments and loans in subsidiary, taking the form of a loan to subsidiaries. The EBT is
consolidated within the Group financial statements.
Leases
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property, the Group has
elected not to separate non-lease components, and to account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred, and an estimate of costs to dismantle and remove the underlying asset,
or to restore the underlying asset or site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method, from the commencement date to the end of the lease
term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term, or the cost of the right-of-
use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life
of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 142
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally,
the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining relevant interest rates from external financing sources and makes
certain adjustments to reflect the terms of the lease and the type of the asset leased.
Lease payments included in the measurement of the lease liability comprise fixed payments.
The lease liability is measured at amortised cost using the effective interest method. It is re-measured if:
— there is a change in the Group’s estimate of the amount expected to be payable under a residual future lease payments;
— the Group changes its assessment of whether it will exercise a purchase, extension or termination options; or
— there is a revised in-substance fixed lease payment.
If a lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in
the Profit or Loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in ’property, plant and equipment’ and lease liabilities as a category on the face of the Statement
of Financial Position.
Short term or low-value leases
The Group has elected not to recognise right-of-use assets and lease liabilities of short term and low-value leases. The Group recognises
lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Sales & Leaseback
A sale and leaseback is where the Group sells an asset and immediately reacquires the use of the asset by entering into a lease with the
buyer.
For sale and operating leasebacks, generally the assets are sold at fair value, and accordingly the profits and loss from the sale are
recognised immediately in the Statement of Profit and loss. The fair value is determined by obtaining a valuation from an independent
property valuation firm.
A sale occurs when control of the underlying asset passes to the buyer. A lease liability is recognised, the associated property, plant
and equipment asset is derecognised, and a right of use asset is recognised at the proportion of the carrying value relating to the right
retained. Any gain or loss arising relates to the rights transferred to the buyer.
Grants
Income from government and other grants is recognised over the period necessary to match them with the related costs which they
are intended to compensate. Grant income is included as other operating income within the statement of comprehensive income, and
the related costs are included within research, development and bioprocessing costs, and administrative expenses. Where grant income
received exceeds grant income recognised, it is included within deferred income on the Statement of financial position, whereas grant
income recognised exceeds grant income received, it is included within accrued income on the Statement of financial position.
Finance income and costs
Finance income and costs comprise interest income and interest payable during the year, calculated using the effective interest rate
method. It also includes the revaluation of external loans denominated in a foreign currency.
Financing expenses include interest payable and finance charges on lease liabilities recognised in profit or loss using the effective interest
method and unwinding of the discount on provisions.
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method.
Taxation
In 2022 and before, the Group was entitled to claim tax credits in the United Kingdom for certain research and development expenditure.
The Group receives a Research and Development Expenditure Credit (’RDEC’) which is accounted for as a reduction in research and
development costs in the statement of comprehensive income, and within trade and other receivables in the Statement of financial
position. The credit is paid in arrears once tax returns have been filed and agreed.
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates
and laws that have been enacted, or substantially enacted, by the Statement of financial position date.
Deferred tax is calculated in respect of all temporary differences identified at the Statement of financial position date except for: the
initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in
a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future.
Temporary differences are differences between the carrying amount of the Group’s assets and liabilities and their tax base. Deferred tax
liabilities may be offset against deferred tax assets within the same taxable entity or qualifying local tax group. Any remaining deferred
tax asset is recognised only when, on the basis of all available evidence, it can be regarded as probable that there will be suitable taxable
profits within the same jurisdiction in the foreseeable future against which the deductible temporary difference can be utilised.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 143
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the asset is realised or liability settled,
based on tax rates and laws that have been enacted or substantially enacted by the Statement of financial position date.
Measurement of deferred tax liabilities and assets reflects the tax consequence expected to fall from the manner in which the asset
or liability is recovered or settled.
Property, plant and equipment
Property, plant and equipment are carried at cost, together with any incidental expenses of acquisition, less depreciation. Cost includes
the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values on a straight-line
basis over the expected useful economic lives of the assets concerned. Depreciation of an asset begins when it is available for use. The
principal annual rates used for this purpose are:
Freehold property
Leasehold improvements
Office equipment and computers
Bioprocessing and laboratory equipment
10%
10%
(over the remaining lease term if shorter)
20–33%
20%
The assets’ residual values and useful lives are reviewed annually. Residual values are set at zero and will be reassessed should the asset’s
selling price exceed its net book value.
The bioprocessing plants are reviewed annually for impairment triggers and, where necessary, a full impairment review is performed.
Assets under construction are capitalised throughout the course of the construction period with depreciation starting once the asset is
available for use.
Assets capitalised under a category of fixed assets may be transferred to another category within fixed assets if, upon review, it is identified
that the asset is more appropriately identifiable with that other category of fixed asset.
Intangible assets & Goodwill
Recognition and measurement
Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Developed technology
Developed technology acquired by the Group (see note 11) has a finite useful life. It is measured at cost less
accumulated amortisation and any accumulated impairment losses.
Patents
Patents have finite useful lives and are measured at cost less accumulated amortisation and
any accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as
incurred.
Cash generating unit (CGU)
A cash generating unit is the smallest group of assets that independently generates cash flow and whose cash flow is largely independent
of the cash flows generated by other assets.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over
their estimated useful lives, and is generally recognised in profit or loss. Goodwill is not amortised.
The estimated useful lives for current and comparative periods are as follows:
— patents: 3–20 years
— developed technology: 15 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Impairment
The carrying value of non-financial assets is reviewed annually for impairment, or earlier if an indication of impairment occurs, and
provision made where appropriate. Charges or credits for impairment are passed through the statement of comprehensive income.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 144
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
For the purposes of assessing impairments, assets are grouped at the lowest levels for which there are separately identifiable cash flows or
cash-generating units. Impairment losses are recognised for the amount by which each asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use. Value in use is calculated using
estimated discounted future cash flows. The key assumptions used in calculating the discounted future cash flows are management
estimates, based where possible on available market information and information for similar products.
Impairment and amortisation charges are included within research, development and bioprocessing costs in the statement of
comprehensive income.
Intellectual property rights comprise third party patent rights or rights to market commercial products for key therapeutic indications that
have been purchased by the Group.
Investments in subsidiaries
Investments are carried at cost less any provision made for impairment. Options over the Company’s shares have been awarded to
employees of subsidiary companies. In accordance with IFRS2, the Company treats the value of these awards as a capital contribution
to the subsidiaries, resulting in an increase in the cost of investment.
Investments in subsidiary undertakings, including shares and loans, are carried at cost less any impairment provision. Such investments are
subject to review, and any impairment is charged to the statement of comprehensive income.
At each year end the Directors review the carrying value of the Company’s investment in subsidiaries. Where there is a material and
sustained shortfall in the market capitalisation, or a significant and sustained change in the business resulting in a decrease in market
capitalisation, the Directors consider this to be a trigger of an impairment review as set out in IAS 36, and the carrying value of the
Company’s investments in subsidiaries is adjusted. The Directors consider that reference to the market capitalisation of the Group
is an appropriate external measure of the value of the Company’s subsidiaries for this purpose.
At year end the Directors will assess the requirement to write back a portion or all of any impairment previously recognised on its
investment in subsidiaries. Factors which will be taken into account with regard to this decision will be the Groups track record of
improved financial results across the last three to four years, as well as the expectation of future impairments being required after a write
back was accounted for.
Financial assets
Assets at fair value through profit and loss
The gain or loss on Assets at fair value through profit and loss is recognised in the statement of comprehensive income.
Investments
Other investments held by the Group are classified as at fair value through profit and loss.
Bank deposits
Bank deposits with original maturities between three months and twelve months are included in current assets and are valued
at amortised cost.
Financial instruments
Classification
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment;
or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for
managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following
the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
— it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
— its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
— it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets;
and
— its contractual terms give rise on specified dates to cash flows that are solely payments of principal, and interest on the principal
amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent
changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above, are measured at FVTPL. This includes
all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI, as at FVTPL if doing so eliminates, or significantly reduces an accounting
mismatch that would otherwise arise.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 145
Derecognition
Financial assets
The Group derecognises a financial asset when:
— the contractual rights to the cash flows from the financial asset expire; or
— it transfers the rights to receive the contractual cash flows in a transaction in which either; or
— substantially all of the risks and rewards of ownership of the financial asset are transferred; or
— the Group neither transfers nor retains substantially all of the risks and rewards of ownership, and it does not retain control of
the financial asset.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also
derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which
case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including
any non-cash assets transferred or liabilities assumed), is recognised in profit or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. It excludes
borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling
expenses.
Trade receivables
Trade receivables are recognised initially at the transaction price as these assets do not have significant financing components, and are
subsequently measured at amortised cost. The Group recognises loss allowances for receivables under the expected credit loss model
as established by evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits repayable on demand, and other short term highly liquid investments with
original maturities of three months or less.
Deposits
Deposits consist of amounts held in escrow and is included within other receivables within the Statement of financial position until such
time as the restrictions relating to those amounts have been lifted.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Contract liabilities
Contract liabilities primarily relate to the advance consideration received from clients for commercial development work and
bioprocessing batches, as well as options and funded research and development activities.
Deferred income
Deferred income primarily relates to the advance consideration received for grants and lease incentives.
Provisions
Provisions for dilapidation costs and other potential liabilities are recognised when the Group has a present legal or constructive
obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount
has been reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using the 3 year historic
inflation rate. The increase in the provision due to the passage of time is recognised as a finance cost.
Share capital
Ordinary shares are classified as equity. Costs of share issues are charged to the share premium account.
Merger reserve
A merger reserve is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of new
shares by the Company, thereby attracting merger relief under s612 and s613 of the Companies Act 2006.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 146
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Business combinations
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets
the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a
business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process,
and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ’concentration test’ that permits
a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if
substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable
assets. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired.
Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Non-controlling interests (NCI)
NCI are measured initially at the Group’s proportionate interest in the recognised amount of the identifiable assets and liabilities of the
acquiree. NCI are measured subsequently at their proportionate share of the subsidiary’s net assets at the reporting date. Changes in the
Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
When a foreign operation is disposed of in its entirety, or partially such that control, significant control or joint control, is lost, the
cumulative amount in the translation reserve related to the foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative
amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence
or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
Financial liability: loans
On initial recognition, external loans are measured at fair value plus directly attributable transaction costs. On subsequent measurement,
external loans are measured at amortised cost under the effective interest rate method. The effective interest rate method is a method
of calculating the amortised cost of a financial liability and allocating the interest expense over the relevant period. The calculation of the
effective interest rate takes into account the estimated cash flows which consider all the contractual terms of the financial instrument,
including any embedded derivatives which are not subject to separation.
Financial liability: Put Options
Where a put option with non-controlling shareholders (NCI) exists on their equity interests, a liability for the fair value of the exercise price
of the option is recognised.
Management have assessed that the NCI still have access to the returns associated with the underlying ownership interests, and have
therefore chosen to apply the present access method under which the corresponding entry is recognised in Other Equity. As required by
IFRS, Oxford Biomedica has chosen to apply an accounting policy, to be applied consistently for all put liabilities: that subsequent to initial
recognition, changes in fair value of the put liability will be recognised in equity.
The value of the put liability is determined using a Monte Carlo simulation which calculates the expected future exercise value of the put
option, taking into consideration Oxford Biomedica Solutions’ forecasted cash flows over the period up until the expected exercise date
along with the expected volatility of those cash flows over that same period. The expected future exercise value is then discounted to
the present using a discount rate in order to capture the counter party risk of the expected payment. The discount rate may be impacted
by economic and market factors as well as changes to the risk free rate of return which impacts debt borrowing rates.
2, Critical accounting judgements and estimates
In applying the Group’s accounting policies, management is required to make judgements and assumptions concerning the future in
a number of areas. Actual results may be different from those estimated using these judgements and assumptions. The key sources of
estimation uncertainty and the critical accounting judgements that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 147
Key accounting matters
Judgements
Contract revenues: Identification of performance obligations, allocation of revenue and timing of revenue recognition
The Group has identified three key areas of judgement within the collaboration agreements entered into during the period. Firstly, in
relation to the number of distinct performance obligations contained within each collaboration agreement; secondly the fair value
allocation of revenue to each performance obligation; and thirdly the timing of revenue recognition based on the achievement of the
relevant performance obligation. The sales royalties contained within the collaboration agreements qualify for the royalty exemption
available under IFRS 15 and will only be recognised as the underlying sales are made even though the performance obligation, in terms
of the technology licence, has already been met.
The judgements with regards to the number of distinct performance obligations and the fair value allocation of revenue to each
performance obligation takes place on a contract-by-contract basis across numerous contracts entered into by the Group. As these
judgements take place across numerous contracts, each with different characteristics, it is not practical to provide a quantitative analysis
of the impact of applying different judgements, and the Directors do not believe that disclosing a range of outcomes resulting from
applying different judgements provides meaningful information to the reader of the financial statements. Consequently, no quantitative
analysis has been provided for these judgements.
Number of distinct performance obligations
Upon review of certain client contracts and preparation of accounting papers setting out the accounting treatment as per IFRS 15,
the Group is required to exercise judgement in identifying the distinct performance obligations contained within the contract. These have
been identified as being:
— The granting of technology licences
— Milestones relating to bioprocessing or process development activities
The fair value allocation of revenue to each performance obligation
Because there is no readily available market price for many of the performance obligations contained in the client contracts, the Group
exercises judgment in estimating the stand alone selling price of each of these performance obligations. Key areas of judgement are
assessed to be:
— The stand alone selling price of technology licences. The Group assesses the stand alone selling price of licences by reference to the
stand alone selling price of previously recognised client technology licences, and the size of the market of the target indication and
other market related observable inputs
— The stand alone selling price of bioprocessing batches. The Group assesses the stand alone selling price of the batches in terms the
stand alone selling price of its other client contract batch selling prices
— The stand alone selling price in terms of the annual full time equivalent rate to charge for process development activities. The Group
assesses the full time equivalent rate in terms the stand alone equivalent rate of its other client contract equivalent rates
Timing of revenue recognition: technology licence revenues
One of the key judgemental areas identified within the collaboration agreements is the timing of recognition of licence revenue based
on the achievement of the relevant performance obligation. The individual factors and aspects relating to licence revenue are assessed as
part of the IFRS 15 accounting paper prepared for each agreement and a judgement is made as to whether the licence fee performance
obligation related to the granting of the licence to the client has been achieved. If it was judged that the performance obligations on
licences granted in 2022 had not been met, revenues would have been £3,385,000 lower with the revenue expected to be recognised
in future when the performance obligations were deemed to have been met.
