A QUALITY AND
INNOVATION-LED
CELL AND GENE
THERAPY CDMO
Annual Report and Accounts 2023
2
OXFORD BIOMEDICA IN BRIEF
CONTENTS
A quality and innovation-led cell and gene
therapy CDMO with a mission to enable its
clients to deliver life changing therapies to
patients around the world.
One of the 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 (also referred to as OXB)
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), adenoviral vectors and
other viral vector types. 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, a FTSE4Good
constituent, is headquartered in
Oxford, UK. It has bioprocessing
and manufacturing facilities across
Oxfordshire, UK, Lyon and Strasbourg,
France, and near Boston, US.
Strategic report
Chair's statement
Operational and Financial Highlights 2023
Market overview
Group at a glance
Transformation and integration of the OXB global
site network
Business Model
Oxford Biomedica's stakeholders
Stakeholder case study
Chief Executive Officer's and 2023 performance review
CDMO Services
Management Team
Financial review
Objectives set for 2024
Sustainability report (ESG)
– Analysis of materials
– People
– Supply Chain
– Innovation
– Community
– Environmental
– Governance, Integrity and Ethics
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
Consolidated Statement of Comprehensive Income
Consolidated and Company Statement of
Financial Position
Consolidated and Company Statement of Cash Flows
Consolidated Statement of Changes in Equity
Attributable to Owners of the Parent
Company Statement of Changes in Equity Attributable
to Owners of the Parent
Notes to the Financial Information
Other information
Glossary
Advisers and contact details
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Strategic report
Corporate Governance
Financial statements
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Oxford Biomedica PLC | Annual Report and Accounts 2023 | Strategic report
POSITIONED FOR COMMERCIAL SUCCESSThe current drivers in the cell and gene therapy market align perfectly with our strategy, and we are already seeing the positive effects of this, particularly with the progress of our client portfolio and robust business development activity.CREATING SUCCESS FOR OUR CLIENTSWith a multi-vector multi-site model spanning the UK, the US and the EU, we are uniquely positioned to build a world-leading cell and gene therapy CDMO. 4
Chair's statement
In 2023, Oxford Biomedica made significant advancements to
become a leading pure-play cell and gene therapy CDMO.
In the year, our efforts were concentrated on establishing
global leadership in developing and manufacturing high-quality
viral vectors for cell and gene therapy and achieving strong
sustainable growth to provide attractive returns for shareholders.
Under the stewardship of our new CEO, Dr. Frank Mathias,
we initiated a strategic reset which involved a comprehensive
realignment of the business, together with significant
restructuring of our business operations and streamlining of our
cost base. This has enabled us to be optimally positioned to
focus on serving our clients and facilitate the delivery of life-
changing cell and gene therapies to patients.
Whilst 2023 was a challenging year for the Group with an
impairment to the US business as a result of the termination
of revenues from Homology Medicines Inc. (Homology), and
financial performance impacted by the non-recurrence of
COVID-19 vaccine bioprocessing volumes, the repositioning of
our business has provided a clear pathway to profitability which
is reflected in our medium-term financial guidance set out on
page 40.
Building a world-leading cell and gene therapy CDMO
Dr. Frank Mathias, who assumed the role of CEO in March
2023, has been instrumental in guiding OXB towards its
goal of becoming a global pure-play quality and innovation-
led CDMO. Under his leadership, we have implemented
necessary restructuring to exit all non-CDMO activities and
have strengthened our operations in the UK, the US and the
EU through the acquisition of ABL Europe SAS (ABL Europe)
from Institut Mérieux which completed on 29 January 2024.
We have also significantly expanded our commercial capabilities,
increasing business development activities to open up potential
revenue opportunities. The acquisition of ABL Europe (recently
renamed Oxford Biomedica (France) SAS or Oxford Biomedica
(France)), completed post period-end provided us not only
with a bioprocessing and manufacturing footprint in the EU,
but also increased our capacity for process and analytical
development, enabling OXB to unleash growth. With a multi-
vector multi-site model spanning the UK, the US and the EU, we
are uniquely positioned to build a world-leading cell and gene
therapy CDMO.
Oxford Biomedica PLC | Annual Report and Accounts 2023
In 2023, Oxford Biomedica made significant advancements to become a leading pure-play cell and gene therapy CDMO.Dr. Roch DoliveuxChair
Strategic report
Corporate Governance
Financial statements
5
Oxford Biomedica's market opportunity in a rapidly
growing sector
Building on our strategic advancements and the establishment
of a robust infrastructure, Oxford Biomedica is harnessing the
anticipated surge in demand from the rapidly growing cell and
gene therapy sector. This sector is characterised by a growing
number of approvals, late-stage trials, and a pipeline of therapies
in development, all of which indicate significant progress in the
advancement of cell and gene therapy candidates. Specifically
in 2023, the pipeline of cell and gene therapy candidates in
development reached nearly 2,100, up from 1,321 in 2010.
By the end of 2023, 30 gene therapies had been approved
globally, compared to 24 at the end of 2022 (ASGCT, 2023;
ASGCT, 2022).
Leveraging the promising market landscape, we have now
strategically positioned ourselves to align to our clients' needs,
including both biotech and large biopharma companies, with
end-to-end process development and manufacturing solutions.
Our well-resourced commercial team, with a viral vector-
agnostic approach, has already achieved significant success
in building commercial momentum and with our repositioned
offering. Our orders grew by more than 50% during 2023
(excluding COVID-19 vaccine manufacturing), with a robust
growing business pipeline across all key vector types and
clinical stages.
Furthermore, in our pursuit of transparency and operational
excellence, we have developed a new set of Key Performance
Indicators (KPIs). These KPIs will help focus our efforts as a
leading CDMO and also allow the financial markets to be able
to track our commercial and future revenue progress from
2024 onwards.
Our governance and commitment to ethical operations
In the past year, we have continued to strengthen our Board
and the Corporate Executive Team (CET - previously known
as the Senior Executive Team (SET) until November 2023) to
align with the repositioned business strategy whilst continuing to
increase diversity. After CEO Dr. Frank Mathias was appointed as
an Executive Director in March 2023, Leone Patterson joined the
Board as an independent Non-Executive Director in May 2023.
Meanwhile, biopharma veteran, Dr. Sam Rasty left the Board in
June 2023, and I would like to express my gratitude for his
service to OXB. As part of our annual Board performance review,
our Senior Independent Director, on behalf of the Nomination
Committee, initiated an in-depth skills review
to fit the new pure-play CDMO strategy.
Post period-end, we announced the decision to streamline
the Board and bolster its CDMO expertise, as part of our
transformation into a pure-play CDMO. Peter Soelkner joined
the Board as an independent Non-Executive Director in March
2024, bringing an impressive track record from a leading global
non-competing CDMO. Having played a defining role in shaping
OXB’s new strategy, Catherine Moukheibir and Dr. Michael
Hayden will not be standing for re-election at the forthcoming
Annual General Meeting in June 2024. We thank them both
for their impeccable service and contribution to the business.
Dr. Michael Hayden will remain an advisor to the Science and
Technology Advisory Committee.
OXB remains dedicated to ethical and socially responsible
operations. Our mission to facilitate the delivery of life-changing
therapies is deeply embedded in our business focus and
practices, and we are proud of our inclusion in the FTSE4Good
index. In 2024, our sustainability strategy will be reviewed to
reflect OXB’s strategic reset as a pure-play CDMO to ensure
that we continue to take a responsible and sustainable approach
to managing our people, engaging with our communities,
protecting the environment and governing our operations.
The future of Oxford Biomedica
While we had to take the difficult decision to reorganise our
workforce during 2023, looking ahead, I am highly optimistic
about our future success as a business, driven by our strategic
focus on integration as "One OXB". With a highly skilled team
in place, we are well-positioned to succeed as a global, client-
centric cell and gene therapy CDMO. The current drivers in
the cell and gene therapy market align perfectly with our
strategy, and we are already seeing the positive effects of this,
particularly with the progress of our client portfolio and robust
business development activity. Oxford Biomedica's commitment
to transforming lives through cell and gene therapy remains
unwavering. I would like to thank all of our shareholders for their
continued support and welcome our new shareholders such as
Institut Mérieux. Finally, a huge thank you to all of our staff for
their hard work and contributions to OXB, as well as their ability
to embrace change, both now and in the future.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Our purposeTransforming lives through gene and cell therapy.
6
Operational and Financial
Highlights 2023
• Newly appointed Chief Executive
Officer Dr. Frank Mathias has led the
transformation of OXB to a global
pure-play quality and innovation-led
cell and gene therapy CDMO
• Commenced reorganising of
operations and streamlining under
the banner of the new “One OXB”
strategy, including:
◦ Conclusion of workforce
reorganisation including a more
streamlined structure across the
UK and the US and the alignment
of roles and operations with the
specific requirements of a pure-
play CDMO
◦ Move to a site-based model,
with operations in the UK and
the US, and post period-end, the
EU (France)
• Continued strong demand for OXB's
CDMO services across all key viral
vector types:
◦ CDMO portfolio continues to
grow and diversify; now working
with 35 clients on 51 client
programmes as of April 2024
(April 2023: 18 clients and
34 programmes), including new
clients gained through Oxford
Biomedica (France)
The contracted value of client
orders signed in 2023 was
£131 million, an increase of over
50% compared to £85 million
in the year ended 31 December
2022 (excluding COVID-19
vaccine manufacturing)
◦
•
◦ Growth in business development
pipeline by 51% from January to
December 2023
Acquisition of ABL Europe (recently
renamed Oxford Biomedica (France))
from Institut Mérieux, completed
post-period end, provides a
bioprocessing and manufacturing
footprint in the EU, strengthening
the Group’s move to a multi-vector,
multi-site model spanning the UK,
the US and the EU
•
•
•
•
•
Post-period end, completed transfer
of lentiviral vector capabilities to
OXB’s US site, with the delivery of
the 5L scale down model process
and accompanying analytics at the
end of March 2024
Launch of the TetraVecta™ system,
OXB’s 4th generation lentiviral
vector delivery system in May 2023,
which allows for higher quality,
potency, safety, expression level and
packaging capacity
Strengthening of OXB’s senior
management team with the addition
of experienced CDMO experts;
Mark Caswell, Site Head of US
Operations and Thierry Cournez,
Chief Operating Officer and UK
Site Head
Exited all non-CDMO activities with
the discontinuation of work on
internal product development in the
second half of 2023
Total revenues decreased by 36% to
£89.5 million (2022 £140.0 million)
due to the non-recurrence of
revenues from the manufacturing
of vaccine batches for AstraZeneca,
offset by a small increase in non-
vaccine revenues when compared to
the prior year.
• Operating EBITDA1 loss and
operating loss of £(52.8) million
and £(184.2) million respectively
(2022 Operating EBITDA profit and
operating profit of £1.6 million
and £(30.2) million respectively)
worsened as a result of the decrease
in revenues, restructuring costs of
£5.6 million, a smaller profit on
sale of property when compared to
2022, partly offset by a lower overall
cost base. The 2023 operating loss
was also negatively impacted by the
impairment of the US business of
£99.3 million.
• Due to the decision by Homology
to cease clinical activities, the
Group performed an impairment
assessment of OXB (US) LLC,
resulting in an impairment of
£99.3 million (2022: £nil).
• Cash at 31 December 2023 was
£103.7 million (2022:£141.3 million);
Net cash at 31 December 2023 was
£65.2 million (2022: £101.5 million).
•
Revenue backlog (including France)
at 31 March 2024 stood at
£104 million, a growth of 11% from
£94 million on 31 December 2023
(excludes order from recently signed
commercial agreement); this is the
amount of future revenue available
to earn from current orders.
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 33.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
7
•
•
The business reorganisation
completed in the second half of
2023 has resulted in a reduction
of the ongoing cost base from
1 January 2024 by circa £30 million
on an annualised basis compared
to 2023.
The Group reiterates existing
near term and medium term
financial guidance communicated to
the market:
◦
2024 total Group revenues
of between £126 million and
£134 million, with a three-year
revenue CAGR of more than 35%
for the year's 2023-2026
Broadly breakeven EBITDA in
2024, excluding the impact of
the acquisition of ABL Europe
(recently renamed Oxford
Biomedica (France))
A modest operating loss in 2024
is expected due to the recently
acquired sites in France, which
will be fully funded by the
€10 million cash funding in ABL
Europe from Institut Mérieux as
part of the transaction
The Group expects to achieve
Operating EBITDA margins in
excess of 20% by the end of
2026, and to be profitable on an
EBITDA level in 2025.
◦
◦
◦
Oxford Biomedica PLC | Annual Report and Accounts 2023
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Market overview
The cell and gene therapy sector
continues to produce more life-
changing approvals and clinical
developments that are further
transforming medicine. This has
created a new paradigm in
healthcare, offering solutions for
conditions for which there are
few treatment options available and
no cures. Currently valued at an
estimated $2.8 billion, the viral
vector outsourced supply market is
projected to grow at a rate of
approximately 20% over the next
four years.
A key factor driving the expansion of the cell and gene
therapy market is the increase in the number of products being
developed. Since 2020, the pipeline of therapies in development
has grown by around 17% per year, reaching 2,099 candidates
in 2023, up from 1,321 in 2020. This growth is largely driven by
pre-clinical molecules (see figure below).
Regulatory approvals for cell and gene therapies have also been
on the rise. The FDA has reported a 10% increase in approvals for
commercial molecules, with cell and gene therapies accounting
for 10% of total FDA approvals in 2023, up from 4% in
2020 (see figure below). Improved accessibility to state-of-the-
art technology at more affordable prices is another factor
contributing to the sector's growth. This increased accessibility
is attracting more players to enter the field, fostering innovation
and driving further expansion.
Looking ahead, 2024 is expected to see the highest number
of commercially approved cell and gene therapy molecules to
date, indicating increasing commercial maturity in the sector.
With ongoing product development, rising regulatory approvals,
and improved access to advanced technology, the cell and gene
therapy sector is on a promising trajectory. It has the potential
to revolutionise healthcare by offering unprecedented treatment
options and potential cures.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Pipeline growth Growth of the overall pipeline for cell and gene therapies based on the number of molecules202220232,0312,0991,7451,3211,539202120201,223911# of molecules5601,480551522410+16.7%+69%FDA approvals Cell and gene therapies approvals as % of total approved molecules from 2020-23202220232021202070%64%56%53%% of FDA approvals20%24%26%24%6%6%6%11%13%4%7%10% Clinical Pre-clinical CGT mABs Other biologics Small moleculesSource: ASGCT Quarterly Data Reports (2020 – 2023)Source: Cell & Gene (2024) Strategic report
Corporate Governance
Financial statements
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Oxford Biomedica PLC | Annual Report and Accounts 2023
Oxford Biomedica is harnessing the anticipated surge in demand from the rapidly growing gene and cell therapy sector. There are a growing number of approvals, late-stage trials, and a pipeline of therapies in development.A RAPIDLY GROWING SECTOR 10
Oxford Biomedica PLC | Annual Report and Accounts 2023
35Number of clients 51Client programmes 714Number of employees** As at 31 December 202310Number of facilities 51Total number of programmes As at April 2024, including post-period events. Includes Oxford Biomedica (France)— A quality and innovation-led pure-play CDMO with 25+ years of experience— First commercial supplier of lentiviral vectors for a CAR-T therapy— Vector agnostic with in-depth platform knowledge spanning lentivirus, adenovirus and AAV— End-to-end capabilities from plasmid design to commercial CGMP manufacturing— 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®Group at a glanceWHO IS OXFORD BIOMEDICA?KEY STATSAs at April 2024, including post-period events. Includes Oxford Biomedica (France)KEY CLIENTSLarge pharma, established biotech and emerging biotech clients include:Pre-clinical through to early-stage clinical 46Late stage clinical 3 Commercial agreements 2CLIENT PORTFOLIO AT A GLANCE Strategic report
Corporate Governance
Financial statements
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Oxford Biomedica PLC | Annual Report and Accounts 2023
WHERE IS OXFORD BIOMEDICA BASED?Facilities and locationsOxford Biomedica has ten facilities across Oxford, UK; Dublin, Ireland; Boston, US and Strasbourg and Lyon, France. The Group’s facilities in Strasboug and Lyon, France, were added in January 2024 following the acquisition of ABL Europe from Institut Mérieux. 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— Detailed design for fit out of 1,850 m2 (20,000 ft2) fallow area to provide 2 x 2000L GMP further production suites is complete and build will commence subject to review of global site capabilities and future business demand 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 developmentYarnton, Oxford, UK (3)— 1,700 m2 (18,300 ft2) of commercial (FDA/MHRA) manufacturing space— 1 x GMP production suite, satellite warehouse and microbiology QC laboratoryHarrow House and Chancery Gate, Oxford, UK (4)— 370 m2 (4,000 ft2) of commercial (FDA/MHRA) manufacturing space — 1 x GMP production suites— Microbiology QC laboratoryCorporate Head Office, Oxford, UK* (5)— Located on an 1,020 m2 (11,000 ft2) site within Oxford Business Park— Houses CET and various support functions* Will be vacated by the end of Q2 2024.Wallingford Warehouse (6)— 4,181 m2 (45,000 ft2) of warehouse space— Dedicated storage space for ambient raw materialsPatriots Park, Boston, MA, US (7)— Facility size c.8,450m2 (91,000 ft2)— 3 x GMP production suites with potential for expansionEarlsfort Terrace, Dublin, Ireland (8)— Located in offices within Dublin’s city centre— Base for quality assurance staff to release product within the EUStrasboug, France (9)— 3,950m2 (42,500 ft2) of commercial EMA manufacturing space— 2x GMP production suites, process development and analytical development labs— Base for quality assurance staff to release product within the EULyon, France (10)— 2,570m2 (27,700 ft2) of commercial EMA manufacturing space— 3x GMP production suites, 1x fill finish suite and quality control lab— Base for quality assurance staff to release product within the EU 10 9 8 1 3 4 6 2 5 7 1 2 3 4 5 6 8 9 10 7USUKEU 12
Transformation and integration of the
OXB global site network
Oxford Biomedica PLC | Annual Report and Accounts 2023
Examples of the One OXB 20 integration workstreamsGenerate increasing returnsOperate a client centric organisationDeliver excellent client experiencesInvest to better serve clientsAttract, develop and retain highly motivated peopleExpand existing partnerships and attract new clientsStreamline operations to enhance efficienciesLeverage our portfolio of CDMO servicesInnovate to help our clients bring their treatments to market fasterProvide best-in-class pure-play CDMO practices Deliver platform technologies from all 3 geographies Foster a unified One OXB culture and set of global values Strategic report
Corporate Governance
Financial statements
13
Oxford Biomedica PLC | Annual Report and Accounts 2023
The "One OXB" strategy is based on operations in the UK, the US and the EU which are globally aligned enabling the Group to benefit from increased efficiency and agility.INCREASED EFFICIENCY AND AGILITY 14
Business Model
Oxford Biomedica PLC | Annual Report and Accounts 2023
Drug development phases Our solutions Size of batches 1 CDMO revenuesUp to 50-2,000 Litre$ — $$200 to 2,000 Litre$$ — $$$200 to 2,000 Litre$$$Up to 5LUp to 50L50 to 200L200 to 1,000L200 to 1,000LSize of batches*Up to 5LUp to 50L50 to 200L200 to 1,000L200 to 1,000LSize of batches*Providing innovative process development and manufacturing services in a fast-growing sectorOXB provides client-centric CDMO services to pharmaceutical and biotech companies in the fast-growing cell and gene therapy sector. OXB’s world-leading viral vector manufacturing expertise in lentiviral vectors, AAV and adenoviral vectors means that it is able to offer innovative process development and manufacturing services to its clients, developing and manufacturing commercially scalable cell and gene therapy products across a broad range of therapeutic areas.Proprietary platform and world leading industry expertise delivering revenuesOXB’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. In addition to its LentiVector® platform, OXB also generates revenues through its CDMO services from its AAV platform, InAAVate™, and its adenoviral vector platform, AdenoVate™. 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).Using innovation and development to drive industrialisationInnovation and development across all viral vector classes are core to the OXB’s goal of industrialising viral vector manufacturing. By industrialising viral vector production, reducing costs and improving quality through innovation, OXB 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.Pre-clinicalPhase 1Phase 2Early: developing robust process and delivering clinical materialPhase 3Late: ensuring scalability and enabling tech transfer Selected services: Development & Analytics GMPFeasibility StudiesProcess DevelopmentAnalytical DevelopmentPilot Scale ProductionProcess Characterisation & ValidationClinical GMPPPQ campaignsCommercialCommercial: large scale commercial supplyCommercial GMPNote: Illustration of potential OXB revenue streams throughout the product development process. The timing of OXB revenue recognition from executed contracts will vary depending on agreements with clients.1. Batches dependent on type of therapeutic product and viral vectorIllustrative Oxford Biomedica revenue streams from CDMO services Strategic report
Corporate Governance
Financial statements
15
Oxford Biomedica'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 (1) 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 (1) of the Companies Act 2006 (as shown in
the case study on pages 20-21. 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 Sustainability (ESG) report on pages 42-66.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Key stakeholdersThe 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 16
OXFORD BIOMEDICA'S STAKEHOLDERS (CONTINUED)
How the Board and the wider
Group engages
Material
Issues identified
Highlights of how the material issues
were addressed in 2023
Patient safety and
product efficacy.
Enabling client-led
product candidates
to enter the
market as quickly
as possible.
Technologies developed with patient
safety and product efficacy at
the centre enabling thousands of
patients to be treated with OXB’s
lentiviral vectors.
Further links
p 47 Innovation
p 22-27 Chief
Executive Officer's
2023 performance
review
Well-designed and efficient processes
and capabilities assist client-led
product candidates to enter the
market as quickly as possible.
p 42 Oxford
Biomedica's
ESG mission
p 65 Clinical trials
The recent addition of capabilities
in France together with increasing
and sharing of capabilities across
the UK and the US sites (e.g.
transfer of lentiviral vector capabilities
to the US site in Bedford, and
operational fill/finish in Oxbox) enable
the Group to broaden the scope of
its commercial scale expertise and
to roll out its expanded capabilities
to new and existing clients ultimately
benefiting patients.
Strategy and
business model.
Financial
performance.
Remuneration
Policy.
Regular meetings/calls with the
investor community held virtually and
in person in 2023 to communicate the
change in strategy and the financial
performance of the Group.
p
22-27 Corporate
and Organisational
development -
CEO's Statement
Shareholders were invited to listen
and/or attend the AGM and vote by
proxy or in person when attending.
Following the 2023 AGM, the
Remuneration Committee engaged
with a number of shareholders to
understand their perspectives on our
Directors’ remuneration arrangements.
In response, the Remuneration
Committee has reviewed the executive
bonus calculations and reporting,
alongside simplifying the new
Remuneration Policy to be adopted at
the 2024 AGM.
p 30-40 Financial
review
p 42-66 ESG
p 73 Corporate
Governance
p
96 Remuneration
– annual bonus
and LTIP
p 105 New
Remuneration
Policy
p 122-174 Financial
Statements
Stakeholders
Patients
The Group works
with clients on
the development of
innovative products
to provide life-
changing treatments
to patients.
Shareholders
The Group’s
shareholders play
an important role
in monitoring and
safeguarding the
governance of
the Group.
The Chief Innovation Officer,
the Chief Quality and Technical
Officer and the Science and
Technology Advisory Committee
(STAC) routinely consults with key
opinion leaders to ensure that
OXB technologies and capabilities
are designed to maximise the
likelihood of success of the
product development pathways
for OXB's clients, and ultimately
patients. The Board is updated on
such consultations.
The Group ensures that the
needs of the clients, and
ultimately the patients, are met
through targeted investments and
innovation in relation to OXB’s
technologies and capabilities, with
overall governance supported
through the Global Technical
and Innovation Committee (GTIC).
GTIC is the successor to Technical
Development Committee (TDC).
Through OXB’s expanded global
capabilities and facilities, the
Group is able to scale-up its
manufacturing capacity to access
a broad patient population and in
line with partner demand.
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.
Shareholders were invited to
attend and participate in the AGM
and vote by proxy or in person
when attending.
A major shareholder was
represented on the Board for the
duration of 2023.
The Group also engages with
shareholders via the Annual
report and accounts and via
RNS announcements and the
corporate website.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
17
Stakeholders
Employees
The Group has
an experienced,
diverse and dedicated
workforce, which it
recognises as a key
asset of the business.
It is important
that the Group
continues to create
the right environment
to attract, develop
and retain highly
motivated people.
Further links
p 45 Equality,
Diversity
and Inclusion
p 45 Health
and Wellbeing
p 86 WEP
p 89 Role of
Remuneration
Committee
How the Board and the wider
Group engages
Material
Issues identified
Highlights of how the material issues
were addressed in 2023
The Group has an open,
collaborative and inclusive
management structure and
engages regularly with employees.
The Group does this through
regular manager one to
one meetings, an appraisal
process, career conversations,
management development
programmes, employee surveys,
webinars, digital sharing platforms,
Company presentations, town hall
meetings, email briefings, site
visits by Board members, and its
Equality, Diversity and Inclusion
(EDI) and wellbeing programme.
In 2023, the Group celebrated
Learning at Work Week with
a range of activities for all
employees to engage with.
Additionally, time was spent
communicating the new Vision
and Company Strategy to
employees, hearing from the
new CEO and members of the
Corporate Executive Team.
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. In 2023, the
leadership team and the
Workforce Engagement Panel
(WEP) spent focused time
evaluating and reviewing the
results from the employee
engagement survey and
developing action plans. Mr.
Henderson attends a number
of WEP 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.
Reorganisation of its
workforce to create
a more streamlined
structure across the
UK and the US.
Health, safety
and wellbeing.
Opportunity to share
ideas and make
a difference.
Equality, Diversity
and Inclusion.
WEP held thirteen meetings in 2023.
During 2023, Mr. Henderson
participated in WEP discussions
relating to employee recognition,
social engagement and employee
morale. The Chair and Vice Chair
of the WEP also presented to the
Board during 2023 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.
Management
development.
Clarity of Vision
& Strategy.
Employee
Engagement.
The WEP was consulted regarding
a reorganisation and right sizing of
the business to ensure the structure
and headcount is fit for the future
and the new strategy. The WEP
presented feedback and lessons learnt
from this activity to the Board via
Mr. Henderson. Approximately 200
positions in both the UK and the
US were affected by the streamlining
of roles, in a move expected to
boost client-centricity, and align roles
and operations with the specific
requirements of a pure-play CDMO.
Throughout the year, the Group's
wellbeing programme included
webinars on "Stress Less Perform Best",
"Building Healthy Habits", "Connecting
Teams", "Focusing Time and Attention"
and "Managing Change".
Feedback and input into EDI activities
and campaigns such as International
Women’s Day, Pride Month, and the
launch of Employee Network groups
to further the Group's EDI strategy.
Continued roll-out of
the management development
programme with additional line
manager toolkit training to improve
their understanding of the Group's
policies to ensure consistency and
best practice.
Delivery of a series of facilitated
away days with some of the senior
leaders in the business, focused on
cascading the new Company strategy
and vision and developing employee
engagement action plans.
Discussing and generating ideas to
improve social engagement and
recognition for all employees.
Oxford Biomedica PLC | Annual Report and Accounts 2023
18
OXFORD BIOMEDICA'S STAKEHOLDERS (CONTINUED)
Stakeholders
Clients
The continued
performance of the
Group's business
would not be
possible without
understanding the
needs and future
aspirations of
its clients. In
addition, the Group's
manufacturing
expertise has
attracted a broader
client base.
Local Communities
The Group is
committed to
supporting the
communities in which
it operates, including
local businesses,
residents, schools and
the wider public.
How the Board and the wider
Group engages
Material
Issues identified
Highlights of how the material issues
were addressed in 2023
Understand clients’
needs to
refine expertise.
Deliver to
meet clients’
business goals.
By understanding clients’ needs
and meeting their expectations, the
Group was able to establish new
client relationships.
Progressed programmes with existing
clients in line with agreements.
Offer expert
manufacturing
capabilities to clients.
Several clients have adopted
the next-generation lentiviral
manufacturing platform.
The Group's Project Management
department and the Business
Development team, the CEO and
the CET (previously known as
SET) regularly communicates with
existing clients to discuss their
goals and incorporate them into
the Group's schedules/strategy.
The Group communicates
with clients 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.
The Chief Commercial Officer
presents a regular update on
the Group’s client relationships at
each Board meeting.
Further links
p 10 Key clients
p 12
Business Model
p 23-27 Chief
Executive Officer's
2023 performance
review
p 31 Financial
Review
p. 97 Executive
annual bonus
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.
Apprenticeships.
School and
careers events.
Fundraising
for charity.
Volunteer for local
charities /
organisations.
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.
In 2023, the Group chose not to enrol
any further apprentices, but to focus
on supporting the 32 apprentices
already on programme, of which, 7
completed their apprenticeship.
p 20 People
p 48 Community
p 47 Innovation
p 48 Charity
Hosted the first UK recognised
Learning & Enterprise Company
“Teachers Encounters” initiative in
collaboration with OxLEP & The
Learning & Enterprise Company.
Attended the Oxford City Schools 2-
day Careers Fairs to promote Early
Careers opportunities at OXB.
Hosted 15 students from local schools
as part of our 1st full school experience
discovery week.
Supported a local school with its mock
interview day to provide students with
some interviewing experience.
In 2023, the Group continued to work
with In2Science helping children from
disadvantaged backgrounds enter
STEM subjects in higher education
and sponsoring five students with
OXB employees also participating in
mentoring sessions to offer insights
and guidance on pursuing a career in
STEM industries.
Throughout the year, 18 volunteering
days were taken, with volunteering
days used by our employees to sell
poppies for the British Legion, tree
planting, completion of a paddle board
litter pick on the river Thames and to
support the Oxford garden project.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
19
Stakeholders
Suppliers
The Group buys
many items from
key suppliers and
outsources some of
its activities to third-
party suppliers and
providers. It is crucial
that the Group
develops strong
working relationships
with the Group's
suppliers to enhance
the efficiency of
the business and to
create value.
Regulators
The Group operates
in a highly regulated
environment and
it is important
that it engages
with the regulators
as required.
How the Board and the wider
Group engages
Material
Issues identified
Highlights of how the material issues
were addressed in 2023
Long
term partnerships.
Collaborative
approach.
Open terms
of business.
Through effective collaboration,
the Group aims to build long-term
relationships with its suppliers so
that all parties benefit.
The Business Development
team, Operations team,
Chief Operations Officer and
Chief Financial Officer have
regular supplier meetings and
business reviews.
The Group has formalised its
Supplier Code of Conduct and
the team reports any concerns
regarding suppliers and the
broader supply chain to the Board
in a timely manner.
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.
Quality audits performed by the Group
on its suppliers.
Supplier Code of Conduct exists for all
the UK suppliers and the Group will roll
out the Supplier Code of Conduct to
major suppliers in the US and France
over the course of 2024.
Further links
p 46 Supply chain
p
49 Environmental
p 65 Modern
Slavery
p
68 Principal Risks
The Chief Innovation Officer,
Chief Quality & Technical
Officer, Chief Operations Officer
and General Counsel are in
contact with various government
regulatory bodies on a regular
basis and attend industry forums.
Engage with
regulators in a
timely manner.
Ensure GMP
regulatory
compliance.
One audit by a Government
regulatory body.
Preparation of drug master files and
product specification files.
GMP inspection and regulatory training
for employees and Directors.
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.
Protect proprietary
company
information
and know-how.
Compliance with
the Corporate
Governance Code.
Company- wide reminders of
confidentiality. Enforcement of
confidentiality policies.
Regular review of compliance with
the Corporate Governance Code
and updates provided to the Board,
as appropriate.
p 42-66 ESG
p 67 Risk
management
framework
p 68 Legal,
Regulatory and
Compliance risks
Oxford Biomedica PLC | Annual Report and Accounts 2023
20
Patient Population and clients
The Board considered the impact
that the transaction would have on
the wider patient population and the
Group's clients.
The Board concluded that the
transaction would provide the Group
with multi viral vector CDMO capabilities
across multiple sites in the UK, the US
and the EU, thereby expanding Oxford
Biomedica's manufacturing and process
development capability for clients in
the EU.
The Board believed that the increase
in capacity would address increased
client demand and reinforce Oxford
Biomedica's position as a world leading
cell and gene therapy CDMO, whilst
not disrupting ongoing client projects at
Oxford Biomedica (France).
Shareholders
The Board considered the effect of the
transaction on the Group's shareholders
and assessed whether it was in the
shareholders’ best interests to proceed
with the transaction.
The Board believed that the acquisition
was in line with the Group's publicly
stated strategy and would facilitate the
Group in expediting its goal of becoming
a pure-play CDMO.
In addition, the Board believed that
the transaction would raise the profile
of the Group within the investment
community and beyond and would
facilitate access to a broader investor
base, allowing for diversification of the
Group's shareholder base.
Oxford Biomedica PLC | Annual Report and Accounts 2023
STAKEHOLDER CASE STUDYDuring 2023, the Group entered into discussions with Institut Mérieux regarding the acquisition of ABL Europe, recently renamed Oxford Biomedica (France), as part of the Group's transformation to a pure-play CDMO. The transaction completed on 29 January 2024.The Board charged management to consider and report on the impact that the acquisition would have on the stakeholders. The Board considered and challenged management’s analysis. Strategic report
Corporate Governance
Financial statements
21
Employees
Consideration was given to the effect
the negotiation and acquisition process
would have on employees as well as
the longer-term integration of Oxford
Biomedica (France) into the Group.
It was noted that the expected impact
on employees would be felt not only
in terms of the increased workload for
key employees involved in the diligence
and negotiation of the transaction itself
under a tight time frame but also as a
result of the integration and alignment
process that was expected to continue
for at least a 12-month period following
closing of the transaction.
A review of workload and priorities was
undertaken to ensure those working
on the integration activities had the
necessary support.
The team were also permitted to retain
any annual leave they were unable to
take during the transaction timetable
that would otherwise have lapsed at
year end.
Supply chain and regulators
The Board assessed the effect of the
transaction on the Group's suppliers and
existing supply chain. The Board decided
that the Group's suppliers would not be
significantly affected by the transaction
and there should not be any additional
pressure on the supply chain.
The Board recognised the need to serve
clients through a dedicated continental
Europe Quality Control centre of
excellence that allows batch release for
the European market.
The Board also gave consideration to
the Group's relationships and dealings
with regulators both within the UK and,
given the location of Oxford Biomedica
(France), the French regulators.
The Board recognised the regulatory
approvals required by both the UK
and the French regulators to allow
completion of the acquisition as
well as recognising the additional
future regulatory workload and
compliance dealing with an additional
regulatory authority.
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 transaction.
Local communities
The Board considered whether the
transaction would have any positive or
negative effect on local communities.
The Board concluded that it would have
a positive impact for OXB employees
in terms of career development
opportunities and future job security due
to increased opportunities for the Group
as a whole.
The Board believed that the transaction
would have a positive effect on the
existing communities in Strasbourg and
Lyon, France where Oxford Biomedica
(France) is located, bringing more
business and employment to the
local area.
Oxford Biomedica PLC | Annual Report and Accounts 2023
22
Chief Executive Officer's and 2023
performance review
2023 was a year of strategic transformation for our Group,
set against a backdrop of unfavourable economic conditions
globally. We took important steps towards our vision of
becoming a global pure-play cell and gene therapy CDMO,
reorganising our operations and streamlining our focus
under the banner of our new "One OXB" strategy. This
repositioning has enhanced OXB's alignment with client needs
and operational capabilities including the scalability of our
operations globally, while maintaining high standards of quality
and innovation. As part of our evolution into a pure-play
viral vector CDMO, we have implemented extensive cost
management initiatives. These initiatives have allowed us to
refine our structure to better align it with the demands of a
pure-play CDMO. By doing so we have laid the foundation
for sustainable growth and profitability, while leveraging our
expertise in viral vector manufacturing.
The introduction of our "One OXB" strategy is based on
operations in the UK, the US and the EU which are globally
aligned enabling the Group to benefit from increased efficiency
and agility. This has already yielded results, with a more than
50% increase both in the contracted value of client orders
in 2023 (excluding COVID-19 vaccine manufacturing) and our
business development pipeline in 2023. Our expansion in key
markets in the UK, the US, and the EU positions us well to
seize further opportunities in the fast-growing cell and gene
therapy sector.
With all efforts focused on the core business, OXB’s
financial performance in 2023 reflects the non-recurrence of
any COVID-19 vaccine bioprocessing volumes, in line with
expectations, which significantly contributed to the Group's
revenues in the prior year. Alongside this, the one-off
impairment charge arising from the cessation of revenues from
Homology, resulted in the Group reporting an operating loss
for 2023.
Our robust operational performance in 2023, complemented by
strategic cost management initiatives, has optimally positioned
us to achieve our medium-term financial guidance of a three-
year revenue CAGR in excess of 35% and Operating EBITDA
margins in excess of 20% by the end of 2026.
Oxford Biomedica PLC | Annual Report and Accounts 2023
2023 was a year of strategic transformation where we took important steps towards our vision of becoming a global pure-play cell and gene therapy CDMO.Dr. Frank MathiasChief Executive OfficerDr. Frank MathiasChief Executive OfficerDr. Frank MathiasChief Executive Officer
Strategic report
Corporate Governance
Financial statements
23
As part of the transaction, Institut Mérieux has acquired a 6.3%
stake in Oxford Biomedica, including through purchases in the
open market, which it intends to increase to approximately
10.0% in aggregate by the end of Q3 2024. An additional
€20 million of committed future funding will be provided
by Institut Mérieux to cover capital expenditure and potential
operational losses related to the acquisition of Oxford
Biomedica (France), in exchange for Oxford Biomedica plc
ordinary shares.
Acquisition of ABL Europe from Institut Mérieux
In September 2023, Oxford Biomedica announced its intention
to acquire ABL Europe from Institut Mérieux, for a consideration
of €15 million (including €10 million of pre-completion cash
funding in ABL Europe from Institut Mérieux). ABL Europe,
recently renamed Oxford Biomedica (France), is a pure-play
European CDMO with specialised expertise in the development
and manufacturing of solutions for biotech and biopharma
companies including viruses for gene therapy, oncolytic viruses
and vaccine candidates.
The transaction completed on 29 January 2024, providing
the Group with bioprocessing and manufacturing facilities in
the EU, through sites in Lyon and Strasbourg, France. This
strategic acquisition increases access to EU-based clients and
broadens the Group’s international development, manufacturing
and testing presence, whilst increasing its capacity in process
and analytical development and early-stage manufacturing, with
over 70,000ft2 of GMP manufacturing space. The addition of
the sites in France brings more than 100 CDMO experts to
the Group and adds expertise in Vaccinia, Modified Vaccinia
Ankara (MVA), Pox Virus, Measles and Arenaviradea, to OXB's
client offering.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Clear strategy1Clear path towards profitability32Clear strategy1Clear path towards profitability32Strong implementation plan 24
CDMO Services
Demand for the Group's CDMO services remains strong across
all key viral vector types. Throughout 2023, OXB continued to
grow and diversify its CDMO portfolio, which now consists of
51 client programmes at various stages of clinical development.
There has been an increase in the number of late-stage
and commercial client agreements, which now consist of 5
programmes compared to 2 at the same time in 2023. This
increased maturity with multiple programmes moving into and
progressing through the clinic is also a result of the Group’s
efforts to allocate resources towards areas of higher value and
success as part of the Group's new commercial strategy.
Throughout the year, multiple new clients were onboarded with
new programmes across lentiviral vectors, adenovirus and AAV,
in line with OXB's multi-vector strategy. Additional agreements
were signed post period-end, including with a new undisclosed
US-based biotechnology company for the manufacture of
lentiviral vectors as the client prepares for the commercial
launch of its CAR-T programme. The Group has also continued
to successfully develop existing client relationships globally
with around one third of clients working with the Group on
more than one programme. Existing clients expanding their
work with OXB included US biotech companies Arcellx and
Cargo. Whilst no further revenues are expected from Homology
beyond the 2023 financial year following its announcement of
a strategic review in July 2023 and its intention to merge with
Q32 Bio, post period-end, two new programmes with existing
clinical-stage clients were signed. The expansion of existing
client relationships and the Group's growing client portfolio is
testament to OXB's strong track record, expertise and know-
how in manufacturing viral vectors.
Programme stage
Pre-clinical through to
early-stage clinical
Late stage clinical
Commercial
agreements
April 20231
18 clients
34
client programmes
323
1
1
1 as per the YE 2022 results release
2 as of this results release (includes post period-end events)
3
Includes undisclosed stage programmes
April 20242
(including France)
35 clients
51 client programmes
46
3
2
Business development
The Group continues to intensify its business development
activities. In 2023, Oxford Biomedica more than doubled
the number of contracts and client orders signed compared
to 2022, reflecting continued demand for its services from
a diverse range of pharmaceutical and biotech clients.
The contracted value of client orders signed in 2023 was
£131 million, an increase of over 50% compared to £85 million
in the year ended 31 December 2022 (excluding COVID-19
vaccine manufacturing).
The Group's business pipeline also showed positive momentum,
with the business development pipeline growing by 51% from
January to December 2023, from $291 million to $438 million.
This includes growth across all segments from early phase
clinical programmes to late-stage programmes close to
commercialisation. Post period-end, the business development
pipeline has continued to increase instilling confidence in the
Group's ability to further expand its backlog and receive orders.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
25
As part of its new commercial strategy, the Group is in the
process of introducing multi-viral vector CDMO capabilities
across its multiple sites. This allows for the opening up of
new potential revenue opportunities based on complementary
capabilities as well as expanded capacities throughout the sites.
Significant progress has already been made in transferring the
Group's lentiviral vector capabilities to its Bedford, US site, with
the first production runs initiated post period-end in February
2024. OXB successfully delivered the 5L scale down model
process and accompanying analytics at the end of March 2024.
It is expected that by expanding viral vector capabilities across
the UK, the US and the EU sites, investing in the OXB platform
and prioritising innovation that directly supports clients, OXB
will be able to work with a broader range of companies and
support them as they grow and progress through clinical trials.
Furthermore, the addition of new sites acquired in the EU
(France) in January 2024 will help to increase capacity in process
and analytical development and early-stage manufacturing, as
well as the addition of new vector types.
To ensure that the commercial team is sufficiently resourced
and optimally positioned to leverage the expected increase
in cell and gene therapy opportunities, this team has been
restructured and is now vector-agnostic, with all members
of the team covering lentivirus, AAV, adenovirus and other
vectors. The team comprises three different units: Commercial
Operations, Sales; and Strategy and Marketing, and is located
across the East and West Coast of the US as well as the EU and
the UK, within close proximity to potential and existing clients.
Innovation
The Group adopts a client-centric approach, focusing on
delivering value through innovative solutions tailored to the
unique challenges of cell and gene therapy. By enhancing
viral vector production, the Group is not only industrialising
the process, but also achieving higher productivity, better
quality, and lower costs, thereby benefiting clients and
ultimately patients. This combination of platform and process
innovation is expected to significantly reduce the cost per dose,
accelerating clinical development and expanding patient access
to these therapies.
The Group’s latest innovation is the TetraVecta™ system which
launched in May 2023. This 4th generation lentiviral vector
delivery system allows for higher quality, potency, safety,
expression level and packaging capacity, and enables cell and
gene therapy companies to overcome barriers in therapeutic
development, caused by features of the therapeutic cargo,
such as size, complexity, or interference of the payload to be
delivered. The TetraVecta™ system is the result of years of
development and direct experience of understanding of industry
challenges. The TetraVecta™ system can be used to accelerate
the adoption of in vivo gene therapies, as well as support
the creation of high-titre stable producer cell lines to facilitate
scale-up for improved yield (up to 3-fold higher) and improved
vector quality (1kb additional space). The new technology is
currently being investigated by a number of existing clients and
several CDMOs.
Additionally, the Group has developed additive technologies that
are already being used in GMP for client programmes (U1) or
expected later in the second half of 2024 (I3A). These allow for
an increase in the number of lentiviral particles generated and
an improvement in their potency such that less vector has to
be used to achieve the same benefit; a continuing challenge for
the industry.
The Group's business
pipeline also showed
positive momentum, with
the business development
pipeline growing by over
50%
Oxford Biomedica PLC | Annual Report and Accounts 2023
26
The TetraVectaTM system outperforms traditional 3rd generation
lentiviral vectors
Corporate and organisational development
3rd generation
TetraVectaTM
Packaging size
Particle activity
(P:I ratio)
Standard
Standard
1kb additional space
Improved
Yield
Standard
Up to 3-fold higher
Contaminants in
LV particles
Transgene protein /
spliced vRNA
Minimal
Transgene
expression in
target cells
Standard
Up to 3-fold higher
Post period-end, the Group launched the inAAVate™ platform,
which offers a proprietary ‘plug and play’ Dual-Plasmid system
for transient transfection, as well as a standard triple transfection
system for AAV-based gene therapies. The inAAVate™ platform
has demonstrated cell culture titre to over 1E15 vg/L for multiple
serotypes across multiple genomes, and shown a significant
increase in AAV vector productivity and quality with >50% full
capsids in the bioreactor and >90% full capsids in the final drug
substance. The Dual-Plasmid system, together with the Group's
proprietary transfection process has been successfully scaled up
to 2,000L with multiple GMP runs at 500L scale, and represents
a high-quality platform with industry-leading productivity to
enable successful AAV product development.
Gene therapeutics pipeline
The Group has concluded the review of strategic options for its
therapeutics portfolio and, in line with its strategy to become
a pure-play CDMO, discontinued work on internal product
development in the second half of 2023. No material costs
associated with the therapeutics portfolio are expected to be
carried by the Group in 2024.
