Annual report and accounts 2021
Saving lives through
innovative cell and gene
therapy services
2
Oxford Biomedica in brief
Oxford Biomedica is an innovative leading viral vector specialist focused
on
delivering life changing therapies to patients.
Cell and gene therapy is the treatment of disease by the delivery
of
therapeutic genetic material (DNA or RNA), into a patient’s cells.
One highly effective approach to delivering the genetic information
is to
re-engineer existing viruses to be safe delivery vehicles (vectors)
to insert
the genetic material into patients cells. This can be achieved
either by
directly administering the vector to the patient (often referred
to as in vivo
gene therapy), or by first introducing the genetic material
to cells or tissue
outside of the body, before administering the cells
or tissue into the
patient (often referred to as ex vivo gene therapy, or gene-modified
cell therapy).
Oxford Biomedica works across key viral vector delivery systems including
those based on lentivirus, adeno-associated virus (AAV) and adenovirus,
providing innovative solutions to cell and gene therapy biotechnology
and biopharma companies for their process development, analytical
development and manufacturing needs. Oxford Biomedica plc
(the Company) and its subsidiaries (together Oxford Biomedica or the
Group) have built a sector leading lentiviral vector delivery system,
LentiVector
®
platform, which the Group leverages to develop product
candidates in-house, before seeking partners to take the products into
clinical trials.
Oxford Biomedica UK Limited (OXB) is based across several locations in
Oxfordshire, UK. In early 2022, the Group established Oxford Biomedica
Solutions, a new US based subsidiary AAV manufacturing and innovation
business, based near Boston, US.
Oxford Biomedica employs more than 940 people. Further information is
available at www.oxb.com.
Terminology
This report uses financial reporting definitions,
and terminology specific to both science and
Oxford Biomedica. An explanation of these can
be found in the glossary on pages 187 to 189.
1 Saving lives
through innovation
2 Innovating viral vectors
to an industrial level
4 Expanding our innovative
process development and
manufacturing services
6 Transforming science
into life saving healthcare
8 Market overview
11 Strategic Report
12 Group at a glance
14 Product pipeline
16 The Group’s business model
18 The Group’s stakeholders
22 Operational highlights
delivered in 2021
24 Financial highlights
delivered in 2021
26 Chair’s statement
30 2021 performance review
38 Management team
40 Delivery of 2021 Objectives
42 Objectives set for 2022
44 Financial review
54 Environmental, Social
and Governance Report
76 Non-financial statement
77 Corporate Governance
78 Principal risks, uncertainties
and risk management
86 Board of Directors
88 Corporate Governance Report
104 Directors’ Remuneration Report
130 Directors’ Report
137 Independent auditors’ report
147 Group financial statements
148 Consolidated statement
of comprehensive income
149 Statement of financial positions
150 Statements of cash flows
151 Statements of changes in equity
attributable to owners of the parent
152 Notes to the consolidated
financial statements
187 Other matters
187 Glossary
190 Advisors and contact details
Saving lives through innovation 1
Oxford Biomedica plc | Annual report and accounts 2021
We use science
to save lives
Oxford Biomedica is at the centre of the rapidly
growing cell and gene therapy sector.
Our innovative solutions and proven expertise
allow us and our customers, the biotech and
biopharma industry, to deliver life-saving therapies
to reach even more patients.
The success of cell and gene therapy products
transforms outcomes for millions of people suffering
from some of the world’s worst diseases and
medical conditions.
Saving lives through innovation
2
Oxford Biomedica plc | Annual report and accounts 2021
2
Saving lives through innovation
Innovating viral vectors
to an industrial level
Strategic Report 3
Oxford Biomedica plc | Annual report and accounts 2021
Saving lives through innovation 3
We are squaring up to the challenge of bringing
down the cost of goods associated with scale-up
manufacturing. We see our innovative approach
as key to success in this area.
By progressing cell and gene therapy closer
to
industrialisation, we open up better treatment
options to millions of people.
Read more in this report
— Innovation and platform development
Page 33
— Market overview
Pages 8 to 9
Time
Cost
Activity
2017
First ever gene
therapy treatment
approved by the FDA
using our LentiVector
®
delivery system
2025
The FDA expects
to approve 10 to 20
cell and gene therapy
products a year by
2025
Cell and
gene therapy
treatments
will become more
affordable
and therefore
more accessible
to patients
Mass
markets
Driving treatment cost down
through innovation
Approvals
4
Oxford Biomedica plc | Annual report and accounts 2021
4
Saving lives through innovation
Expanding our innovative
process development and
manufacturing services
Strategic Report 5 Saving lives through innovation 5
Oxford Biomedica plc | Annual report and accounts 2021
F
urther strong growth is
expected in the viral vector
market as pharma development companies add
to
their pipelines, and new treatments are approved
and
commercialised.
W
ith our recent deal with Homology Medicines,
we are expanding our US presence – healthcare’s
largest market. But more than that, this strategic
acquisition adds adeno-associated virus (AAV)
vectors to our
offering
.
Viral vector growth to continue
its growth trajectory
Global viral vector supply (outsourced)
Source: Company estimates and third party research
3
2.5
2
1.5
1
0
Lenti and
-retrovirus
Adenovirus
Adeno
associated
virus (AAV)
2022
2021
2024
2025
2026
2023
2020
$ billions
CAGR
16%
25%
17%
(25%)
Read more in this report
— Facilities and capacity expansion
Page 35
— Vector agnostic strategy
Chair’s statement – Page 27
6
Oxford Biomedica plc | Annual report and accounts 2021
6
Saving lives through innovation
Transforming science
into life-saving healthcare
Strategic Report 7 7 Strategic Report 7 Saving lives through innovation 7
Oxford Biomedica plc | Annual report and accounts 2021
Our business model is built upon using science
to save lives. The innovative work we are doing
will allow our customers, the biotech and biopharma
industry, to deliver life-saving therapies to reach
more patients.
Read more in this report
— Product pipeline
Page 14
— The Group’s business model
Pages 16 to 17
>25 years
experience
More than 25 years experience in delivering innovative
cell and gene therapies
Our vector delivery system, LentiVector
®
,
is enabling our customers
to bring next generation
treatments for serious diseases to market.
For example, Novartis’ Kymriah
®
product for blood
cancer; it’s an
available gene therapy
that’s out there saving people’s lives.
Since expanding our manufacturing capacity at our Oxbox facility,
over 100m
doses of the adenovirus-based Oxford
AstraZeneca
COVID-19 vaccine have
been successfully manufactured.
8
Oxford Biomedica plc | Annual report and accounts 2021
Oxford Biomedica is at the heart of the rapidly growing
cell and gene therapy market
Continued growth and investment in the sector
holds great promise for treating diseases
The cell and gene therapy market continues to grow strongly since the
approval of Kymriah
®
in 2017 and is forecast to grow at a Compound
Annual Growth Rate (CAGR) of 61% from c.$1.8 billion in 2021 to
c.$31.4 billion in 2027 (Source: Global Data). This growth is fuelled by a
strong pipeline of cell and gene therapy candidates in clinical development,
which increased from 1050 in 2017 to 2551 in 2021 (Source: Informa). The
sector has continued to attract increasing investment, growing from
$7.5 billion in 2017 to $23.1 billion in 2021. In 2021, venture capital was the
main driver of investment in the sector, contributing $9.8 billion — a 75%
increase over 2020. 2021 saw a record number of public offerings take
place in the sector, with 26 IPOs raising $4.8 billion, a 30% increase in
the amount raised in 2020 (Source: Alliance for Regenerative Medicine).
Oxford Biomedica broadens its viral vector capabilities
Following a strategy review conducted in 2020, the Group assessed the
opportunity to apply its viral vector expertise to the manufacture of AAV
and assessed the potential size of this new market opportunity. In the
period of 2015 to 2021 this sector has seen a 38% CAGR in clinical trial
initiations, growing from 7 in 2015 to 49 in 2021. The Group estimates the
AAV outsourced supply market to grow to c.$2.2 billion by 2026, and to
c.$3.7 billion by 2030.
The number of clinical trial initiations is seen as a leading indicator of
future potential innovative process development and manufacturing
services deal flow.
Post period (March 2022), the Group announced that it was broadening
its viral vector capabilities with the launch of Oxford Biomedica Solutions,
a full scope AAV business in Boston, US, following closing of its deal with
Homology Medicines.
The Group’s LentiVector
®
platform –
maximising the global opportunity
In the period from 2015 to 2021 this sector has seen a 19% CAGR in clinical
trial initiations, growing from 17 in 2015 to 49 in 2021 (Source: Informa).
There was a decrease in the number of clinical trial initiations observed in
2020 and 2021, thought to be attributable to clinical trial recruitment
issues relating to the global pandemic. However, it is anticipated that this
may begin to show signs of recovery in 2022.
The Group assessed the number of programmes in the clinic and
forecasted the global market for integrating vector manufacture
(including both lentiviral and -retroviral vectors) to be in excess of
$1 billion by 2026, growing to c.$1.8 billion by 2030, a CAGR of 14%
from 2020. It is estimated that c. 50% of this market relates to supply
outsourced to third parties. With the Group’s proven expertise in process
development and commercial scale lentiviral manufacturing, we are well
placed to maximise this global opportunity.
Market overview
61%
Cell and gene therapy market growth
Forecast to grow at a Compound Annual Growth
Rate (CAGR) of 61% from c.$1.8 billion in 2021
to c.$31.4 billion in 2027
$9.8 bn
Venture capital investment 2021
Venture capital investment increased 75% over 2020
to $9.8 billion
$3.7 bn
AAV market opportunity
The Group estimates the AAV outsourced
supply market to grow to c.$3.7 billion by 2030
50%
Outsourced providers
The number of programmes in the clinic and
forecasted in the global market for integrating vector
manufacture is estimated by the Group to be in
excess of $1 billion by 2026, growing to c.$1.8 billion
by 2030. It is estimated that c. 50% of this market
is supplied by third party service providers.
Saving lives through innovation
Saving lives through innovation 9
Oxford Biomedica plc | Annual report and accounts 2021
Global viral vector supply (outsourced)
$m
5,000
4,000
3,000
2,000
1,000
0
AAV
Adeno
Integrating vectors
Source: Company data
The outsourced supply market for adenoviral,
AAV and integrating vectors is estimated
to be worth c.$2.8 billion by 2026 growing
to c.$4.8 billion by 2030.
2022
2021
2024
2028
2025
2029
2026
2030
2023
2027
2020
Source: Informa
Number of cell and gene therapy candidates
in development
3,000
2,000
1,000
0
Total global financings
$bn
25
20
15
10
5
0
Source: State of the Industry Briefing, Alliance
for Regenerative Medicine, January 2022
2017
2017
2019
2019
2020
2020
2021
2021
2018
2018
Global cell and gene therapy market forecast
$m
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Source: GlobalData analyst consensus
(extracted 24 February 2022)
Note: This forecast includes cell therapy
(adoptive, allogeneic, autologous), gene therapy
and gene-modified cell therapy products
2019
2018
2021
2025
2022
2026
2023
2027
2020
2024
2017
Clinical trial initiations by vector type
250
200
150
100
50
0
Adeno
2017
2016
2019
2020
2021
2018
2015
AAV
2017
2016
2019
2020
2021
2018
2015
µ-Retro
2017
2016
2019
2020
2021
2018
2015
Lenti
2017
2016
2019
2020
2021
2018
2015
Source: Informa
Note: This data includes
Open, Planned,
Completed and Closed
trials, and excludes
Terminated trials
10
Oxford Biomedica plc | Annual report and accounts 2021
Our cutting edge science and
innovation is saving human lives by
delivering life-changing therapies
to patients
Strategic Report 11
Oxford Biomedica plc | Annual report and accounts 2021
1 Saving lives
through innovation
2 Innovating viral vectors
to an industrial level
4 Expanding our innovative
process development and
manufacturing services
6 Transforming science
into life-saving healthcare
8 Market overview
11 Strategic Report
12 Group at a glance
14 Product pipeline
16 The Group’s business model
18 The Group’s stakeholders
22 Operational highlights
delivered in 2021
24 Financial highlights
delivered in 2021
26 Chair’s statement
30 2021 performance review
38 Management team
40 Delivery of 2021 Objectives
42 Objectives set for 2022
44 Financial review
54 Environmental, Social
and Governance Report
76 Non-financial statement
77 Corporate Governance
78 Principal risks, uncertainties
and risk management
86 Board of Directors
88 Corporate Governance Report
104 Directors’ Remuneration Report
130 Directors’ Report
137 Independent auditors’ report
147 Group financial statements
148 Consolidated statement
of comprehensive income
149 Statement of financial positions
150 Statements of cash flows
151 Statements of changes in equity
attributable to owners of the parent
152 Notes to the consolidated
financial statements
187 Other matters
187 Glossary
190 Advisors and contact details
12
Strategic Report
Group at a glance
— Oxford Biomedica is a leading viral vector
specialist in the fast growing cell and gene
therapy market
— Large scale manufacturer of the adenovirus-
based Oxford AstraZeneca COVID-19 vaccine
— Multiple partnerships with leading
companies and proven commercial supply
capabilities
— The Group’s CDMO revenues provide a
growing financial foundation with long term
upside from the Group’s proprietary pipeline
Oxford Biomedica plc | Annual report and accounts 2021
Who is Oxford Biomedica?
At the end of 2021, Oxford Biomedica had six UK-based facilities spread over five
sites. Oxford is one of the main centres of scientific excellence in Europe and
is less than an hour from Heathrow. Post-period end in 2022, the Group established
Oxford Biomedica Solutions LLC with Homology Medicines, which has seen
Oxford Biomedica expand into the US.
Where is Oxford Biomedica based?
815
815 employees
circa 940** employees
as of March 2021
in the UK and US
FTSE 250
FTSE250 Biotech company
19
19 partner programmes
6
Six facilities*** over
five sites in Oxford, UK
Partners and customers include
Key stats*
Oxbox, Oxford, UK (1)
The Group’s 84,000 sq. ft. manufacturing facility,
Oxbox, was constructed during 2019. The first
phase of development, totalling over 45,000 sq. ft.,
consisted of four GMP manufacturing suites,
two fill and finish suites and supporting areas
such as warehouse, cold chain facilities and QC
laboratories. The second phase of development,
including fit out of the fallow area, will provide
additional flexible manufacturing capacity for
a variety of viral vector based products, including
cell and gene therapy products, vaccines and
other advanced therapeutics at 2,000L scale.
Windrush Court, Oxford, UK (2)
The Group’s registered office is at Windrush
Court. The building has 36,000 sq. ft. of
laboratories as well as extensive office space.
The conversion of office space into GMP
grade laboratories was completed in 2021.
These laboratories
are now in use to meet the
growing demand for commercial development
work and analytics from both current and
potential future partners.
Windrush Innovation Centre, Oxford, UK (3)
Adjoining Windrush Court is the Windrush
Innovation Centre. In June 2021, the Group was
granted planning permission for redevelopment
of the Windrush Innovation Centre site. The new
dedicated building will be the key
hub of both
innovation for the platform as well as
proprietary product development
.
Yarnton, Oxford, UK (4)
The GMP manufacturing facility at Yarnton has
both FDA and MHRA approval. It has around
6,000 sq. ft. of manufacturing space, including
one clean room suite.
Harrow House and Chancery Gate,
Oxford, UK (5)
The Group’s Harrow House facility first received
MHRA approval to manufacture in 2012. It has
around 4,000 sq. ft. of manufacturing space
with two GMP clean room suites. Harrow House
and Chancery Gate are located directly opposite
Windrush Court.
Corporate Head Office, Oxford, UK (6)
The Group’s Corporate Head Office is located
on an 11,000 sq. ft. site within the Oxford Business
Park, close to Oxbox. It houses the Senior
Executive Team and various support functions.
Patriots Park, Boston, MA, US (7)
In March 2022 the Group established Oxford
Biomedica Solutions with Homology Medicines,
which specialises in AAV manufacturing from
its GMP facility near Boston, US, operating three
500L bioreactors using a serum-free
suspension process, which has also been
successfully scaled to 2,000L.
* as of 31 December 2021
** circa 125 employees in Boston, US, as of March 2022
*** Seventh site added in Boston, US, in March 2022
1
2 3
4
5
6
7
Strategic Report 13
Oxford Biomedica plc | Annual report and accounts 2021
What does Oxford Biomedica do?
1 For the purpose of financial reporting, the platform and CDMO both sit within the ’Platform’ segment for segmental reporting.
Gene Therapeutics sits for the ’Product’ segment within segmental reporting.
Gene Therapeutics
1
– Patient-centric
— Leveraging Oxford Biomedica’s
expertise to deliver innovative new
lentiviral vector-based gene therapies
— Activities leading to the development
of an OXB originated (and IP protected)
marketable drug product which the Group
benefits from through direct sales, or
licences, milestone and royalty payments
CDMO
1
– Customer-centric
— Innovative process development and
manufacturing services
— Leading provider of scale-up
solutions and commercial supply
— Expert professionals use Oxford Biomedica’s
laboratories and manufacturing suites to
apply the Group’s Platform technologies
(including the LentiVector
®
technology
platform) to develop and manufacture
commercially scalable products for partners
— Revenue generated from commercial
development fees, bioprocessing
activities and milestones
Platform
1
– Innovation-centric
— Driving industrialisation of viral vectors
— All IP, patents and know-how that the
Group uses to aid discovery, development
and manufacturing of gene therapies;
and all of the facilities, quality systems and
expertise that make it happen
— Revenue generated via licensing and
royalties on sales of products
Innovative process
development and
manufacturing
services
2021
19 Partner
Programmes
2018
9 Partner
Programmes
Process
development
Analytics
Cell and
vector
engineering
AAV and lentiviral
vector platform
technologies
— Progress in-house before seeking
partners to take products into clinical
trials
— LentiVector
®
based and supported
by Oxford Biomedica’s Platform
and CDMO
14
Strategic Report
Product pipeline
CDMO pipeline
By the end of 2021, Oxford Biomedica was working on 19 partner programmes.
The Group receives multiple revenue streams from work with partners including licence
fees, process development fees and milestones, bioprocessing revenues and royalties on
sales once a therapy has reached the market.
Product/ indication
Pre-clinical Phase I Phase I/II
Phase II Phase III
Approved
Kymriah
®
r/r ALL r/r DLBCL
2nd CAR-T
Cancer (multiple)
3rd CAR-T
Cancer (multiple)
4th CAR-T
Cancer (multiple)
5th CAR-T
Cancer (multiple)
1st CAR-T/ TCR-T
Undisclosed
2nd CAR-T/ TCR-T
Undisclosed
3rd CAR-T/ TCR-T
Undisclosed
4th CAR-T/ TCR-T
Undisclosed
OTL-201
MPS-IIIA
Other
Undisclosed
CAR-T
Cancer (multiple)
TCR-T
Undisclosed
CAR-T
Undisclosed
CFTR gene
Cystic Fibrosis
Ocular gene
Inherited retinal disease
LentiVector
®
platform
By the end of 2021 , Oxford Biomedica had 19 partner programmes and
five active proprietary programmes.
Oxford Biomedica plc | Annual report and accounts 2021
10
6th CAR-T
Cancer (multiple)
9
Read more about the Group’s CDMO pipeline on page 30.
AZD1222
SARS-CoV-2 vaccine
1 Axo Lenti PD formerly known as OXB 102. In January 2022, Sio Gene Therapies gave notice of their
intention to return the rights to AXO-Lenti-PD and cease work on their programme in Parkinson’s
Disease. The Group plans to out-license the programme in due course.
AXO-Lenti-PD
1
Parkinson’s Disease
1
8
1
1
1
1
1
1
1
1
1
5
4
4
1
1
1
6
Strategic Report 15
Gene therapeutics pipeline
At the end of 2021, Oxford Biomedica had five programmes in its gene therapeutics
pipeline. Revenues from out-licensed programmes come in the form of licence,
milestone and royalty payments.
Product/indication
Pre-clinical Phase I Phase I/II
Phase II Phase III
Approved
Oxford Biomedica partnered products
1
Oxford Biomedica proprietary unencumbered products
OXB-302
Haematological malignancies
OXB-40X
Undisclosed liver indications
OXB-40Y
Undisclosed liver indications
OXB-401
Undisclosed liver indications
AXO-Lenti-PD
1
Parkinson’s disease
Oxford Biomedica plc | Annual report and accounts 2021
Read more about the Group’s gene therapeutics pipeline
on page 34.
Pipeline indications
Oncology
Haematology
Immunology
Metabolic
Neurology
Respiratory
Central Nervous System (CNS)
Infectious Disease
Hepatology
Ophthalmology
Approved in multiple geographies (30 countries)
Approved in multiple geographies
1
2
3
4
5
6
7
8
9
10
1
8
1 Axo Lenti PD formerly known as OXB 102. In January 2022, Sio Gene Therapies gave notice of their
intention to return the rights to AXO-Lenti-PD and cease work on their programme in Parkinson’s
Disease. The Group plans to out-license the programme in due course.
5
2
9
9
9
16
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
The Group’s business model
CDMO: Contract
Development and
Manufacturing
Organisation
The CDMO provides innovative
process development and
manufacturing services. It is
customer-centric and is a
leading viral vector provider
of scale-up solutions and
commercial supply to
pharmaceutical and biotech
companies in the fast-growing
cell and gene therapy
sector. The Group’s expert
professionals use the Group’s
world-leading facilities to apply
the Platform technologies
to develop and manufacture
commercially scalable
products for partners.
The Group’s industry-leading
knowledge in multiple
therapeutic areas (gene
modified cell therapies,
oncology, liver, respiratory
diseases and CNS disorders)
means that it is able to help
solve partners scale-up and
supply needs for their cell
and gene therapy products.
The Group has applied its
world leading capabilities and
expertise in lentiviral vectors
to other vector types, and
has worked in partnership
with AstraZeneca since 2020
on the commercial supply
of the adenovirus-based
Oxford AstraZeneca
COVID-19 vaccine.
The Group continues to
apply its leading viral vector
expertise to the development
and manufacture of other
viral vector types. In April,
the Group announced a new
three-year development
and supply agreement with
Boehringer Ingelheim for
the manufacture and supply
of various types of viral
vectors to support the
development of viral vectors
and viral
vector products,
further
demonstrating
growing expertise beyond
lentiviral vectors.
In September 2021, Serum
Life Sciences Ltd, a subsidiary
company of Serum Institute
of India Pvt Ltd, invested just
over £50 million in the Group
to fund the development
of the fallow area at Oxbox,
the Group’s 84,000 sq. ft
manufacturing facility based
in Oxford, UK. The investment
is being used to develop the
fallow area into additional
flexible manufacturing
capacity for a variety of viral
vector based products,
including cell and gene
therapy products, vaccines
and other advanced
therapeutics at 2,000L scale.
Oxbox was constructed
by the Group during 2019
and the first phase of
development, totalling over
45,000 sq. ft., consisted of
four independent GMP
manufacturing suites,
two fill and finish suites and
supporting areas such
as warehouse, cold chain
facilities and QC laboratories.
During 2021, three suites
were dedicated to producing
the adenovirus-based Oxford
AstraZeneca COVID-19
vaccine at 1000L scale and
a fourth suite dedicated
to 200L lentiviral vector
manufacturing. The investment
will allow Oxford Biomedica
to continue to expand the
capacity of the Group’s world
class facilities in anticipation
of growing demand for
the Group’s world leading
capabilities in viral vector
development and manufacture.
The Group continues to
explore opportunities to apply
its world leading expertise i
n viral vector development
and manufacture to support
partners in bringing their cell
and gene therapy products
to market and save the lives
of patients worldwide.
Link to risks
— Wholly owned products
3
Process development and manufacturing provides
multiple revenue streams
Commercial stage viral vector CDMO with
over 25 years experience
Gene Therapeutics
Delivering innovative therapies
2 3 4 5
Quality
systems
Expertise Facilities
IP:
Patents &
know-how
Proprietary
platform
1
Delivering on our strategy to become a global
fully integrated viral vector platform
1
LentiVector
®
platform
Oxford Biomedica’s innovative
LentiVector
®
platform is driving
the industrialisation of lentiviral
vectors. By industrialising lentiviral
vector production and bringing
down the cost per dose through
IP innovation, it will open up
therapeutic markets currently
inaccessible to cell and gene
therapy due to the amount
(and therefore costs) of the
vector required. In addition,
the reduction in cost will help
drive adoption by payors into
indications where there are
far larger numbers of patients,
by bringing down the overall
cost per patient treated.
The Platform innovations and
arising IP are built into agreements
with partners with the aim
of having many royalty bearing
agreements which, once
the products receive regulatory
approval, will mean royalty
streams flowing through to
the Group.
The LentiVector
®
platform is at the
heart of the Group. The IP, patents
and know-how, along with the
Group’s 25 plus years of expertise
in applying its lentiviral vector
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.
Link to risks
Financial reporting
For the purposes of financial
reporting the LentiVector
®
platform (1) and CDMO partner
programmes (2) both sit within
the ’Platform’ segment
for segmental reporting. The
gene therapeutics proprietary
products (3)
which includes
internal pipeline (4) and out-
licensed products (5) sit within
the ’Product’ segment within
segmental reporting.