Modification of Oaktree loan agreement
When a loan agreement with an existing lender is modified, a determination has to be made as to whether the modification is treated
as the extinguishment of the existing financial liability and the recognition of a new liability, or accounting for the modification of the
agreement as a modification to the existing financial liability.
On 10 March 2022 the Group entered into and drew down an US$85 million loan facility agreement with Oaktree under a 1 year facility
agreement maturing in 2023 with a nominal interest rate on the loan of 8.5%. On 7 October 2022, the Loan Agreement was amended,
US$35 million was repaid and the term extended to October 2026, with a variable interest rate which is capped at 10.25% per annum.
A substantial modification under IFRS 9 is deemed to have occurred if the net present value of the cash flows under the new terms,
including any fees, differs by at least 10% from the present value of the remaining cashflows under the original terms.
Management has determined that the modification of the Oaktree loan agreement on 7 October 2022 does not meet the substantial
modification criteria and therefore will be recognised as a non-substantial modification to the existing loan, with the loan being restated
to its present value and subsequently at amortised cost under the effective interest rate method.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
This was determined on the basis of the quantitative test performed as required by IFRS 9 resulting in a 3% change to the net present
value of the remaining cash flows when compared to the original cash flows under the original terms. Management has also performed
a qualitative assessment to identify substantial differences in terms that by nature were not captured by the quantitative assessment.
In considering the qualitative factors, Management has considered the payment terms, options, change in other terms and collaterals.
Based on the quantitative and qualitative assessment, Management has determined that the modification of the loan does not meet the
substantial modification criteria.
If the Group had concluded that the amendment constitutes a significant modification, this accounting treatment would have resulted
in the recognition of a loss on extinguishment of £1,391,000, recognition of legal fees of £439,000, and an increase in the loan balance
of £409,000 on the 7th of October 2022.
Estimations
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The nature of estimation means that actual outcomes could differ from those estimates.
Percentage of completion of bioprocessing batch revenues
Bioprocessing of clinical/commercial product for clients is recognised on a percentage of completion basis over time as the processes are
carried out. Progress is determined based on the achievement of verifiable stages of the bioprocessing process. Revenues are recognised
on a percentage of completion basis and as such require estimation in terms of the assessment of the correct stage of completion
including the expected costs to completion for that specific bioprocessing batch. The value of the revenue recognised with regard to the
bioprocessing batches which remain in progress at year end is £32,051,000. If the assessed percentage of completion was 10 percentage
points higher or lower, revenue recognised in the period would have been £3,866,000 higher or lower.
Percentage of completion of fixed price process development revenues
As it satisfies its performance obligations the Group recognises revenue and the related contract asset with regard to fixed price process
development work packages. Revenues are recognised on a percentage of completion basis and as such require estimation in terms of
the assessment of the correct percentage of completion for that specific process development work package. The value of the revenue
recognised raised with regard to the work packages which remain in progress at year end is £8,179,000. If the assessed percentage
of completion was 10 percentage points higher or lower, revenue recognised in the period would have been £818,000 higher or lower.
Provision for out of specification bioprocessing batches
Bioprocessing of clinical/commercial product for clients is recognised on a percentage of completion basis over time as the processes
are carried out. Progress is determined based on the achievement of verifiable stages of the process.
As Oxford Biomedica (UK) Ltd has now been bioprocessing product across a number of years, and also in a commercial capacity,
Oxford Biomedica (UK) Ltd has assessed the need to include an estimate of bioprocessed product for which revenue has previously been
recognised and which may be reversed should the product go out of specification during the remaining period over which the product
is bioprocessed. In calculating this estimate Oxford Biomedica (UK) Ltd has looked at historical rates of out of specification batches across
the last four years, and has applied the percentage of out of specification batches to total batches produced across the assessed period to
the revenue recognised on batches which have not yet completed the bioprocessing process at year end. This estimate, based on
the historical percentage, may be significantly higher or lower depending on the number of bioprocessing batches actually going out
of specification in future. If the historical percentage had been 10% higher or lower, the estimate would be £259,000 higher or lower.
The estimate will increase or decrease based on the number of bioprocessing batches undertaken, the percentage of completion
of those bioprocessing batches, and the number of batches which go out of specification over the assessment period.
Consequently, bioprocessing revenue of £2,592,000 (2021: £769,000) has not been recognised during 2022, with the corresponding
credit to contract liabilities (note 19). This revenue will be recognised as the batches complete bioprocessing.
No provision for out of specification batches has been raised for Oxford Biomedica Solutions as management has concluded that,
based on review of analytical testing results received after year end, no bioprocessing batch was deemed to be at risk of failure to meet
specifications.
Amortisation of intangibles assets (developed technology)
The estimated useful life of developed technology acquired by the Group is 15 years as the Group expects the technology to generate
cash flows for a total of 15 years. The estimate of 15 years is based on management’s experience of the time period over which the
technology acquired as part of the acquisition of Oxford Biomedica Solutions will become fully obsolete. Over time as the platform
technology is improved, parts of the technology become obsolete as they are superseded by new technology until after 15 years the
original technology is expected to have been fully replaced by newer/improved technology.
If the estimated useful life of the assets had been 10 years, the estimated amortisation for the year ended 31 December 2022 would be
£3,036,000 higher (2021: nil); whilst, if the estimated useful life of the assets had been 20 years, the estimated amortisation for the year
ended 31 December 2022 would be £1,518,000 lower (2021:nil).
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 149
Sale and leaseback – Lease liability discount rate
During November 2022 the Group sold its Windrush Court facility property to Kadans for a cash consideration of £60 million in a sale and
leaseback transaction (refer note 33). A key estimate identified by the Group within the sale and leaseback agreement is the incremental
borrowing rate used to discount the lease liability cash flows back to their present value to determine the lease liability at year end.
Since the rate implicity in the lease is not readily determinable, the Group's incremental borrowing rate has been used (the rate of
interest that would have to be paid to borrow on a collateralised basis over a similar term for an amount equal to the lease payments
in a similar economic environment) based on the information available at commencement date in determining the discount rate used
to calculate the present value of lease payments. The rates have been determined using previously available information on borrowing
rates as well as indicative borrowing rates that would be available based on the value, currency and borrowing term provided by financial
institutions, adjusted for company and market specific factors. Estimation of uncertainty is involved in selecting an appropriate rate, and
the rate selected for each lease will have an impact on the value of the lease liability and corresponding right-of-use (ROU) asset in the
Consolidated Statement of financial positions.
If the estimated lease liability discount rate had been one percentage higher or lower, the gain recognised on the sale of Windrush court
would have been £1,775,000 higher or lower (2021: £nil) with the other side of the entry decreasing or increasing the lease liability by a
£2,027,000 (2021: £nil) and decreasing and increasing right of use assets by a £253,000 (2021: £nil).
Valuation of put option liability
Where a put option with non-controlling shareholders exists on their equity interests, a liability for the fair value of the exercise price
of the option is recognised. On 10 March 2022, the Group recognised a put option liability to acquire the remaining 20% of Oxford
Biomedica Solutions that it doesn’t already own, from Homology Medicines. The fair value of the option at the date of acquisition was
assessed to be £39.0 million. At 31 December 2022 the fair value of the put option liability was £38.2 million (Dec 2021: £nil).
The Group estimates the value of the put liability using a Monte Carlo simulation which calculates the expected future exercise value of
the put option, taking into consideration Oxford Biomedica Solutions’ forecasted revenues over the period up until the expected exercise
date along with the expected volatility of those revenues over that same period. The expected future exercise value is then discounted
to the present using a discount rate in order to capture the counter party risk of the expected payment.
Key estimation uncertainty inputs which directly impact the valuation of the put option liability are assessed to be:
— Revenues of Oxford Biomedica Solutions – the revenues of Oxford Biomedica Solutions are based on the management approved forecast
up until the end of the option period. Should the forecast change or the actual results vary this may impact the value of the put option
liability.
— Expected volatility of revenues – should the expected volatility of Oxford Biomedica Solutions revenues vary, this may impact the value
of the put option liability,
— Discount rate – the discount rate may be impacted by economic and market factors, as well as changes to the risk free rate of return
which impacts debt borrowing rates. Should the discount rate calculated by management be adjusted, this may impact the value of
the put option. Management has calculated the discount rate based on the risk free rate, the expected return from similar companies
and the Group’s cost of debt.
Put option liability
31 December 2022
Effect in thousands of pounds:
Revenues of Oxford Biomedica Solutions:
10% higher or lower
Discount rate 2% lower or higher
Fair value
Increase
Decrease
2.1
1.4
(2.4)
(1.4)
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Valuation of acquired intangible assets
As part of the acquisition accounting for the acquisition of Oxford Biomedica Solutions LLC in 2022, we have performed an assessment
on the identification, fair value, and expected useful economic lives of acquired intangible assets such as developed technology assets
at the date of acquisition. The fair value attributed to intangible assets arising on acquisition is recognised in accordance with IAS 38
Intangible assets and is based on a number of estimates.
The acquired identifiable assets and liabilities have been recognised at their fair values at acquisition date and in accordance with the
Group’s accounting policies. The fair value of the developed technologies intangible asset is considered a key estimate subject to
estimation uncertainty. Below are the details for the valuation methodologies used for the intangible assets.
Acquired developed technology has been valued using the multi-period excess earnings method (MPEEM) method, valued at
£102.8 million, The MPEEM method considers the present value of net cash flows expected to be generated by the client relationships,
by excluding any cash flows related to contributory assets.
Management considers the weighted average return on assets and discount rates as critical estimates as a reasonably possible change
to these assumptions in aggregation, or in isolation, will have an impact on the consolidated financial statements. The weighted average
return on assets and discount rate used by management in the valuation of the developed technology is 17.3% and 20% respectively.
Below are the various sensitivities of weighted average return on assets and discount rates and their impact on the related
intangible assets.
Sensitivities
Discount rate
17%
18%
19%
Weighted average
rate of return
15.0%
15.8%
16.5%
Adjusted Developed
technology value
£’m
121.8
113.5
106.0
Impact
£’m
19.0
10.7
3.2
3, Financial risk management
Financial risk factors
The Group has a simple corporate structure which consists of the Company and two main operating subsidiaries, one domiciled in
the UK and the other in the US. Monitoring of financial risk is part of the Board’s ongoing risk management, the effectiveness of which
is reviewed annually. The Group’s agreed policies are implemented by the Chief Financial Officer, who submits reports at each Board
meeting. The Group does not use financial derivatives, and it is the Group’s policy not to undertake any trading in financial instruments.
(a) Foreign exchange risk
In 2022 the Group’s revenues were mostly receivable in Sterling and US Dollars, and certain of its expenditures were payable in Euros
and US Dollars. The majority of the UK based entities’ operating costs are denominated in Sterling. A 10% difference in the £/$ average
exchange rate would have had an impact of approximately £1,121,000 (2021: £712,000) over the year. The US based entities’ revenue
and operating costs are all in USD.
The Group also has exposure to the £/$ exchange rate due to the Oaktree loan facility denominated in Dollars. Had the £/$ exchange rate
been 10% different, the impact on cost in 2022 would have been approximately £455,000 (2021: nil).
The Group also has exposure to the £/€ exchange rate due to the need to fund certain expenditure denominated in Euros. Had the average
£/€ exchange rate been 10% different, the impact on cost in 2022 would have been approximately £418,000 (2021: £305,000). The
Group’s policy is to hold the majority of its funds in Sterling and US Dollars. No other hedging of foreign currency cash flows is undertaken.
(b) Interest rate risk
The Group’s policy is to maximise interest receivable on deposits, subject to maintaining access to sufficient liquid funds to meet day
to day operational requirements and preserving the security of invested funds. With the current low level of bank interest rates at the start
of the year, interest receivable on bank deposits in 2022 was just £973,000 (2021: £nil).
On 10 March 2022, the Group drew down an US$85 million loan facility with Oaktree to finance the acquisition of Oxford Biomedica
Solutions, under a 1 year facility agreement maturing in 2023. On 7 October 2022, the loan facility was refinanced with Oaktree. Under
the terms of such refinancing, the Company has partially repaid the outstanding amounts under the Short-Term Loan Facility and
amended the facility into a new senior secured four year term loan facility provided by Oaktree in a principal amount of US$50 million.
The Term Loan carries a variable interest rate, which is capped at 10.25% per annum and payable quarterly in cash, with up to 50% of
interest for the first twelve months payable in kind as additional loan principal, at the option of the Company. The interest rate is subject
to downward adjustment following the satisfaction of certain commercial conditions.
If interest rates had been 1% higher in 2022 the impact on cash interest paid would have been £nil (2022: £nil).
(c) Credit risks
Cash balances are mainly held on short term deposits with financial institutions with a credit rating of at least A, in line with the Group’s
policy to minimise the risk of loss.
Trade debtors are monitored to minimise the risk of loss (note 16).
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 151
Derivative financial instruments and hedging
There were no material derivatives at 31 December 2022 or 31 December 2021 which have required separation, and hedge accounting
has not been used.
Fair value estimates
The fair value of short term deposits with a maturity of one year or less is assumed to be the book value.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to minimise the cost of capital.