Streamlining operations
Oxford Biomedica has made significant progress in streamlining
its operations. The Group has concluded the reorganisation
of its workforce, which, among other measures to increase
efficiency, includes a more streamlined structure across the
UK and the US. Approximately 200 positions in both the UK
and the US were affected by the streamlining of roles, in a
move expected to boost client-centricity, and align roles and
operations with the specific requirements of a pure-play CDMO.
Across the organisation, other changes to increase efficiencies
have included adapting the batch scheduling process to
optimise cross-site flexibility and increase the capacity that
can be offered for manufacturing, as well as refining review
processes to accelerate speed of delivery.
As part of this operational streamlining, the Group has moved
to a site-based model, with operations in the UK and the US
(and post period-end, the EU (France)), and has appointed Site
Heads for each of these locations. The Group’s Bedford, US site
is based near Boston, Massachusetts and is led by Mark Caswell
who joined the Group in July 2023. The Group's UK sites
are led by Thierry Cournez who joined the Group in October
2023 as Chief Operating Officer & Site Head of UK Operations.
Post period-end in January 2024, following the acquisition of
ABL Europe from Institut Mérieux, the French sites are led by
Stéphanie Colloud. The shift to a site-based structure allows the
Group to maximise efficiency as well as be better adapted to
serve clients' needs.
In accordance with the Group's re-positioning as a quality and
innovation led pure-play CDMO, the Senior Executive Team
(renamed the Corporate Executive Team in November 2023)
has been restructured to reflect a more client-centric structure,
with Dr. Kyriacos Mitrophanous appointed as Chief Innovation
Officer (formerly Chief Scientific Officer), whilst Dr. James Miskin
has taken on the role of Chief Quality and Technical Officer
(formerly Chief Technical Officer).
Outlook
Looking ahead, the Group will continue to execute on the new
strategy implemented in 2023 and strengthen its position as a
leading global quality and innovation-led cell and gene therapy
CDMO. With the streamlining of the Group’s operations now
complete, the Group's focus will turn to integrating all sites,
including its recently acquired operations in the EU (France),
to "One OXB", alongside growing its global portfolio of clients
and projects. Through our ongoing dedication to delivering the
highest quality to our clients and focusing on client-centric
innovation, OXB can better facilitate the delivery of life-changing
cell and gene therapies to patients and deliver long-term
sustainable profitability to the Group's shareholders.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
27
Oxford Biomedica PLC | Annual Report and Accounts 2023
We’re already collaborating with some of the world’s most innovative pharmaceutical and biotechnology companies to make cell and gene therapy a universally accessible clinical option.MAKING CELL AND GENE THERAPY HAPPEN 28
Management Team
During 2023, the Management Team
(referred to as the Senior Executive
Team until November 2023 when it
became the Corporate Executive Team)
comprised the following:
Frank Mathias (1)
Chief Executive Officer
Dr. Frank Mathias joined Oxford
Biomedica and the 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.
Stuart Paynter (2)
Chief Financial Officer
Stuart Paynter joined Oxford Biomedica
and the Board in August 2017 as Chief
Financial Officer. Mr. Paynter has over 23
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.
Thierry Cournez (9)
Chief Operating Officer and UK
Site Head
Thierry Cournez joined Oxford
Biomedica as Chief Operating Officer
and Site Head of UK Operations
in October 2023. Mr. Cournez
has extensive experience in Sales,
Marketing and GMP/GLP operations,
with broad industry knowledge in the
life science, biopharma and CDMO
ecosystems. Prior to joining Oxford
Biomedica, Mr. Cournez served as Vice
President of Global Testing Operations
Bioreliance® at Merck Life Science,
where he successfully managed large
capacity expansion projects and held
international responsibility for contract
testing operations across the US, the
UK, Singapore and China. Prior to
this, in his role as Vice President of
End-to-End Bioprocessing Solutions, Mr.
Cournez built and developed Merck
Life Science's End-to-End Promise
Venture business unit, which involved
the delivery and implementation of
CDMO solutions for biopharma clients.
Mr. Cournez holds an Engineer's Degree
in Biochemistry and Molecular Biology
from INSA, Lyon, alongside a Master's of
Science in Molecular Biology from Paris
VI University.
Mark Caswell (10)1
Site Head of US Operations
Mark Caswell joined Oxford Biomedica
as Site Head of US Operations in July
2023. He has more than 25 years
of experience and expertise in the
biopharma and CDMO space. Previously,
Mark was Vice President, Site Head
of leading global CDMO Rentschler
Biopharma, where he successfully
managed all operations at the
company's US facilities in Massachusetts.
Mark has a diverse background in
various areas of operations, including
serving as Head of Operations at
Lonza’s Portsmouth, New Hampshire
site and as Director, Global Engineering
and Technology at Sanofi Genzyme.
Mr. Caswell holds a BS in Nuclear
Engineering Technology from Thomas
Edison State University. Mark is also a
proud veteran of the US Navy.
James Miskin (3)
Chief Quality and Technical Officer
Dr. James Miskin joined Oxford
Biomedica in 2000. He has more than
23 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 and Regulatory functions, as
well as the newly formed technical
excellence function. 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.
He is also director of the OXB-led
BBSRC funded collaborative training
partnership, Advanced Bioscience of
Viral Products (ABViP), which is a 7-year
programme together with the University
of Oxford and UCL for the training of
PhD/DPhil students.
Kyriacos Mitrophanous (4)
Chief Innovation Officer
Dr. Kyriacos Mitrophanous joined
Oxford Biomedica in 1997. He has
over 25 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 all aspects
regarding client focussed innovation.
He holds a PhD in Molecular Biology
from University College London and has
conducted post-doctoral research at the
University of Oxford.
Lisa James (5)
Chief People Officer
Lisa James joined the Corporate
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.
Matthew Treagus (6)
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.
Natalie Walter (7)
Group 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.
Sébastien Ribault (8)
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.
1 Mark Caswell was a member of the Senior Executive Team until November 2023 when it became the Corporate Executive Team. Mr. Caswell remains Site Head of Oxford
Biomedica (US) LLC but is not a member of the newly formed Corporate Executive Team.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
29
Oxford Biomedica PLC | Annual Report and Accounts 2023
Jason SlingsbyJason Slingsby stepped down from his position as Chief Business & Corporate Development Officer in April 2023.Tim KellyTim Kelly stepped down from his position as Oxford Biomedica Solutions (now Oxford Biomedica (US) LLC) CEO in July 2023.Ravi RaoRavi Rao stepped down from his position as Chief Medical Officer in October 2023.13267485910 30
Financial review
Transformation to a global pure-play cell and gene therapy CDMO
2023 was a transformational year, with the Group executing on its strategy to become a quality and innovation-led pure-play cell
and gene therapy CDMO with a global reach. This has been achieved by the closing of the legacy product development division,
organisational realignment and the recent acquisition of ABL Europe, recently renamed Oxford Biomedica (France). The acquisition
has provided the Group with a manufacturing and development foothold in the EU, together with the existing operations in the UK
and the US.
Lentiviral vector manufacturing volumes have continued their post pandemic upward trajectory, with revenues from the core
business achieving low single digit revenue growth compared with 2022. COVID-19 vaccine bioprocessing volumes reduced to
zero, which is reflected in the overall variance from the prior year. Throughout 2023, the Group continued to sign new clients,
whilst also expanding existing client agreements. OXB's CDMO portfolio (including France) comprises 51 client programmes at
various stages of clinical development, which includes multiple new clients onboarded and expansion of work with existing clients
during 2023.
As part of its evolution into a quality and innovation-led pure-play cell and gene therapy CDMO, the Group made the difficult
decision to reorganise its workforce, affecting approximately 200 positions. This reorganisation included a more streamlined
structure across the UK and the US to ensure strategic alignment of resources, boost efficiency and client-centricity, and align roles
and operations with the specific requirements of a pure-play CDMO.
In 2023, the Group remained dedicated to expanding its core business. This involved attracting new clients, enhancing its services
for existing clients, and pursuing growth through the acquisition of technologies, capabilities, and additional client partnerships. The
Group achieved total revenues of £89.5 million and incurred an Operating EBITDA1 loss of £(52.8) million in 2023 compared to
revenues of £140.0 million and an Operating EBITDA1 profit of £1.6 million in the prior year. The variance in revenues from the prior
year reflects the non-recurrence of any COVID-19 vaccine bioprocessing volumes in 2023, which were in excess of £40.0 million in
2022. Excluding COVID-19 vaccine revenues, manufacturing and development revenues showed a low single digit increase, driven
by growth in lentiviral vector manufacturing revenues.
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 35.
Oxford Biomedica PLC | Annual Report and Accounts 2023
2023 was a transformational year with the Group executing on its strategy to become a quality and innovation-led pure-play cell and gene therapy CDMO with a global reach.Stuart PaynterChief Financial Officer
Strategic report
Corporate Governance
Financial statements
31
At a cost level, there was a decrease in operating expenditure in 2023 of £5.1 million reflecting the impact of the restructuring of
the business and closure of the Product division, which was partly offset by one off restructuring costs, and inflationary operational
cost increases. The business reorganisation has resulted in an annualised like for like reduction to the ongoing fixed cost base from
1 January 2024 of circa £30 million on an annualised basis compared to 2023, driven by streamlining of roles, synergies achieved
from the move to a site-based model, and focusing R&D expenditure on revenue-generating activities for clients
In September 2023, Oxford Biomedica announced that it had entered into exclusive negotiations with Institut Mérieux for the
proposed acquisition of ABL Europe, with the transaction closing in January 2024. Through this transaction, the Group has
broadened its client base, both in Europe and the cell and gene therapy space. OXB acquired ABL Europe for a consideration of
€15 million by means of a share for share exchange, with Institut Mérieux now becoming a major shareholder in the Group. Assets
acquired as part of the acquisition include €10 million of pre-completion cash funding from Institut Mérieux.
At the end of June 2023, the Group completed a sale and leaseback of its Harrow House facility for £4.5 million to Kadans Science
Partner. Under the agreement, Kadans has granted the Group an occupational lease of the property for approximately 15 years at
a rent of £0.5 million per annum rising to £0.6 million after five years, with a further market rent review after 10 years. In the year
2023, the Group recognised a profit on the sale of £0.5 million, a right of use asset of £2.1 million and a lease liability of £3.1 million.
In July 2023, Homology Medicines Inc. (Homology), a genetic medicines company and client of Oxford Biomedica (US) LLC (OXB
(US) LLC), previously named Oxford Biomedica Solutions LLC, announced a strategic review of its business. Subsequently in H2
2023, Homology announced its intention to merge with Q32 Bio Inc. No further revenues will be received from Homology beyond
the 2023 financial year. As a result of this development, the Group has performed an impairment review of the US business' Cash
Generating Unit (CGU) as at 31 December 2023 resulting in an impairment charge of £99.3 million to the intangible assets and fixed
assets of the US business being recognised in the 2023 financial statements.
Oxford Biomedica PLC | Annual Report and Accounts 2023
20152016201720182019202020212022Year-end headcount900800700600500400300200100020152016201720182019202020212022Revenue£m180160140120100806040200 Licence, milestones and grants Bioprocessing and process development Vaccine revenues*20232023* Vaccine revenues were in excess of £40 million in 2022 and in excess of £100 million in 2020-2021. 32
Selected highlights of the Group's financial results are as follows:
• Total revenues decreased by 36% to £89.5 million (2022: £140.0 million) due to the non-recurrence of revenues from the
manufacturing of vaccine batches for AstraZeneca, as well as lower revenues from milestones licenses and royalties, partly offset
by a small increase in the underlying bioprocessing and commercial development revenues when compared to the prior year.
• Revenues from bioprocessing and commercial development activities decreased by 35% to £82.8 million (2022: £128.1 million)
driven by the non-recurrence of revenues from the manufacturing of vaccine batches for AstraZeneca, which were in excess of
£40.0 million in 2022. Revenues from viral vector commercial development and manufacturing activities performed on behalf of
the Group's existing clients showed a low single digit increase when compared to the prior year.
• Revenues from milestones, licences and royalties decreased by 44% to £6.7 million (2022: £11.9 million); this decrease was
driven by lower licence fees from new client programmes.
• Acquisition of ABL Europe from Institut Mérieux for a consideration of €15 million (including the value of €10 million of
pre-completion cash funding in ABL Europe) by means of a share-for-share exchange.
• Due to the decision by Homology to cease clinical activities, the Group performed an impairment assessment of OXB (US) LLC,
resulting in an impairment of £99.3 million (2022: £nil).
• Operating EBITDA1 loss and operating loss benefited from a profit on sale of the Harrow House facility of £0.5 million.
• Operating EBITDA loss and operating loss of £(52.8) million and £(184.2) million respectively (2022 Operating EBITDA profit and
operating loss of £1.6 million and £(30.2) million respectively) worsened as a result of the decrease in revenues, restructuring
costs of £5.6 million, a smaller profit on sale of property when compared to 2022, partly offset by a lower overall cost base. The
2023 operating loss was also negatively impacted by the impairment of the US business of £99.3 million.
• Cash burn3 of £38.2 million in 2023 (2022: £33.0 million) reflected no cash inflows from vaccine production, restructuring costs
of £5.6 million, offset by lower operational cash flows and capital expenditure.
• Cash at 31 December 2023 was £103.7 million (2022: £141.3 million); Net cash at 31 December 2023 was £65.2 million (2022:
£101.5 million).
Key Financial and Non-Financial Performance Indicators
The Group evaluates its performance inter alia by making use of alternative performance measures as part of its Key Financial
Performance Indicators (refer to the table below). 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 in this section for prior years are those reported in the Annual Reports for
those years.
£'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) / accretion3
Financing
Cash
Loan
Non-Financial Key Indicators
Headcount
Year end
Average
2023
82.8
6.7
89.5
(52.8)
(184.2)
(36.0)
9.8
(38.2)
103.7
38.5
714
854
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
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 35.
2 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.
3 Cash burn/(accretion) is net cash generated from operations plus net interest paid plus capital expenditure. A reconciliation to GAAP measures is provided on page 37.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
33
Revenue
The Group's revenues decreased by 36% to £89.5 million (2022 £140.0 million). Revenue generated from bioprocessing/commercial
development decreased by 35% to £82.8 million (2022: £128.1 million) due to the non-recurrence of revenues from the
manufacturing of vaccine batches for AstraZeneca. Revenues from lentiviral vector and AAV commercial development and
manufacturing activities performed on behalf of the Group's existing clients exhibited a low single digit increase when compared to
the prior year.
Revenues from licence fees, milestones and royalties of £6.7 million (2022: £11.9 million), decreased by 44% when compared to the
prior year due to a generally lower level of milestones achieved from existing clients and licence fees from new clients.
Operating EBITDA
£'m
Revenue
Other income
Gain on sale of property
Total expenses1
Operating EBITDA2
Impairment
Non cash items3
Operating (loss)/profit
2023
89.5
2.8
1.0
(146.1)
(52.8)
(99.3)
(32.1)
(184.2)
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
-
(81.1)
7.3
-
(13.0)
(5.7)
2019
64.1
0.9
-
(70.2)
(5.2)
-
(9.3)
(14.6)
1 Total expenses are operational expenses including cost of goods incurred by the Group. A reconciliation to GAAP measures is provided on page 34.
2 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 35.
3 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 35.
Revenue decreased by 36% in 2023 whilst the Group's cost base decreased by 10% to £(146.1) million. Costs included a decrease in
operational spend due to the restructuring completed and the closure of the Product division at the end of 2023, with annualised
savings of £30 million expected from 2024 onwards. These cost savings were partly offset by an increase in operational spend
due to the consolidation of the results of OXB (US) LLC for a full 12 months, one off restructuring costs of £5.6 million, acquisition-
related due diligence costs of £1.4 million, and inflationary increases. The Group benefited from a profit on sale of its Harrow House
facility of £0.5 million in a sale and lease back transaction. The Operating EBITDA loss of £(52.8) million is therefore £54.4 million
lower than the £1.6 million Operating EBITDA profit generated in 2022 as a result of the decrease in revenues, a smaller profit on
sale of property when compared to 2022, and then partly offset by a lower overall cost base.
Oxford Biomedica PLC | Annual Report and Accounts 2023
34
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 on
the next page.
£'m
Research and development1
Bioprocessing costs
Administrative expenses2
Impairment
Operating expenses
Depreciation
Amortisation
Impairment
Share option charge
Adjusted Operating expenses3
Cost of sales
Total Expenses4
2023
59.4
43.7
25.4
99.3
227.8
(21.5)
(7.2)
(99.3)
(3.5)
96.3
49.8
146.1
2022
60.9
33.9
28.2
0.0
123.0
(20.3)
(6.1)
-
(5.4)
91.2
70.8
162.0
2021
40.2
7.2
15.1
0.0
62.5
(12.4)
(0.0)
-
(2.5)
47.6
60.2
107.8
2020
29.7
10.7
11.3
0.0
51.7
(9.8)
-
-
(2.4)
39.5
41.7
81.1
2019
22.6
7.4
11.9
0.0
41.9
(5.8)
-
-
(1.6)
34.5
35.7
70.2
1
2
Includes the RDEC tax credit.
Included £5.1 million in one-off acquisition-related due diligence costs in 2022 relating to the transaction to acquire Oxford Biomedica Solutions.
3 Research, development, bioprocessing and administrative expenses excluding depreciation, amortisation, impairment and the share option charge.
4 Cost of goods plus research, development, bioprocessing and administrative expenses excluding depreciation, amortisation, impairment and the share option charge.
£'m
Raw materials, consumables and other external
bioprocessing costs
Manpower-related
External R&D expenditure
Due diligence costs
Other costs
RDEC Credit
Total Expenses1
2023
32.4
83.2
2.5
1.4
32.8
(6.3)
146.1
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
22.0
45.3
1.4
0.0
17.1
(4.6)
81.2
22.8
35.2
1.4
0.0
12.0
(1.2)
70.2
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 decreased as no materials were required for vaccine
manufacture in 2023. Materials used in lentivector and AAV batch manufacturing and development remained consistent
with 2022.
• The decrease in manpower-related costs is due to the restructuring completed at the end of 2023 with the loss of approximately
200 roles across the UK and the US business, as well as the fact that no bonuses accrued with regards to 2023 performance. The
lower costs were partly offset by redundancy costs incurred as a result of the restructuring of £5.6 million.
• External R&D expenditure decreased as a result of the closure of the product division in the second half of the year.
• Due diligence costs incurred in 2023 were as a result of the acquisition of ABL Europe (recently renamed Oxford Biomedica
(France)). Due diligence costs incurred in 2022 related to the establishment of OXB (US) LLC.
• Other costs were higher as a result of the full 12-month impact of the inclusion of the administrative expenditure of OXB (US)
LLC, and inflationary increases.
• The RDEC credit has increased to £6.3 million (2022: £4.5 million) due to a more generous Research and Development tax
scheme introduced by the UK Government.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
Operating and Net profit/(loss)
£'m
Operating EBITDA1
Depreciation, Amortisation and share
option charge
Impairment
Revaluation of investments/Change in fair value
of available for sale assets
Operating (loss)/profit
Interest
Foreign exchange
Taxation
Net(loss)/profit
2023
(52.8)
(32.2)
(99.3)
0.1
(184.2)
(6.3)
1.9
4.4
(184.2)
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)
18.9
2020
7.3
(12.2)
-
(0.8)
(5.7)
(0.8)
-
0.3
(6.2)
35
2019
(5.2)
(7.3)
-
(1.9)
(14.5)
(5.4)
(1.0)
4.8
(16.1)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 33.
In arriving at Operating (loss)/profit it is necessary to deduct from Operating EBITDA the non-cash items referred to above. The
depreciation (£21.5 million) and amortisation (£7.2 million) charge was higher in 2023 due to fixed assets acquired during 2022
and 2023, as well as the 12 month impact of the acquisition of the fixed assets and intangible assets of OXB (US) LLC. Due to the
decision by Homology to cease clinical activities, the Group performed an impairment assessment of the US business, resulting
in an impairment of £99.3 million (2022: £nil). The share option charge decreased by £1.9 million due to the lower share price,
employee restructuring, as well as the non-vesting of certain share options with performance conditions.
The impact of these charges resulted in an operating loss of £184.2 million in 2023 compared to a loss of £30.2 million in the
prior year.
The net interest charge decreased by £1.5 million as a result of an increase in interest received of £3.9 million due to improved
interest rates on cash balances held by the Group but offset by a £2.4 million increase in IFRS 16 interest on the lease liabilities
related to the Group’s Bedford Massachusetts, Windrush Court and Harrow House facilities. Foreign exchange gains of £1.9 million
were recognised in 2023 on the Oaktree loan, as opposed to foreign exchange losses of £8.0 million in 2022. The corporation tax
charge was negative due to the release of the deferred tax liability as a result of the impairment of the OXB (US) LLC intangible
asset. The negative tax charge was partly offset by an increase in the notional tax charge due to an increase in the RDEC tax credit
expected for 2023.
Other Comprehensive Income
The Group recognised a loss within other comprehensive income in 2023 of £5.3 million (2022: £10.6 million income) 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023
36
Segmental Analysis
During 2023, in order to reflect the way the business has been managed by the Corporate Executive Team (CET) (previously known
as the Senior Executive Team (SET) until November 2023), the Group reported its results within two segments, namely:
1. the ‘Platform’ segment which includes the revenue generating bioprocessing and process development activities for third parties
(i.e. the Partner 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®
platform; and
2. the ‘Product’ segment, which includes the costs of research and development of new gene therapeutic product candidates.
£'m
2023
Revenue
Operating EBITDA1
Operating loss
2022
Revenue
Operating EBITDA
Operating loss
Platform
Product
Total
89.4
(45.1)
(174.9)
139.9
11.7
(17.9)
0.1
(7.7)
(9.3)
0.1
(10.0)
(12.3)
89.5
(52.8)
(184.2)
140.0
1.6
(30.2)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Impairment, 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 35.
The Platform segment in 2023 experienced a decrease in revenue of 36% from £139.9 million to £89.4 million due to the non-
recurrence of vaccine batches manufactured for AstraZeneca. Excluding the impact of the loss of vaccine revenues, lentivector and
AAV revenues exhibited a low single digit increase when compared to the prior year. From a cost perspective, operating results were
positively impacted by the restructuring and the closure of the product segment, although this was partly offset by an increase in
operational spend due to the consolidation of the results of OXB (US) LLC for a full 12 months, one off restructuring costs incurred,
acquisition-related due diligence costs and inflationary increases.
The Product segment has generated revenues of £0.1 million (2022: £0.1 million) and an Operating EBITDA loss and Operating loss
of £7.7 million and £9.2 million respectively (2022: loss of £10.0 million and £12.3 million respectively). Product operating expenses
were lower due to the closure of the product division in the second half of 2023.
The Group has concluded the review of strategic options for its therapeutics portfolio and, in line with its strategy to become a
pure-play CDMO, discontinued work on internal product development in the second half of 2023. No material costs associated
with the therapeutics portfolio are expected to be carried by the Group in 2024.
2024 and beyond
As part of the restructuring of the business and the closure of the product segment at the end of 2023, the CET 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 2024 and
thereafter. No changes from the current basis have been reflected in the 2023 Annual report and accounts.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
Cash flow
£'m
Operating (loss)/profit
Non-cash items included in operating loss1
Operating EBITDA2
Working capital movement3
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
Capex4
Net cash (burn) / inflow5
Acquisition of subsidiary
Sale of building
Net proceeds from financing6
Movement in year
2023
(184.2)
131.4
(52.8)
16.8
(36.0)
7.5
(28.5)
0.1
-
(9.8)
(38.2)
-
8.4
(8.6)
(38.4)
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
37
2019
(14.5)
9.2
(5.2)
(1.4)
(6.6)
3.1
(3.5)
(3.3)
6.3
(25.8)
(26.3)
-
-
10.3
(16.0)
1 Depreciation, Amortisation, Impairment, revaluation of investments and assets at fair value through profit and loss, and Share Based Payments.
2 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, Impairment, 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 35.
3 This is Changes in working capital and reversal of the Gain on sale of building as outlined in note 30: Cash flow from operating activities on page 160.
4 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.
5 Cash burn/(inflow) is net cash generated from operations plus net interest paid plus capital expenditure.
6 This is net cash generated from financing activities as per the Cash flow statement on page 125 excluding interest paid.
The Group held £103.7 million of cash at 31 December 2023, having begun the year with £141.3 million. Significant movements
across the year are explained below:
• The positive working capital movement of £16.8 million was mainly as a result of the decrease in trade and other receivables due
to amounts received from clients outstanding as at 31 December 2022;
Interest paid less interest received decreased by £4.2 million due to improved interest rates received on cash balances held;
•
• The Group received the 2021 RDEC tax credit in January 2023 and the 2022 RDEC tax credit in October 2023;
• Purchases of property, plant and equipment decreased from £16.3 million to £9.8 million, as the Group limited capex spend to
replacement requirements except for some highly strategic and specifically approved projects;
• The net outflows from financing during 2023 was £8.6 million, consisting of share option equity issued of £0.7 million, and
reduced by lease payments of £9.3 million which have increased due to the sale and leaseback of the Group's Harrow House and
Windrush Court facilities;
• The result of the above movements is a net decrease of £38.4 million which, together with a negative movement in foreign
currency balances of £0.8 million, leads to a decrease in cash from £141.3 million to £103.7 million.
Oxford Biomedica PLC | Annual Report and Accounts 2023
38
Statement of financial position review
The most notable items on the Statement of financial position, including changes from 31 December 2022, are as follows:
Intangible assets decreased from £105.9 million to £31.0 million due to amortisation of £7.2 million, an impairment of
•
£62.6 million and foreign exchange movements of 5.1 million;
• Property, plant and equipment has decreased from £133.8 million to £75.7 million due to disposals of property of £9.0 million,
impairments of £36.7 million, depreciation of £21.5 million, foreign exchange movements of £4.5 million, reallocations and
change in estimate of £0.6 million, and offset by capital expenditure of £14.2 million on mainly plant and equipment;
Inventories have increased slightly from £12.6 million to £12.9 million;
•
• Trade and other receivables decreased from £61.6 million to £24.7 million mainly as a result of the receipt of amounts
outstanding from clients as at December 2022, but also lower levels of un-invoiced client work as compared to year end;
• Trade and other payables have decreased from £36.6 million at the start of the year to £17.8 million due to due to lower levels
of client and other operational activities leading to lower levels of accruals and trade creditors outstanding, including no bonus
accrual required at the end of 2023;
• Contract liabilities increased from £18.5 million in 2022 to £26.1 million due to an increased level of client orders invoiced in
advance for the goods and services being provided by the Group;
• Deferred Income decreased from £2.0 million in 2022 to £1.4 million due to the release of amounts deferred as part of the
Innovate UK capex grant funding;
• Provisions remained stable at £8.5 million as an increase of £0.8 million as a result of the recognition of a liability for the costs of
restoring the newly leased Harrow House manufacturing facility to its original state at the end of the lease term was offset by a
change in the estimate of restoring the existing properties to their original state;
• Lease liabilities increased by £1.6 million to £72.9 million due to the recognition of the lease liability on the sale and lease back of
our Harrow House facility more than offsetting lease payments made by the Group during the period;
• The dollar denominated loan has decreased by £1.2 million to £38.5 million ($50 million) due to foreign currency
movements; and
• Put option liability – the put option liability to acquire the remaining 20% of OXB (US) LLC that the Group doesn’t already own
has decreased from £38.2 million at 31 December 2022 to £9.3 million at the end of December 2023 due to a decrease in the
value at which the option is expected to be exercised.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
39
Subsequent events
On 29 January 2024, the Group acquired ABL Europe (recently renamed Oxford Biomedica (France)) from Institut Mérieux SAS for
a consideration of €15 million, which included €10 million of pre-completion cash funding from Institut Mérieux in ABL Europe, in
exchange for 3,149,374 new ordinary shares in the Company which have been issued at a price of 407.4p.
Oxford Biomedica (France) is a pure-play European CDMO with specialised expertise in the development and manufacturing of
solutions for biotech and biopharma companies including viruses for gene therapy, oncolytic viruses and vaccine candidates.
The acquisition of Oxford Biomedica (France) broadens the Group's international presence by establishing a footprint within the
European Union through facilities located in Lyon and Strasbourg, France. In addition, the acquisition increases OXB's capacity
in process and analytical development, and early-stage manufacturing, and addresses increased client demand for the Group's
process development services.
Financial outlook
The Group expects 2024 revenues to be between £126 million and £134 million, with revenues for the year being second half-
weighted, as previously communicated. This includes revenues from the newly acquired sites in France, existing client programmes
progressing through development and the acquisition of new clients, driven by high levels of business development activity.
The Group's revenue backlog1as at 31 March 2024, including contributions from Oxford Biomedica (France), stood at £104 million,
a growth of 11% from £94 million at 31 December 2023. This is the amount of future revenue available to earn from current
orders. Since the end of March 2024, the Group has signed a new order with a US-based client preparing for commercial launch
(agreement announced in March 2024) which is excluded from this backlog figure. The contracted value of client orders signed
in the year ended 31 December 2023 was £131 million, an increase of over 50% compared to £85 million in the year ended
31 December 2022, which instils confidence in the Group's ability to further expand its backlog and receive orders.
With the streamlining of the Group's operations completed in 2023, including the transition to a global site-based model, and the
acquisition of ABL Europe, Oxford Biomedica reiterates its guidance of achieving broadly breakeven EBITDA in 2024, excluding
the impact of the acquisition. Including the impact of the acquisition, the Group anticipates a modest operating loss attributed
to the recently acquired operations in France. This is expected to be fully funded by the €10 million cash funding in ABL Europe
from Institut Mérieux received prior to completion of the transaction. This improvement compared to the Operating EBITDA loss of
£(52.8) million reported in 2023 demonstrates the effectiveness of the Group's strategic initiatives.
Capital expenditure is expected to be limited to maintenance capex required as well as modest spend on certain key capital
expenditure projects, such as the transfer of the Group's lentiviral vector capabilities into its US site.
1 Revenue backlog represents ordered CDMO bioprocessing/commercial development revenues available to earn. The value of client orders included in revenue
backlog only includes the value of work for which the client has signed a financial commitment for OXB to undertake, whereby any changes to agreed values will
be subject to either change orders or cancellation fees.
Oxford Biomedica PLC | Annual Report and Accounts 2023
40
Medium term financial guidance
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. As previously guided, the Group expects a three-year revenue CAGR of more
than 35% for the year's 2023-2026. With increased operational efficiencies, targeted cost management, and targeted investment,
the Group expects to achieve Operating EBITDA margins in excess of 20% by the end of 2026, and to be profitable on an EBITDA
level in 2025.
Going concern
The financial position of the Group and Company, their cash flows and liquidity position are described in the Financial Statements
and notes to these financial statements section of this Annual report and accounts.
The Group and the Company made a loss after tax for the year ended 31 December 2023 of £184.2 million and £120.0 million
respectively, and consumed net cash flows from operating activities for the year of £28.5 million and £9.8 million. The Group also:
• Sold its Harrow House manufacturing facility in a sale and leaseback transaction for £4.5 million to Kadans Science Partner in
June, whilst also agreeing an occupational lease of the property for 15 years;
• Closed the acquisition of ABL Europe in January 2024 for a consideration of €15 million, (including €10 million of pre-
completion cash funding from Institut Mérieux); and
• Ended the year with cash and cash equivalents of £103.7 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
2024 annual budget and forecasts for 2025. The Directors have undertaken a rigorous assessment of the forecasts in a base case
scenario and assessed identified downside risks and mitigating actions. These cash flow forecasts also take into consideration
severe but plausible downside scenarios including:
• Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the
LentiVector® platform and AAV businesses;
• No revenues from new clients;
• Decreases in forecasted existing client milestones and removal of any future licence revenues; and
• The potential impacts of a downturn in the biotechnology sector on the Group and its clients including expected revenues from
existing clients under long term arrangements.
Under both the base case and mitigated downside scenario, the Group and Company have 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 all the downside
scenarios above crystallising, the Group and Company would continue to meet their existing loan covenants until March 2025
without taking any mitigating actions, but the Board has mitigating actions in place that are largely within its control that would
enable the Group to reduce its spend within a reasonably short time-frame to increase the Group and Company’s cash covenant
headroom as required by the loan facility with Oaktree Capital Management. Specifically, the Group will continue to monitor its
performance against the base case scenario and if base case cash-flows do not crystallise, start taking mitigating action by the end
of Q3 2024 which may include rationalisation of facilities and rightsizing the workforce.
In addition, the Board has confidence in the Group and Company’s ability to continue as a going concern for the following reasons:
• As noted above, the Group has cash balances of £103.7 million at the end of December 2023;
• More than 50% of 2024 base case forecasted revenues are covered by binding purchase orders and rolling client forecasts which
give confidence in the level of revenues forecast over the next 12 months;
• The Group intends to delay the construction element of its Oxbox manufacturing facility expansion to now take place during
2028 and 2029;
• The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully
entering into new client agreements including with Arcellx, Cargo Therapeutics, Cabaletta Bio and Oxford University over the last
12 months; and
• The Group has the ability to control capital expenditure costs and lower other operational spend, as necessary.
Taking account of the matters described above, the Directors are confident that the Group and 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 2023
Strategic report
Corporate Governance
Financial statements
41
Objectives set for 2024
The Company Goals for 2024 apply to all entities. The Goals are cascaded across all sites and incorporated in employees
personal objectives.
Objective
People
Attract develop and retain highly motivated people by developing our leadership, defining a "One OXB"
culture and connect people with the vision and strategy of OXB.
Headlines
Weighting
10%
• Reduce voluntary turnover
•
Improve overall sustainable engagement score
Commercial
Acquire new clients and projects. Increase commercial pipeline and portfolio size by expanding client
relationships to include new projects.
20%
•
Increase order volume
• Maintain client satisfaction
Build "ONE OXB" Transform to a pure-play CDMO following a systematic approach and integrate all three geographies into
10%
one company.
• Complete transformation and integration activities according to the two-year plan
•
Increase resource allocation on client projects
Delivery
Focus on efficiency and quality to increase output and improve margin. Prepare for the next wave of
innovation with focus on technical excellence and clients’ needs.
Increase Right-First-Time
•
• Complete transfer of Lenti to US
Financials
Achieve the 2024 budget; revenue growth and broadly break-even reached. Manage expenses, realise
additional cost savings. Quarterly guidance updates to the market on progress to be released by
Investor Relations.
10%
50%
Increase revenues
•
• Reach broadly break-even
• Carry adequate gross cash
Overall, Oxford Biomedica is committed to enhance its ESG activities (environmental, social, and governance) activities in 2024. By
the end of 2024, clear ESG objectives will be defined for the Group.
The Remuneration Committee has overriding discretion on the assessment of the achievement of the above goals 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 goals were achieved, for example, the market conditions, if achieved on time and
to budget.
Oxford Biomedica PLC | Annual Report and Accounts 2023
42
Oxford Biomedica’s ESG mission
Oxford Biomedica’s ESG mission is to deliver life-changing
cell and 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, and also in
how the Group does business. During 2023, Oxford Biomedica
continued to focus on ways to increase sustainability initiatives
across the Group, and to build momentum in its mission-led
approach to incorporate sustainable practices in regular, day-to-
day business activities.
Oxford Biomedica’s ESG Committee
The Group's ESG Committee is responsible for the governance
and oversight of the ESG commitments. Until September 2023,
the ESG Committee was chaired by Nick Page – in his capacity
as Chief Operations Officer. From September 2023, following
Mr. Page's decision to step down from the Group, the Group's
CEO, Dr. Frank Mathias assumed the role of Chair of the
ESG Committee.
The ESG Committee is responsible for tracking progress against
the objectives and providing regular progress reports to the CET
every quarter. Progress updates are also shared in all-company
meetings, and to the Board.
In 2024, the ESG strategy will be reviewed to reflect OXB’s
strategic reset as a pure-play CDMO. This will include an
assessment of pillars and objectives to reflect the new structure
of the business and the global multi-site model.
Oxford Biomedica PLC | Annual Report and Accounts 2023
SUSTAINABILITYREPORTThe Group's ESG mission is to deliver life-changing cell and gene therapies to patients in an ethical and socially responsible way.Five pillars of Responsible BusinessInnovation Supply ChainFive pillars of Responsible BusinessPeople Community Environment Strategic report
Corporate Governance
Financial statements
43
Values
Oxford Biomedica’s three values, "Integrity, Innovation and
Inspiration", 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. Its
performance management processes ensure that employee
behaviours which align with its values are appropriately
recognised and rewarded.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Our ValuesOur ValuesBe inspiringWe succeed together through our passion, commitment and teamwork. Through our actions and behaviours, we create an environment which positively challenges, engages and excites us.Deliver innovationWe 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.Have integrityWe 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. 44
Oxford Biomedica PLC | Annual Report and Accounts 2023
Analysis of material ESG issuesESG materiality matrix1718191111291014315582024131667Importance to stakeholdersMost relevantAssessed impact on Oxford Biomedica’s businessMost impactPeople5 Employee safety and wellbeing8 Talent attraction and retention15 Anti-bribery and corruption19 BrexitCommunity3 Outreach, engagement and early talent development14 Human rights and labour standards20 Transparent reporting and communicationsResponsible Innovation1 Intellectual property, product and technological innovation2 Product safety4 Privacy and data security6 Regulatory compliance7 Business continuity13 Ethical supplier standards16 Animal testing 17 Ethics18 Clinical trial conductEnvironment9 Waste and recycling10 Water use and water effluent11 Energy use and climate change12 Single use plasticsThe 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.OXB's 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.OXB 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. Strategic report
Corporate Governance
Financial statements
45
People
Equality, Diversity and Inclusion (EDI)
As part of the Group's EDI three-year plan, three focus areas have been defined - Women in work, Neurodiversity and LGBQTIA+.
Throughout 2023, events were held to celebrate and raise awareness of these focus areas, including a LGBTQ+ Pronouns and
Allyship Workshop, celebrating International Women's Day with a how to ‘break the bias’ and 'Embrace Equity' Webinar, activities
including launching a book club, quizzes, and an OXB employee designed Pride badge. Employee Network Groups have been
formed in the focus areas, which are voluntary, employee-led groups whose aim is to foster a diverse, inclusive workplace. Their
aim is to help marginalised groups, and their allies, feel connected through a common cause or interest, thereby building a strong
community to help create a sense of belonging whilst supporting employee wellbeing.
The Group continued its commitment to review OXB policies to ensure they are inclusive, progressive and offer equal opportunities
to all employees. A new set of policies have been released in line with national awareness days including a set of Family friendly
policies, a Religion and Belief policy, a Transgender and Non-Binary Policy, a Menopause policy and a newly updated Reasonable
Adjustments policy.
Health and Wellbeing
Throughout the year, the Group's wellbeing programme included webinars on "Stress Less Perform Best", "Building Healthy Habits",
"Connecting Teams", "Focusing Time and Attention" and "Managing Change". Mental health awareness week was celebrated with
onsite activities across all global sites to encourage conversations around mental health. Guidance and resources have been
shared on ways to "Increase Energy and Productivity Levels", Endometriosis, Sleep Support, Bowel Cancer, Movember and World
Menopause Day and guides to support discussions around mental health with young people and friends.
OXB has continued to address feedback from its employee engagement survey "Your Voice" and continues to find ways to connect
its employees with its mission through patient story events, which in 2023 included "Cystic Fibrosis, cheating death and the
potential of gene therapy".
Group Headcount
Board including Non-Executive Directors
Senior managers and direct reports
All other employees
Total
Group headcount as at 31 December 2023.
Male
6
24
304
334
Female
5
31
344
380
Total
11
55
648
714
% Male
55%
44%
47%
47%
% Female
45%
56%
53%
53%
In 2023, the Group experienced an increase in involuntary turnover due to the streamlining of its operations and transformation of
its organisational structure. In the twelve months leading up to 31 December 2023, the average involuntary turnover rate for the
Group was 19%, up from 5.7% in the prior year. Voluntary turnover was 12.7% for its UK employees (-0.3% relative to benchmarks)
and 10.8% for its US employees (-3.7% relative to benchmarks).
Oxford Biomedica PLC | Annual Report and Accounts 2023
46
Supply Chain
The Group is fully committed to responsible supply chain management. Throughout 2023, the Group continued to build a supply
chain that aligns with the Group's commitment to sustainability whilst delivering commercial benefit. The Supplier Code of Conduct
which the Group launched in 2021 has been issued to the Group's top 125 suppliers for compliance detailing the Group's overall
approach to supplier engagement and the standards it expects its suppliers to adopt.
Supplier Code of Conduct
OXB’s Supplier Code of Conduct follows a continuous improvement approach 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 its supply chain are managed responsibly. Full details of the Group’s ESG pillars, including the
Supplier Code of Conduct, can be found on the ESG section of the website at www.oxb.com.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
47
Innovation
OXB is committed to delivering life-changing cell and gene therapies to patients in an ethical and socially responsible way. This will
be achieved by practising and delivering ethical, relevant and sustainable innovation.
Innovation tools to support delivering greater economic value
Through the majority of 2023 the Technical Development Committee (TDC), with support from the New Technology Committee,
provided governance around the Group's decisions for investment in innovation and new technologies, including 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. As of December 2023, the decision was made to
disband the TDC.
From December 2023, the newly-formed Global Technical and Innovation Committee and associated governance processes will be
used to facilitate the Group in determining the most appropriate areas of innovation to prioritise. The technology and innovation
roadmap will be employed to ensure the smooth and timely progression of new technologies from inception to commercialisation,
supported by staged investment decisions.
Continued strong academic collaborations and support of studentship programmes
During 2023, OXB continued to support PhD/ DPhil studentships through the Advanced Bioscience of Viral Products (ABViP)
programme. The multi-disciplinary training programme is led by OXB and involves both UCL and University of Oxford as academic
institutions as well as being supported by the BBSRC partnership. The programme will help foster development of the next
generation of bioscience leaders and advance research in the area of viral vectors for future gene therapies and vaccines. ABViP will
train a cohort of 24 PhD/DPhil students over the course of 2022, 2023 and 2024, with 7 students enrolled on to the programme in
2022, 9 students enrolled on to the programme in 2023, and recruitment is underway for 8 students to join the programme later
in 2024.
The Group intends to continue to support outreach programmes, to promote STEM careers as a viable route for school children
from demographics with low representation in higher education, particularly in STEM subjects.
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Community
Volunteering
OXB recognises the importance and power of giving back and encourages its employees to take a day off to volunteer through its
volunteering policy, a scheme which allows employees to request up to seven hours of paid time off for volunteering each year.
Employees can choose to support a local charity or lend a helping hand to a community project and see their efforts make a real
difference. Throughout the year, 24 volunteering days were taken, with volunteering days used by employees to sell poppies for the
British Legion, tree planting, complete a paddle board litter pick on the river Thames and supporting the Oxford garden Project.
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 OXB’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 and a total of £3,320 was raised for nominated charities. In addition, OXB made further
donations of £3,000 to each of the Group's nominated charities and made a £50,000 donation to the Disasters and Emergencies
Committee for the Turkey and Syria earthquake appeal.
In 2023, 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.
Apprenticeship scheme
As part of the Group's focus on delivering local benefits and providing high-skilled jobs to the local community, OXB has an
apprenticeship scheme in collaboration with the Advanced Therapies Apprenticeship Community and multiple training providers. In
2023, the Group chose not to enrol any further apprentices, but to focus on supporting the 32 apprentices already on programme,
of which, 7 completed their apprenticeship. 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. OXB is committed to supporting the
apprentices through in-post learning, training, and expanding the scheme in the future.
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Environmental
The Group is steadfast in acknowledging its duty to mitigate the effects of its operations on the environment, neighbouring
communities, and employees. The ongoing development of OXB's Environmental Management System (EMS) aligns seamlessly with
the Group's strategy for growth. The Group continues to collaborate with stakeholders such as regulators, utility providers, waste
operators, and suppliers, to enhance responsible operating practices. Adherence to all environmental regulations, encompassing
permits, consents, waste disposal and discharges underscores the Group's commitment to environmental responsibility.
In 2023, OXB embarked on a strategic journey marked by heightened transparency within environmental reporting. Notably, this
year marked the inaugural utilisation of Carbon Disclosure Project (CDP) to spotlight existing management practices and identify
avenues for further enhancements in addressing climate change risks and opportunities. Furthermore, 2023 stands out as the year
in which OXB formally committed to the Science Based Targets Initiative (SBTI). The Group recognises that establishing robust and
verified targets is imperative for instilling confidence in the realisation of the Paris Agreement Goals.
Significant strides have been made in the computation of scope 3 emissions, with both Oxford, UK and Bedford, US site data shared
with third-party specialists. Plans for 2024 include a paradigm shift in the Group's near-term and long-term decarbonisation targets,
aligning them with the baseline and ambitious goals encompassing the entirety of the Group's value chain emissions.
While the Group has concentrated on high-level strategic initiatives this year, it is important to note that endeavours to diminish
environmental impact have remained at the forefront. As evident in the Streamlined Energy and Carbon Reporting (SECR) section
of the Annual Report and accounts, the Group has directed its efficiency initiatives towards reducing water consumption,
implementing lighting upgrades, introducing recycling practices in the manufacturing facility, encouraging carpooling and
achieving a second consecutive entry into the International Freezer Challenge. In 2024, there will be a heightened focus on
operational efficiencies, including strategies such as consolidating liquid waste for more streamlined collections and implementing
measures for better control of office temperatures. The acquisition of sites in Lyon and Strasbourg, France is expected to bring
forth fresh perspectives and innovative ideas within the Group, fostering an environment conducive to knowledge sharing. It is
imperative that these newly acquired French sites align seamlessly with the overall governance structure, performance monitoring,
and target-setting of the Group. This alignment will necessitate the incorporation of the sites' greenhouse gas (GHG) emissions into
the Group's comprehensive emissions profile.