1 2
1 2 3 4 5
A C E
A B C E
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report 17
Value creation for our
stakeholders in 2021
19
Partner programmes
at the end of 2021
16
Apprenticeships created
in 2021
Read more about the Group’s stakeholders
on pages 18 and 19.
Over 200
New colleagues in 2021
Patients
Oxford Biomedica expanded its
manufacturing capacity at its Oxbox
facility to support the large-scale
commercial manufacture of
the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine.
The Group worked alongside
AstraZeneca and other manufacturing
organisations internationally
to enable the supply of COVID-19
vaccines on a global scale.
Employees
Oxford Biomedica’s team are
some of the most highly skilled
and focused people in the cutting
edge world of cell and gene
therapy, working in office and
laboratory facilities that are
amongst the best.
Customers
The Group continued to target new
strategic commercial relationships
in 2021, and continued to maintain
very good relationships with existing
customers.
Local communities
Oxford Biomedica has provided
high skilled
jobs to the local
community, and has established
an apprenticeship scheme in
collaboration with
Advanced
Therapies Apprenticeship
Community and multiple training
providers.
Suppliers
Oxford Biomedica is committed
to building a supply chain that
delivers commercial benefit to
the business, while meeting its
goal of sustainability.
Governing bodies
and regulators
The Group operates in a highly
regulated environment. With
a long history of achievements,
Oxford Biomedica’s technology
is recognised by regulators on
both sides of the Atlantic.
Over 100m
doses of the adenovirus-
based Oxford AstraZeneca
COVID-19 vaccine
successfully manufactured
since the partnership began
95%
of suppliers invoices paid
within 30 days
organ, an integrating lentiviral
vector can provide the potential
for a single administration
leading to life-long therapeutic
benefit. Pre-clinical studies
for the first of these, OXB-401
(in development for an
undisclosed liver indication),
were initiated in 2021.
The Group has chosen to
deprioritise OXB-203,
OXB-204 and OXB-103.
Post-period end in February
2022, Oxford Biomedica
announced that Sio Gene
Therapies had given notice that
they intend to return the global
rights for AXO-Lenti-PD and
to terminate their programme
in Parkinson’s Disease. Oxford
Biomedica does not plan
to invest in the development
of this non-core legacy
asset and plans to out-license
it again in due course to a
suitable partner with resource
capabilities and funding to
further develop this asset.
Link to risks
Gene Therapeutics
The Group leverages its
expertise to develop innovative
IP-protected cell and gene
therapeutics. The Group’s
product pipeline offers long
term upside potential, building
on its internal research expertise
and know-how developed over
the last 25 years. The product
pipeline is being progressed
through proof-of-concept and
into early clinical development,
after which third-party
funding will be sought for
full clinical development and
commercialisation.
An internal review of the
Group’s proprietary pipeline
was carried out in 2021, and
the current product portfolio
consists of five programmes.
OXB-302 (CAR-T 5T4) is
currently the Group’s most
advanced candidate and targets
haematological tumours. The
5T4 antigen has been shown to
be highly expressed on various
haematological tumours as well
as most solid tumours with
restricted expression on normal
tissues.
An exciting new area for
therapeutic intervention is the
liver. There are many diseases
that could be treated by the
efficient modification of liver
cells. As the liver is a dividing
Principal risks facing the business
The main risks are:
Risks associated with pharmaceutical product development
including product safety issues, lack of efficacy, and failure
to obtain regulatory approval.
Risks to the Group’s bioprocessing revenue from failure
to manufacture lentiviral vector to the required standard.
Exposure to one or more of the Group’s partners ceasing
to develop their products and therefore no longer requiring
the Group’s services.
D
Failure to out-license or spin-out the Group’s product
development candidates so that development stops.
E
Inability to attract and/or retain highly skilled employees.
A
The principal risks facing the Group, including how they are
managed and mitigated, are set out in detail on pages 78 to 85.
B
C
3
4
5
A C D E
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
The Group’s stakeholders
18
The Board believes that, to maximise value and secure
long-term success, the Directors must take account
of what is important to key stakeholders. This is best
achieved through proactive and effective engagement.
s172 Companies Act 2006
The adjacent table identifies the Group’s key stakeholder groups,
material issues and how the Group engages with them. Each
stakeholder group requires a tailored engagement approach to
foster effective and mutually beneficial relationships.
By understanding the Group’s stakeholders, the Board factors the
potential impact of decisions into Boardroom discussions and
considers stakeholders needs and concerns, in accordance with
s172 of the Companies Act 2006 (as shown in the case study
on pages 20 and 21). The Group works effectively with its employees,
customers and suppliers, to make a positive contribution to local
communities and achieve long-term sustainable returns for its
investors. Acting in a fair and responsible manner is a core element
of the Group’s business practice as seen in the Environmental, Social
and Governance (ESG) report on pages 54 to 75.
Key stakeholders
The Group has identified seven key stakeholders through a workshop
facilitated by an external specialist consultant and these are as follows:
1
Patients
2
Employees
3
Customers
4
Local communities
5
Suppliers
6
Regulators
7
Shareholders
Stakeholders
How the Board and the wider Group engages Material issues
identified
Addressing Material issues in 2021
Highlights
Further links
1
Patients
The Group works on the development of innovative products either
by itself or with partners to provide life-changing treatments to patients.
The Clinical Development department, the Chief Scientific Officer, the Chief
Technical Officer and the Scientific, Technology and Advisory Committee (STAC)
consults with key clinical opinion leaders, patient advocacy groups and regulatory
experts to design safe clinical trials for patients. The Chief Scientific Officer, the
Chief Technical Officer and STAC regularly update the Board on the results of such
consultations. The Group is able to scale-up its manufacturing capacity to access a
broad patient population in line with customer demand.
– Patient safety
– Well-designed clinical trials
– Progress product candidates
to the market as quickly
as possible
– Thousands of patients treated with the Group’s
lentiviral vectors
– Expanded manufacturing capacity for large-scale
commercial manufacture of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine to treat
millions of people
p. 74 Clinical trials and
ethics
2
Employees
The Group has an experienced, diverse and dedicated workforce,
which it recognises as a key asset of the business. Therefore,
it is important that the Group continues to create the right environment
to encourage and create opportunities for individuals and teams
to realise their full potential.
The Group has an open, collaborative and inclusive management structure
and engages regularly with employees. The Group does this through the regular
appraisal process, structured career conversations, management development
programmes, employee surveys, webinars and webcasts, digital sharing
platforms, company presentations, town hall meetings, site visits by Board
members, email briefings and newsletters and its wellbeing programme.
Employee engagement is frequently measured and the Group has designated
Stuart Henderson as the Board’s representative for gathering the views of the
workforce and overseeing employee engagement. Mr Henderson attends a
number of Workforce Engagement Panel meetings per year to obtain employee
feedback on key issues and to facilitate two-way communication between the
Board and employees, with the objective to improve Board decision-making.
During 2021, the Group’s Workforce Engagement Panel, comprising employee
representatives from across the business, met eight times.
– COVID-19 impact
– Opportunities for
development and
progression
– Health, safety and wellbeing
– Opportunity to share ideas
and make a difference
– Equality, Diversity and
Inclusion
– COVID-19 specific pulse surveys to understand
workforce concerns
– Workforce Engagement Panel held eight meetings,
– Stuart Henderson, the Board’s designated representative,
attended two Workforce Engagement Panel meetings
and has presented feedback to the Board arising from
employee surveys and Workforce Engagement Panel
discussions. During 2021, Mr Henderson participated
in Workforce Engagement Panel discussions relating
to future ways of working, Executive pay and the role
of the Remuneration Committee
– Diversity and Inclusion workshop held with an external
facilitator, with a strategy and action plan developed and
shared with the Group
– Continued roll-out of the Management Development
Programme
– Continued roll-out of the Rewards and Talent programme
– 233 new colleagues recruited
p. 60 People and wellbeing
p. 106 Executive annual
bonus, organisation
and staff
p. 59 Equality, Diversity and
Inclusion
p. 58 Workforce
Engagement Panel
3
Customers
The continued performance of the Group’s business would not be
possible without understanding the needs and future aspirations
of its customers. Many customers have come to the Group as their
businesses have moved into the cell and gene therapy sector, which
is testament to the Group’s expertise and leadership in the sector.
In addition, the Group’s manufacturing expertise has attracted
a broader customer base.
The Group’s Client Partner and Alliance Management department and the
Business Development team, the Chief Scientific Officer, the Chief Technical
Officer and the Chief Financial Officer regularly communicates with existing
customers/partners to discuss their goals and incorporate them into the Group’s
schedules/strategy. The Group does this through meetings, engagement events
and forums. This active engagement ultimately ensures that the Group meets
their customers’ needs and assists them in achieving their business goals.
The Chief Business Officer and Chief Commercial Officer present a regular
update on the Group’s customer/partner relationships at each Board meeting.
– Understand customers’
needs to refine expertise
– Deliver to meet customers’
business goals
– Offer expert manufacturing
capabilities to partners
– By understanding clients’ needs and meeting their
expectations, the Group was able to establish new client
relationships such as Boehringer Ingelheim, Arcellx, and
Caballetta Bio
– Progressed programmes with partners as per agreements
p. 30 Performance review
p. 106 Executive annual
bonus
4
Local communities
The Group is committed to supporting the communities in which
it operates, including local businesses, residents, schools and the
wider public.
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. Employees of the Group attend
schools and career fairs and provide apprenticeships and work experience
opportunities. The Group liaises with industry bodies and government
organisations to enhance the positive impact the Group has on the communities
and sector in which it operates. The Board is kept updated on the various
community initiatives.
– Apprenticeships
– School and careers events
– Fundraise for charity
– Volunteer for local charities/
organisations
– 16 apprenticeships offered in 2021
– Outreach programme in STEM subjects
– Collaborative Training Partnership programme with
Oxford University and University College London
launched
– £17,000 in employee fundraising for local Oxford charity
p. 57 People
p. 61 Community
p. 71 Innovation
p. 62 Charity
5
Suppliers
The Group buys many items from key suppliers and outsources some
of its activities to third-party suppliers and providers. As a result, it is
crucial that the Group develops strong working relationships with the
Group’s suppliers, so the Group can enhance the efficiency of the
business and create value.
Through effective collaboration, the Group aims to build long-term
relationships with its suppliers so that both parties benefit. The business
development team, operations team, Chief Operations Officer and
Chief Financial Officer have regular supplier meetings and business reviews
and are creating a supplier code of conduct. The team reports back
to the Board on a regular basis on any supplier concerns.
– Long term partnerships
– Collaborative approach
– Open terms of business
– Quality audits performed by the Group on its suppliers
– Due diligence performed by the Group on its suppliers
– Procurement and supplier function enhanced to interact
with suppliers more effectively
– Development of a Supplier Code of Conduct
p. 75 Slavery and code of
conduct
p. 73 Supply chain
6
Regulators
The Group operates in a highly regulated environment and
it is important that it engages with the regulators as required.
The Chief Scientific Officer, Chief Technical Officer, Chief Operations Officer
and General Counsel are in contact with government regulatory bodies on
a regular basis and attend industry forums. The Group has compliance audits
performed by both government regulatory bodies and by its customers.
The General Counsel arranges for annual Corporate Governance updates to
the Board from external advisers and provides other ad hoc regulatory updates
as appropriate.
– Engage with regulators early
– Meeting regulatory
compliance
– Compliance with the
Corporate Governance Code
– Two audits by government regulatory bodies
– Seven audits by customers
– Regulatory training for employees and Directors
– Product safety update reports (PSURs)
– Regular review of the Corporate
Governance Code
p. 80 Regulatory risk
p. 103 Governance
p. 54 ESG
7
Shareholders
The Group’s shareholders play an important role in monitoring
and safeguarding the governance of the Group.
Through the Group’s investor relations programme, which includes regular
updates to the Board on investor presentations, one-to-one meetings and
investor roadshows as well as the Group’s Annual General Meeting (AGM), the
Group ensures shareholder views are brought into the Boardroom and are
considered in its decision-making. There was a representative of one major
shareholder on the Board for the duration of 2021. The Group engages with
shareholders via the Annual report and accounts and via RNS announcements
and the corporate website.
– Corporate Governance
– Business ethics
– Strategy and business model
– Financial performance
– c.170 meetings/calls with the investor community held
virtually and in person in 2021
– Shareholders were invited to listen in to the AGM and
vote by proxy
p. 92 Shareholder
engagement
in 2021
p. 106 Remuneration –
annual bonus and LTIP
p. 103 Governance
p. 54 ESG
p. 44 Financial review
p. 147 Financials
Strategic Report 19
Oxford Biomedica plc | Annual report and accounts 2021
Stakeholders
How the Board and the wider Group engages Material issues
identified
Addressing Material issues in 2021
Highlights
Further links
1
Patients
The Group works on the development of innovative products either
by itself or with partners to provide life-changing treatments to patients.
The Clinical Development department, the Chief Scientific Officer, the Chief
Technical Officer and the Scientific, Technology and Advisory Committee (STAC)
consults with key clinical opinion leaders, patient advocacy groups and regulatory
experts to design safe clinical trials for patients. The Chief Scientific Officer, the
Chief Technical Officer and STAC regularly update the Board on the results of such
consultations. The Group is able to scale-up its manufacturing capacity to access a
broad patient population in line with customer demand.
– Patient safety
– Well-designed clinical trials
– Progress product candidates
to the market as quickly
as possible
– Thousands of patients treated with the Group’s
lentiviral vectors
– Expanded manufacturing capacity for large-scale
commercial manufacture of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine to treat
millions of people
p. 74 Clinical trials and
ethics
2
Employees
The Group has an experienced, diverse and dedicated workforce,
which it recognises as a key asset of the business. Therefore,
it is important that the Group continues to create the right environment
to encourage and create opportunities for individuals and teams
to realise their full potential.
The Group has an open, collaborative and inclusive management structure
and engages regularly with employees. The Group does this through the regular
appraisal process, structured career conversations, management development
programmes, employee surveys, webinars and webcasts, digital sharing
platforms, company presentations, town hall meetings, site visits by Board
members, email briefings and newsletters and its wellbeing programme.
Employee engagement is frequently measured and the Group has designated
Stuart Henderson as the Board’s representative for gathering the views of the
workforce and overseeing employee engagement. Mr Henderson attends a
number of Workforce Engagement Panel meetings per year to obtain employee
feedback on key issues and to facilitate two-way communication between the
Board and employees, with the objective to improve Board decision-making.
During 2021, the Group’s Workforce Engagement Panel, comprising employee
representatives from across the business, met eight times.
– COVID-19 impact
– Opportunities for
development and
progression
– Health, safety and wellbeing
– Opportunity to share ideas
and make a difference
– Equality, Diversity and
Inclusion
– COVID-19 specific pulse surveys to understand
workforce concerns
– Workforce Engagement Panel held eight meetings,
– Stuart Henderson, the Board’s designated representative,
attended two Workforce Engagement Panel meetings
and has presented feedback to the Board arising from
employee surveys and Workforce Engagement Panel
discussions. During 2021, Mr Henderson participated
in Workforce Engagement Panel discussions relating
to future ways of working, Executive pay and the role
of the Remuneration Committee
– Diversity and Inclusion workshop held with an external
facilitator, with a strategy and action plan developed and
shared with the Group
– Continued roll-out of the Management Development
Programme
– Continued roll-out of the Rewards and Talent programme
– 233 new colleagues recruited
p. 60 People and wellbeing
p. 106 Executive annual
bonus, organisation
and staff
p. 59 Equality, Diversity and
Inclusion
p. 58 Workforce
Engagement Panel
3
Customers
The continued performance of the Group’s business would not be
possible without understanding the needs and future aspirations
of its customers. Many customers have come to the Group as their
businesses have moved into the cell and gene therapy sector, which
is testament to the Group’s expertise and leadership in the sector.
In addition, the Group’s manufacturing expertise has attracted
a broader customer base.
The Group’s Client Partner and Alliance Management department and the
Business Development team, the Chief Scientific Officer, the Chief Technical
Officer and the Chief Financial Officer regularly communicates with existing
customers/partners to discuss their goals and incorporate them into the Group’s
schedules/strategy. The Group does this through meetings, engagement events
and forums. This active engagement ultimately ensures that the Group meets
their customers’ needs and assists them in achieving their business goals.
The Chief Business Officer and Chief Commercial Officer present a regular
update on the Group’s customer/partner relationships at each Board meeting.
– Understand customers’
needs to refine expertise
– Deliver to meet customers’
business goals
– Offer expert manufacturing
capabilities to partners
– By understanding clients’ needs and meeting their
expectations, the Group was able to establish new client
relationships such as Boehringer Ingelheim, Arcellx, and
Caballetta Bio
– Progressed programmes with partners as per agreements
p. 30 Performance review
p. 106 Executive annual
bonus
4
Local communities
The Group is committed to supporting the communities in which
it operates, including local businesses, residents, schools and the
wider public.
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. Employees of the Group attend
schools and career fairs and provide apprenticeships and work experience
opportunities. The Group liaises with industry bodies and government
organisations to enhance the positive impact the Group has on the communities
and sector in which it operates. The Board is kept updated on the various
community initiatives.
– Apprenticeships
– School and careers events
– Fundraise for charity
– Volunteer for local charities/
organisations
– 16 apprenticeships offered in 2021
– Outreach programme in STEM subjects
– Collaborative Training Partnership programme with
Oxford University and University College London
launched
– £17,000 in employee fundraising for local Oxford charity
p. 57 People
p. 61 Community
p. 71 Innovation
p. 62 Charity
5
Suppliers
The Group buys many items from key suppliers and outsources some
of its activities to third-party suppliers and providers. As a result, it is
crucial that the Group develops strong working relationships with the
Group’s suppliers, so the Group can enhance the efficiency of the
business and create value.
Through effective collaboration, the Group aims to build long-term
relationships with its suppliers so that both parties benefit. The business
development team, operations team, Chief Operations Officer and
Chief Financial Officer have regular supplier meetings and business reviews
and are creating a supplier code of conduct. The team reports back
to the Board on a regular basis on any supplier concerns.
– Long term partnerships
– Collaborative approach
– Open terms of business
– Quality audits performed by the Group on its suppliers
– Due diligence performed by the Group on its suppliers
– Procurement and supplier function enhanced to interact
with suppliers more effectively
– Development of a Supplier Code of Conduct
p. 75 Slavery and code of
conduct
p. 73 Supply chain
6
Regulators
The Group operates in a highly regulated environment and
it is important that it engages with the regulators as required.
The Chief Scientific Officer, Chief Technical Officer, Chief Operations Officer
and General Counsel are in contact with government regulatory bodies on
a regular basis and attend industry forums. The Group has compliance audits
performed by both government regulatory bodies and by its customers.
The General Counsel arranges for annual Corporate Governance updates to
the Board from external advisers and provides other ad hoc regulatory updates
as appropriate.
– Engage with regulators early
– Meeting regulatory
compliance
– Compliance with the
Corporate Governance Code
– Two audits by government regulatory bodies
– Seven audits by customers
– Regulatory training for employees and Directors
– Product safety update reports (PSURs)
– Regular review of the Corporate
Governance Code
p. 80 Regulatory risk
p. 103 Governance
p. 54 ESG
7
Shareholders
The Group’s shareholders play an important role in monitoring
and safeguarding the governance of the Group.
Through the Group’s investor relations programme, which includes regular
updates to the Board on investor presentations, one-to-one meetings and
investor roadshows as well as the Group’s Annual General Meeting (AGM), the
Group ensures shareholder views are brought into the Boardroom and are
considered in its decision-making. There was a representative of one major
shareholder on the Board for the duration of 2021. The Group engages with
shareholders via the Annual report and accounts and via RNS announcements
and the corporate website.
– Corporate Governance
– Business ethics
– Strategy and business model
– Financial performance
– c.170 meetings/calls with the investor community held
virtually and in person in 2021
– Shareholders were invited to listen in to the AGM and
vote by proxy
p. 92 Shareholder
engagement
in 2021
p. 106 Remuneration –
annual bonus and LTIP
p. 103 Governance
p. 54 ESG
p. 44 Financial review
p. 147 Financials
20
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
The Group’s stakeholders
Stakeholder case study
The Board charged management
to consider and report on the impact
that the proposed transaction with
Homology to establish an AAV
business in the US would have on the
stakeholders. The Board considered
and challenged management’s analysis.
Proposed transaction with
Homology Medicines
During 2021, the Company entered
discussions with NASDAQ quoted
Homology Medicines, Inc. regarding
the proposed acquisition of an
80% ownership interest in a newly
formed AAV focused manufacturing
and innovation business, Oxford
Biomedica Solutions, comprising of
Homology Medicines’ 25,000 sq. ft.
adeno-associated virus manufacturing
facilities in Boston, US, and the assets
and staff associated therewith.
Patient population
and customers
The Board considered the impact
that the transaction would have on
the wider patient population and
customers and assessed whether
it would bring benefits to these
stakeholders.
The Board concluded that the
transaction would enable the Group
to readily bring its viral manufacturing
and commercial scale expertise to the
manufacture of Homology Medicines’
AAV products and to roll out its
expanded capabilities to other AAV
customers in the future. Importantly,
the Board believed that the transaction
would enable the Group to achieve its
goal of becoming a global viral vector
leader, providing treatments to patients
and solutions to its customers. The
Board considered that the transaction
would provide additional benefits to
customers by way of an expanded
offering in AAV manufacturing and
were confident that the transaction
would not disrupt Homology Medicines’
clinical trials, nor have a negative
impact on the patient population.
Employees
Consideration was given to the effect
that the process of negotiating and
agreeing the transaction, together
with the longer-term integration
of Oxford Biomedica Solutions
into the Group, would have on the
Group’s employees. 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 timeframe, 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.
Measures were put in place to assist
the key deal team with their increased
workload, including providing
wellbeing support during the period
of increased activity. 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. Increased staffing needs
were agreed for the implementation
of the integration post-closing
of the transaction.
The transaction
will provide additional
benefits to customers
by way of an expanded
offering in AAV
manufacturing
Treatments and solutions
The Board believed that the transaction would
enable the Group to achieve its goal of
becoming a global viral vector leader, providing
treatments to patients and solutions to its
customers.
80%
Acquisition of an 80% ownership interest in
a newly formed AAV focused manufacturing
and innovation business, Oxford Biomedica
Solutions
Strategic Report 21
Oxford Biomedica plc | Annual report and accounts 2021
Local communities
The Board considered whether
the transaction would have any
positive or negative effect on local
communities. The Board concluded
that the transaction would have a
positive impact in terms of providing
future job security for Oxford
Biomedica employees in Oxford,
and for those employees of Oxford
Biomedica Solutions based in the
wider Boston area. The Board
believed that the transaction would
have a positive effect on the existing
community in the local Oxford area
and the community in the Greater
Boston area where Oxford Biomedica
Solutions would be located, bringing
more business and employment
to the local area.
Supply chain and regulators
The Board assessed the effect of the
transaction on the Group’s suppliers
and existing supply chain as well
as on its relationships and dealings
with regulators both within the
UK and, given the location of Oxford
Biomedica Solutions, US regulators.
The Board decided that the Group’s
suppliers would not be significantly
affected by the transaction and that
there would not be any additional
pressure on the supply chain. The
Board recognised the additional
regulatory workload that the forward-
looking compliance with the US
regulatory authorities post-closing
would bring to the Group. In addition,
the Board acknowledged the need
for compliance with the UK financial
regulators to ensure the transaction
received the necessary approvals from
the UK Financial Conduct Authority
and the US regulatory authorities
to obtain approval from the US
anti-trust regulators under the
Hart-Scott Rodino Act.
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 the combined Group,
that would result from the transaction,
would align with Oxford Biomedica’s
publicly stated strategy and facilitate
the Group’s goal of becoming a
global viral vector leader. In addition,
the Board believed that 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.
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.
The Group’s suppliers
will not be significantly
affected by the transaction
and there will not be any
additional pressure on
the Group’s supply chain
Oxford Biomedica Solutions, located in
the Greater Boston area, US, will bring more
business and employees to the local area.
Proprietary ’plug and play’ manufacturing
process and platform
The Board believed that the transaction
will enable the Group to achieve its goal
of becoming a global viral vector leader,
providing treatments to patients and solutions
to its customers.