Group
Net (cash)/debt ²
Equity
Debt/equity
Represents Cash balance only as no debt.
¹
² Net (cash)/debt is Cash and cash equivalents less Loans as outlined on page 136.
2022
£’000
(101,505)
236,192
43%
2021
£’000
(108,944) ¹
187,338
(58%)
4, Segmental analysis Segmental reporting
The chief operating decision-maker has been identified as the Senior Executive Team (SET), comprising the Executive Directors, Chief
Commercial Officer, Chief Technical Officer, Chief Scientific Officer, Chief Business and Corporate Development Officer, Chief Operations
Officer, Chief People Officer, Chief Information Officer and General Counsel. The SET monitors the performance of the Group in two
business segments:
(i) Platform – this segment consists of the revenue generating bioprocessing and process development activities undertaken for third
parties (i.e the partner programmes LentiVector® and AAV CDMOs business). It also includes internal technology developments and
technical intellectual property within the LentiVector® platform.
(ii) Product – this segment consists of the clinical and pre-clinical development of in vivo and ex vivo cell and gene therapy products
(gene therapeutics) which are owned by the Group.
In the first quarter of 2023, the SET has re-assessed the reporting segments to reflect the way the business will be managed in future.
Management reporting is currently being reworked to align with these new segments going forward and the Group expects to be
able to report on these new segments during 2023 and thereafter. No changes from the current basis have been reflected in the 2022
Annual report and accounts.
Revenues, other operating income and operating loss by segment
Revenues, Operating EBITDA and Operating profit/(loss) represent the Group’s measures of segment profit and loss as they are a primary
measure used for the purpose of making decisions about allocating resources and assessing performance of segments.
2022
Revenue
Other operating income
Gain on sale and leaseback
Operating EBITDA¹
Depreciation, amortisation and share based payment
Operating loss
Net finance cost
Loss before tax
2021
Revenue
Other operating income
Operating EBITDA¹
Depreciation, amortisation and share based payment
Revaluation of investments
Operating profit/(loss)
Net finance cost
Profit before tax
Platform
£’000
139,903
2,307
21,389
11,654
(29,551)
(17,948)
Platform
£’000
142,693
867
45,292
(13,702)
(165)
31,425
Product
£’000
86
–
–
(10,023)
(2,250)
(12,272)
Product
£’000
104
–
(9,368)
(1,288)
–
(10,657)
Total
£’000
139,989
2,307
21,389
1,631
(31,801)
(30,220)
(15,756)
(45,976)
Total
£’000
142,797
867
35,924
(14,990)
(165)
20,768
(888)
19,880
¹
Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and Assets at fair value through profit and loss, and Share Based
Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the
charge for share based payments options. A reconciliation to GAAP measures is provided on page 34.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Other operating income of £2.3 million (2021: £0.9 million) includes sub lease rental income of £1.4 million (2021: Nil) in relation to a
portion of the Patriot’s Park property in the US accounted for as a as a short term lease, and grant income to further develop our supply
chain capabilities of £0.9 million (2021: £0.9 million) and is included within the Platform segment.
Costs are allocated to the segments on a specific basis as far as possible. Costs which cannot readily be allocated specifically are
apportioned between the segments using relevant metrics such as headcount or direct costs.
No intangible assets or fixed assets of any significant value have been assessed to be assigned specifically to the Products division, and
therefore no impairment has been required as a result of the decision by the Group to look for alternative funding for the Product division.
A segmental or geographical split of assets and liabilities is not provided because this information is not received or reviewed by the chief
operating decision-maker. All assets are located within the United Kingdom and United States.
Disaggregation of revenue
Revenue is disaggregated by the type of revenue which is generated by the commercial arrangement.
2022
Bioprocessing/Commercial development
Licence fees, milestones and royalties
Total
2021
Bioprocessing/Commercial development
Licence fees, milestones and royalties
Total
Timing of transfer of goods or services
Products and services transferred at a point of time
Products and services transferred over time
Total revenue
Platform
£’000
127,994
11,909
139,903
Platform
£’000
128,318
14,375
142,693
Product
£’000
86
–
86
Product
£’000
104
–
104
2022
£’000
11,909
128,080
139,989
Total
£’000
128,080
11,909
139,989
Total
£’000
128,422
14,375
142,797
2021
£’000
13,997
128,800
142,797
The majority of the Group’s revenue is typically recognised over time as the performance obligations in the contract are being fulfilled.
Results by geographical location
The Group’s revenue derives wholly from assets located in the United Kingdom and the United States. Analysed by location the Group’s
revenues derive predominantly from United Kingdom, United States, Europe and the rest of the world:
Revenue by client location
United Kingdom
United States
Europe
Rest of world
Total revenue
In 2022 five clients each provided 10% or more of the Group’s revenues in the platform segment.
Geographic split of operating loss
United Kingdom
United States
Total operating loss
Geographic split of non current assets
United Kingdom
United States
Total non current assets
2022
£’000
49,939
61,591
28,063
396
139,989
2022
£’000
(1,465)
(28,755)
(30,220)
2022
£’000
94,997
149,679
244,676
2021
£’000
97,063
20,816
21,632
3,286
142,797
2021
£’000
(20,768)
–
(20,768)
2021
£’000
73,385
–
73,385
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 5, Employees and directors
The monthly average number of persons (including Executive Directors) employed by the Group during the year was:
By activity
Office and management
Research, development and bioprocessing
Total
Employee benefit costs
Wages and salaries
Social security costs
Other pension costs (note 32)
Share based payments (note 28)
Total employee benefit costs
Key management compensation
Wages and salaries
Social security costs
Other pension costs
Share based payments
Total
2022
£’000
117
812
929
2022
£’000
70,042
6,165
3,560
6,471
86,238
2022
£’000
4,486
760
293
2,620
8,159
153
2021
£’000
56
703
759
2021
£’000
43,174
5,122
2,839
3,523
54,658
2021
£’000
3,167
893
250
2,075
6,385
The key management figures above include Executive and Non-Executive Directors and the other members of the SET. Further information
about the remuneration of individual Directors, including the highest paid Director, is provided in the audited part of the Directors’
Remuneration Report on page 95 which forms part of these financial statements.
The Company had no employees during the year (2021: zero).
6, Finance income and costs
Finance income:
Bank interest receivable
Total finance income
Finance costs:
Unwinding of discount in provisions (note 20)
Gain on foreign exchange
Interest payable on loans
Interest payable on finance leases
Total finance costs
Net finance costs
Group
2022
£’000
973
973
(66)
(7,975)
(5,564)
(3,124)
(16,729)
(15,756)
2021
£’000
–
–
(27)
–
–
(861)
(888)
(888)
Company
2022
£’000
2021
£’000
–
–
(28)
(7,964)
(5,564)
(477)
(14,033)
(14,033)
–
–
–
–
–
–
–
–
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
7, Expenses by nature
Employee benefit costs
Depreciation of property, plant and equipment
Amortisation
Raw materials and consumables used in
bioprocessing
Operating lease payments
Net loss on foreign exchange
Notes
5
12
11
Group
Company
2022
£’000
86,238
20,271
6,088
27,449
231
(751)
2021
£’000
54,658
12,435
21
23,026
236
(115)
2022
£’000
992
323
–
–
–
–
2021
£’000
823
–
–
–
–
–
Company employee benefit costs include £992,000 (2021: £823,000) relating to non-executive costs paid by Oxford Biomedica UK Ltd
and recharged to the Company.
Depreciation is charged to cost of goods, research and development, and bioprocessing costs in the statement of comprehensive
income.
Amortisation is charged to research and development in the statement of comprehensive income.
The operating lease payments relate to short term leases which have been accounted for under the IFRS 16 exemption.
During the year the Group (including its subsidiaries) obtained services from the Group’s auditors and their associates as detailed below:
Services provided by the Group’s auditors
Fees payable for the audit of the parent company and consolidated financial statements
Fees payable for other services:
The audit of the Company’s subsidiaries
Additional fees relating to prior year audit
Review of interim results
Total
2022
£’000
50
895
98
35
1,078
2021
£’000
50
350
70
35
505
8, Taxation
During 2020 the Group ceased being eligible to claim a research and development tax credits under the Government’s small company
scheme, and instead in 2021 and 2022 claimed under the Large Company scheme.
Current tax
Corporation tax
Adjustments in respect of prior periods:
United Kingdom corporation tax research and development credit
Current tax
Deferred tax
Relating to the origination of timing differences
Deferred tax
Taxation credit/(charge)
2022
£’000
(1,282)
(1,282)
307
(975)
1,792
1,792
817
2021
£’000
(1,427)
(1,427)
558
(869)
–
–
(869)
U.K. income tax
The amount of £1,282,000 (2021:£1,427,000) included as part of the taxation charge within the statement of comprehensive income for
the year ended 31 December 2022 comprises the corporation tax payable on the amount claimed as a Large Company Tax credit (RDEC)
within research and development expenses in the statement of comprehensive income.
The adjustment of current tax in respect of the prior year of £307,000 relates to the corporation tax credit on a lower than anticipated
RDEC tax receipt. In 2021 the adjustment in respect of prior years in the amount of £558,000 related to a SME tax credit received relating
to prior years.
The United Kingdom corporation tax research and development (RDEC) credit which is included in research and development expenses,
is paid in arrears once tax returns have been filed and agreed. The tax credit recognised in the financial statements but not yet received is
included in trade and other receivables in the Statement of financial position.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
155
During 2022 the Group recognised £125,000 (2021: £458,000) of current tax relating to tax relief obtained on exercise of share options
directly within equity.
The Company has no tax liability, nor is it entitled to tax credits (2021: £nil).
At 31 December 2022, the Group had UK tax losses, with no expiry date, to be carried forward of approximately £76.2 million
(2021: £78.3 million).
U.S. income tax
Deferred tax of £1,764,000 (2021: Nil) relates to temporary differences relating to intangible assets.
At 31 December 2022, the Group had US tax losses to be carried forward of approximately £7.3 million (2021: £nil) that expire 20 years
from it being incurred.
Reconciliation of effective tax rate
The tax credit for the year is lower (2021: lower) than the standard rate of corporation tax in the UK. The differences are explained below:
Loss/(profit) on ordinary activities before tax
Loss/(profit) on ordinary activities before tax
multiplied by the standard rate of corporation tax
in the UK of 19% (2021: 19%)
Effects of:
Expenses not deductible for tax purposes
Income not taxable
Transfer pricing adjustments
Current tax relief less than accounting charge on
share options
Effects of group relief/other reliefs
Deferred tax not recognised
Amounts not recognised
Rolled over gains
Effects of overseas tax rates
Adjustments in respect of prior periods
Total tax (charge)/credit for the year
Group
2022
£’000
(45,976)
2021
£’000
19,880
Company
2022
£’000
(4,804)
2021
£’000
(2,366)
8,734
(3,777)
913
(1,985)
376
(1,005)
(517)
–
–
(4,753)
(3,074)
2,734
307
817
(649)
344
–
(174)
–
2,829
–
–
–
558
(869)
(28)
1,272
(1,005)
–
(158)
579
(1,573)
–
–
–
–
450
(101)
–
–
–
(349)
–
–
–
–
–
–
9, Basic and diluted profit/(loss) per ordinary share
The basic loss per share of 41.29p (2021: profit 22.77p) has been calculated by dividing the (loss)/profit for the period by the weighted
average number of shares in issue during the year ended 31 December 2022 being, 94,829,892 (2021: 83,484,173).
As the Group made a loss this year, there is therefore no difference between the basic loss per ordinary share and the diluted loss per
ordinary share in the current period. The Group made a profit in the prior period and the diluted earnings per share in the year was
22.20p, which was calculated by dividing the earnings for the period by the weighted average number of shares in issue during the period
after adjusting for the dilutive effect of the share options outstanding at 31 December 2021 (2,134,494).
10, Loss for the financial year
As permitted by section 408 of the Companies Act 2006, the Company’s statement of comprehensive income has not been included in
these financial statements. The Company’s loss for the year was £4,804,000 (2021: £2,366,000).
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
11, Intangible assets
Cost
At 1 January 2021
At 31 December 2021
At 1 January 2022
Acquisitions through business combinations
Retirements
Effects of movements in exchange rates
At 31 December 2022
Accumulated amortisation and impairment
At 1 January 2021
Charge for the year
At 31 December 2021
At 1 January 2022
Charge for the year
Retirements
Effects of movements in exchange rates
At 31 December 2022
Net book amount at 31 December 2022
Net book amount at 31 December 2021
Notes
Goodwill
£’000
Developed
technology
£’000
Patents
£’000
35
–
–
–
610
–
51
661
–
–
–
–
–
–
–
–
661
–
–
–
–
102,869
–
8,536
111,405
–
–
–
–
6,072
–
116
6,188
105,217
–
5,636
5,636
5,636
–
(3,825)
–
1,811
5,563
21
5,584
5,584
16
(3,797)
–
1,803
8
52
Total
£’000
5,636
5,636
5,636
103,479
(3,825)
8,587
113,877
5,563
21
5,584
5,584
6,088
(3,797)
116
7,991
105,886
52
Intangible assets comprise Goodwill, Developed Technology and Patents for intellectual property rights. The Group has not capitalised
any internally generated intangible assets.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements Freehold
property
£’000
Leasehold
improvements¹
£’000
Office
equipment
and computers
£’000
Bioprocessing
and Laboratory
equipment
£’000
Right of use
asset
£’000
25,409
113
14
–
(15,688)
–
–
9,848
12,652
2,052
–
(8,210)
6,494
28,145
7,767
(417)
22,747
–
1,986
60,228
6,226
5,167
47
–
11,440
10,663
955
(6)
788
(45)
–
65
12,420
6,863
2,204
2
(27)
9,042
29,505
7,461
409
10,436
(127)
–
912
48,596
12,519
5,916
40
(89)
18,386
18,411
13,038
–
24,974
–
(1,349)
2,072
57,146
4,145
4,932
19
–
9,096
157
Total
£’000
112,133
29,334
–
58,945
(15,860)
(1,349)
5,035
188,238
42,405
20,271
108
(8,326)
54,458
3,354
48,788
3,378
30,210
48,050
133,780
Freehold
property
£’000
Leasehold
improvements
£’000
Office
equipment
and computers
£’000
Bioprocessing
and Laboratory
equipment
£’000
Right of use
asset
£’000
23,331
2,078
–
–
25,409
10,444
2,208
–
12,652
27,219
939
(13)
–
28,145
3,519
2,707
–
6,226
9,106
1,557
–
–
10,663
4,610
2,253
–
6,863
24,606
4,886
13
–
29,505
9,177
3,342
–
12,519
18,012
21
–
378
18,411
2,220
1,925
–
4,145
Total
£’000
102,274
9,481
–
378
112,133
29,970
12,435
–
42,405
12,757
21,919
3,800
16,986
14,266
69,728
12, Property, plant and equipment
Group
Cost
At 1 January 2022
Additions at cost
Reallocations
Acquisitions through business
combinations
Disposals
Change in estimate
Effects of movements
in exchange rates
At 31 December 2022
Accumulated depreciation
At 1 January 2022
Charge for the year
Effects of movements
in exchange rates
Disposals
At 31 December 2022
Net book amount
at 31 December 2022
Group
Cost
At 1 January 2021
Additions at cost
Reclassification
Disposals
At 31 December 2021
Accumulated depreciation
At 1 January 2021
Charge for the year
Reclassification
At 31 December 2021
Net book amount at
31 December 2021
¹
Included within Leasehold Improvements are Assets under Construction of £5,541,000 (2021:£nil) representing ongoing construction works at Patriots Park, Boston,
which will start being depreciated once completed and in use.