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Streamlined Energy and carbon reporting (SECR) STATEMENT
The Group recognises that OXB's global operations have an environmental impact and it is committed to monitoring and reducing
the Group's emissions. OXB is also aware of its reporting obligations under The Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018.
In order to fulfil these obligations, the methodology used to calculate OXB's greenhouse gas emissions has been deployed in
accordance with the requirements of the following standards:
• World Resources Institute (WRI) Greenhouse Gas (GHG) Protocol (revised version).
• Defra’s Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements (March 2019).
• UK office emissions have been calculated using the Defra 2023 issue of the conversion factor repository.
Following an operational control approach to defining the Group's organisational boundary, the calculated GHG emissions from
business activities in the UK fall within the reporting period 1 January 2023 to 31 December 2023, using the January to December
reporting periods of 2021 and 2022 as comparison.
Scope 1
Emission Source
Natural Gas
Diesel
Fleet
Refrigerant
Medical CO2
Scope 1 Emissions (UK and Ireland)
Scope 1 Emissions (USA)
Total Scope 1 Emissions
Scope 2
Electricity (Market-Based) (UK and Ireland)
Electricity (Market-Based) (USA)
Electricity (Location-Based) (UK and Ireland)
Electricity (Location-Based) (USA)
Total Scope 2 Emissions (Market-Based)
Total Scope 2 Emissions (Location-Based)
Scope 3
Electricity Transmission and Distribution
Water
Employee Commuting
Business Travel (Employee cars)
Business Travel (Rail)
Business Travel (Taxis)
Business Travel (flights)
Paper
Waste and Recycling
Scope 3 Emissions (UK and Ireland)
Scope 3 Emissions (USA)
Total Scope 3 Emissions
Total All Emissions
Total Energy Usage (kWh)
Normaliser (tCO2e/£ Revenue)
Global Emissions tCO2e
2022
2021
2023
Percentage Change to 2022
1,103.98
13.08
12.82
54.86
15.24
1,164.47
35.51
1,199.98
280.88
1,130.69
2,147.98
1,130.69
1,411.57
3,278.67
243.36
4.72
1,054.85
2
1
1
109
4.04
52.21
1,251.13
221.05
1,472.18
4,083.73
19,148,159.45
28.6
801.43
6.30
9.18
23.44
45.30
850.14
35.51
885.65
43.91
1,130.69
1,670.81
1,130.69
1,174.60
2,801.50
206.12
3.56
1,046
6
1
2
448
2.90
52.20
1,375.55
392.23
1,767.78
3,828.03
15,977,677.88
27.3
750.14
24.90
9.14
0
44.18
802.83
25.53
828.36
15.34
1,221.16
1,682.77
1,221.16
1,236.50
2,903.93
203.17
5.85
849.92
6
2
3
435
4.19
33.71
1,171.04
371.8
1,542.84
3,607.70
15,566,675.48
40.30
-6.4%
+295%
-0.5%
-100%
-3.5%
-5.8%
-28.2%
-6.5%
-65.1%
+8%
+0.7%
+8%
+5.3%
+3.7%
-1.5%
+64.3%
-18.8%
-
+100%
+50%
-2.9%
+44.5%
-35.5%
-14.7%
-5.2%
-12.7%
-5.8%
-2.6%
+47.6%
Natural Gas Consumption:
•
In 2023, natural gas consumption decreased significantly. This reduction was primarily due to the phasedown and subsequent
surrender of the Windrush Innovation Centre (WIC) building lease.
Diesel Consumption Emissions:
• Diesel consumption emissions increased considerably. However, this change is a result of a more accurate calculation of backup
generator consumption. The formula now considers the run time of generators. Unfortunately, the run time data from previous
years was unavailable for restatement.
Refrigerant Emissions:
• Refrigerant emissions are reported as zero because no leaks were detected in 2023.
Electricity Emissions and Consumption:
• Electricity emissions underwent continued deep reduction. This positive trend is attributed to the Group's investment in
renewable energy tariffs across UK sites.
• However, electricity consumption increased in the US, leading to a slight rise in the Group's offshore emissions. The site in the
US is served by a fossil fuel-derived tariff.
Scope 3 Emissions:
• Scope 3 emissions slightly decreased in 2023. This reduction aligns with the overall decrease in full-time employees (FTEs),
resulting in reduced business travel and employee commuting emissions.
The Group uses revenue as a normaliser and this figure is lower than the previous year, hence the increased intensity figure shown.
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During the reporting period, the Group has taken the following actions to reduce its greenhouse gas emissions:
• A significant impact was due to the phasing down in utilisation of the WIC building and subsequent reliance on air conditioning
units and the associated energy and refrigeration.
• The Group has also focused on best practice within cold storage, joining the International Freezer Challenge for the second
consecutive year. This led to a collection of ultra-low temp freezers (-80 degrees), for example, having their set point
temperature increased to -75 degrees.
• The Group reduced the water flushes performed when storing liquid waste into the bulk tank. This has drastically reduced
volumes being sent for waste treatment.
TASKFORCE FOR CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD)
OXB supports the TCFD framework and is committed to refine its governance and risk management 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 OXB’s operational sites to also include five key suppliers. The following TCFD sections set out the required disclosures
and describes the Group’s approach. OXB is pleased to confirm that the disclosures in the Annual Report and accounts are
consistent with the TCFD recommendations except for the inclusion of all calculated scope 3 emissions as GHG metrics and
relevant intensity metrics for energy use, water use, and waste generation (Recommendations b and c of Metrics and Targets of
TCFD Recommendations). The data for these emissions and environmental performance has been collected, however, work on
calculation and SBTI targeting is currently ongoing and will be available in the 2024 Annual Report and accounts. Throughout the
report, the all sector guidance of the TCFD annex has been used to inform the Group's approach.
GOVERNANCE
Good governance practice continues to be a priority for the Group, as it maintains robust climate-risk and opportunity
management to deliver value for stakeholders. As previously described, the Board has the responsibility of overseeing climate-
related risks and opportunities, ensuring that appropriate management processes are integrated into future financial planning,
business strategy, and operations. The Board is accountable for approving carbon reduction targets and ultimately the journey to
net zero. In order to fulfil its oversight obligation and ensure that appropriate attention is dedicated to sustainability, including
climate change, the Board has established an ESG Committee to formalise its approach to sustainability and strengthen its
governance processes. Until September 2023, the ESG Committee was chaired by the Group's Chief Operating Officer, Nick Page,
who provided the link between the Board members with climate- related responsibilities (Table 1) and the Environmental Pillar team
in the ESG Committee (Table 2). From September 2023, following Mr. Page’s decision to step down from the Group, Dr. Frank
Mathias, the Group's CEO, has assumed the role of Chair of the ESG Committee.
Table 1: Overview of OXB Board of Directors with climate- related responsibilities during 2023
Board Member
Responsibilities
Dr. Frank Mathias
• Responsible for the day-to-day running of the business and implementation of the
CEO (Chair of ESG Committee since
October 2023)
Group's strategy.
• Oversees the development of the Group's decarbonisation strategy and the assessment of
climate-related risks and opportunities.
Namrata P Patel
• Responsible for providing strategic insight and practical solutions to shape and achieve
Independent Non-Executive Director
objectives with regards to the Group's sustainability strategy.
Table 2: Overview of OXB ESG Committee members with climate-related responsibilities during 2023
ESG Committee Member
Responsibilities
Nick Page - Chair
COO (UK)
Mr. Page was appointed ESG Committee Chair in 2022 following
John Dawson’s departure from the Company as CEO and Chair of
the ESG Committee.
Mr. Page left the business in October 2023 and Dr. Frank Mathias
replaced Mr. Page as Chair.
Sophia Bolhassan
Corporate Affairs and Investor Relations (UK)
• Responsible for maintaining coordination between the Board and ESG
Committee on climate strategy.
• Responsible for enabling effective work flows within operational teams
to enable action aligned with the agreed climate strategy.
• Provides stakeholder input by communicating with shareholders,
investigating materiality and guiding climate strategy. An explanation of
engagement strategy can be found in the materiality section.
• Oversees ESG section of the Annual report and accounts.
• Collaborates with ratings agencies.
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52
Shane Johnston
Head of Responsible Business and Health and Safety (UK)
• Shapes and ensures the implementation of the agreed climate strategy.
• Ensures that monitoring is ongoing for all identified climate-related
metrics and targets.
Richard Crossman
Head of Engineering and Facilities (UK)
• Ensures climate strategy is being implemented and provides SME
knowledge from the estates teams in the UK.
• Ensures monitoring is ongoing for all identified climate-related metrics
Mr. Crossman left the business in November 2023.
and targets.
Following the restructure of the Group, Melanie Bull attends
meetings in her new role as Head of Engineering and Facilities (UK),
replacing Mr. Crossman.
Jonathon Baker
Head of Supply Chain (UK)
• Ensures monitoring is ongoing for all identified climate-related metrics
and targets.
• Reports using selected supply chain and procurement metrics.
• Ensures climate strategy is being implemented and provides SME
knowledge from supply chain
Mellanie Bull
Head of Manufacturing (UK)
• Ensures climate strategy is being implemented and provides SME
knowledge from manufacturing.
Ms Bull attended meetings as Head of Manufacturing (UK) until the
restructure of the Group. Following the restructure of the Group,
Ms Bull attends meetings in her new role as Head of Engineering
and Facilities (UK) and Aude Cazenave will attend in her new role as
Head of Manufacturing.
Randall Warin
Head of Procurement (UK)
Krishan Pandit
Deputy Company Secretary (UK)
Mr. Pandit left the business in November 2023.
Puja Chopra has replaced Mr. Pandit as Deputy Company Secretary
and will attend meetings in his place.
• Develops focus on sustainable procurement.
• Ensures climate strategy is being implemented and provides SME
knowledge from procurement.
• Reports using selected supply chain and procurement metrics.
• Responsible for ensuring compliance with all regulatory reporting
requirements in regards to the annual report.
Jordan Dolbear
Safety, Health and Environment Advisor and Environmental
Pillar Lead
• Advises on climate strategy and ensures agreed strategy is implemented.
• Leads overall monitoring for all identified metrics and targets.
• Collates all climate-related risk information for Group risk registers.
Mark Caswell
Site Head (US)
• Ensures climate strategy is being implemented and provides SME
knowledge from the Bedford, US site.
• Ensures monitoring is ongoing for all identified climate-related metrics
Mark became a member as US site representation in late 2023.
and targets.
The ESG Committee brings together a wealth of experience and knowledge from departments that hold strategic and operational
responsibilities that are integral to climate-related performance. Key considerations from Stakeholders and the Board are
championed by the Chair and Investor Relations roles, and operational teams provide information on opportunities and create
workflows to action agreed changes.
The specific duties of the ESG Committee are to:
• Solicit and comprehend the views of stakeholder groups on ESG and climate-related matters to inform the Group's long-term
strategic decisions.
Identify the ESG and climate-related priorities that most significantly impact the Group, its stakeholders, and its reputation.
•
• Assist in defining and executing the Group's strategy and agree on the annual plan and targets relating to climate-
related matters.
Indicate additional demand for resources, e.g. capital or personnel, to leadership in order to action targets.
•
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• Review the Group's performance against its annual plan and ESG targets, initiatives, and commitments, including its journey to
net zero Scope 1, 2 and 3 greenhouse gas emissions.
• Guide the Group's ESG communication strategy, including the Annual report and accounts.
In 2023, the ESG Committee met on 3 occasions (January, April and July). The fourth quarter meeting was rescheduled to 2024 due
to the organisational restructuring. Figure 1 illustrates the agenda items raised at the ESG Committee meetings and full governance
structure with regards to climate-related risks and opportunities.
Oxford Biomedica PLC | Annual Report and Accounts 2023
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Oxford Biomedica PLC | Annual Report and Accounts 2023
Figure 1: ESG Committee Climate-based agenda items 2023Clear strategy12023 Agenda:• Awareness of SBTI and data collection requirements• Employee travel survey• Water reduction initiative• Lighting upgrades and behavioural awareness• Introduction of recycling uncontaminated solids in manufacturing areas• Freezer challenge initiativeFinance Department2023 Agenda:• Review of climate-related risks and opportunities for materiality and strategic implicationsStrong implementation plan22023 Agenda:• Scope 1 and 2 data improvement options• Scope 3 data collection UK completion and US progressStrong implementation plan22023 Agenda:• Progress on regulatory reporting• Progress on completion of CDP and customer surveys• SBTI commitment letter and progress on scope 3 baseline data• Progress on management of priority physical climate-related risks• Review of environmental policy responsibilities• Opportunities for operational and recycling increase)Strong implementation plan22023 Agenda:• Management of “Climate Change” as a principal risk with “mitigate” status• Flood risk at Bedford, US managed as a sub-risk of the overall "Climate Change" risk on local site risk registerEnvironmental Representative GroupNet Zero GroupESG CommitteeRisk Management CommitteeBoard of Directors2023 Agenda:• Regulatory reporting (TCFD, SECR, EPR, etc.)• Stakeholder voluntary reporting appetite• Robust and credible decarbonisation targets• Material risks identified in 2022 TCFD report• Robust environmental policy Strategic report
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Figure 1: ESG Committee Climate-based agenda items 2023
The Risk Management Committee (RMC) is integral to the Group's management of climate-based risks and is informed of risk
by scenario modelling undertaken as part of TCFD work through the ESG Committee. The RMC assesses the identified risks for
materiality using defined financial risk criteria. The decision about the management of the risk (accept, mitigate, retain) is agreed
with the Board of Directors at regular Board Meetings, along with monitoring of progress for agreed action on existing risks. Agreed
actions are reviewed by the Board and progress on these actions is reported to the RMC.
There are local risk management committees across all geographies, however, Climate Change is listed as a Principal risk across
the entire business. In 2023, the Bedford, US site flood risk was recognised as a sub-risk of the overall Climate Change risk and
listed as a critical risk with a “mitigate” status in the Bedford, US specific risk register. The Group recognises that Climate Change
carries a multitude of physical and transitional risks, whilst physical risks can be modelled and simply associated with a location,
there is a level of uncertainty in the scale and impact of transitional risks. The overall “Climate Change” risk includes risks, such as
for enhancement of regional reporting and decarbonisation, which are continuously monitored. The Finance Department plays a
crucial role in informing the level of materiality in terms of financial risk for those items listed on the risk register. Finance SMEs
use the risk register to develop strategies to manage risks. One of the main actions in terms of climate-related risk in 2023 was to
integrate financial analysis for risks identified. This has now been completed and inclusion of the Bedford, US site flood risk as a
separate input on the local risk register was the direct result of this integration.
The ESG Committee is informed by and reports to the Environmental Representative group and the Net Zero group.
The Environmental Representative group is formed of 32 UK based employees situated in positions across a range of functions
within the Group. In 2023, this group of representatives met with the Environment Pillar lead on 8 occasions, to be kept
abreast of environmental developments and to drive more sustainable efficiencies within the business. In 2023, initiatives mainly
targeted employee travel, water consumption, waste management, lighting upgrades, and cold storage. These employees received
educational awareness in regard to the TCFD process, CDP and SBTI and have been tasked with sharing their knowledge within
their departments to raise the profile of the ESG strategy to improve collaboration.
The Net Zero group was created in 2023 and has met twice to progress scope 3 baseline data collection. This group is led by
the Environmental Pillar Lead and consists of Heads of Department and managerial roles within Engineering, Facilities, Finance,
Supply Chain and Procurement. A scope 3 baseline must be submitted to SBTI for verification. UK data collection was completed
in November 2023 and US data collection was completed in December 2023. Data collection for French sites will be undertaken in
2024. The Net Zero group will continue to be used as the primary hub for data collection and monitoring GHG performance. Once
SBTI targets are agreed, this group will also be responsible for planning reduction actions to meet the ambition of the targets.
STRATEGY
The Group completed modelling for climate-based risks and opportunity at both a corporate level and critical geographical
locations. The locations chosen were those determined to be most material to the Group. These were the UK and US operational
sites and 5 critical suppliers. Critical suppliers were determined by the dependency of the business in terms of both the total value
of goods and services, and deficiencies in back up suppliers for the same type of goods and services. Further details on the method
and rationale behind the modelling can be found in the Risk Management section of this report on page 67.
To understand the risk and opportunity summary table (Table 6), the time horizons and climate scenarios utilised in the modelling
have been defined below. The Group utilised 3 time horizons, as seen in Table 3 below.
Table 3: Time Horizons
Short-term
Medium-term
Long-term
Up to 2030 (in 5 year increments)
2031-2050 (in 5 year increments)
2051-2100 (in 5 year increments)
The short-term time frame is the most useful to the Group in terms of strategic planning. It is the time horizon in which transitional
risks from policy change, client and investor demand and requirement for technological adaption will be the most transparent.
The Group is aware of deadlines within these transitional spaces, whereas longer-term time frames are more unclear due to the
shorter-term developments within the transitional risk factors. One of the few known transitional requirements is the net zero
decarbonisation goal by 2050, and the short-term period covers the near-term milestones to reaching this target.
During modelling it was clear that physical climate-based risks develop over a much longer period. Short-term physical risk
modelling determines the risks that could be a material issue now. Medium-term climate modelling is utilised for oversight on
the issues that may not be a material risk now but may become material in the future. Some of the mitigation to these risks may
require medium term planning due to the requirement of large upfront investment in operational site adaptation or the sourcing of
alternative raw materials to counter risk at supplier sites or on transportation routes.
The long-term time horizon is of limited use for strategic response and the modelling has relatively low confidence due to the span
of years being forecast. For this reason, the Group chose to focus efforts on the short and medium terms risks and opportunities.
The Climate scenarios utilised within the time horizons are described in Table 4 below.
Table 4: Climate Scenarios
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Optimistic
NGFS Net Zero 2050 median
SSP2 RCP 4.5 (optimistic)
Middle of the road "Current Policies"
NGFS Current Policies median
SSP2 RCP 8.5 (Business as Usual)
Pessimistic
RCP 8.5 median
SSP3 RCP 8.5 (Pessimistic)
Set 1
Set 2
The climate scenarios were chosen to align with international best practice. Where possible, global scenarios were selected to allow
comparability of the risks that arose across all sites. The Group elected to prioritise Set 1 data because NGFS climate scenarios are
the only resource that are commonly used to also include the impact of policy change. However, Set 2 scenarios has been included
because for some physical risk modelling the Set 1 data was not available.
Table 6 describes the risks and opportunities identified, the perceived financial materiality, management and resilience of the
Group. The climate scenarios will be split between the optimistic (1.5℃), the middle of the road (2℃) and pessimistic (>2℃). The
temperature increase given to the scenarios are those that they model in the year 2050.
Table 6: Climate- Based Risks and Opportunities
TCFD
Category
Climate related trend
Potential
financial impact
Climate
scenario
Potential
materiality
Strategic response and resilience
2030
2050
2100
(Short
(Medium
(Long
Term)
Term)
Term)
‒ Reduced revenue from
decreased production
capacity (e.g. transport
difficulties, supply
chain interruptions).
1.5℃
2℃
>2℃
All climate
scenarios
‒ Write-offs and early
retirement of existing
assets (e.g. damage to
property and assets in
“high-risk” locations).
‒ Increased capital costs
(e.g. damage to facilities)
‒ Reduced revenues
from lower sales/output.
‒ Increased insurance
premiums and potential
for reduced availability
of insurance on assets in
“high-risk” locations.
Physical Risk
(Acute):
Increased
severity of
extreme
weather
events.
Annual Expected Damages
and 1-in-100-year Damage
expected to rise significantly
in middle-of-the-road
“current polices” and
pessimistic climate scenario
models for the Netherlands
and the UK.
Physical Risk
(Acute):
Increased risk
of flooding
Notable flood risk identified
in Bedford, US. Analysis
for this location indicates
the risk of a major flood
is at least 26% in 30
years before accounting for
climate change. All climate
scenarios project that this
property has about a 51%
chance of a significant
pluvial or fluvial flood over
4 feet deep before 2050.
Annual Expected Damages
in the UK are expected to
rise steeply in the worst-
case climate scenario.
Optimistic and middle
of the road scenarios
are expected to see a
much less severe increase
by comparison.
The Group periodically assesses
building integrity and has
local Business Continuity Plans
to protect against extreme
weather disruption e.g. backup
generators, prioritisation of
consumable store volumes and
client work alternative locations
and/or prioritisation.
The Group is aware that this is
a significant medium-term risk to
operational performance and the
vulnerability of assets to damage.
This risk is being managed at
site level. The landlords of the
Bedford, US site have recently
fitted a flood defence system in
place to adapt to this risk.
Local Business Continuity Plans
are expected to be developed in
2024 to manage client projects
strategically around this risk.
There is already the capacity
to utilise other OXB sites for
scheduled work across the
different geographies. The post
period-end period acquisition of
ABL Europe (renamed Oxford
Biomedica (France)) enhances site
choice for this purpose.
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TCFD
Category
Climate related trend
Potential
financial impact
Climate
scenario
Potential
materiality
Strategic response and resilience
2030
2050
2100
(Short
(Medium
(Long
Term)
Term)
Term)
Physical Risk
(Chronic):
Rising mean
temperature
Increased risk of heat
stress and decline of
labour productivity of the
middle of the road and
pessimistic scenarios.
‒ Reduced revenue
and higher costs from
negative impacts on
workforce (e.g. health,
safety, absenteeism).
All climate
scenarios
‒ Increased
operating costs.
‒ Increased operating
costs (e.g. inadequate
water supply)
All climate
scenarios
Physical Risk
(Chronic):
Water stress
Increased risk of water
stress identified at 2
critical supplier sites in
the Netherlands over the
middle of the road and
pessimistic scenarios.
High water stress area
identified at the Group's
Irish office over all
climate scenarios.
The Group recognises that
increased heat could impact
operational performance at sites
and suppliers. However, the risk
of operational loss remains low
due to the ability for the business
and critical suppliers assessed to
control the temperature within
the working environment.
The relatively low material
financial risk originates from the
expected increase in operational
costs as a result of increased
energy demand.
The Group engaged with
suppliers situated in the
Netherlands during 2023 and
assessed that there is little
financial risk to the supply of
raw materials due to water stress.
These suppliers do not provide
water-based products from the
region modelled.
The Group has identified that the
risk of water stress in Ireland
does not pose an operational risk
because operations in this region
are limited to office-based work.
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TCFD
Category
Climate related trend
Potential
financial impact
Climate
scenario
Potential
materiality
Strategic response and resilience
2030
2050
2100
(Short
(Medium
(Long
Term)
Term)
Term)
The Group is aware that there
are some green taxonomy
focused shareholders that hold a
significant share of the business.
The Group is committed to
providing the best value to
all shareholders, whilst being
an attractive addition for
sustainability credentials.
The Group tracks shareholder
requirements through materiality
assessment and direct requests.
The Group is already experiencing
requests from clients for robust
decarbonisation targets and data
associated with products. This is
one of the reasons that SBTI
commitment has been made
in 2023.
CDP reporting is also being
utilised to ensure alignment with
best practice in terms of risk and
GHG management.
The Group is aware that over
the medium term it is likely
that capital project spend will
increase to meet net zero goals.
There is currently no projection
of the spend for these projects.
However, it is estimated that
if the Group had to rely on
carbon removals it would cost
>£400,000 (UK emissions only),
using current UK carbon pricing
of £40/tCO2e. This cost is
expected to increase rapidly as
the carbon price increases.
The Group is aware that the
increase in workload brought
by enhanced reporting will
increase cost through direct
employment and consultancy.
However, the financial impact is
still expected to remain in the low
impact threshold.
Transitional
Risk:
Reputation
Increased investor and
client concern expected
across all time frames
because of interest in
green assets and scope
3 decarbonisation.
‒ Less investment
from shareholders.
All climate
scenarios
‒ Reduced attraction
to clients.
‒ Increased upfront
cost to enable
capital projects for
decarbonisation or
carbon removal.
‒ Increased operating
costs (e.g., higher
compliance costs).
All climate
scenarios
Transitional
Risk: Policy
and Legal
Enhanced emissions
reporting obligations. The
upcoming UK SDS and
CSRD are 2 rigorous
sustainability reporting
frameworks that will impact
the Group over the short-
term.
It is expected that regulatory
reporting will continue to
grow over the medium
and long term. No specific
requirements are yet known
apart from ongoing carbon
accounting improvements.
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TCFD
Category
Climate related trend
Potential
financial impact
Climate
scenario
Potential
materiality
Strategic response and resilience
2030
2050
2100
(Short
(Medium
(Long
Term)
Term)
Term)
Opportunity:
Products and
Services
There is potential for the
Group to gain client interest
from positive sustainability
performance e.g. as a low
carbon CDMO.
Opportunity:
Resource and
energy
efficiency
The Group is focused on
reducing the demand for
raw materials, energy and
generation of waste as part
of the decarbonisation plan.
‒ Increased revenue
through demand
for lower emissions
products and services.
‒ Better competitive
position to reflect
shifting consumer
preferences, resulting in
increased revenues.
‒ Reduced operating
costs (e.g., through
efficiency gains and
cost reductions)
All
Climate
scenarios
All climate
scenarios
The Group is positioned as
a pure-play CDMO and may
have the ability to attract client
interest through sustainability
performance. Risk management
and a decarbonisation plan
are underway.
The Group expects to decrease
operational cost through
investment made in resource and
energy efficiency initiatives. All
initiatives are expected to have a
positive payback period.
In terms of the overall resilience against physical climate-based risk, the Group is fortunate to be situated and have suppliers in, for
the most part, geographically advantageous locations. The only physical critical risk identified is the flooding at the Bedford, US site.
However, there is currently a floodwater pump system in place and the Group are reviewing this control and developing business
continuity plans to ensure this risk can be managed.
Transitional risk resilience relies on the Group having a robust decarbonisation strategy and being prepared for new regulation and
reporting in the ESG space. The financial impact of transitional changes are largely unknown, However the Group prefer to take a
cautious approach and ensure that the net zero goal is classified as a high risk. The Group's decarbonisation strategy is progressing
rapidly, once targets are verified and a transition plan is in place, the resilience of the Group will increase.
RISK MANAGEMENT
As mentioned, the Group has a robust and comprehensive risk management strategy that guides the identification, classification,
and monitoring of business risks. The Group established a climate-based risk identification strategy, with the support of an external
ESG consultancy and tables A1.1 and A1.2 of the all sector TCFD annex. This strategy enables the Group to identify and assess
climate-related risks and opportunities, which have now been integrated into the Group's wider business risk management
processes. The Group is committed to ensuring that its business operations are sustainable and resilient in the face of climate
change, and the Group's climate-based risk identification strategy is a testament to this commitment.
The Group conducted an internal stakeholder engagement process, by holding meetings with relevant departments, to identify
climate-related risks that could impact the business. Stakeholders across key business functions, including finance, facilities, risk
management, IT, and supply chain management were engaged. In total, 6 climate-related risks and 2 opportunities were identified
as material.
During 2023, the Group assessed the financial materiality of the identified risks, alongside the strategic response and Group
resilience, the results of which can be found in Table 6. Financial materiality is rated low, medium and high. These ratings have
used the Group's internal risk management impact criteria: low reflects the " minor" impact from the risk criteria, 1-2% revenue.
Medium reflects the "moderate" impact from the risk criteria, 3-5% revenue. High reflects both the Major and Critical risks from the
risk register, 6-10% and >10%.
Figure 2 describes the methodology of the climate-related risk strategy.
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Oxford Biomedica PLC | Annual Report and Accounts 2023
Analysis of physical climate risksAnalysis of transition risksin the pharmaceutical sectorAssessment MethodologyAnalysis of physical, transition & supply chain risksRegister ofOXB facilitiesRegisterof OXBsuppliersQualitativeassessmentof potentialtransitionrisksLevel ofdependencyon suppliersIndirectsupply chainriskOverlay toOXB FinancialStatementsDirect risk toOXB facilities/operationsRisk to top 5suppliersIdentificationof OXB’s top5 suppliersIdentificationof relevantcategories ofphysical risk• Acute risks• Chronic risksSelection ofClimateScenarios tomodel• Optimistic• Pessimistic•Current policytrajectoryDeterminationof timehorizons• Short term• Medium term• Long termSelection ofmetrics to useas proxies forclimate impactConsiderationof geographicalgranularity• Global• Regional• Country-level•LocationspecificPolicy RisksLegal RisksReputationalRisksMarket RisksTechnologicalRisksHazardProjectionMatrixAdjustment forlevel ofexposure/proximityExposure tosome risk (e.g.flood risk) ishighly locationsensitive, whileexposure toother riskfactors is moregeneralised.Adjustment forlevel ofvulnerabilityAssessment ofwhether thepresence ofmitigationfactors reducesthe level ofvulnerability tothe underlyingrisk.Production ofPhysical RiskScoresThe evaluation of climate risk scenarios under TCFD seeks to integrate both physical and transition factorsPhysical FactorsFor the purposes of this report the analysis has been limited to the top 5 suppliers (selected on the basis of size in market, deliveryfrequency, and replaceability). The transmission of climate risk via the supply chain must also consider the level of dependency on eachsupplier which may lessen or reinforce the potential impact.Transition FactorsTransition risks are typically less business or asset-specific and may be generalised across the relevant sector – in this case thepharmaceutical sector. Strategic report
Corporate Governance
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Figure 2: Climate-based risk and opportunity assessment methodology
Once the Group had selected sites for assessment, climate-related risk modelling was undertaken utilising the below metrics shown
in Table 7.
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Table 7: Climate-based risk and opportunity metrics
Risk factor
Extreme Weather
(Physical – acute)
Flood Risk
(Physical – acute)
Metric used
as proxy
1-in-100-Year
Expected
Damage from
Tropical Cyclones
Annual Expected
Damage from
Tropical Cyclones
Annual Expected
Damage from
River Floods
Distance from
projected
flood plains
Explanation of why these particular metrics have been used
In most cases, the following proxy metrics have been used for assessing the risk of extreme weather:
1-in-100-Year Expected Damage from Tropical Cyclones
•
• Annual Expected Damage from Tropical Cyclones
While there are other metrics that are relevant to extreme weather, these have been deemed the
most useful as they provide the best aggregation of overall/combined risk levels from this particular
climate factor.
In most cases, the following proxy metrics have been used for assessing regional flood risk:
• Annual Expect Damage from River Floods
• Distance from projected flood plains
While there are other metrics that are relevant to regional flood risk, these have been deemed the
most useful as they provide the best aggregation of overall/combined risk levels from this particular
climate factor.
Where possible location specific data for flood risk has been sourced to provide a more granular
assessment that reflects likely conditions on the ground at each site.
Heat Stress
(Physical
– chronic)
Daily Maximum
Air Temperature
Daily Minimum
Air Temperature
Mean
Air Temperature
In most cases, the following proxy metrics have been used 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 the most useful
as they provide the best aggregation of overall/combined risk levels from this particular climate factor.
Humidity
Relative Humidity The risk from humidity can be presented through more direct metrics without the need for proxies.
(Physical
– chronic)
Specific Humidity
Water Resource
Water Stress
(Physical
– chronic)
Water Supply
Water Demand
Transitional Risks
Policy and Legal
(Transitional
– chronic)
Transitional
Opportunities
Technology
Reputation of
Pharma Sector as
a whole
Market
Resource
Efficiency
Energy Source
Products
and service
Where available, the following proxy metrics have been used 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 the most useful as they provide the best aggregation of overall/combined risk levels
from this particular climate factor.
The assessment of transitional risks and opportunity 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 super-abundance of potentially relevant data makes it prohibitively difficult to
isolate 2 or 3 key metrics as representative.
Sector specific research and economic commentary has been relied upon to assign various
transitional risks as low, medium or high respectively.
The climate scenarios and time-horizons described in the strategy section of this TCFD report were utilised along with the above
metrics using common global climatic data sources and models, shown in Table 8.
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Data Sources and Models
ISMIP (Inter-Sectorial Impact Model Intercomparison Project) based on more than 100 models
CLIMADA (an open-source catastrophe risk modelling framework)
CMIP5 GCM data
For US flood and precipitation risk: FEMA analysis, NOAA Inundation maps and LOCA statistically downscaled CMIP5 projections
World Resource Institute Aquaduct Global Maps 3.0
HydroBASINS database
The Pfafstetter System
The method described provides oversight on the current and future level of physical risk for all physical climate- based metrics.
Transitional risk identification was completed by expert input from external consultants and the Group's own internal research. In
2023, the Group received a horizon report for upcoming change in regulatory reporting to further understand the impact of this
risk. Further training on reporting requirements is planned by the ESG Committee in 2024.
Not all the metrics used in physical climate-based modelling returned a material risk. The modelling returned a low risk for humidity
overall and certain metrics only suggested enhanced risk in certain geographies, for example, Bedford, US site flood risk.
As part of the Group's strategy, agreement was gained at the ESG Committee in 2023 to repeat physical-climate risk modelling
across all locations every 5 years to reflect the fact that changes in physical risk is a longer-term issue. However, high material risks
in the current time, i.e. Bedford, US flood risk, shall be reviewed more frequently by the RMC to ensure that current controls are
adequate for the risk.
Transitional risks will require an annual assessment starting in 2024 because changes in this space are faster. This will be achieved
through continued engagement with external consultants and reviews of stakeholder demands through materiality assessment.
As detailed in the Governance section of this TCFD report, the ESG committee is responsible for enacting risk and opportunity
identification methods and monitoring overall management of material risks. The RMC is notified of developments in the
identification of risks and works with the Finance department to decide on overall materiality. The Board of Directors meets with
representatives from the ESG Committee and RMC to decide on the most appropriate level of action for each risk.
METRICS AND TARGETS
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. The all sector guidance of the TCFD annex was utilised, particularly Table A2.1,
to assess the materiality of the metrics chosen. Further details regarding these metrics, together with the reasons for their selection,
are disclosed in Table 7.
The Group has made considerable progress on calculating the entire value change of Greenhouse Gas (GHG) emissions and
implementation of a recognised, robust decarbonisation plan. In 2023, the Group committed to the SBTI to ensure alignment with
internationally recognised GHG reduction requirements. This decision was taken by the Board of Directors in coordination with the
ESG Committee and with investors and clients in mind. The scope 1, 2 and selected scope 3 emission figures for 2023 can be seen
in the SECR report. Whilst this is all that can be demonstrated at this time, scope 3 emission data has been collected for Bedford,
US and Oxford, UK sites. The new target for 2024 is to calculate the entire GHG value chain, which means the inclusion of the
newly acquired Oxford Biomedica (France) sites, for our baseline year of 2021. Newly agreed decarbonisation targets will then be
sent for SBTI validation. Whilst this will not slow action planned for emission reduction in 2024, such as standardised office heating
and cooling, it will mean that the decarbonisation targets will be adapted. Although the Group cannot disclose these new targets in
this report, the scope of the value chain emissions for inclusion is described below in Table 9. All emissions that are material to the
business will be included in calculations.
Table 9: GHG Inventory scope
Scope 1
All sources from SECR apply. The GHG Protocol operational control scoping method has been adopted.
Scope 2
All sources from SECR apply. The GHG Protocol operational control scoping method has been adopted.
Scope 3
Emission Category
Included/Not Included
Rationale if not included
Category 1- Purchased Goods and Services
Category 2- Capital Goods
Category 3- Fuel and energy-related activities
Included
Included
Included
Category 4- Upstream transport and distribution
Included
Category 5- Waste Generated in Operations
Category 6- Business Travel
Category 7- Employee Commuting
Included
Included
Included
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Scope 1
Category 8- Upstream Leased Assets
Not Included
Category 9- Downstream Transport and distribution Included
Category 10- Processing of Sold Products
Not Included
The Group has operational control of all assets being
leased. The emissions from these assets are accounted
for in scopes 1 and 2.
OXB products undergo complex processing with a
number of third-party consumables at client sites. These
emissions are not practically possible to determine.
Category 11- Use of Sold Products
Not Included
There are no use phase emissions to be determined.
Category 12- End of Life Treatment of sold products Included (waste
packaging only)
Category 13- Downstream Leased assets
Included
Category 14- Franchises
Category 15- Investments
Not Included
Not Included
The Group does not have a franchise business model.
The Group does not have an investment portfolio.
The planned SBTI targets will be near-term (maximum of 10 years) to enable a focused effort on the development of transition
planning and actions in following years. In 2023, the Group decided to extend the net zero target from 2040 to 2050 due to
the Group being reliant on future technological advancements and market conditions to be able to achieve this target without
creating unnecessary financial risk from unproven technology and carbon storage methods. Whilst the Group will be net zero in
2050 aligned from 2024, if technology and market conditions become favourable, the Group is open to bringing this long-term
date forward in the future.
Scope 1 and 2 emission performance remains the key area for large scale reduction to meet the Group's decarbonisation targets.
Figure 3 demonstrates Group's performance to date with the existing near-term targets (to be altered) and the net zero 2050 target.
The Group defines net zero as reducing Scope 1, 2 and 3 emissions by 90-95% against the established baseline (2021), as well as,
engaging in carbon removal initiatives to manage residual emissions.
Figure 3: Scope 1 and 2 emissions performance with projected near and long-term targets
Existing near-term targets (to be reviewed once SBTI targets are proposed):
•
10% reduction in Scope 1 and Scope 2 GHG emissions by the beginning of 2027 from 2021 baseline;(Ongoing, baseline
requires review);
10% of electric energy to be fully renewable (non-carbon based) by 2027 (met through renewable energy tariffs); and
•
• Switch to 100% fully electric vehicles used by the Group on site by the end of 2027 (Ongoing).
There are plans, post period-end, for the Group to investigate expected capital cost of emission reduction actions. This will allow
the integration of these costs into future financial planning.
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Non-Financial and Sustainability Information Statement (NFSIS)
The Group aims to comply with the Non-Financial Reporting requirements contained in section 414CA and 414CB of the
Companies Act 2006. The table below, and information it refers to, is intended to help stakeholders understand the Group's
position on key non-financial and sustainability matters.
414CB Disclosure Requirement
Location of disclosure within this annual report
(A1) Climate- related financial disclosures
• TCFD report Page 49-65
(1) (a) Environmental matters
(1) (b) The company's employees
(1) (c) Social matters
• Environment Section Page 49
• People Page 45
• Community Page 48
(1) (d) Respect for human rights
• Governance, Integrity and Ethics Page 65
(1) (e) Anti-corruption and anti-bribery matters
• Governance, Integrity and Ethics Page 65
(2) (a) Description of business model
• Business Model Page 12
(2) (b) + (c) policies relating to (1) (a)-(e) and their outcomes
• To be found in the relevant sections referenced against (1) (a)-(e)
(2) (d) principle risks of matters considered in (1) (a)-(e)
• Principal Risks Page 67
(2) (e) non-financial key performance indicators
• Non-Financial key performance indicators Page 31
Governance, Integrity and Ethics
Oxford Biomedica is committed to the highest standards of ethical conduct and integrity in its business activities in the UK, the US
and overseas.
Corporate Governance
Good corporate governance, including compliance with the Corporate Governance Code and the Listing Rules, continues to be
an important area of focus for the Group. The Board believes that good corporate governance is ultimately the responsibility of
the Board and its Committees and is essential for the long-term success of the business. During 2023, the Company was largely
in compliance with the Corporate Governance Code and the Listing Rules but acknowledges that it did not fully comply. Further
details of the Company's compliance with the Corporate Governance Code and the Listing Rules can be found in the Corporate
Governance Report section of this Annual report and accounts on pages 76-81.
Oxford Biomedica is aware of the upcoming changes to the Corporate Governance Code and the proposed changes to the Listing
Rules, which become effective in 2025 (including Provision 29 which becomes effective in 2026). During 2023, the Company
continued to prepare for the expected changes, ahead of the expected reforms. Preparation for the upcoming changes included,
amongst other things, a review of Board composition and a review of the internal controls environment within the Finance
department. Much of these changes are now complete although the Group will continue to monitor the proposed reforms to
prepare for compliance with the new rules and regulations in 2025.
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.
Following an anti-bribery and anti-corruption review that was undertaken by an independent external consultant in 2021, the
policies and procedures were reviewed and revisions were made to existing policies and procedures to enhance oversight and risk
management. During 2023, these policies and procedures were reviewed against the onboarding due diligence process for all third
parties and training was arranged for employees through an online learning portal. All employees are required to repeat general
anti-bribery training annually.
OXB (US) LLC is committed to complying with the US Foreign Corrupt Practices Act and other applicable anti-corruption laws and
has an employee-facing policy to maintain compliance with such laws.
Following the acquisition of ABL Europe (recently renamed Oxford Biomedica (France) SAS), and post period-end, the anti-bribery
and corruption policies and processes are being reviewed with a view to aligning across OXB's sites to strengthen and enhance the
onboarding due diligence processes with regards to all third parties.
Whistleblowing
Oxford Biomedica’s compliance activities include the prevention and detection of misconduct through policy implementation,
training and monitoring. As part of this effort, 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 whistleblowers. A similar reporting channel will be rolled out to employees in Oxford Biomedica (France) in 2024.
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Clinical Trials
Oxford Biomedica instils transparency, safety and ethics in all aspects of its business, including the design and conduct of its clinical
trials with patient safety as a paramount concern. 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 as well as the internationally accepted guidelines for the conduct of ethical clinical trials,
specifically ICH-GCP and the Declaration of Helsinki.
Quality Assurance 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.
Oxford Biomedica’s standard operating procedures and the legislative framework covers the risk assessment procedures of the
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).
In line with its strategy to become a pure-play CDMO, Oxford Biomedica discontinued work on internal product development in
the second half of 2023. As a pure-play CDMO the Group will not be running clinical trials.
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 Statement 2023 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. OXB (US) LLC 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. Post period-end, the Group plans to roll out the Group
Supplier Code of Conduct to all major suppliers in the US and France over the course of 2024 and continue to develop tools and
processes to educate its people on how to engage with new and existing suppliers on this topic.
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 “R's” 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.
In addition , 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 pre-clinical 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 pre-clinical projects reviewing design and animal numbers, and includes ethical
review considerations.
Please note that from the end of 2023, Oxford Biomedica is no longer developing products and is therefore not carrying out any
animal testing.
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Principal risks, uncertainties and
risk management
The Group is exposed to a range of risks, and operates in the cell and gene therapy sector which, by its nature, is relatively high risk
compared with other industry sectors. Some of the risks are specific to the Group's current operations, others are common to all
CDMO companies. Following the strategic review by the Board in 2023, the Risk Management Committee (RMC), the Board, and
the CET have carried out a robust assessment of the emerging and principal risks facing the Group, a quality and innovation-led
pure-play CDMO, including those which could threaten its business model, future performance, solvency or liquidity. Following the
Group exiting its gene therapeutics pipeline, the Group no longer deem risks associated with product development as principal
risks. There are significant financial, development and manufacturing risks in the 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 is provided with a risk report from the RMC as part
of its Board materials at each of its formal meetings, of which there are at least six annually. The risk management processes
are the responsibility of the CET with emerging risks identified by horizon scanning and discussed at the RMC (details of which
can be found in the section titled Emerging Risks). The Audit Committee monitors the risk management processes and their
implementation as well as reviewing the Group's internal financial controls and internal control systems.
• CET - during 2023, the CET (referred to as SET until November 2023) generally met every week, with once monthly-extended
CET sessions to discuss current business issues and to consider relevant risks. Every quarter, the CET meets with the Chair of the
RMC to consider the operational risk management processes and risks identified.
• Key management committees – the Group currently operates management sub-committees which meet monthly and through
which much of the day-to-day business is managed. During 2023, this was managed through the extended Operational
Leadership Team (which incorporates the Quality and Manufacturing Operations Committee), now represented by the Site
Leadership Teams; the Intellectual Property Management Committee; the Science and Technology Advisory Committee; the
Technical Development Committee, now the Global Technical and Innovation Committee; and the Workforce Engagement
Panel (WEP). Risk management is a key feature of each sub-committee. Further information on the reporting lines of these
committees can be found in the section titled Corporate Governance Framework on pages 77.
• Risk Management Committee – During 2023 ,the RMC comprised senior managers from each area of the business including
members from the UK and US sites. The RMC is chaired by the Director of Financial Controls. Following the acquisition of ABL
Europe (recently renamed Oxford Biomedica (France)), the RMC will include members representing operations in France. The
RMC 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 resultant risk register, captures each operational and strategic risk, and any related mitigating
actions. A combined corporate risk register is discussed with the CET, at least quarterly, where strategic risks are agreed. The
strategic risks form the basis of the Board risk report.
• From Q2 2024, a new Group Environmental, Social, Governance and Risk Committee structure will replace the existing
RMC, ESG Committee, and Health & Safety Committee thereby formalising ESG into the Group's enterprise risk management
framework. This committee will be supported by ESG & Risk Forums across each of OXB's sites in the UK, the US and EU (France).
• 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 good manufacturing practice (GMP),
good clinical practice (GCP) and good laboratory practice (GLP) any deviations from the SOPs are identified and investigated.
Compliance with such SOPs are routinely subject to audit by the relevant regulators and business partners. Other SOPs, such as
financial processes, are also subject to audits.
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PRINCIPAL RISKS, UNCERTAINTIES AND RISK MANAGEMENT (CONTINUED)
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 in the short term. 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 in order to ensure these are managed appropriately.