22
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Operational highlights delivered in 2021
COVID-19 Vaccine and Agreement with AstraZeneca
— Continued large-scale commercial manufacture of the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine at the Group’s Oxbox facility, running three
manufacturing suites at 1000L scale to maximise production of vaccine
— Cumulative revenues from AstraZeneca by the end of 2021 were in excess of
£100 million, contributing to significant growth in Group Operating EBITDA in 2021
Novartis Partnership
— In December, Novartis and Oxford Biomedica extended their commercial supply
agreement for the manufacture of lentiviral vectors for several Novartis CAR-T products
to the end of 2028
— Global roll out of Kymriah
®
in both paediatric and young adult relapsed or refractory
B-cell acute lymphoblastic leukaemia (r/r ALL) and relapsed or refractory diffuse large
B-cell lymphoma (r/r DLBCL) indications continued to expand with more than 365
qualified treatment centres in 30 countries having coverage for at least one indication
Boehringer Ingelheim
— In April, Oxford Biomedica announced that it had entered into a new three-year
development and supply agreement with Boehringer Ingelheim for the manufacture
and supply of various types of viral vectors, demonstrating the versatility of the
Group’s platform
— In October, the Group announced that Boehringer Ingelheim had exercised its option
to license Oxford Biomedica’s lentiviral vector technology to manufacture, register
and commercialise BI 3720931 as a long-lasting therapeutic option for patients with
cystic fibrosis
Other Partnership News and Strategic Updates
— Oxford Biomedica continues to actively progress its exciting collaborations with
Juno Therapeutics Inc. (a wholly owned subsidiary of Bristol Myers Squibb Inc.)
and Beam Therapeutics
— In March, Oxford Biomedica announced that Sanofi had given notice of their intent
to terminate their collaboration and licence agreement for the process development
and manufacturing of lentiviral vectors to treat haemophilia. Oxford Biomedica
expects a negligible impact on revenue over the coming 18-month period
— In November, OXB signed a new agreement with Immatics, a leading company
developing T-cell-redirecting cancer immunotherapies
— In December, Oxford Biomedica announced a new licence and supply agreement
and a three-year clinical supply agreement with leading next-generation CAR-T
developer Arcellx, and is currently working on their lead CAR-T programme
— In May, Orchard Therapeutics announced it would be returning the rights
to its OTL-101 programme to the academic originators of that programme
— Post-period end, Oxford Biomedica announced a licence and supply agreement
with Cabaletta Bio for their DSG3-CAART programme (now in Phase I) (January 2022)
— Post-period end, Oxford Biomedica announced that Sio Gene Therapies had given
notice of their intention to return the rights for AXO-Lenti-PD; Oxford Biomedica
plans to out-license the programme in due course (February 2022)
— During 2021, the Group concluded an internal review of its proprietary pipeline and,
following this, identified a set of select assets for development
See page 30.
See page 31.
See page 31.
See page 32.
See page 32.
See page 32.
See page 33.
See page 33.
See page 34.
Strategic Report 23
Oxford Biomedica plc | Annual report and accounts 2021
Investment from Serum Life Sciences Ltd
— In September, Serum Life Sciences Ltd (a subsidiary of Serum Institute of India) made an
investment of £50 million in the Company in return for 3.9% of the share capital at the time
— The proceeds of the transaction will fund the development of the fallow area at Oxbox
into a flexible advanced manufacturing space for a variety of viral vector based products,
including cell and gene therapy products, vaccines and other advanced therapeutics
at 2,000L scale
Transaction with Homology Medicines, Inc and creation of Oxford Biomedica
Solutions (post-period end)
— In January 2022, Oxford Biomedica announced that it had agreed with Homology
Medicines to establish Oxford Biomedica Solutions, a high-performing, full scope
AAV manufacturing and innovation business near Boston, US
— The transaction completed on 10 March 2022 and is immediately accretive to the
Group’s revenue growth
— The transaction has expanded the Group’s suite of viral vector capabilities into the large
and growing AAV segment
— Oxford Biomedica, Inc acquired an 80% ownership interest in Oxford Biomedica
Solutions for $130 million (£97 million) cash consideration, with a further $50 million
(£37 million) capital injection into Oxford Biomedica Solutions to fund growth
Expansion of Capacity
— In January 2021, Oxford Biomedica hosted the Prime Minister, the Rt. Hon Boris Johnson MP,
to formally open the Oxbox manufacturing facility following MHRA approval of four
manufacturing suites
— Planning permission for redevelopment of the Windrush Innovation Centre was granted in
June 2021, and is planned to provide next generation laboratory facilities; project
anticipated to commence in second half of 2022
Corporate Governance and Organisational Progress
— Post-period end, Dr. Roch Doliveux assumed the role of Interim CEO of the Company,
simultaneous with the announcement of John Dawson’s decision to retire as CEO after
more than 13 years of service. A process to appoint a new CEO is underway
— The Company welcomed three new Board members in 2021; Professor Dame Kay Davies,
a world-renowned geneticist and Dr. Lee’s Professor of Anatomy Emeritus at Oxford
University, Dr. Michael Hayden, with decades of industry defining contributions and
achievements, and Ms Catherine Moukheibir, with extensive international experience
in finance, capital markets and life sciences
— During the period two long-standing Board members also stepped down; Martin Diggle,
Partner at Vulpes Investment Management, stepped down in February and Dr. Andrew
Heath retired from the Board at the AGM in May
— In April 2022, the Company welcomed Namrata P Patel to the Board as an Independent
Non-Executive Director. Ms Patel brings extensive international experience in manufacturing
and product supply, and ESG
See page 35.
See page 36.
See page 35.
See page 28.
24
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial highlights delivered in 2021
£142.8m
Revenue
Revenue increased by 63% from £87.7 million to £142.8 million
+87%
Bioprocessing and commercial development revenue
Bioprocessing and commercial development revenues increased
by +87% to £128.4 million (2020: £68.5 million)
£108.9m
Cash
Cash of £108.9 million (31 December 2020: £46.7 million)
£14.4m
Licences, milestone and royalties revenue
Licences, milestone and royalty revenues decreased to £14.4 million
(2020: £19.2 million)
£24.5m
Cash generated from operations
Increased by £28.3 million to £24.5 million
(2020: £3.9 million used)
£35.9m
Operating EBITDA
1
profit
Operating EBITDA profit generated of £35.9 million (2020: £7.3 million)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through
profit and loss, and Share Based Payments) is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes
from operating profit or loss all non-cash items, including the charge for share options. 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. Share options are considered non-cash as there is no cash payment associated with the annual share
option charge recognised in the statement of comprehensive income. A reconciliation to GAAP measures is provided on page 50.
£9.5m
Capital expenditure
Capital expenditure of £9.5 million (2020: £13.4 million)
£31.4m
& (£10.6m)
Segment operating profit/(loss)
The Platform segment generated an operating profit of £31.4 million in
2021 (2020: £2.0 million profit), whilst the Product segment made a loss
of £10.6 million (2020: £7.7 million loss)
£20.8m
Operating profit
Operating profit generated of £20.8 million (2020: £5.7 million loss)
£50.0m
Strategic equity placing in Sep 2021
Strategic £50.0 million equity placing by Serum Life Sciences Ltd
for the development of the Oxbox fallow area
Operating EBITDA
£m
50
40
30
20
10
0
–10
–20
2017
2016
2019
2020
2021
2018
2015
2017
2016
2019
2020
2021
2018
2015
Cash generated from operations
£m
50
40
30
20
10
0
–10
–20
Strategic Report 25
Oxford Biomedica plc | Annual report and accounts 2021
Process development is a critical
success factor driving better
efficacy, safety, affordability and
wider applicability of cell and
gene therapies
26
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Chair’s statement
Saving lives through innovative
cell and gene therapy services
Introduction
2021 was an outstanding year for Oxford Biomedica as we continued to
succeed in our mission to deliver life-changing therapies and vaccines to
patients. Our business model is built upon using science to save lives and the
innovative work we are doing is enabling our customers, the biotech and
biopharma industry, to deliver life-saving therapies to reach more patients.
We continued the large-scale manufacture of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine, successfully manufacturing
more than 100 million doses of the vaccine and demonstrating Oxford
Biomedica’s world class facilities, expertise and strength of our team. We
expanded upon other existing partnerships, including with Boehringer
Ingelheim for the manufacture and supply of various types of viral vectors,
whilst also signing two new partnerships.
In line with our aim of becoming a global viral vector leader, not only did
we invest in the expansion of our world class facilities in the UK, but we
also announced a transformational deal with Homology Medicines which
was completed in early 2022. This transaction has enabled us to broaden
our vector offering into adeno-associated virus (AAV) whilst enhancing
our process development and manufacturing capabilities and expanding
our US presence.
1 Company estimates and third-party research.
Dr. Roch Doliveux
Chair
> 100m doses
Adenovirus-based COVID-19 vaccine
Oxford Biomedica has now successfully manufactured
more than 100 million doses of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine.
$2.8bn
Vector manufacturing supply market
The global outsourced vector manufacturing supply
market, for lentivral vector, AAV and adenoviral vector,
is growing rapidly and is expected to reach c. $2.8bn
by 2026
1
.
2021 was an outstanding year for
Oxford Biomedica as we continued
to succeed in our mission to deliver
life-changing therapies and vaccines
to patients. The innovative work we
are doing will allow our customers,
the biotech and biopharma industry,
to deliver life-saving therapies
to reach more patients.
Strategic Report 27
Oxford Biomedica plc | Annual report and accounts 2021
Innovation in our platform remains integral to the future of our business.
We conducted an internal review of our additional assets in development
in 2021 and as of the end of the year we had several assets in our gene
therapeutics pipeline.
We have entered 2022 in a robust financial position, providing us with a
stable foundation for future growth. In September, we received an
investment by Serum Life Sciences Ltd of £50 million, which enables us
to further expand the capacity of our world class facilities as we continue
anticipating growing demand for our capabilities in viral vector
manufacturing.
Our Culture
Our purpose is at the heart of our culture. During 2021, our culture
became even stronger despite being tested by the COVID-19 pandemic.
The Group’s approach to employee wellbeing continued to focus on
mental wellbeing and, in particular, resilience. The pandemic has
emphasised that whilst we cannot control the external environment
around us, we can support employees and provide them with the tools to
manage their personal response to these external factors.
As a Group, employee engagement remains a key priority. We are
committed to making sure employees are regularly asked for their views
and suggestions on a variety of issues, through multiple channels and
forums. In 2021, we launched our first ever company-wide employee
engagement survey. The results were positive, and the Group’s sustainable
engagement score, a key overall engagement indicator, was above those
of other benchmarked groups. We will continue to take action to further
improve our performance in this area.
Our Strategy
The Group’s goal is focused on becoming an innovative global viral vector
leader that provides solutions to cell and gene therapy companies.
In September, having conducted a strategic review and following our
success in both lentiviral vectors and our performance above other CDMOs
with the adenovirus-based Oxford AstraZeneca COVID-19 vaccine, we
announced that we would expand the scope of our innovative process
development and manufacturing to all classes of viral vectors. The global
outsourced vector manufacturing supply market for lentiviral vector, AAV
and adenoviral vector is growing rapidly and is expected to reach c. $2.8bn
by 2026
1
, and we see significant potential to build upon our success with
lentiviral vectors and capitalise on the opportunities available.
In line with this vector agnostic strategy, our recent transaction with
Homology Medicines has enabled us to further broaden our leading viral
vector capabilities into the large and fast-growing AAV segment. We
believe that the transaction will accelerate our strategy of becoming an
innovative global viral vector leader, providing solutions to cell and gene
therapy biotech and biopharma companies for their process development
and manufacturing needs across key viral vectors.
Our focus is now on the delivery of this strategy. Process development is
one of the most critical success factors to ensure the efficacy, safety,
affordability and wider applicability of cell and gene therapies and
therefore an increased focus on this is a natural evolution for the company.
Over the long-term, our process development has the potential to help
build a proprietary pipeline of assets for which we will seek external
funding and continue to progress in-house before seeking partners to
take the products into clinical trials.
Culture and values
During 2021, our culture became even stronger
despite being tested by the COVID-19 pandemic.
Read more about our Environmental, Social and
Governance Report on pages 54 to 75.
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28
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Chair’s statement
Governance
As a FTSE 250 company, best practice corporate governance is paramount
to Oxford Biomedica and the Board plays a key role in promoting the
long-term success of the Company, ensuring that we maintain sustainable
practices. Alongside this, the Group is firmly committed to strengthening
and diversifying the Board. During 2021 we made significant strides
enhancing diversity, moving from one to three women on the Board, of
whom two chair committees that advise the Board.
In March, Professor Dame Kay Davies, a world-renowned geneticist and
Dr. Lee’s Professor of Anatomy Emeritus at Oxford University, was
appointed to the Board as an Independent Non-Executive Director. Dame
Kay Davies is the Chair of our newly formed Science and Technology
Advisory Committee, an advisory committee to the Board on science and
technology matters which reaffirms our commitment to innovation.
Details of the Science and Technology Advisory Committee are on
page 93. The Board was further bolstered in July when we appointed
Dr. Michael Hayden as a Non-Executive Director. Dr. Hayden has decades
of industry defining scientific contributions and achievements, including
developing the world’s first approved gene therapy treatment. In
December, the Board was pleased to appoint Catherine Moukheibir to the
Board as an Independent Non-Executive Director. Ms Moukheibir has
extensive international experience in finance, capital markets and life
sciences and currently serves on the board of six other companies. Post
period end, we added a fourth female Non-Executive Director, with
Namrata P Patel joining the Board in April 2022. Ms Patel brings extensive
international experience in manufacturing and product supply and
Environmental Social and Governance (ESG) matters.
In addition to chairing the Board, I assumed the role of Interim Chief
Executive Officer of the Company in January 2022, after John Dawson
announced his decision to retire after more than 13 years of service, which
was closely followed by the announcement of the transformational deal
with Homology Medicines. On behalf of the Board, I would like to express
my sincere appreciation for John Dawson’s leadership and achievements
as Chief Executive Officer during his lengthy tenure. His successful career
and pivotal role in the manufacture of the life-saving adenovirus-based
Oxford AstraZeneca COVID-19 vaccine were recognised at the end of
2021 by a much-deserved Commander of the Order of the British Empire
(CBE) award for services to UK Life Science. Under his leadership, Oxford
Biomedica has grown into a global industry leader in viral vectors and its
market cap has multiplied over 20 times and delivered multiple high-value
partnerships alongside successfully manufacturing the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine at unprecedented speed. We
have commenced a formal process to appoint a successor who will lead
the Group through its next phase of growth.
During the period two long-standing Board members also stepped down
after many years of service. Martin Diggle, a Partner at Vulpes Investment
Management stepped down as a Non-Executive Director in February after
nearly nine years of service and Dr. Andrew Heath, Non-Executive
Director, retired from the Board at the AGM in May, after more than eleven
years of service to the Group. We thank them both for their contribution.
“ We continue to build our
global footprint as a vector-
agnostic provider of life-
changing therapies to a group
of high calibre customers
globally
.”
John Dawson
John Dawson announced his decision to retire
after more than 13 years as Oxford Biomedica’s
Chief Executive Officer. Under his leadership,
Oxford Biomedica has grown into a global industry
leader in viral vectors and its market cap has multiplied
over 20 times. At the end of 2021 he was made a
Commander of the Order of the British Empire (CBE)
awarded for services to UK Life Science.
Strategic Report 29
Oxford Biomedica plc | Annual report and accounts 2021
In August 2021, Matthew Treagus, Chief Information Officer joined the
Senior Executive Team as a permanent member, having worked with
Oxford Biomedica on the development and implementation of its digital
strategy since 2019. This announcement reflects the Group’s commitment
to driving its digitalisation agenda. Dave Backer joined the Senior Executive
Team in September 2021 as Chief Commercial Officer, broadening the
Group’s business development expertise as it expands beyond lentiviral
manufacturing into other vectors, including adenovirus and AAV.
The Group remains committed to its role as a responsible business
and continues work on implementing its ESG strategy, which is focused
on five pillars: People; Community; Environment; Innovation and Supply
Chain. Throughout 2021, the Group made progress towards strengthening
its involvement in the local community adding a further 16 apprentices
across the organisation and raising £17,000 for our chosen charity SeeSaw.
We are pleased with the progress we are making towards reducing our
environmental footprint and work alongside our team of 40 environmental
representatives to identify areas where further efficiencies can be made.
The Group endeavours to gain an environmental certification as part of its
sustainability plan.
Summary
The Board expects 2022 to be a year of growth for the Group, excluding
the one-time impact of the Oxford AstraZeneca COVID-19 vaccine.
We continue to build our global footprint as a vector-agnostic provider of
life-changing therapies to a group of high calibre customers globally. In
particular, the Group is expected to increase its presence in the strategically
important US market, following the transformational transaction with
Homology Medicines, which has culminated in the establishment of
Oxford Biomedica Solutions. This transaction has provided Oxford
Biomedica with entry into the high value AAV market, which is expected
to grow at a CAGR of 25%
1
over the next five years.
Innovation in cell and gene therapy remains key to our strategy, where
our platforms and capabilities are sought after by global customers.
Underpinned by our purpose of saving lives, the innovative work Oxford
Biomedica is doing will allow our customers, the biotech and biopharma
industry to deliver the breakthroughs of cell and gene therapies which
have the amazing potential to cure patients.
Dr. Roch Doliveux
Chair
Saving lives
Our purpose at Oxford Biomedica is saving lives. We
will continue to be an innovator in cell and gene
therapy, and work with our customers to deliver
breakthrough life-changing treatments.
1 Company estimates and third-party research.
40 people
Environmental representatives
Oxford Biomedica has a team of 40 environmental
representatives working to identify areas where
efficiencies can be made.
30
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
2021 performance review
Introduction
2021 was a year of significant progress for Oxford Biomedica, as reflected
by the strong financial performance during the year, largely driven by the
Group’s significant efforts to produce COVID vaccines for AstraZeneca.
Over the course of the period, Oxford Biomedica has continued to deliver
on its strategy of becoming a global viral vector leader and further
demonstrated its world-leading expertise in cell and gene therapy. Now,
more than ever, the Group is in a strong position to enable its customers
to bring their new life-changing therapies to patients.
CDMO Pipeline
COVID-19 vaccine and agreement with AstraZeneca
Throughout the year, Oxford Biomedica continued the large-scale
commercial manufacture of the adenovirus-based Oxford AstraZeneca
COVID-19 vaccine at the Group’s Oxbox facility. Manufacturing was at full
pace in three manufacturing suites running at 1000L scale to maximise
production of the vaccine. In May 2021, the Group announced that
AstraZeneca had committed to an increase in the number of batches
required from Oxford Biomedica in the second half of 2021. As a result of
this, cumulative revenues from AstraZeneca by the end of 2021 were in
excess of £100 million, contributing to significant growth in Group’s
revenues and Operating EBITDA in the year ending 2021.
Oxford Biomedica has a three-year master supply and development
Agreement with AstraZeneca for large-scale commercial manufacture of
the adenovirus-based Oxford AstraZeneca COVID-19 vaccine, announced
in September 2020. The Group has successfully manufactured over
100 million doses of the adenovirus-based Oxford AstraZeneca COVID-19
vaccine, working alongside AstraZeneca and other manufacturing
organisations internationally to enable the supply of COVID-19 vaccines
on a global scale. The worldwide network has now been responsible for
the manufacture of over 2.9 billion doses of COVID-19 vaccines to more
than 180 countries, supporting significant unmet demand for vaccines in
high, middle and low income countries.
In June 2020, the Group announced a five-year collaboration agreement
with Vaccines Manufacturing and Innovation Centre (VMIC) to enable the
rapid manufacture of viral vector-based vaccines. As part of the agreement
VMIC provided equipment for 1000L scale production in two GMP
manufacturing suites in Oxbox to further scale up production of AZD1222.
The Group purchased this equipment to allow for longer term use, which
consisted of a capital outlay of £3.8 million paid in the first half of 2021.
The collaboration was terminated by mutual consent in April 2022
following the sale of VMIC to Catalent.
“ Manufacturing was at full
pace in three manufacturing
suites running at 1000L scale
to maximise production of
vaccine
.”
> £100m
Revenues from AstraZeneca
Cumulative revenues from AstraZeneca by
the end of 2021 were in excess of £100 million.
Strategic Report 31
Oxford Biomedica plc | Annual report and accounts 2021
Novartis
Throughout 2021, the Group continued to deliver under its partnership
with Novartis for the commercial and clinical supply of lentiviral vectors
for Kymriah
®
(tisagenlecleucel, formerly CTL019) and Novartis’ broader
CAR-T portfolio. The Novartis collaboration was extended in December
2021, building on the strategic partnership the Group has had with them
since 2014. Under the terms of the updated agreement, Oxford Biomedica
regained the rights to its LentiVector
®
platform relating to three CAR-T
targets, including CD19 targeted therapies. In addition, Novartis has been
granted additional flexibility in the ordering of GMP batches across Oxford
Biomedica’s multiple GMP facilities but will no longer have a minimum
order commitment. Oxford Biomedica continues to be Novartis’ sole
global supplier of lentiviral vector for Kymriah
®
.
Global roll out of Kymriah
®
in both paediatric and young adult relapsed or
refractory B-cell acute lymphoblastic leukaemia (r/r ALL) and relapsed or
refractory diffuse large B-cell lymphoma (r/r DLBCL) indications continued
to expand with more than 365 qualified treatment centres in 30 countries
having coverage for at least one indication. Kymriah
®
continued to see
double-digit growth showing 24% growth in the 2021 financial year, over
the 2020 financial year, reporting sales in 2021 of $587 million.
Indication expansion for Kymriah
®
continues to progress well, and in
October, Novartis filed regulatory submissions for Kymriah
®
in relapsed or
refractory follicular lymphoma (r/r FL) in the US and EU (with a positive
CHMP opinion received in March 2022).
The Group is currently working with Novartis on five partner programmes,
in addition to Kymriah
®
.
Boehringer Ingelheim
During 2021, Oxford Biomedica’s partnership with Boehringer Ingelheim
continued to progress through development. In April, Oxford Biomedica
announced that it had entered into a new three-year development and
supply agreement with Boehringer Ingelheim for the manufacture and
supply of various types of viral vectors, demonstrating the versatility of the
Group’s platform.
In October, the Group announced that Boehringer Ingelheim had
exercised its option to license Oxford Biomedica’s lentiviral vector
technology to manufacture, register and commercialise BI 3720931, a
lentiviral vector based gene therapy for the treatment of cystic fibrosis (in
an inhaled formulation). The agreement builds on the existing partnership
established between the two companies in 2018 with the UK Cystic
Fibrosis Gene Therapy Consortium and IP Group to develop BI 3720931
as a long-lasting therapeutic option for patients with cystic fibrosis.
Boehringer Ingelheim is accelerating the start of First-in-Human studies
as much as possible in close collaboration with patients, investigators
and regulators.
Under the terms of the agreement originally announced in 2018, the
Group received and recognised a £3.5 million cash option exercise fee
and is entitled to receive a further £27.5 million in development,
regulatory and sales milestones, in addition to tiered low single digit
royalties on net sales.
New three-year development
and supply agreement
In April, Oxford Biomedica announced that it had
entered into a new three-year development and supply
agreement with Boehringer Ingelheim for the
manufacture and supply of various types of viral
vectors, demonstrating the versatility of the Group’s
platform.
30 countries
Global roll out of Kymriah
®
Kymriah
®
in both relapsed or refractory B-cell acute
lymphoblastic leukaemia (r/r ALL) and relapsed or
refractory diffuse large B-cell lymphoma (r/r DLBCL)
indications continued to expand with more than 365
qualified treatment centres in 30 countries having
coverage for at least one indication.
“ 2022 marks the 10 year
anniversary of Emily Whitehead
being treated with CAR-T
therapy. Oxford Biomedica
is the manufacturer of lentiviral
vectors for Novartis’ CAR-T
therapy, Kymriah
®
.”
32
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
2021 performance review
Immatics
In November, OXB signed a new licence and supply agreement with
Immatics, a Tübingen, Germany-based clinical-stage biopharmaceutical
company active in the discovery and development of T-cell-redirecting
cancer immunotherapies. The agreement grants Immatics a non-
exclusive licence to Oxford Biomedica’s LentiVector
®
platform for its
application in select TCR-T programmes and puts in place a three-year
Clinical Supply Agreement.
Arcellx
In December, OXB signed a licence and supply agreement with Arcellx, a
clinical-stage cell therapy company developing treatments for patients
with cancer and other incurable diseases. The agreement grants Arcellx a
non-exclusive licence to Oxford Biomedica’s LentiVector
®
platform for its
application in select Arcellx CAR-T programmes, and also puts in place a
three-year clinical supply agreement, for which the Group will receive
payments related to the development and manufacturing of lentiviral
vectors for use in clinical trials. In addition, the Group will receive payments
for the manufacture and supply of lentiviral vectors for commercial use.
The Group is currently working on two programmes with Arcellx, including
Arcellx’s lead CAR-T programme CAR-T ddBCMA.
Further partner updates
The Group’s collaborations with Juno Therapeutics Inc. (a wholly owned
subsidiary of Bristol Myers Squibb Inc.) and Beam Therapeutics continue
to progress through development. The combined revenues from these
two partnerships are expected to continue to provide a meaningful
contribution to commercial development revenues.
Sanofi
In March, the Group announced that Sanofi had given notice of their
intent to terminate the 2018 collaboration and licence agreement for the
process development and manufacturing of lentiviral vectors to treat
haemophilia. The Group expects that the impact on revenue will be
negligible over the coming 18-month period, and continues to believe
that a lentivector-based approach to treat haemophilia is a very attractive
opportunity.
Orchard Therapeutics
The MPS-IIIA (OLT-201) partner programme with Orchard is currently
being evaluated in an ongoing proof-of-concept clinical trial. Clinical
data, including early clinical outcomes of cognitive function, is expected
by year end 2022.
In May, Orchard Therapeutics announced that it would be returning the
rights to their OTL-101 programme for ADA-SCID to the academic
originators of the programme, following its decision to deprioritise that
programme in a prior portfolio review.
While this news means that Oxford Biomedica will no longer be working
with Orchard on the OTL-101 programme, the Group awaits further
information on whether it can be of assistance to the academic partners
at UCLA and UCL.