Leasehold improvements are capital improvements to buildings which the Group leases. Bioprocessing and laboratory equipment is
equipment purchased for the Group’s laboratory and bioprocessing processes, and are generally movable from one facility to another.
During the year a sale and leaseback transaction was completed on the Windrush facility and as a result assets with a net book value of £7.5 million
have been disposed of in the period and a Right of use Asset of £5.8 million recognised at Group. Refer to note 33 for details of the lease.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Company
Cost
At 1 January 2022
Additions at cost
At 31 December 2022
Accumulated depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Net book amount at
31 December 2022
Right of use asset
£’000
–
39,717
39,717
–
323
323
Total
£’000
–
39,717
39,717
–
323
323
39,394
39,394
The Windrush Court building was owned and then sold by Oxford Biomedica (UK) Ltd in October 2022, after which the building was
immediately leased under a 15 year lease by Oxford Biomedica PLC on the same day. In the Company’s individual accounts, the Company
has accounted for the lease as a standalone lease with the resultant lease liability and matching right of use asset, whilst Oxford Biomedica
(UK) Ltd has accounted for the transaction as a standalone sale of an asset. However, from a Group perspective the transaction has been
accounted for as a sale and leaseback transaction as both companies form part of the same group and both the sale and leaseback was
negotiated and entered into at the same time. The Company had no property, plant and equipment at 31 December 2021.
13, Assets at fair value through profit and loss
Assets at fair value through profit and loss (FVTPL): Group
At 1 January
Additions
Sale of shares
Change in fair value of FVTPL asset
At 31 December
14, Investments and loans in subsidiaries
Shares in group undertakings
At 1 January and 31 December
Loans to group undertakings
At 1 January
Loan advanced in the year
At 31 December
Total investments in shares and loans to group undertakings
Accumulated impairment
At 1 January and 31 December
Net book amount at 31 December
Capital contribution in respect of employee share schemes
At 1 January
Additions in the year (note 27 and 28)
At 31 December
Total investments
2022
£’000
74
–
–
(51)
23
2021
£’000
239
–
–
(165)
74
2022
£’000
2021
£’000
15,182
15,182
273,253
153,602
426,855
442,037
262,002
11,251
273,253
288,435
126,065
315,972
126,065
162,370
18,793
6,471
25,264
15,269
3,523
18,792
341,237
18,792
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
159
The Company recognised a loss allowance for expected credit losses on financial assets. The expected credit losses are estimated by
reference to an analysis of the subsidiary’s current financial position and future repayment expectations. The loss allowance recognised on
loans in subsidiaries at the end of the year was £93.1 million (2021: £93.1 million). In addition to the loss allowance recognised on loans in
subsidiaries, an impairment loss is recognised under IAS 36 for shares in Group undertakings and for capital contribution in respect
of employee share schemes of £32.9 million (2021: £32.9 million).
The loan from Oxford Biomedica plc to Oxford Biomedica (UK) Limited is unsecured and interest free. The loan is legally due for
repayment on demand though the expectation is that it will not be repaid within 12 months of the year end.
Net investment in foreign operations:
The company has designated a US$180 million intercompany loan to Oxford Biomedica (US) Inc as a monetary item that forms part of
the Group’s net investment in Oxford Biomedica Solutions with the foreign exchange differences recognised as a separate component
in Other Comprehensive income until such time as the investment in Oxford Biomedica Solutions is disposed of. A translation gain of
£10.6 million was recognised in 2022 (2021: Nil).
Interests in subsidiary undertakings
Country of
incorporation
Description
of shares held
Proportion of nominal
value of issued shares
held by the Group
and Company
Oxford Biomedica (UK) Limited
Oxford Biomedica (Ireland) Limited
Oxxon Therapeutics Limited
Great Britain
Ireland
Great Britain
1p ordinary shares
1p ordinary shares
1p ordinary shares
Oxford Biomedica Solutions LLC
Oxford Biomedica (US) Inc.
Invivusbio Limited
United States
United States
Great Britain
N/A
1c ordinary shares
1p ordinary shares
100%
100%
100%
80%
100%
100%
Nature of business
Gene therapy research development
and manufacturing
Product release
Dormant
Gene therapy research, development
and manufacturing
Business Development
Dormant
The registered office of the Company, its UK subsidiaries and Oxford Biomedica (US) Inc. is Windrush Court, Transport Way, Oxford,
OX4 6LT. The registered office of Oxford Biomedica (Ireland) Ltd is Earlsfort Terrace, Dublin 2, DO2 T380, Ireland. The registered office
of Oxford Biomedica Solutions LLC is 1 Patriots Park, Bedford, MA 01730, USA.
In addition, the Group set up the Oxford Biomedica Employee Benefit Trust (EBT) to hold market-purchased shares to settle the 2013
deferred bonus share awards made to Executive Directors and employees (note 27).
All of the above subsidiaries have been consolidated in these financial statements.
At each year end the Directors review the carrying value of the Company’s investment in subsidiaries. Where there is a material and
sustained shortfall in the market capitalisation, or a significant and sustained change in the business resulting in a decrease in market
capitalisation, the Directors consider this to be a trigger of an impairment review as set out in IAS 36, and the carrying value of the
Company’s investments in subsidiaries is adjusted. The Directors consider that reference to the market capitalisation of the Group is an
appropriate external measure of the value of the Group for this purpose. Cumulative impairment of £126.0 million has been recognised
up to 31 December 2022.
15, Inventories
Group
Raw Materials
Total inventory
2022
£’000
12,625
12,625
2021
£’000
9,521
9,521
Inventories constitute raw materials held for commercial bioprocessing purposes, all of which the Group expects to recover within the
next 12 months.
During the year, the Group wrote down £1,117,000 (2021: £766,000) of inventory which is not expected to be used in production or
sold onwards. During the year, the Group wrote off £11,717,000 of inventory as a result of cancelled orders from a client, which was
recognised as part of cost of sales in the year. The Company holds no inventories.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
16, Trade and other receivables
Current
Trade receivables
Contract assets
Other receivables
Other tax receivable
Prepayments
Total trade and other receivables
Group
Company
2022
£’000
34,109
10,897
4,832
7,757
3,976
61,571
2021
£’000
22,398
13,547
365
5,227
3,210
44,747
2022
£’000
–
–
–
–
–
–
2021
£’000
–
–
–
–
–
–
Non-current trade and other receivables constitute other receivables of £5,010,000 (2021: £3,605,000) which are deposits held in escrow
as part of the Windrush Innovation Centre and Oxbox lease arrangements.
The fair value of trade and other receivables are the current book values. The Group has performed an impairment assessment under
IFRS 9 and has concluded that the application of the expected credit loss model has had an immaterial impact on the level of impairment
of receivables.
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
Sterling
US Dollar
2022
£’000
50,395
16,186
66,581
2021
£’000
44,527
3,825
48,352
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable above. The Group does not hold
any collateral as security.
Trade receivables
Included in the Group’s trade receivable balance are debtors with a carrying amount of £1,336,000 (2021: £3,800,000) which were past
due at the reporting date and of which £1,333,000 (2021: £3,800,000) has been received after the reporting date.
Ageing of past due but not impaired trade receivables:
0–30 days
30–60 days
60+ days
2022
£’000
171
3
1,162
1,336
2021
£’000
3,266
389
145
3,800
Contract assets
Contract assets relates to the Group’s rights to consideration for work completed but not invoiced at the reporting date for commercial
development work and bioprocessing batches. The contract assets are transferred to receivables when the rights become unconditional.
This usually occurs when the Group issues an invoice to the client.
The balance of £10.9 million (2021: £13.5 million) mainly relates to commercial development milestones which have been accrued as the
specific conditions stipulated in the licence agreement have been met, commercial development work orders accrued on a percentage
complete basis which will be invoiced as the related work package completes, and bioprocessing batches accrued on a percentage of
completion basis which will be invoiced as the manufacturing of the batch is completed.
Contract assets have decreased from £13.5 million at the end of 2021 to £10.9 million at the end of 2022 due to the timing of
bioprocessing and commercial development activities undertaken during the year leading to a lower level of consideration for work
completed but not yet billed.
A portion of contract assets relates to fixed price process development work packages which are recognised on a percentage of
completion basis and as such requires estimation in terms of the assessment of the correct percentage of completion for that specific
work package. The value of the contract asset raised with regard to these work packages is £8,179,000 (2021: £8,022,000). If the assessed
percentage of completion was 1 percentage point higher or lower, revenue recognised in the period would have been £82,000 higher
or lower (2021: £80,000).
The Group performed an impairment assessment under IFRS 9 and has concluded that the application of the expected credit loss model
has had an immaterial impact on the level of impairment on contract assets. We have noted there has been no change in the time frame
for a right to consideration to become unconditional and the performance obligation to be satisfied.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
17, Cash and cash equivalents
Cash at bank and in hand
18, Trade and other payables
Trade payables
Other taxation and social security
Accruals
Total trade and other payables
161
Group
2022
£’000
141,285
2021
£’000
108,944
Company
2022
£’000
19,197
2021
£’000
61,630
Group
Company
2022
£’000
13,604
2,347
20,628
36,579
2021
£’000
5,260
1,899
11,899
19,058
2022
£’000
–
–
143
143
2021
£’000
–
–
152
152
19, Contract liabilities and deferred income
Contract liabilities and deferred income arise when the Group has received payment for services in excess of the stage of completion
of the services being provided.
Contract liabilities and deferred income have increased from £15.2 million at the end of 2021 to £20.4 million at the end of 2022 due
to funds received in advance for future licencing, bioprocessing and process development activities. Of the £12.6 million balance included
in the statement of financial position at the end of 2021, £12.5 million has been recognised as revenue during the 2022 financial year.
Contract liabilities consists primarily of deferred bioprocessing and process development revenues, which are expected to be released
as the related performance obligations are satisfied over the period as described below:
At 31 December 2022
Contract liabilities
Bioprocessing income
Process development income
Licence fees and Milestones
Deferred Income
Grant
At 31 December 2021
Contract liabilities
Bioprocessing income
Process development income
Licence fees and Milestones
Deferred Income
Grant
0–1
£’000
18,370
10,218
3,136
5,016
894
894
0–1
£’000
12,502
9,755
2,325
422
894
894
1–3
£’000
32
–
–
32
1,069
1,069
1–3
£’000
48
–
–
48
1,760
1,760
3–5
£’000
32
–
–
32
–
–
3–5
£’000
44
–
–
44
–
–
5–10
£’000
12
–
–
12
–
–
5–10
£’000
–
–
–
–
–
–
Total
£’000
18,446
10,218
3,136
5,092
1,963
1,963
Total
£’000
12,594
9,755
2,325
514
2,654
2,654
Included within bioprocessing contract liabilities is revenue of £2,592,000 million which has not been recognised during 2022 (2021:
£0.8 million) relating to the estimate of out of specification batches (see note 2: ’Estimations’ for additional information).
Deferred income relates to grant funding received from the UK Government for capital equipment purchased as part of the Oxbox
bioprocessing facility expansion. The income will be recognised over the period over which the purchased assets are depreciated.
The Company had primarily no contract liabilities or deferred income in 2022 or 2021.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
162
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
20, Provisions
At 1 January
Unwinding of discount
Additional provision recognised
Change in estimate
At 31 December
Current
Non-current
Total provisions
Group
Company
2022
£’000
6,244
66
3,463
(1,349)
8,424
2022
£’000
–
8,424
8,424
2021
£’000
5,839
27
–
378
6,244
2021
£’000
–
6,244
6,244
2022
£’000
–
28
3,207
(477)
2,758
2022
£’000
–
2,758
2,758
2021
£’000
–
–
–
–
–
2021
£’000
–
–
–
Provisions are exclusively in respect of dilapidations. The new provisions during the year relate to new lease liabilities at the Wallingford
Warehouse, and as a result of the sale and leaseback by the Company of the Windrush Court facility the provisions are based on the
anticipated costs of restoring the leaseholds at the end of the lease terms, both of which are 2037. The existing dilapidations provisions
relate to anticipated costs of restoring the leasehold Yarnton, Oxbox, Windrush Innovation Centre and Corporate Office properties in
Oxford, UK to their original condition at the end of the lease terms in 2024, 2033, 2028 and 2030 respectively.