Emerging risks are identified via horizon scanning and are discussed at the RMC, and if deemed significant are captured in the
risk register. For example, the following key active risks have been observed as an increasing risk, in terms of the likelihood and
potential impact:
• Cyber risk: Threats relating to cyber security have been identified as becoming more sophisticated.
• Legal, regulatory and compliance risks: These risks continue to increase as the Group expands into new geographies becoming
subject to additional rules and regulations.
Principal risks
There are a few notable changes to the Group's principal risks this year.
Previously, the Group identified the risk of failure or delays in the execution of the
business plan of OXB (US) LLC (previously Oxford Biomedica Solutions LLC) as a
principal risk. This risk crystallised during 2023 when Homology, a key client of
OXB (US) LLC, announced a halt to its development programme. In addition, the
Group previously identified as a principal risk being unable to spin out its product
development business. This risk has been removed by the closing of the legacy
product development division.
The change in strategy into a quality and innovation-led pure-play CDMO has
assisted the Group in offsetting these previously identified principal risks. However,
the Group recognises the risk posed by the transformation itself. The Group has
therefore identified and registered the failure to become a quality and innovation-
led pure-play CDMO as a principal risk for 2024.
Additionally, given the impact of the external macroeconomic and geopolitical
environment on supply chains, the Group took the decision to extend the previous
principal risk concerning the war in Ukraine to cover general geopolitical unrest.
Risk category and
principal risk
Context and potential impact
Mitigation actions
Trend versus prior year
COMMERCIALISATION RISKS
OXB fails in its strategy
to become a quality
and innovation-led
pure-play CDMO.
A failure by the Group to adopt its
change in strategy, and a failure to
execute the strategy could materially
impact the business and success of
the Group.
This new risk recognises
the challenges posed
by the Group's
transformation strategy.
• Group-wide transformation and integration
programmes are in progress to ensure the
business is supported in its transition to
become a pure-play CDMO.
• A Group CEO with strong CDMO experience,
has been appointed to drive the change in
Group strategy.
• A new organisational structure has been
created to align and integrate commercial
and operational activities across the OXB sites,
which includes the appointment of Site Heads
for each site who provide regular updates to
the CET and the Board.
• The Group has invested in the recruitment
of a commercial team with strong CDMO
experience. The Group has created a global
function for CDMO sales and business
development thereby aligning the sales
pipeline across all sites.
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Risk category and
principal risk
Collaborator
and partner
Context and potential impact
Mitigation actions
Trend versus prior year
• 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.
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 licences.
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.
Rapid technical change The cell and gene therapy
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
active horizon scanning 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.
This risk increases as
the move into new viral
vector sectors carries
significant risk.
Vector strategy
The Group has historically been
dependent on lentiviral vector
partnerships for revenue, and the
move into new viral vector sectors,
such as AAV, without prior specialist
experience carries significant risk to
the Group.
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.
• The Group is mitigating this risk by diversifying
its client portfolio with a vector agnostic
approach, across all key viral vectors.
• The commercial teams across the sites have
been consolidated, aligning the use of the
OXB brand to leverage the OXB reputation in
lentiviral vectors to grow the AAV franchise
and expand the growing business pipeline to
spread the risk.
• The Group is planning the introduction of
manufacturing of lentiviral vectors at the
Bedford, US site.
• The Group has appointed sector experienced
Site Heads to mange the US and UK
operations. The Site Heads regularly report to
CET and the Board.
• The Group mitigates the supply chain risks,
across sites, by sourcing from multiple
suppliers and regularly evaluating the correct
inventory levels of critical material supplies
through strategic inventory reviews.
• The Group has asked key suppliers to hold
stocks in local warehouses to cover any
immediate supply issues.
• The Group's new 45,000 square feet
Wallingford warehouse is now open enabling
the Group to hold an appropriate amount of
ambient stock to cover upcoming production.
Bioprocessing failure
The Group receives significant
revenues from bioprocessing 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.
• The Group mitigates the risk of failing to
meet required specifications by investing
in high quality facilities, equipment and
employees and, in particular, in quality
management systems.
• The Group mitigates the risk of variability
in the quality of critical raw materials by
increased engagement with its key suppliers
and evaluating alternative critical suppliers.
This risk increases as
the move into new
viral vector sectors may
increase the risk of
bioprocessing failure.
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PRINCIPAL RISKS, UNCERTAINTIES AND RISK MANAGEMENT (CONTINUED)
Risk category and
principal risk
Failure in information
technology or
cyber security
Context and potential impact
Mitigation actions
Trend versus prior year
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 may impact the Group's
ability to deliver to clients and
ultimately its financial performance
and damage the Group's reputation.
• The Group mitigates the risk of cyber-attacks
by ensuring that it has robust security
monitoring and protection in place to
provide detection of, and defence against,
hostile activity.
• The Group works holistically, across all sites, to
protect domains and systems from attack.
• The Group has worked to mitigate the impact
of a cyber-attack by developing and testing
recovery plans.
• Further details can be found in the CIO report
on page 72.
This risk continues to
increase as threats from
cyber security become
more sophisticated.
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.
• The Group has put in place a competitive
rewards and incentivisation package and
regularly engages with employees 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.
This risk has reduced due
to a general downturn in
the recruitment market,
but the threat of
highly skilled employees
joining competitors
remains a concern.
LEGAL, REGULATORY AND COMPLIANCE RISKS
Adverse outcome of
litigation and/or
governmental
investigations
The Group's business operations are
subject to a wide range of laws,
rules and regulations across the UK,
the EU and the US. 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 has an established compliance
framework and has developed a strong ethical
and compliance-focused culture amongst
its employees.
• The Group uses professional advisers to
provide appropriate guidance and advice
tailored to both the UK, the US and the EU
market and applicable laws and regulations, to
minimise any resulting risk that may arise.
This risk continues
to increase as the
Group expands into new
geographies becoming
subject to additional rules
and regulations.
Adverse outcome of
regulatory inspections
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 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.
Intellectual Property
Third party patents may emerge
containing claims that impact the
Group's freedom to operate with
respect to its platforms.
• The Group has a dedicated team which
actively manages IP rights and any IP litigation.
• The Group has adopted a strategy of
monitoring third party IP to identify future
possible issues.
As the Group is no longer
developing products, the
approach to IP is different
but infringement remains
a risk.
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Risk category and
principal risk
Context and potential impact
Mitigation actions
Trend versus prior year
ECONOMIC AND FINANCIAL RISKS
Climate change
The Group assesses physical climate-
related risk at material geographic
locations; transitional risks forecast
by upcoming policy change;
and non-compliance with TCFD
reporting requirements.
• The Group assesses physical climate-related
risks, such as acute risks (flooding, high
winds) and chronic risks (increased average
temperatures) across all Group sites and
suppliers where operational disruption may
hold significant financial risk.
Foreign currency
exposure and
loan facility
Product liability and
insurance risk
Geopolitical unrest
The Group may fail to
assess and implement increasing
regulation as it expands into
new geographies and encounters
increased regulatory oversight.
• Transitional climate-related risks are assessed
at a Group or regional level and include
issues such as enhanced regulatory reporting
requirements; changes in client and investor
demand; and reputational risk.
• The Group liaise with external advisers
to help ensure the Group comply with
TCFD recommendations.
The change in strategy into a
quality and innovation-led pure-play
CDMO, across three countries,
exposes the Group to currency
fluctuations between the US Dollar,
Euro and Sterling.
The Group has increased its US
Dollar denominated spend by the
UK business, and is exposed to
fluctuations in the Sterling/US Dollar
exchange rate.
Failure to comply with the terms
of the $50m loan agreement with
Oaktree could potentially place the
Group in default, and may require
immediate repayment of the loan.
• Following the strategic decision of the
Group to become vector agnostic across
manufacturing sites, the Group expects an
increased proportion of income received in
both US Dollars and Euros to offset this risk.
• The Group's acquisition of ABL Europe
(recently renamed Oxford Biomedica (France))
included the value of €10 million cash from
Institut Mérieux.
• The Group's cash balances are predominantly
held in Sterling, but the Group does
keep US Dollar balances to cover net US
Dollar expenditure over a forward-looking 12
month period.
• Compliance with the terms of the Oaktree
loan agreement is monitored by the Legal and
the Finance departments.
This risk is increasing
as the Group expands
into new geographies
becoming subject
to additional rules
and regulations.
This risk continues to
increase due to continued
fluctuation of Sterling
versus the US Dollar,
and the Group's increased
activity in Euro currency.
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
across the business.
• The Group operates extensive insurance
coverage, across its global operations, to cover
any loss incurred where possible.
• Although the Group is able to obtain coverage
against these risks, there can be no assurance
that future insurance cover will be available to
the Group at an acceptable cost, or that in
the event of any claim the level of insurance
carried by the Group will be adequate.
This risk has been
reduced by the decision
to discontinue internal
product development,
although exposure to
legacy products remain.
• 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.
This new risk recognises
the impact of the external
macroeconomic and
geopolitical environment
on the Group's
supply chains,
Inflationary cost pressures have
accelerated in the wake of
geopolitical events, such as the war
in Ukraine and unrest in the Middle
East giving rise to 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
is directly impacted by negative
geopolitical events.
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72
PRINCIPAL RISKS, UNCERTAINTIES AND RISK MANAGEMENT (CONTINUED)
Protecting the Group's digital infrastructure, systems and data - CIO report
The Group recognise cyber security as a principal risk. A comprehensive digital security plan helps mitigate the operational,
financial, reputational and stakeholder risks caused by cyber security threats, including the risk of major data breaches arising from
internal lapses. The Board and CET acknowledge that threats and attacks here are becoming more sophisticated, more targeted and
more automated.
Strategy
Governance
The digitalisation of core GxP and research processes is an
important part of OXB's overall corporate strategy to be
an innovation-led CDMO. Digitisation enhances controls and
compliance, makes the Group's data easier to work with and brings
operational efficiency.
Oxford Biomedica's role in COVID vaccine manufacturing for
AstraZeneca required the Group to take a more alert and defensive
posture on cyber matters. The nature and source of threats
became both more likely and more diverse. The Group continues
to receive support from the National Cyber Security Centre
following its work with AstraZeneca on the COVID vaccine. In
addition, the Group continues to actively participate in industry-
focussed cyber security forums.
As the Group moves to end-to-end digitisation of design,
development and manufacturing functions it inherently increases
the attack surface and the criticality of those services to compliant
delivery to clients and therefore revenue.
The Chief Information Officer leads on digital security strategy
for CET. The Board is presented with an annual Cyber Security
Review and receives an update in every CIO Board Paper. Digital
security governance, process and routine cycles are captured in
SOPs and Policies, which provide a framework for both PLC and
GxP, including for healthcare regulator audit purposes.
The CIO is a member of the CET; this ensures that cyber matters
are directly connected with strategy and that security is ‘designed
in’ to new and development activity. There is strong central control
and investment in IT.
Perimeter security, strong authentication and detection tools are
fundamental. The Group monitors and reviews configuration of
these tools as a team and reviews usage with vendors on a regular
basis. This is regularly tested.
Strong emphasis is placed on human factors and vigilance as
defence. The Group's life sciences 'quality' mentality brings a
healthy culture of reporting potential incidents and raising low-
level concerns which is embraced and supported by the Group's IT
and security functions.
Risks
Events
Aside from the general threat to business operations, digital security
risks present specific threats to the Group's ability to operate as
a CDMO:
The Group was subject to two phishing attacks during 2023. The
Group's systems and procedures detected the attacks and rapidly
prevented any intrusion.
• GxP Data Integrity. To release a product to a client such that it
is safe, performs to the required quality and is compliant with
regulations it must be accompanied by a complete and accurate
record of every aspect of its production. As more of that record
becomes digitised so does the potential for cyber disruption.
New systems, supporting infrastructure and archiving tools will
extend to address this risk.
•
IP Theft and Data Loss. Clients entrust the Group with their IP.
The Group's platform IP and know-how is a key differentiator
for Oxford Biomedica. Internal controls and monitoring tools
support this work.
The strategic report on pages 4 to 72 was approved by the the Board on 29 April 2024 and signed on its behalf by:
Frank Mathias
CEO
29 April 2024
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Corporate Governance
Financial statements
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CONTENTS
Corporate Governance
Board of Directors
Corporate Governance Report
Audit Committee Report
Nomination Committee Report
Directors' Remuneration Report
Directors' Report
74
76
82
86
89
115
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Corporate Governance
74
Board of Directors
At the end of 2023 the Board
comprised the following Directors:
Dr. Roch Doliveux (1)
Chair (Interim Chief Executive Officer
until March 2023)
Dr. Roch Doliveux was appointed to
the Board as Non-Executive Chair in
June 2020. Dr. Doliveux was appointed
interim CEO from January 2022,
following John Dawson’s retirement,
until March 2023 when Oxford
Biomedica welcomed Dr. Frank Mathias
as the Chief Executive Officer. 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 S.A. 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. Prior to this,
Dr. Doliveux worked at Schering-Plough
International, Inc. from 1990–2003 and
at Ciba-Geigy AG (now Novartis) from
1982-1990. Dr. Doliveux is a Veterinary
Surgeon by training and has an MBA
from INSEAD.
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
Dr. Frank Mathias (2)
Chief Executive Officer
Dr. Frank Mathias joined the Board
as Chief Executive Officer 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 Rentschler, 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 Deutschland GmbH, Servier
Deutschland GmbH 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.
Relevant skills:
Biotech and Pharma experience.
CDMO Industry experience.
CEO and global leadership.
Manufacturing/Supply Chain.
Stuart Henderson (3)
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 LLP 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 Non-
Executive Director of the Babraham
Institute, Biocity Group Limited, Norwich
Research Partners LLP, OneNucleus
Limited (the Life Sciences trade body
for Cambridge and London) and Cell
Therapy Catapult Limited.
Committee membership:
Audit Committee (Chair).
Remuneration Committee.
Nomination Committee.
Relevant skills:
Audit.
Corporate governance.
Corporate finance.
Professor Dame Kay
Davies (4)
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 Dr. Lee’s Professor of Anatomy
Emeritus and Co-Director of MDUK
Oxford Neuromuscular Centre at the
University of Oxford. Professor Davies
also sits on the Board of UCB S.A. and
Thomas White Oxford Limited. She was
co-founder of Summit Therapeutics Plc,
a spinout from her research activities.
Previously, Professor Davies was a
Director of The Biotech Growth Trust
plc. and a governor of the Wellcome
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.
Committee membership:
Remuneration Committee.
Nomination Committee.
Science and Technology Advisory
Committee (Chair).1
Relevant skills:
Cell and gene therapy.
Scientific advisory.
Stuart Paynter (5)
Chief Financial Officer
Stuart Paynter joined the Board as
Chief Financial Officer in August 2017.
Mr. Paynter has more than 20 years’
experience in the pharmaceutical and
healthcare sectors. He qualified as
a Chartered Accountant with Haines
Watts before moving to Electronic
Data Systems Limited. Mr. Paynter
subsequently joined Steris plc, 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 plc 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.
Relevant skills:
Financial, Audit and Risk.
Corporate Governance.
Cell and Gene Therapy
industry experience.
Catherine Moukheibir (6)2
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 (Chairman
and CEO), Zealand Pharma A/S, Zeltia
S.A., and Creabilis SA. Prior to that,
she was the CFO of Movetis N.V,
overseeing the company’s IPO on
Euronext and subsequent sale to Shire
Pharmaceuticals plc. 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.
1 The STAC which comprises selected external scientific advisers, members of the CET (known as SET until November 2023) and members of the Board. The STAC
is chaired by Professor Dame Kay Davies.
2 Catherine Moukheibir will not be standing for re-election at the forthcoming Annual General Meeting in June 2024.
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In March 2024, post
period-end, the Board was
delighted to announce
the appointment of Peter
Soelkner to the Board
as an independent Non-
Executive Director.
Peter Soelkner (12)
Independent Non-Executive Director
Peter Soelkner was appointed to the
Board as a Non-Executive Director in
March 2024. Mr. Soelkner has more
than 30 years' experience in the
global pharmaceutical services industry
with significant CDMO expertise. He is
currently Managing Director of Vetter
Pharma, a global Aseptic Filling and
Packaging CDMO, where over the
past 15 years he has helped grow
revenues from $200 million to more
than $1 billion. Prior to Vetter, Mr.
Soelkner held various senior positions
at Sartorius including Vice President
of the Americas region where he
expanded the global footprint of the
business across the US and multiple
sectors. He has an MBA from Columbia
Business School, New York and Masters
in Chemical Engineering from TU
Dortmund University, Germany.
Relevant skills:
Corporate strategy.
CDMO.
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 NV,
Ironwood Pharmaceuticals, Inc and
MoonLake ImmunoTherapeutics), and
privately owned (CMR Surgical Limited,
Asceneuron SA. DNA Script SAS and
Noema Pharma AG).
Committee membership:
Audit Committee.
Relevant skills:
Corporate finance.
Corporate strategy.
Dr. Heather Preston (7)
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 also on the board
of Oxford Nanopore Technologies plc.
In addition, she 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
more than 20 years. Over the course
of her career, Dr. Preston has also
served as a Director on the Boards of
Oxford Science Enterprises plc, Karuna
Pharmaceuticals and Akouos Inc. Dr.
Preston holds a degree in Medicine from
the University of Oxford.
Committee membership:
Remuneration Committee (Chair).
Audit Committee.
Nomination Committee.
Scientific and Technology
Advisory Committee.3
Relevant skills:
Scientific advisory.
Corporate finance.
Investor relations.
Leone Patterson (8)
Independent Non-Executive Director
Leone Patterson was appointed to the
Board as an Independent Non-Executive
Director in May 2023. Ms. Patterson
has more than 20 years of public
company biotech experience including
in the cell and gene therapy industry and
has managed significant growth within
international commercial companies
working across areas including strategy,
finance, operations and governance. She
is currently the Chief Financial and
Business Officer at Tenaya Therapeutics,
Inc., a clinical-stage company with a
mission to discover, develop, and deliver
potentially curative therapies, including
gene therapy, for heart disease. She is
also a Board member at Nkarta, Inc.,
a clinical-stage cell therapy company.
Over the course of her career, Ms.
Patterson has held leadership roles at
Adverum Biotechnologies, Inc., Diadexus
Inc., and Transcept Pharmaceuticals, Inc.
and, earlier in her career, worked within
Novartis AG, Chiron Corporation and
KPMG. She holds a BS in business
administration and accounting from
Chapman University, an executive M.B.A.
from St. Mary’s College and is a Certified
Public Accountant (inactive).
Committee membership:
Audit Committee.
Relevant skills:
Financial, Audit and Risk, Business
Development and Strategy.
Cell and Gene Therapy
industry experience.
Cybersecurity/IT.
Dr. Michael Hayden (9)4
Non-Executive Director
Dr. Hayden was appointed to the
Board as a Non-Executive Director
in July 2021. Dr. Hayden 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.
Committee membership:
Science and Technology
Advisory Committee.3
Relevant skills:
Cell and gene therapy.
Scientific advisory.
Drug development.
Namrata Patel (10)
Independent Non-Executive Director
Namrata Patel was appointed to the
Board as an Independent Non-Executive
Director in April 2022. Ms. Patel has
extensive international experience in
manufacturing, contract manufacturer's
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, Procter & Gamble and
is currently working as Chief Supply
Chain Officer for Haleon plc. Ms.
Patel 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.
Relevant skills:
Sustainability
Corporate finance.
Investor relations.
Robert Ghenchev (11)
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.
Relevant skills:
Corporate finance.
Investor relations.
3 The STAC which comprises selected external scientific advisers, members of the CET (known as SET until November 2023) and members of the Board. The STAC
is chaired by Professor Dame Kay Davies.
4 Dr. Michael Hayden will not be standing for re-election at the forthcoming Annual General Meeting in June 2024.
Oxford Biomedica PLC | Annual Report and Accounts 2023
791181012
76
Corporate Governance Report
Dear Shareholder
I am pleased to present Oxford Biomedica’s Corporate Governance Report for 2023.
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.
I assumed the role of interim Chief Executive Officer of the Company in January 2022 following the announcement that John
Dawson intended to retire from his role as Chief Executive Officer and an external search consultancy was appointed to commence
the formal process to appoint a successor. In November 2022, we were 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, having joined us from Rentschler Biopharma SE, where he served as
their CEO from 2016. The appointment of Dr. Mathias has been a significant step in embedding our strategic focus as a quality and
innovation-led cell and gene therapy CDMO.
During 2023, Oxford Biomedica made significant advancements to become a leading pure-play cell and gene therapy CDMO.
Throughout the year, our primary focus has been further establishing global leadership in developing and manufacturing high-
quality viral vectors for cell and gene therapy and achieving sustainable growth to provide attractive returns for shareholders. To
facilitate this, we completed a strategic reset under the leadership of our new CEO which included a comprehensive realignment
of the business, including a transformation of the organisational structure. This has enabled us to be optimally positioned to serve
our clients and facilitate the delivery of life-changing cell and gene therapies to patients. We have also significantly expanded
our commercial capabilities, increasing business development activities to open up potential revenue opportunities. This has been
further enhanced by the acquisition of ABL Europe (recently renamed Oxford Biomedica (France)), completed post period-end in
January 2024, which has provided us with a footprint in the EU and increased our capacity for process and analytical development.
With a multi-vector multi-site model spanning the UK, the US and EU (France) we are continuing to build a world-leading cell and
gene therapy CDMO. Leveraging the promising market landscape, we have strategically positioned ourselves to align to our clients'
needs with end-to-end process development and manufacturing solutions.
At the end of 2023, the Board comprised 45% women, meeting the recommended target set in the Listing Rules. Furthermore,
we can confirm that, during the year, the Company met the recommendations of the Parker Review on Ethnic Diversity and 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 2023. We held our AGM as a hybrid meeting,
encouraging shareholders to vote by proxy in advance and inviting questions to be submitted to the Board in advance by post
or email. Questions and our responses were made available on our website. The Board is looking forward to more "in person"
engagement with shareholders, employees and other stakeholders in 2024, including inviting shareholders to attend the AGM in
person this year.
In December 2023, the Company Secretary conducted an internal evaluation of the Board's performance covering the period
from January 2023 to the fourth quarter of 2023. The review process comprised the completion of an anonymised questionnaire
covering the various aspects of the activities of the Board and its Committees. The resulting report was discussed at the in person
Board meeting in January 2024 and the Board plans to implement appropriate changes based on the outcome of the report. In
addition to the Board evaluation in December 2023, the Nomination Committee initiated a skills review of the Board with the aim
of realigning the skills with the Group's new strategy to become a pure-play CDMO. As a result of the review, the Board initiated a
search conducted by an external search consultancy, Spencer Stuart, specifically targeting the selection of candidates with recent
CEO and CDMO experience. In March 2024, we were pleased to announce that the Board had been further strengthened by the
appointment of Peter Soelkner as an independent Non-Executive Director. Peter Soelkner has more than 30 years’ experience
in the global pharmaceutical services industry with significant CDMO expertise. In parallel, Catherine Moukheibir and Dr. Michael
Hayden, who have played a defining role in shaping the Group’s new strategy, both volunteered not to stand for re-election at
the next AGM given that their strengths lie more in therapeutics rather than CDMO. I would like to personally thank Catherine and
Michael for their impeccable service, loyalty and valuable insights throughout their tenure.
The following pages set out in more detail the activities and major matters considered by the Board in 2023.
Dr. Roch Doliveux
Chair1
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.
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77
Corporate Governance Framework
The Board and the Senior Executive Team and the global sub-committees during the period from 1 January 2023 to 30 November
2023 are set out below:
The Board and the Corporate Executive Team (CET) and the global sub-committees since 1 December 2023 are set out below:
Dr. Roch Doliveux was not a member of the Remuneration Committee whilst he served as interim CEO but was invited to join
meetings as an observer.
Oxford Biomedica PLC | Annual Report and Accounts 2023
SET = Senior ExecutiveTeam; Dr. Roch Doliveux served as interim CEO until March 2023, when Dr.Frank Mathias assumed the CEOroleeOLT = extended Operations LeadershipTeamIPMC = Intellectual Property Management CommitteePDC = Product Development Committee RMC = Risk Management CommitteeSTAC = Science andTechnology Advisory CommitteeTDC =Technical Development CommitteeWEP =Workforce Engagement PanelThe BoardAudit CommitteeChair –Stuart HendersonRemuneration CommitteeNomination CommitteeIPMCeOLTPDCRMCTDCWEPSETCEO – Dr.Frank MathiasSTACChair – Prof. Kay DaviesCET = Corporate Executive Team, replacing the Senior Executive Team (SET) from December 2023; operations are now covered by the respective Site LeadershipTeams (SLTs) in Bedford, US and Oxford, UK replacing the eOLGESGRC = Environment, Social, Governance and Risk Committee (new committee combining ESG and Risk Management)GTIC = Global Technical and Innovation Committee, replacing the Technical Development CommitteeIPMC = Intellectual Property Management CommitteeQMRC = Quality Management Review CommitteeSTAC = Science and Technology Advisory CommitteeWEP = Workforce Engagement PanelThe BoardAudit CommitteeChair – Stuart HendersonRemuneration CommitteeNomination CommitteeESGRCGTICIPMCQMRCWEPCETCEO – Dr. Frank MathiasSTACChair – Prof. Kay Davies 78
CORPORATE GOVERNANCE REPORT (CONTINUED)
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 executive management. Following John Dawson’s decision to step down as CEO in January 2022,
Dr. Roch Doliveux acted as interim CEO whilst the Company undertook a search for a new CEO. Following Dr. Frank Mathias’
appointment as CEO in March 2023 there was once again a clear division of responsibilities between the Chair and Chief Executive
Officer. Following Board changes during 2023, the Board comprised nine Non-Executive Directors and two Executive Directors 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 during 2023 covered reports
from the Chief Financial Officer on Finance and Investor Relations; the Chief Operations Officer on Safety, Health and Environment
and UK 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 Commercial Officer on Commercial CDMO
activities; the Chief Information Officer on Cyber security and Digital Strategy; the Chief People Officer on Human Resources; the
OXB (US) LLC CEO/US Site Head on the US Operations; and a Risk Management Report.
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 can be found on pages 15-19. The Board considers the stakeholder
impact 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 acquisition of ABL Europe (recently renamed Oxford Biomedica (France)) illustrates how the Board
considered the potential impact of the decision to acquire ABL Europe on each stakeholder group as well as stakeholder needs and
concerns, in accordance with s172 of the Companies Act 2006. . Further details of the Board's consideration of how the acquisition
may affect stakeholders can be found on pages 20-21.
Board Committees
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 STAC which comprises selected external scientific advisers, members
of the CET (known as SET until November 2023) and of the Board. The STAC meets as required to review and assess new
opportunities and provides an external independent view of assets to 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). Further information
regarding the WEP can be found in the Nomination Committee report on page 86.
Reports from the Audit and Nomination Committees are included in this section and the Directors’ Remuneration Report can be
found on pages 89-114 incorporating the Remuneration Committee Report.
Board Independence
At the end of 2023, the Board comprised the following Directors, whose biographies are more particularly set out on pages 74-75.
• 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 Mathias joined as CEO in March 2023.
• Dr. Frank Mathias who was appointed as Chief Executive Officer in March 2023.
• Stuart Paynter who was appointed as Chief Financial Officer in August 2017.
• Stuart Henderson who was appointed as a Non-Executive Director in June 2016. Mr. Henderson is considered to
be independent.
• Dr. Heather Preston who was appointed as a Non-Executive Director in March 2018. Dr. Preston 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 12.05% investor in the Group, and as such he is not considered independent under
the Corporate Governance Code.
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• Professor Dame Kay Davies who was appointed as a Non-Executive Director in March 2021. Professor Davies is considered to
be independent.
• 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. Dr. Hayden has informed the Board that he will not
be standing for re-election at the forthcoming AGM in June 2024.
• Catherine Moukheibir who was appointed as a Non-Executive Director in December 2021. Ms. Moukheibir is considered to be
independent. Ms. Moukheibir has informed the Board that she will not be standing for re-election at the forthcoming AGM in
June 2024.
• Namrata Patel who was appointed as a Non-Executive Director in April 2022. Ms. Patel is considered to be independent.
• Leone Patterson who was appointed as a Non-Executive Director in May 2023. Ms. Patterson is considered to be independent.
Each Director is provided with an appropriate induction on appointment.
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 2023, 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:
Regular Board Meeting
Attended
Possible
Audit Committee
Possible
Attended
Remuneration Committee
Attended
Possible
Nomination Committee
Attended
Possible
Professor Dame Kay Davies
Dr. Roch Doliveux
Dr. Frank Mathias2
Robert Ghenchev
Dr. Michael Hayden
Stuart Henderson
Catherine Moukheibir
Namrata Patel
Stuart Paynter
Dr. Heather Preston
Dr. Sam Rasty4
Leone Patterson5
6
6
4
6
6
6
6
6
6
6
3
4
6
6
4
6
6
6
6
6
6
6
3
4
4
4
2
3
4
4
33
1
2
11
111
11
11
10
101
11
11
5
5
5
5
5
5
5
5
1 Dr. Roch Doliveux acting as interim CEO was not considered independent during his time as interim CEO and attended as an observer for the first 5 meetings.
2 Dr. Frank Mathias joined the Board in March 2023.
3 Stuart Paynter attended as an observer.
4 Dr. Sam Rasty retired from the Board on 23 June 2023.
5 Leone Patterson was appointed in May 2023.
In addition to the above regular meetings, the Board (or an appointed sub-committee of the Board) met on seven other occasions
to consider specific ad hoc matters including, inter alia, the approval of the 2022 financial statements, the interim 2023 financial
results, succession planning and the acquisition of ABL Europe (recently renamed Oxford Biomedica (France)).
The Chair holds meetings after each regular Board meeting with Non-Executive Directors, without the Executive Directors
in attendance.
Board activity during 2023
Board matters during 2023 included:
• Financial matters: including the approval of the 2023 financial budget; the 2023 corporate objectives; performance of 2022
corporate objectives; the Annual report and accounts; the preliminary results announcement; the interim results announcement;
and review of the basis for the Group's related going concern disclosures;
• Startegy: including reviewing implementation of the change from a hybrid company to a pure-play CDMO and the acquisition of
ABL Europe;
• Operational matters: including regular operational updates of the UK and the US sites;
• Commercial matters: including regular discussion of the commercial pipeline and business development opportunities;
• Reviewing the progress in relation to external funding opportunities for the therapeutics portfolio;
• Board governance: including the appointment of Dr. Frank Mathias as CEO, Leone Patterson as a Non-Executive Director and the
completion of an internal evaluation on Board effectiveness;
• Human Resources: including regular updates on the restructuring and redundancy process, regular updates on workforce
engagement from the WEP and regular review of employee retention statistics;
• Risk Management: regular reviews of the Group's risk management processes and key risks including cyber risks; and
• Health, Safety and Environment: regular updates on Health, Safety and Environment including reporting across all OXB sites.
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.
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CORPORATE GOVERNANCE REPORT (CONTINUED)
In line with the Corporate Governance Code, Dr. Roch Doliveux, Dr. Frank Mathias, Stuart Paynter, Stuart Henderson, Dr. Heather
Preston, Robert Ghenchev, Professor Dame Kay Davies, Leone Patterson, and Namrata Patel will retire and be subject to re-election
at the AGM in 2024. Peter Soelkner shall stand for appointment by the shareholders for the first time. Catherine Moukheibir and Dr.
Michael Hayden have informed the Board that they will not seek re-election at the forthcoming AGM in 2024.
Communication with shareholders
The Board recognises the importance of effective communication with shareholders and potential investors. The primary points of
contact during 2023 were the interim Chief Executive Officer until March 2023, Chief Executive Officer after March 2023 and Chief
Financial Officer. The Chair, Vice-Chair, Senior Independent Director and Chair of the Remuneration Committee are also available
for meetings with investors, if required. Novo Holdings (12.05% 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, Dr. Frank Mathias and Stuart Paynter met with major shareholders during 2023.
2023 Annual General Meeting The 2023 AGM was held on 23 June 2023 as a hybrid meeting.
Stuart Henderson as Chair of the Audit Committee and Dr. Heather Preston as Chair of the
Remuneration Committee also met with major shareholders.
Directors and Shareholders were invited to attend the AGM virtually or in person. The AGM 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 able to be submitted in advance of
the meeting).
Meetings with potential investors During 2023, Stuart Paynter regularly made presentations and met potential investors on a one-to-
Results announcements
and presentations
one basis or virtually at investor conferences in Europe and the US. In addition, Dr. Roch Doliveux
(both as interim CEO and Chair) and Dr. Frank Mathias 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 joining the Group as CEO in March 2023,
Dr. Mathias has assumed primary responsibility for meetings with potential investors, alongside
Mr. Paynter.
The Group announced its 2022 full year performance and financial results in April 2023, and its
2023 half year interim results in September 2023, through RNS announcements accompanied by
analyst conference calls which are accessible to all shareholders, with recordings and transcripts of
which were made available on the Group's website.
2022 Annual report The Group published its 2022 Annual report and accounts in April 2023.
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 to alert followers to Company news flow.
The Senior Executive Team (SET) and its committees
From January to November 2023, operational management was conducted by the Senior Executive Team (SET) comprising the
Executive Directors, Dr. James Miskin, Dr. Jason Slingsby (stepped down April 2023), Dr. Kyriacos Mitrophanous, Lisa James, Nick
Page (stepped down September 2023), Mark Caswell (joined July 2023), Matthew Treagus, Natalie Walter, Dr. Ravi Rao (stepped
down October 2023), Dr. Sébastien Ribault, Dr. Thierry Cournez (joined October 2023) and Tim Kelly (stepped down July 2023).
The SET met every week, 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 were five SET sub-committees covering the major business operational areas from January to November 2023. During 2023,
except for the Product Development Committee, these sub-committees met monthly, and were attended by SET members and
other relevant senior managers from the business. The five SET sub-committees were:
• Product Development Committee (PDC) – covering the development of new cell and gene therapy products from initial
concept through to clinical development; the PDC was dissolved in H1 2023;
• Technical Development Committee (TDC) – covering the development of new and improved assays and production and other
processes, including cell and vector engineering;
• Extended Operational Leadership Team (eOLT) – incorporated the Quality and Manufacturing Operations Committee covering
•
quality, operational and manufacturing matters;
Intellectual Property Management Committee (IPMC) – comprising senior members of technical and IP teams was responsible
for ensuring the protection of Intellectual Property at OXB. During 2023, representatives from OXB (US) LLC joined the IPMC; and
• Risk Management Committee (RMC) – comprising senior managers from all parts of the business, responsible for identifying and
assessing risks facing the business and proposing risk mitigation and management actions.
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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.
Important matters from all of these committees were referred to the SET.
The Corporate Executive Team (CET) and its committees
From December 2023, the composition of the SET changed to align with the transformation of the Company to a pure-play
CDMO. The SET became known as the Corporate Executive Team (CET) and became responsible for the global management
of the Company. The CET comprises the Executive Directors, Dr. Thierry Cournez, Lisa James, Dr. James Miskin, Dr. Kyriacos
Mitrophanous, Dr. Sébastien Ribault, Matthew Treagus and Natalie Walter. The CET focuses on overall global governance (including
ESG and risk management), Company culture and management, strategic direction, financial performance, including regular
measurement of the Company objectives and KPI’s. The CET meets on a bi-weekly basis. The Site Heads join the CET meetings
every other meeting. Operations are covered by the respective Site Leadership Teams (SLTs) in Bedford, US and Oxford, UK
replacing the eOLT.
From December 2023, the five SET committees were restructured into four CET sub-committees covering the major business
operational areas. These sub-committees meet on a regular basis and are attended by certain CET members and other relevant
senior managers from the business. The CET sub-committees are:
• Environment, Social, Governance and Risk Committee (ESGC) – this new committee combines ESG and Risk Management
Committees comprising senior managers from all parts of the business across all OXB sites;
• Global Technical and Innovation Committee (GTIC) – this committee is authorised by the CET to review all technical and
innovation activities associated with the Group’s capabilities, platform technologies and technical innovations across all OXB
sites, and is the successor of the previous TDC. It will be the primary forum for discussing new projects related to the
technology / innovation roadmap and making strategic and budgetary decisions on the best uses of OXB resources;
Intellectual Property Management Committee (IPMC) – this committee comprises senior members of technical and IP teams
and and is responsible for ensuring the protection of Intellectual Property across all OXB sites; and
•
• Quality Management Review Committee (QMRC) – this committee provides global oversight in relation to quality and
compliance across all OXB sites and is supported by more frequent location/site specific quality forums where each of the sites
review quality related KPIs, compliance, etc. to evaluate the overall health of the Quality Management System at the site level.
Within their area of responsibility these committees set objectives and targets, monitor performance against KPI’s, ensure
compliance with GxP and other relevant requirements, monitor expenditure against budget and risk management. Important
matters from all of these committees are referred to the CET.
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. A risk report is provided ahead of every Board meeting. The Audit Committee monitors the conduct of the risk
management processes within the Group whilst the CET is accountable for those processes, identifying the risks facing the
Group and formulating risk mitigation plans. The active involvement of the Executive Directors and CET in the management of
the sub-committees allows them to monitor and assess significant business, operational, financial, compliance and other risks.
Further details of the Group's risk management framework, together with the Group's identified principal risks, uncertainties and risk
management, can be found at pages 67-72.
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 pages 119-121.
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82
Audit Committee Report
During 2023, the Audit Committee comprised Stuart Henderson (Chair), Dr. Heather Preston, Catherine Moukheibir and Leone
Patterson. In April 2023, Dr. Preston resigned from the Audit Committee and Ms Patterson was appointed to the Audit Committee
in May 2023. During 2023, the Company complied with the recommendation set out in Provision 24 of the Corporate Governance
Code that the Audit Committee comprise at least three independent Non-Executive Directors. Mr Henderson, Dr. Preston, Ms
Moukheibir and Ms Patterson all have relevant experience across life sciences and biotechnology, which qualified them for
membership of the Audit Committee and, in the case of Mr. Henderson, to be Chair of the Audit Committee. In addition,
although not a member of the Audit Committee, Namrata Patel attends the Audit Committee at least twice a year in her role
as Non-Executive Director responsible for reviewing climate and sustainability reporting.
Each Audit Committee member's respective experience can be found in their biographies on page 74
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 external audit process and auditors; and
• The processes for compliance with laws, regulations and ethical codes of practice.
Key activities
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 (further details can be found on pages 118-119). The Audit
Committee reviewed and recommended the approval of the 2022 preliminary results and announcement and 2022 Annual report
and accounts, the 2023 interim financial statements, the Group's 2023 preliminary results and this Annual report and accounts.
Statutory reporting
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 section of the Annual report
and accounts.
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) presented the Audit Committee with an update on the
existing principal risks, emerging risks and any significant operational risks identified by the respective risk management committees
of the UK and US sites, and the associated steps that the Group takes to mitigate such risks. The Audit Committee acknowledge that
the risks concerning failure in the execution of the business plan for OXB (US) LLC, and the closure of the product development
programmes have been removed as principal risks. The Audit Committee also recognise the Group has spent significant effort in
revising its corporate strategy, details of which can be found on pages 4-5. As mentioned above, further details of the Group's
principal risks can be found on pages 67-72.
On an annual basis the RMC performs an update to the corporate fraud risk register to refresh the 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. The Audit Committee also noted the importance of maintaining the fraud risk register in preparation for
the upcoming Economic Crime and Corporate Transparency Act 2023.
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, and 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 outstanding external audit recommendations and internal financial control
improvement activity was reviewed at the April 2023 and November 2023 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.
In addition to the formal Audit Committee updates, the Audit Committee Chair met with the Chief Financial Officer, Director of
Financial Controls and Finance Leadership Team at least twice during 2023 for more detailed review and conversation on the
progress on internal control improvements, and key accounting estimates, such as the impairment of the OXB (US) LLC investment.
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 CET (known as SET until November 2023)
and the Board;
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• Preparation of accounting papers for significant accounting and judgemental issues by the Senior Director, Head of Finance
and the Financial Reporting Manager and independently reviewed by 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;
• Clear separation of duties and authorisation limits within the financial processes such as approval of invoices, purchase orders,
payroll and disbursements; and
• Use of specialists and experts for areas of technical accounting judgemental areas where there is not sufficient expertise in
the team.
During 2021, the Group embarked on a finance function transformation strategy to enhance the internal control environment,
ahead of expected corporate governance reforms and updates to the UK Corporate Governance Code. The Group operates a
continuous improvement approach to its internal control environment. This includes the ongoing monitoring of Finance processes
to identify inefficiencies or areas of weakness. The Group also ensures that feedback from external auditors is incorporated into its
control processes.
During 2023, the following control improvements were implemented:
• Enhanced the quality of documents, procedures and technical accounting papers that underpin our key financial
reporting processes;
• Established closer working relationships between the UK and the US Finance teams to align accounting policies and financial
reporting processes;
• Documented the key risks and mitigating controls across the end-to-end financial reporting processes across the US site
including the monthly monitoring and testing of US key controls;
• Performed a risk review over Finance user access to our Enterprise Resource Planning (ERP) system; and
• Continued to report regularly to the Audit Committee on progress on the improvements to our control environment.
This work will continue throughout 2024 as the Group focusses on bringing the financial reporting processes performed by Oxford
Biomedica (France) into the Group's control framework ensuring access and segregation of duties across the US and the French
ERP systems are regularly reviewed and monitored.
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 regularly reviews the role of the external auditor and the scope of its work, including audit and non-audit
fees, update reports and management letter observations, as well as the effectiveness of the external auditor having regard to the
FRC's Revised Ethical Standard 2019. The Audit Committee is satisfied that it complies with the FRC's Audit Committee and the
External Audit: Minimum Standards 2023. See External Auditor section on page 85 which sets-out how the Audit Committee has
interacted with the auditors during the year.
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. The Audit Committee is satisfied that, at this stage, the Group is not currently in a position to support
an Internal Audit function. However, in the absence of an Internal Audit function, the Audit Committee receives and acknowledges
regular updates from either the Group Financial Controller or the Director of Financial Controls regarding control activity performed
during the year, as set-out in the internal control section, above. In addition, the Audit Committee receives regular updates from
the Chief Technical Officer on the performance of the Group's quality and compliances systems, and updates from the Chief
Information Officer on the Group's protections against cyber security events.
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. During 2023, the Board reviewed and approved the Audit Committee terms of reference. No changes were made, other
than to ensure that the the terms of reference remain fit for purpose.
Meetings held
The Audit Committee met four times in 2023. The key items for discussion and review were as follows:
• April 2023 – to review the 2022 audit findings and consider the auditors’ report. The Audit Committee reviewed all the material
accounting and estimation judgements likely to have a material impact on the financial statements. The auditors reported on
significant risk areas of audit focus including revenue streams, valuation of acquired intangible assets, sale and leaseback of the
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AUDIT COMMITTEE REPORT (CONTINUED)
Windrush Court property, management override of controls, inventory quantities at OXB (US) LLC, impairment of the OXB (US)
LLC Cash Generating Unit, share-based payment, and going concern. A quality update was presented by the Chief Quality and
Technical Officer on the outcome of regulator audits and supplier audits.
• June 2023 - to review the terms of reference of the Audit Committee, the annual Audit Committee cycle, and agree standing
items for future meetings. The Audit Committee also held a debrief of the 2022 audit and key matters to address.
• September 2023 – to review the 2023 interim results. The auditors reported on the status of their review of areas of audit
focus, including going concern; feedback from the review of key financial reporting controls; discussion on management's
judgement over the impairment of the put option liability to acquire the remaining 20% of Oxford Biomedica (US) LLC that
the Group doesn't already own; and the sale and leaseback transaction of the Harrow House property. The Audit Committee
reviewed the audit plan for the year ending 2023, including materiality, audit and non-audit fees, the independence of PwC,
and matters relating to regulatory and governance changes. Namrata Patel presented a sustainability update to highlight the
Group's environmental policies and initiatives. The auditors noted how the Group compared to other companies on their public
statements about sustainability. The Audit Committee requested the Group delegation of authority framework be reviewed to
reflect alignment between the UK and the US jurisdictions and the predicted changes from the Group transformation strategy.
The Audit Committee also held a private session with the auditors.
• November 2023 – to review risk management, financing strategies, insurance strategy, tax strategy, treasury policy and the
financial control environment and related controls. The 2023/24 insurance strategy was presented to and accepted by the Audit
Committee. An update was provided on improvements to the Group's internal control environment during 2023, and the Audit
Committee discussed the impact of the 2023 Group restructuring on the finance function. The Chief Financial Officer presented
a review of the Group's financing strategy including cash forecasts over a 3-year period. The Audit Committee discussed the
valuation of the OXB (US) LLC business and the impact of its impairment on the put option liability. The Chief Information Officer
presented an update on the risks and mitigations against cyber security threats. A quality update was presented by the Chief
Quality and Technical Officer on the outcome of regulator audits and supplier audits.
In accordance with Provision 3 of the Corporate Governance Code, the Chair of the Audit Committee engaged with shareholders
on significant matters involving Audit Committee business, and was and remains available to discuss Audit Committee matters with
shareholders throughout the year.
Key judgements and estimates considered within the financial statements:
The key judgements and estimates considered in relation to the financial statements for the year ended 31 December 2023 are
set out in the following table. 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, were considered by the Audit Committee. As part of these considerations, management provided the Audit
Committee with detailed updates on the nature, the rationale and risk of misstatement of these key accounting items, estimates and
judgements. The Audit Committee and the external auditor have discussed the significant issues at each of the Audit Committee
meetings, as noted on page 83.