“ The Group is currently
working on two programmes
with Arcellx, including
Arcellx’s lead CAR-T
programme
.”
Licence and supply agreement with Immatics
OXB signed a new licence and supply agreement with
Immatics, a Tübingen, Germany-based clinical-stage
biopharmaceutical company active in the discovery
and development of T-cell-redirecting cancer
immunotherapies.
Strategic Report 33
Oxford Biomedica plc | Annual report and accounts 2021
Cabaletta Bio
Post period end in January 2022, Oxford Biomedica announced a licence
and supply agreement with Philadelphia, US-based Cabaletta Bio for their
lead product candidate, DSG3-CAART. DSG3-CAART is being evaluated
in the DesCAARTes
™
Phase I clinical trial as a potential treatment for
patients with Mucosal Pemphigus Vulgaris (mPV), and is designed to
selectively target and kill the B cells that produce DSG3 antibodies while
preserving the healthy B cells critical to immune function. No DLTs were
observed in the first four cohorts of the trial with the 28-day safety data
for the fifth cohort expected to be announced in mid-2022.
Sio Gene Therapies (formerly Axovant Gene Therapies)
Post-period end in February 2022, Oxford Biomedica announced that Sio
Gene Therapies had given notice that they intend to return the global
rights for AXO-Lenti-PD which they had originally out-licensed in 2018
and to terminate their programme in Parkinson’s Disease. The Group
expects that the impact on revenue will be negligible through at least
2022 and 2023. Oxford Biomedica plans to out-license the programme in
due course to a suitable partner with resource capabilities and funding to
further develop this asset.
Innovation and platform development
Innovation and the development of the platform are core to Oxford
Biomedica’s goal of industrialising viral vector manufacturing not just with
lentiviral vectors but across all viral vector classes. By industrialising viral
vector production thereby reducing the cost and improving quality
attributes through innovation, the Group will broaden the therapeutic
indications that are amenable to treatment with cell and gene therapy. It
is expected that the reduction in cost will help drive adoption by payors
into indications where there are far larger numbers of patients, by bringing
down the overall cost per patient treated.
Multiple elements of IP and innovation are relevant across all viral vector
classes. Development of technologies such as TRiPSystem
™
, SecNuc
™
,
LentiStable
™
and U1 and U2, along with the corresponding IP, continue to
move ahead. A number of the Group’s platform technologies developed for
lentiviral vectors such as TRiPSystem
™
, SecNuc
™
and perfusion technology,
can also be used commercially for AAV. The Group also continues to utilise
automation and the use of robotics, artificial intelligence and machine
learning to further drive productivity improvements.
Process C, which incorporates enhancers (such as U1, U2) and perfusion
coupled with improvements in downstream processing into the
manufacturing process is now proven at 200L scale in GMP, with general
roll out expected in the first half of 2022, thereby enabling process D
utilising LentiStable
™
technology.
The Group has additionally started development work in the area of in
vivo CAR-T, which the Group believes would offer greater patient access
and superior efficacy to existing treatment options.
“
Innovation and the development
of the platform are core
to Oxford Biomedica’s goal
of industrialising viral vector
manufacturing not just with
lentiviral vectors but across all
viral vector classes
.”
Cabaletta Bio licence and supply agreement
OXB signed a licence and supply agreement with
Philadelphia, US-based Cabaletta Bio for their lead
product candidate.
34
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
2021 performance review
R&D collaborations
During the year, the Group continued to progress R&D to develop next
generation manufacturing processes for viral vectors. In October 2021,
the Group entered into a research collaboration with Circularis
Biotechnologies to identify novel tissue specific promoters for
incorporation into the Group’s in vivo lentiviral gene therapy products.
Post period end, in January 2022, the Group announced a new R&D
partnership with Virica Biotech, a leading developer of solutions for scaling
of viral medicines, to improve the yield and production efficiency of the
Group’s lentiviral vector manufacturing platform using Virica’s Viral
Sensitizers (VSEs
™
).
OXB also entered into a research collaboration with Isolere Bio, a
bioprocessing company that provides a platform technology for tackling
downstream inefficiencies in the manufacturing of biologics. By bringing
together both companies’ technologies, the research collaboration aims
to develop an easily scalable purification process for lentiviral vectors with
significantly improved yields and vector quality.
Finally, in March 2022, the Group announced a new agreement with
BiologIC Technologies, a biocomputer company, to collaborate on a
novel biocomputer system for viral vector development.
These R&D collaborations with companies developing innovative
solutions for viral vector manufacturing, represent the Group’s ongoing
commitment to continuously innovate and improve Oxford Biomedica’s
LentiVector
®
platform, with the goal of including these technologies in
the Group’s gene therapy products and making these proprietary
technologies available to its customers in the future.
Gene therapeutics pipeline
The Group concluded an internal review of its proprietary products
pipeline in 2021, and following this, has a select set of products being
developed for which external funding will be sought. This includes the
gene therapy programme for Parkinson’s disease, AXO-Lenti-PD, which is
available for out-licensing.
The most advanced programme, OXB-302, which targets 5T4, is currently
being investigated in Acute Myeloid Leukaemia (AML) with preparation for
clinical trial initiation ongoing. 5T4 is an oncofoetal antigen specifically
expressed on the cell surface of most cancers including AML. The
restricted expression profile of 5T4 on normal tissues combined with its
broad expression on tumour cells (including cancer stem cells) makes
5T4 an attractive target.
OXB-302 is a second-generation CAR-T product generated via an
optimised lentiviral vector, manufactured utilising the latest generation of
vector processing, and a T-cell-transduction protocol and expression
process that generates more potent cells than more conventional CAR-T
production processes. OXB-302 has demonstrated potent in vitro and in
vivo activity against a panel of human solid and liquid tumour cell lines
and the Group believes it has high commercial potential for the treatment
of multiple liquid and solid tumours.
Work has also been initiated on assets for liver indications including
OXB-401, where preclinical work began in 2021. The potential use of
lentiviral vectors in liver gene therapy is recognised as highly promising
due to the potential for one-off therapies giving long term benefits.
The Group has chosen to deprioritise OXB-203, OXB-204 and OXB-103
at this time.
“ The Group’s research
collaboration with Isolere
Bio aims to develop an easily
scalable purification process
for lentiviral vectors with
significantly improved yields
and vector quality
.”
Acute Myeloid Leukaemia clinical trials
The Group’s most advanced programme, OXB-302,
which targets 5T4, is currently being investigated in
Acute Myeloid Leukaemia with clinical trials expected
to be initiated in 2023.
Strategic Report 35
Oxford Biomedica plc | Annual report and accounts 2021
Facilities and capacity expansion
In January 2021, the Group was delighted to host the Prime Minister, the
Rt. Hon Boris Johnson MP, to formally open the Oxbox manufacturing
facility following MHRA approval of four manufacturing suites during
2020, three of which were dedicated to running at 1000L scale for
adenovirus-based Oxford AstraZeneca COVID-19 vaccine production
with the fourth suite dedicated to 200L lentiviral vector manufacturing.
The first fill / finish suite has been qualified and regulatory submission to
the MHRA has been made, with approval and start of commercial use
expected in the second half of 2022.
Design work for the next phase of Oxbox development, including fit out
of the fallow area, is progressing. This will provide additional flexible
manufacturing capacity for a variety of viral vector based products,
including cell and gene therapy products, vaccines and other advanced
therapeutics at 2,000L scale, and will be funded by the proceeds of the
£50 million equity investment received from Serum Life Sciences Ltd.
In June 2021, the Group was granted planning permission for
redevelopment of the Windrush Innovation Centre (WIC) site. The new
WIC building will provide next generation laboratory facilities, with this
project anticipated to commence in the second half of 2022.
Conversion of office space into GMP grade laboratories at Windrush
Court was completed in the last quarter of 2021 and the laboratories are
now in place to meet expected near-term demand in commercial
development and analytics.
Investment from Serum Life Sciences Ltd
In September, Oxford Biomedica announced that Serum Life Sciences Ltd
(a subsidiary of Serum Institute of India) agreed to invest just over
£50 million in the Group in return for new ordinary shares representing
3.9% of the share capital at the time.
The proceeds of the investment by Serum Life Sciences are being used to
fund the development of the fallow area at Oxbox, the Group’s 84,000 sq.
ft manufacturing facility based in Oxford, UK, and will allow Oxford
Biomedica to continue to expand the capacity of the Group’s world class
facilities in anticipation of growing demand for the Group’s capabilities.
Oxford Biomedica has recently signed a Memorandum of Understanding
with Serum Life Sciences Ltd, granting them the right of first refusal to the
exclusive use of one of two 2,000L bioreactor facilities that Oxford
Biomedica is building in the expansion of its Oxbox manufacturing facility.
Exclusive use will require Serum Life Sciences to commit to a minimum
contract value per year for up to ten years.
45,000 sq. ft.
Oxbox facility fitout
Oxbox was constructed during 2019. The first phase
of development, totalling over 45,000 sq. ft., consisted
of four GMP manufacturing suites, two fill and finish
suites and supporting areas.
36
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
2021 performance review
Transaction with Homology Medicines, Inc and creation of Oxford
Biomedica Solutions
In January 2022, Oxford Biomedica announced that it had entered into an
agreement with Homology Medicines to establish Oxford Biomedica
Solutions, a high-performing, full scope AAV manufacturing and innovation
business in Boston, US. The transaction completed on 10th March 2022
and is immediately accretive to the Group’s revenue growth.
The newly formed company will offer a scalable, high quality manufacturing
platform to global customers, including Homology Medicines, through a
multi-year supply agreement as a preferred customer with minimum
contracted revenue of approximately $25 million ($19 million) from
Homology Medicines for the first twelve months.
Under the agreement, Oxford Biomedica US, Inc. acquired an 80%
ownership interest in the newly formed AAV focused manufacturing
and innovation business for a $130 million (£97 million) cash
consideration, and a $50 million (£37 million) capital injection into
Oxford Biomedica Solutions to fund growth. Oxford Biomedica
Solutions now includes approximately 125 technical operation
employees based at a state of the art AAV manufacturing facility with
approximately 25,000 sq. ft of GMP space.
Tim Kelly, former Chief Operating Officer of Homology Medicines joined
Oxford Biomedica Solutions as Chief Executive Officer and Chair of its
Board of Directors.
Upon completion, the transaction immediately expanded Oxford
Biomedica’s suite of viral vector capabilities into the large and growing
AAV segment, as well as giving Oxford Biomedica a US presence within
close proximity to current and potential biotech and pharma customers.
Outlook
The Group targets growth in manufacturing and commercial development
revenues from both new and existing lentiviral vector customers as well
as new AAV revenues from US-based Oxford Biomedica Solutions.
Currently, total revenues in 2022 are expected to be lower than in 2021
(but significantly ahead of 2020) due to a pause in vaccine manufacturing
activity while discussions with AstraZeneca continue on a potential
extension of the supply agreement.
Oxford Biomedica Solutions will contribute minimum revenues of
c.US$25 million for the first twelve months (post deal completion in March
2022) from its multi-year supply agreement with Homology Medicines.
With Oxford Biomedica Solutions full scope AAV manufacturing and
innovation business currently operating at approximately one third of its
overall capacity, the Group is committed to securing new AAV customer
partnerships within the first 12 months of operation.
The Group expects to be loss-making on an Operating EBITDA level in
2022, after consolidation of Oxford Biomedica Solutions. This is driven by
one-off costs for integrating the new business, as well as R&D costs, which
are targeted to be higher than in 2021 as the Group invests in innovation.
Capital expenditure is targeted to be higher than 2021. However the
Group intends to implement a cautious strategy when planning significant
new projects.
The Group’s growing customer base and new base in the US puts it in an
ideal position to maximise growth and achieve its goal of becoming an
innovative global viral vector leader.
“ Establishing Oxford
Biomedica Solutions
has expanded Oxford
Biomedica’s suite of viral
vector capabilities into the
largest and fastest growing
AAV segment, as well as
giving Oxford Biomedica
a US presence
.”
Revenue growth
The Group is targeting growth in manufacturing and
commercial development revenues from both new
and existing lentiviral vector customers as well as new
AAV revenues from US-based Oxford Biomedica
Solutions.
Strategic Report 37
Oxford Biomedica plc | Annual report and accounts 2021
Our growing customer base,
and our new capabilities and
facility in the US make us ideally
placed for continued success
38
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Management team
Roch Doliveux
Chair and Interim
Chief Executive
Officer
Dr. Roch Doliveux was
appointed to
the
Board as
Non-
Executive Chair in June
2020. Dr. Doliveux also
became Interim
Chief
Executive Officer in
January 2022.
He is
currently Chair of
the
Board of Directors
at Pierre Fabre S.A.
Dr. Doliveux was
previously the Chief
Executive Officer of
UCB S.A. for ten years
during which time
he transformed the
company from a
diversified chemical
group into a global
biopharmaceutical
leader. 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.
John Dawson, CBE
Chief Executive
Officer (during 2021)
John Dawson joined
the Board as a Non-
Executive Director
in August 2008 and
was appointed Chief
Executive Officer in
October 2008 until
January 2022, when the
Company announced
his intention to retire.
Previously,
Mr Dawson held
senior management
positions in the
European operations
of Cephalon Inc.,
including Chief
Financial Officer and
Head of Business
Development Europe.
While at Cephalon
Mr Dawson led many
deals building the
European business to
over 1,000 people,
and to a turnover of
several hundred million
US dollars. In 2005,
Mr Dawson led the
US$360 million
acquisition of Zeneus
by Cephalon. Prior to
his time at Cephalon,
Mr Dawson was
Director of Finance
and Administration of
Serono Laboratories
(UK) Limited.
Stuart Paynter
Chief Financial
Officer
Stuart Paynter joined
the Board in August
2017 as Chief Financial
Officer. Mr Paynter
has over 17 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 and 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.
Dave Backer
Chief Commercial
Officer
Dave Backer joined OXB
in September 2021
as Chief Commercial
Officer, overseeing
Oxford Biomedica’s
Contract Development
and Manufacturing
Organisation (CDMO)
as it expands beyond
lentiviral manufacturing
into other vectors,
including adeno and
AAV. Mr Backer has
been involved in cell
and gene therapy for
almost 25 years, starting
as owner and founder
of Molecular Medicine
BioServices, a CDMO
that started in the late
1990’s focusing on
GMP manufacturing of
viral vectors. Mr Backer
broadened out into
cell therapy and
gene editing as Head
of Commercial
Development within
MilliporeSigma’s
’Promise Venture’ that
focused on cell and
gene therapy products
and services. Most
recently, Mr Backer was
SVP of Commercial
Development at
ElevateBio, a technology
company that
centralises Chemistry,
Manufacturing and
Control related
functions for partially
or wholly owned
companies, as well
as more traditional
Contract Manufacturing
Organisation services
for select strategic
partners.
Kyriacos
Mitrophanous
Chief Scientific
Officer
Dr. Mitrophanous
joined OXB in 1997.
He has over 20 years
of lentiviral vector
experience covering
a range of technical
disciplines, including
the development
of cell and gene
therapies, delivery
platform technologies,
bioprocessing
and analytics.
Dr. Mitrophanous is
a recognised world-
class expert in the
field, a named inventor
on numerous lentiviral
vector patents and
an author of a number
of key papers. In his
current role, he is
responsible for the
development of
Oxford Biomedica’s
new product
candidates and
LentiVector
®
platform.
He holds a PhD in
Molecular Biology
from University
College London and
has conducted
post-doctoral research
at the University of
Oxford.
James Miskin
Chief Technical
Officer
Dr. Miskin joined OXB
in 2000. He has
more than 18 years’
experience in cell and
gene therapy, 14 of
which have been in
the GxP (good practice)
environment. In his
current role, Dr. Miskin
has overall responsibility
for Oxford Biomedica’s
Quality systems,
analytical testing and
lentiviral based
bioprocessing
development, as well
as client programmes
and alliance
management. He is
also a named inventor
on several patents in
the field. Dr. Miskin
holds a Bachelor of
Science degree and
a PhD in Molecular
Biology from the
University of Leeds
and subsequently
conducted post-
doctoral research at
The Pirbright Institute
for a number of years.
He is a member of
the UK BioIndustry
Association
Manufacturing
Advisory Committee
and is the Advanced
Therapies workstream
lead for The Medicines
Manufacturing
Industry Partnership
(MMIP).
Full biographies for the Board of Directors
can be found on pages 86 and 87.
Strategic Report 39
Oxford Biomedica plc | Annual report and accounts 2021
Jason Slingsby
Chief Business and
Corporate
Development Officer
Dr. Slingsby joined OXB
in 2015 as Head of
Business Development
and was promoted to
Chief Business Officer
in May 2019 and Chief
Business and Corporate
Development Officer
in September 2021. Dr.
Slingsby has 20 years’
experience in the
biotechnology industry
in biologics, vaccines
and gene therapy. He
has worked in
international business
development roles
at Sosei Co., Ltd. and
Intercell AG, and was
co-founder and CEO
of ProtAffin AG, a
venture capital backed
company in Austria and
the UK. Dr. Slingsby
started his career as a
post-doctoral scientist
at Oxford Biomedica
and first worked at the
company between
1997–2000. He was
awarded a
1st class BA (Hons) in
Biochemistry from
Magdalen College,
Oxford University and
also completed a PhD
in complex disease
genetics from Imperial
College London.
Dr. Slingsby was also
awarded an MBA with
distinction from the
London Business
School in 2002.
Nick Page
Chief Operations
Officer
Nick Page joined OXB
in April 2019. Prior to
joining, Mr Page held a
number of senior
operational leadership
positions in the
pharmaceutical
industry, most recently
as Platform Head of
Anti-infectives within
Novartis. His 40+ years
of industry experience
include API, Solid oral
dose, Sterile, and
Radiopharmaceutical
manufacturing in
various organisations
encompassing
innovative, generic and
contract
manufacturing. During
his career, Mr Page
spent several years
working in China
and India as well as
in global roles. He
originally qualified as a
Chartered Chemist
and also has an
MBA from The Open
University.
Tim Kelly
Chief Executive
Officer of Oxford
Biomedica Solutions
Tim Kelly joined as
Chief Executive Officer
of Oxford Biomedica
Solutions and Chair of
its Board of Directors
in March 2022. Mr Kelly
has over 20 years’
experience in global
product development
and manufacturing
which he gained whilst
working for a range
of pharmaceutical
companies in Europe
and the US. Prior
to joining Oxford
Biomedica Solutions,
Mr Kelly was Chief
Operating Officer at
Homology Medicines,
Inc. Mr Kelly has
an MBA from Troy
University as well as a
BSc in Engineering
Mechanics from the
United States Air Force
Academy.
Natalie Walter
General Counsel
Natalie Walter joined
OXB in May 2019 as
General Counsel having
worked as a consultant
for the Company since
May 2018. She has over
20 years’ experience as
a corporate lawyer
advising life sciences
companies, including
Oxford Biomedica, on
a range of business
and transactional issues,
equity capital markets
transactions, mergers
and acquisitions and
corporate governance.
Ms Walter has worked
for a number of UK and
US law firms, as well
as working at Lehman
Brothers as a Director
and Legal Counsel
for
the Equity Capital
Markets division. She
was most recently a
Partner with Covington
& Burling LLP. Ms
Walter also sits on the
Board of C4X Discovery
Holdings plc as a
Non-Executive Director.
Matthew Treagus
Chief Information
Officer
Matthew Treagus
joined OXB 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
OXB. He has also served
as Interim CIO at Save
the Children UK.
Helen
Stephenson-Ellis
Chief People Officer
Helen Stephenson-Ellis
served as a permanent
member of the Senior
Executive Team from
July 2018. She stepped
down from her role in
April 2022.
Lisa James
Chief People Officer
Lisa James joined the
Senior Executive Team
in April 2022, having
worked with OXB since
2016. She joined
Oxford Biomedica as
HR Manager and
during her six-year
tenure has been
promoted to Head of
HR Delivery and Head
of HR Business
Partnering and
Development.
Ravi Rao
Chief Medical Officer
Dr. Rao joined the
Senior Executive Team
in April 2022. He brings
long standing bio
pharmaceutical and
translation experience
from early stage
through to launch and
life cycle across
multiple therapeutic
areas with different
treatment modalities.
40
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Delivery of 2021 Objectives
CDMO
To service the Group’s customers to achieve agreed milestones/decision gates, along with improvements
in net promoter score (customer satisfaction) from baseline.
C
To launch a client process that reduces the on-boarding time from project initiation to batch start.
A
To sign agreements with new partners for CDMO projects (late-stage and early-stage projects).
A
To initiate six additional new viral vector projects (to include new and current partners).
A
To target the initiation of one project for commercial manufacture.
A
To gain approval for one fill and finish suite at Oxbox by the third quarter of 2021.
C
2021 objectives
1
Products
To establish one new academic relationship focused on product identification.
A
To engage with a company on product discussions.
A
To advance an internal product to a meaningful milestone.
C
3
A
B
C
Met
Partly met
Not met
Organisational development
To deliver on digitalisation projects planned for 2021 to ensure that the Group remains effective for its size.
A
To focus on stakeholder engagement in various ways, including through the Workforce Engagement Panel to deliver
on year one of the employee engagement strategy.
A
To ensure the Group’s ESG goals are set for 2021 and are met effectively.
B
To implement the Group’s learning and development strategy.
A
To develop a strategic workforce plan.
A
5
2
Platform
To achieve four new inventions.
A
To apply a Group invention into a GMP setting.
A
To in-license technology for the platform.
C
To use analytical automation in a GMP or R&D setting.
A
To establish a partnership for the in vivo CAR-T programme.
A
Financial objectives
To achieve revenue £125.4m.
A
To achieve Operating EBITDA £8.9m.
A
To achieve cash flow targets as set by the budget approved by the Board.
A
4
In addition to these corporate objectives, the Group sets annual ESG objectives,
which involve every part of the business. Detail of the ESG objectives for 2021 is set
out in the five pillars for responsible business, on pages 54 to 73.
Strategic Report 41
Oxford Biomedica plc | Annual report and accounts 2021
Most of the CDMO objectives were fully met, while two were not met.
The Group did service the customers to achieve agreed milestones/decision gates, however, the Group did not see an improvement
in the net promoter score (customer satisfaction) from baseline, so this objective was not met. The Group did launch a process that
reduced the onboarding time from project initiation to batch start, so this objective was met. The objective of signing new partners
for CDMO projects was met, with projects for Boehringer Ingelheim and Arcellx announced in 2021. The objective of initiating six
new additional viral vector projects (undisclosed for confidentiality reasons) that included new and current partners was successfully
met. The Group met the objective of initiation of one project for commercial manufacture, as the Group commercially
manufactured the Oxford AstraZeneca COVID-19 vaccine. The Fill & Finish A suite at Oxbox was not MHRA licensed by third quarter
2021, therefore this objective was not met.
2021 performance against priorities
1
Two of the product objectives were fully met, while one was not met.
One new academic relationship focused on product identification was successfully established with a UK university (not disclosed)
and two projects had been agreed at the end of 2021. This objective was fully met. The Group successfully engaged with several
companies (undisclosed) for clinical products and, therefore, this objective was fully met. The objective to advance an internal product
candidate to a meaningful milestone was not achieved.
3
Majority of the objectives were met in full, with one partly met.
The digitalisation projects including the Laboratory Information Management System (LIMS), the Human Resources (HR), system
and iManage were delivered during 2021. This objective was met in full. Stakeholder engagement under section 172 such
as the Workforce Engagement Panel (WEP) being embedded into the business and adding significant value was achieved. The
employment engagement strategy was rolled out to include Pulse surveys, Team Talk and a full employment engagement survey
completed in November 2021. This objective was met in full. The Group’s ESG objectives for the five pillars (People; Community;
Environmental; Innovation and Supply chain: see ESG report on pages 54 to 76) were effectively set in 2021 and targets were mainly
met. Consequently, this objective was partly met. The learning and development strategy for the Group was successfully developed
and delivered and as a result this objective was met in full. The Group managed to develop a strategic workforce plan for the HR
team as a pilot and successfully planned a strategic workforce plan and organisation design to reflect the strategy review in 2021,
therefore this objective was met in full.
5
Most of the platform objectives were fully met, while one was not met.
The Group successfully filed six new patent applications, with two more planned to be filed. This objective was successfully met.
The application and/exemplification of a Group invention in a GMP setting was met, with the Process C: U1 and perfusion
USP exemplified in the second
half of 2021. The objective to bring in new technology for the platform was not met in 2021.
R&D
automation was exemplified as a service across PR&D/R&D in the second half of
2021 and initiation of GMP automation for
integration assay towards the end of 2021, resulted in this objective being successfully met. Finally, the objective of establishing
a partnership
to enable in vivo CAR-T platform development was met with agreements signed with
an undisclosed
biopharmaceutical company and an undisclosed academic partner.
2
The financial objectives were fully met.
The Group exceeded the revenue targets of £125.4m, with £142.8m in revenue achieved.
The Group exceeded the Operating EBITDA target set in the budget of £8.9m, with £35.9m operating EBITDA achieved. The Group
completed a £50 million capital raise in September 2021, achieving cash flow in accordance with expectations in the budget.
4
42
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Objectives set for 2022
Align the Group’s two locations for delivery to customer
To deliver to Homology Medicines as agreed and make them a satisfied customer.