The future anticipated costs of restoring the properties is calculated by inflating the current expected restoration costs using the 3 year
historic UK Consumer Price Inflation rate, up to the end of the lease term. The discount rate utilised for the purpose of determining the
present value of the provision is 5.41% based on the risk free rate adjusted for inflation. The present value of the future anticipated costs
of restoration is calculated by discounting the future expected value using the nominal rate. The unwinding of this discount over time is
included within finance costs.
21, Loans
On 10 March 2022, the Group drew down an US$85 million loan facility with Oaktree to finance the acquisition of Oxford Biomedica
Solutions under a 1 year facility agreement maturing in 2023. Over the course of the term loan interest was payable quarterly with
a nominal interest rate on the loan of 8.5%.
On 7 October 2022, the loan facility was refinanced with Oaktree. Under the terms of such refinancing, the Company has partially repaid
the outstanding amounts under the Short-Term Loan Facility and amended the facility into a new senior secured four year term loan
facility provided by Oaktree in a principal amount of US$50 million. The Term Loan will mature four years after the date of completion
and will not amortise, with the full aggregate principal and outstanding amount being repayable on the final maturity date. The Term
Loan carries a variable interest rate, which is capped at 10.25% per annum and payable quarterly in cash, with up to 50% of interest for the
first twelve months payable in kind as additional loan principal, at the option of the Company. The interest rate is subject to downward
adjustment following the satisfaction of certain commercial conditions.
The Company also has secured the option, subject to the same commercial conditions as the amended facility and available for a three-
year period, to draw down a further US$25 million from Oaktree to fund certain permitted acquisitions. If the option were to be exercised,
it would be assessed against meeting the substantial modification requirements under IFRS 9.
The terms include financial covenants including holding a minimum of US$20 million cash at all times, restrictions on the level
of indebtedness the Group may enter into or distributions made by the Group. The Oaktree facility was secured by a pledge over
substantially all of the Group’s assets.
At 1 January
New Loan
Interest accrued
Interest paid
Foreign exchange movement
Amortised fees
Loan repayment
Arrangement fees
At 31 December
Group
Company
2022
£’000
–
64,866
5,564
(4,554)
7,964
588
(31,424)
(3,224)
39,780
2021
£’000
–
–
–
–
–
–
–
–
–
2022
£’000
–
64,866
5,564
(4,554)
7,964
588
(31,424)
(3,224)
39,780
2021
£’000
–
–
–
–
–
–
–
–
–
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
22, Put option liability
At 1 January
Recognised at fair value
Revaluation
At 31 December
163
2021
£’000
–
–
–
–
2022
£’000
–
38,996
(814)
38,182
On 10th March 2022, the Group recognised a put option liability to acquire the remaining 20% of Oxford Biomedica Solutions that it
doesn’t already own from Homology Medicines. The fair value of the option at the date of acquisition was assessed to be £39.0 million.
At 31st December 2022 the fair value of the Put option liability was £38.2 million (Dec 2021: £nil). The lower liability valuation was due
to increases in borrowing rates over the period leading to a higher discount rate applied and a resultant lower put option liability.
23, Financial instruments
The Group and Company’s financial instruments comprise cash and cash equivalents, trade and other receivables, assets at fair value
through profit and loss, and trade and other payables. Additional disclosures are set out in the Corporate Governance Report and in
note 3 relating to risk management.
The Group had the following financial instruments at 31 December each year:
Cash and cash equivalents
(note 17)
Trade receivables and
other receivables (note 16)
Assets at fair value through profit
and loss (note 13)
Trade and other payables
excluding tax (note 18)
Loan (note 21)
Put option liability (note 22) ¹
Financial assets / financial liabilities
at fair value through profit and loss
2021
£’000
2022
£’000
Cash and receivables
Amortised costs, loans
and other liabilities
2022
£’000
2021
£’000
2022
£’000
2021
£’000
–
–
23
–
–
74
141,285
108,944
62,605
45,142
–
–
–
–
–
–
–
–
–
–
–
74
1 Although the put option is included within the amortised cost table, it is not measured at amortised cost but at the fair value of the expected consideration payable.
–
–
–
203,890
–
–
–
154,086
34,232
39,780
38,182
112,194
–
–
–
23
17,160
–
–
17,160
The Company had the following financial instruments at 31 December each year:
Cash and cash equivalents (note 17)
Trade and other payables excluding tax (note 18)
Loan (note 21)
Floating rate instant access deposits earned interest at prevailing bank rates.
Sterling
US Dollar
Cash and receivables
Amortised costs, loans
and other liabilities
2022
£’000
19,197
–
–
19,197
2021
£’000
61,630
–
–
61,630
2022
£’000
–
143
39,780
39,923
2021
£’000
–
152
–
152
2022
Weighted average
rate
1.67%
1.26%
2021
Weighted average
rate
0.02%
0.00%
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Assessment of financial assets by credit risk rating:
Cash and cash equivalents are held with reputable banks with a low assessed risk of default.
All trade receivables are assessed as having a low credit risk rating as the debt is owed by blue chip pharmaceutical groups in the top 10
in the world by market capitalisation, and by biotechnology companies with sufficient cash reserves to satisfy their obligations. There
has been no change in the determined risk during 2022, therefore no reconciliation between the 2021 and 2022 closing debtor balance
assessed by risk of default has been provided. The opening and closing position was low (2021: low).
Other receivables are rent deposits held in separately administered bank accounts with covenants limiting their use and are as such
assessed as having a low risk of default.
The Group considers a financial asset to be in default when:
— The debtor is unlikely to pay its credit obligation to the Group in full, without recourse by the Group to actions such as realising
security (if any is held); or
— the financial asset is more than 90 days past its contracted due date.
Fair value
The Directors consider that the fair values of the Group’s financial instruments do not differ significantly from their book values.
The carrying amounts of the Group’s cash and cash equivalents are denominated in the following currencies:
Sterling
Euro
US Dollar
2022
£’000
117,247
623
23,415
141,285
2021
£’000
96,477
524
11,943
108,944
Financial assets classified as level 1 in hierarchy
The investment asset represented by ordinary shares in Orchard Therapeutics is classified as at fair value through profit and loss.
Please refer to note 13 for further information.
Financial liabilities classified as level 3 in hierarchy
The Put option liability is classified as at fair value as a liability. Please refer to note 22 for further information.
Measurement of fair values
Valuation techniques and significant unobservable inputs:
The following table shows the valuation techniques used in measuring level 3 fair values, as well as the significant unobservable inputs used:
Type
Put option liability
Valuation technique
Monte Carlo simulation
Significant
unobservable inputs
Revenues of Oxford Biomedica
Solutions
Interrelationship between unobservable inputs
and fair value measurement:
— The revenues of Oxford Biomedica Solutions
are based on the management approved
forecast up until the end of the option period.
Should the forecast change or the actual
results vary this may impact the value of the
put option liability.
Discount rate
— The discount rate may be impacted by
economic and market factors, as well as
changes to the risk free rate of return which
impacts debt borrowing rates. Should the
discount rate calculated by management be
adjusted, this may impact the value of the
put option. Management has calculated the
discount rate based on the risk free rate,
the expected return from similar companies
and the Group’s cost of debt.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
165
Sensitivity analysis
For the fair values of the put option liability, reasonably possible changes at the reporting date to one of the significant unobservable inputs,
holding other inputs constant, would have the following effects:
Put option liability
31 December 2022
Effect in thousands of pounds:
Revenues of Oxford Biomedica Solutions:
10% higher or lower
Discount rate 2% lower or higher
Reconciliation of movements of liabilities to cash flows arising from financing activities
Group
Balance at 1 January 2021
Changes from financing cash flows
Share options – Proceeds from shares issued
Issue of shares excluding options
Payments for the principal portion of lease liabilities
Payments for the interest portion of lease liabilities
Total changes from financing cash flows
Other changes:
Additions
Interest
Balance at 31 December 2021
Changes from financing cash flows
Share options – Proceeds from shares issued
Issue of shares excluding options
Cost of share issues
Loans received
Loans repaid
Arrangement fees
Interest paid
Payments for the principal portion of lease liabilities
Payments for the interest portion of lease liabilities
Total changes from financing cash flows
Other changes:
Acquisitions
Additions
Interest
Fee amortisation
Foreign exchange
Closing balance at 31 December 2022
Liabilities
Lease
liabilities
£’000
13,845
Loan
£’000
–
–
–
(4,520)
(873)
(5,393)
16
873
9,341
–
–
–
–
–
–
–
(1,120)
(3,124)
(4,244)
24,974
39,193
3,124
–
2,113
74,501
–
–
–
–
–
–
–
–
–
–
–
64,866
(31,424)
(3,224)
(4,554)
–
–
25,664
–
–
5,564
588
7,964
39,780
Fair value
Increase
Decrease
2.1
1.4
(2.4)
(1.4)
Equity
Total
Share
capital
£’000
41,161
236
1,691
–
–
1,927
–
–
43,088
106
4,938
–
–
–
–
–
–
–
5,044
–
–
–
–
–
48,132
Share
Premium
£’000
258,017
1,439
48,309
–
–
49,748
–
–
307,765
78
75,062
(2,952)
–
–
–
–
–
–
72,188
–
–
–
–
–
379,953
Total
£’000
313,023
1,675
50,000
(4,520)
(873)
46,282
16
873
360,194
184
80,000
(2,952)
64,866
(31,424)
(3,224)
(4,554)
(1,120)
(3,124)
98,652
24,974
39,193
8,688
588
10,077
542,366
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Company
Balance at 1 January 2021
Changes from financing cash flows
Share options – Proceeds from shares issued
Issue of shares excluding options
Total changes from financing cash flows
Balance at 31 December 2021
Changes from financing cash flows
Share options – Proceeds from shares issued
Issue of shares excluding options
Cost of share issues
Loans received
Loans repaid
Interest paid
Arrangement fees
Payments for the principal portion of lease liabilities
Payments for the interest portion of lease liabilities
Total changes from financing cash flows
Other changes:
Additions
Interest
Fee amortisation
Foreign exchange
Closing balance at 31 December 2022
Liabilities
Lease
liabilities
£’000
–
–
–
–
–
–
–
–
–
–
–
–
55
(477)
(422)
35,567
477
–
–
35,622
Loan
£’000
–
–
–
–
–
–
–
–
64,866
(31,424)
(4,554)
(3,224)
–
–
25,664
–
5,564
588
7,964
39,780
Equity
Total
Share
capital
£’000
41,161
236
1,691
1,927
Share
Premium
£’000
258,017
1,439
48,309
49,748
Total
£’000
299,178
1,675
50,000
51,675
43,088
307,765
350,853
106
4,938
–
–
–
–
–
–
–
5,044
–
–
–
–
48,132
78
75,062
(2,952)
–
–
–
–
–
–
72,188
–
–
–
–
379,953
184
80,000
(2,952)
64,866
(31,424)
(4,554)
(3,224)
55
(477)
102,474
35,567
6,041
588
7,964
503,487
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
167
Carrying
Amount
£’000
74,501
39,780
Carrying
Amount
£’000
9,341
–
Carrying
Amount
£’000
35,622
39,780
Carrying
Amount
£’000
–
–
Contractual Cash flows
Total
£’000
119,496
59,082
2 months
or less
£’000
–
–
2–12
months
£’000
9,179
4,294
1–2 years
£’000
18,681
4,306
2–5 years
£’000
24,353
50,482
>5 years
£’000
67,283
–
Contractual Cash flows
Total
£’000
13,456
–
2 months
or less
£’000
–
–
2–12
months
£’000
1,590
–
1–2 years
£’000
3,033
–
2–5 years
£’000
2,850
–
>5 years
£’000
5,983
–
Contractual Cash flows
Total
£’000
63,226
59,082
2 months
or less
£’000
–
–
2–12
months
£’000
3,500
4,294
1–2 years
£’000
7,000
4,306
2–5 years
£’000
6,300
50,482
>5 years
£’000
46,426
–
Contractual Cash flows
Total
£’000
–
–
2 months
or less
£’000
–
–
2–12
months
£’000
–
–
1–2 years
£’000
–
–
2–5 years
£’000
–
–
>5 years
£’000
–
–
Exposure to Liquidity Risk
Group
At 31 December 2022
Lease Liabilities
Loans
Group
At 31 December 2021
Lease Liabilities
Loans
Company
At 31 December 2022
Lease Liabilities
Loans
Company
At 31 December 2021
Lease Liabilities
Loans
24, Deferred taxation
U.K. deferred tax
The Group has recognised UK deferred tax assets and liabilities at 31 December 2022 and 31 December 2021. In light of the Group’s
history of losses, recovery of the whole deferred tax asset is not sufficiently certain, and therefore a deferred tax asset has been
recognised only to the extent that there is a deferred tax liability.
Finance Act 2020 enacted provisions to increase the UK Corporation tax rate to 19% from 1 April 2021. Finance Act 2021 which was
Substantively Enacted on 24 May 2022 included provisions to increase the rate further to 25% effective from 1 April 2023 and this rate has
been applied when calculating the UK deferred tax at the year end.
U.S. deferred tax
The Group have recognised US deferred tax assets and liabilities at 31 December 2022 (31 December 2021: Nil).
The remaining deferred tax assets have not been recognised as there is uncertainty regarding when suitable future profits against which
to offset the tax losses will arise.