Issue
How the issue was addressed by the Audit Committee
Contract revenues: identification
of performance obligations,
allocation of revenue and timing
of revenue recognition
Percentage of completion of
bioprocessing batch revenues
The Audit Committee reviewed management's approach to the key areas of judgement within the
collaboration agreements entered into during the period. With regard to (i) 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 Audit Committee accepted management's
judgements. The Audit Committee also accept that 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.
The Audit Committee considered management's policy on recognition of revenue of clinical / commercial
product based on the achievement of verifiable stages of the bioprocessing process. The Audit Committee
challenged management's judgement in terms of the assessment of the correct stage of completion
including the expected costs of completion for that specific bioprocessing batch, and confirmed that the
judgement continued to be appropriate.
Percentage of completion
of fixed price process
development revenues
The Audit Committee reviewed management's rationale supporting its estimation in terms of the
assessment of the correct percentage of completion for fixed price process development work packages.
The Audit Committee was satisfied with the judgement and estimates employed to recognise revenue and
the related contract asset.
Provision for out of specification
bioprocessing batches
The Audit Committee challenged management on its policy on the estimation 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. Management explained
that the Group has looked at historical rates of out of specification batches across the last five 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. The Audit Committee were satisfied that the Group makes appropriate specific provisions for
product batches.
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Issue
How the issue was addressed by the Audit Committee
Amortisation of intangible assets
(developed technology)
Valuation of put option liability
Impairment assessment of
Oxford Biomedica (US) LLC Cash
Generating Unit (CGU)
The Audit Committee confirmed management's assessment that the estimated useful life of developed
technology acquired by the Group is 15 years. The Audit Committee were satisfied that 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 (US) LLC will become fully obsolete, noting that 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.
The Audit Committee considered management's approach to the valuation of the put option liability, in light
of the significant impairment assessment of the US business. On 10 March 2022, the Group recognised
a put option liability to acquire the remaining 20% of Oxford Biomedica (US) LLC that it doesn't already
own, from Homology. The Audit Committee, having taken into consideration the significant impairment, is
satisfied with the methodology to estimate the fair value of the put liability.
The Audit Committee spent considerable time challenging both management and the auditors on the
significant impairment of the US business, due to the decision by Homology (the US business units
largest client) to cease clinical activities. The Audit Committee is satisfied with management's impairment
assessment performed with the assistance of external subject matter experts. Due to the CGU not meeting
the original revenues forecasted as part of the acquisition of Oxford Biomedica (US) LLC, an impairment
assessment is required as the recoverable amount of the CGU is deemed to be the higher of its fair value in
use less cost of disposal or value in use.
External Auditor
The Group welcomed PricewaterhouseCoopers LLP (PwC) whose appointment to replace KPMG LLP as auditors was approved
by shareholders at the Company's 2023 AGM. Under the direction of the Audit Partner, and working closely with the Group, PwC
implemented a comprehensive audit plan to transition activity from KPMG. The Chair of the Audit Committee met with the new
external auditors during the transition to support and ensure the smooth execution of the transition.
The Audit Committee regularly reviews the role of the external auditor and the scope of their audit, and formally met with PwC at
two of the four Audit Committee meetings during the year. In addition to these formal meetings, the Chair of the Audit Committee
met with the external auditors, during the year, to discuss specific items relevant to the audit and financial statements, thus ensuring
a continuous and ongoing dialogue is maintained. 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 2023 financial statements, PwC 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 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 PwC in 2023. The non-audit fees policy is compliant with ethical Standards for Auditors. In 2023, PwC
received total fees of £0.9 million (2022: £nil). Fees paid to PwC 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
Chair of the Audit Committee
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Nomination Committee Report
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 until March 2023 (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 5 times in 2023 in order to review the succession plans for both the Board and that of its
Committees. In addition, the Nomination Committee met to discuss the results of the internal Board evaluation from 2022 and to
prepare for the internal Board evaluation for 2023.
In addition, and in accordance with Provision 12 of the Corporate Governance Code, Stuart Henderson, as the Senior Independent
Director, met with the Non-Executive Directors without the Chair present to appraise the Chair's performance. Professor Dame Kay
Davies will continue this best practice in accordance with the Corporate Governance Code in 2024.
Board succession planning
As noted above, during the year the Nomination Committee reviewed the succession plans for both the Board and that of its
Committees. As part of its succession planning, the Nomination Committee identified that a woman should hold a senior position
on the Board in order to meet the recommendations set out in Listing Rule 9.8.6(9)(a)(ii) and also the recommendations of the
FTSE Women Leaders Review. Accordingly, the Nomination Committee decided to split the role of Deputy Chair and Senior
Independent Director into two roles, appointing Professor Dame 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.
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 and Leone Patterson was appointed as an independent Non-Executive Director with effect from 1 May 2023, following a
search conducted by an external search consultancy, Koenig Associates, specifically targeting the selection of female and ethnically
diverse candidates. The Company and the Directors have no connections with Koenig Associates.
Following the Company restructure in December 2023, the Nomination Committee commenced a review of the Board
composition to ensure the Board's skills aligned with restructure to a client centric quality lead, CDMO. As part of the Board
evaluation process, all Board members were asked to complete a skills matrix, the results of which were shared with the
Board at the January Board meeting. The skills matrix showed the Board to be strong in finance but lacking strength in
CEO/CDMO experience. As a result, in January 2024, the Nomination Committee commenced a search with external search
consultancy, Spencer Stuart, specifically targeting candidates with CEO/CDMO experience. The Company and the Directors
have no connections with Spencer Stuart. In March 2024, the Company announced the appointment of Peter Soelkner as an
independent Non-Executive Director. Mr. Soelkner has more than 30 years’ experience in the global pharmaceutical services
industry with significant CDMO expertise.
In January 2024, whilst reviewing the skills matrix in the context of the restructure, the Nomination Committee considered the
Board composition more generally and agreed that the Board should be reduced in size to 10 (including the Chair, CEO and CFO)
to align with company-wide restructure. Following a discussion with each Non-Executive Director and taking into consideration
the skills matrix results, Catherine Moukheibir and Dr. Michael Hayden informed the Board that they did not intend to stand for
re-election at the next AGM. Following the AGM, the Board will continue to be compliant with the recommendations set out in the
Corporate Governance Code and the requirements set out in the Listing Rules.
Board evaluation
Following an externally-facilitated evaluation of the Board's performance in 2021, in December 2023, the Company Secretary
conducted an internal evaluation of the Board's performance covering the period from January 2023 to the fourth quarter of 2023.
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 in-person Board meeting in January
2024. Board members valued the feedback of their peers and the Board has agreed to implement suggestions raised in the report,
including for Directors to leverage their networks and share contacts with the CET.
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 mid-2024.
Workforce Engagement Panel and Designated Non-Executive Director
In compliance with Corporate Governance Code, the Group has an established 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. The WEP met 13 times during 2023 and Mr.
Henderson attended 2 of those meetings. Topics covered by the WEP during 2023 included the results of the Company-wide
employee engagement survey, “Your Voice”; employee recognition programme; social engagement and activities for employees;
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equality, diversity and inclusion initiatives; and acting as Representatives during a formal consultation process regarding a company-
wide restructure. During the year, the WEP was pleased to welcome two additional representatives from its US site. During 2024, a
re-election of the WEP will be concluded as the existing term of appointment for representatives comes to an end in March 2024.
More details on engagement with WEP is included in the Director's Report on pages 115-121.
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. From January to
March 2023, the Board comprised 40% women. Following Dr. Frank Mathias’ appointment to the Board in late March 2023, the
Board comprised 36% women for the period of one month until 1 May 2023 when Leone Patterson joined the Board. The ratio
changed further following the 2023 AGM when Dr. Sam Rasty did not stand for re-election. From the end of June 2023, the Board
comprised 45% women.
Consequently, as at 31 December 2023 the Board was in compliance with both the recommendations of the FTSE Women
Leaders Review and also the recommended target 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 2023. 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 2023, the CET (known as SET until November 2023), excluding the Executive Directors, totalled seven, of which
there were two female members. In the gender pay gap report for 2023 (for the full report see the Group's website www.oxb.com),
the population at the Head of Department and senior management level was made up of 49% females and 51% males, thereby
meeting the FTSE Women Leaders Review’s recommendation that 40% of senior leadership roles (defined as the CET (formerly
known as SET until November 2023) 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 2024/2025.
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. Two of the
Group's Directors, Namrata Patel and Leone Patterson identify themselves from ethnic minority background strengthening and
diversifying the Board and aligning the Board's composition with both the recommendations of the Parker Review and also the
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 2023, the Group met the recommendations set out in Listing Rule 9.8.6(9)(a)(iii) with regard to
the representation of female and minority ethnic groups on its Board. Further to this, in line with the 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 CET (known as SET until November 2023) as at 31 December 2023, as set out in the following tables.
Sex of Board and CET members (known as SET until November 2023) as at 31 December 2023
Number of
Board members
6
5
Percentage of
the Board
55%
45%
Men
Women
Number of senior positions on the
Board (CEO, CFO, SID, and Chair)
4
1
Number in executive
management
7
2
Ethnic background of Board and CET (formerly known as SET until November 2023) members as at 31 December 2023
Number of
Board members
Percentage of
the Board
White British or other
White (including minority-
white groups)
Asian/Asian British
Other
9
1
1
81.8%
9.09%
9.09%
Number of senior positions
on the Board (CEO, CFO,
SID, and Chair)
5
-
-
Number in executive
management
91
-
-
1 The data excludes Dr. Ravi Rao who identified himself from ethnic minority background as he has left the business in October 2023.
Percentage of
executive
management
77.78%
22.22%
Percentage of
executive
management
100%
-
-
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NOMINATION COMMITTEE REPORT (CONTINUED)
The reference date used by the Group for the collection of the data set out above is the Company's year-end (31 December).
During the year, the number in executive management were
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 2024 and forms the basis of the disclosures made in this Annual report and accounts.
Compliance with the Corporate Governance Code
The Group considers that it was largely in compliance with the terms of the Corporate Governance Code during 2023 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 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
CEO was only taken following consultation with the Company's major shareholders and further 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.
Compliance with the Listing Rules
The Group considers that it was largely in compliance with the Listing Rules during 2023 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.
Listing Rule
9.8.6(9)(a)(i)
Listing Rule
9.8.6(9)(a)(ii)
Following Dr. Frank Mathias’ appointment to the Board in late March 2023, the Board comprised 36% women for the period of
one month until 1 May 2023 when Leone Patterson joined the Board.
Whilst none of the senior Board positions was held by a woman for the first three months of the 2023, in March 2023, the role
of Deputy Chair and Senior Independent Director was split into two separate roles appointing Professor Dame Kay Davies as
the Senior Independent Director and appointing Stuart Henderson as Vice Chair, thereby complying with the recommended
target set out in Listing Rule 9.8.6(9)(a)(ii).
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 115
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Directors' Remuneration Report
Dear Shareholder
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended 31 December 2023.
This report describes the work of the Remuneration Committee, how it has applied our Remuneration Policy (the Policy) that was
approved by shareholders at the 2021 AGM and sets out the Remuneration Committee's proposals for changes to that Policy that
will be subject to a binding shareholder vote at the 2024 AGM.
The Annual Report on Remuneration on pages 96-105, along with the remainder of the Directors' Remuneration Report other
than the Directors' Remuneration Policy, describes how the Policy has been applied for the period ended 31 December 2023. This
will be the subject of an advisory shareholder vote at the 2024 AGM.
Investor engagement and new Policy
We are committed to aligning shareholder and Group interests and maintaining an open and transparent dialogue with our
shareholders on Executive Director (Executive) pay. Following the 2023 AGM, we engaged with a number of shareholders to
understand their perspectives on our Directors’ remuneration arrangements.
As set out in the announcement on 13 December 2023, whilst shareholders are largely supportive of our approach to Executive
remuneration, shareholder feedback notably emphasised the need for:-
• enhanced transparency of the components of the bonus, bonus criteria and performance delivered against the targets set;
•
•
• a more simplified approach to the bonus / Policy in the future.
the bonus to be based on a smaller number of quantitative and objective metrics;
the bonus metrics used and bonus out-turn to reflect the overall shareholder experience; and
In response, the Remuneration Committee has reviewed and revised the Executive bonus criteria, targets and reporting, alongside
simplifying the Policy. As set out in more detail on pages 91 and 93, recognising shareholder feedback, the 2024 bonus will be
based on a smaller number of quantitative and objective metrics aligned to Oxford Biomedica’s pillars for success and at least 50%
of the bonus opportunity will be based on financial performance measures.
Further, following the shareholder engagement:-
•
the Remuneration Committee, with the agreement of the relevant Executive Directors, and in recognition of the potential for
windfall gains, approved a scale-back of all 2023 Long Term Incentive Plan (LTIP) awards. The LTIP awards to newly appointed
Senior Executive Team members (renamed Corporate Executive Team (CET) in December 2023) were scaled back by 20%
while awards to all other Senior Executive Team members were scaled back by 30%. In addition, the Remuneration Committee
approved a scale back of 10% to all other 2023 Oxford Biomedica employee share awards. As a result, the 2023 LTIP award for
Dr. Frank Mathias was scaled back from 200% of salary to 160% of salary, and the award for Stuart Paynter was scaled back from
175% of salary to 122.5% of salary. Details of the awards granted and the performance conditions are set out later in this section
of the Annual report and accounts.
• Stuart Paynter and John Dawson (our former CEO) also agreed to a reduction of 10% to their overall bonuses earned in respect
of 2022 and Dr. Roch Doliveux elected to waive the additional fee of £225,000 previously awarded in recognition for his
increased duties and significant time commitment for acting as interim CEO. The impact of these reductions and waiver are
detailed later in this section of the Annual report and accounts.
During the second half of 2023 and early 2024 the Remuneration Committee has focused on the review of our Policy, which we
will ask shareholders to approve at our AGM on 24 June 2024, in line with the normal three-year lifecycle.
In early 2024, we consulted the Company's top shareholders representing circa. 70% of the share register and the main proxy
voting advisory agencies on our Policy proposals. We met with shareholders who wished to discuss the proposals in more detail
and responded in writing to those requesting more information. Our major shareholders who provided feedback were largely
very supportive of the proposals. As part of the consultation exercise, a number of shareholders requested clarification on the
exceptional circumstances for the annual bonus and LTIP and requested reassurance that a dual listing on NASDAQ would
not, in isolation, be considered an exceptional circumstance. Taking this feedback into account, we have limited exceptional
circumstances to facilitating the recruitment of a new Executive Director; and a significant increase in the size and complexity of
the business. The principal Policy changes are summarised below. Other minor changes have been made to reflect the principal
changes referred to below and to aid the operation of the Policy.
We also engaged with our major shareholders on the proposed change to increase our “10% in ten years” dilution limit for our
share plans to “15% in ten years”. As part of the consultation we explained our rationale for this proposed change and we took the
feedback provided into account. Further details are set out on page 91.
Our new Policy
The 2021 Policy was developed to ensure that we could recruit a new CEO of the calibre required to shape and deliver the
Group's business strategy, recognising that the Group competes for talent in a global market, including in the US and Asia. The
2021 Policy also addressed the significant gap to market practice in the US that we had faced when attracting and retaining
Non-Executive Directors.
Our new Policy is proposed in the context of:-
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
1. feedback provided as part of our shareholder engagement process. Our aim is to align the Group's practices more closely
with shareholder expectations whilst recognising that it is critical that we are able to attract and retain the best Executive and
Non-Executive talent with the right skills and experience to deliver on the growth aspirations of the business;
2. the appointment of Dr. Frank Mathias as CEO in March 2023, the Group's strategy and the transformation to position OXB as a
pure-play CDMO; and
3. the cell and gene therapy industry being at an inflection point. We are in the right market at the right time, and well-equipped
to succeed with our highly skilled workforce and leading-edge technology. A significant proportion of cell and gene therapy is
based in the US and the US market continues to have significant commercial potential for the Group. We operate in a global
talent market and need to pay competitively against CDMO businesses in Europe, Asia and the US.
The key changes proposed to the Policy for Executive Directors are summarised below, with information on the changes to the
Policy as regards Non-Executive Directors discussed later in this section of the Annual report and accounts.
• Simplification: Moving to a single remuneration framework, the proposed new Policy does not have higher incentive plan limits
•
for an Overseas Executive Director. The ability to grant market value options to Executive Directors has also been removed.
Incentive headroom to pay competitively: Recognising the differences across the UK, the US and wider global markets and the
need to align pay competitively within the talent markets in which we operate, under the new Policy:
◦ Annual bonus opportunity: 75% of salary at target and 2x target at maximum (i.e. a 150% of salary maximum). This is aligned
with the current maximum annual bonus opportunity for our CEO and CFO. The new Policy will include flexibility to increase
the annual bonus in exceptional circumstances to 100% of salary at target and 200% of salary at maximum. This exceptional
circumstance maximum is consistent with the maximum in the 2021 Policy for an “Overseas Executive Director”.
◦ LTIP opportunity: Up to 200% of salary maximum for our CEO and up to 175% for our CFO, aligned with the current
maximum LTIP opportunity for our CEO and CFO. The new Policy will include flexibility to increase the LTIP to 400% of salary
in exceptional circumstances. Taking into account feedback from shareholders, this exceptional circumstance maximum is a
reduction from the 500% of salary in the 2021 Policy for an “Overseas Executive Director”.
For both the bonus and LTIP, exceptional circumstances are: (1) to facilitate the recruitment of a new Executive Director; and (2)
in the event of a significant increase in the size and complexity of the business.
• Annual bonus performance measures: In line with best practice, the new Policy includes a commitment that at least 50% of the
bonus opportunity will be based on financial performance measures. Our approach to setting and reporting bonus criteria and
targets will reflect our response to shareholder feedback as described on page 89.
• Shareholding and bonus deferral: In the current Policy, Executive Directors are required to defer 50% of any bonus earned
(released in three equal tranches over three years). To ensure the new Policy supports the attraction (and retention) of high-
quality talent, whilst ensuring that Executive Directors’ interests are aligned with those of shareholders, under the new Policy
if the in-service shareholding guideline (equal to the Executive Director's normal annual LTIP opportunity) is met, the deferral
requirement is reduced to 25% of any bonus earned. During our consultation with shareholders in relation to the new Policy, it
was recognised that the our US, European and Asian competitors often pay bonuses 100% in cash, meaning that bonus deferral
makes our overall remuneration package less competitive. During the consultation, our major shareholders who provided
feedback confirmed that they could support this proposal on the basis that an element of deferral would continue to apply
regardless of whether the shareholding guideline has been met.
Non-Executive Directors – simplification and competitive fees
• We need to continue to attract and retain Non-Executive talent with the right skills and experience to deliver on the growth
aspirations of the business.
• The current Policy includes additional fee elements for Non-Executive Directors outside the UK / recruited from or based in
the US. Reflecting the feedback from shareholders, our intention is to phase out this two-tier approach over the life of the
new Policy.
• The proposed new Policy therefore removes this distinction, introducing a simpler structure where fees may be structured on
the basis of a base fee with additional fees for additional duties (such as chairing or being a member of a Board Committee,
holding other positions such as Vice-Chair or Senior Independent Director) or to reflect additional time commitments taking into
account a Non-Executive Director's location.
• Under the new Policy, a proportion of the fees may be subject to a requirement that the after-tax amount will be applied in the
acquisition of shares at market value which must be retained for a specified period. In line with the UK Corporate Governance
Code, the Chair and Non-Executive Directors do not participate in any of the Group's incentive plans and do not receive any
incentive awards geared to the share price or corporate performance.
The full new Policy is set out on pages 105-114 of this section of the Annual report and accounts.
2023 remuneration decisions in the context of our business performance and outcomes for our key stakeholders
The Remuneration Committee has, as usual, considered Executive remuneration in the light of outcomes for the wider workforce,
our shareholders and other stakeholders by taking a fair, prudent and balanced approach to remuneration. In 2023,
•
the financial performance was impacted by the non-recurrence of COVID-19 vaccine bioprocessing volumes and a one-off
impairment to the US business as a result of the termination of revenues from Homology.
• as part of its evolution into a pure-play cell and gene therapy CDMO, OXB has implemented extensive cost
management initiatives.
• OXB more than doubled the number of contracts and client orders signed compared to 2022, reflecting continued demand for
its services from a diverse range of pharmaceutical and biotech clients. The contracted value of client orders signed in 2023 was
£131 million, compared to £85 million in the year ended 31 December 2022 (excluding COVID-19 vaccine manufacturing).
• OXB continued to grow and diversify its CDMO portfolio, which now consists of 38 client programmes at various stages of
clinical development. This increased maturity with multiple programmes moving into and progressing through the clinic in 2023,
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is also a result of the Group's efforts to allocate resources towards areas of higher value and success in supporting its clients
progress their programmes into the clinic, as part of the Group's new commercial strategy.
• OXB also continued to successfully develop existing client relationships globally with 50% of clients working with the Group on
more than one programme.
• OXB’s order book has grown by more than 50% over the year, with a robust growing business pipeline across all key vector types
and clinical stages.
• OXB has implemented the necessary restructuring to exit all non-CDMO activities and has strengthened operations in the UK,
the US and the EU with the acquisition of ABL Europe (recently renamed Oxford Biomedica (France)) from Institut Mérieux which
completed on 29 January 2024. Commercial capabilities have also significantly expanded increasing business development
activities to open up potential revenue opportunities.
In addition, OXB’s mission to facilitate the delivery of life-changing therapies is deeply embedded in its business focus and practices
and are proud of our inclusion in the FTSE4Good index. Further details of our operational highlights in 2023 are set out on
pages 6-7.
2023 Executive Director remuneration and variable pay outcomes
Dr. Frank Mathias’ was appointed on a base salary of £610,000 reflecting his experience and track record of success running both
an innovative biopharma company and a high-performing CDMO.
Stuart Paynter’s salary was increased by 3% with effect from 1 January 2023. This increase was within the range of increases
awarded to the wider workforce and below the Group's overall 5% budget for salary increases in 2023.
As later described in this section of the Annual Report and accounts, our overall performance in the year resulted in the corporate
objectives for the 2023 annual bonus being achieved at 55% of maximum and the personal objectives for Stuart Paynter’s bonus
being assessed at 50% of maximum. However, notwithstanding the overall performance in the year, since the financial underpin was
not achieved, the Remuneration Committee determined that no bonuses would be paid in respect of 2023.
In line with the requirements of the reporting regulations, the single total figure of remuneration for 2023 includes the vesting
outturn of the following LTIP awards.
Grant
Performance Condition
Vesting outturn
26 June
2020
50%: revenue growth measured over the three years
ended 31 December 2022
50%: share price targets assessed to 26 June 2023
Estimated vesting outturn of 100% included in the 2022 single total
figure of remuneration. The vesting outturn was confirmed when the
award vested in June 2023.
This element lapsed in June 2023 as the threshold level of share price
performance was not achieved.
8 June
2021
40%: relative TSR over the three year period to
8 June 2024
The vesting of the relative TSR element of the 2021 LTIP award will be
included in the single total figure of remuneration for 2024.
40%: revenue growth measured over the three years
ended 31 December 2023
The threshold level of performance was not achieved and this element
of the award lapsed.
20%: strategic milestones based on achievement of
four strategic goals (1) Rebalancing the Hybrid Model;
(2) Evolving the CAR-T Business; (3) Expansion of
Capabilities into Alternative Vector Types; and (4)
Building of Academic Collaborations, each accounting
for 5% of the total Award.
Two out of four of the strategic milestones were achieved therefore
50% of the strategic element (10% of the overall awards) has
vested. Further details can be found on pages 98-100.
Implementation of the new Policy in 2024
• Base salary increases: For 2024, having regard to the approach to remuneration across the wider workforce, base salaries for the
Executive Directors will be maintained at the same level that applied in 2023.
• Annual bonus: No change to the maximum annual bonus opportunity of 150% of salary. Recognising shareholder feedback, the
bonus will be based on a smaller number of quantitative and objective metrics aligned to Oxford Biomedica’s pillars for success.
In line with the new Policy, 50% of the bonus will be based on financial measures with the balance based on metrics aligned with
the pillars of Delivery, People, and Commercial and Transformation and Integration. Further information on the annual bonus
measures and weightings in set out in the 'Remuneration at a glance' section on page 93. The forward looking bonus targets
are commercially sensitive as they could provide our competitors with insights into our plans. In line with market practice, we
will adopt a more transparent approach to the disclosure of the target ranges and performance delivered in the 2024 Directors’
Remuneration Report.
• LTIP opportunity: No change to the maximum LTIP opportunity of up to 200% of salary for the CEO and up to 175% of salary
for the CFO. However, taking into account OXB’s volatile share price, the detail of the number of shares under award will be
determined closer to the grant date, having regard to the then prevailing share price.
• LTIP metrics: For 2024, it is proposed that the LTIP metrics will be 40% revenue, 40% EBITDA and 20% non-financial measures
aligned with the Group's leading performance indicators. The decision to replace the relative TSR metric with an EBTIDA metric
has been considered very carefully by the Remuneration Committee recognising the difficulty in identifying an appropriate
comparator group, given the very limited number of relevant listed CDMO businesses. The Remuneration Committee was also
mindful that the delivery of appropriately stretching revenue and EBITDA targets is aligned with our growth aspirations and
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
the creation of long-term sustainable value for shareholders. In line with market practice, the target ranges are set out in the
‘Remuneration at a glance’ section on page 93.
• Treatment of materially significant transactions: As part of the shareholder consultation we confirmed that if a materially
significant transaction (for example an acquisition, disposal, share issuance or fund raising) were to take place, the Remuneration
Committee would consider applying discretion to adjust the incentive plan targets so that:
1. performance is measured on a fair and equitable ‘like-for-like’ basis (i.e. performance will be assessed against the base plan and
the cash available at the time of setting the targets, excluding capital from a share issuance);
2. any significant transaction does not result in the targets being materially more or less difficult to satisfy;
3. management are appropriately rewarded for transactions that are in line with the Group's strategy and not disincentivised from
doing the right thing for the business at the right time; and
4. retrospective adjustments are not made as a result of general changes in market conditions or general market movements.
This is intended to ensure bonus and LTIP pay-outs support building long-term sustainable shareholder value.
Share plans renewal
Our current employee share plans were adopted in 2015 and expire in 2025. To coincide with the renewal of the Policy, we are
seeking shareholder approval for new plans which reflect the new Policy and typical practice. Summaries of the principal terms of
the new plans will be included in the Notice of AGM.
Our current plans include a “10% in 10 years” dilution limit on the use of new issue shares and treasury shares. Aligning the interests
of our Executive Directors and our wider workforce with the interests of shareholders by rewarding them in equity is of fundamental
importance to Oxford Biomedica and reflected in the broad-based operation of our plans. This, together with the importance of
the US talent market where equity participation is an expectation, means that the "10% in 10 years" limit is unduly restrictive. Taking
this into account, the new plans include a “15% in 10 years” limit to ensure that we have flexibility over the life of the new plans to
enable us to incentivise and retain the employees who are key to delivery of long term sustainable performance, including those
below the Executive Director level, whilst at the same time giving us the flexibility to settle awards in the most appropriate way
taking into account all relevant considerations, including cash cost and dilution. As part of our consultation with shareholders in
relation to the new Policy, we discussed that we have sought to manage dilution in recent years by the scaling back of awards to
reflect share price falls (the Notice of AGM will contain further details). Our ability to grant LTIP awards to key executives and the
wider workforce is critical to our ability to attract and retain high calibre individuals in an increasingly competitive market and to
remunerate executives fairly and responsibly. We appreciate that this limit is higher than the current UK guidelines. However, it is
below the accepted level of dilution in the US where the proxy guidance provides for equity plan dilution limits in excess of 15% for
companies in our sector. Taking into account the feedback provided from shareholders, we have provided assurance that:-
•
• we will continue to manage dilution by the scaling back of awards, where appropriate, taking into account the share price when
the 2024 equity grants will be within the current 10% in ten year limit;
awards are granted, alongside careful consideration of eligibility for the equity plans; and
• our intention is that a 15% in ten year limit would not be permanent. During the ten-year life of the new shares plans our
intention would be to revert to operating within a 10% in ten year limit, where feasible.
Our major shareholders who provided feedback confirmed they are supportive of this proposed 15% dilution limit on this basis.
Further information in relation to the new share plans will be included in the Notice of AGM.
Conclusion
The Remuneration Committee would like to thank the shareholders who have engaged with the Group during 2023 and 2024 in
relation to our approach to Directors’ remuneration.
The decisions made as regards remuneration earned in respect of 2023 and the proposals for 2024 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 2024 AGM, where I and other Remuneration Committee members will be
available to answer any questions that you have.
Heather Preston
Chair of the Remuneration Committee
Oxford Biomedica PLC | Annual Report and Accounts 2023
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Remuneration at a Glance
Actual remuneration of Executive Directors for 2023
CEO – Dr. Frank Mathias
Base salaries
2023 - £610,000
Annualised base salary from date appointed to the Board
on 27 March 2023 reflecting his experience and track
record of success running both an innovative biopharma
company and a high-performing CDMO.
Pension
7.5% of salary in line with the wider workforce
CFO – Stuart Paynter
2023 - £351,230
2022 - £341,000
Annual Bonus
- maximum
opportunity for 2023
Bonus earned
for 2023
LTIP vesting in
respect of 2023
2023: 150% of salary
2023: 150% of salary
Notwithstanding the overall performance in the year, since the financial underpin was not achieved, the Remuneration
Committee determined that no bonuses would be paid in respect of 2023.
Dr. Frank Mathias did not hold an LTIP capable of vesting
by reference to a performance period ending in 2023.
The threshold share price target for 50% of the LTIP granted
26 June 2020 was not achieved based on performance to
26 June 2023. This element of the 2020 LTIP grant therefore
lapsed in June 2023.
The strategic milestone element for 20% of the LTIP granted
8 June 2021 vested at 50% (10% of the overall award)– see
pages 98-100 for further details.
£400,000
Single Figure total
for 2023
£520,000
LTIP awards granted to Executive Directors in 2023
CEO – Dr. Frank Mathias
CFO – Stuart Paynter
LTIP granted
in 2023
2023: LTIP award for 2023 was scaled back from 200% of salary
to 160% of salary
2023: LTIP award for 2023 scaled back from 175% of
salary to 122.5% of salary
Shareholding of Executive Directors as at 31 December 2023
This chart illustrates the value of shares held by the Executive Directors as at 31 December 2023 (based on the year end share price
of £2.20) against the share ownership guidelines of 200% of salary for the CEO and 175% of salary for the CFO. Dr. Frank Mathias
joined the Company in March 2023 and therefore will build up his holding over time. In September 2023, he acquired 20,000
shares. Stuart Paynter’s shareholding as a number of shares has increased by c. 155% over the last three years (from 78,604 shares
to 200,409 shares).
Oxford Biomedica PLC | Annual Report and Accounts 2023
Dr. Frank MathiasStuart Paynter7%193%126%49%Progress towards holding requirementBalance of holding requirement 94
DIRECTORS' REMUNERATION REPORT (CONTINUED)
How OXB intend to implement the new Policy for 2024
Element
CEO – Dr.
Frank Mathias
CFO – Stuart Paynter
Base salary
from 1 January
2024
£610,000
£351,230
(No increase)
(No increase)
Pension
7.5% of salary in line with the wider workforce
Annual bonus
Target annual bonus opportunity is 75% of base salary and the maximum annual bonus opportunity is 150% of base salary
(2x target).
Annual bonus
measures for
2024
Financial (Revenue
and EBITDA)
50%
People
Commercial
(Turnover
and Engagement)
(Order volume and
client satisfaction)
Transformation
and Integration
10%
Delivery
and quality
10%
10%
20%
The forward looking bonus targets are commercially sensitive as they could provide our competitors with insights into our
plans. In line with market practice, and reflecting our response to shareholder feedback as described on page 89, a more
transparent approach to the disclosure of the target ranges and performance delivered will be adopted in the 2024 Directors’
Remuneration Report.
Up to 200% of salary
Up to 175% of salary
It is intended that the 2024 LTIP awards will be granted in the 42 days following the 2024 AGM. The Remuneration Committee
will finalise the quantum of the LTIP awards to be granted for 2024 when the award is granted having regard to share price
performance at that time.
Compound Annual
Revenue Growth
(CAGR) based on
the growth in the
Company's Revenue
between 2023 and
2026 (40%)
Threshold vesting 25%:
25% CAGR over a
three-year performance
period. Maximum
vesting: 45% CAGR
over a three-year
performance period.
2026 EBITDA
margin (40%)
Non-financial leading performance indicators (20%)
Once determined, further details will be included at the date of grant and
in the 2024 Remuneration Report
Threshold vesting
25%: 10% 2026
EBITDA margin.
Maximum vesting: 30%
2026 EBITDA margin
A two-year holding period applies following the three-year performance period.
200% of salary
175% of salary
100% of the in-service share ownership requirement, with the required holding tapering to zero over a two-year period.
Long-term
incentive
(granted under
the LTIP)
LTIP measures
assessed over
the three-year
performance
period
LTIP holding
requirements
Shareholding
guideline In-
employment
Post-
employment
Malus and
clawback
Malus and clawback provisions apply to the LTIP and deferred bonus awards as set out in the Policy. Clawback applies to the
annual bonus awards as set out in the Policy.
Non-Executive Directors – implementation of the Policy in 2024
The current Policy includes additional fee elements for Non-Executive Directors outside the UK / recruited from or based in the US.
Reflecting the feedback from shareholders, the intention is to phase out this two-tier approach over the life of the new Policy. The
Board agreed that, from 1st February 2024, until the 2025 AGM, all Non-Executive Director remuneration be limited to the base fee
with no additional travel fee for North American Non-Executive Directors. In addition, no additional fee would be provided to North
American Non-Executive Directors for the purchase of shares in market during 2024. Fees for chairing a Committee or holding
the role of Vice Chair / SID would continue to be paid. To ensure Non-Executive Directors' fees remain competitive, they will be
reviewed further in advance of the 2025 AGM.
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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
£65,000
£10,000
£10,000
£10,000
£10,000
£65,000
£10,000
£10,000
£10,000
£10,000
2023 level
2024 level
Additional allowance in recognition of the extra time commitment required for travel on
Company business and/or additional time commitment where NED is based in a different
time zone (where applicable).
£15,000 (paid to Non-
Executive Directors
based outside the UK)
Not applicable for 2024
up to 2025 AGM.
For 2024, Non-Executive Directors recruited from or based in the United States will not receive an additional fee of £50,000
per annum.
The Chair of the Board's fee for 2024 will remain at the level of £225,000. In line with the UK Corporate Governance Code, the
Chair and Non-Executive Directors do not participate in any of the Group's incentive plans and do not receive any incentive awards
geared to the share price or corporate performance.
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
Annual Report on Remuneration
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.
The Remuneration Committee members during 2023 comprised Dr. Heather Preston (Chair), Stuart Henderson, Professor Dame
Kay Davies and, following the appointment of Dr. Frank Mathis as CEO with effect from 27 March 2023, Dr. Roch Doliveux. Other
Directors are invited to attend meetings on an agenda driven basis. The attendance of Directors at Committee meetings is set out in
the Corporate Governance Report on pages 73-121
Remuneration Committee activities during 2023
During 2023, the Remuneration Committee met 11 times. The main activities and decisions included: assessment of 2022 goals
and approval of 2023 goals; review of Executive Director compensation and and Chair of the Board fees, with the Board having
reviewed the fees for other NEDs; LTIP outturns; review and approval of the Directors' Remuneration Report; approval of grant of
annual share awards; shareholder engagement post the AGM: review of the Remuneration policy and share plan rules and review of
wider workforce pay and gender pay gap.
Engagement with shareholders
As detailed in the statement from the Remuneration Committee Chair, in accordance with Provision 3 of the Corporate
Governance Code, the Chair of the Remuneration Committee has engaged with shareholders on significant matters related to
Board remuneration. The Chair of the Remuneration Committee contacted and met with a number of shareholders ahead of
the 2023 AGM, and has engaged with shareholders in connection with the development and finalisation of the new Policy, as
referred to below. In accordance with Provision 4 of the UK Corporate Governance Code, following the 2023 AGM, the Chair
of the Remuneration Committee engaged with those shareholders who voted against the resolution to approve the Directors'
Remuneration Report, to understand their views, and noted that shareholders were largely supportive of the Company's approach
to Executive Remuneration. The points highlighted in the shareholder feedback and the way in which the Remuneration Committee
has addressed those points (including the overall simplication of the Remuneration Policy as part of its triennial review) are
described in the Remuneration Committee Chair's statement on pages 89-92, reflecting the overall aim of aligning the Group's
practices more closely with shareholder expectations.
In addition, in early 2024, the Chair of the Remuneration Committee reached out to shareholders to canvass their views on
proposed changes to the Remuneration Policy, enabling shareholders recommendations to be considered ahead of finalising the
new Policy.
The Chair of the Remuneration Committee is available to discuss matters with shareholders throughout the year.
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Single total figure of remuneration
(audited)
The following table shows the single total figure of remuneration for 2023 for the Directors and comparative figures for 2022.
During 2023, Dr. Roch Doliveux was Non-Executive Chair for the majority of the year and interim CEO for part of the year.
Accordingly, he has been included in the Non-Executive Director section of the table below. Robert Ghenchev elected to receive
no remuneration for his services as a Director.
Salary/fees
£’000
Benefits1
£’000
Bonus
£’000
LTIP2
£’000
Pension3
£’000
Total
£’000
Total fixed
remuneration
£’000
Total variable
remuneration
£’000
Executive Directors
Dr. Frank Mathias4
Stuart Paynter
2023
2022
2023
2022
Former Executive Directors
John Dawson
2023
2022
Dr. Sam Rasty8
Stuart Henderson
Dr. Heather Preston
Non-Executive Directors6
Dr. Roch Doliveux
Professor Dame
Kay Davies9
Dr. Michael Hayden
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Catherine Moukheibir 2023
2022
2023
2022
2023
2022
2023
2022
Leone Patterson11
Namrata Patel10
Total
458
-
351
341
-
189
225
2257
85
85
140
140
64
130
73
65
130
130
115
140
65
47
87
-
1,793
1,492
28
-
12
11
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40
16
-
-
-
3865
-
2195
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
605
-
-
11
69
-
125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
194
34
-
26
51
-
28
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60
79
520
-
400
858
-
566
225
225
85
85
140
140
64
130
73
65
130
130
115
140
65
47
87
-
1,904
2,386
520
-
389
403
-
222
225
225
85
85
140
140
64
130
73
65
130
130
115
140
65
47
87
-
1,893
1,587
-
-
11
455
-
344
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
799
1 Benefits comprise medical insurance, the provision of a car allowance and, in the case of Dr. Frank Mathias, an annual allowance of £35,000 agreed in order to secure his recruitment as
referred to in the 2022 Directors’ Remuneration Report.
2 The LTIP values comprise the Performance Shares Awards vesting by reference to performance in the relevant year. In the case of the 2022 value for Stuart Paynter and John Dawson,
in the 2022 Directors’ Remuneration Report the values were calculated by reference to the average share price over October, November and December 2022 of 356p and an estimated
vesting outturn of 100%. The Remuneration Committee confirmed the vesting outturn of 100% on 3 July 2023 after having considered the underpin condition that awards only vest if
the Remuneration Committee considers that the overall performance of the business across the period justifies it. In line with the applicable regulations, the values in the single total
figure table have been updated to reflect the price of 439p at vesting on 26 June 2023. In the case of the 2023 value, this relates to the estimated vesting outturn of the portion of the
LTIP granted to Mr. Paynter on 8 June 2021 which is subject to the strategic milestones performance condition. This has been calculated by reference to the average share price over
October, November and December 2023.
3 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. Each
Executive Director elected to receive a cash allowance.
4 Dr. Mathias joined the Board on 27 March 2023.
5 The 2022 Directors’ Remuneration Report reported that, in respect of 2022, Mr. Paynter had earned a bonus of £429,000 and that Mr. Dawson had earned a bonus of £243,000. On
13 December 2023 it was announced that each had agreed to a 10% reduction in their bonus. In the table above, the 2022 figures have been restated accordingly.
6 The Non-Executive Directors’ remuneration consists of fees only.
7 The 2022 Directors’ Remuneration Report reported that Dr. Doliveux’s fee in respect of 2022 included an additional £225,000 to be paid to him in recognition of the additional
time commitments from 28 January 2022 to 31 December 2022, the after tax amount of which would be applied in the acquisition of shares at market value. It was announced on
13 December 2023 that Dr. Doliveux elected to waive this additional fee. In the table above, the 2022 figure has been restated accordingly.
8 Dr. Sam Rasty retired from the Board with effect from 23 June 2023.
9 Professor Davies became Senior Independent Director when the role of Deputy Chair and Senior Independent Director was divided into two roles.
10 Namrata Patel was appointed to the Board with effect from 13 April 2022.
11 Leone Patterson was appointed to the Board with effect from 1 May 2023.
2023 Annual Bonus
(audited)
Each of Dr. Frank Mathias and Stuart Paynter were eligible to earn a bonus of up to 150% of salary for 2023, subject to the
satisfaction of performance objectives, with Dr. Frank Mathias’ bonus opportunity calculated on a pro-rata basis for the period from
his appointment on 27 March 2023.
Dr. Mathias’ 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023
98
DIRECTORS' REMUNERATION REPORT (CONTINUED)
In January 2024, the Remuneration Committee met to consider the achievement of the 2023 objectives. Based on performance
against the corporate objectives set, the Remuneration Committee assessed the outturn at 55%. However, due to the financial
underpin not being achieved, the Remuneration Committee determined that no bonuses would be paid to either Director in respect
of 2023. Information in relation to the objectives and performance against them is set out below.
Group objectives element
Performance against the applicable Group objectives for 2023 was as follows:
Objective Headlines
Growth
Objectives were set to achieve the revenue, EBITDA and cash targets in the 2023 budget, order book /
backlog targets, improving productivity and customer satisfaction and the proposition to increase the
service catalogue.
The 2023 budget targets were not met whilst the productivity and proposition targets were partially met. The
order book / backlog and customer satisfaction targets were met in full.
Weighting Outturn
40%
20%
Innovation Innovation targets were set around technology and platform to directly connect research and development
20%
15%
activity with customer challenge and market needs as well as collaboration targets to share knowledge across
functions and sites.
The technology and platform target was met in full whilst the collaboration target was partially met.
People
People objectives were set to connect people to the Group's purpose, develop employees, and retain
highest performers.
20%
10%
All three People objective were partially met.
Corporate Corporate objectives were set included establishing TherapyCo, mitigating the risk of Brexit in OXB’s
20%
10%
abilities to continue to serve customers and strengthening the relationship with US and other institutional
shareholders following the Group's strategic shift to becoming a 100% CDMO business.
The TherapyCo business was not established and therefore not met, the Brexit preparedness objective was
exceeded and the investor relations was partially met.
Total
100%
55%
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 supporting the rightsizing activity, preparation for
the acquisition of ABL Europe (renamed Oxford Biomedica (France) on 22 March 2024), providing 3-year financial guidance and
increasing awareness amongst investors in the US and the Europe. The personal objectives for Stuart Paynter were assessed at 50%
of maximum. However, notwithstanding the overall performance in the year, since the financial underpin was not achieved, the
Remuneration Committee determined that no bonuses would be paid in respect of 2023.
Performance Shares Award vesting in respect of performance in 2023
(audited)
Stuart Paynter was granted a Performance Shares Award in 2020. 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 estimated vesting value of the 50% of the award based on growth in revenue was included in the single total figure of
remuneration for 2022 and has been confirmed as referred to in the note to the single total figure table.
The performance condition for the 50% of the award based on share price growth was assessed in June 2023; as set out below the
threshold level of performance was not achieved and this portion of the award lapsed.
Compound annual growth rate of the Company's share price over the three year
period starting with the date of grant1
Percentage of the award subject to the share price
performance condition that will vest
Less than 10%
10% (i.e. 33.1% over three years)
Between 10% and 17.5%
0%
25%
Calculated on a straight line basis between 25% and 100%
17.5% or more (i.e. 62.2% over 3 years)
100%
1 The starting price is 760p being the average share price over the five business days ending with the date of grant.
Over the three-year performance period, the Company's share price fell. Therefore, the threshold level of the share price
performance was not achieved, and this element of the award granted in 2020 lapsed. Accordingly, no value is included in the
2023 single total figure of remuneration in respect of this element of the award.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
99
Award vesting in respect of performance in 2023 – award granted in 2021
Stuart Paynter was granted a Performance Shares Award in 2021. The performance conditions were based on relative TSR
performance (as regards 40% of the award), growth in revenue between 2020 and 2023 as regards 40% of the award and strategic
milestones as regards 20% of the award.
The relative TSR performance condition will be assessed in June 2024 and the vesting outturn in respect of that element will be
confirmed in the 2024 Directors’ Remuneration Report.
The revenue growth performance condition was as follows:
Compound annual growth rate of the Company's revenue between
2020 and 2023
Percentage of the award subject to the share price performance
condition that will vest
Less than 15%
15%
More than 15% but less than 30%
30% or more than 30%
0%
25%
Determined 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 1% resulting in an
estimated vesting outturn of 0%.