To focus on change and best practice in Oxford Biomedica Solutions for service of AAV development and GMP manufacture.
To integrate back-office staff and systems to reduce demands for overhead costs.
To preserve the culture and capabilities of Oxford Biomedica Solutions.
For Oxford Biomedica Solutions to operate independently of Homology Medicines and exit transitional services in a timely manner.
Objectives set for 2022
Achieve the 2022 budget
To achieve revenue, EBITDA and cash flow targets as set by the budget approved by the Board.
To achieve a target goal of sales for new projects recognised in 2022.
To sign two contracts for AAV development programmes and GMP manufacturing.
To enter 2023 with 60% of forecast revenues booked.
To maintain on budget delivery of planned 2022-23 strategic projects such as Windrush Innovation Centre (WIC), the Oxbox fallow
area and digitisation projects.
Deliver on customer commitments
To service the Group’s customers to achieve agreed milestones and decision gates as agreed.
To maintain the Net Promoter Score (NPS) score of >40.
To ensure the fill and finish A suite at Oxbox is in use by customers in 2022.
Innovate the Group’s AAV and lentiviral platforms
To achieve five new inventions.
To launch Process C to the market.
To exemplify a Group invention in a GMP setting.
To demonstrate Process D (stable cell lines) in the platform manufacturing process.
To demonstrate proof of principle for in vivo CAR-T products.
To launch the Collaborative Training Partnerships (CTP) programme in the fourth quarter of 2022.
1
3
2
4
In addition to achieving the Group’s ESG priorities, the Group has also set ESG objectives
for 2022, which involve every part of the business. Detail of the ESG objectives for 2022 is
set out in the five pillars for responsible business, on pages 54 to 73.
Strategic Report 43
Oxford Biomedica plc | Annual report and accounts 2021
Objectives set for 2022
Chart the Group’s path to products
To establish a strategy with delivery milestones for the products at the Group.
To complete the efficacy evaluation of OXB-302.
To initiate pre-clinical development for one indication.
Strengthen the Group’s leadership and change capability
To increase employee retention and satisfaction as measured through employee survey.
To demonstrate an engrained approach to Equality, Diversity and Inclusion through confirmation and communication of the
three-year plan.
To strengthen governance of change initiatives and CAPEX investments.
To create space and capabilities for strategic thinking for the senior leadership team.
To deliver on the year two of the three-year Learning and Development plan.
Achieve the Group’s ESG priorities
For environmental impact: to establish a roadmap to net zero CO
2
by 2040. Reduce packaging waste and volume of hazardous waste.
Meet Task Force on Climate-related financial Disclosures metric targets.
For employee engagement: build on Workforce Engagement Panel success to bring employee views into change initiatives and
business decision making.
For governance: holistic approach to risk management to improve key decisions. Ensure environmental, quality and cyber security is
thought about in all business activity.
5
7
6
44
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial review
2015
2015
2016
2016
2017
2017
2018
2018
2019
2019
2020
2020
2021
2021
Year-end headcount
900
800
700
600
500
400
300
200
100
0
Revenue
£m
180
160
140
120
100
80
60
40
20
0
Licence, milestones and grants
(light tints)
Bioprocessing and process
development (dark tints)
growth over 2020 +21.1%
Stuart Paynter
Chief Financial Officer
In 2021, the Group performed
well from an operational perspective,
continuously manufacturing the
adenovirus-based Oxford AstraZeneca
COVID-19 vaccine in three of its
manufacturing suites across the whole
year in order to meet its customer
obligations. As a result, batch volumes
were up 210% from the prior year
and resulted in exceptional revenue
growth of 63% in 2021.
Strategic Report 45
Oxford Biomedica plc | Annual report and accounts 2021
Exceptional results
In 2021, the Group performed well from an operational perspective, manufacturing the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine in three of its manufacturing suites across the whole year (excluding maintenance
periods) in order to meet its customer obligations. As a result, batch volumes were up 210% from the prior year, and
this resulted in exceptional revenue growth of 63% in 2021. Bioprocessing and commercial development activities
continued as normal, albeit with some continued adjustments in terms of social distancing, mask wearing and
employees working from home where possible due to the COVID-19 pandemic.
2021 was a very successful year for the Group in terms of revenue generation. In terms of customer agreements, OXB
signed new licence and supply agreements with Arcellx, Cabaletta Bio and Immatics. These partnerships with leaders
in the CAR-T, cancer and autoimmune disease fields builds on the longstanding partnerships with Novartis and Juno
Therapeutics/Bristol Myers Squibb, as well as the more recently announced partnership with Beam Therapeutics.
In April 2021, OXB also signed a new three-year development and supply agreement with Boehringer Ingelheim for the
manufacture and supply of various types of viral vectors to support Boehringer Ingelheim’s ongoing development
programmes, including potential future programmes.
In December 2021, OXB extended the terms of its commercial supply agreement with Novartis to the end of 2028. The
Group also regained the exclusive rights to its LentiVector
®
platform with regards to three CAR-T targets, including
CD19 targeted therapies. This now allows the Group to work with pharmaceutical and biotech partners other than
Novartis in these areas. In exchange for the return of these exclusive rights, Novartis has been granted additional
flexibility in the ordering of GMP batches and will no longer have a minimum order commitment. OXB continues to
work on multiple CAR-T programs with Novartis, including Kymriah
®
, from which the Group earns manufacturing
revenues, process development fees and royalties on net sales.
In March 2021, Sanofi gave notice of their intention to terminate the collaboration and licence agreement originally
signed in 2018 for the process development and manufacturing of lentiviral vectors to treat haemophilia. The
collaboration ended amicably and the Group remains open to working with Sanofi again in the future should an
opportunity arise.
In January 2022, the Group was informed that Sio Gene Therapies intends to return the global rights for AXO-Lenti-PD,
and that it would cease work on this gene therapy programme in Parkinson’s Disease due to a constraint on its resource
requirements. All rights will be returned to Oxford Biomedica at no cost to the Group. The Group plans to out-license the
programme again in due course to a suitable partner with resource capabilities and funding to further develop this asset.
In the first half of 2022, OXB’s 18-month supply agreement (under a three-year master supply and development
agreement) for manufacture of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine will end. Discussions
are ongoing with AstraZeneca on potential extension of this supply agreement while AstraZeneca completes its supply
chain planning. The Group announced the existing three-year master supply and development agreement with
AstraZeneca in September 2020 and since then has successfully manufactured over 100 million doses of the
adenovirus-based Oxford AstraZeneca COVID-19 vaccine. We remain committed to resuming vaccine manufacture
and supporting AstraZeneca to enable the supply of COVID-19 vaccines on a global scale, and will update the market
when further information is available.
In March 2022, the Group acquired an 80% ownership interest in a newly formed AAV focused manufacturing and
innovation business, Oxford Biomedica Solutions, for $180 million (£134 million) , with Homology Medicines Inc. as a
20% owner. As part of the financing arrangements, the Group raised gross proceeds of £80 million through a placing of
shares, and secured a short term loan facility of $85 million (£64 million) which is repayable 12 months after completion
of the acquisition. Oxford Biomedica Solutions is expected to generate a minimum first 12 months contracted revenues
of approximately US$25 million from Homology under a three-year manufacturing and supply agreement.
In September 2021, the Group also raised £50 million of new equity, through a strategic investment by Serum Life
Sciences Ltd, a subsidiary company of Serum Institute India. These funds will be used to develop the fallow area at
its Oxbox manufacturing facility into a flexible advanced manufacturing space, including the validation of several
independent cGMP suites to exploit new opportunities in the cell and gene therapy market.
46
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial review
Selected highlights are as follows:
— Total revenues increased by 63% over 2020 to £142.8 million (2020: £87.7 million);
— Revenues from bioprocessing and commercial development continued its upward trend, growing 87% due to the
large scale commercial manufacture of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine;
— Revenues from milestones, licences and royalties, which included recognition of the £4.0 million licence fee from
Boehringer Ingelheim, decreased by 25% to £14.4 million. In 2020 a licence fee from Juno Therapeutics/Bristol
Myers Squibb of £7.8 million ($10 million) was recognised;
— Operating EBITDA
1
and operating profits improved by £28.5 million and £26.5 million respectively, with the Group
generating an Operating EBITDA
1
profit of £35.9 million and an operating profit of £20.8 million;
— The Platform division made an Operating EBITDA
1
profit of £45.3 million (2020: £13.9 million profit) and an operating
profit of £31.4 million (2020: £2.0 million profit), whilst the Product division made an Operating EBITDA loss of
£9.4 million (2020: £6.6 million loss), and an operating loss of £10.6 million (2020: £7.7 million loss);
— Cash generated from operations of £24.5 million in 2021 (2020: £3.9 million used in operations) increased as a result of
the adenovirus-based Oxford AstraZeneca COVID-19 vaccine manufactured for AstraZeneca as explained above, offset
by further operational investments required
;
— Gross proceeds of £50.0 million were raised through a placing with Serum Life Sciences Ltd in September 2021 to
develop the fallow area of the Oxbox manufacturing facility; and
— Cash at 31 December 2021 was £108.9 million.
Overview
The Group saw a 63% increase in revenues which was driven by the volume of the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine. This was offset by a decrease in commercial development revenues from existing
customers AstraZeneca, Novartis and Orchard as activities transitioned to clinical and commercial batch manufacture.
Revenues from licence fees, milestones and royalties, which included recognition of the £4.0 million licence fee from
Boehringer Ingelheim, decreased by 25%.
Operating costs, including Cost of Sales, grew by 31%, and by 32% when non-cash items
2
are excluded. Manpower,
raw material and facility costs have increased due to the cost of manufacturing the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine at full capacity throughout the year, as well as the full year effect of the Group’s
investments in the employees required to maintain operations at this level. Headcount rose from 673 at the end
December 2020 to 815 at the end of 2021.
The Group made an Operating EBITDA profit of £35.9 million, an improvement of £28.5 million from the prior year.
Once non-cash items
2
are added back, the Group made an Operating profit of £20.8 million, an improvement
of £26.5 million on the prior year.
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and share based payments)
is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share options.
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 49.
2 Non-cash items include depreciation, amortisation, revaluation of investments, fair value adjustments of assets held at fair value through profit and loss and the share based payment
charge. A reconciliation to GAAP measures is provided on page 50.
Strategic Report 47
Oxford Biomedica plc | Annual report and accounts 2021
Key Financial and Non-Financial Performance Indicators
The Group evaluates its performance by making use of alternative performance measures as part of its Key Financial
Performance Indicators (refer to the table 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 within this section for prior years are those reported in
the Annual reports and accounts for those years and have not been restated where a change in accounting standards may
have required this (e.g. revenue under IFRS 15 during 2018 to 2021 but IAS 18 during 2015 to 2017).
£m 2021 2020 2019 2018 2017 2016 2015
Revenue
Bioprocessing / commercial development 128.4 68.5 47.3 40.5 31.8 22.6 11.3
Licences, milestones and royalties 14.4 19.2 16.8 26.3 5.8 5.2 4.6
142.8 87.7 64.1 66.8 37.6 27.8 15.9
Operations
Operating EBITDA
1
35.9 7.3 (5.2) 13.4 (1.9) (7.1) (12.1)
Operating profit/(loss) 20.8 (5.7) (14.5) 13.9 (5.7) (11.3) (14.1)
Cash flow
Cash generated from/(used in) operations 24.5 (3.9) (6.6) 9.2 (1.5) (5.9) (14.9)
Capex
2
9.5 13.4 25.8 10.1 2.0 6.4 16.6
Cash inflow/(burn)
3
16.0 (7.8) (26.3) (1.9) (9.8) (11.5) (29.8)
Financing
Cash 108.9 46.7 16.2 32.2 14.3 15.3 9.4
Loan – – – 41.2 36.9 34.4 27.3
Non-Financial Key Indicators
Headcount
Year-end 815 673 554 432 321 256 231
Average 759 609 500 377 295 247 196
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and share based payments)
is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share based
payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as they may be paid in cash upon the
instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 49.
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 50.
3 Cash inflow/(burn) is net cash generated from operations plus net interest paid plus capital expenditure. A reconciliation to GAAP measures is provided on page 51.
48
Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial review
Revenue
Revenue increased by 63% to £142.8 million (2020 £87.7 million) due largely to the volume of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine batches manufactured for AstraZeneca. Revenue generated from bioprocessing/
commercial development increased by 87% to £128.4 million (from £68.5 million in 2020). The main contributor to
growth in 2021 has been the revenues generated from increased bioprocessing batches produced for AstraZeneca as
part of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine manufacturing efforts.
Revenues from licence fees, milestones and royalties of £14.4 million (2020: £19.2 million), which included
recognition of the £4.0 million licence fee from Boehringer Ingelheim, decreased by 25%. In 2020 a licence fee from
Juno Therapeutics/Bristol Myers Squibb of £7.8 million ($10 million) was recognised.
Due to the signature of a number of licence, development and supply agreements during the year, the Group’s customer
base has continued to diversify. However, the largest portion of its revenues in 2021 came from the manufacture of the
adenovirus-based Oxford AstraZeneca’s COVID-19 vaccine under the development and supply agreement.
£m 2021 2020 2019 2018 2017 2016 2015
Revenue 142.8 87.7 64.1 66.8 37.6 27.8 15.9
Operating EBITDA
£m 2021 2020 2019 2018 2017 2016 2015
Revenue 142.8 87.7 64.1 66.8 37.6 27.8 15.9
Other income 0.9 0.8 0.9 1.1 1.8 3.0 2.9
Total expenses (107.8) (81.2) (70.2) (54.5) (41.3) (37.9) (30.9)
Operating EBITDA
1
35.9 7.3 (5.2) 13.4 (1.9) (7.1) (12.1)
Non cash items
2
(15.1) (13.0) (9.3) 0.5 (3.8) (4.2) (2.0)
Operating profit/(loss) 20.8 (5.7) (14.5) 13.9 (5.7) (11.3) (14.1)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and assets at fair value through profit and loss, and Share Based Payments)
is a non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share based
payments. However, deferred bonus share option charges are not added back to operating profits in the determination of Operating EBITDA as they may be paid in cash upon the
instruction of the Remuneration Committee. A reconciliation to GAAP measures is provided on page 49.
2 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 50.
Revenue increased by 63% in 2021 whilst the Group’s cost base grew by
32%
to £107.8 million due to an increased
investment in raw materials for batches of vaccine produced, as well the full year effect of the Group’s investments in
people, equipment and operations required for the manufacturing of the adenovirus-based Oxford AstraZeneca
COVID-19 vaccine. The Operating EBITDA profit of £35.9 million is £28.5 million higher than the £7.3 million profit
generated in 2020, as a result of the large increase in revenues when compared to the prior year.
Strategic Report 49
Oxford Biomedica plc | Annual report and accounts 2021
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 below.
£m 2021 2020 2019 2018 2017 2016 2015
Research and development
1
40.2 29.7 22.6 18.0 21.6 24.3 20.3
Bioprocessing costs 7.2 10.7 7.4 1.2 – – –
Administrative expenses 15.1 11.3 11.9 7.4 7.3 6.0 6.7
Operating expenses 62.5 51.7 41.9 26.6 28.9 30.3 27.0
Depreciation (12.4) (9.8) (5.8) (4.3) (4.1) (3.3) (1.3)
Amortisation - – – – (1.2) (0.3) (0.4)
Share option charge
4
(2.5) (2.4) (1.6) (1.1) (0.7) (0.6) (0.2)
Adjusted Operating Expenses
2
47.6 39.5 34.5 21.2 22.9 26.1 25.1
Cost of sales 60.2 41.7 35.7 33.3 18.4 11.8 5.8
Total Expenses
3
107.8 81.2 70.2 54.5 41.3 37.9 30.9
£m 2021 2020 2019 2018 2017 2016 2015
Raw materials, consumables and
other external bioprocessing costs 34.2 22.0 22.8 18.3 13.2 9.3 6.1
Manpower-related 55.0 45.3 35.2 26.7 19.3 17.4 13.6
External R&D expenditure 2.5 1.4 1.4 1.9 1.7 2.8 3
Other costs 21.2 17.1 12.0 7.6 7.1 8.4 8.2
RDEC tax credit (5.1) (4.6) (1.2) – – – –
Total expenses
1
107.8 81.2 70.2 54.5 41.3 37.9 30.9
1 Includes the RDEC tax credit.
2 Research, development, bioprocessing and administrative expenses excluding depreciation, amortisation and the share option charge.
3 Cost of goods plus research, development, bioprocessing and administrative expenses excluding depreciation, amortisation and the share option charge.
4 Deferred bonus share option charges of £1.0 million (2020: £1.4 million) are not added back in the determination of Operating EBITDA as the Remuneration Committee
has the ability to determine that this is paid in cash up until the point the option is granted.
— Raw materials, consumables and other external bioprocessing costs have increased substantially due to increased
raw material cost as a result of the large volumes of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine
batches produced;
— The increase in manpower-related costs is due to the increase in the average headcount from 609 in 2020 to 759
in 2021. Additional investments were made in staff required for vaccine manufacturing, as well as some required
investment in back-office staff;
— External R&D expenditure increased to normal levels as compared to 2020, as activities continued throughout 2021,
with limited activities having taken place in the first half of 2020;
— Other costs were higher as a result of increased operational and facility costs incurred due to the continuous running
of the Oxbox manufacturing facility during the year, as well as the additional laboratory space put in place at Windrush
Court. Other items included due diligence fees incurred in the establishment of an 80% ownership interest in Oxford
Biomedica Solutions, offset by an insurance payment received with regards to a previous customer claim; and
— The RDEC credit has increased to £5.1 million (2020: £4.6 million) due to an increase in eligible research and
development expenditure, mainly increases in employee cost, raw materials, consumables and qualifying external
research and development expenditure.
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Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial review
Operating and Net profit/(loss)
£m 2021 2020 2019 2018 2017 2016 2015
Operating EBITDA
35.9 7.3 (5.2) 13.4 (1.9) (7.1) (12.1)
Depreciation, Amortisation and share option charge
1
(14.9) (12.2) (7.4) (5.5) (6.1) (4.2) (2.0)
Change in fair value of assets at fair value
through profit and loss
(0.2) (0.8) (1.9) 6.0 2.3 – –
Operating profit/ (loss)
20.8 (5.7) (14.5) 13.9 (5.7) (11.3) (14.1)
Interest
(0.9) (0.8) (5.4) (6.2) (9.3) (4.9) (1.9)
Taxation
(0.9) 0.3 4.8 2.5 2.7 3.7 4.0
Foreign exchange revaluation (non cash)
– – (1.0) (2.7) 3.3 (4.1) (1.0)
Net profit/(loss)
19.0 (6.2) (16.1) 7.5 (9.0) (16.6) (13.0)
1 Deferred bonus share option charges of £1.0 million (2020: £1.4 million) are not added back in the determination of Operating EBITDA as the Remuneration Committee has the ability
to determine that this is paid in cash up until the point the option is granted.
In arriving at Operating profit/(loss) it is necessary to deduct from Operating EBITDA the non-cash items referred to
above. The depreciation charge was higher in 2021 due to the full year impact of Oxbox becoming operationally active,
conversion of one of the Windrush facility floors into laboratories, and then also due to additional bioprocessing
equipment obtained to allow vaccine manufacturing. The Orchard Therapeutics asset held at fair value through profit
and loss decreased by £0.2 million due to negative share price movements. The interest charge of £0.9 million was
slightly higher due to additional interest on IFRS 16 leased bioprocessing equipment. The corporation tax expense
increased due to a corporation tax charge expected on the taxable profits made by the Group during the period.
Segmental analysis
Reflecting the way the business is currently being managed by the Senior Executive Team, the Group reports its results
within two segments, namely:
I. the ’Platform’ segment which includes the revenue generating bioprocessing and process development activities for
third parties (i.e. the 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.
II.
the ’Product’ segment, which includes the costs of researching and developing new gene therapeutic product candidates.
£m Platform Product Total
2021
Revenue 142.7 0.1 142.8
Operating EBITDA 45.3 (9.4) 35.9
Operating profit/(loss) 31.4 (10.6) 20.8
2020
Revenue 87.1 0.6 87.7
Operating EBITDA 13.9 (6.6) 7.3
Operating profit/(loss) 2.0 (7.7) (5.7)
The Platform segment in 2021 saw an increase in revenue of 64% from £87.1 million to £142.7 million due to the
volume of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine batches manufactured for AstraZeneca as
part of the COVID-19 pandemic efforts. This was offset by a decrease in commercial development revenues from
existing customers AstraZeneca, Novartis and Orchard as activities transitioned over to more clinical and commercial
batch manufacture. Operational results were very positively impacted by the large revenue increases, but especially
the fact that the Oxbox manufacturing facility operated at almost full capacity for most of the year which meant that
revenues more than offset the additional investment in headcount and facilities, resulting in an Operating EBITDA
profit of £45.3 million, and an operating profit of £31.4 million. The Group will target increased bioprocessing volumes
and commercial development revenues from its customer base in the coming year, whilst recognising that the
adenovirus-based Oxford AstraZeneca COVID-19 vaccine volumes are not expected to be at the same levels as those
seen during 2021.
The Product segment has generated revenues of £0.1 million (2020: £0.6 million) and an Operating EBITDA loss and
Operating loss of £9.4 million and £10.6 million respectively (2020: loss of £6.6 million and £7.7 million respectively).
Clinical development revenues decreased due to lower levels of activities performed for Sanofi and Sio Gene Therapies.
Strategic Report 51
Oxford Biomedica plc | Annual report and accounts 2021
Cash flow
The Group held £108.9 million of cash at 31 December 2021, having begun the year with £46.7 million. Significant
movements across the year are explained below.
£m 2021 2020 2019 2018 2017 2016 2015
Operating profit/(loss) 20.8 (5.7) (14.5) 13.9 (5.7) (11.3) (14.1)
Non-cash items included in operating profit/(loss) 15.1 13.0 9.3 (0.5) 3.8 4.2 2.0
Operating EBITDA 35.9 7.3 (5.2) 13.4 (1.9) (7.1) (12.1)
Working capital movement (11.4) (11.2) (1.4) (4.2) 0.4 1.2 (2.8)
Cash generated from/(used in) operations 24.5 (3.9) (6.6) 9.2 (1.5) (5.9) (14.9)
R&D tax credit received 1.0 7.0 3.1 3.7 4.5 4.1 3.2
Net cash generated from/(used in) operations 25.5 3.1 (3.5) 12.9 3.0 (1.8) (11.7)
Interest paid, less received – – (3.3) (4.7) (10.8) (3.3) (1.5)
Sale of investment asset – 2.5 6.3 – – – –
Capex (9.5) (13.4) (25.8) (10.1) (2.0) (6.4) (16.6)
Net cash inflow/(burn) 16.0 (7.8) (26.3) (1.9) (9.8) (11.5) (29.8)
Net proceeds from financing 46.2 38.3 10.3 19.8 8.8 17.5 25.0
Movement in year 62.2 30.5 (16.0) 17.9 (1.0) 6.0 (4.8)
— The operating profit in 2021 was £26.5 million better than the operating loss of £5.7 million achieved in 2020 due to
the large increase in revenues only partially offset by increased operating expenses. These improved operational
results flowed through to the Operating EBITDA profit of £35.9 million (2020: £7.3 million profit);
— The negative working capital movement of £11.4 million is driven by a decrease in Contract liabilities (£15.7 million)
offset by receipt of the 2020 RDEC tax credit;
— The Group received £1.0 million R&D tax funding in 2021 in respect of the 2020 claim, down £6.0 million from the
prior year. The decrease from 2020 was due to the Group not being eligible to claim a tax credit under the Governments
SME tax credit scheme from 2020 onwards due to its growth in size;
— No funds were generated from the sale of shares in Orchard Therapeutics (2020: £2.5 million), an asset held at fair
value through profit and loss;
— Purchases of property, plant and equipment decreased from £13.4 million to £9.5 million, mainly as a result of the
main construction phase of the new Oxbox manufacturing facility being completed in 2020, with Capex in 2021
relating to the purchase of manufacturing and laboratory equipment, and the fit out of laboratory space on one of
the floors of the Windrush Court Head Office;
— The net proceeds from financing during 2021 was £46.2 million, consisting of the £50.0 million equity investment by
Serum Life Sciences Ltd, share option issues of £1.6 million, and reduced by lease payments of £5.4 million in the
year. £3.7 million of lease payments made consisted of bioprocessing equipment leased for purposes of vaccine
manufacturing which the Group now owns; and
— The result of the above movements is a net increase in cash of £62.2 million from £46.7 million to £108.9 million.