U.S. deferred tax assets and liabilities are calculated at a blended rate of approximately 28%.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements Total
£’000
–
7,397
508
(1,792)
6,113
–
–
–
Total
£’000
(29,902)
4,281
(25,621)
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Group – recognised
Deferred tax (assets)/liabilities – recognised
At 1 January 2022
Arising on acquisition
Foreign exchange
Income statement credit
At 31 December 2022
Trading temporary
differences
£’000
–
–
–
(1,256)
(1,256)
Fixed assets
£’000
3,051
–
–
306
3,357
Tax losses
£’000
(3,051)
–
–
(439)
(3,490)
Intangible assets
£’000
–
7,397
508
(403)
7,502
At 1 January 2021
Origination and reversal of temporary differences
At 31 December 2021
–
–
–
–
3,051
3,051
–
(3,051)
(3,051)
–
–
–
Group – not recognised
Deferred tax (assets)/liabilities –
not recognised
At 1 January 2022
Origination and reversal of
temporary differences
At 31 December 2022
At 1 January 2021
Origination and reversal
of temporary differences
At 31 December 2021
Intangibles
£’000
–
(4,819)
(4,819)
–
–
–
Loan
relationships
£’000
(1,668)
1,668
–
(1,267)
(401)
(1,668)
Provisions
£’000
(298)
Tax losses
£’000
(21,760)
Share options
£’000
(6,176)
50
(248)
(206)
(92)
(298)
3,511
(18,249)
3,871
(2,305)
(17,443)
(3,239)
(22,155)
(4,317)
(21,760)
(2,937)
(6,176)
(7,747)
(29,902)
Oxford Biomedica PLC has unrecognised deferred tax assets of £35,000 relating to non temporary trading differences.
25, Ordinary shares
Group and Company
Issued and fully paid
Ordinary shares of 50p each
At 1 January – 86,175,055 (2021: 82,320,585) shares
Allotted for cash in placing and subscription – 9,876,544 (2021: 3,382,950) shares
Allotted on exercise of share options – 212,646 (2021: 471,520)
At 31 December – 96,263,165 (2021: 86,175,055) shares
2022
£’000
43,088
4,938
106
48,132
2021
£’000
41,161
1,691
236
43,088
The share capital of the Company consists only of fully paid ordinary shares with a nominal (par) value of £0.50 per share. There are
no restrictions on the ability of shareholders to receive dividends, nor on the repayment of capital. All ordinary shares are equally eligible
to receive dividends and the repayment of capital in accordance with the Company’s Articles of Association and represent one vote
at shareholders’ meetings of the Company.
As part of the financing arrangements for the Oxford Biomedica Solutions acquisition, the Group raised gross proceeds of £80 million through
a placing of 9,876,544 shares at £8.10 per share. The placing was done in 2 tranches with 5,018,134 shares placed on 28 January 2022, and a
further 4,858,410 shares were placed on 10 March 2022.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
169
2021
£’000
258,017
48,309
1,439
–
307,765
2022
£’000
307,765
75,062
78
(2,952)
379,953
26, Share premium account
Group and Company
At 1 January
Premium on shares issued for cash in placing and subscription
Premium on exercise of share options
Costs associated with the issue of shares
At 31 December
27, Options over shares of Oxford Biomedica plc
The Company has outstanding share options that were issued under the following schemes:
— The 2007 Share Option Scheme (approved February 2007)
— The 2015 Executive Share Option Scheme (approved May 2015)
— The 2007 Long Term Incentive Plan (LTIP) (approved February 2007)
— The 2015 Long Term Incentive Plan (LTIP) (approved May 2015)
— The 2013 Deferred Bonus Plan (approved February 2014)
— The 2015 Deferred Bonus Plan (approved May 2015)
— The 2015 Sharesave scheme (approved May 2015)
Share options are granted to Executive Directors and selected senior managers under the Company’s Long Term Incentive Plans (LTIP),
and Deferred Bonus Plans, and to other employees under the Share Option Schemes and Sharesave scheme. All option grants are at the
discretion of the Remuneration Committee. All options granted are equity settled share options, but deferred share awards may be settled
in cash at the option of the Remuneration committee.
Options and RSUs granted under the 2007 and 2015 LTIP to Directors and other senior managers are subject to both revenue and market
condition performance criteria and will vest only if, at the third anniversary of the grant, the performance criteria have been met. Failure to
meet the minimum performance criteria by the third anniversary results in all the granted options lapsing.
The performance criteria are described in the Directors’ Remuneration Report. LTIP awards made to date are exercisable at either par or at
nil cost on the third anniversary of the date of grant, and lapse 10 years after being granted. For Directors, options granted between 2019
and 2021 also have a 2 year holding period post vesting.
Restricted stock units (RSUs) granted to employees under the 2015 LTIP are issued at nil cost. They are not subject to market condition
performance criteria and the lives of the RSUs are ten years, after which the RSUs expire. RSUs granted under the 2015 Scheme cannot
normally be exercised before the third anniversary of the date of grant. RSUs are valued based on the market price at the date of grant.
Options granted under the 2007 Share Option Scheme have fixed exercise prices based on the market price at the date of grant. They
are not subject to market condition performance criteria and the lives of the options are ten years, after which the options expire. Options
granted prior to 2012 cannot normally be exercised before the third anniversary of the date of grant. Options granted under the 2007
Scheme during 2012 to 2014, with one exception, vest in tranches of 25% from the first to fourth anniversaries of the grant dates.
Options granted under the 2015 Executive Share Option Scheme have fixed exercise prices based on the market price at the date of
grant. They are not subject to market condition performance criteria and the lives of the options are ten years, after which the options
expire. Options granted under the 2015 Scheme cannot normally be exercised before the third anniversary of the date of grant.
Options granted under the 2015 Sharesave Scheme have fixed exercise prices based on the market price at the date of grant. They are not
subject to market condition performance criteria and the lives of the options are four years, after which the options expire and the cash
saved is returned. Options cannot be exercised before the third anniversary of the date of grant.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
Share options outstanding at 31 December 2022 have the following expiry date and exercise prices:
Options granted to employees under the Oxford Biomedica 2007 and 2015 Share Option Schemes
2022
Number of shares
–
12,860
16,518
38,170 ¹
52,689 ¹
95,927 ¹
120,903 ¹
326,889 ¹
458,426 ¹
1,122,382
2021
Number of shares
5,560
15,155
16,518
39,873¹
55,309¹
106,026¹
141,060¹
379,808¹
520,824 ¹
1,281,133
¹
Options granted under the 2015 Executive share option scheme.
Exercise price
per share
115p to 155p
80p to 140p
100p to 200p
490p
275p
495p
502p to 904p
618p to 705p
760p to 817p
Date from
which exercisable
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
26/06/2023 to 05/10/2023
Expiry date
08/05/22 to 21/12/22
22/05/23 to 19/11/23
03/06/24 to 17/10/24
13/03/25 to 10/06/25
16/05/26 to 13/10/26
13/07/2017 to 13/07/27
15/02/2028 to 07 08 2028
04/01/2029 to 12/09/2029
26/06/2030 to 05/10/2030
Options granted to employees under the Oxford Biomedica 2015 Sharesave scheme
2022
Number of shares
–
187,396
98,670
71,109
623,097
980,272
2021
Number of shares
29,682
237,069
154,756
143,345
–
564,852
Exercise price
per share
725p
422p
672p
1,226p
294p
Date from
which exercisable
10/10/21
09/10/22
31/10/23
31/10/24
19/10/25
Expiry date
10/04/22
09/04/23
30/04/24
30/04/25
19/04/26
Options granted under the Oxford Biomedica 2007 and 2015 Long Term Incentive Plans
2022
Number of shares
55,774
29,524
43,824
82,185
123,754 ²
39,652 ²
109,658 ¹,²
260,577 ¹,²
263,297 ¹,²
205,562 ³
460,986 ¹,²
1,403,889 ³
3,078,692
5,181,346
2021
Number of shares
55,774
29,524
43,824
82,185
143,294 ²
62,913 ¹,²
282,093¹,²
260,577¹,²
263,297¹,²
234,883¹,²
–
–
1,590,364
3,436,268
Exercise price
per share
50p
50p
0p
0p
0p
0p
0p
0p
0p
0p
0p
0p
Date from
which exercisable
Vested
Vested
Vested
Vested
Vested
Vested
Vested
26/06/2023
08/06/2024
08/06/2024
29/04/2025
10/09/2022 to 20/12/2026
Expiry date
12/06/2023
20/06/2024 to 17/10/2024
10/01/2025
16/05/2026
17/07/2027 to 25/09/2027
15/02/2028 to 07/08/2028
18/04/2029 to 12/09/2029
26/06/2030
08/06/2031
08/06/2031
29/04/2032
18/03/2032 to 20/12/2032
¹
²
³
These LTIP awards will vest provided that performance conditions specified in the Directors’ Remuneration Report are met.
Options granted under the 2015 LTIP.
Restricted Share Options (RSUs) granted under the 2015 LTIP issued to employees vesting over 3 years.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
171
Deferred Share Awards
The Executive Directors and certain other senior managers have been awarded deferred bonuses in the form of share options. These
options are exercisable at nil p on either the first three anniversaries of the grant or the third anniversary of the grant dependent on the
option conditions. Options with a value of £1,029,000 vested during 2022 (2021: £1,037,000).
The options granted under the 2013 Deferred Bonus Plan will be satisfied by market-purchased shares held by the Oxford Biomedica
Employee Benefit Trust (EBT). As at 31 December 2022, all shares held by the EBT had vested. The EBT is consolidated at year end with
the shares held in trust until the exercise of the option. During the year 77,376 shares (2021: nil) from the EBT were exercised. Deferred
bonus share awards are valued at the market price on the date of grant.
The options granted under the 2015 Deferred Bonus Plan will be satisfied by new issue shares at the time of exercise.
Options granted to employees under the Oxford Biomedica 2013 and 2015 Deferred Bonus Plan
2022
Number of shares
68,725
27,402
32,010
27,696
31,815
67,793
64,701
58,943
175,958
555,043
2021
Number of shares
68,725
27,402
32,010
27,696
36,205
67,793
65,576
58,943
–
384,350
Exercise price
per share
0p
0p
0p
0p
0p
0p
0p
0p
0p
Date from
which exercisable
Exercisable
Exercisable
Exercisable
Exercisable
Exercisable
Exercisable
20/06/21 to 20/06/23
08/06/22 to 08/06/24
29/04/23 to 29/04/25
Expiry date
15/06/24 and 14/10/24
04/05/25
14/05/26
11/07/27
07/08/28
18/04/29
20/06/30
20/06/31
29/04/32
National insurance liability
Certain options granted to UK employees could give rise to a national insurance (NI) liability on exercise. A liability of £642,000 (2021:
£1,305,000) is included in accruals for the potential NI liability accrued to 31 December on exercisable options that were above water
based on the year-end share price of 443p (2021: 1,230p) per share.
28, Share based payments
Sharesave Scheme awards
(Model used: Black Scholes)
Share price at grant date
Exercise price
Vesting period (years)
Total number of shares under option
Expected volatility (weighted average)
Expected life (years)
Risk free rate (weighted average)
Fair value per option
LTIP awards
(Model used: Monte Carlo)
Share price at grant date
Exercise price
Vesting period (years)
Total number of shares under option
Expected volatility (weighted average)
Expected life (years)
Risk free rate (weighted average)
Fair value per option
Options awarded
19 Oct 2022
300.00p
294.40p
3
626,154
48.08%
3
3.49%
109.61p
LTIPs awarded
29 Apr 2022
570p
0p
3
474,117
46.03%
3
1.65%
278p
LTIPs awarded
18 Mar 2022
697p
0p
3
268,790
44.78%
3
0.21%
475p
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
The tables below show the movements in the Share Option Scheme, Sharesave scheme and the LTIP during the year, together with the
related weighted average exercise prices.
Excluding the LTIP, RSU and Deferred Bonus awards which are exercisable at par/nil value, the weighted average exercise price for options
granted during the year was 294.4p (2021: 1,226.0p).
290,022 options were exercised in 2022 (2021: 471,520), including 4,390 of deferred bonus options (2021: 69,454). The total charge for
the year relating to employee share-based payment plans was £6,471,000 (2021: £3,523,000), all of which related to equity-settled share
based payment transactions.
2022
2021
Weighted average
exercise price
695.5p
294.4p
718.5p
467.0p
829.9p
565.3p
520.0p
Number
2,118,041
144,079
(147,282)
(252,676)
(16,258)
1,845,904
410,102
Weighted average
exercise price
548.7p
1,226.0p
706.4p
577.5p
587.7p
695.5p
588.4p
269,463
520.0p
410,102
588.4p
Share options
excluding LTIP
Outstanding at 1 January
Granted
Forfeited
Exercised
Cancelled
Number
1,845,904
626,154
(182,828)
(19,195)
(167,381)
Outstanding at 31 December
2,102,654
524,463
Exercisable at 31 December
Exercisable and where
market price exceeds
exercise price
at 31 December
LTIP awards (options exercisable at par value 1p or nil cost)
Outstanding at 1 January
Granted
Expired
Exercised
2022 Number
1,590,364
2,053,897
(299,132)
(266,437)
2021 Number
1,361,829
507,604
(168,796)
(110,273)
3,078,692
1,590,364
484,371
549,514
Outstanding at 31 December
Exercisable at 31 December
Range of exercise prices
LTIP:
Exercisable at par or at nil cost
Deferred bonus:
Exercisable at par or at nil cost
Options:
50p to 150p
150p to 250p
250p to 350p
350p to 650p
650p+
At 31 December 2021
Weighted
average
exercise price
Number
of shares
Weighted average
remaining life
(years)
Weighted
average
exercise price
Number
of shares
Weighted average
remaining life
(years)
1.4p
3,078,692
0p
555,043
101p
200p
293p
452p
782p
21,822
7,556
675,786
321,493
1,075,997
5,736,389
8.2
6.5
0.9
1.8
9.3
5.6
7.0
6.8p
1,590,364
0p
384,350
101p
183p
275p
454p
798p
25,197
12,036
56,228
393,529
1,358,914
3,820,618
6.9
6.3
1.8
1.9
4.3
6.7
8.1
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
29, Accumulated losses
At 1 January
(Loss)/profit for the year
Share based payments
Acquisition of NCI without a change in control
Deferred tax on share options
Exercise of nil cost option
At 31 December
Notes
37
Group
Company
2022
£’000
(165,806)
(39,157)
5,922
400
125
(29)
(198,545)
2021
£’000
(188,723)
19,011
3,523
–
458
(75)
(165,806)
2022
£’000
(128,584)
(4,804)
–
–
–
(15)
(133,403)
173
2021
£’000
(126,143)
(2,366)
–
–
–
(75)
(128,584)
¹
The credit to accumulated losses is made up out of the charge for the year relating to employee share-based payment plans of £5,442,000 (2021: £2,486,000) (note 28),
£1,029,000 (2021: £1,037,000) related to the vesting of deferred share awards made to executive directors and senior managers less £549,000 of share based payment
charge allocated to Non controlling interests.