The strategic milestones performance condition was based on four elements, each with an equal weighting. The elements and the
performance outturn were as follows:
Rebalancing the
Hybrid Model
element: Number of
products in clinic
by the end of the
performance period
Evolving the CAR-
T Business element:
Progression of
strategic alliances
by the end of the
performance period
Expansion of Capabilities into
Alternative Vector Types element:
Progression of the AAV business by
the end of the performance period
Building of Academic Collaborations
element: Collaboration agreements
signed with leading (STAC
endorsed) universities or research
institutes by the end of the
performance period
Percentage of
the Performance
Shares Award
subject to the
element that
Vests
One product in clinic At least one strategic
AAV partnership signed
alliance signed
Two products
in clinic
Lead
candidate identified
AAV GMP batches released
More than two
products in clinic
Lead candidate in
IND-enabling studies
AAV GMP batches released
+
In-licensing or filing two or more
inventions (patents or know how) to
build technical differentiation for AAV
services. For these purposes whether
a technology is patented or kept as
know-how is documented at the IP
Management Committee
Single asset partnership with leading
(STAC endorsed) university or
research institute
Multiple asset partnership with
leading (STAC endorsed) university or
research institute
Single or multiple asset partnerships
across 2 or more leading
(STAC endorsed) university or
research institute
25%
50%
100%
Not achieved
(0% vesting)
Not achieved
(0% vesting)
Achieved
(100 % vesting)
Achieved
(100% vesting)
Partly achieved.
(10% overall
vesting)
9 Partnerships signed 7 AAV, 4 Drug
Product GMP batches were made
for Homology, and all these were
released, and 10 patents filed.
The Company signed and is funding
two projects with the University of
Oxford under the Medical and Life
Sciences Translational Fund (MLSTF)
to develop two products.
Overall, performance against the milestones resulted in an estimated vesting outturn of 10%.
For the purposes of the single total figure of remuneration for 2023, the value of these awards is calculated as follows.
Executive
Director
Shares subject
to award
Shares subject
to the revenue
performance condition
Estimated vesting outturn of the
element of the award subject to the
revenue performance condition
Estimated number of shares that will
vest by reference to the revenue
performance condition
Stuart Paynter
47,966
19,186
0%
0
Oxford Biomedica PLC | Annual Report and Accounts 2023
100
DIRECTORS' REMUNERATION REPORT (CONTINUED)
Executive
Director
Shares subject
to award
Shares subject to
the strategic milestones
performance condition
Estimated vesting outturn of
the element of the award
subject to the strategic milestones
performance condition
Estimated number of shares that will
vest by reference to the strategic
milestones performance condition
Stuart Paynter
47,966
9,594
50%
4,797
Executive Director Estimated total number of shares that will vest Value of the shares included in the single total figure of remuneration1
Stuart Paynter
4,797
£10,505
1 The award will not vest until the relative TSR 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 2023, being 219p. As that average share price is less than the share price at the date of grant of the awards (1131p), the
value is not split between that attributable to the share price at grant and that attributable to growth in share price.
The award is also subject to a performance underpin, such that it 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 TSR performance period.
Dr. Frank Mathias did not hold a Performance Shares Award capable of vesting by reference to a performance period ending 2023.
Performance Shares Awards granted under the LTIP during 2023
On 4 October 2023, Frank Mathias and Stuart Paynter were awarded Performance Shares Awards under the LTIP as follows:
Dr. Frank Mathias
Stuart Paynter
Basis of award (% of salary)
160%
122.5%
Number of shares under award
323,178
142,469
Face value of grant
£976,000
£430,256
As noted in the statement from the Remuneration Committee Chair, Dr. Frank Mathias’ LTIP award for 2023 was scaled back to
160% of salary and Stuart to 122.5% of salary. The number of shares under award was calculated by reference to the average share
price of 302p in the five business days prior to the date of the award.
The awards are nil cost options and are subject to a three-year vesting period. They are subject to the achievement of the
performance conditions based on relative Total Shareholder Return, growth in revenue and strategic milestones described below.
TSR and Revenue performance conditions (40% each of the award)
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 S&P 1500 Pharma Biotech and Life Sciences index and the STOXX Europe
TM Pharma & Biotech 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 2023–2025.
Strategic milestones performance conditions (20% of the award)
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.
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.
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 their normal annual LTIP opportunity (200% of base salary in the case of Dr. Frank Mathias and 175% of salary in the
case of Stuart Paynter).
The value of the shares as at 31 December 2023 has been determined based on a share price of 220p (being the prevailing closing
share price on 29 December 2023). Under this criteria Dr. Mathias and Mr. Paynter are working towards meeting this guideline with
further information included in the 'Remuneration at a Glance' section on page 93.
The interests in shares of the Directors who served during the year as at 31 December 2023 were as set out below. There have been
no changes in these interests between 31 December 2023 and the date on which this Directors' Remuneration Report was finalised.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
101
Executive Directors
Dr. Frank Mathias
Stuart Paynter
Non-Executive Directors
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Robert Ghenchev1
Dr. Sam Rasty2
Professor Dame
Kay Davies
Dr. Michael Hayden
Catherine Moukheibir
Namrata Patel
Leone Patterson
Shares held outright
Vested but
unexercised options
Deferred bonus plan not
yet exercisable
2023
20,000
18,687
2022
n/a
14,657
2023
-
251,676
2022
n/a
172,057
2023
-
91,197
2022
n/a
46,349
Unvested Performance
Shares Awards subject to
performance conditions
2022
n/a
175,566
2023
323,178
286,535
371,805
10,862
18,298
-
11,614
1,000
39,973
25,287
9,170
12,447
335,675
9,862
11,614
-
11,614
-
11,289
11,846
7,500
n/a
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Mr. Ghenchev is Head of Growth Equity at Novo Holdings which has a holding of 12,048,802 shares as at 15 April 2024.
2 Dr. Sam Rasty retired from the Board with effect from 23 June 2023 and his 2023 number of shares is as at that date.
During 2023, the following options have been awarded, vested and lapsed:
LTIP
Dr. Frank Mathias
Stuart Paynter
Deferred bonus
Dr. Frank Mathias
Stuart Paynter
Unvested at
1 January 2023
n/a
175,566
Vesting during 2023 Lapsed during 2023 Awarded during 2023
n/a
15,750
n/a
15,750
323,178
142,469
Not exercisable at
1 January 2023
n/a
46,349
Becomes exercisable
during 2023
n/a
19,021
Awarded during 2023
n/a
63,869
Unvested at
31 December 2023
323,178
286,535
Not exercisable at
31 December 2023
n/a
91,197
The Deferred bonus award granted to Stuart Paynter during 2023 is a nil-cost option under the Deferred Bonus Plan granted on
4 October 2023 in respect of the deferred portion of his bonus earned for 2022 which will vest as to one third of the shares subject
to it on each of the first three anniversaries of the grant date. During 2023, neither Stuart Paynter nor Dr. Frank Mathias exercised
any options.
Payment to past Directors and payments for loss of office
(audited)
No payments to past directors or payments for loss of office were made in the year.
Performance graph and comparison with CEO’s remuneration
The chart below illustrates the Company's TSR performance since January 2014 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Dec 13Dec 14Dec 15Dec 16Dec 17Dec 18Dec 19Dec 20Dec 21Dec 22Dec 231.6001.4001.2001.0008006004002000Key:Oxford Biomedica plcFTSE all-share indexNASDAQ Biotech index 102
DIRECTORS' REMUNERATION REPORT (CONTINUED)
CEO’s single
total figure
of remuneration
LTIP vesting
Annual bonus
CEO’s remuneration in last ten years
Year
2014 2015 2016 2017 2018 2019 2020 2021
£’000
680
732
653
811 1,311 1,220 1,258 1,828
John
Dawson1
104 3
2022
Roch
Doliveux1
2083
Roch
Doliveux2
53
2023
Frank
Mathias2
529
% of
maximum
% of
maximum
0% 100% 50% 25% 80% 100% 62% 42%
75% 42% 50% 85% 92% 70% 85% 84%
50%
863
n/a
n/a
n/a
n/a
n/a
n/a
1
2
In 2022, Dr. Roch Doliveux was interim CEO from 28 January 2022. Therefore, the CEO’s total single figure of remuneration is shown separately for Mr. John Dawson’s remuneration
from 1 January 2022 to 27 January 2022 and Dr. Doliveux’s remuneration from 28 January 2022 until 31 December 2022. 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 included is
calculated by reference to Mr. Dawson’s bonus awarded in the year.
In 2023, Dr. Doliveux was interim CEO until 27 March 2023. Therefore, the CEO’s total single figure of remuneration is shown separately for Dr. Doliveux’s remuneration from 1 January
2023 to 27 March 2023 and Dr. Frank Mathias’ remuneration from 27 March 2023 until 31 December 2023. Dr. Doliveux did not participate in an LTIP that vested by reference to
performance in 2023 or the 2023 annual bonus or any pension arrangement. Dr. Mathias did not participate in an LTIP that vested by reference to performance in 2023.
3 The values for Mr. Dawson and Dr. Doliveux have been restated to reflect the agreed reduction of Mr. Dawson’s bonus and the waiving by Dr. Doliveux of his additional fee, in each case
as referred to earlier in this report.
Percentage change in remuneration of Directors and employees
The table below shows the annual percentage change in salary/fees, benefits and bonus between 2019 and 2023 for the Directors.
Information in relation to the changes in respect of previous years is included in previous years’ Directors’ Remuneration Report.
The stated increases and decreases in salary and fees between various years reflects that comparison is between full years and part
years. In particular, the comparison between years for Dr. Sam Rasty and Catherine Moukheibir compare full years and part years.
Year
2022/23
2021/22 % change
2020/21 %
2019/20 %
2022/23 %
2021/22
2020/21 %
2019/20 %
2022/23 %
2021/22
2020/21 %
2019/20 %
Salary/Fees
Benefits
Bonus
%
change1
3
0
0
0
-514
12
0
-185
38
6
7
Stuart Paynter
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Dr. Sam Rasty
Professor Dame
kay Davies
Dr. Michael Hayden
Catherine
Moukheibir
Namrata Patel
Comparator
employee group7
change
change
change
%
change
change
change
%
change
change
10
03
0
0
0
20
57
3,4005
n/a
30
89
27
109
1,757
n/a
n/a
n/a
n/a
5
n/a
3
3
n/a
n/a
n/a
n/a
n/a
change
9
0
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
n/a n/a
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
change
0 2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-100
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
47
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
28
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
11
8
9
14 (10)
9
11
-100
11
22
98
1 Dr. Frank Mathias and Leone Patterson were appointed during 2023 and, accordingly, have been excluded from the table. Robert Ghenchev did not receive any remuneration for his
role, and accordingly has been excluded from the table.
2 As explained earlier in this report, Stuart Paynter agreed to a 10% reduction in his bonus in respect of 2022. The percentage change between 2021 and 2022 has been
restated accordingly.
3 As explained earlier in this report, Dr. Doliveux waived his additional fee in respect of 2022. The percentage change between 2021 and 2022 has been restated accordingly.
4 Dr. Sam Rasty resigned from the Board on 23 June 2023.
5 As noted above, the significiant changes in Catherine Moukheibir's fees between 2021 and 2022 reflect that the fee for 2022 is for a full year and that the fee for 2021 is for a part year.
The decrease in 2023 is due to her start dare in 2021, Catherine received her 2021 and 2022 share allotment in 2022 but only her normal annual allotment in 2023.
6 Namrata Patel was appointed as a Director during 2022.
7 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) Limited throughout the whole of the
relevant years.
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 each year.
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.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
103
In 2023, Dr. Roch Doliveux was interim CEO until 27 March 2023 at which point Dr. Frank Mathias became CEO. For 2023, the CEO
remuneration is the aggregate of Dr. Doliveux’s remuneration for the period to 27 March 2023 and Dr. Mathias’ remuneration from
that date onwards.
Employees’ involvement in the Group's performance is encouraged. 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. 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. The Group considers the median pay ratio to be consistent with the Group's wider
policies on employee pay, reward and progression. The ratios reduced in 2022 due to Dr. Roch Doliveux holding office as interim
CEO after the retirement of Mr. John Dawson, and also his waiver of his 2022 additional fee. The ratios have increased in 2023 due
to the appointment of Dr. Frank Mathias as full time CEO in March 2023.
Financial year
2018
2019
2020
2021
20221
2023
Method
Option A
Option A
Option A
Option A
Option A
Option A
25th percentile pay ratio
1:48
1:42
1:40
1:59
1:6
1:17
Median pay ratio
1:37
1:32
1:30
1:44
1:5
1: 13
75th percentile pay ratio
1:27
1:24
1:23
1:32
1:4
1: 9
1 As explained earlier in this report, Dr. Doliveux waived his additional fee in respect of 2022. The 2022 ratios have been restated accordingly.
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)
2023
Salary (£’000)
Total remuneration (£’000)
CEO
£380
£1,311
CEO
£410
£1,220
CEO
£431
£1,258
CEO
£455
£1,828
CEO
£225
£312
CEO
£511
£582
25th percentile
£25
£27
25th percentile
£26
£29
25th percentile
£28
£31
25th percentile
£27
£31
25th percentile
£31
£36
25th percentile
£32
£35
Median
£32
£35
Median
£35
£38
Median
£37
£42
Median
£36
£42
Median
£40
£46
Median
£42
£46
75th percentile
£44
£48
75th percentile
£45
£50
75th percentile
£47
£55
75th percentile
£50
£57
75th percentile
£54
£62
75th percentile
£58
£63
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 can be found in the Finance review and were identified as being:
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
Explanations for the year on year movements in the key cash measures are provided on pages 34 (Staff pay and Non-payroll costs),
37 (Cash generated from/(used in) operations and Net cash inflow/(burn) and 33 (Cash revenues).
Approach to Directors’ Remuneration in 2024
The Company's approach to Directors’ Remuneration in 2024 is set out in the statement from the Remuneration Committee Chair
on pages 89-92 and Remuneration at a Glance section on page 93.
Statement of voting at AGM
At the 2023 AGM, the 2022 Directors’ Remuneration Report was approved by shareholders as follows:
Resolution
Votes for (including
discretionary)
% for Votes against % against
Approval of the Directors’
Remuneration Report
51,080,127 79.93%
12,826,613
20.07%
Total votes
cast (excluding
votes withheld)
63,906,740
Votes withheld
(abstentions)
9,301,496
Following the AGM, the Chair of the Remuneration Committee engaged with shareholders that had voted against the resolution
to approve the Remuneration Report. In December 2023, details of action that was taken following shareholder feedback was
published in accordance with Provision 4 of the Corporate Governance Code. The points highlighted in the shareholder feedback
and the way in which the Remuneration Committee has addressed these points (including the overall simplification of the Policy)
are described in the Remuneration Committee Chair's statement earlier in this report.
At the 2021 AGM, the 2020 Directors’ Remuneration Policy was approved by shareholders as follows:
Resolution
Votes for (including
discretionary)
% for Votes against % against
Approval of the Directors’
Remuneration Policy
46,437,980 80.95%
10,926,461
19.05%
Total votes
cast (excluding
votes withheld)
57,364,441
Votes withheld
(abstentions)
1,039,205
Advisers to the Remuneration Committee
Deloitte LLP acted as adviser to the Remuneration Committee during 2023. Deloitte was appointed by the Remuneration
Committee based on its expertise in remuneration matters and 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 2023 were £71,100 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 2023
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.
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Introduction to the Directors’ Remuneration Policy
The Company's Directors’ Remuneration Policy set out in the 2020 Annual Report and accounts was approved by shareholders at
the 2021 AGM. In accordance with the applicable legislation, the Company is seeking approval for a new Directors’ Remuneration
Policy at the 2024 AGM. The approach taken by the Remuneration Committee to the determination of the new Policy and the
differences between the new Policy and the Policy approved by shareholders at the 2021 AGM are described in the statement from
the Remuneration Committee Chair on pages 89-92. As described in the statement from the Remuneration Committee Chair, the
development and finalisation of the Policy took into account the consultation with key shareholders. Input was also sought from
the Executive Directors, but the Policy was finalised by the Remuneration Committee, which no Executive Director is a member of.
In summary, the new Policy aims to align the Group's practices more closely with shareholder expectations whilst ensuring that the
Policy supports the Group's strategy to transform and grow the business and enables it to recruit and retain high calibre Executive
and Non-Executive talent and pay competitively within the global talent markets in which it operates. With the cell and gene
therapy industry at an inflection point, the Group is in the right market at the right time, and well-equipped to succeed with a highly
skilled workforce and leading-edge technology. A significant proportion of cell and gene therapy is based in the US and the US
market continues to have significant commercial potential for the Group. The Group operates in a global talent market and needs
to pay competitively against CDMO businesses in Europe, Asia and the United States.
Directors’ Remuneration Policy
Policy table
Component
and purpose
Executive Directors
Base salary
To provide a base
salary which is
sufficient to attract
and retain Executive
Directors of a
suitable calibre.
Operation
Maximum potential
Performance targets
and metrics
Base salaries are normally reviewed annually
taking into account a number of factors which
may include (but are not limited to):
• underlying Group performance;
•
• competitive salary levels and market
role, experience and individual performance;
forces; and
• pay and conditions elsewhere in the Group.
While there is no maximum salary,
increases will normally be within or below
the range of salary increase awarded
(in percentage of salary terms) to other
employees in the Group.
Higher salary increases may be awarded
in appropriate circumstances, such as, but
not limited to:
While no formal
performance conditions
apply, an individual's
performance in role
is taken into account
in determining any
salary increase.
Any changes are normally effective from
1 January.
Benefits
To provide benefits
on a market
competitive basis.
Benefits 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 or allowances may be
provided based on individual circumstances,
including the location of the Executive Director.
These may include, for example, travel expenses.
•
• where an Executive Director has been
promoted or has had a change in
scope or responsibility;
to take account of competitive salary
levels and market forces;
to reflect an individual's development
or performance in role;
•
• 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.
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
Component
and purpose
Retirement benefits
To provide funding
for retirement.
Sharesave scheme
To create alignment
with the Group and
promote a sense
of ownership.
Operation
Maximum potential
The Group operates a defined contribution
scheme for all employees, including
Executive Directors.
Executive Directors are permitted to take a
cash supplement instead of some or all of
the contributions to a pension plan. Non-
UK national Executive Directors are 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 determined
in accordance with the applicable legislation
and which are 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.
A maximum employer contribution
or cash supplement (or combination
thereof) not exceeding the contribution
available to the wider workforce
as determined by the Remuneration
Committee (currently 7.5% in the UK).
For the Sharesave scheme, participation
limits and the level of discount permitted
in setting the exercise price are
determined in accordance with the
applicable legislation 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.
Performance targets
and metrics
Not applicable.
Not subject to
performance measures in
line with usual practice
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Component
and purpose
Annual bonus
To incentivise
and reward
delivery of the
Group's objectives.
Delivery of part of
the bonus as a
deferred bonus
award aligns the
incentive package
with shareholders’
interests.
Operation
Maximum potential
The usual target annual bonus
opportunity is 75% of base salary
and the usual maximum annual bonus
opportunity is 150% of base salary
(2x target).
In exceptional circumstances, the target
annual bonus opportunity may be
increased to up to 100% of base
salary and the maximum annual bonus
opportunity is to up to 200% of base
salary (2x a target bonus of 100% of base
salary). These exceptional circumstances
are: (1) to facilitate the recruitment of a
new Executive Director; and (2) in the
event of a significant increase in the size
and complexity of the business.
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.
Bonus Deferral
The extent of the deferral of bonus
will ordinarily depend upon achievement
against the Company's In-Service Share
Ownership Guideline.
•
•
If an Executive Director has not
met the Company's In-Service Share
Ownership Guideline as determined by the
Remuneration Committee, ordinarily 50% of
the bonus will be delivered as a deferred
bonus award.
If an Executive Director has met the
In-Service Share Ownership Guideline as
determined by the Remuneration Committee,
ordinarily 25% of the bonus will be delivered
as a deferred bonus award.
The Remuneration Committee may permit or
require the deferral of a greater proportion of
any bonus earned.
Any bonus not delivered as a deferred bonus
award will be paid in cash.
Deferred bonus awards ordinarily vest in three
equal instalments on the first, second and
third anniversaries of the award. The deferred
bonus awards are not subject to further
performance targets.
Dividend Equivalents Additional shares may be
awarded in respect of shares subject to deferred
bonus awards to reflect the value of dividends
over the deferral period. These dividend
equivalents may assume the reinvestment of
dividends into shares on such basis as the
Remuneration Committee determines.
Recovery provisions apply as summarised below.
Performance targets
and metrics
The performance metrics
may be based on
financial and/or non-
financial objectives (which
may include leading
performance indicators,
ESG metrics and individual
objectives). At least 50%
of the bonus opportunity
will be based on financial
measures. 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.
Subject to
the Remuneration
Committee's discretion to
amend the pay-out, for
financial metrics, up to
50% of the target (up
to 25% of the maximum)
which may be earned
for a metric is earned
for threshold performance,
rising to 100% of the
target amount (50% of the
maximum) for on-target
performance and to 2x the
target amount (100% of the
maximum) for meeting or
exceeding the maximum
level of performance. For
non-financial 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.
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
Component
and purpose
Long
Term Incentives
To enhance
shareholder
alignment by
providing Executive
Directors with
longer term
interests in shares
whilst requiring
challenging
performance before
the awards vest.
Operation
Maximum potential
The maximum Performance Shares
Award is:
• Up to 175% of base salary in respect
of a financial year for an Executive
Director other than the CEO; and
• Up to 200% of base salary in respect of
a financial year for the CEO.
In exceptional circumstances, the
maximum Performance Shares Award
in respect of a financial year may be
increased to up to 400% of base salary for
any Executive Director. These exceptional
circumstances are: (1) to facilitate the
recruitment of a new Executive Director;
and (2) in the event of a significant
increase in the size and complexity of
the business.
At the discretion of the Remuneration
Committee, 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 such basis as the Remuneration
Committee determines.
Recovery provisions apply as summarised below.
Performance targets
and metrics
Performance conditions
will be based on
financial measures and/or
the achievement of non-
financial objectives (which
may include leading
performance indicators
and ESG metrics). Financial
measures may include (but
are not limited to) share
price, shareholder return,
EBITDA and revenue
measures. The weighting
of measures and objectives
will be determined in
respect of each grant
by the Remuneration
Committee. The proposed
approach to performance
metrics and targets for the
awards to be granted in
respect of 2024 is set out
on page 94.
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.
Subject to
the Remuneration
Committee's discretion
to amend the formulaic
vesting outturn, 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 non-financial
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.
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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 vested may be
cancelled or reduced in the relevant circumstances (malus). For up to one year following the first instalment of a deferred bonus
award vesting, the Remuneration Committee may require the repayment of some or all of the shares acquired pursuant to the
deferred bonus award 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.
Share ownership guidelines
To align Executive Directors 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. The Remuneration
Committee retains discretion to vary these provisions in exceptional circumstances.
In-Service Share Ownership Guideline
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 shares which vest under a deferred bonus award, until the share
ownership guideline has been satisfied. Shares which are fully owned with no outstanding vesting criteria count towards the share
ownership guideline together with shares subject to deferred bonus awards 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).
Post-Employment Share Ownership Requirement
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 share ownership 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 metrics and targets
Performance metrics for the annual bonus and LTIP are set by the Remuneration Committee and aligned with the strategy
of creating a leading global quality and innovation-led cell and gene therapy CDMO. Financial and non-financial metrics are
utilised to align the interests of Executive Directors with both the overall financial performance of the Group and forward looking
performance, with at least 50% of the annual bonus to be based on financial metrics as outlined above. Appropriately stretching
targets are set each year for the annual bonus and LTIP taking into account a number of different factors including business
expectations and market conditions. The proposed approach to performance metrics and targets for the 2024 annual bonus and
the LTIP awards to be granted in respect of 2024 are set out on pages 94.
The Remuneration Committee retains the ability to adjust or set different performance measures in appropriate circumstances
(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. All discretions available under the rules of any share plan operated by the Group will be
available under this Policy, except where expressly limited under this policy. This includes 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
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
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.
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 global talent market in which the Company operates. The
Company's approach to being competitive is to include comparison with global CDMO businesses and local market conditions,
whilst ensuring that employees are remunerated 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.
The Company operates a Group-wide cash bonus scheme which gives 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.
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.
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 Corporate 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 appropriate markets 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's approach to the formulation of this Policy included canvassing the views of shareholders. While the
Remuneration Committee has not consulted with employees when preparing this Policy, the Remuneration Committee considers
the pay and employment conditions of all other employees when setting and implementing the Policy, and as noted above, the
level of salary increase for the wider workforce is taken into account when determining any salary increase for Executive Directors.
During March 2023, the Group engaged with the workforce at a meeting of the WEP to explain how Executive pay aligns with the
wider Group pay policy; the output of this engagement was taken into account in formulating this new Policy.
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.
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.
Travel and accommodation expenses in connection
with attendance by the Chair and Non-Executive
Directors at relevant 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.
There is no overall maximum, but fees are set taking
into account the responsibilities of the role, expected time
commitment and market competitive fee levels.
Fees may be structured on the basis of a base fee with
additional fees for one or more of the following: (1) chairing a
Board Committee; (2) being a member of a Board Committee;
(3) holding the position of Vice-Chair or Senior Independent
Director (or any other relevant role); (4) having regard to the
additional time commitments associated with the fulfilment
of their role by a Non-Executive Director taking into account
their location.
A proportion of the fees may be subject to a requirement that
the after-tax amount will be applied in the acquisition of shares
at market value which must be retained for a specified period.
Total remuneration opportunity
The total remuneration for Dr. Frank Mathias and Stuart Paynter that could result from the proposed remuneration policy in 2024
under four different performance levels is shown below:
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Performance level
Fixed pay
Annual Bonus (including
any amount deferred
under the DBP)
LTIP
Minimum performance Fixed elements of remuneration only:
No bonus.
No award vesting.
• base salary – being the salary for 2024;
• pension contribution or salary
supplement assuming a contribution/
supplement rate of 7.5%; and
• benefits – benefits for 2023 as stated
in the single figure table on page 97,
“annualised” in the case of Dr. Frank
Mathias to reflect the fact that he
served for part only of 2023.
Performance in line
with expectations
As above.
Maximum
performance
As above.
75% of salary
(50% of maximum)
awarded for achieving
target performance.
150% of salary (2x target)
awarded for achieving
maximum performance.
As above.
As above.
Maximum
performance plus an
assumed 50% increase
in the share price
for the purposes of
the LTIP
25% of maximum vesting, being:
•
•
for Dr. Frank Mathias, equivalent to 50% of
salary; and
for Stuart Paynter equivalent to 43.75%
of salary.
100% vesting for achieving maximum
performance, being:
•
•
for Dr. Frank Mathias equivalent to 200% of
salary; and
for Stuart Paynter equivalent to 175%
of salary.
100% vesting for achieving maximum
performance plus an assumed 50% increase
in the share price, being:
•
•
for Dr. Frank Mathias equivalent to 300% of
salary; and
for Stuart Paynter equivalent to 262.5%
of salary.
Oxford Biomedica PLC | Annual Report and Accounts 2023
£m3.53.02.52.01.51.00.50Maximumperformance with50% shareMaximumperformance with50% shareMaximumperformance£2,838,982£1,531,070£3,448,982£1,838,396Dr. Frank MathiasStuart PaynterMaximumperformancePerformance in linewith expectations£1,466,482£806,658Performance in linewith expectationsMinimumperformance£703,982£389,572Minimumperformance100%100%48%31%21%48%33%19%25%32%43%25%34%41%20%27%53%21%29%50% 112
DIRECTORS' REMUNERATION REPORT (CONTINUED)
Approach to recruitment remuneration
The Remuneration Committee's overarching principle for recruitment remuneration is to pay no more than is necessary to attract
an Executive Director of the calibre required to shape and deliver the Group's business strategy, recognising that the Group
competes in a global talent market, including against US CDMO businesses. In determining each element of pay and the package as
a whole upon recruitment, the Remuneration Committee will take into account all relevant factors including, but not limited to, the
skills and experience of the individual, the market rate for an individual of that experience, as well as the importance of securing the
best person for the role.
The remuneration package of a new Executive Director will be subject to the principles and limits referred to below:
• Base salary will be set at a level appropriate to the role and the experience of the Executive Director being appointed. This may
include agreement on future increases up to a market rate, in line with increased experience and/or responsibilities, subject to
good performance, where it is considered appropriate.
• Retirement and other benefits will be provided in line with the Policy.
• Annual bonus and LTIP opportunities for a newly appointed Executive Director may be awarded up to the maximum permitted
by the Policy table. However, the use of these maximum incentive opportunities for a newly appointed Executive Director will
not be automatic.
• The Remuneration Committee will not offer non-performance related incentive payments (for example a “guaranteed sign-
on bonus”).
• Other elements may be included in the following circumstances.
◦ An interim appointment being made to fill an Executive Director role on a short-term basis.
◦
If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a short-
term basis.
If an Executive Director is recruited at a time in the year when it would be inappropriate to provide a bonus or long-term
incentive award for that year as there would not be sufficient time to assess performance. Subject to the limit on variable
remuneration set out below, the quantum in respect of the months employed during the year may be transferred to the
subsequent year so that reward is provided on a fair and appropriate basis.
If the Executive Director will be required to relocate in order to take up the position, it is the Group's policy to
allow reasonable relocation, travel and subsistence payments. Any such payments will be at the discretion of the
Remuneration Committee.
◦
◦
• The Remuneration Committee may also alter the performance measures, performance period, vesting period, deferral period
and holding period of the annual bonus, deferred bonus awards or long-term incentives if the Remuneration Committee
determines that the circumstances of the recruitment merit such alteration. The rationale will be clearly explained in the
following Directors’ Remuneration Report.
• The maximum level of short and long-term incentive opportunity which may be granted (excluding “buyout” awards as referred
to below) is 600% of salary (reflecting the limits in the policy table).
Any share awards referred to in this section will be granted as far as possible under the Group's share plans. If necessary, and subject
to the limits referred to above, recruitment awards may be granted outside of these plans as permitted under the Listing Rules
which allow for the grant of awards to facilitate, in unusual circumstances, the recruitment of an Executive Director.
Compensation for the forfeiture of any remuneration arrangements in respect of a previous employment or engagement would
be considered on a case-by-case basis. The Remuneration Committee will generally seek to structure such “buyout” awards or
payments on a like for like basis to the remuneration arrangements forfeited and on the basis that they are limited to the expected
value of the forfeited awards. Where considered appropriate, such special recruitment awards will be liable to forfeiture or “malus”
and/or “clawback” on early departure.
Where a position is filled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to
continue according to the original terms.
Fees for new Non-Executive Directors will be in line with the Policy.
Service contracts and policy on payment for loss of office
The Company's policy is for Executive Directors’ service contracts to have a notice period of up to 12 months. Non-Executive
Directors are engaged on initial three year contracts and thereafter on one-year rolling contracts subject to annual re-election by
shareholders. Details of the notice periods in the Executive Directors’ service contracts and in the Non-Executive Directors’ letters
of appointment are set out below.
Service contracts
Dr. Frank Mathias
Stuart Paynter
Date of appointment
27 March 2023
29 August 2017
Notice period
12 months
12 months
Oxford Biomedica PLC | Annual Report and Accounts 2023
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Financial statements
Letters of appointment
Dr. Roch Doliveux
Stuart Henderson
Dr. Heather Preston
Robert Ghenchev
Professor Dame Kay Davies
Dr. Michael Hayden
Catherine Moukheibir
Namrata Patel
Leone Patterson
Date of appointment
24 June 2020
1 June 2016
15 March 2018
24 June 2019
1 March 2021
15 July 2021
14 December 2021
13 April 2022
1 May 2023
113
Notice period
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
All Directors are subject to re-election by shareholders on an annual basis. Catherine Moukheibir and Dr. Michael Hayden have
informed the Board that they will not be standing for re-election at the forthcoming AGM in June 2024.
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
Executive Directors may be required to work during their notice period or be paid in lieu of notice if not required to work for their
full notice period.
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.
Annual
Bonus
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 such that a bonus will be paid only
where the Remuneration Committee considers there are “good leaver” circumstances. 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).
Deferred
Bonus
Awards
Long Term
Incentives
Change of
control or
other
relevant
corporate
event
The starting point would be that the deferral would apply on a similar basis as it would for a continuing Director in line with
the policy table depending upon whether the former Director had met the In-Service Share Ownership Guideline at cessation.
However, the Remuneration Committee has discretion to pay the whole of any bonus earned for the year of departure
and preceding year in cash where deferral would otherwise apply, although would only do so where in the opinion of the
Remuneration Committee there are compassionate “good leaver” circumstances.
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 their employer or any other reason at the discretion of the Remuneration Committee, the Remuneration
Committee shall determine whether the award will vest at the normal date or at an earlier 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.
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 their employer or any other reason at the discretion of
the Remuneration Committee, the Remuneration Committee shall determine whether the award will continue until the originally
anticipated vesting date or vest at an earlier date. 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.
Unvested awards 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.
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DIRECTORS' REMUNERATION REPORT (CONTINUED)
Other
payments
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 appropriate circumstances, the Remuneration Committee may agree that certain benefits (such
as medical insurance) may be continued for a reasonable period following termination of employment. If an Executive Director
has relocated as part of their appointment, the Company may 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.
Existing contractual arrangements
The Remuneration Committee retains discretion to make any remuneration payment or payment for loss of office outside the
policy in this Annual Report and accounts (including exercising any discretions available to it in connection with any such payment):
• where the terms of the payment were agreed before the Policy came into effect (provided that, in the case of any payment
agreed after the Company's 2018 Annual General Meeting, they are in line with the Policy in place at the time the terms were
agreed or were otherwise approved by shareholders); or
• where the terms of the payment were agreed at a time when the relevant individual was not a Director of the Company and, in
the opinion of the Remuneration Committee, the payment was not in consideration of the individual becoming a Director of the
Company; or
to satisfy contractual commitments under legacy remuneration arrangements.
•
For these purposes, “payments” includes the satisfaction of awards of variable remuneration and, in relation to an award over
shares, the terms of the payment are agreed at the time the award is granted.
Statement of consideration of shareholder views The Remuneration Committee greatly values the continued dialogue with
shareholders and regularly engages with shareholders and representative bodies to take their views into account when setting
and implementing the Company's remuneration policies. The Company engaged extensively with shareholders and their proxy
advisers on the 2024 Remuneration Policy review. More detail on the engagement with shareholders in 2024 can be found in the
Remuneration Committee Chair's letter on pages 89-92.
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115
Directors' Report
For the year ended 31 December 2023
The Directors present their Annual report and audited consolidated financial statements (Annual report and accounts) for the year
ended 31 December 2023 as set out on pages 122-174. This report should be read in conjunction with the Corporate Governance
Report on pages 73-121. 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 the 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 the
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 2024 is on pages 3-72. 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 2023 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 2023, the Directors
consider that they are sufficiently well informed to be able to make this judgement.
Key Financial and Non-Financial performance indicators (KPIs)
Key financial and non-financial performance indicators are outlined in the Chief Financial Officer's review on pages 31-39.
Corporate Governance
The Group's statement on corporate governance is included in the Corporate Governance Report on pages 73-121, which forms
part of this Directors’ Report.
Risk Management
The Group's exposure to risks is set out on pages 67-72 (Principal risks, uncertainties and risk management) and on page 139 (note
3: financial risk management).
Dividends
The Directors do not recommend payment of a dividend (2022: £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 74-75. 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 2023 are disclosed in
the Directors’ Remuneration Report on pages 100-105.
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 2018 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 2023 and up to the date of approval of the financial statements.
Share Capital
Structure of the Company's capital
At 31 December 2023, the Company had 96,804,353 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 the premium listing segment of the Official List
of the Financial Conduct Authority and to trading on the main market for listed securities 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 23 June 2023, authority
was given to allot up to 32,153,630 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 32,153,630 shares, solely in a rights issue. Authority was also given, subject to certain conditions, to waive pre-emption
Oxford Biomedica PLC | Annual Report and Accounts 2023
116
DIRECTORS' REPORT (CONTINUED)
rights over up to 9,646,088 shares, being 10% of the shares then in issue for cash and an additional authority was also given
to waive pre-emption rights over up to 9,646,088 shares, being 10% of the shares then in issue for use in connection with an
acquisition of specified capital investment announced contemporaneously with the issue, or that has taken place in the 12-month
period preceding the announcement of the issue. No rights have been granted to the Directors to buy back shares.
Substantial shareholdings
At 31 December 2023, 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 (Copenhagen)
Vulpes Investment Mgt (Singapore)
M&G Investments (London)
Liontrust Asset Mgt (London)
Fidelity Investments (Boston)
Hargreaves Lansdown Asset Mgt (Bristol)
Serum Life Sciences Ltd (UK)
Columbia Threadneedle Investments (London)
Institut Mérieux SA (Lyon)
Vitruvian Partners (London)
Vanguard Group (Philadelphia)
Mr. S M H Shah (UK)
Number of ordinary shares
12,048,802
8,426,390
7,050,521
6,917,757
4,105,735
3,433,247
3,382,950
3,183,728
3,160,000
3,004,567
2,985,324
2,902,652
Percentage of issued share capital
12.45
8.70
7.28
7.15
4.24
3.55
3.49
3.29
3.26
3.10
3.08
3.00
At 15 April 2024 , 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 (Copenhagen)
Vulpes Investment Management (Singapore)
M&G Investments (London)
Institut Mérieux SA (Lyon)
Liontrust Asset Management (London)
Hargreaves Lansdown Asset Management (Bristol)
Serum Life Sciences Ltd (UK)
Columbia Threadneedle Investments (London)
Interactive Investor (Manchester)
Lansdowne Partners (London)
Vitruvian Partners (London)
Number of ordinary shares
12,048,802
8,426,390
7,170,330
6,309,374
6,078,799
3,689,888
3,382,950
3,245,381
3,241,215
3,085,765
3,004,567
Percentage of issued share capital
12.05
8.43
7.17
6.31
6.08
3.69
3.38
3.25
3.24
3.09
3.00
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 centred on being an innovative CDMO. Research and development activities are focussed on making
improvements to platforms 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 an established WEP 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. Further details regarding the WEP can be found in the
Nomination Committee Report on page 86. Employees’ involvement in the Group's performance is encouraged. All employees who
have completed probation are eligible to participate in discretionary bonus schemes.
In March 2023, the Group engaged with the workforce at a meeting of the WEP 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. WEP members also 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. In December 2023, the Group provided the workforce with further detail in relation to Executive pay alignment in the
form of an all employee update.
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 can be found in the Group's Stakeholders
section of the Strategic Report on pages 15-19.
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
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117
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 can be found in the ESG
statement on pages 42-66.
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 can be found on pages 15-19 and in the Board section of the
Corporate Governance Report on pages 78-80.
Financial instruments and related matters
Included in note 3, on pages 139-140, 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 Annual report and accounts and are incorporated by reference.
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 2023, the EBT held 1,300 shares with
a value of £3,000 on which all the related options have vested. The EBT also administers the 2015 Deferred and LTIP bonus plans
in as far as subscribing for and applying the share capital for nil cost options in the Company exercised by employees. Settlement
of the funds occurs through the Group. At the end of 2023 bonuses to senior management with a value of £nil vested with none
converted to nil cost options during 2024. Refer to note 26 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.
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DIRECTORS' REPORT (CONTINUED)
Going Concern
The financial position of the Group and Company, their cash flows and liquidity position are described in the Financial Statements
and notes to these financial statements section of this Annual report and accounts.
The Group and the Company made a loss after tax for the year ended 31 December 2023 of £184.2 million and £120.0 million
respectively, and consumed net cash flows from operating activities for the year of £28.5 million and £9.8 million. The Group also:
• Sold its Harrow House manufacturing facility in a sale and lease back transaction for £4.5 million to Kadans Science Partner in
June, whilst also agreeing an occupational lease of the property for 15 years;
• Closed the acquisition of ABL Europe in January 2024 for a consideration of €15 million, (including €10 million of pre-
completion cash funding from Institut Mérieux); and
• Ended the year with cash and cash equivalents of £103.7 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
2024 annual budget and forecasts for 2025. The Directors have undertaken a rigorous assessment of the forecasts in a base case
scenario and assessed identified downside risks and mitigating actions. These cash flow forecasts also take into consideration
severe but plausible downside scenarios including:
• Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the
LentiVector® platform and AAV businesses;
• No revenues from new clients;
• Decreases in forecasted existing client milestones and removal of any future licence revenues, and
• The potential impacts of a downturn in the biotechnology sector on the Group and its clients including expected revenues from
existing clients under long term arrangements.
Under both the base case and mitigated downside scenario, the Group and Company have 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 all the downside
scenarios above crystallising, the Group and Company would continue to meet their existing loan covenants until March 2025
without taking any mitigating actions, but the Board has mitigating actions in place that are largely within its control that would
enable the Group to reduce its spend within a reasonably short time-frame to increase the Group and Company’s cash covenant
headroom as required by the loan facility with Oaktree Capital Management. Specifically, the Group will continue to monitor its
performance against the base case scenario and if base case cash-flows do not crystallise, start taking mitigating action by the end
of Q3 2024 which may include rationalisation of facilities and rightsizing the workforce.
In addition, the Board has confidence in the Group and Company's ability to continue as a going concern for the following reasons:
• As noted above, the Group has cash balances of £103.7 million at the end of December 2023;
• More than 50% of 2024 base case forecasted revenues are covered by binding purchase orders and rolling client forecasts which
give confidence in the level of revenues forecast over the next 12 months;
• The Group intends to delay the construction element of its Oxbox manufacturing facility expansion to now take place during
2028 and 2029;
• The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully
entering into new client agreements including with Arcellx, Cargo Therapeutics, Cabaletta Bio and Oxford University over the last
12 months; and
• The Group has the ability to control capital expenditure costs and lower other operational spend, as necessary.
Taking account of the matters described above, the Directors are confident that the Group and 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.
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119
Viability Statement
The Directors have assessed the prospects of the Group over the three years to December 2026. 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 performed by developing and updating the Long Range
Plan that covers the viability assessment period which the Board has scrutinised in depth together with its financial advisers 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 2026 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 increasingly
sophisticated cyber threats), and the Group's response to these;
— The prevailing economic climate and global economy, competitor activity, market dynamics and changing client behaviours;
— 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 year in 2023, however, despite set backs, the Group has continued to add new
Lentivector® platform and AAV clients, while expanding on its existing partnerships. In response to these set backs, the Group
implemented an extensive transformation plan resulting in management changes both in the UK and the US, significant reduction
in the number of employees across the Group and acquisition of ABL Europe. The Group is entering into 2024 under a new, leaner,
more efficient structure and a clear vision to become a pure-play quality and innovation-led CDMO. This is an extremely exciting
stage in its development with focus 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 assumes the
Group continues to execute on its growth strategy and is able to raise additional finance before the Oaktree loan needs to be repaid
in 2026. The sufficiently long timeframe over which this needs to be achieved allows the Group a flexible approach in financing
strategy execution to maximise the outcome. The Group continues to investigate strengthening its cash position through both
non-dilutive and opportunistic dilutive financing in the short to medium term. The Group has a strong and supportive shareholder
base and a successful track record of raising equity finance. It has been able to capitalise on its previous investments through sale
and leaseback transactions and has options to out-licence its product R&D or platform to third parties.
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 considered the impact of severe but plausible downside scenarios, including scenarios
arising from the Group's principal risks as outlined on pages 68-71. 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, the combination of downside risks that would need to crystallise 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.
Scenario
Risk
Description
No revenues from new clients
Commercialisation risk
The Group is unable to attract new clients, or existing clients do not
add additional products to their existing programmes.
A substantial downside affecting the
core multi-vector platform business
Commercialisation risk
Clients discontinue their existing programmes or transfer them to
other suppliers.
Supply Chain and business
execution risk
The Group is unable to produce batches for clients meeting the
required specification.
Significant decreases in forecasted
existing client milestones and royalties
Commercialisation risk
Clients terminate or delay their existing programmes due
to the products under development not meeting safety and
efficacy requirements.
In addition, the 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). As described
above, over the last twelve months the business has demonstrated the ability to manage its cost base by undergoing a substantial
reduction in workforce and cost re-alignment to revenues, to allow for new, leaner, more efficient structure.
Oxford Biomedica PLC | Annual Report and Accounts 2023
120
DIRECTORS' REPORT (CONTINUED)
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 2026.
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
Information required
Response
LR 9.8.4 (5) and (6) Arrangement under which a Director has
waived current or future emoluments.
Robert Ghenchev elected to receive no fees for his services as a Director
(page 97).
LR 9.8.4 (7) and (8) Allotment of shares other than to existing
shareholders in proportion to holdings.
Allotment of shares on exercise of options by employees under approved
share schemes (note 26, pages 155-157).
Allotment of shares in accordance with the acquisition of ABL Europe (note
36, page 163)
Statement of Directors’ responsibilities in respect of the Annual report and accounts
The Directors are responsible for preparing the Annual report and accounts in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have
prepared the Group and Parent Company financial statements in accordance with UK-adopted international accounting standards.
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 financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• State whether applicable UK-adopted international accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
• Make judgements and accounting estimates that are reasonable and prudent; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The directors are responsible for safeguarding the assets of the Group and Parent Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's
and Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and
Parent Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' confirmations
Each of the Directors, whose names and functions are listed in the Strategic Report, confirm that, to the best of their knowledge:
• The Group and Parent Company financial statements, which have been prepared in accordance with the UK-adopted
international accounting standards, give a true and fair view of the assets, liabilities and financial position of the Group and
the Parent Company and of the loss of the Group; and
• The Strategic Report includes a fair review of the development and performance of the business and the position of the Group
and the Parent Company, together with a description of the principal risks and uncertainties that they face.