Statement of financial position review
The most notable items on the Statement of financial position, including changes from 31 December 2020, are as follows:
— Property, plant and equipment has decreased by £2.6 million to £69.7 million as depreciation of £12.4 million more
than offset additions of £9.5 million, mainly purchases of manufacturing and laboratory equipment and the fit out of
laboratory space on one of the floors of the Windrush Court head office;
— Inventories have increased from £6.9 million to £9.5 million due to increased raw material balances as a result of
forecasted bioprocessing manufacturing activities;
— Trade and other receivables decreased from £57.5 million to £48.4 million due to decreased levels of bioprocessing
and process development activities across the year end as compared to 2020;
— Trade and other payables decreased slightly from £19.7 million to £19.1 million, due to a lower level of operational
activity at the year end as compared to the prior year end;
— Contract liabilities decreased from £28.3 million in 2020 to £12.6 million as the high level of funds received in advance
for future bioprocessing and process development activities at the end of 2020 was recognised as revenue during
2021 as the performance obligations were met;
— Deferred Income decreased from £3.5 million in 2020 to £2.7 million due to the release of amounts deferred as part
of the Innovate UK capex grant funding;
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Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Financial review
— Provisions increased by £0.4 million as a result of the recognition of an increased liability for the costs of restoring
leased properties to their original state at the end of the lease term; and
— Lease liabilities decreased from £13.8 million to £9.3 million due to lease payments made in the year, but
specifically, £3.7 million of lease payments made relating to bioprocessing equipment leased for purposes of
vaccine manufacturing which the Group now owns.
Subsequent events
During March 2022 the Group acquired an 80% stake in the newly established Oxford Biomedica Solutions LLC (Oxford
Biomedica Solutions), an AAV manufacturing and innovation business, from Homology Medicines Inc. for $130 million.
Homology Medicines will continue to own 20% of Oxford Biomedica Solutions with both the Group and Homology
Medicines retaining an option to buy/sell the remaining 20% of Oxford Biomedica Solutions to the Group. As part of the
acquisition, the Group also agreed to inject $50 million of cash into Oxford Biomedica Solutions for working capital
purposes. Oxford Biomedica Solutions leases a GMP facility near Boston, Massachusetts, operating three 500L bioreactors
using a serum-free suspension process, which has also been successfully scaled to 2,000L. The facility has been
manufacturing 500L batches since 2019 without a single failed batch.
In order to fund the acquisition, the Group raised gross proceeds of £80 million through a placing of shares and also
entered into, and drew down, a short-term loan facility of $85 million (£64 million) with Oaktree Capital Management
LLC which is repayable twelve months after completion of the acquisition.
Prior period restatement
During the year, the Financial Reporting Council (FRC) communicated with the Directors regarding the Group’s Annual
report and accounts for the year ended 31 December 2020. The FRC raised a limited number of matters for which,
on some, the Directors undertook to make additional disclosures in the financial statements for the year ended
31 December 2021. Following the review by the FRC it was recognised that the movement in the loan to subsidiary of
£13.9 million within the Company only cash flow statement was incorrectly presented within cash flows from financing
activities rather than cash flows from investing activities. OXB has therefore restated the prior year financial statements
to present the movement in the loan to subsidiary within cash flows from investing activities in the Company only cash
flow statement. This change has no effect on the cash position of the Group or Company and has no further impact
on the Group or Company Financial Statements. The FRC have now concluded its review.
Financial outlook
The Group will continue to target growth in its lentiviral vector manufacturing volumes, as well as growth in commercial
development activities. Oxford Biomedica Solutions is expected to contribute AAV manufacturing and commercial
development revenues through services provided to Homology Medicines during 2022. In addition, the Group will seek
to secure both new lentiviral vector and AAV customer relationships in line with the strategy to become an innovative
global viral vector leader, operating in all viral vector types.
Vaccine manufacturing volumes are expected to be substantially lower during 2022 due to the end of the 18-month
supply agreement with AstraZeneca, and a pause in manufacturing activity while discussions continue on a potential
extension of this supply agreement. As a result, overall revenues are expected to be lower than in 2021 (but significantly
ahead of 2020) with an expected corresponding impact on Operating EBITDA.
The Group will be focused on making select investments, aimed at accelerating Oxford Biomedica Solutions commercial
activities and build market share in the fast-growing AAV market. As a result, administrative expenses are expected to be
significantly higher than in 2021 as the Group makes one-off expenditures in building and integrating Oxford Biomedica
Solutions. Bioprocessing costs are also expected to be higher as the Group builds the AAV customer base.
The Group will continue to accelerate investment in R&D in order to maintain its competitive edge and build a leading
position in AAV, in addition to lentiviral vectors. Apart from investments aimed at building long term revenue growth, the
Group will be closely monitoring its operating cost base and headcount, which we expect to be affected by inflation in
both salaries and costs.
The integration of Oxford Biomedica Solutions is expected to be ongoing during the year and fully completed within
12 months. The consolidation of this initially loss-making part of the Group is expected to result in the Group being
loss-making on an Operating EBITDA level in 2022, however with significant growth targeted in 2023.
The contracts signed in 2021 with Arcellx, Immatics and Cabaletta Bio, together with continued bioprocessing and
commercial development activities performed for existing customers, is expected to drive a broadening out of the
future revenue base and should put the Group in a strong position to achieve future operational profitability.
Strategic Report 53
Oxford Biomedica plc | Annual report and accounts 2021
Continuing the implementation of its long-term strategy, the Group will continue to focus on building and maintaining
the Group’s commercial relationships with customers, both existing and new. The success of the Group’s customers is
seen as key to the Group’s success, including driving growth in new customer relationships in 2022 and beyond in its
existing LentiVector
®
and new AAV platform.
The Group will implement a cautious strategy with regards to capital expenditure with significant new projects only
implemented if the Group’s financial stability is not impacted and the business case details a clear long term strategic
benefit to the Group. The Group continues to make selective strategic investments in its products and enabling
technologies where the opportunity exists to improve patient outcomes and increase shareholder value.
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the primary statements and
notes to these financial statements.
The Group made a profit for the year ended 31 December 2021 of £19 million, and generated net cash flows from
operating activities for the year of £25.5 million. The Group also raised an additional £50 million in cash through a
successful equity placement by Serum Life Sciences Ltd in September 2021 and post year end has raised £80 million in
January to March 2022. The Group ended the year with cash and cash equivalents of £108.9 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 2022 annual budget and forecasts for 2023. 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:
— A substantial manufacturing and development revenue downside affecting the core LentiVector
®
platform business;
— Vaccine manufacturing revenues only included to the extent contracted;
— No revenues from new customers;
— Significant decreases in forecasted existing customer milestone and royalty revenues; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its customers including expected
revenues from existing customers under long term contracts.
The Group entered into an $85 million (£64 million) loan facility with Oaktree Capital Management as part of the Group’s
acquisition of an 80% stake in Oxford Biomedica Solutions in March 2022. The facility was drawn down in full and the
Group is required to repay this one-year facility in March 2023. In both the Group’s cash flow forecast and the mitigated
downside scenarios, the Group is able to repay this loan in March 2023, but in the mitigated downside scenarios the
Group would need to obtain additional equity or loan financing in the third quarter of 2023 to continue operations.
However, despite the above requirement, the Board has confidence in the Group’s ability to continue as a going
concern for the following reasons:
— The Group’s history of being able to access capital markets including raising £130 million of equity during the last
nine months;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure
and operational purposes, as recently evidenced by the $85 million one year facility obtained with Oaktree Capital
Management;
— The Group’s ability to continue to be successful in winning new customers and building its brand as demonstrated by
successfully entering into new customer agreements with Arcellx, Immatics, Caballetta Bio and Boehringer Ingelheim
;
— As noted above, the Group has cash balances of £108.9 million at the end of December 2021 and £144 million at the
end of March 2022;
— More than two thirds of 2022 forecasted revenues are covered by binding purchase orders and rolling customer
forecasts which give confidence in the level of revenues forecast over the next 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 remain confident that the Group will have sufficient funds
to continue to meet its 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
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Oxford Biomedica plc | Annual report and accounts 2021
Strategic Report
Environmental, Social and Governance Report
Oxford Biomedica’s ESG mission
Oxford Biomedica’s ESG mission is to deliver life-changing gene therapies
to patients in an ethical and socially responsible way. This mission has
become firmly embedded through the Group, both in terms of the areas
of focus of the business, but also how the Group does business.
The Group has made good progress in the delivery of its ESG mission
during 2021 and has increasingly moved from an initiative led approach to
incorporating an ESG mission-led approach in regular, day-to-day
business activities.
Oxford Biomedica’s ESG values
Oxford Biomedica’s ESG strategy is focused on five pillars: People;
Community; Environment; Innovation and Supply Chain, which were
identified as key areas of focus as part of an analysis of ESG related issues
that are most critical to the organisation (further details on page 56).
The Group’s ESG Committee is responsible for the governance and
oversight of our ESG commitments. During 2021, the Committee was
chaired by John Dawson in his capacity as Chief Executive Officer,
providing a link to the Board for regular review of ESG issues. Following
John’s decision to step down as CEO in January 2022, the Committee is
chaired by Nick Page, Chief Operating Officer until the new Chief
Executive Officer is appointed.
Oxford Biomedica’s ESG committee
Department heads within the business are responsible for each of the five
pillars. Annual ESG objectives are set by the department head responsible
for each pillar, in conjunction with the Senior Executive Team. The Group
considers the ESG objectives to be fundamental to maintaining and
enhancing the culture and values of the Group.
The ESG Committee is responsible for tracking progress against the objectives
and providing regular progress reports to the Senior Executive Team every
quarter. Progress updates are also shared in all-company meetings.
More information on ESG
Information on the Group’s Environmental,
Social and Governance (ESG) Mission and Strategy
can be found on the Oxford Biomedica website:
www.oxb.com/environmental-social-governance-esg
Strategic Report 55
Oxford Biomedica plc | Annual report and accounts 2021
Values
Oxford Biomedica’s three values govern the way that the Group does
business, how the Group works together and the interactions the Group
has with all its stakeholders.
Oxford Biomedica’s values and the associated behaviours are embedded
throughout its people processes, including recruitment practices, seeking
evidence that job candidates share the Group’s values upon appointment.
The values are an important feature in the Group’s reward principles,
whilst its performance management processes ensure values behaviours
are measured so they are appropriately recognised and rewarded.
Each year the Group celebrates employees who consistently demonstrate
the Company values via its annual ‘Living our Values Awards’ ceremony.
Employees have the opportunity to nominate colleagues who have
achieved great things by living the Company values for individual and
team awards.
Have integrity
We always do the right thing. Whatever the situation and consequences,
we do what’s right for employees, patients and partners. We make
objective decisions and can be trusted to deliver on our commitments.
Be inspiring
We succeed together through our passion, commitment and teamwork.
Through our actions and behaviours, we create an environment which
positively challenges, engages and excites us.
Deliver innovation
We deliver ground-breaking scientific excellence by nurturing exceptional
talent. Together, we continually improve by generating new ideas and
creative ways of working to bring about better solutions for patients.
H
a
v
e
I
n
t
e
g
r
i
t
y
B
e
I
n
s
p
i
r
i
n
g
D
e
l
i
v
e
r
I
n
n
o
v
a
t
i
o
n
Shared values
The Group’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.
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Environmental, Social and Governance Report
Analysis of material ESG issues
The Group conducted an analysis to identify and prioritise those 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.
ESG materiality matrix
17
18
19
1
11 12
9 10
14
3
15
5
8
20 2
4
13
16
6 7
Importance to stakeholders Most relevant
Assessed impact on Oxford Biomedica’s business Most impact
Environment
9
10
11
12
Responsible Innovation
1
2
4
6
7
13
16
17
18
Intellectual property, product
and technological innovation
Product safety
Privacy and data security
Regulatory compliance
Business continuity
Ethical supplier standards
Animal testing
Ethics
Clinical trial conduct
Waste and recycling
Water use and water effluent
Energy use and climate change
Single use plastics
People
5
8
15
19
Community
3
14
20
Outreach, engagement and
early talent development
Human rights and labour
standards
Transparent reporting and
communications
Employee safety and
wellbeing
Talent attraction and
retention
Anti-bribery and corruption
Brexit
Strategic Report 57
Oxford Biomedica plc | Annual report and accounts 2021
People
Health and Safety
Being able to deliver the Group’s products and services both in a safe and
sustainable manner is the number one priority. Through the systematic
evaluation of all activities, the Group ensures that significant risks are
identified and controlled to minimise the risk to employees and anyone
else who may be affected by the Group’s acts or omissions. The Group
endeavours to maintain its facilities and equipment to the highest standards.
The Group’s response to the COVID-19 pandemic was reviewed twice by
Inspectors from the Health and Safety Executive, and on both occasions
the Inspectors left without raising any areas for improvement.
The Group’s Health and Safety Management System covers all aspects of
its work, from working with hazardous substances, to use of display
screen equipment. The electronic Health and Safety Management System
(introduced in 2020) has continued to evolve and grow during 2021, and
now includes incident reporting and management, action tracking, risk
assessment, and the Group’s Health and Safety Policies and Procedures,
making it a ‘one-stop-shop’ for our employees, and providing improved
performance monitoring and metrics that drive improvements.
The Group continues to focus on the output of the Safety Climate Survey,
engaging with staff and their Safety Representatives to identify
improvements revolving around eight factors that contribute to a positive
safety culture. The eight factors are:
— Accident and near miss reporting;
— Organisational commitment;
— Health and Safety oriented behaviours;
— Health and Safety trust;
— Usability of procedures;
— Engagement in Health and Safety;
— Peer group attitude; and
— Resources for Health and Safety.
The Group has revised its management of fire evacuations, introducing
electronic roll call and training 40+ managers to support new command
and control structure. The Group’s Health Surveillance programme and
systems have been improved, with the result that the Group can now
provide better metrics to managers and a more targeted, rather than a
blanket, approach.
The Group continues to have a first-class safety record and has continued
the trend of having no major injuries. Health and Safety is a standing item
on the Board’s agenda, and there is a quarterly Safety Committee chaired
by a member of the Senior Executive Team (SET). The Group is committed
to meet both the letter and spirit of all Health and Safety regulation and
best practice.
2021 ESG People objectives –
what we achieved:
— Create an action plan for Equality,
Inclusion and Diversity (ED&I). 100%
— Continue employee engagement
activity and launch a full employee
engagement survey. 100%
— Introduce further wellbeing initiatives
focusing on mental health and
resilience. 100%
2022 ESG People objectives:
— Deliver on year one actions from the
three-year ED&I plan
— Continue employee engagement
activity and expand to cover new
topics
— Introduce further wellbeing initiatives
to ensure the Group is offering
’something for everyone’
3
3
3
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Engagement
Oxford Biomedica is committed to making sure that it regularly asks
employees for their views and suggestions on a variety of issues through
multiple channels and forums. The Group’s Workforce Engagement Panel
(WEP), made up of employees representing all levels and functions across
the organisation, met eight times in 2021. The purpose of the WEP is to
enable employees to discuss issues of importance to them and ensure
that the senior leaders and the Group’s Board hear the views of the
workforce. Two meetings were attended by Stuart Henderson, the Board’s
designated Non-Executive Director, to facilitate direct discussion and
engagement at Board level. Increased engagement is planned for 2022,
including a schedule of monthly meetings.
As part of the 2021 ESG people objectives, three Pulse surveys were
completed focused on the impacts of the COVID-19 pandemic. These
surveys provide rich insights into how employees are feeling, their
concerns and their suggestions for future improvement. A number of
actions resulting from the surveys were put in place throughout the year,
such as regularly reviewing the Group’s COVID-19 secure workplace
guidance and continuing to provide lateral flow COVID-19 testing kits to
employees working onsite.
In response to the changes in working practices, due to the COVID- 19
pandemic and feedback from employees, the Group revised its approach.
New flexible ways of working guidelines were created to offer employees
more choice, where possible, around when, where and how they work.
The Group took a principle led approach to flexible working, putting in
place supportive structures, including a ‘ways of working’ policy, while
empowering employees to decide when and where they work to be the
most effective; for them, their team, and the Group.
In 2021, the Group launched its first ever company-wide employee
engagement survey as part of the ESG people objectives. A dedicated
internal communication campaign was created to encourage employees
to take part and share their views on a wide range of subjects including
trust, inclusion, support, collaboration, and rewards. The survey ran for
two weeks and 70% of employees participated, exceeding our target of
65% as a first survey of this kind. The overall results were positive. The
Group’s sustainable engagement score, a key overall engagement
indicator, was more favourable than those of other benchmarked groups,
including the global pharmaceutical norm and the UK norm, with a score
of 84%. High-level Group-wide results have been shared with all
employees and three focus areas for 2022 have been identified.
The Group’s employee engagement strategy, developed and approved by
the SET in 2020, began to be implemented in 2021. The strategy creates
further opportunity for senior leadership visibility, more frequent two-way
communication across a variety of channels, including internal social
media and virtual events, enabling the Group to keep all employees up to
date and engaged as the business grows. Further details of the 2022 ESG
People objectives are set out on page 57.
“ New flexible ways of working
guidelines were created
to offer employees more
choice, where possible,
around when, where and
how they work.
”
84% score
Engagement survey
The Group completed a company-wide employee
engagement survey as part of the ESG people
objectives. The Group’s sustainable engagement score,
a key overall engagement indicator, was more
favourable than those of other benchmarked groups,
including the global pharmaceutical norm and the UK
norm, with a score of 84%.
Strategic Report 59
Oxford Biomedica plc | Annual report and accounts 2021
Equality, Inclusion and Diversity
The Group is committed to building a more inclusive organisation where
all forms of diversity are celebrated. The Group strives to make the
employee experience one of inclusion and belonging to maintain
engagement and commitment.
Further to initial work started in 2020, the Group set out in 2021 to
undertake a diagnostic phase of work to develop an understanding of
people’s experiences, opinions, and aspirations for the Group in the areas
of equality, diversity and inclusion (ED&I) moving forward. This consisted
of a review of current policies and procedures and available ED&I data,
along with sessions with the SET, WEP and the HR team. Focus groups
and one-to-one conversations were also held with employees who were
selected to represent a balance between men and women, as well as
representation across sites, departments, age, seniority, and length of
service.
A recommendation report has since been shared with the SET which
highlights the bright spots and areas of opportunity. These outputs have
also been shared and discussed with the Group’s senior leaders. Further
to this activity a three-year ED&I plan has been created and the Group is
committed to implementing its year one objectives in 2022, which include
awareness raising throughout the business and establishing benchmarks
to enable transparency across the business.
Alongside this work in 2021, the Group also engaged its senior leader
population in inclusive leadership sessions to better educate, inform and
raise awareness of this important topic. The Board and the senior
management are fully committed to providing equal opportunities for all
employees, irrespective of race, gender, religion, national origin, disability,
or any other personal characteristics, and embrace diversity in all forms.
The Gender Pay Gap Report for 2021 has been prepared by the Group.
The Group is pleased to report a continued increase in representation of
female employees at all levels including the more senior levels of the
organisation. This has had a positive impact on the Group’s mean and
median gender pay ratio. For full details of the report please visit the
Group’s website at www.oxb.com.
Male Female Total % Male % Female
Board including
Non-Executive Directors 7 3 10 70% 30%
Senior managers and
direct reports 24 24 48 50% 50%
All other employees 350 407 757 46% 54%
Total 381 434 815 47% 53%
Representation of female employees
The Group is pleased to report a continued increase in
representation of female employees at all levels
including the more senior levels of the organisation.
Three-
year plan
Equality, diversity and inclusion (ED&I)
The Group set out in 2021 to undertake a diagnostic
phase of work to develop an understanding of people’s
experiences, opinions, and aspirations for the Group in
the areas of equality, diversity and inclusion (ED&I)
moving forward.
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Environmental, Social and Governance Report
Health and Wellbeing
The health and wellbeing of all employees is of the utmost importance.
The Group’s aim is to help employees feel good at work and at home by
fostering a positive health culture. Empowering colleagues to take
personal accountability for their physical, emotional, mental and financial
wellbeing is important and the Group supports colleagues by providing
access to a number of benefits, wellbeing resources and initiatives
throughout the year.
In 2021, the Group’s wellbeing strategy continued to focus on mental
wellbeing and, in particular, resilience. The COVID-19 pandemic has
emphasised that, whilst the Group cannot control the external environment
around us, the Group can support employees and provide them with the
tools to manage their personal response to these external factors.
In 2021, the Group provided all employees the opportunity to join four
speaker events. Through the power of storytelling these speaker events
merged elements of inclusion and mental health, emphasising resilience.
A number of national dates were recognised and aligned with these
storyteller sessions including Stress Awareness Week, Mental Health
Awareness Week and Pride.
In line with the 2021 ESG objectives, the Group offered a variety of
wellbeing sessions to the whole workforce, which included: mindfulness
courses, and updates from our benefit providers including the Employee
Assistance Program service and private medical insurers, Bupa. Financial
wellbeing events took place in the form of group and 1-2-1 sessions.
Guest speaker sessions were also delivered on the topics of ‘The
importance of good hydration’ and ‘Nutrition and the effect of nutrition
on mood and performance’. All events were well received.
The Group added two new wellbeing offerings to its benefits package in
2021. An online wellbeing platform that provides a gateway to over 3,000
experiences, covering lifestyle, mental and physical wellbeing and learning
vouchers, to pay for or contribute to costs associated with any structured
learning, be that a course, online programme or other structured learning
arrangement to help employees strike a balance between work and
non-work life.
The Group understands it has a duty of care towards all employees and
continually assesses the risks to the workforce. Throughout 2021, the
Group regularly communicated with employees in respect of the latest
government guidelines in relation to the COVID-19 pandemic as well as
providing regular updates on measures available to provide extra protection.
Health and wellbeing remain an important focus for the Group’s ESG
objectives for 2022 and will introduce further wellbeing initiatives offering
a variety of choice, with a key theme being ‘something for everyone’.
“ My experience as an
apprentice for Oxford
Biomedica has been a
challenging yet rewarding
one, particularly during
the AZD1222 (Oxford
AstraZeneca COVID-19)
manufacture. It was an
honour to have been
nominated and I’m very
proud to have won
Oxfordshire’s higher
apprenticeship of the year
award. It was fantastic to see
the wide range of incredible
talent across many sectors
at the event, it really does
highlight the importance
of apprenticeships in the
modern world.”
Nathan Jarvis
Higher Apprentice of the Year Award at the 2021
Oxfordshire Apprenticeship Awards.
Strategic Report 61
Oxford Biomedica plc | Annual report and accounts 2021
Community
The Group continues to build and strengthen its involvement in the local
community, recognising the value of being a good local citizen and
delivering positive benefits to the community.
The Group recruited over 200 new employees at all levels across the
organisation during 2021, and continued to develop its apprenticeship
scheme, supporting science education. The Group behaves as a responsible
neighbour, complying with national and local laws and regulations,
particularly with regard to emissions, waste, property planning, and the
traffic impact caused by employees. To help minimise the traffic impact on
the community, the Group has put in place a range of transport initiatives
including a well-established cycle to work scheme, bike shelters and other
infrastructure, and a partnership with a local cycling group.
Apprenticeship scheme
As part of the Group’s focus on delivering local benefits and providing
high skilled jobs to the local community, the Group has an apprenticeship
scheme in collaboration with Advanced Therapies Apprenticeship
Community and multiple training providers. In 2021, the Group added an
additional 16 apprentices with 33 apprenticeships running at the end of
the year, exceeding our initial target for 2021 of nine additional apprentices.
The apprentices include school leavers from the local community who
are enrolled on a training scheme in the highly skilled areas of Manufacturing
and Analytical testing. The Group is committed to supporting the
apprentices through in-post learning, training, and expanding the scheme
in the future.
Further details of the 2022 ESG Community objectives are set out on
page 61.
2022 ESG Community objectives:
— Continue to fundraise for chosen
company charities – Oxfordshire Mind
and Homeless Oxfordshire
— Launch the community volunteering
policy
— Continue to build local educational
establishment / early careers links
2021 ESG Community objectives –
what we achieved:
— Added a further nine apprentices to
the apprenticeship scheme. 100%
— To introduce a system for voluntary
charitable monthly payroll. 100%
— Contributions to continue to support
volunteering initiatives, such as reading
support (with time off support). 80%
— To increase outreach programme to
schools and universities. 50%
3
3
3
3
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Oxford Biomedica plc | Annual report and accounts 2021
Charitable giving
The Group’s charity team, Helping Hands, forms part of the Group’s
commitment to provide support to a local charity. The Helping Hands
team organise fundraising events in aid of a charity selected by employees.
The employee-selected charity in 2021 was SeeSaw (Registered Charity
No. 1076321), an Oxford based charity providing support for bereaved
children, young people and their families when they face a death in the
family. The Group raised £17,000 for SeeSaw, through a variety of
fundraising initiatives including sponsored shave, sunrise Blenheim Palace
walk, fire walk, unused clothing drive, Christmas wreath-making and
raffle.
At the end of 2021, after supporting SeeSaw for three years, the Helping
Hands team asked employees to suggest new charities for the company
to support for the next three years. Nine charities were suggested,
and through an employee vote, Oxfordshire Mind (Registered Charity
No. 261476) and Homeless Oxfordshire (Registered Charity No. 297806)
have been selected as the Group’s nominated charities for the period
2022 to 2024.
In 2021, the Group provided all employees the opportunity to support
good causes through monthly payroll contributions. Payroll giving is
a voluntary way for employees to support any UK-registered charity in a
tax-efficient manner.
The Group encourages employees to get involved in community work
and helps to support employees that participate in such initiatives. The
Group regards community projects as a great way to meet people,
develop new friendships, and most of all improve employees’ own
wellbeing. The Group is also progressing opportunities to provide more
formalised support to employees who give up their time to support
volunteering initiatives. A volunteering policy has been approved with a
planned launch in 2022.
