Oxford Biomedica’s share price hits record peaks as it upgrades forecasts!

The Oxford Biomedica share price has roared to new all-time peaks as vaccine orders from AstraZeneca increase. Here are the key points.

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Investor appetite for UK shares remains stable in Tuesday business, following last week’s heavy falls. Though fears over runaway inflation — allied with lingering concerns over the Covid-19 crisis — has stymied hopes of significant dip-buying interest. That said, the Oxford Biomedica (LSE: OXB) share price is picking up fresh momentum today.

At £11.14 per share, Oxford Biomedica was up 11% during Tuesday’s session. The FTSE 250 healthcare giant touched record highs around £11.28 earlier today, after announcing upgrades to its full-year earnings estimates.

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Guidance gets a shot in the arm!

Oxford Biomedica — which manufactures the AstraZeneca coronavirus vaccine — has released a series of strong updates in recent months. And on Tuesday, it advised that the FTSE 100 firm has bumped up orders of the pandemic battler.

It said the “successful manufacture of large-scale batches” of Covid-19 vaccines meant AstraZeneca has “committed to an increase in the number of batches” in the second half of 2021. This follows on from the 18-month supply agreement both parties had signed back in September.

As a consequence, Oxford Biomedica said it was raising its revenues guidance from the AstraZeneca deal. It now predicts sales “in excess of £100m” from the Footsie firm, double its previous guidance of above £50m. It also added it expects “significant growth” in group operating earnings before interest, tax, depreciation and amortisation (EBITDA).

Arrowings ascending on a chalkboard

What Oxford Biomedica said

John Dawson, chief executive at Oxford Biomedica, said: “Everyone involved with production of the Covid-19 vaccine can be truly proud of their achievement in manufacturing batches of vaccine from our Oxbox manufacturing facility.

“We are delighted to be a key supplier of the vaccine and the group is proud to be part of this world-leading vaccination project that is saving many lives,” he added.

Finally, Oxford Biomedica reiterated its belief that it doesn’t expect its vaccine production agreement with AstraZeneca “to have any impact on the group’s current partnerships or ability to secure and support additional new partnerships in the cell and gene therapy field.”

Will profits forecasts leap?

As I say, this is the latest in a line of positive trading statements from Oxford Biomedica. Its full-year results of April showed revenues soared 37% year-on-year in 2020 to £87.7m. Consequently, the FTSE 250 firm saw pre-tax losses narrow significantly to £6.6m from £20.9m in 2019.

The business saw bioprocessing and commercial development revenues rocket 45% on an annual basis to £68.5m, it said. Trade here was helped by new contract wins with Astrazeneca, Beam Therapeutics and Bristol Myers Squibb. Meanwhile, the number of partner programmes grew from 13 in 2019 to 20 last year.

City analysts expect Oxford Biomedica to bounce back into profit in 2021. They had been predicting pre-tax profit of £6.9m this year, rising to £11m in 2022. Today’s news means these forecasts could be significantly upgraded.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Bristol Myers Squibb. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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