Oxford Biomedica PLC | Annual Report and Accounts 2023
Strategic report
Corporate Governance
Financial statements
121
In the case of each Director in office at the date the Directors’ report is approved:
• So far as the Director is aware, there is no relevant audit information of which the Group’s and Parent Company’s auditors are
unaware; and
• They have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Parent Company’s auditors are aware of that information.
Independent auditors
A resolution concerning the re-appointment of PricewaterhouseCoopers LLP will be proposed at the Company's AGM in 2024.
Greenhouse gas emissions report
Details on greenhouse gas emissions are set out in the ESG Report in the Strategic Report on page 49-65.
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 on pages 15-19.
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 15-19, with a working example in action on pages 20-21.
Annual General Meeting
The AGM will be held on Monday 24 June 2024 at the Group's offices at Windrush Court, Transport Way, Oxford, OX4 6LT. The
Group encourages shareholders to attend the AGM in person and vote by proxy.
By order of the Board
Stuart Paynter
Director
29 April 2024
Oxford Biomedica PLC | Annual Report and Accounts 2023
122
CONTENTS
Financial
statements
Consolidated Statement of Comprehensive Income
Consolidated and Company Statement of
Financial Position
Consolidated and Company Statement of Cash Flows
Consolidated Statement of Changes in Equity
Attributable to Owners of the Parent
Company Statement of Changes in Equity Attributable
to Owners of the Parent
Notes to the Financial Information
Independent review report to Oxford Biomedica plc
123
124
125
126
127
128
164
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
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Financial statements
123
Consolidated Statement of
Comprehensive Income
for the year ended 31 December 2023
Continuing operations
Revenue
Cost of sales
Gross profit
Research and development costs
Bioprocessing costs
Administration expenses
Impairment of assets
Other operating income
Gain on sale and leaseback
Change in fair value of available for sale assets
Operating (loss)
Finance income
Finance costs
(Loss) before tax
Taxation
(Loss) for the period
Other comprehensive income
Foreign currency translation differences
Other comprehensive income
Total comprehensive (expense)
(Loss) attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
Basic and Diluted (loss) per ordinary share
The loss for the year is attributable to the owners of the parent.
Notes
4
4
6
6
8
34
34
9
Dec-23
£'000
89,539
(49,812)
39,727
(59,353)
(43,746)
(25,413)
(99,284)
2,803
1,018
74
(184,174)
4,910
(9,263)
(188,527)
4,365
(184,162)
Dec-22
£'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)
(5,307)
(5,307)
10,575
10,575
(189,469)
(34,584)
(157,490)
(26,672)
(184,162)
(161,359)
(28,110)
(189,469)
(39,157)
(6,002)
(45,159)
(31,332)
(3,252)
(34,584)
(163.11)
(41.29p)
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
124
Consolidated and Company Statement of
Financial Position
for the year ended 31 December 2023
Group
Dec-23
£'000
Dec-22
£'000
Company
Dec-23
£'000
Dec-22
£'000
Notes
Assets
Non-current assets
Intangible assets & goodwill
Property, plant and equipment
Investments
Trade and other receivables
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Provisions
Contract liabilities
Deferred income
Lease liabilities
Deferred tax
Net current assets / (liabilities)
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
11
12
13
15
14
15
16
17
19
18
18
32
23
19
18
18
20
32
21
23
24
25
29
28
34
30,981
75,692
-
4,340
111,013
12,872
24,741
103,716
141,329
17,802
747
21,598
514
3,654
-
44,315
97,014
7,710
4,494
837
38,534
69,270
9,348
-
130,193
77,834
48,403
380,333
(1,812)
(352,918)
74,006
3,828
77,834
105,886
133,780
-
5,010
244,676
12,625
61,594
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
-
36,543
246,738
-
283,281
-
-
47
47
1,578
-
-
-
740
-
2,318
(2,272)
2,715
-
-
38,534
34,199
-
-
75,448
205,561
48,403
380,333
1,580
(224,756)
205,561
-
205,561
-
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
The Company's registered number is 03252665.
The Company made a loss for the year of £119,947,000 (2022: £4,804,000).
The financial statements on pages 128-163 were approved by the Board of Directors on 29 April 2024 and were signed on its
behalf by:
Frank Mathias
Chief Executive Officer
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
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125
Consolidated and Company Statement of
Cash Flows
for the year ended 31 December 2023
Cash flows from operating activities
Cash (consumed in)/generated from operations
Tax credit received
Net cash (used in)/generated 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 property, plant
and equipment
Loans to subsidiary
Other initial direct costs in relation to leases
Interest received
Net cash generated / (used) in
investing activities
Cash flows from financing activities
Proceeds from issue of ordinary share capital
Costs of share issues
Interest paid
Loans repaid
Loan arrangement fees
Payment of lease liabilities
Payment of lease liabilities interest
Loans received
Net cash (used in)/ generated from
financing activities
Net (decrease) / increase in cash and
cash equivalents
Cash and cash equivalents at 1 January 2023
Movement in foreign currency balances
Cash and cash equivalents at
31 December 2023
30
12
12
6
24,25
20
32
32
16
16
Group
2023
£’000
2022
£’000
Notes
(36,027)
7,510
(13,173)
558
(28,517)
(12,615)
Company
2023
£’000
(9,847)
-
(9,847)
-
-
-
(2,318)
-
-
2022
£’000
10,146
-
10,146
-
-
-
(153,603)
(1,420)
-
(99,206)
(16,296)
60,000
-
(1,420)
460
(56,462)
(2,318)
(155,023)
80,154
(2,952)
(4,554)
(31,424)
(3,224)
(1,120)
(3,124)
64,866
651
-
(4,136)
-
-
(683)
(2,817)
-
80,154
(2,952)
(4,554)
(31,424)
(3,224)
-
(422)
64,866
-
(9,832)
8,390
-
-
4,248
2,806
651
-
(4,136)
-
-
(3,117)
(6,101)
-
(12,703)
98,622
(6,985)
102,444
(38,414)
141,285
845
29,545
108,944
2,796
(19,150)
19,197
-
(42,433)
61,630
-
103,716
141,285
47
19,197
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
126
Consolidated Statement of Changes
in Equity Attributable to Owners of
the Parent
for the year ended 31 December 2023
Reserves
Share
premium
Non-
controlling
Group
At 1 January 2022
Loss for period
Foreign currency translation differences
Other comprehensive income
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
Cost of share issues
Total contributions
Changes in ownership interests:
Acquisition of subsidiary with NCI
Acquisition of NCI without a change in control
Put Option recognition
Put Option revaluation
At 31 December 2022
Loss for period
Foreign currency translation differences
Total comprehensive income for the period
Transactions with owners:
Share options
Proceeds from shares issued
Value of employee services
Total contributions
Changes in ownership interests:
Put Option revaluation
At 31 December 2023
Ordinary
shares
Notes £'000
account Merger
£'000
2,291
-
-
-
-
£'000
43,088 307,765
-
-
-
-
-
-
-
-
£'000
Accumulated
losses
£'000
Other
Equity Translation
£'000
-
-
-
-
-
Total
£'000
- (165,806) 187,338
(39,157)
- (39,157)
7,825
-
7,825
7,825
7,825
-
7,825 (39,157) (31,332)
interest
£'000
Total
equity
£'000
- 187,338
(45,159)
(6,002)
2,750
10,575
2,750 10,575
(3,252) (34,584)
24,25
28
28
24,25
25
34
34
21
21
106
-
-
78
-
-
4,938 75,062
(2,952)
5,044 72,188
-
-
-
-
-
-
-
-
-
48,132 379,953
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (38,996)
3,993
-
2,291 (35,003)
-
-
-
-
-
-
-
-
-
-
-
-
-
549
-
-
-
(29)
5,922
125
-
-
155
5,922
125
80,000
(2,952)
6,018 83,250
155
6,471
125
80,000
(2,952)
549 83,799
-
34,642
-
-
400
- (38,996)
- (38,996)
3,993
-
3,993
-
7,825 (198,545) 204,653 31,539 236,192
- (157,490)(157,490)
(26,672)(184,162)
(5,307)
(3,869)
(3,869)
-
(3,869)(157,490)(161,359) (28,110)(189,469)
34,642
(400)
-
400
(1,438)
-
-
-
-
24,25
28
271
-
271
380
-
380
-
-
-
-
-
-
-
-
-
-
3,117
3,117
651
3,117
3,768
29
-
-
48,403 380,333
- 26,944
2,291 (8,059)
-
26,944
3,956 (352,918) 74,006
-
-
399
399
651
3,516
4,167
-
26,944
3,828 77,834
-
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
127
Company Statement of Changes in
Equity Attributable to Owners of
the Parent
for the year ended 31 December 2023
Company
At 1 January 2022
Loss for 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
Loss for period
Foreign currency translation differences
Total comprehensive income for
the period
Transactions with owners:
Share options
Proceeds from shares issued
Value of employee services
Total contributions
At 31 December 2023
Reserves
Notes
24,25
28
24,25
25
Ordinary
shares
£'000
43,088
-
Share
premium
account
£'000
307,765
-
-
-
106
-
4,938
-
48,132
-
-
78
-
75,062
(2,952)
379,953
-
-
Merger
£'000
1,580
-
-
-
-
-
-
1,580
-
-
Other
Equity
£'000
18,792
-
Accumulated
losses
£'000
(128,584)
(4,804)
Total
£'000
242,641
(4,804)
-
(4,804)
(4,804)
-
6,471
-
-
25,263
-
-
(15)
-
-
-
(133,403)
(119,947)
-
169
6,471
80,000
(2,952)
321,525
(119,947)
-
-
-
-
-
(119,947)
(119,947)
271
-
271
48,403
380
-
380
380,333
-
-
-
1,580
-
3,516
3,516
28,779
(184)
-
(184)
(253,534)
467
3,516
3,983
205,561
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
128
Notes to the Financial Information
1 Accounting policies
Oxford Biomedica plc ("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 2023 comprise the results of
the Company and its subsidiary undertakings (together referred to as "Oxford Biomedica" or the "Group").
As at 31 December 2023, the Company's principal subsidiaries were Oxford Biomedica (UK) Limited and Oxford Biomedica (US) LLC.
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 with UK-adopted international accounting
standards. As more fully explained in the Directors’ Report on pages 115-121 and below, the going concern basis has been adopted
in preparing the financial statements.
A summary of the material 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 material 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 the previous carrying amount and fair value less
costs to sell.
Going concern
The financial position of the Group and Company, their cash flows and liquidity position are described in the Financial Statements
and notes to these financial statements section of this Annual report and accounts.
The Group and the Company made a loss after tax for the year ended 31 December 2023 of £184.2 million and £120.0 million
respectively, and consumed net cash flows from operating activities for the year of £28.5 million and £9.8 million. The Group also:
• Sold its Harrow House manufacturing facility in a sale and leaseback transaction for £4.5 million to Kadans Science Partner in
June, whilst also agreeing an occupational lease of the property for 15 years;
• Closed the acquisition of ABL Europe in January 2024 for a consideration of €15 million, (including €10million of pre-completion
cash funding from Institut Mérieux); and
• Ended the year with cash and cash equivalents of £103.7 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
2024 annual budget and forecasts for 2025. The Directors have undertaken a rigorous assessment of the forecasts in a base case
scenario and assessed identified downside risks and mitigating actions. These cash flow forecasts also take into consideration
severe but plausible downside scenarios including:
• Commercial challenges leading to a substantial manufacturing and development revenue downside affecting both the
LentiVector® platform and AAV businesses;
• No revenues from new clients;
• Decreases in forecasted existing client milestones and removal of any future licence revenues; and
• The potential impacts of a downturn in the biotechnology sector on the Group and its clients including expected revenues from
existing clients under long term arrangements.
Under both the base case and mitigated downside scenario, the Group and Company have 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 all the downside
scenarios above crystallising, the Group and Company would continue to meet their existing loan covenants until March 2025
without taking any mitigating actions, but the Board has mitigating actions in place that are largely within its control that would
enable the Group to reduce its spend within a reasonably short time-frame to increase the Group and Company’s cash covenant
headroom as required by the loan facility with Oaktree Capital Management. Specifically, the Group will continue to monitor its
performance against the base case scenario and if base case cash-flows do not crystallise, start taking mitigating action by the end
of Q3 2024 which may include rationalisation of facilities and rightsizing the workforce.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
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129
In addition, the Board has confidence in the Group and Company’s ability to continue as a going concern for the following reasons:
• As noted above, the Group has cash balances of £103.7 million at the end of December 2023;
• More than 50% of 2024 base case forecasted revenues are covered by binding purchase orders and rolling client forecasts which
give confidence in the level of revenues forecast over the next 12 months;
• The Group intends to delay the construction element of its Oxbox manufacturing facility expansion to now take place during
2028 and 2029;
• The Group’s ability to continue to be successful in winning new clients and building its brand as demonstrated by successfully
entering into new client agreements including with Arcellx, Cargo Therapeutics, Cabaletta Bio and Oxford University over the last
12 months; and
• The Group has the ability to control capital expenditure costs and lower other operational spend, as necessary.
Taking account of the matters described above, the Directors are confident that the Group and 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:
• Amendment to IAS 12 - deferred tax related to assets and liabilities from a single transaction
• Disclosure of accounting policies - Amendments to IAS 1
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 intra-group 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 year, with the exception of the impairment charge in 2023 which has been translated at the year
end rate.
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.
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 milestones.
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
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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 recognised
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, except for project management services which are recognised based on the
input method.
• As a resut of the processes and procedures implemented by Oxford Biomedica (US) LLC for the purposes of tracking and
accounting for its costs against projects, the company makes 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.
The achievement of milestones relating to bioprocessing or process development activities are assessed against the 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 the specific deliverables are considered to be binary milestones and will be
recognised in full once it is deemed highly probable that the milestone will be achieved.
Milestones related to the provision of support services are considered to be non-binary. Milestones are recognised on a percentage
of completion basis, but taking into account the likelihood of achievement of the deliverable. Amounts receivable on the
achievement of the milestone represents variable consideration and has 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 because the client needs to pay fair value at point of exercising.
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.
Where amounts receivable in respect of milestone payments are binary, they will be recognised in full once it is deemed highly
probable that the conditions associated with the milestone payment 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 occurs.
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
the achievement of the milestone represents variable consideration and has 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
contracted clients.
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.
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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 licencced 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 sharesave 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 plans 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 forfeited 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 share awards made
to Executive Directors and employees. Within the Company financial statements, the investment in the Oxford Biomedica Employee
Benefit 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. 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.
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:
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•
•
•
there is a change in the Group's estimate of the amount expected to be payable under residual future lease payments;
the Group changes its assessment of whether it will exercise a purchase, extension or termination option; 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.
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 2023 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. For expenditure starting
on or after 1st April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%. As the
financial year end of OXB is 31 December 2023, this will be applied pro rata for 2023. The benefit to the Group of this change
for 2023 is estimated to be £1.4 million. However, there is now also a requirement to provide additional information alongside
the claim, including technical narratives for a certain proportion of the research and development projects for which a claim is
being made.
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.
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.
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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 remaining term of the lease if shorter)
20-33%
14% -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
Patents
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 have finite useful lives and are measured at cost less accumulated amortisation and any accumulated
impairment losses.
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.
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.
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 charges are included within research, development and bioprocessing costs in the Statement of
Comprehensive Income.
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.
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 charges are included on the face of the statement of comprehensive income.
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.
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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 Group's 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.
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.
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:
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.
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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.
Contract Assets
Contract assets relate to the Group's rights to consideration for work completed but not invoiced at the reporting date for
commercial development work and bioprocesing 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.
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, and funded research and development activities.
Deferred income
Deferred income primarily relates to the advance consideration received for grants.
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
historical 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.
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.
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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 (US) LLC's 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.
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 based on its relative stand alone selling price; 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, based on relative stand alone selling price, 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.
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 2023 had not been met, revenues would have been £1.7 million lower with the
revenue expected to be recognised in future when the performance obligations were deemed to have been met.
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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.
Revenue recognition: The allocation of the transaction price to each performance obligation based on its relative stand alone
selling price
Because there is no readily available market price for many of the performance obligations contained in the client contracts, the
Group estimates the stand alone selling price of each of these performance obligations. Key areas of estimation 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, 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; and
• 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.
Revenue recognition: Percentage of completion of bioprocessing batch revenues
Bioprocessing of clinical/commercial product for partners 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 £12.9 million. If the
assessed percentage of completion was 10 percentage points higher or lower, revenue recognised in the period would have been
£1.1 million higher or £1.6 million lower.
Revenue recognition: 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 with regards to the work packages which remain in progress at year end is £11.9 million. If the
assessed percentage of completion was 10 percentage points higher or lower, revenue recognised in the period would have been
£1.9 million higher or £2.2 million lower.
Revenue recognition: Provision for out of specification bioprocessing batches
Bioprocessing of clinical/commercial product for partners 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 Group has now been bioprocessing product across a number of years, and also in a commercial capacity, the Group 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 Group has looked at historical rates of out of specification batches across the last five 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. The Group makes specific
provisions for product batches where it is considered that the average overall historical failure rate does not adequately cover the
perceived risk of revenue recognised on those specific batches having to be subsequently reversed.
This estimate, based on the historical average percentage as well as certain specific provisions, may be significantly higher or
lower depending on the number of bioprocessing batches actually going out of specification in future. 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 £1.1 million (31 December 2022: £2.6 million) has not been recognised during the year
ended 31 December 2023 with the corresponding credit to contract liabilities. This revenue will be recognised as the batches
complete bioprocessing.
Impairment assessment of OXB (US) LLC Cash Generating Unit (CGU)
Oxford Biomedica (US) has been identified as a CGU (cash generating unit) of the business. Since the last impairment assessment
performed, an impairment trigger was identified in that it was assessed that the CGU did not meet the original revenues forecasted
as part of the acquisition of Oxford Biomedica (US) and the business unit’s largest customer, Homology Medicines, gave notice that
it was not intending to progress development of its clinical products any further. Accordingly, a full impairment assessment has
been performed as at 31 December 2023.
The recoverable amount of the CGU is deemed to be the higher of its fair value less cost of disposal, or value in use. The Group has
determined that the recoverable amount of the CGU is the fair value less costs of disposal (FVLCOD) of the OXB (US) LLC CGU as
it expects this value to be higher than the value in use. The valuation is considered to be level 3 in the fair value hierarchy due to
unobservable inputs used in the valuation.
Management’s approach and the key assumptions used to determine the CGU’s FVLCOD were as follows:
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138
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
The Group assessed the FVLCOD of the OXB (US) LLC CGU through a discounted cash flow calculation to approximate the fair
value a buyer would be willing to pay for the CGU. The discounted cash flow calculation calculates the present value of the CGU
taking into consideration the forecasted cash flows based on the Board approved long term forecast, as well as the calculation of
the terminal value at the end of the cash flow period. Management has prepared the FVLCOD calculation based on an approved
forecast of 10 years.
Management have assessed this to be 10 years followed by the calculation of the terminal value. The forecast period has been
brought down from 15 years to 10 years as the CGU did not meet the original revenues forecasted as part of the acquisition of
OXB (US) LLC and the business units largest customer, Homology Medicines gave notice that it was not intending to progress
development of its clinical products any further. This created sufficient uncertainty regarding outer years for management to assess
that a 10 year forecast would be more appropriate.
Sensitivity calculation:
Key estimation uncertainty inputs which directly impact the FVLCOD of the CGU are assessed to be:
• Revenue growth rates including the ability of the CGU to acquire new clients and increase revenues from existing clients.
Average growth rates of 34% over the period as assessed to be the expected growth rates for a start-up CDMO entity over the
initial growth period after which growth rates are brought down to more inflationary levels. Revenues include revenues with
respect to the Lentivector platform which will be commercialised through the Solutions business from 2025 onwards. We have
estimated that 20% of the current Group pipeline will be routed through the US business;
• 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 FVLCOD of the CGU. The discount rate used of 12.3% has been calculated based on the current risk free rate, the NASDAQ
biotechnology Index’s expected rate of return, and the Group’s cost of debt;
• Operational expenditure and capital expenditure – the cash flows of OXB (US) LLC are based on the management approved
forecasts. These forecasts may change in future or the actual results vary;
• Long term inflation rates in the United States which are used to approximate the long term growth rate into perpetuity for the
terminal value;
• The calculation includes a Group technology licensing charge for the use by the CGU of the Group's Lentivector technology
platform. The charge is estimated until such time as a transfer pricing study is completed;
• Expected volatility of cash flows – should the expected volatility of OXB (US) LLC cash flows vary, this may impact the FVLCOD
of the CGU.
Sensitivities
31-Dec-23
Forecast revenues 10% higher or lower
Operational expenditure 10% higher or lower
Capital expenditure 10% higher or lower
Group technology licencing charge 10% higher or lower
Long term inflation rates 2% higher or lower
Discount rate 3% higher or lower
Higher/ Longer
£'ms
Lower/Shorter
£'ms
45.8
(30.4)
(2.5)
(2.3)
27.7
(30.1)
(47.7)
29.8
2.6
2.4
(17.8)
64.0
Based on the valuation of the CGU through a discounted cash flow calculation, the Group has assessed that an impairment of OXB
(US) LLCof £99.3 million ($126.4 million) was required at 31 December 2023. This impairment has been reflected in the financial
statements of the Group at year end 31 December 2023. No impairment triggers were identified in the prior year and therefore no
full assessment was required to be performed.
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 OXB (US) LLC 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.
The effective date of the impairment of OXB (US) LLC was 31 December 2023, therefore the amortisation charge in 2023 is
pre-impairment. If the estimated useful life of the assets had been 10 years, the estimated amortisation for the year ended
31 December 2023 would be £3.6 million higher (2022: £1.2 million); whilst, if the estimated useful life of the assets had been 20
years, the estimated amortisation for the year ended 31 December 2023 would be £1.8 million lower (2022: £0.6m).
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
OXB (US) LLC that it doesn't already own, from Homology. The fair value of the option at the date of acquisition was assessed to be
£39.0 million. At 31 December 2023, the fair value of the put option liability was £9.3 million (Dec 2022: £38.2m).
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 OXB (US) LLC's forecasted revenues over the period up until the expected
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139
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 and judgemental uncertainty inputs which directly impact the valuation of the put option liability are assessed to be:
• Revenues of OXB (US) LLC –the revenues of OXB (US) LLC 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 OXB (US) LLC 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.
• Expected exercise date - this is judged to be 10 March 2025 which is 3 years since the date of the Agreement. This is the earliest
date on which both parties to the option have the ability to unilaterally exercise the option.
Put option liability
31-Dec-23
Revenues of Oxford Biomedica (US) LLC 20% higher or lower
Discount rate 2% lower or higher
3 Financial risk management
Fair value
Increase
£'000s
1,900
200
Decrease
£'000s
(1,900)
(200)
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.
Foreign exchange risk
In 2023, 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 £426,000 (2022: £1,121,000) 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 2023 would have been approximately £461,000 (2022: £455,000).
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 2023 would have been approximately £426,000 (2022:
£418,000). 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.
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 level of bank interest rates at
the start of the year, interest receivable on bank deposits in 2023 was £4,910,000 (2022: £973,000).
On 10 March 2022, the Group drew down an $85 million loan facility with Oaktree to finance the acquisition of Oxford Biomedica
(US) LLC, 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
$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 2023 the impact on cash interest paid would have been £nil (2022: £nil) as the rate is capped..
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).
Loss allowances on intercompany balances
The Company performs an assessment of the required 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
140
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
Derivative financial instruments and hedging
There were no material derivatives at 31 December 2023 or 31 December 2022 which have required separation, and hedge
accounting has not been used.
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
Equity
Debt/Equity
2023
£'000
65,182
77,834
-84%
2022
£'000
101,505
236,192
-43%
4 Segmental analysis and segmental reporting
During 2023, in order to reflect the way the business has been managed by the Corporate Executive Team (CET) (previously known
as the Senior Executive Team (SET) until November 2023), the Group reported its results within two segments, namely:
1. the ‘Platform’ segment which includes the revenue generating bioprocessing and process development activities for third parties
(i.e. the Partner 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®
platform; and
2. the ‘Product’ segment, which includes the costs of research and development of new gene therapeutic product candidates.
Revenues, other operating income and operating (loss) by segment
Operating EBITDA and Operating loss represent the Group's measures of segment loss as they are a primary measure used for the
purpose of making decisions about allocating resources and assessing performance of segments.
2023
Revenue
Other operating income
Operating EBITDA
Impairment of assets
Depreciation, amortisation and share based payment
Change in fair value of asset held at fair value through profit and loss
Operating loss
Net finance cost
Loss before tax
2022
Revenue
Other operating income
Gain on sale and leaseback
Operating EBITDA
Depreciation, amortisation and share based payment
Change in fair value of asset held at fair value through profit and loss
Operating loss
Net finance cost
Loss before tax
Platform
£'000
89,410
2,803
(45,081)
(99,284)
(30,652)
74
(174,943)
Platform
£'000
139,903
2,307
21,389
11,654
(29,551)
(51)
(17,948)
Product
£'000
129
-
(7,742)
-
(1,489)
-
(9,231)
Product
£'000
86
-
-
(10,023)
(2,250)
-
(12,272)
Total
£'000
89,539
2,803
(52,823)
(99,284)
(32,141)
74
(184,174)
(4,353)
(188,527)
Total
£'000
139,989
2,307
21,389
1,631
(31,801)
(51)
(30,220)
(15,756)
(45,976)
Other operating income of £2.8 million (2022: £2.3 million) includes sub lease rental income of £2.2 million (2022: £1.4 million) 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 supply chain capabilities of £0.6 million (2022: £0.9 million) which 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.
An impairment charge of £99.3 million has been recognised in respect of the Platform division in 2023. 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
2023
Bioprocessing/ Commercial development
Licence fees & incentives
Total
2022
Bioprocessing/ Commercial development
Licence fees & incentives
Total
Timing of transfer of goods or services
Products and services transferred at a point in time
Products and goods transferred over time
Total revenue
141
Total
£'000
82,855
6,684
89,539
Total
£'000
128,080
11,909
139,989
2022
£'000
11,909
128,080
139,989
Platform
£'000
82,726
6,684
89,410
Platform
£'000
127,994
11,909
139,903
Product
£'000
129
-
129
Product
£'000
86
-
86
2023
£'000
6,684
82,855
89,539
The majority of the Group's revenue is typically recognised over time as the performance obligations in the contract are
being fulfilled.
Unsatified performance obligations
The following table shows revenue remaining from unsatisfied performance obligations:
Revenue remaining to be recognisedon partially or fully unsatified performance obligations
2023
£'000
63,013
2022
£'000
59,643
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 and Europe:
Revenue by client location
UK
United States
Europe
Rest of World
Total revenue
In 2023 four clients each generated more than 10% of the Group's revenue 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
2023
£'000
3,984
65,757
19,798
-
89,539
2023
£'000
(47,542)
(136,632)
(184,174)
2023
£'000
60,881
50,132
111,013
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
& bioprocessing
Total
2023
£'000
122
732
854
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
2022
£'000
117
812
929
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
142
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
Employee benefit costs
Wages and salaries
Social security costs
Other pension costs
Share based payments
Total
Key management compensation
Short- term employee benefits
Post-employment benefits
Share based payments
Total
2023
£'000
68,537
5,378
3,764
3,516
81,195
2023
£'000
5,162
311
444
5,917
2022
£'000
70,042
6,165
3,560
6,471
86,238
2022
£'000
5,246
293
2,620
8,159
The key management figures above include Executive and Non-Executive Directors and the other members of the CET (known
as SET until November 2023). 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 96-105 which forms part of these
financial statements.
The Company had no employees during the year (2022: zero).
6 Finance income and costs
Finance income:
Bank interest receivable
Total finance income
Finance costs:
Unwinding of discount in provisions
Loss/(gain) on foreign exchange
Interest payable on loan
Interest payable on finance leases
Total finance costs
Net finance costs
7 Expenses by nature
Employee benefit costs
Depreciation of property, plant and equipment
Amortisation
Impairment of assets
Raw materials and consumables used in bioprocessing
Operating lease payments
Net (loss) on foreign exchange
Note
5
12
11
Group
2023
£'000
4,910
4,910
(528)
1,936
(4,570)
(6,101)
(9,263)
(4,353)
2023
£'000
81,195
21,504
7,206
99,284
14,961
249
(71)
2022
£'000
973
973
(66)
(7,975)
(5,564)
(3,124)
(16,729)
(15,756)
2022
£'000
86,238
20,271
6,088
-
27,449
231
(751)
Company employee benefit costs include £1,415,000 (2022: £992,000) relating to Non-Executive Directors' costs paid by Oxford
Biomedica (UK) Ltd and recharged to the Company.
Depreciation and Amortisation is charged to cost of goods, research and development, and bioprocessing costs 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, PwC and their associates, as
detailed below (2022 audit services were provided by KPMG):
Services provided by the Group's auditors
Fees payable for the audit of the parent company & Financial Statements
Fees payable for other services:
The audit of the Company's subsidiaries
Additional fees relating to prior period audit
Review of interim results
Total
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
2023
£'000
80
817
-
45
942
2022
£'000
50
895
98
35
1,078
Strategic report
Corporate Governance
Financial statements
8 Taxation
The Group claims research and development tax credits under the UK Government's 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
Deferred tax relating to the origination of timing differences
Deferred tax
Taxation (charge)/ credit
2023
£'000
(1,487)
(1,487)
(58)
(1,545)
5,910
5,910
4,365
143
2022
£'000
(1,282)
(1,282)
307
(975)
1,792
1,792
817
UK income tax
The amount of £1,487,000 (2022:£1,282,000) included as part of the taxation charge within the Statement of Comprehensive
income for the year ended 31 December 2023 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 is £58,000. The adjustment in 2022 was £307,000 which related to the
corporation tax credit on a lower than anticipated RDEC tax receipt.
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.
During 2023, the Group recognised £nil (2022: £125,000) 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 (2022: £nil).
At 31 December 2023, the Group had UK tax losses, with no expiry date, to be carried forward of approximately £127.6 million
(2022: £76.2 million).
US income tax
Deferred tax of £nil (2022: £1,792,000) relates to temporary differences relating to intangible assets.
At 31 December 2023, the Group had US tax losses to be carried forward of approximately £19.7 million (2022: £7.3m) that expire 20
years from it being incurred.
Reconciliation of effective tax rate
The tax credit for the year is lower (2022: lower) than the standard rate of corporation tax in the UK. The differences are
explained below:
Current tax
(Loss) on ordinary activities before tax
(Loss) on ordinary activities before tax multiplied
by the standard rate of corporation tax in the UK of 23.52%
(2022 19%)
Expenses not deductible for tax purposes
Income not taxable
Transfer pricing
Tax deduction for share options less than share option
accounting charge
Group relief
Deferred tax not recognised
Rolled over gains
Effects of overseas tax rates
Tax losses carried forward to future periods
Adjustments in respect of prior periods
Other
Exempt items
Total tax credit for the period
Group
2023
£'000
(188,527)
2022
£'000
(45,976)
Company
2023
£'000
(119,947)
(44,342)
2,624
(288)
-
-
-
43,496
-
(6,510)
-
(58)
503
211
(4,365)
(8,734)
1,985
(376)
1,005
517
-
-
4,753
3,074
(2,734)
(307)
-
-
(817)
(28,211)
2,101
-
-
-
-
24,378
-
-
-
-
-
-
-
2022
£'000
(4,804)
(913)
28
(1,272)
1,005
0
158
(579)
1,573
-
-
-
-
-
-
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
144
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
9 Basic and diluted profit/(loss) per ordinary share
The basic loss per share of (163.11)p (2022: (41.29)p) has been calculated by dividing the loss for the period by the weighted average
number of shares in issue during the year ended 31 December 2023 being 96,555,347 (2022: 94,829,892).
As the Group made a loss this year and the prior year, there is therefore no difference between the basic loss per ordinary share and
the diluted loss per ordinary share in the current period.
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 £119,947,000 (2022: £4,808,000).
11 Intangible assets
Cost
At 1 January 2022
Acquisitions through business combinations
Retirements
Effects of movements in exchange rates
At 31 December 2022
Effects of movements in exchange rates
At 31 December 2023
Amortisation and impairment
At 1 January 2022
Charge for the period
Retirements
Effects of movements in exchange rates
At 31 December 2022
Charge for the period
Impairment of assets
Effects of movements in exchange rates
At 31 December 2023
Net book amount at 31 December 2023
Net book amount at 31 December 2022
Note
Goodwill
£’000
Developed
technology
£’000
Patents
£’000
-
610
-
51
661
(33)
628
-
-
-
-
-
-
628
-
628
-
661
-
102,869
-
8,536
111,405
(5,516)
105,889
-
6,072
-
116
6,188
7,205
61,972
(451)
74,914
30,975
105,217
5,636
-
(3,825)
-
1,811
-
1,811
5,584
16
(3,797)
-
1,803
2
-
-
1,805
6
8
Total
£’000
5,636
103,479
(3,825)
8,587
113,877
(5,549)
108,328
5,584
6,088
(3,797)
116
7,991
7,207
62,600
(451)
77,347
30,981
105,886
Intangible assets comprise Goodwill, Developed Technology and Patents for intellectual property rights. The Group has not
capitalised any internally generated intangible assets.
An impairment indicator relating to the manufacturing and process development operation of the Oxford Biomedica (US) LLC
Cash-generating unit (CGU) located at the Bedford site in the United States, was identified. The CGU was tested for impairment at
31 December 2023 with an impairment of £99.3 million being recognised of which £62.6 million has been allocated to intangible
assets on a pro-rata basis based on the carrying value of the intangible asset as a proportion of the total assets of the CGU, in line
with the requirements of IFRS.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
12 Property, plant & equipment
Freehold
Leasehold
Office
equipment
property Improvements
£’000
£’000
and computers
£’000
Bio-processing
and
Laboratory
equipment
£’000
Cost
At 1 January 2023
Additions at cost
Reallocation between asset classes
Disposals
Change of Estimate
Effects of movements in exchange rates
At 31 December 2023
Depreciation & Impairment
At 1 January 2023
Charge for the period
Reallocation between asset classes
Impairment of assets
Effects of movements in exchange rates
Disposals
At 31 December 2023
9,848
-
-
(9,848)
-
-
-
6,494
336
-
-
-
(6,830)
-
60,228
3,155
943
(1,318)
-
(1,945)
61,063
11,440
5,760
958
16,056
(194)
(119)
33,901
Net book amount at 31 December 2023
-
27,162
12,420
1,474
(222)
(2,872)
-
(429)
10,371
9,042
1,765
(226)
479
(8)
(2,870)
8,182
2,189
Freehold
Leasehold
Office
equipment
propertyImprovements
£’000
£’000
and computers
£’000
Bio-processing
and
Laboratory
equipment
£’000
Cost
At 1 January 2022
Additions at cost
Reallocations
Acquisitions through business combinations
Disposals
Change of Estimate
Effects of movements in exchange rates
At 31 December 2022
Depreciation & Impairment
At 1 January 2022
Charge for the period
Effects of movements in exchange rates
Disposals
At 31 December 2022
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
Net book amount at 31 December 2022
3,354
48,788
10,663
955
(6)
788
(45)
-
65
12,420
6,863
2,204
2
(27)
9,042
3,378
145
Total
£’000
188,238
14,189
-
(19,703)
(552)
(5,012)
177,160
54,458
21,504
-
36,683
(521)
(10,656)
101,468
Right-of-use
assets
£’000
57,146
4,357
(3,720)
(5,155)
(552)
(1,310)
50,766
9,096
5,609
(2,423)
12,914
(190)
(603)
24,403
Right-of-use
assets
£’000
18,411
13,038
-
24,974
-
(1,349)
2,072
57,146
4,145
4,932
19
-
9,096
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
48,596
5,203
2,999
(510)
-
(1,328)
54,960
18,386
8,034
1,691
7,234
(129)
(234)
34,982
29,505
7,461
409
10,436
(127)
-
912
48,596
12,519
5,916
40
(89)
18,386
19,978
26,363
75,692
30,210
48,050
133,780
Included within Leasehold Improvements are Assets under Construction of £nil (2022:£5.54 million) 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 Harrow House facility and as a result, assets with a net book
value of £3.0 million have been disposed of in the period and a Right of use Asset of £2.1 million recognised at Group. Refer to note
32 for details of the lease.
An impairment indicator relating to the manufacturing and process development operation of the Oxford Biomedica (US) LLC
Cash-generating unit (CGU) located at the Bedford site in the United States, was identified. The CGU was tested for impairment at
31 December 2023 with an impairment of £99.3 million being recognised of which £36.7 million has been allocated to property,
plant and equipment on a pro-rata basis based on the carrying value of the fixed assets as a proportion of the total assets of the
CGU, in line with the requirements of IFRS.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
146
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
Company
Cost
At 1 January 2022
Additions at cost
At 31 December 2022
Change in estimate
Disposals
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the period
At 31 December 2022
Charge for the period
At 31 December 2023
Net book amount at 31 December 2023
Net book amount at 31 December 2022
Right of Use
£'000
-
39,717
39,717
(209)
-
39,508
-
323
323
2,641
2,964
36,544
39,394
Total
£'000
-
39,717
39,717
(209)
-
39,508
-
323
323
2,641
2,964
36,544
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.
13 Company 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 period
At 31 December
Total investments in shares and loans to group undertakings
Accumulated impairment
At 1 January
Impairment in period
At 31 December
Net book amount at 31 December
Capital contribution in respect of employee share schemes
At 1 January
Additions in the period
At 31 December
Total investments
Note
26
2023
£'000
15,182
426,855
2,136
428,991
444,173
126,065
100,150
226,215
217,958
25,264
3,516
28,780
246,738
2022
£'000
15,182
273,253
153,602
426,855
442,037
126,065
-
126,065
315,972
18,793
6,471
25,264
341,237
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 £193.3 million (2022: £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
contributions in respect of employee share schemes of £32.9 million (2022: £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 $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 (US) LLC with the foreign exchange differences recognised as a separate
component in Other Comprehensive income until such time as the investment in Oxford Biomedica (US) LLC is disposed of. A
translation loss of £5.3 million was recognised in 2023 (2022: £10.6 million gain). The $180 million loan was converted into equity in
February 2024 and remains part of the Group's net investment in Oxford Biomedica (US) LLC.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
147
Interests in subsidiary undertakings
Country
of incorporation
Description of shares held Proportion of nominal
value of issued shares
held by the Group
and Company
Nature of business
Oxford Biomedica
(UK) Limited
Oxford Biomedica
(Ireland) Limited
Great Britain
1p ordinary shares
100%
Gene therapy
research development
and manufacturing
Ireland
1p ordinary shares
100%
Product release
Oxxon Therapeutics Limited
Great Britain
1p ordinary shares
Oxford Biomedica (US) LLC
United States
N/A
Oxford Biomedica (US) Inc.
United States
1c ordinary shares
Invivusbio Limited
Great Britain
1p ordinary shares
100%
80%
100%
100%
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 (US) 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 26).
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 £226.2 million has
been recognised up to 31 December 2023.
14 Inventory
Raw materials
Total Inventory
2023
£'000
12,872
12,872
2022
£'000
12,625
12,625
Inventories constitute raw materials held for commercial development and bioprocessing purposes, all of which the Group expects
to recover within the next 12 months.
During the year, the Group wrote down £2,066,000 (2022: £1,117,000) of inventory which is not expected to be used in production
or sold onwards. The Company holds no inventories.
15 Trade and other receivables
Current
Trade receivables
Contract assets
Other receivables
Other tax receivable
Prepayments
Total trade and other receivables
Group
2023
£'000
8,114
5,228
2,081
4,962
4,356
24,741
2022
£'000
34,109
10,897
4,855
7,757
3,976
61,594
Company
2023
£'000
-
-
-
-
-
-
2022
£'000
-
-
-
-
-
-
Non-current trade and other receivables constitute other receivables of £4,340,000 (2022: £5,010,000) which are deposits held in
escrow as part of the Oxbox lease arrangements as well as security deposits held on the Group's Bedford facility lease.
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:
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
148
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
Sterling
US Dollar
2023
£'000
21,574
7,507
29,081
2022
£'000
50,395
16,186
66,581
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 £3,472,000 (2022: £1,336,000) which were
past due at the reporting date and of which £3,466,000 (2022: £1,333,000) has been received after the reporting date.
Ageing of past due but not impaired trade receivables:
0 - 30 days
30 - 60 days
60+ days
2023
£'000
1,054
1,320
1,098
3,472
2022
£'000
171
3
1,162
1,336
Contract assets
The balance of £5.2 million (2022: £10.9 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 £10.9 million at the end of 2022 to £5.2 million at the end of 2023 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.
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. The Group has 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.
16 Cash and cash equivalents
Cash at bank and in hand
17 Trade and other payables
Trade payables
Other taxation and social security
Accruals
Total Trade and other payables
Group
2023
£'000
103,716
2022
£'000
141,285
Company
2023
£'000
47
2022
£'000
19,197
Group
2023
£'000
6,052
1,478
10,272
17,802
2022
£'000
13,604
2,347
20,628
36,579
Company
2023
£'000
-
-
1,578
1,578
2022
£'000
-
-
143
143
18 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 £20.4 million at the end of 2022 to £27.4 million at the end of 2023
due to funds received in advance for future licensing, bioprocessing and process development activities. Of the £20.4 million
balance included in the statement of financial position at the end of 2022, £11.8 million has been recognised as revenue during the
2023 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:
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
Years
At 31 December 2023
Contract Liabilities
Bioprocessing income
Process development income
Licence fees and incentives
Deferred Income
Grant
At 31 December 2022
Contract Liabilities
Bioprocessing income
Process development income
Licence fees and incentives
Deferred Income
Grant
0-1
£'000
21,598
18,784
2,798
16
514
514
0-1
£'000
18,370
10,218
3,136
5,016
894
894
1-3
£'000
4,467
3,738
697
32
428
428
1-3
£'000
32
-
-
32
1,069
1,069
3-5
£'000
27
-
-
27
287
287
3-5
£'000
32
-
-
32
-
-
5-10
£'000
-
-
-
-
122
122
5-10
£'000
12
-
-
12
-
-
149
Total
£'000
26,092
22,522
3,495
75
1,351
1,351
Total
£'000
18,446
10,218
3,136
5,092
1,963
1,963
Included within bioprocessing contract liabilities is revenue of £1.1 million which has not been recognised during 2023 (2022:
£2.6 million) relating to the estimate of out of specification batches (refer note 2: Estimations’ for additional information). In 2023 all
of the £2.6 million held in contract liabilities at 31 December 2022 was recognised as revenue.
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 no contract liabilities or deferred income in 2023 or 2022.
19 Provisions
At 1 January
Unwinding of discount
New provision
Change in estimate
Derecognition
At 31 December
Current
Non-current
Total provisions
Group
Company
2023
£'000
8,424
528
772
(552)
(715)
8,457
2023
£'000
747
7,710
8,457
2022
£'000
6,244
66
3,463
(1,349)
-
8,424
2022
£'000
-
8,424
8,424
2023
£'000
2,758
167
-
(210)
-
2,715
2023
£'000
-
2,715
2,715
2022
£'000
-
28
3,207
(477)
-
2,758
2022
£'000
-
2,758
2,758
Provisions are exclusively in respect of dilapidations. The new provision during the year relates to new lease liabilities as a result
of the sale and leaseback of the Harrow House facility and is based on the anticipated costs of restoring the leasehold properties
at the end of the lease terms which is 2033. The existing dilapidations provisions relate to anticipated costs of restoring the
leasehold properties at the Corporate Office, Oxbox, Wallingford Warehouse, Windrush Court and Yarnton properties in Oxford and
Wallingford, UK to their original condition at the end of the lease terms in 2030, 2033, 2037 and 2024 respectively.
The Windrush Innovation centre was surrendered in November 2023 with no restoration costs incurred resulting in the release of
the related restoration provision of £715,000 in 2023.
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 7.69% (2022: 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 of
7.69% (2022: 5.41%). The unwinding of this discount over time is included within finance costs.
20 Loans
On 10 March 2022, the Group drew down an $85 million loan facility with Oaktree to finance the acquisition of OXB (US) LLC under
a 1 year facility agreement maturing in 2023. Over the course of the loan term 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 and amended the facility into a new senior secured four year term loan facility provided
by Oaktree in a principal amount of $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
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
150
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
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 $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 $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.
Group
Company
At 1 January
New loan
Interest accrued
Interest paid
Foreign exchange movement
Amortised fees
Loan repayment
Arrangement fees
At 31 December
21 Put option liability
At 1 January
Recognised at fair value
Revaluation
At 31 December
2023
£'000
39,780
-
4,570
(4,136)
(2,003)
323
-
-
38,534
2022
£'000
-
64,866
5,564
(4,554)
7,964
588
(31,424)
(3,224)
39,780
2023
£'000
39,780
-
4,570
(4,136)
(2,003)
323
-
-
38,534
2023
£'000
38,182
-
(28,834)
9,348
2022
£'000
-
64,866
5,564
(4,554)
7,964
588
(31,424)
(3,224)
39,780
2022
£'000
-
38,996
(814)
38,182
On 10 March 2022, the Group recognised a put option liability to acquire the remaining 20% of Oxford Biomedica (US) LLC that it
doesn't already own from Homology. The fair value of the option at the date of acquisition was assessed to be £39.0 million.
At 31 December 2023 the fair value of the put option liability was £9.3 million (Dec 2022: £38.2m). The lower liability valuation
was due a decrease in the value at which the option is expected to be exercised as a result of lower forecasted revenues over the
option period.