Yorkshire 3 Peaks
In August 2021 Yatish Lad completed walking the
Yorkshire 3 Peaks, covering 24.5 miles and a total
climb of 5,000ft and taking 12h 4mins to complete.
He raised over £2,700 for Mind.
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Oxford Biomedica plc | Annual report and accounts 2021
Environment
Environmental policies and initiatives
The Group fully recognises its responsibility to minimise the impact of its
activities on the global environment, its neighbours, and the local
community. The Environmental Management System (EMS) has continued
to evolve and grow with the organisation. The Group has undertaken a
gap analysis against ISO14001 and has been working towards aligning the
Group’s EMS, with the aim of gaining certification as part of the Group’s
sustainability plan. The Group complies with all environmental regulations,
including those relating to environmental permits and consents, waste
disposal and discharges (see page 65 for further details).
The Group continues to work towards reducing its carbon footprint (see
pages 64 and 65 for further details). As part of the Group’s 2021
Environmental pillar initiatives, we held a sustainable travel to work event
for employees, encouraging them walk, cycle, or use public transport to
travel to work instead of driving. The Group moved several of its processes
to paperless, saving approximately 10,000 sheets of paper and
approximately two tonnes of carbon emissions associated with the
harvesting, processing, and transporting of paper. The Group increased its
recycling efforts, increasing the volumes of cardboard and plastic it was
able to recycle through installing compactors in its warehouses. With the
redevelopment of the Windrush Innovation Centre, the Group has used
BREEAM as a third-party assessment of sustainability performance of the
building during the planning phase and will continue to use this third party
assessment for the demolition and construction phases.
The Group has continued efforts to improve the management of waste,
conducting an internal audit of several waste streams. Unfortunately, due
to the growth in manufacturing, the Group did not manage to reduce the
overall volume of hazardous liquid waste, a 2021 ESG target. However,
the Group did see reductions outside of manufacturing waste. For
example, there was a 61% reduction in Virkon waste (approx. 18,500L
less than 2020) due to a revised waste process.
A number of projects were launched in 2021, which aim to reduce waste
in the supply chain and it is expected that these will come to fruition in
2022. Examples of these initiatives look at switching the transportation
method for several cold chain liquid products from air freight to sea freight
and working with distributors to develop transportation methods which
use re-usable containers as supposed to single-use polystyrene ones.
The Group has also commenced engagement with suppliers to explore
options for waste reduction in respect to packaging materials, including
alternative configuration of packages and evaluating potential recycling
and reuse options for packages received.
The Group has high levels of engagement from employees on
environmental sustainability activities, and actively encourages employee
engagement and involvement in improving the Group’s environmental
performance. The Group established the role of Environmental
Representatives in 2021, and now has an active forum of approximately
40 employee volunteers who help identify local areas for improvement.
For example, the Group’s used wooden pallets are now being donated to
a local social venture, who use the pallets to build furniture (e.g., benches),
providing teenagers and adults who are out of work with valuable practical
skills. Coffee pods are now recycled using the PODBACK scheme,
diverting this waste away from incineration. The Group has substituted
everyday consumables (e.g. dishwasher tablets) to greener options.
2022 ESG Environment objectives:
— Aim to reduce the volume of paper
used and offset paper usage by
planting trees (become “paper neutral”)
— Increase recycling by 5%
— Develop our NetZero plan for CO
2
by 2040 and meet the Group’s
TCFD metrics
— Gain affiliation to an external agency
e.g. SBTI, “My Green Lab” to assist with
our 10+ year sustainability plan
2021 ESG Environment objectives –
what we achieved:
— To commission a third-party
assessment of sustainability
performance on the redevelopment
of the Windrush Innovation Centre
(eg. BREEAM). 100%
— To map the Group’s Environmental
Management System against
ISO14001. 100%
— To engage with the Group’s suppliers
to reduce the volume of waste
generating materials coming into the
organisation. 60%
— To reduce greenhouse gas emissions
by optimising the Group’s energy
usage. 100%
— To reduce the volume of hazardous
liquid wastes being generated. 0%
— To meet the TCFD metrics and targets.
100%
3
3
3
3
3
3
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The Group’s SECR Compliant Directors statement
The Group continues to meet and exceed the greenhouse gas (‘GHG’)
emissions reporting requirements of The Companies (Directors’ Report).
The Group is also aware of its forthcoming obligations under The
Companies (Directors’ Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018. The Group has prepared this report
in accordance with the requirements for quoted companies under these
regulations. The Group continues to report all material GHG emissions
across its operations.
2021 ESG Environmental performance
This year, the Group has calculated its environmental impact across the
required scope 1, 2 and 3 (selected categories) emissions sources for the
UK only. The Group’s emissions on a location basis (using the UK grid
emissions intensity) are 4,021 tCO₂e, a 2% decrease from last year.
The Group has calculated emission intensity metrics on an FTE basis,
which the Group will monitor to track performance in its subsequent
environmental disclosures. The Group had an average impact of 6 tCO₂e
per FTE, a 14% decrease to 2020.
Electricity was the most material of the emission sources reported and
made up 46% of total emissions in 2021. Business flights have seen
considerable reductions with a 55% decrease in related emissions between
the two reporting periods. This is primarily due to the disruption caused by
the COVID-19 pandemic which resulted in changes in travel habits. Driven
by changes in DEFRA GHG conversion factors, emissions associated with
water consumption have decreased this year. Despite this, water
consumption has risen compared to 2020, caused by improvements in
the accuracy of estimations applied at multiple sites.
Energy and carbon action
In 2021 the following Energy Savings Initiatives were undertaken:
— Energy efficient HVAC was added to Windrush Court West Wing; and
— Energy efficient operations of air handling unit (AHU) – GMP clean
room suite 1 has been split from GMP suite 2 at Harrow House. This has
allowed for the AHU to be switched off to reduce any unnecessary
energy consumption.
2021 ESG Environmental results
The methodology used to calculate the GHG emissions is 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); and
— UK office emissions have been calculated using the DEFRA 2021 issue
of the conversion factor repository.
–14%
Environmental impact
The Group had an average impact of 6 tCO₂e per FTE,
a 14% decrease to 2020.
–55%
Business flights
Business flights have seen considerable reductions
with a 55% decrease in related emissions between the
two reporting periods.
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Following an operational control approach to defining the Group’s organisational boundary, the Group calculated GHG
emissions from business activities falling within the reporting period of January 2021 to December 2021 and using the
reporting period of January 2020 to December 2020 for comparison.
Emissions Source
Global Emissions tCO
2
e Percentage
change to 2020
(%)2020 2021
Scope 1 Natural gas 1,614 1,684 4
Other fuel types 13 14 8
Fleet 18 13 -28
Total Scope 1 1,645 1,711 4
Scope 2 Electricity 1,900 1,864 -2
Total Scope 2 1,900 1,864 -2
Scope 3 Electricity transmission and distribution 163 165 1
Water 14 7 -50
Employee cars 3 1 -67
Rail 0.8 0.2 -75
Public Transport 0.6 0.1 -83
Business flights 212 96 -55
Paper 6 4 -33
Waste and Recycling 152 173 14
Total Scope 3 552 446 -19
Total (Market Based) 2,647 2,358 -11
Total (Location Based) 4,097 4,021 -2
Total Energy Usage (kWh)
2
17,058,312 18,084,620 -6
Nomaliser tCO
2
e per FTE 7 6 -14
1 Emissions have been rounded to one decimal place when less than 1 tCO
2
e to allow for more accurate comparisons year on year.
2 Energy reporting includes kWh from scope 1, scope 2 and scope 3 employee cars only (as required by the SECR regulation).
Direct emissions
Direct emissions are emissions within a
company’s organisational boundary from
sources that the company owns or controls,
like business travel in a company car or the
combustion of fuel in a company’s boilers or
furnace.
Indirect emissions
Indirect emissions result from a company’s
activities but from sources owned or controlled
by another company. The most prominent
example is electricity.
12 3
Scope 1:
Direct
Scope 3:
Indirect
SF
6
N
2
O PFCsCO
2
CH
4
HFCs
Scope 2:
Indirect
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Taskforce for Climate-related Financial Disclosure (TCFD)
The TCFD was established to help identify the information needed by
investors, lenders, and insurance underwriters to assess and price climate
related risks and opportunities appropriately. The Taskforce structured its
recommendations around four thematic areas that represent core
elements of how organisations operate: Governance; Strategy; Risk
Management; and Metrics and Targets.
The Group supports the TCFD framework and the Group have made
disclosures consistent with the four TCFD recommendations and the 11
recommended disclosures. The table on pages 69 to 70 set outs the required
disclosures and explains where in this Annual report and accounts the various
disclosures can be found. The Group first adopted the TCFD framework in
the 2020 Annual report and accounts and continues to apply it this year to
describe activities conducted in the year to 31 December 2021.
Climate change and strategy for physical risks
Understanding the potential impact of future climate scenarios, together
with proactive mitigation, and intervention plans the Group looks to build
resilience to ensure its long-term financial sustainability and continued
supply of product to the Group’s customers. It is critical to understand the
physical climate change risks posed to the workforce, local communities,
assets, and supply to customers. Working in a preventive way, the Group
would like to minimise reactive behaviour and minimise interruptions
from extreme weather events across the Group’s operations.
In 2020, the Group screened climate impacts across its operations/
facilities and strategic suppliers (defined by cost of interruption and
strategic role to the Group) and reported the outcome in the 2020 Annual
report and accounts. In 2022/2023 the Group will assess what a worst-
case scenario will look like in the short, medium, and long term.
As the work progresses, the Group will increase its knowledge base about
the potential financial impact of extreme weather events, and appropriate
mitigation and intervention plans. Financial impacts, such as stranded
assets, cost of interruptions of supply, and capital investments, will be
further assessed and, where material, they will be disclosed.
Climate change and strategy for transition risks and opportunities
The nature of the risks and opportunities the Group faces depends not
only on the physical aspects of climate change, but also regulatory and
commercial changes in the markets in which the Group operates,
pressures to reduce the carbon footprints of the Group’s manufacturing
business, and the ability to shape a culture of climate action focused on
de-carbonising the value chain. To respond to the identified climate risks
and opportunities, the Group is taking enterprise-wide actions, and is
committed to:
— Achieving net-zero greenhouse gas (GHG) emissions by maximising
energy efficiency, shifting to renewable energy sources, and investing
in nature-based removals to compensate for any residual GHG footprint
by 2040; and
— Building resilience by managing the physical (sites, supply chain) and
transitional (regulatory, market and product) risks and opportunities
from climate change in the value chain through adaptation and
business continuity planning.
11
Recommended disclosures
The Group have made disclosures consistent with the
four TCFD recommendations and the 11
recommended disclosures.
Net-zero
Greenhouse gas (GHG) emissions target
The Group is committed to achieving net-zero
greenhouse gas (GHG) emissions by maximising our
energy efficiency, shifting to renewable energy
sources, and investing in nature-based removals to
compensate for any residual GHG footprint by 2040.
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Through the Group’s plan to reduce to net zero by 2040 the Group looks to
reduce GHG emissions from operations by 10% by the beginning of 2027
and to halve emissions by 2032, on the way to achieve net zero by 2040.
Near-term targets (short to medium)
— Become paper neutral by off-setting through investing in tree planting
in 2022;
— Increase waste recycling targets by 5% in 2022;
— Gain affiliation to an external agency to assist with the Group’s long
term sustainability plan in 2022;
— 5% reduction in packaging waste, and 20% increase in plastic recycling
by 2027;
— Achieve 10% reduction in Scope 1 and Scope 2 GHG emissions by the
beginning of 2027 from 2020 baseline;
— 10% of electric energy to be fully renewable (non-carbon based) by
2027; and
— Switch to 100% fully electric vehicles used on site and carbon off-
setting by the end of 2027.
Long-term targets
— 100% of electric energy to be renewable by 2032;
— 10% reduction in packaging waste by 2032;
— Achieve 50% reduction in Scope 1 and Scope 2 GHG emissions by the
beginning of 2032 from 2020 baseline;
— Aim to be “plastic neutral” by off-setting plastics used with plastics
recycling by 2040; and
— Achieve 100% reduction (net zero) in Scope 1 and Scope 2 GHG
emissions by the beginning of 2040 from 2020 baseline.
Governance
The Group has an established Environmental, Social and Governance
(ESG) Committee to monitor the execution of its sustainability strategy,
oversee communication of its sustainability activities with stakeholders
and provides input to the Board and other Committees on sustainability
matters. During 2021, the Committee was chaired by John Dawson in his
capacity as CEO, providing a link to the Board for regular review of ESG
issues. Following Mr Dawson’s decision to step down as CEO in January
2022, the Committee is chaired by Nick Page, Chief Operating Officer
until the new Chief Executive Officer is appointed. The ESG Committee
met every quarter during 2021 for an update on progress regarding the
Group’s Climate Strategy, TCFD and other ESG targets.
The Group’s CEO is responsible to the Board for the management,
development, and performance of the business, including the Group’s
Ambition Zero Carbon and climate-related risks and opportunities.
A strategic group has been established to support the delivery of
sustainability and climate strategies. The sustainability group meets on a
regular basis and makes suggestions, publicises sustainability actions to
be taken within Oxford Biomedica.
“ A strategic group has been
established to support the
delivery of sustainability and
climate strategies.
”
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In the future, the Group intends to establish a TCFD steering group with
cross-functional membership (expected to comprise representatives
from Corporate Affairs, Investor Relations, Finance Risk and Reporting,
R&D, Operations and ESG) to identify and proactively manage the physical
and transition risks and opportunities posed to the Group by climate
change. It is anticipated that this steering group would report to the Audit
Committee and the Board.
Remuneration
In 2022, to incentivise delivery of the Group’s ESG priorities, and delivery
of the Zero Carbon commitment was included in the Executive incentive
arrangements for the Performance Share Plan (PSP) as part of the
Corporate objectives, with a weighting of 10%. This underlines the
importance we place on reducing the Group’s Scope 1 and Scope 2 GHG
emissions.
Identifying and managing climate risk and opportunity
To inform the wider enterprise risk management process of any specific
risks and opportunities posed by climate change and/or the transition to
a low-carbon economy, the Group has integrated climate assessments
into the overall enterprise risk management process.
Assessment of physical risks
In 2020, the Group’s facilities services conducted a screening study of
future climate scenarios to explore the Group’s physical climate-related
risks (floods, water scarcity, extreme heat, strong winds and wildfires).
These scenarios were applied to material Oxford Biomedica sites and key
suppliers with predictions out to the medium/long term. The evaluated
sites include all business-critical operations sites and the Group’s strategic
suppliers. The outcome of these screening studies was combined with a
revenue-based assessment for each site to identify mid- to long-term risks.
Priorities for 2022/23 include an updated review of the climate risk screening
of the Group’s sites including the Boston, US, facility and the screening will
incorporate detailed site level physical climate impact assessments.
Assessment of transition risks and opportunities
To meet the Paris Agreement commitments to be net-zero and restrict
global warming to 1.5ºC, the Group needs to take a product and company
perspective to proactively manage the risks and opportunities posed by
the transition to a low-carbon economy.
To deliver the Group’s 2040 carbon neutral ambition, the products the
Group produces, as well as the Group’s business will need to become
carbon neutral.
To better understand the financial consequences of the transition into a
low-carbon economy to the Group’s business, the Group will need to
work with expert advisors to assist us in this area. Risks and opportunities
will need to be further assessed.
Priorities for 2022 include identifying an expert advisor to assist us in
refining the methodology, ensuring that the climate risks associated with
the Group are fully integrated into business planning and to assist us in
defining a pathway for net zero by 2040.
Carbon neutral
To deliver the Group’s 2040 carbon negative
ambition, the products the Group produces, as
well as the Group’s business will need to become
carbon neutral.
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Outcome of the physical and transitional assessments
In many cases mitigation measures are already in place to address the
risks and opportunities presented by climate change, including those
posed by the transition to a low-carbon economy.
Monitoring progress
The climate emergency is a public health emergency. It is changing the
planet irreversibly, with warming reaching critical tolerance thresholds for
health. Human health and the health of the planet are deeply
interconnected. The Group has an opportunity now to reset how we live
and create a more sustainable world – together and without delay.
The Group reports on its greenhouse gas (GHG) emissions and actions
taken to reduce emissions and is disclosed on pages 64 and 65 of this
Annual report and accounts.
Recommendation The Group’s approach Further information
Governance
Disclose the organisations governance
around climate-related risks and opportunities.
– Describe the Board’s oversight of climate-related
risks and opportunities described
– Describe management’s role in assessing and
managing climate-related risks and opportunities
The Board is accountable for overseeing the delivery
of the Group’s climate-related risk and opportunities.
The SET is responsible for delivering on these
objectives within their functional areas.
The Board and the SET are supported by a cross-
functional ESG Committee which was chaired by the
CEO in 2021 and is currently chaired by Nick Page,
until such time as a new CEO is appointed, who work
to define the Group’s ESG strategy and to set
objectives and targets related to climate related risks
and opportunities.
Corporate Governance
(pages 77 to 137).
Environmental, Social and
Governance Report (page 54 to 75).
TCFD report (pages 66 to 69).
Strategy
Disclose the actual and potential impacts of climate
related risks and opportunities on the Group’s business,
strategy and financial planning where information is
material.
– Describe the climate-related risks and opportunities
the organisation has identified over the short,
medium and long term
– Describe the impact of climate-related risks and
opportunities on the organisation’s business,
strategy, and financial planning
– Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or or lower scenario
The Group’s environmental strategy and objectives
are described in the Group’s Environmental, Social
and Governance Report and the TCFD report.
The Group is committed to minimise the impact
of its operations on the environment by adopting
responsible environmental practices and complying
with applicable environmental legislation.
The Group, during 2022, is looking to develop
a strategy to reach net zero by 2040 and details
of current actions are described in the Annual
report and accounts in the ESG and TCFD reports.
Environmental, Social and
Governance Report (pages 54 to 75).
TCFD report (pages 66 to 69).
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Risk Management
Disclose how the organisation identifies, assesses and
manages climate-related risks.
– Describe the organisation’s processes for identifying
and assessing climate-related risks;
– Describe the organisation’s process for managing
climate-related risks; and
– Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management.
The Group has assessed the impact of climate change
as part of its normal risk management process
and concluded that there is likely to be minor future
financial risks that would need to be managed and
none that would materially impact its business model.
These are described in the Risk section and the TCFD
report in this Annual report and accounts.
This assessment is consistent with the Sustainability
Standards Board’s (SASB) Materiality Map, which
indicates that the issue is not likely to be material for
the biotechnology and pharmaceutical sector.
Risks (pages 78 to 85).
TCFD report (pages 66 to 69).
Metrics and Targets
Disclose the metrics and targets to assess and manage
relevant climate-related risks and opportunities where
such information is material.
– Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in line
with its strategy and risk management process;
– Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions, and
related risks; and
– Describe the targets used to manage climate-related
risks and opportunities and performance against
targets.
The Group’s environmental metrics and targets are
described in its Environmental, Social and
Governance Report. The key targets are:
– Minimise waste disposal from laboratories and
manufacturing suites;
– Reduce carbon emissions by optimising the
Group’s energy usage;
– Reduce packaging materials (plastics used); and
– Use sustainable suppliers.
The Group’s Scope 1, Scope 2 and Scope 3 Green
House Gas emissions are disclosed in the
Environmental, Social and Governance report.
The targets that the Group uses to manage climate-
related risks and opportunities and the Group’s
performance against targets are disclosed in the
TCFD report in this Annual report and accounts.
Environmental, Social and
Governance Report (pages 54 to 75).
SECR report on GHG (pages 64 to 65).
TCFD report (pages 66 to 69).
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Innovation
The Group is committed to delivering life-changing cell and gene therapies
to patients in an ethical and responsible way. This will be achieved by
practicing and delivering ethical, relevant and sustainable innovation. The
Innovation pillar has three key strategic aims:
— To ensure all research and innovation by the Group maintains the
highest ethical standards;
— To deliver innovation that is relevant and understandable so its
implications can be easily assessed; and
— To foster and encourage a culture of innovation to build a sustainable
future for the Group and the wider community.
Ensure all research and innovation at the Group maintains the
highest ethical standards
The Group’s commitment to achieving the highest ethical standards has
historically been embedded in all research and development activities and
has continued to shape the Group’s platform innovation in 2021. This
objective underpins the Group’s overall ESG mission to deliver life-changing
gene therapies to patients in an ethical and socially responsible way.
An ethical review process for the New Technology and New Product
Committees has been drafted and will be implemented in 2022. Ethical
review already takes place as part of the Group’s review of research and
innovation activities, however this represents a formalised inclusion of
ethical review considerations. In 2022, an additional focus of the New
Technology Committee will be on identifying and prioritising innovation
around process intensification to produce therapeutic viral vectors in
sufficient quantities to meet clinical and commercial demands in a more
economical and environmentally sustainable way.
Deliver innovation that is relevant and understandable so its
implications can be easily assessed
In 2020, the Group developed three new tools for innovation to aid the
innovation process. During the course of 2021, the Group implemented
these tools:
— A technology roadmap designed to ensure the smooth and timely
progression of new technologies to commercialisation;
— A new technology profile (NTP) to document the key stages and
decision points of the technology development process; and
— A decision matrix scoring which will evaluate promising technologies
and to officially transition them to governance by the New Technology
Committee.
These tools have been used to prioritise and expedite the process of
commercialising new programmes and technologies and allow the Group
to track the development process with greater clarity and granularity. This
has resulted in the formation of coordinated cross functional project
teams focused on the delivery of technologies from research and
development to commercial application.
2022 ESG Innovation objectives:
— Promote science and increase
knowledge sharing through increased
public engagement
— Deliver greater economy by
maximising productivity at scale and
reducing environmental impact
— Continue to build strong academic
collaborations through support for the
ABViP programme
2021 ESG Innovation objectives –
what we achieved:
— Ensure research and innovation
maintains highest ethical standards by
the formal inclusion of ethical review
within the New Technology and New
Product Committees. 80%
— To deliver innovation that is relevant
and understandable so its implications
can be easily assessed. 100%
— Foster and encourage a culture of
innovation to build a sustainable future
for the Group and the wider
community. 100%
3
3
3
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Foster and encourage a culture of innovation to build a sustainable
future for the Group and the wider community
In 2021, the Group continued to work with In2Science who help children
from disadvantaged backgrounds enter STEM subjects in higher education.
The group sponsored five students during the year with Oxford Biomedica
employees also participating in mentoring sessions to offer insights and
guidance on pursuing a career in STEM industries.
The Group has committed to support PhD studentships through the
Biotechnology and Biological Sciences Research Council (BBSRC)
Collaborative Training Partnership (CTP) in Advanced Bioscience of Viral
Products (ABViP). This multidisciplinary training programme will help foster
the next generation of bioscience leaders and advance research in the
area of viral vectors for future gene therapies and vaccines. The programme
is led by Oxford Biomedica and involves both UCL and University of Oxford
as academic institutions. Over the course of three years, 24 students will
start on the ABViP CTP (18 CTP-funded studentships, six partner-funded
studentships).
The primary focus of the Group’s ESG innovation objectives for 2022 will
be on continuing to foster and encourage a culture of innovation to build
a sustainable future for the Group and the wider community. The Group
intends to continue to support outreach programmes such as In2Science,
to promote STEM careers as a viable route for school children from
demographics that have a low representation in higher education,
particularly in STEM subjects. The Group is also committed to ensuring the
BBSRC CTP programme is a success and fully engage with academic
partners and the research council to ensure the best support is provided
for the next generation of research leaders coming through the programme.
“ The primary focus of the
Group’s ESG innovation
objectives for 2022 will
be on continuing to foster
and encourage a culture
of innovation to build
a sustainable future for
the Group and the wider
community
.”
Studentships
The group has committed to support a multidisciplinary
training which will help foster the next generation
of bioscience leaders and advance research in the area
of viral vectors for future gene therapies and vaccines.
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Supply chain
The Group is committed to building a supply chain that delivers commercial
benefit to the business, while meeting its goal of sustainability. It is intended
that this will continue to be achieved through establishing and maintaining
robust supplier relationships and ensuring that their conduct supports the
Group’s principles for openness, ethics and resilience in the face of
environmental changes.
The Group looks to pay all its suppliers within 30 days of the invoice being
received. In 2021, the Group managed to pay 95% of suppliers’ invoices
within 30 days, continuing its positive track record since 2020, where this
figure was 94%.
The Group has two main ESG supply chain objectives for 2022, which build
on the progress made during 2021 on these areas. The objectives comprise
the launch of a code of conduct for suppliers and the creation of a supplier
page on the Group’s website www.oxb.com.
In 2021, the Group successfully sourced new ethical GMP grade suppliers
for PPE, amidst a challenging environment with unprecedented global
demand for PPE during the pandemic. New supplier relationships were
formed to support the production of the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine, enabling the Group to increase bioreactor
capacity from 200L to 1000L at short notice to accelerate vaccine rollout.
Launch a code of conduct for suppliers working with the Group and
create a supplier page for the Group’s website
The Group is committed to ensuring that its suppliers adhere high
standards of safe working conditions, fair and respectful treatment of
employees, and ethical practices. As part of its due diligence process for
new suppliers, the Group refers to ethical supply chain, environmental
impact, slave and child labour and sustainability issues.