Neither the Company nor its subsidiary undertakings had reserves available for distribution at 31 December 2022 or 31 December 2021.
30, Other reserves
Group
At 1 January 2022
Put option recognition
Put option revaluation
Foreign currency translation differences
At 31 December 2022
Group
At 1 January 2022
At 31 December 2022
At 1 January 2021
At 31 December 2021
Company
At 1 January 2022
Credit in relation to employee share schemes
At 31 December 2022
At 1 January 2021
Credit in relation to employee share schemes
At 31 December 2021
Translation
Reserve
£’000
–
–
–
7,825
7,825
Other equity
£’000
–
(38,996)
3,993
–
(35,003)
Merger reserve
£’000
2,291
–
–
–
2,291
Merger reserve
£’000
2,291
2,291
2,291
2,291
Merger reserve
£’000
1,580
–
1,580
Share Scheme
Reserve
£’000
18,792
6,471
25,263
1,580
–
1,580
15,269
3,523
18,792
Total
£’000
2,291
(38,996)
3,993
7,825
(24,887)
Total
£’000
2,291
2,291
2,291
2,291
Total
£’000
20,372
6,471
26,843
16,849
3,523
20,372
Merger reserve
The Group merger reserve at 31 December 2022 and 2021 comprised £711,000 arising from the consolidation of Oxford Biomedica (UK)
Ltd using the merger method of accounting in 1996, and £1,580,000 from the application of merger relief to the purchase of Oxxon
Therapeutics Limited in 2007.
Share scheme reserve
Options over the Company’s shares have been awarded to employees of Oxford Biomedica (UK) Ltd., Oxford Biomedica Solutions and
Oxford Biomedica (US) Inc. In accordance with IFRS 2 ’Share-based Payment’ the expense in respect of these awards is recognised
in the subsidiaries’ financial statements (see note 27). In accordance with IFRS 2, the Company has treated the awards as a capital
contribution to the subsidiaries, resulting in an increase in the cost of investment of £6,471,000 (2021: £3,523,000) (see note 14) and
a corresponding credit to reserves.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
31, Cash flows from operating activities
Reconciliation of loss before tax to net cash used in operations:
Continuing operations
(Loss)/profit before taxation
Adjustment for:
Depreciation
Amortisation of intangible assets
Loss on disposal of property, plant and equipment
(Gain) on sale and leaseback
Loss on disposal of intangible
Amortisation of loan fees
Finance costs
Charge in relation to employee share schemes
Non-cash loss
Changes in working capital:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Decrease in deferred income
Increase/(decrease)/ in contract liabilities
Decrease/(increase) in inventory
Net cash (used in)/generated from operations
Group
2022
£’000
2021
£’000
Company
2022
£’000
2021
£’000
(45,976)
19,880
(4,804)
(2,366)
20,271
6,088
28
(21,389)
27
588
15,756
6,471
51
(17,876)
16,959
(691)
5,852
688
(13,173)
12,435
21
–
–
–
–
888
3,981
165
6,891
(657)
(867)
(15,667)
(2,609)
24,461
323
–
–
–
–
588
14,033
–
–
–
6
–
–
–
10,146
–
–
–
–
–
–
–
–
–
–
17
–
–
–
(2,349)
32, Pension commitments
The Group operates a defined contribution pension scheme for its directors and employees. The assets of the scheme are held in
independently administered funds. The pension cost charge of £3,560,000 (2021: £2,839,000) represents amounts payable by the Group
to the scheme. Contributions of £403,000 (2021: £392,000), included in accruals, were payable to the scheme at the year-end.
33, Leases
The additions to right of use assets during the year relate to lease of at Patriot’s Park (£25.0 million) as part of the acquisition of Oxford
Biomedica Solutions, and £13.0 million related to the new lease liabilities as a result of the sale and leaseback of the Windrush Court facility
and the Wallingford Warehouse.
The additions in leases entered into during the year relate to those at Patriot’s Park £25.0 million respectively as part of the acquisition and
£39.2 million related to the new lease liabilities as a result of the sale and leaseback of the Windrush Court facility, and the lease
of the Wallingford Warehouse.
Sale and leaseback of Windrush Court
The Windrush Court building was owned and then sold by Oxford Biomedica (UK) Ltd in October 2022, after which the building was
immediately leased under a 15 year lease by Oxford Biomedica PLC on the same day. In the Company’s individual accounts, the Company
has accounted for the lease as a standalone lease with the resultant lease liability and matching right of use asset, whilst Oxford Biomedica
(UK) Ltd has accounted for the transaction as a standalone sale of an asset. However, from a Group perspective the transaction has been
accounted for as a sale and leaseback transaction as both companies form part of the same group and both the sale and leaseback was
negotiated and entered into at the same time.
The Group leases land and buildings and IT equipment. Information about leases for which the Group is a lessee is presented below:
Right-of-use assets:
Group
Balance at 1 January 2022
Acquisitions through business combinations
Foreign exchange
Additions
Change in estimate
Depreciation charge for the period
Balance at 31 December 2022
Property
£’000
11,450
24,974
2,072
13,038
(1,349)
(4,185)
46,000
Equipment
£’000
2,780
–
–
–
–
(730)
2,050
IT equipment
£’000
36
–
–
–
–
(36)
0
Total
£’000
14,266
24,974
2,072
13,038
(1,349)
(4,951)
48,050
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
Company
Balance at 1 January 2022
Additions
Depreciation charge for the period
Balance at 31 December 2022
Lease liabilities:
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
Six to ten years
More than ten years
Total undiscounted cash flows at 31 December 2022
Lease liabilities included in the Statement of Financial Position
Current
Non-current
Total lease liabilities at 31 December 2021
Amounts recognised in the profit or (loss)
Interest on lease liabilities
Expense relating to short term leases
Amounts recognised in the statement of cash flows
Total cash outflow for leases
175
Total
£’000
–
39,717
(323)
39,394
2021
£’000
–
–
–
–
–
2021
£’000
–
–
–
2021
£’000
–
–
2021
£’000
–
Property
£’000
–
39,717
(323)
39,394
Equipment
£’000
–
–
–
–
IT equipment
£’000
–
–
–
–
Group
Company
2022
£’000
9,179
43,035
42,224
25,059
119,497
2022
£’000
3,295
71,206
74,501
2022
£’000
3,124
178
2022
£’000
4,244
2021
£’000
1,590
5,883
5,071
913
13,457
2021
£’000
853
8,488
9,341
2021
£’000
873
369
2021
£’000
5,393
2022
£’000
3,500
13,300
23,491
22,935
63,226
2022
£’000
683
34,939
35,622
2022
£’000
477
–
2022
£’000
422
34, Contingent liabilities and capital commitments
The Group has a letter of credit £1,405,000 (2021: nil) related to the deposit on the Patriots park lease which is disclosed within Trade and
other receivables in non current assets. The Group had commitments of £2,882,000 for capital expenditure for leasehold improvements
and plant and equipment not provided for in the financial statements at 31 December 2022 (2021: £3,974,000).
35, Acquisition of subsidiary
On 10 March 2022, the Group acquired 74% of the shares and voting interests in Oxford Biomedica Solutions LLC for US$130 million.
As a result, the Group’s equity interest granted it control of Oxford Biomedica Solutions. Immediately following the acquisition, the Group
acquired a further 6% interest in Oxford Biomedica Solutions through an equity investment of £38.2 million (US$50 million) leading to
a dilution in the interests of Homology Medicines from 26% to 20% (refer note 37).
Included in the identifiable assets and liabilities acquired at the date of acquisition of Oxford Biomedica Solutions are inputs, production
processes and an organised workforce. The Group has determined that together the acquired inputs and processes significantly contribute
to the Group’s ability to create revenue. The Group has concluded that the acquired inputs and processes is a business.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements
176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
A. Consideration Transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred:
Cash
Total Consideration
B. Acquisition related expenses:
The Group incurred acquisition related legal and due diligence expenses of £5.1 million (2021: £1.2 million) which is included in
Administrative expenses.
C. Identifiable assets acquired and liabilities assumed:
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition:
Property, plant & equipment
Intangible assets
Inventory
Prepaid expenses
Lease Liabilities
Deferred tax liabilities
Total identifiable net assets acquired:
£’000
99,206
99,206
£’000
58,945
102,869
3,476
229
(24,974)
(7,307)
133,238
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
Assets acquired
Property plant and equipment
Intangible assets
Inventory
D. Goodwill
Valuation technique
Market comparison technique and cost technique – The valuation model considers market prices
for similar items when they are available, and depreciated replacement cost when appropriate.
Depreciated replacement cost reflects adjustments for physical deterioration as well as functional
and economic obsolescence
Multi-period excess earnings method – The multi-period excess earnings method considers the
present value of net cash flows expected to be generated by the client relationships, by excluding
any cash flows related to contributory assets.
Market comparison – To determine the fair value of the inventory, the Group obtained current prices
for each of the items making up the transferred inventory.
Consideration transferred
Interest in the identifiable net assets of non-controlling interests
Fair value of identifiable assets
Goodwill
£’000
99,206
34,642
(133,238)
610
The goodwill is attributable mainly to the skills and technical talent of Oxford Biomedica Solutions’ workforce. None of the goodwill
recognised is expected to be deductible for tax purposes.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
177
36, Non-controlling interest
The proportion of the identifiable net assets of the Non-controlling interest in Oxford Biomedica Solutions on acquisition was determined
to be £34,642,000. Following a review of the accounting for the acquisition of Oxford Biomedica Solutions it was identified that the fair
value initially attributed to the non-controlling interest was not appropriate. As a result, the group has elected to change its accounting
policy for the initial recognition of non-controlling interest from fair value at date of acquisition to the holders' proportionate interest in the
recognised amount of the identifiable net assets of the acquiree. This valuation method better reflects the value of the business attributable
to the non-controlling shareholders. This has resulted in a reduction in the initial value of non-controlling interest from £48.4 million to
£34.6 million, a corresponding reduction of 'Goodwill' recognised on acquisition from £14.4 million to £0.6 million and a reduction in the
'Acquisition of NCI without a change in control' of £11.3 million to £0.4 million. The overall impact of this to net assets is £13.8 million with
no impact to profit or loss recognised in the period.
The following table summarises the information relating to the Group’s subsidiary that has material NCI:
2022
NCI percentage
Non current assets
Current assets
Non-current liabilities
Current liabilities
Net assets¹
Net assets attributable to NCI
¹ Net assets include the impact of share based payments.
Revenue
Profit
OCI
Total comprehensive income
Profit allocated to NCI
OCI allocated to NCI
Cash flows from operating activities
Cash flows from investment activities
Cash flow from financing activities (dividends to NCI: nil)
Net increase in cash and cash equivalents
There was no Non-controlling interest in 2021.
£’000
20%
171,419
29,732
(7,473)
(35,979)
157,699
31,539
23,722
(30,011)
13,756
(16,255)
(6,002)
2,750
(9,732)
30,867
(2,293)
18,842
37, Acquisition of Non-controlling interest
On 10 March 2022, the Group acquired an additional 6% interest in Oxford Biomedica Solutions through an equity investment in Oxford
Biomedica Solutions of £38.2 million (US$50 million), increasing its ownership from 74% to 80%, leading to a dilution in the interests
of Homology Medicines from 26% to 20% . The carrying amount of Oxford Biomedica Solutions’ net assets in the Group’s consolidated
financial statements on the date of the acquisition was £133.2 million.
Carry amount of NCI acquired
Consideration paid to NCI
Increase in equity attributable to owners of the Company
The increase in equity attributable to owners of the Company comprised solely of an increase to retained earnings.
£’000
400
–
400
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 December 2022
38, Related party transactions
Identity of related parties
As at 31 December 2022, the Group consisted of:
— a parent, Oxford Biomedica plc,
— one wholly-owned UK trading subsidiary Oxford Biomedica (UK) Limited, the principal trading company,
— one US trading subsidiary, 80% owned, Oxford Biomedica Solutions LLC,
— one US subsidiary 100% owned, Oxford Biomedica (US) Inc,
— one Irish wholly-owned subsidiary of the parent company, Oxford Biomedica (Ireland) Ltd,
— one dormant subsidiary, Oxxon Therapeutics Limited which was acquired and became dormant in 2007 when its assets and trade
were transferred to Oxford Biomedica (UK) Limited, and
— one additional dormant subsidiary, Invivusbio Limited, which changed its name on 18 January 2023 from OXB Solutions Limited.
The registered office of the Company, it’s UK subsidiaries and Oxford Biomedica (US) Inc. is Windrush Court, Transport Way, Oxford
OX4 6LT. The registered office of Oxford Biomedica (Ireland) Ltd is Earlsfort Terrace, Dublin 2, DO2 T380, Ireland. The registered office
of OXB Solutions LLC is 1 Patriots Park, Bedford, MA 01730, USA.
The parent company is responsible for financing and setting Group strategy. Oxford Biomedica (UK) Limited carries out the UK elements
of the Group strategy, employs all the UK staff including the Executive Directors, and owns and manages all of the Group’s intellectual
property. Oxford Biomedica Solutions carries out the US equivalent activities.