22 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, trade and other payables, loans and the put option liability. 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
Trade receivables and other receivables
Assets at fair value through profit & loss
Trade and other payables excluding tax
Loan
Put Option1
At 31 December
Financial assets at fair
value through profit & loss
2022
£'000
-
-
23
-
-
-
23
2023
£'000
-
-
97
-
-
-
97
Note
16
15
17
20
21
Assets held at
amortised cost
Amortised costs, loans &
other liabilities
2023
£'000
103,716
24,628
-
-
-
-
128,344
2022
£'000
141,285
62,605
-
-
-
-
203,890
2023
£'000
-
-
-
16,324
38,534
9,348
64,206
2022
£'000
-
-
-
34,232
39,780
38,182
112,194
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.
The Company had the following financial instruments at 31 December each year:
Cash and cash equivalents
Trade and other payables excluding tax
Loan
Total
Assets held at amortised cost
Amortised costs, loans &
other liabilities
2023
£'000
47
47
2022
£'000
19,197
-
-
19,197
2023
£'000
1,578
38,534
40,112
2022
£'000
-
143
39,780
39,923
Note
16
17
20
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
151
Floating rate instant access deposits earned interest at prevailing bank rates.
Sterling
US Dollars
2023
period average
weighted
average rate
2022
period average
weighted
average rate
4.50%
4.52%
1.67%
1.26%
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 2023, therefore no reconciliation between the 2022 and 2023
closing debtor balance assessed by risk of default has been provided. The opening and closing position was low (2022: 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 Dollars
2023
£'000
92,634
545
10,537
103,716
2022
£'000
117,247
623
23,415
141,285
Financial assets classified as level 1 in hierarchy
The investment asset represented by ordinary shares in Orchard Therapeutics Limited 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 21 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
Valuation technique
Significant
unobservable inputs
Inter-relationship between unobservable inputs and fair
value measurement:
Put option liability
Monte
Carlo simulation
Revenues of Oxford
Biomedica (US) LLC
Discount rate
— The revenues of Oxford Biomedica (US) LLC 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.
— 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.
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:
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
152
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
Put option liability
31-Dec-23
Revenues of Oxford Biomedica (US) LLC 20% higher or lower
Discount rate 2% lower or higher
Reconciliation of movements of liabilities to cash flows arising from financing activities
Fair value
Increase
£'000s
1,900
200
Decrease
£'000s
(1,900)
(200)
Group
At 1 January 2022
Lease liability
£'000
9,341
Share capital Share premium
£'000
307,765
£'000
43,088
Loans
£'000
-
-
-
-
64,866
(31,424)
(4,554)
(3,224)
-
-
25,664
-
-
5,564
588
7,964
39,780
-
(4,136)
-
-
(4,136)
-
-
4,570
323
(2,003)
38,534
Loans
£'000
-
-
-
-
64,866
(31,424)
(4,554)
(3,224)
-
-
25,664
-
(1,120)
Total
£'000
360,194
184
80,000
(2,952)
64,866
(31,424)
(4,554)
(3,224)
(3,124)
98,652
0
0
24,974
39,193
8,688
588
10,077
542,366
651
(4,136)
(3,118)
(6,101)
(12,704)
4,525
(1,744)
10,671
323
(3,243)
540,194
Total
£'000
350,853
184
80,000
(2,952)
64,866
(31,424)
(4,554)
(3,224)
78
75,062
(2,952)
-
-
-
-
-
72,188
-
-
-
-
-
379,953
380
-
-
-
380
-
-
-
-
-
380,333
78
75,062
(2,952)
-
-
-
-
-
55
-
72,188
(477)
102,474
106
4,938
-
-
-
-
-
-
-
5,044
-
-
-
-
-
48,132
271
-
-
-
271
-
-
-
-
-
48,403
106
4,938
-
-
-
-
-
-
-
5,044
Share capital Share premium
£'000
307,765
£'000
43,088
-
-
-
-
-
-
-
(1,120)
(3,124)
(4,244)
24,974
39,193
3,124
-
2,113
74,501
-
-
(3,118)
(6,101)
(9,219)
4,525
(1,744)
6,101
-
(1,240)
72,924
Lease liability
£'000
-
-
-
-
-
-
-
-
55
(477)
(422)
Share options
Issue of shares (exlcuding 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 change from financing cash flows
Other Changes
Acquisitions
Additions
Interest
Fee amortisation
Foreign exchange
At 31 December 2022
Share options
Interest paid
Payments for the principal portion of
lease liabilities
Payments for the interest portion of
lease liabilities
Total change from financing cash flows
Other Changes
Additions
Disposals
Interest
Fee amortisation
Foreign exchange
At 31 December 2023
Company
At 1 January 2022
Share options
Issue of shares (exlcuding 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 change from financing cash flows
Other Changes
Acquisitions
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
-
-
-
-
-
Strategic report
Corporate Governance
Financial statements
Lease liability
£'000
35,567
477
-
-
35,622
-
-
(683)
(2,817)
(3,500)
-
2,817
-
34,939
Loans
£'000
-
5,564
588
7,964
39,780
-
(4,136)
-
-
(4,136)
4,570
323
(2,003)
38,534
Share capital Share premium
£'000
-
-
-
-
379,953
£'000
-
-
-
-
48,132
271
-
-
-
271
-
-
-
48,403
380
-
-
-
380
-
-
-
380,333
153
Total
£'000
35,567
6,041
588
7,964
503,487
651
(4,136)
(683)
(2,817)
(6,986)
4,570
3,141
(2,003)
502,209
Carrying Amount
£'000
72,924
38,534
Total
£'000
113,286
53,961
2m or less
£'000
508
-
2-12 months
£'000
8,931
4,306
Carrying Amount
£'000
74,501
39,780
Total
£'000
119,496
59,082
2m or less
£'000
-
-
2-12 months
£'000
9,179
4,294
Contracted Cashflows
>5 yrs
£'000
62,951
-
2-5 yrs
£'000
31,422
45,361
1-2 yrs
£'000
9,474
4,294
Contracted Cashflows
>5 yrs
£'000
67,283
-
2-5 yrs
£'000
24,353
50,482
1-2 yrs
£'000
18,681
4,306
Carrying Amount
£'000
34,939
38,534
Total
£'000
59,726
53,961
2m or less
£'000
-
-
2-12 months
£'000
3,500
4,306
Contracted Cashflows
>5 yrs
£'000
41,728
-
2-5 yrs
£'000
10,998
45,361
1-2 yrs
£'000
3,500
4,294
Carrying Amount
£'000
35,622
39,780
Total
£'000
63,226
59,082
2m or less
£'000
-
-
2-12 months
£'000
3,500
4,294
Contracted Cashflows
>5 yrs
£'000
46,426
-
2-5 yrs
£'000
6,300
50,482
1-2 yrs
£'000
7,000
4,306
Company
Additions
Interest
Fee amortisation
Foreign exchange
At 31 December 2022
Share options
Interest paid
Payments for the principal portion of
lease liabilities
Payments for the interest portion of
lease liabilities
Total change from financing cash flows
Other Changes
Interest
Fee amortisation
Foreign exchange
At 31 December 2023
Exposure to liquidity risk
Group
At 31 December 2023
Exposure to Liquidity Risk
Lease Liabilities
Loans
Group
At 31 December 2022
Exposure to Liquidity Risk
Lease Liabilities
Loans
Company
At 31 December 2023
Exposure to Liquidity Risk
Lease Liabilities
Loans
Company
At 31 December 2022
Exposure to Liquidity Risk
Lease Liabilities
Loans
23 Deferred taxation
UK deferred tax
The Group has recognised UK deferred tax assets and liabilities at 31 December 2023 and 31 December 2022. 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
154
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
US deferred tax
The Group have recognised US deferred tax assets and liabilities at 31 December 2023 £nil (31 December 2022: £6.1 million).
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%.
Group - recognised
Deferred tax (assets)/
liabiltiies - recognised
At 1 January 2023
Foreign exchange
Income statement credit
At 31 December 2023
At 1 January 2022
Arising on acquisition
Foreign exchange
Income statement credit
At 31 December 2022
Group - not recognised
Deferred tax (assets)/
liabiltiies - not recognised
At 1 January 2023
Origination and reversal of
temporary differences
At 31 December 2023
At 1 January 2022
Origination and reversal of
temporary differences
At 31 December 2022
Trading
temporary
differences
Fixed assets
Tax losses
Intangible
asset
Total
£'000
£'000
£'000
£'000
£'000
3,357
-
(1,797)
1,560
3,051
-
-
306
3,357
(3,490)
-
1,741
(1,749)
(3,051)
-
-
(439)
(3,490)
7,502
(206)
(4,905)
2,391
-
7,397
508
(403)
7,502
6,113
(206)
(5,907)
-
-
7,397
508
(1,792)
6,113
(1,256)
-
(946)
(2,202)
-
-
-
(1,256)
(1,256)
Loan
Trading
temporary
differences
Intangibles
relationships Provisions
Tax losses
Share
options
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
-
(4,819)
(385)
(385)
(26,714)
(31,533)
-
-
-
(248)
(18,249)
(2,305)
(25,621)
54
(194)
(19,093)
(37,342)
(1)
(2,306)
(46,139)
(71,760)
-
-
-
-
(1,668)
(298)
(21,760)
(6,176)
(29,902)
(4,819)
(4,819)
1,668
-
50
(248)
3,511
(18,249)
3,871
(2,305)
4,281
(25,621)
Oxford Biomedica plc has unrecognised deferred tax assets of £385,000 (2022: £35,000) relating to non temporary
trading differences.
24 Ordinary shares
Group and Company
Issued and fully paid
Ordinary shares of 50p each
At 1 January - 96,263,165 (86,175,055) shares
Allotted for cash in placing and subscription - (2022:9,876,544) shares
Allotted on exercise of share options -541,188 (2022: 212,646) shares
At 31 December - 96,804,353 (2022: 96,263,165)
2023
£'000
48,132
-
271
48,403
2022
£'000
43,088
4,938
106
48,132
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.
In 2022, as part of the financing arrangements for the Oxford Biomedica (US) LLC acquisition, the Company raised gross proceeds
of £80.0 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 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
155
25 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
26 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 2007 Long Term Incentive Plan (LTIP) (approved February 2007)
• The 2013 Deferred Bonus Plan (approved February 2014)
• The 2015 Executive Share Option Scheme (approved May 2015)
• The 2015 Long Term Incentive Plan (LTIP) (approved May 2015)
• The 2015 Deferred Bonus Plan (approved May 2015)
• The 2015 Sharesave scheme (approved May 2015)
2023
£'000
379,953
-
380
-
380,333
2022
£'000
307,765
75,062
78
(2,952)
379,953
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 Executive 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 Executive 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 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.
Share options outstanding at 31 December 2023 have the following expiry date and exercise prices:
Options granted to employees under the Oxford Biomedica 2007 and 2015 Share Option Scheme
2023 Number of shares
2022 Number of shares
Exercise price per share
Date from
which exercisable
-
14,942
25,9261
38,9441
78,3341
104,2531
292,4831
408,1131
12,860
16,518
38,170
52,689
95,927
120,903
326,889
458,426
80p to 140p
100p to 200p
490p
275p
495p
502p to 904p
618p to 705p
760p to 817p
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Expiry date
Expired
03/06/24 to 17/10/24
13/03/25 to 10/06/25
16/05/26 to 13/10/26
13/07/27
15/02/28 to 07/08/28
04/01/29 to 12/09/29
26/06/30 to 05/10/30
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
156
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
2023 Number of shares
2022 Number of shares
Exercise price per share
Date from
which exercisable
Expiry date
962,995
1,122,382
1 Options granted under the 2015 Executive share option scheme.
Options granted to employees under the Oxford Biomedica 2015 Sharesave Scheme
2023 Number of shares
2022 Number of shares
Exercise price per share
-
60,513
34,232
471,553
566,298
187,396
98,670
71,109
623,097
980,272
422p
672p
1226p
294p
Options granted under the Oxford Biomedica 2007 and 2015 Long Term Incentive Plans
2023 Number of shares
2022 Number of shares
Exercise price per share
-
4,378
43,824
82,185
123,7541
31,7142
77,0622
99,8072
208,2502
179,1973
486,6162
711,7403
979,6342
1,752,7613
4,780,922
6,310,215
55,774
29,524
43,824
82,185
123,754
39,652
109,658
260,577
263,297
205,562
460,986
1,403,899
-
-
3,078,692
5,181,346
50p
50p
0p
0p
0p
0p
0p
0p
0p
0p
0p
0p
0p
0p
Date from
which exercisable
Vested
Vested
20-10-2024
19-10-2025
Date from
which exercisable
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
08/06/24
08/06/24
29/04/25
Expiry date
Expired
30/04/24
20/04/25
19/04/26
Expiry date
Expired
20/06/24 to 17/10/24
10/01/25
16/05/26
17/07/27 to 25/09/27
15/02/28 to 07/08/28
18/04/29 to 12/09/29
26/06/30
08/06/31
08/06/31
29/04/32
10/09/22 to 20/12/26
18/03/32 to 20/12/32
04/10/26 to 24/11/28
04/10/33 to 24/11/33
04/10/24 to 04/10/27
04/10/33
1 Options granted under the 2015 LTIP.
2 These LTIP awards will vest provided that performance conditions specified in the Directors’ Remuneration Report are met.
Options granted under the 2015 LTIP.
3 Restricted Share Options (RSUs) granted under the 2015 LTIP issued to employees vesting over 3 years
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 £nil vested during 2023 (2022: £1,029,000).
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 2023, 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 15,050 shares (2022: 77,376) 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.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
157
Options granted to employees under the Oxford Biomedica 2013 and 2015 Deferred Bonus Plan
2023 Number of shares
2022 Number of shares
Exercise price per share
25,000
27,402
32,010
27,696
31,815
59,177
54,237
53,046
161,124
329,443
800,950
68,725
27,402
32,010
27,696
31,815
67,793
64,701
58,943
175,958
-
555,043
0p
0p
0p
0p
0p
0p
0p
0p
0p
0p
Date from
which exercisable
Expiry date
Exercisable
15/06/24 and 14/10/24
Exercisable
Exercisable
Exercisable
Exercisable
Exercisable
Exercisable
08/06/22 to 08/06/24
29/04/23 to 29/04/25
04/10/24 to 04/10/26
04/05/25
14/05/26
11/07/27
07/08/28
18/04/29
20/06/30
08/06/31
29/04/32
04/10/33
National insurance liability
Certain options granted to UK employees could give rise to a national insurance (NI) liability on exercise. A liability of £283,000
(2022: £642,000) 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 220p (2022: 443p) per share.
27 Share based payments
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
LTIPs awarded
4-Oct-23
300p
0p
3
913,197
43.98%
3
4.54%
220.29p
LTIPs awarded
24-Nov-23
178p
0p
5
66,437
46.57%
5
4.12%
113.77p
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 nil p (2022: 294.4p).
548,925 options were exercised in 2023 (2022: 290,022), including 34,373 of deferred bonus options (2022: 4,390). The total
charge for the year relating to employee share-based payment plans was £3,516,000 (2022: £6,471,000), all of which related to
equity-settled share based payment transactions.
2023
2022
Share options excluding LTIP
Number
Outstanding at 1 January
Granted
Forfeited
Exercised
Cancelled
Outstanding at 31 December
Exercisable at 31 December
Exercisable and where market
price exceeds exercise price
at 31 December
2,102,654
-
(254,588)
(110,550)
(208,223)
1,529,293
1,023,508
14,942
Weighted
average exercise
price
565.3p
0.0p
829.1p
1093.1p
27.5p
441.4p
659.5p
151.3p
Weighted
average exercise
price in pence
695.5p
294.4p
718.5p
467.0p
829.9p
565.3p
520.0p
520.0p
Number
1,845,904
626,154
(182,828)
(19,195)
(167,381)
2,102,654
524,463
269,463
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
158
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
LTIP awards (options exercisable at par value 1p or nil cost)
Outstanding at 1 January
Granted
Expired
Exercised
Outstanding at 31 December
Exercisable at 31 December
2023
Number
Weighted
average
remaining
of shares
life (years)
Weighted
average
exercise
price in
pence
0p
4,780,922
0p
800,950
102p
200p
21p
494p
679p
7,386
7,556
510,497
104,260
899,594
7,111,165
8.7
7.5
0.4
0.8
8.3
3.0
6.0
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
650+p
At 31 December
28 Accumulated losses
2023
Number
3,078,692
2,772,592
(666,360)
(404,002)
4,780,922
2022
Number
1,590,364
2,053,897
(299,132)
(266,437)
3,078,692
462,724
484,371
2022
Number
Weighted
average
remaining
of shares
life (years)
Weighted
average
exercise
price in
pence
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
At 1 January
Loss for the period
Share based payments
Acquisition of NCI without a change in control
Tax on share options
Exercise of nil cost options
At 31 December
Note
Group
Company
2023
£'000
(198,545)
(157,490)
3,117
-
-
-
(352,918)
2022
£'000
(165,806)
(39,157)
5,922
400
125
(29)
(198,545)
2023
£'000
(133,403)
(119,947)
-
-
-
(184)
(253,534)
2022
£'000
(128,584)
(4,804)
-
-
-
(15)
(133,403)
The credit to accumulated losses is made up out of the charge for the year relating to employee share-based payment plans
of £3,516,000 (2022: £5,442,000) (note 28), £nil (2022: £1,029,000) related to the vesting of deferred share awards made to
executive directors and senior managers less £399,000 of share based payment charge allocated to Non controlling interests
(2022: £549,000).
Neither the Company nor its subsidiary undertakings had reserves available for distribution at 31 December 2023 or
31 December 2022.
29 Other reserves
Group
At 1 January 2023
Put option revaluation
Foreign currency translation differences
At 31 December 2023
Group
At 1 January 2022
Put option recognition
Put option revaluation
Foreign currency translation differences
At 31 December 2022
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Translation
Reserve
£'000
7,825
-
(3,869)
3,956
Translation
Reserve
£'000
-
-
-
7,825
7,825
Other Equity
£'000
(35,003)
26,944
-
(8,059)
Merger reserve
£'000
2,291
-
-
2,291
Other Equity
£'000
-
(38,996)
3,993
-
(35,003)
Merger reserve
£'000
2,291
-
-
-
2,291
Total
£'000
(24,887)
26,944
(3,869)
(1,812)
Total
£'000
2,291
(38,996)
3,993
7,825
(24,887)
Strategic report
Corporate Governance
Financial statements
Company
At 1 January 2023
Exercise of options
At 31 December 2023
Company
At 1 January 2022
Credit in relation to employee share schemes
At 31 December 2022
Merger reserve
£'000
1,580
-
1,580
Merger reserve
£'000
1,580
-
1,580
Share Scheme
reserve
£'000
25,263
3,516
28,779
Share Scheme
reserve
£'000
18,792
6,471
25,263
159
Total
£'000
26,843
3,516
30,359
Total
£'000
20,372
6,471
26,843
Merger reserve
The Group merger reserve at 31 December 2023 and 2022 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 (US)
LLC 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 £3,516,000 (2022: £6,471,000) (refer
note 13) and a corresponding credit to reserves.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
160
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
30 Cash flows from operating activities
Continuing operations
Loss before tax
Adjustment for:
Depreciation
Amortisation of intangible assets
Impairment charge
Loss on disposal of property, plant and equipment
Gain on sale and leaseback
Loss on disposal of intangible
Amortisation of loan fees
Net finance costs
Charge in relation to employee share schemes
Non-cash loss
Changes in working capital:
Decrease/(increase) in contract assets and trade and other receivables
(Decrease)/increase in trade and other payables
Increase in contract liabilities
(Decrease) in deferred income
Increase in provisions
(Increase)/decrease in inventory
Net cash used in operations
Group
2023
£'000
2022
£'000
Company
2023
£'000
2022
£'000
(188,527)
(45,976)
(119,947)
(4,804)
21,504
7,206
99,285
197
(1,018)
-
-
4,353
3,516
-
28,793
(18,125)
7,034
-
2
(247)
(36,027)
20,271
6,088
-
28
(21,389)
27
588
15,756
6,471
51
(17,876)
16,959
5,852
(691)
-
668
(13,173)
2,641
-
100,150
-
-
-
-
5,551
-
-
-
1,758
-
-
-
-
(9,847)
323
-
-
-
-
-
588
14,033
-
-
-
6
-
-
-
-
10,146
31 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 £3,764,000 (2022: £3,560,000) represents amounts payable by
the Group to the scheme. Contributions of £434,000 (2022: £403,000), included in accruals, were payable to the scheme at
the year-end.
32 Leases
The additions to right of use assets during the year are as a result of the sale and leaseback of the Harrow House facility
(£2.9 million) in the UK, and an expansion of the lease in Patriot's Park in the US (£1.0 million).
The Windrush Innovation centre lease was surrendered in November 2023 and the subsequent right of use asset and dilapidation
estimate disposed of (£1.1 million). £3.9 million of funding has been received from the landlord at the Patriot's Park site in the US to
fund the leasehold improvements undertaken, resulting in a disposal from right of use assets. VMIC equipment with a carrying value
of £1.3 million has been reclassified as Property, Plant and Equipment.
In 2022, leases entered into related to those at Patriot’s Park (£25.0 million) as part of the acquisition of Oxford Biomedica (US) LLC
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 lease
of the Wallingford Warehouse.
The Group leases land and buildings and equipment. Information about leases for which the Group is a lessee, is presented below:
Right-of-use assets:
Balance at 1 January 2023
Additions
Disposals
Impairment of assets
Change in estimate
Depreciation charge for the period
Effects of movements in exchange rates
Balance at 31 December 2023
Company
Balance at 1 January 2023
Change in estimate
Depreciation charge for the period
Balance at 31 December 2023
Property
£'000
46,000
4,357
(4,544)
(12,914)
(552)
(4,864)
(1,120)
26,363
Equipment
£'000
2,050
-
(1,305)
-
-
(745)
-
-
Property
£'000
39,394
(209)
(2,642)
36,543
Total
£'000
48,050
4,357
(5,849)
(12,914)
(552)
(5,609)
(1,120)
26,363
Total
£'000
39,394
(209)
(2,642)
36,543
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
161
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
Lease liabilities included in the Statement of Financial Position
Current
Non-current
Total lease liabilities at 31 December 2023
Amounts recognised in statement of comprehensive income
Interest on lease liabilities
Expense relating to short-term leases
Group
2023
£'000
9,439
40,896
43,090
19,861
113,286
2023
£'000
3,654
69,270
72,924
2023
£'000
6,101
234
2023
£'000
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
Company
2023
£'000
2022
£'000
3,500
14,498
23,491
18,236
59,726
2023
£'000
740
34,199
34,939
2023
£'000
2,817
-
3,500
13,300
23,491
22,935
63,226
2022
£'000
683
34,939
35,622
2022
£'000
477
-
2022
£'000
2023
£'000
2022
£'000
Amounts recognised in the statement of cash flows
Total cash outflow for leases
9,219
4,244
3,500
422
33 Contingent liabilities and capital commitments
The Group has a letter of credit for £1,405,000 (2022: £1,405,000) 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 £3,476,000 for capital
expenditure for leasehold improvements and plant and equipment not provided for in the financial statements at 31 December
2023 (2022: £2,882,000).
34 Non-controlling interest
The accounting policy selected and applied by the Group to calculate Non-controlling interest (NCI) was the holders' proportionate
interest in the recognised amount of the identifiable net assets of the acquiree. The proportion of the identifiable net assets of the
Non-controlling interest in Oxford Biomedica (US) LLC on acquisition was determined to be £34,642,000. Goodwill of £0.6 million
and Acquisition of NCI without a change in control of £0.4 million was recognised.
The following table summarises the information relating to the Group's subsidiary that has material NCI:
NCI percentage
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attritutable to NCI
Revenue
Profit
OCI
Total comprehensive income
Profit allocated to NCI
OCI allocated to NCI
2023
£'000
20%
50,282
11,813
(22,479)
(20,477)
19,139
3,828
26,813
(133,361)
(7,190)
(140,551)
(26,672)
(1,438)
2022
£'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
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
162
NOTES TO THE FINANCIAL INFORMATION (CONTINUED)
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
35 Related party transactions
Identity of related parties
2023
£'000
(15,105)
3,077
(3,717)
(15,745)
2022
£'000
(9,732)
30,867
(2,293)
18,842
As at 31 December 2023, 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 (US) LLC;
• one wholly-owned US subsidiary, Oxford Biomedica (US) Inc;
• one wholly-owned Irish subsidiary, Oxford Biomedica (Ireland) Ltd;
• one wholly-owned UK 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 wholly-owned UK 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 Biomedica (US) 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 (US) LLC 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.
Sales of goods and services
Homology Medicines, Inc
Purchase of services
Homology Medicines, Inc
Other
Homology Medicines, Inc - rental income
Transactions
2023
£'000
2022
£'000
23,664
23,252
387
4,258
1,074
1,085
Balance outstanding
2023
£'000
2,429
17
258
2022
£'000
4,334
1,158
424
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: period-end balance of loan
Loan to subsidiary : Oxford Biomedica (UK) Ltd
Loan to subsidiary: Oxford Biomedica (US) Inc.
2023
£'000
287,592
141,398
2022
£'000
278,091
148,764
The investment in the subsidiaries, of which the loan forms part, has been impaired by £226.1 million (note 14) in previous years.
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 £28,781,000 (2022: £25,265,000).
There were no transactions (2022: 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 2023
(2022: none). Key person remuneration can be seen in note 5 of the financial statements.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
Strategic report
Corporate Governance
Financial statements
163
36 Post balance sheet event
Acquisition of ABL Europe
On the 29 January 2024 the Group acquired 100% of ABL Europe SAS (recently renamed Oxford Biomedica (France) SAS) from
Institut Mérieux SAS for a consideration of €15 million, which included €10 million of pre-completion cash funding from Institut
Mérieux in Oxford Biomedica (France) in exchange for 3,149,374 new ordinary shares in the Company which have been issued at a
price of 407.4p.
Oxford Biomedica (France) is a pure-play European CDMO with specialised expertise in the development and manufacturing of
solutions for biotechs and biopharma, including viruses for gene therapy, oncolytic viruses and vaccine candidates. The acquisition
of Oxford Biomedica (France) broadens the Group's international presence by establishing a footprint within the European Union
through facilities located in Lyon and Strasbourg, France. In addition, the acquisition increases Oxford Biomedica's capacity
in process and analytical development and early-stage manufacturing, and addresses increased client demand for the Groups
‘ process development services. Oxford Biomedica (France) currently works on more than 10 cell and gene therapy programmes
spanning disease areas including more than six different vector types.
This acquisition will be treated as a business combination under IFRS 3. The Group did not disclose an accounting policy or fair
value as required by IFRS 3, due to the short period of time from the date of acquisition till issuance of the annual accounts.
ABL Europe changed its name to Oxford Biomedica (France) SAS on 22 March 2024.
Conversion of intercompany loan to equity
During February 2024, the Company has converted a US$180 million intercompany loan (note 13) to Oxford Biomedica (US) Inc to
equity of Oxford Biomedica (US) Inc.
Oxford Biomedica PLC | Annual Report and Accounts 2023 | Financial statements
164
Oxford Biomedica PLC | Annual Report and Accounts 2023
Independent auditors’ report to the members of Oxford Biomedica plc Report on the audit of the financial statements Opinion In our opinion, Oxford Biomedica plc’s group financial statements and company financial statements (the “financial statements”): • give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2023 and of the group’s loss and the group’s and company’s cash flows for the year then ended; • have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006; and • have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise: Consolidated and Company Statement of Financial Position as at 31 December 2023; Consolidated Statement of Comprehensive Income, Consolidated and Company Statement of Cash Flows, Consolidated Statement of Changes in Equity Attributable to Owners of the Parent and Company Statement of Changes in Equity Attributable to Owners of the Parent for the year then ended; and the notes to the financial statements, comprising material accounting policy information and other explanatory information. Our opinion is consistent with our reporting to the Audit Committee. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided. Other than those disclosed in note 7, we have provided no non-audit services to the company or its controlled undertakings in the period under audit. Strategic report
Corporate Governance
Financial statements
165
Oxford Biomedica PLC | Annual Report and Accounts 2023
Our audit approach Overview Audit scope • We performed full scope audit procedures over two significant components of the Group • We performed full scope audit procedures over the parent company for the purpose of both the parent company opinion and consolidation • This provided coverage of 100% of revenue, 88% of loss before tax, and 98% of net assets. Key audit matters • Stage of completion revenue recognition for incomplete batches (group) • Impairment of assets of the Oxford Biomedica Solutions component (group) • The Group and Company's ability to continue as a going concern (group and parent) • Impairment of investments and loans in subsidiaries (parent) Materiality • Overall group materiality: £1,241,000 based on 1% of three year average revenue. • Overall company materiality: £2,833,000 based on 1% of total assets. • Performance materiality: £807,000 (group) and £1,841,000 (company). The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. Key audit matters Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, 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. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 166
Oxford Biomedica PLC | Annual Report and Accounts 2023
This is not a complete list of all risks identified by our audit. Key audit matter How our audit addressed the key audit matter Stage of completion revenue recognition for incomplete batches (group) Refer to Note 2 Critical accounting judgements and estimates The audit procedures we performed to address the risk regarding stage of completion revenue recognition for incomplete batches were as follows: Bioprocessing revenue is recognised on a percentage of completion basis over time as the processes are carried out. Revenue is recognised based on the progress towards verifiable stages of the bioprocessing process. The percentage of completion assigned to each verifiable stage of the bioprocessing process requires estimation in terms of an assessment of the underlying cost base of each stage of production. The value of the revenue recognised on these work orders through to 31 December 2023 with regards to the bioprocessing batches which remain in progress at year end is £12.9m. For Bioprocessing revenues the following procedures were performed: 1) We assessed management’s historical forecasting accuracy of percentage of completion for the prior financial year. 2) We obtained management’s revenue recognition paper for bioprocessing batches with respect to the key estimate being underlying batch cost split by phase, agreed this to supporting evidence and challenged management on the allocation of costs between different phases of the process; 3) We assessed the changes to the percentage of completion for each stage of a batch compared to half-year and prior year, understood the rationale for key changes and ran appropriate sensitivities to confirm that management’s percentages were reasonable; 4) We attended the last pre year-end and the first post year-end batch review meeting of 2023 and 2024 respectively to ascertain the status of each open batch at year-end and 5) We obtained evidence of the stage of completion for a sample of batches and independently recalculated the stage of completion. The Group also recognises revenue for fixed price process development work packages 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 work package. The value of revenue recognised on work orders which remain in progress as at 31 December 2023 is £11.9m. In order to address the risk around open fixed price process development revenues, the following procedures were performed: 1) We assessed management’s historical forecasting accuracy of the percentage of completion for the prior financial year; 2) For a sample of open work orders, we obtained management’s calculation of the percentage of completion and vouched completed activities to supporting evidence to verify that the stage of completion was appropriate and accurate. The key estimate in this revenue stream related to the value attributed to specific tasks in non-project management work order and we understood how the estimates for the values of these tasks were derived and compared them to similar projects and whether there were any tasks to which an unreasonable value was allocated when compared to other work packages; and 3) We examined margins of customers and work orders that were open at year-end, post year-end to ascertain whether the percentage of completion at year-end was appropriate. The recognition of both of these revenue streams involves significant estimation uncertainty and subjectivity. Based on these procedures, we did not identify any exceptions. Impairment of assets of the Oxford Biomedica Solutions component (group) Refer to Note 2 Critical accounting judgements and estimates, Note 11 Intangible assets and Note 12 Property, plant & equipment The audit procedures we performed to address the risk around the impairment of goodwill and other intangible assets of the Oxford Biomedica Solutions component were: Under IAS 36 ‘Impairment of Assets’, goodwill must be tested for impairment at least annually and finite life intangible assets tested to the extent there is any indication that an asset may be impaired. Following the acquisitions of the Oxford Biomedica Solutions LLC business ("Solutions") in 2022 goodwill of £0.6m was recognised along with a developed technology intangible 1) Assessed the methodology and approach applied by management in performing the impairment review, including the identification of Solutions as a single CGU and ensured this was consistent with the requirements of IAS 36 ‘Impairment of Assets’; 2) Obtained management’s impairment assessment for the Solutions CGU and ensured the discounted cash flow calculation was mathematically accurate and the methodology used was in Strategic report
Corporate Governance
Financial statements
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asset of £102.9m and property, plant & equipment of £58.9m. line with the requirements of IAS 36 ‘Impairment of Assets’; 3) Tested the underlying data on which the impairment assessment is based. We evaluated the year 1 cash flows and agreed them to underlying support where available, together with assessing the growth rates applied to them. In doing so, we also agreed the cash flow forecasts to the latest Board approved 10 year forecast and compared prior years forecasts to actual results across the Group, in order to assess the accuracy of the forecasting process; 4) Tested the short term revenue growth rate assumption by comparing this to previous growth rates within the Group and market data used by management to support the growth. This includes with respect to the Lenti platform which will be commercialised through the Solutions business from 2025 onwards. Management have estimated that 20% of the current Group pipeline will be routed through the US business; 5) Used our PwC valuation experts to assess the appropriateness of the discount rate and long term growth rate. Management performed their annual impairment assessment of goodwill and intangibles as at 31 December 2023. The assessment was performed over the Solutions business as a whole as management determined the business to represent a single cash generating unit ("CGU"). The impairment review contains a number of judgements and estimates such as the forecast cash flows, growth rates and discount rates. We concluded that the fair value less costs to sell model prepared by management was consistent with the requirements of IAS 36 and that the resulting impairment charge was materially appropriate. We have confirmed that management have appropriately applied the requirements of IAS 36 in allocating the impairment charge first against goodwill, and subsequently to apportion the remaining charge between fixed assets and intangibles. Management have determined the recoverable amount of the CGU to be the fair value less costs to sell for the business as they expect this value to be higher than the value in use. There is no significant difference between fair value less costs of disposal and value in use in the case of management’s discounted cash flow model. Management compared the present value of expected future cash flows to the net asset value of the CGU as at 31 December 2023 and identified a final impairment of £99.3m of which £0.6m was allocated against goodwill, £62.0m against intangibles and £36.7m against Property, plant & equipment. We also reviewed the adequacy of disclosures made in the financial statements and assessed compliance with IAS 36. The Group and Company's ability to continue as a going concern (group and parent) Refer to Note 1 Accounting policies to the Consolidated and Company Financial Statements. For our audit response and conclusions in respect of the group and the company’s ability to continue as a going concern, see the ‘Conclusions relating to going concern’ section below. For the year ended 31 December 2023, the Group used net cash in operating activities of £28.5 million and the Company used net cash in operating activities of £9.8m. Cash and cash equivalents as at 31 December 2023 were £103.7 million for the Group and £0.05 million for the Company. As stated in Note 1 to 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 consolidated and company financial statements, based in the first instance on the Group’s 2024 annual budget and forecasts for 2025. The Directors have undertaken an assessment of the forecasts in a base case, severe but plausible downside and mitigated downside case scenario, and identified downside risks and mitigating actions. A substantial proportion of the Group's forecasted revenues under the base case is not covered by binding 168
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purchase orders. The group has a number of mitigating actions in place that are largely within its control and would enable the Group to reduce its spend within a reasonably short time-frame to increase the Group and Company's cash covenant headroom as required by the loan facility with Oaktree Capital Management. However, under a severe but plausible downside scenario, management is required to commit to these actions in a timely manner including taking mitigating action by the end of Q3 2024 which may include rationalisation of facilities and rightsizing the workforce. As a result, we considered going concern to be a significant risk area warranting additional focus as part of our audit procedures including the evaluation of the levers available to the Directors in order to conserve cash, considering the timing of when such decisions would have to be made in order to have the desired effect on the cash run rate of the business. Impairment of investments and loans in subsidiaries (parent) Refer to Note 2 Critical accounting judgements and estimates and Note 13 Company Investments and loans in subsidiaries The audit procedures we performed to address the risk around the carrying value of investments in subsidiaries and recoverability of the intercompany receivables were: As at 31 December 2023, the company held investments and loans in subsidiaries with a carrying value of £246.7m (2022: £341.2m). There is a risk that the recoverable amount of investments held at 31 December 2023 falls below their current carrying value and that the loans in subsidiaries are not recoverable. 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 has the greatest potential for material misstatement for the parent company audit. 1) We discussed with management the basis of their impairment review and, where triggers were identified, the cash flow forecasts and fair value models; 2) Evaluated the appropriateness of management’s initial trigger assessment and, supported by PwC Valuation experts, reviewed and tested management’s subsequent detailed fair value models and challenged management's key assumptions including, but not limited to, revenue growth rates, discount rates, long term growth rates and revenue multiples The realisation of the carrying value of the investments and loans in subsidiaries is dependent on the future performance of the trading entities within the Group. The assessment therefore involves judgement, particularly in accurately forecasting future cash flows of fair value less costs to sell. Through this assessment management concluded that an impairment of £100.2m was required. Based on the procedures performed, as summarised above, we agree with the impairment recorded against the investment and loans in subsidiaries held by the company at 31 December 2023. How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate. In the year ended 31 December 2023, the group operated across the UK, Europe and United States. We have scoped in two of these companies as significant; Oxford Biomedica UK Limited and Oxford Biomedica Solutions LLC. Work performed over Oxford Biomedica UK Limited has been performed by the Group audit team, whilst work performed over Oxford Biomedica Solutions was performed by PwC Boston as component auditor. For the work performed by the component auditor, we determined the appropriate level of involvement we needed to have in that audit work to ensure we could conclude that sufficient appropriate audit evidence had been obtained for the Group financial statements as a whole. We issued written instructions to the component auditor and held regular communications with them throughout the audit cycle. The Group Engagement Leader and team visited the US during the planning phase of the audit to provide additional direction to the component team and attended the audit close meeting remotely. A working Strategic report
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paper review was also performed over the significant risk areas together with additional workpapers based on engagement team judgement. In addition, we performed full scope audit procedures over the parent company for the purpose of both the parent company opinion and the consolidated financial statements. The procedures performed to support the consolidated financial statements were performed using a lower overall materiality of £1,178,000 being 95% of the Group overall materiality and a performance materiality of £765,000. Based on the detailed audit work performed across the Group,we have gained coverage of 100% of total revenue, 88% of profit before tax, and 98% of net assets. The impact of climate risk on our audit As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the group’s and company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the group’s and company’s financial statements. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Financial statements - group Financial statements - company Overall materiality £1,241,000. £2,833,000. How we determined it 1% of three year average revenue 1% of total assets Rationale for benchmark applied Based on the benchmarks used in the annual report, revenue is considered to be the primary measure used by shareholders in assessing the performance of the group and is a key performance indicator. We believe that a total asset benchmark is appropriate given that the company does not generate revenues of its own and is a holding company for subsidiaries within the group. For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was £810,000 to £1,178,000. Certain components were audited to a local statutory audit materiality that was also less than our overall group materiality. We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 65% of overall materiality, amounting to £807,000 for the group financial statements and £1,841,000 for the company financial statements. In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our normal range was appropriate. We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £62,000 (group audit) and £141,650 (company audit) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. 170
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Conclusions relating to going concern Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern basis of accounting included: • Testing the mathematical integrity of the Group and Company’s cash flow forecasts and assessing management’s historical forecasting accuracy. • Assessing the completeness and accuracy of costs included within the Group and Company’s cash flow forecasts based on historical expenditure and committed future costs. • Assessing the reasonableness of assumptions within the base case model based on our understanding of the business and by comparing against historical results. • Considering compliance with debt covenants for the Group's loan arrangement with Oaktree. • Considering the appropriateness of revenues retained in management's downside scenario including agreeing a sample of committed revenues to supporting work orders and assessing the reasonableness of uncommitted revenues retained based on historic conversion rates of such revenues into actual revenue. • Evaluating a mitigated downside scenario with discretionary expenditure carefully controlled in line with available resources under which the group may seek to rationalise facilities and rightsize the workforce. We evaluated the levers available to the Directors in order to conserve cash, considering the timing of when such decisions would have to be made in order to have the desired effect on the cash run rate of the business. This scenario showed that based on the level of existing cash, the projected income and expenditure (the quantum and timing of some of which is at the Group’s discretion) and other potential sources of funding, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in business for the foreseeable future. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the company's ability to continue as a going concern. In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. Strategic report
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With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below. Strategic report and Directors' Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report. Directors' Remuneration In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. Corporate governance statement The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement, included within the Corporate Governance Report is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to: • The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks; • The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated; • The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; • The directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment covers and why the period is appropriate; and • The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the group and company and their environment obtained in the course of the audit. In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit: 172
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• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the group’s and company's position, performance, business model and strategy; • The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and • The section of the Annual Report describing the work of the Audit Committee. We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements As explained more fully in the Statement of Directors’ responsibilities in respect of the Annual report and accounts, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also 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. In preparing the financial statements, the directors are responsible for assessing the group’s and the 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 the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the financial statements 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 an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to The Listing Rules, applicable tax legislation, The UK Corporate Governance Code 2018, and Companies Act 2006, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries, either in the underlying books and records or as part of the consolidation process, and management bias in accounting estimates. The group engagement team shared this risk assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the group engagement team and/or component auditors included: • Discussions with management, the Group’s legal team and additional personnel outside finance including consideration of known or suspected instances of non-compliance with laws and regulations and fraud • Review of the component auditor's working papers • Challenging assumptions and judgements made by management in their significant accounting judgements and estimates that involve considering future events that are inherently uncertain or that may be subject to management bias. Strategic report
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In particular, we focused our work on impairment of goodwill and other intangible assets, the valuation of the put option liability and estimates and judgments relating to revenue. • Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations • Testing all material consolidation adjustments to ensure these were appropriate in nature and magnitude. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report. Use of this report This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Other required reporting Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: • we have not obtained all the information and explanations we require for our audit; or • adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or • certain disclosures of directors’ remuneration specified by law are not made; or • the company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. Appointment Following the recommendation of the Audit Committee, we were appointed by the members on 23 June 2023 to audit the financial statements for the year ended 31 December 2023 and subsequent financial periods. This is therefore our first year of uninterrupted engagement. 174
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Other matter As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS. David Farmer (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Reading 29 April 2024 Strategic report
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Other information
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Glossary
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.
InAAVateTM platform
Oxford Biomedica's AAV platform, which offers a proprietary
‘plug and play’ Dual-Plasmid system for transient transfection,
as well as a standard triple transfection system for AAV-based
gene therapies. The inAAVate™ platform has demonstrated cell
culture titre to over 1E15 vg/L for multiple serotypes across
multiple genomes, and shown a significant increase in AAV
vector productivity and quality with >50% full capsids in the
bioreactor and >90% full capsids in the final drug substance.
The Dual-Plasmid system, together with the Group's proprietary
transfection process has been successfully scaled up to 2,000L
with multiple GMP runs at 500L scale, and represents a high-
quality platform with industry-leading productivity to enable
successful AAV product development.
STAC
Scientific, Technology and Advisory Committee
TetraVectaTM system
Oxford Biomedica's 4th generation lentiviral vector delivery
system, which allows for higher quality, potency, safety,
expression level and packaging capacity.
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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.
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 bio-
economy; provide candidates with research, innovation and
transferable skills.
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
CMIP5
Coupled Model Intercomparison Project
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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.
OxLEP
Oxfordshire Local Enterprise Partnership
RCP
Representative Concentration Pathway
SSP2
Shared Socioeconomic Pathway 2
SSP3
Shared Socioeconomic Pathway 3
STEM
Science, Technology, Engineering and Mathematics
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.
Viral vectors
Are tools commonly based on viruses used by molecular
biologists to deliver genetic material into cells.
Corporate Governance Code
The UK Corporate Governance Code, published by the UK
Financial Reporting Council, which sets out standards of good
practice in relationship to board leadership and effectiveness,
remuneration, accountability and relations with shareholders.
DNA
Deoxyribonucleic acid (DNA) is a molecule that carries
genetic information.
ex vivo
Latin term used to describe biological events that take place
outside the bodies of living organisms.
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.
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.
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.
Listing Rules
Listing rules made by the Financial Conduct Authority pursuant
to section 73A (2) of the UK Financial Services and Markets Act
2000, as amended from time to time.
LOCA
Localised Constructed Analogue
NGFS
The Network of Central Banks and Supervisors for Greening the
Financial System
NOAA
National Oceanic and Atmospheric Administration
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GLOSSARY (CONTINUED)
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.
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Advisers and contact details
Contact Details
Oxford Biomedica plc
Windrush Court
Transport Way
Oxford
OX4 6LT
United Kingdom
Tel: +44 (0) 1865 783 000
Advisers
Joint Corporate Broker
RBC Europe Limited
100 Bishopsgate
London EC2N 4AA
Financial Adviser and Joint Corporate Broker
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London
E14 5JP
Financial and Corporate Communications
Consilium Strategic Communications
85 Gresham St
London EC2V 7NQ
Registered Independent Auditors
PricewaterhouseCoopers LLP
3 Forbury place
33 Forbury Road
Reading
RG1 3JH
Solicitors
Covington & Burling LLP
22 Bishopsgate
London EC2N 4BQ
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Company Secretary and Registered Office
Natalie Walter
Windrush Court
Transport Way
Oxford OX4 6LT
Tel: +44 (0) 1865 783 000
Fax: +44 (0) 1865 783 001
enquiries@oxb.com
www.oxb.com
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This report and its messaging has been designed and produced by Oxford Biomedica and scientific branding specialists thinkerdoer using the Tangelo Platform for corporate reporting.www.thinkerdoer.comwww.tangelo-software.com Oxford Biomedica plcWindrush Court, Transport Way Oxford OX4 6LT, United KingdomTel: +44 (0) 1865 783 000 enquiries@oxb.comwww.oxb.com