The proceeds from the issue of shares by the parent are passed from Oxford Biomedica plc to Oxford Biomedica (UK) Limited as a loan,
and Oxford Biomedica (UK) Limited manages Group funds and makes payments, including the expenses of the parent company.
Company: transactions with subsidiaries
Purchases:
Parent company expenses paid by subsidiary
Cash management:
Cash loaned by parent to subsidiary Oxford Biomedica (UK) Limited
Cash loaned by parent to subsidiary Oxford Biomedica (US) Inc.
2022
£’000
2021
£’000
(10,941)
(749)
15,780
148,764
12,000
–
The loans from Oxford Biomedica plc to Oxford Biomedica (UK) Limited and Oxford Biomedica (US) Inc. are unsecured and interest free.
The loans are not due, planned or expected for repayment within 12 months of the year end. The year-end balance on the loans was:
Company: year-end balance of loan
Loan to subsidiary
Oxford Biomedica (UK) Limited
Oxford Biomedica (US) Inc
2022
£’000
278,091
148,764
2021
£’000
273,253
–
The investment in the subsidiary, of which the loan forms part, has been impaired by £126.0 million (note 14) in previous years.
Other Related Party Transactions
Sales of goods and services: Homology Medicines
Purchase of services: Homology Medicines
Other: Homology Medicines – rental income
Transactions
2022
£’000
23,252
4,258
1,085
2021
£’000
–
–
–
Balance Outstanding
2022
£’000
4,334
1,158
424
2021
£’000
–
–
–
In addition to the transactions above, options over the Company’s shares have been awarded to employees of subsidiary companies.
In accordance with IFRS 2, the Company has treated the awards as a capital contribution to the subsidiaries, resulting in a cumulative
increase in the cost of investment of £25,265,000 (2021: £18,793,000).
There were no transactions (2021: none) with Oxxon Therapeutics Limited.
Company: transactions with related parties
There were no other outstanding balances in respect of transactions with Directors and connected persons at 31 December 2022
(2021: none). Key person remuneration can be seen in note 5 of the financial statements.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements
GLOSSARY
179
Oxford Biomedica specific terminology
Terminology not specific to Oxford Biomedica
LentiVector® platform
Oxford Biomedica’s LentiVector® platform technology is an
advanced lentiviral vector based gene delivery system which is
designed to overcome the safety and delivery problems associated
with earlier generations of vector systems. The technology can
stably deliver genes into cells with up to 100% efficiency and
can integrate genes into non-dividing cells including neurons in
the brain and retinal cells in the eye. In such cell types, studies
suggest that gene expression could be maintained indefinitely.
The LentiVector® platform technology also has a larger capacity
than most other vector systems and can accommodate multiple
therapeutic genes.
Adeno-associated viral vectors (AAV)
AAV based vectors are small and are generally administered
directly to patients into target tissues or into the blood. They allow
expression of the therapeutic protein in cells that generally do not
divide such as in the liver, the brain or eye.
Adenoviral vectors
Adenoviral based vectors are often used to make vaccines
to combat pathogens (such as the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine). They work by expressing a protein
in the vaccine recipient’s cells to generate an immune response.
AXO-Lenti-PD (formerly OXB-102: Parkinson’s disease)
Axo-Lenti-PD (formerly OXB-102) is a gene-based treatment for
Parkinson’s disease, a progressive movement disorder caused by
the degeneration of dopamine producing nerve cells in the brain.
OXB-102 uses the Company’s LentiVector® platform technology
to deliver the genes for three enzymes that are required for
the synthesis of dopamine. The product is administered locally
to the region of the brain called the striatum, converting cells into
a replacement dopamine factory within the brain, thus replacing
the patient’s own lost source of the neurotransmitter.
OXB-302 (CAR-T 5T4): cancer
OXB-302 aims to destroy cancerous cells expressing the 5T4
tumour antigen. It uses the Group’s LentiVector® platform™ to
deliver a Chimeric Antigen Receptor (CAR) to target the 5T4
tumour antigen expressed on the surface of most solid tumours
and some haematological malignancies.
BBSRC CTP programme
This Biological Sciences Research Council (BBSRC) collaborative
training partnerships (CTP) programme is a funding opportunity
from the UK Research and Innovation organisation. UK registered
businesses can apply for funding to set up and run collaborative
training partnerships, in collaboration with research organisations.
These partnerships should address industrial research challenges.
The programme aims to: build capacity; address strategic skills
challenges in the UK bioeconomy; provide candidates with
research, innovation and transferable skills.
BREEAM
BREEAM (Building Research Establishment Environmental
Assessment Method), first published by the Building Research
Establishment (BRE) in 1990, is the world’s longest established
method of assessing, rating, and certifying the sustainability of
buildings.
CAR-T therapy
Adoptive transfer of T cells expressing Chimeric Antigen Receptors
(CAR) is an anti-cancer therapeutic as CAR modified T cells can be
engineered to target virtually any tumour associated antigen.
CDMO
(Contract Development and Manufacturing Organisation)
A CDMO is a company that serves other companies in the
pharmaceutical industry on a contract basis to provide
comprehensive services from drug development through to drug
manufacturing.
Cell therapy
Cell therapy is defined as the administration of live whole cells in a
patient for the treatment of a disease often in an ex vivo setting.
CLIMADA
CLIMate ADAptation a probabilistic natural catastrophe impact model
Clinical trials (testing in humans)
Clinical trials involving new drugs are commonly classified into
three phases. Each phase of the drug approval process is treated
as a separate clinical trial. The drug-development process will
normally proceed through the phases over many years. If the drug
successfully passes through all phases it may be approved by the
regulatory authorities:
— Phase I: screening for safety
— Phase II: establishing the efficacy of the drug, usually against a
placebo
— Phase III: final confirmation of safety and efficacy
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 180
GLOSSARY
CMC (Chemistry, Manufacturing and Controls)
To appropriately manufacture a pharmaceutical or biologic
product, specific manufacturing processes, product characteristics,
and product testing must be defined in order to ensure that the
product is safe, effective and consistent between batches. These
activities are known as CMC, chemistry, manufacturing and
controls.
CMIP
Coupled Model Intercomparison Project
CTL019
CTL019 is a CAR-T cell therapy for patients with B cell cancers
such as acute lymphoblastic leukemia (ALL), B cell non-Hodgkin
lymphoma (NHL), adult disease chronic lymphocytic leukemia
(CLL) and diffuse large B cell lymphoma.
DLBCL
Diffuse large B-cell lymphoma (DLBCL) is a cancer of B cells, a type
of white blood cell responsible for producing antibodies. It is the
most common type of non-Hodgkin lymphoma among adults.
DNA
Deoxyribonucleic acid (DNA) is a molecule that carries genetic
information.
EMA
European Medicines Agency (EMA) is an agency of the European
Union in charge of the evaluation and supervision of medicinal
products.
ex vivo
Latin term used to describe biological events that take place
outside the bodies of living organisms.
FDA
US Food and Drug Administration (FDA) is responsible for
protecting the public health by assuring the safety, effectiveness,
quality, and security of human and veterinary drugs, vaccines and
other biological products, and medical devices.
FEMA
FEMA is the Federal Emergency Management Agency
Gene therapy
Gene therapy is the use of DNA to treat disease by delivering
therapeutic DNA into a patient’s cells which can be in an ex vivo or
in vivo setting. The most common form of gene therapy involves
using DNA that encodes a functional, therapeutic gene to replace a
mutated gene. Other forms involve directly correcting a mutation,
or using DNA that encodes a therapeutic protein drug to provide
treatment.
GxP, GMP, GCP, GLP
GxP is a general term for Good (Anything) Practice. GMP, GCP and
GLP are the practices required to conform to guidelines laid down
by relevant agencies for manufacturing, clinical and laboratory
activities.
HSC
Haematopoietic stem cell
in vitro
Latin term (for within the glass) refers to the technique of
performing a given procedure in a controlled environment outside
of a living organism.
in vivo
Latin term used to describe biological events that take place inside
the bodies of living organisms.
IP
Intellectual Property (IP) refers to creative work which can be
treated as an asset or physical property. Intellectual property rights
fall principally into four main areas; copyright, trademarks, design
rights and patents.
LentiStable™
Oxford Biomedica has developed highly efficient packaging and
producer cell lines, which enable scalable and cost-effective
manufacturing. LentiStable™ is the result of more than 15 years of
optimisation work. Our cutting-edge, automated technologies
enable us to streamline production, minimise process risks and
reduce costs.
Lentiviral vectors
Lentiviral based vectors integrate into patients’ cells and give rise
to long term expression and can be used in both dividing and non-
dividing cells, to treat conditions such as immunodeficiencies or
cancer through CAR-T therapy.
LOCA
Localised Constructed Analogue
MHRA
Medicines and Healthcare products Regulatory Agency (MHRA)
is an Executive agency of the Department of Health and Social
Care in the United Kingdom which is responsible for ensuring that
medicines and medical devices work and are acceptably safe.
MSDA
Manufacturing Services and Development Agreement
NGFS
The Network of Central Banks and Supervisors for Greening the
Financial System
NOAA
National Oceanic and Atmospheric Administration
Oxford AstraZeneca COVID-19 vaccine
The adenovirus-based Oxford AstraZeneca COVID-19 vaccine,
Vaxzevria (formerly known as AZD1222), was co-invented by the
University of Oxford and its spin-out company, Vaccitech. The
adenovirus-based Oxford AstraZeneca COVID-19 vaccine uses a
replication deficient chimpanzee viral vector based on a weakened
version of a common cold virus (adenovirus) that causes infections
in chimpanzees and contains the genetic material of the SARS-
CoV-2 virus spike protein. After vaccination, the surface spike
protein is produced, priming the immune system to attack the
SARS-CoV-2 virus if it later infects the body.
The vaccine has been granted a conditional marketing
authorisation or emergency use in more than 90 countries. It also
has Emergency Use Listing from the World Health Organization,
which accelerates the pathway to access in up to 144 countries
through the COVAX Facility.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial Statements 181
Definitions of non-GAAP measures
Operating EBITDA
(Earnings Before Interest, Tax, Depreciation, Amortisation,
revaluation of investments and assets at fair value through profit
and loss, and Share Based Payments) is a non-GAAP measure
often used as a surrogate for operational cash flow as it excludes
from operating profit or loss all non-cash items, including the
charge for share based payments. However, deferred bonus share
option charges are not added back to operating profits in the
determination of Operating EBITDA as they may be paid in cash
upon the instruction of the Remuneration Committee.
Adjusted Operating expenses
Being Operating expenses before Depreciation, Amortisation and
Share based payments and the revaluation of investments.
Cash burn
Cash burn is net cash generated from operations plus net interest
paid plus capital expenditure.
Pre-clinical studies
Pre-clinical studies (also known as non-clinical studies) is the stage
of research that takes place before clinical trials can begin during
which important feasibility, iterative testing and drug safety data is
collected.
Process C
Process C utilises perfusion-mode production, as opposed to the
more typical batch-mode production. Process C works together
with production enhancers (such as U1, U2) and has resulted in
process improvements by as much as tenfold, without the need
for an increase in bioreactor size, and yielding significantly more
lentiviral vector per batch.
RCP
Representative Concentration Pathway
r/r paediatric ALL
Relapsed or refractory (r/r) acute lymphoblastic leukaemia (ALL) is
a type of cancer in which the bone marrow in children and young
adults make too many immature B lymphocytes (a type of white
blood cell) that are resistant to treatment.
SecNuc™
We have developed a highly efficient way to maximise LVV, AAV
and AdV quality by using secreted nucleases in co-production with
viral vector manufacture (SecNuc™). SecNuc has the potential to
reduce manufacturing costs and production timeline, streamline
downstream steps and facilitates scale up.
SSP2
Shared Socioeconomic Pathway 2
STAC
Scientific, Technology and Advisory Committee
STEM
Science, Technology, Engineering and Mathematics
TRiPSystem™
The TRiP System™ maximises vector production yield and quality.
The TRiP System™ can significantly improve yield and particle purity.
It also enables the development of vectors carrying cytotoxic
transgenes, or those that inhibit cell growth.
U1
U1 is a novel enhancer of lentiviral vector production. Oxford
Biomedica has generated a modified U1 that increases lentiviral
vector titres and improves the P-to-I ratio.
UK Corporate Governance Code
The UK Corporate Governance Code is published by the UK
Financial Reporting Council and sets out standards of good
practice in relationship to board leadership and effectiveness,
remuneration, accountability and relations with shareholders.
Viral vectors
Are tools commonly based on viruses used by molecular biologists
to deliver genetic material into cells.
Oxford Biomedica plc | Annual report and accounts 2022 | Financial StatementsStrategic ReportCorporate GovernanceGroup Financial Statements 182
ADVISORS AND CONTACT DETAILS
Advisors
Contact details
Oxford Biomedica plc
Windrush Court
Transport Way
Oxford OX4 6LT
United Kingdom
Tel: +44 (0) 1865 783 000
Financial adviser and
joint broker
Peel Hunt
7th Floor
100 Liverpool Street
London EC2M 2AT
United Kingdom
Financial adviser and
joint broker
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP
Financial and corporate
communications
Consilium Strategic
Communications
85 Gresham Street
London EC2V 7NQ
United Kingdom
Registered independent
auditors
KPMG LLP
2 Forbury Place
33 Forbury Road
Reading
RG1 3AD
United Kingdom
Solicitors
Covington & Burling LLP
22 Bishopsgate
London EC2N 4BQ
United Kingdom
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Company secretary
and registered office
Natalie Walter
Windrush Court
Transport Way
Oxford OX4 6LT
United Kingdom
Oxford Biomedica plc | Annual report and accounts 2022 | Group financial statements
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Oxford Biomedica plc
Windrush Court, Transport Way
Oxford OX4 6LT, United Kingdom
Tel: +44 (0) 1865 783 000
enquiries@oxb.com
www.oxb.com