Significant progress was made towards a formalised code of conduct for
suppliers in 2021. The Group undertook market research, including
consulting with industry leaders and reviewing their codes of conduct, in
order to identify best practices. The new formal code of conduct for
suppliers has been developed and reviewed internally, and is expected to
be approved and published on a new supplier page on the Group’s website
www.oxb.com in 2022.
A review of existing supplier relationships is planned to take place and the
new code of conduct to be incorporated into all new contractual supply
relationships moving forwards.
Benchmark suppliers
The Group has Quarterly Strategic Supplier Reviews in place for key suppliers.
This built on the existing procurement and supply chain management
processes and provides a formal supplier feedback programme, providing
suppliers with feedback on their performance against expectations. The
Group has elected to introduce a further level of review by benchmarking
the Group’s suppliers and creating a ranking system, which scores suppliers
against four key performance indicators (KPIs); delivery time, quality of
products, number of supply complaints and price.
2022 ESG Supply Chain Objectives:
— To incorporate the new code of
conduct for suppliers into all new
contractual supply relationships
— To publish the new code of conduct
on the Group’s website including the
Group’s supply chain requirements
2021 ESG Supply chain objectives –
what we achieved:
— To launch a code of conduct for
suppliers. 50%
— To create a supplier page on the
Group’s website. 10%
— To benchmark the Group’s suppliers
and provide suppliers with feedback.
100%
3
3
3
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Governance
Integrity and Ethics
Oxford Biomedica is committed to the highest standards of ethical
conduct and integrity in its business activities in the UK and overseas.
Anti-bribery
Oxford Biomedica’s policy on preventing and prohibiting bribery is in full
accordance with the UK Bribery Act 2010 as well as other relevant overseas
legislation and all employees receive training in this matter. Oxford
Biomedica does not tolerate any form of bribery by, or of, its employees,
agents or consultants or any person or body acting on its behalf. This
prohibition includes the prohibition of facilitation payments made to
government officials for carrying out or speeding up routine procedures.
Senior management is committed to implementing effective measures to
prevent, monitor and eliminate bribery.
During 2021, an anti-bribery and anti-corruption review was undertaken
by an independent external consultant. The consultant reviewed the
current policies and procedures and met with the Board and 17 members
of the senior management team within Oxford Biomedica to understand
how such policies and procedures were implemented. The consultant
found that there was a strong culture of “doing the right thing” within
Oxford Biomedica. Following the review, it was agreed that, in order to
reinforce the current policies and procedures, additional training would
be arranged for employees during the course of 2022.
Oxford Biomedica Solutions is committed to complying with the U.S.
Foreign Corrupt Practices Act (the “FCPA”) and other applicable anti-
corruption laws and has an employee-facing policy to maintain compliance
with such laws.
Whistleblowing
Oxford Biomedica’s compliance activities include the prevention and
detection of misconduct through policy implementation, training and
monitoring. As part of this effort, Oxford Biomedica employees are
encouraged to report suspected cases of misconduct in confidence and
without fear of retaliation. Concerns and allegations are thoroughly
investigated with disciplinary action taken where necessary, up to and
including dismissal and reporting to relevant authorities.
An anonymous confidential reporting channel is provided for both UK
and US-based employees, and there are procedures to protect whistle-
blowers.
Clinical trials
Oxford Biomedica instils transparency, safety and ethics in all aspects of
its business, including the design and conduct of its clinical trials. Oxford
Biomedica’s trials are designed with patient safety as a paramount
concern and the protocols are agreed with the relevant national
regulatory authorities, as well as local ethics committees and institutional
review boards at clinical trial sites, before any patients are treated. Oxford
Biomedica has standard operating procedures in place under a controlled
Quality Management System to ensure compliance with appropriate
legislation for Good Clinical Practice (GCP) as well as the internationally
accepted guidelines for the conduct of ethical clinical trials, specifically
ICH-GCP and the Declaration of Helsinki.
Quality Assurance (QA) audits are undertaken to give independent
assurance that the practices and procedures undertaken for Oxford
Biomedica’s clinical trials are in accordance with the relevant legislation
and guidelines thereby providing assurance that the data and reported
“ During 2021, an anti-
bribery and anti-corruption
review was undertaken by
an independent external
consultant. The consultant
found that there was a strong
culture of ’doing the right
thing’
.”
Clinical trials
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.
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results are credible and accurate, and that the rights, integrity, and
confidentiality of trial patients are protected. The QA function at Oxford
Biomedica puts in place an annual GCP risk-based audit strategy which
is reviewed on a quarterly basis.
Oxford Biomedica’s standard operating procedures and the legislative
framework also covers the risk assessment procedures of the company’s
trials. These assessments include consideration of any specific risks to
the patient population proposed for the clinical trials especially if any trial
were to include vulnerable patients.
Oxford Biomedica is committed to transparency, and information
on ongoing clinical trials is provided on the website. Relevant trials in the
EU and EEA are automatically posted on the EU Clinical Trials Register
(www.clinicaltrialsregister.eu) and Oxford Biomedica discloses its trials
on a US government-sponsored website (www.clinicaltrials.gov).
Human rights and anti-slavery
Oxford Biomedica fully respects human rights and conducts its business in
accordance with the letter and spirit of UK Human Rights legislation and
the UK Modern Slavery Act 2015. The Board of Directors has approved a
Modern Slavery Transparency Statement in compliance with section 54 of
the UK Modern Slavery Act, which can be downloaded from the Group’s
website www.oxb.com. Many of Oxford Biomedica’s facilities are located
in the UK, where its policies accord with human rights regulations and its
supply chain operates in territories with strong commitments to human
rights safeguarding. Oxford Biomedica Solutions is based in the US and is
committed to ensuring its business practices are conducted in compliance
with all applicable federal and state legislation in relation to the preservation
of human rights and prevention of human trafficking.
Animal testing
It is a regulatory requirement that all new therapeutic products must be
appropriately tested for safety before they are administered to patients,
and there is currently no alternative to using animal models as part of this
process.
Oxford Biomedica is committed to following the principles of the three
“Rs” in safety testing: replacement, refinement, and reduction of animal
testing. These principles ensure that animal testing is only employed when
necessary and where there are no alternatives. This includes the following
strategies:
(i) Minimising the use of animal models by cross-referring LentiVector
®
platform data packages for regulatory authorities.
(ii) Optimising in vitro work with models with multiple configurations, with
only the best candidates being moved to in vivo.
(iii) Maximising the use of cell lines, human organoids and making use
of primary tissue where possible in R&D work to reduce the need for
in vivo testing.
In addition to this, Oxford Biomedica only works with Contract Research
Organisations (CROs) that are accredited to international ethical bodies.
Each institution has an internal ethical review of the preclinical work to be
conducted (Institutional Animal Care and Usage Committee), and the
CROs have international accreditation with AAALAC (Association for
Assessment and Accreditation of Laboratory Animal Care).
The New Product Committee approves preclinical projects reviewing
design and animal numbers, and includes ethical review considerations.
A formalised ethical review process for the New Product Committee
has been drafted and will be implemented in 2022.
“ The Group’s principles ensure
that animal testing is only
employed when necessary
and where there are no
alternatives.
”
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Strategic Report
Non-financial statement
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 matters.
Requirement
Policies and standards which govern
the Group’s approach
Risk management and additional information
Environment
– Environment statement
– Environmental, Society and Governance
policy
– Health and safety policy
Health and Safety disclosures on page 57; Stakeholders
pages 18 to 19; Environment, greenhouse gas emissions on
page 65.
Employees
– Equal opportunities policy
Stakeholders pages 18 to 19; People page 57; Employee
numbers by gender page 59; Board engagement with the
business page 58; Diversity page 59; CEO’s remuneration
compared to employees page 120; Gender pay gap report
page 59 and published on the Group’s website.
Human rights
– Privacy Notice
– Whistleblowing policy
– IT and information security policy
Review and approval of the Group’s modern slavery and
human trafficking statement page 75;
Stakeholders pages 18 to 19; Whistleblowing page 74.
Social matters
The Group has an Environmental, Society and
Governance Policy (previously known as the
Responsible Business policy), which covers
the Group’s way of working with employees,
customers/suppliers, patients, the local
community and the environment.
Stakeholders pages 18 to 19; engaging with the local
community and charitable work page 62; Environmental,
Society and Governance pages 54 to 75.
Anti-corruption and
anti-bribery
– Anti-bribery policy
Anti-corruption/anti-bribery page 74.
Policy embedding due diligence
and outcomes
Governance framework and structure page 89;
Board activity during the year page 91; Audit Committee
report page 94.
Principal risks and impact
on business activity
Principal risks and effective management pages 78 to 85;
Audit Committee report page 94; Risk management and
regulatory disclosure pages 78 to 85.
Description of business model
The Group’s business model pages 16 to 17.
Non-financial key performance
indicators
The Group at a glance pages 12 to 13; Operational
highlights pages 22 to 23; Stakeholders pages 18 to 19.
The Strategic Report on pages 12 to 76 was approved by the Board on 20 April 2022 and signed on its behalf by
Dr. Roch Doliveux
Chair and Interim Chief Executive Officer
Corporate Governance 77
Oxford Biomedica plc | Annual report and accounts 2021
Corporate Governance 77
1 Saving lives
through innovation
2 Innovating viral vectors
to an industrial level
4 Expanding our innovative
process development and
manufacturing services
6 Transforming science
into life-saving healthcare
8 Market overview
11 Strategic Report
12 Group at a glance
14 Product pipeline
16 The Group’s business model
18 The Group’s stakeholders
22 Operational highlights
delivered in 2021
24 Financial highlights
delivered in 2021
26 Chair’s statement
30 2021 performance review
38 Management team
40 Delivery of 2021 Objectives
42 Objectives set for 2022
44 Financial review
54 Environmental, Social
and Governance Report
76 Non-financial statement
77 Corporate Governance
78 Principal risks, uncertainties
and risk management
86 Board of Directors
88 Corporate Governance Report
104 Directors’ Remuneration Report
130 Directors’ Report
137 Independent auditors’ report
147 Group financial statements
148 Consolidated statement
of comprehensive income
149 Statement of financial positions
150 Statements of cash flows
151 Statements of changes in equity
attributable to owners of the parent
152 Notes to the consolidated
financial statements
187 Other matters
187 Glossary
190 Advisors and contact details
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Oxford Biomedica plc | Annual report and accounts 2021
The Group is exposed to a range of risks. Some of them are specific to the Group’s current operations, others are
common to all development-stage biopharmaceutical companies. The Directors have carried out a robust assessment
of the emerging and principal risks facing the Group, including those, which could threaten its business model, future
performance, solvency or liquidity.
The Group operates in the cell and gene therapy biotechnology sector which, by its nature, is relatively high risk
compared with other industry sectors. During 2021, there have only been a few additional cell and gene therapy
products that have been approved for commercial use and, consequently, there are still significant financial and
development risks in the 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 incorporates the implementation of a mitigation strategy, each tailored to the
specific risk in question. The Group has taken the decision to disclose the steps it has taken to mitigate the risks facing
its operations during the period as described in the prior year approach to the disclosure of risks.
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 considers risk in the context of
its agenda items at each of its formal meetings, of which there at least six annually. However, twice a year, in March
and September, a full presentation to the Board on risk is provided by the Risk Management Committee. The risk
management processes are the responsibility of the Senior Executive Team (SET) with emerging risks identified by
horizon scanning and discussed at the Risk Management Committee. The Audit Committee monitors the processes
and their implementation as well as reviewing the Group’s internal financial controls and the internal control systems.
The Audit Committee also monitors the integrity of the financial statements of the Group and any formal
announcements relating to the Group’s financial performance, reviewing significant financial reporting judgements
contained in them.
— Senior Executive Team (SET) – During 2021, the SET generally met every week, with twice monthly-extended SET
sessions to discuss current business issues and consider relevant risks. The SET also held regular COVID-19 update
sessions. At least twice a year, the SET meets with representatives from the Risk Management Committee to consider
the operational risk management processes and risks identified.
— Key management committees – the Group currently has three key management sub-committees which meet
monthly and through which much of the day-to-day business is managed. These are the extended Operational
Leadership Team (which incorporates the Quality and Manufacturing Operations Committee), the Product
Development Committee and the Technical Development Committee. SET members attend these meetings and risk
management is a key feature of each sub-committee.
— Risk Management Committee – the Group has a Risk Management Committee comprising senior managers from
each area of the business and chaired by the Chief of Staff. This group meets quarterly with a remit to identify and
assess risks in the business and to consider mitigation and risk management steps that can be taken. The risk register
is regularly reviewed by the SET and key risks are highlighted to the Board at each formal meeting.
— Standard Operating Procedures – all areas of the business have well established Standard Operating Procedures
(SOPs) which are required be followed to minimise the risks inherent in the business operations. Where these are
required for GMP, GCP and GLP any deviations from the SOPs must be identified and investigated. Compliance with
such SOPs are routinely subject to audit by the relevant regulators and customers. Other SOPs, such as financial
processes, are also subject to audits.
Corporate Governance
Principal risks, uncertainties and risk management
Corporate Governance 79
Oxford Biomedica plc | Annual report and accounts 2021
Key risks specific to the Group’s current operations
Pharmaceutical product development risks
To develop a pharmaceutical product, it is necessary to conduct pre-clinical studies and human clinical trials for product
candidates to demonstrate safety and efficacy. The number of pre-clinical studies and clinical trials that will be required
varies depending on the product candidate, the indication being evaluated, the trial results and the regulations applicable
to the particular product candidate. In addition, the Group or its partners will need to obtain regulatory approvals to
conduct clinical trials and bioprocess drugs before they can be marketed. This development process takes many years.
The Group may fail to develop successfully a product candidate for many reasons, including:
— Failure to demonstrate long-term safety;
— Failure to demonstrate efficacy;
— Failure to develop technical solutions to achieve necessary dosing levels or acceptable delivery mechanisms;
— Failure to establish robust bioprocessing processes;
— Failure to obtain regulatory approvals to conduct clinical studies or, ultimately, to market the product; and
— Failure to recruit sufficient patients into clinical studies.
The failure of the Group to successfully develop a product candidate could adversely affect the future profitability of
the Group. There is a risk that the failure of any one product candidate could have a significant and sustained adverse
impact on the Group’s share price. There is also the risk that the failure of one product candidate in clinical development
could have an adverse effect on the development of other product candidates, or on the Group’s ability to enter into
collaborations in respect of product candidates.
The Group has accepted this risk but looks to mitigate via several product candidates in the pipeline and to collaborate
with other larger more experienced partners on product development.
(i) Safety risks
Safety issues may arise at any stage of the drug development process. An independent drug safety monitoring board
(DSMB), the relevant regulatory authorities or the Group itself may suspend or terminate clinical trials at any time. There
can be no assurances that any of the Group’s product candidates will ultimately prove to be safe for human use.
Adverse or inconclusive results from pre-clinical testing or clinical trials may substantially delay, or halt, the development
of product candidates, consequently affecting the Group’s timeline for profitability. The continuation of a particular
study after review by the DSMB or review body does not necessarily indicate that all clinical trials will ultimately be
successfully completed. The Group has accepted this risk but looks to mitigate the impact as much as possible through
careful assessment of any safety issues arising from the product early in the development process and to stop the
development if required.
(ii) Efficacy risks
Human clinical studies are required to demonstrate efficacy in humans when compared against placebo and/or existing
alternative therapies. The results of pre-clinical studies and initial clinical trials of the Group’s product candidates do not
necessarily predict the results of later stage clinical trials. Unapproved product candidates in later stages of clinical trials
may fail to show the desired efficacy despite having progressed through initial clinical trials. There can be no assurance
that the efficacy data collected from the pre-clinical studies and clinical trials of the Group’s product candidates will be
sufficient to satisfy the relevant regulatory authorities that the product should be given a marketing authorisation. The
Group has accepted this risk but looks to mitigate the impact as much as possible through consultation with the
regulatory authorities early in the development process to determine what is required for market authorisation.
(iii) Technical risks
During the course of a product’s development, further technical development may be required to improve the product
candidate’s characteristics such as the delivery mechanism or the bioprocessing process. There is no certainty that
such technical improvements or solutions can be identified. The Group continues to innovate in this area using its R&D
expertise in collaboration with its customers to mitigate this risk.
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(iv) Bioprocessing process risk
There can be no assurance that the Group’s product candidates will be capable of being produced in commercial
quantities at acceptable cost. The Group’s LentiVector
®
and AAV platform product candidates use specialised
bioprocessing processes for which there are only a few suitable bioprocessors including the Group itself. There can be
no assurance that the Group will be able to bioprocess the Group’s product candidates at an economically viable cost
or that contractors who are currently able to bioprocess the Group’s product candidates will continue to make capacity
available at economic prices, or that suitable new contractors will enter the market. Bioprocessing processes that are
effective and practical at the small scale required by the early stages of clinical development may not be appropriate at
the larger scale required for later stages of clinical development or for commercial supply. There can be no assurance
that the Group will be able to adapt current processes or develop new processes suitable for the scale required by later
stages of clinical development or commercial supply in a timely or cost-effective manner, nor that contract bioprocessors
will be able to provide sufficient bioprocessing capacity when required. The Group continues to monitor and review the
platform and production processes to ensure that innovative steps are taken to increase production yields.
(v) Regulatory risk
The clinical development and marketing approval of the Group’s product candidates and the Group’s bioprocessing
facility, are regulated by healthcare regulatory agencies, such as the FDA (USA), EMA (Europe) and MHRA (UK). During
the development stage, regulatory reviews of clinical trial applications or amendments can prolong development
timelines. Similarly, there can be no assurance of gaining the necessary marketing approvals to commercialise products
in development. Regulatory authorities may impose restrictions on a product candidate’s use or may require additional
data before granting approval. If regulatory approval is obtained, the product candidate and bioprocessor will be subject
to continual review and there can be no assurance that such an approval will not be withdrawn or restricted. The
Group’s laboratories, bioprocessing facility and conduct of clinical studies are also subject to regular audits by the
MHRA and the FDA to ensure that they comply with GMP, GCP and GLP standards. Failure to meet such standards could
result in the laboratories or the bioprocessing site being closed or the clinical studies suspended until corrective actions
have been implemented and accepted by the regulator. The Group consults with the regulator early in the development
process to understand any concerns identified and looks to remedy these before they become a major issue.
(vi) Failure to recruit sufficient patients into clinical studies
Clinical trials are established under specific protocols which specify how the trials should be conducted. Protocols
specify the number of patients to be recruited into the study and the characteristics of patients who can and cannot be
accepted into the study. There is a risk that it proves difficult in practice to recruit the number of patients with the
specified characteristics, potentially causing delays or even abandonment of the clinical study. This could be caused by
a variety of reasons, such as the specified characteristics being too tightly defined resulting in a very small population
of suitable patients, or the emergence of a competing drug, either one that is approved or another drug in the clinical
stage of development.
The threats from the above product development risks are inherent in the pharmaceutical industry. The Group aims to
mitigate these risks by employing experienced staff and other external parties, such as contract research organisations,
to plan, implement and monitor its product development activities and to review progress regularly in the Group’s
Product Development Committee.
Corporate Governance
Principal risks, uncertainties and risk management
Corporate Governance 81
Oxford Biomedica plc | Annual report and accounts 2021
Bioprocessing revenue risk
The Group receives significant revenues from bioprocessing lentiviral vectors, AAV vectors and adenovirus-based
vaccines for third parties. Bioprocessing of lentiviral vectors, AAV vectors and adenovirus-based vaccines is complex
and bioprocessing batches may fail to meet the required specification due to contamination or inadequate yield. Failure
to deliver batches to the required specification may lead to loss of revenues. Furthermore, the Group relies on third
parties, in some cases sole suppliers, for the supply of raw materials and certain out-sourced services. If such suppliers
perform in an unsatisfactory manner, it could harm the Group’s business. The Group’s bioprocessing and analytical
facilities are subject to regular inspection and approval by regulators and customers. Failure to comply with the standards
required could result in production operations being suspended until the issues are rectified with the potential for loss
of revenue.
As the Group’s revenues from bioprocessing continue to grow, the risk to the Group has increased as a result in the last
twelve months. 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 processes. In addition, the Group mitigates
the supply chain issues in the UK with looking to source second suppliers and stockpile three months of critical material
supplies. The Group plans to mirror its approach of mitigating supply chain risk in the US by ensuring that Oxford
Biomedica Solutions continues to stockpile several months’ worth of critical material supplies and source back-up
sources of supplies The Group has also asked key suppliers to hold stocks in UK warehouses to cover any immediate
supply issues. Outsourcing of fill and finish has also been seen as a risk but the Group is looking to bring this in-house
to have more control on the process.
Collaborator and partner risk
The Group has entered several collaborations and partnerships, involving the development of product candidates by
partners in which the Group has a financial interest through IP licences. Failure of the Group’s partners to continue to
develop the relevant product candidates for any reason could result in the Group losing potential revenues. The Group
looks to mitigate this risk through having a close relationship with its partners via steering group meetings that look at
candidate selection and progression.
Business development
The Group may seek to out-license or spin out its in-house product development programmes into externally funded
vehicles and may seek to develop strategic partnerships for developing certain of the Group’s other product candidates.
The Group may not be successful in its efforts to build these third-party relationships, which may cause the development
of the products to be delayed or curtailed. The Group has enhanced the commercial development function within the
Group and is thus putting significant resources behind the effort to find good strategic partners to assist in developing
the Group’s other product candidates.
The Group has looked to mitigate its dependency and the associated risk of its partnerships being lentiviral dependent
by expanding into other viral vector areas including adenovirus and AAV. This mitigation was exemplified via the Group’s
establishment in early 2022 of Oxford Biomedica Solutions a new US based subsidiary AAV manufacturing and innovation
business, based near Boston, Massachusetts, US.
The Group is building a revenue generating business by providing its LentiVector
®
and AAV platform to third parties in
return for revenues derived from process development, bioprocessing and future royalties. The Group may be
unsuccessful in building this business for reasons including:
a) Failing to maintain a leadership position in lentiviral vector technology or failing to develop a leading position in AAV
technology;
b) Becoming uncompetitive from a pricing perspective; and
c) Failure to provide an adequate service to business partners and collaborators.
The Group is continuing to invest in its LentiVector
®
and AAV technology to reduce this risk, and takes customer
relationship management extremely seriously to ensure that customers and partners receive the service they expect, as
indicated by the Group on pages 30 to 33 of the Annual report and accounts.
Attraction and retention of highly skilled employees
The Group depends on recruiting and retaining highly skilled employees to deliver its objectives and meet its customers’
needs. The market for such employees is increasingly competitive, especially in the Boston area in the US, and failure
to recruit or to retain employees with the required skills and experience could adversely affect the Group’s performance.
The Group mitigates this risk by creating an attractive working environment and conducting benchmarking reviews to
ensure that the remuneration package offered to employees is comparable with competing employers in the relevant
jurisdiction as indicated by the Group on pages 58 to 60 of the Annual report and accounts.
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Oxford Biomedica plc | Annual report and accounts 2021
Broader business risks which are applicable to the Group
The broader business risks, which the Group face as outlined below are important and the Group looks to identify these
risks early through a horizon scanning project with the assistance of external healthcare consultants and then outlines
actions for the business development team, the SET and ultimately the Board to follow by way of mitigation.
Cell and gene therapy risk
The Group’s commercial success, both from its own product development and from supporting other companies in
the sector, will depend on the acceptance of cell and gene therapy by the medical community and the public for the
prevention and/or treatment of diseases. To date there are only a small number of gene therapy products which have
been approved either in Europe and/or in the US. Furthermore, specific regulatory requirements, over and above those
imposed on other products, apply to cell and gene therapies and there can be no assurance that additional requirements
will not be imposed in the future. This may increase the cost and time required for successful development of cell and
gene therapy products. The Group looks to mitigate this risk through market assessments of the product development
pathway and conducts pricing and reimbursement studies for the cell and gene therapy product.
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 a horizon scanning project to identify the competition and technology advances in the sector
and to develop either in-house or via in-licensing, new technologies for the Groups products and platform.
Longer-term commercialisation risks
In the longer term, the success of the Group’s product candidates and those of its partners will depend on the regulatory
and commercial environment several years into the future. Future commercialisation risks include:
— The emergence of new and/or unexpected competitor products or technologies. The biotechnology and
pharmaceutical industries are subject to rapid technological change which could affect the success of the Group’s
product candidates or make them obsolete;
— Regulatory authorities becoming increasingly demanding regarding efficacy standards or risk averse regarding safety;
— Governments or other payers being unwilling to pay for/reimburse gene therapy products at a level which would
justify the investment. Based on clinical studies to date, the Group’s LentiVector
®
platform product candidates have
the unique potential to provide permanent therapeutic benefit from a single administration. The pricing of these
therapies will depend on assessments of their cost-benefit and cost effectiveness; and
— The willingness of physicians and/or healthcare systems to adopt new treatment regimes.
Any or all of these risks could result in the Group’s future profitability being adversely affected as future royalties and
milestones from commercial partners could be reduced. The Group looks to mitigate this long term commercialisation
risk through a horizon scanning project in order to identify the competition and technology advances early, consult
with regulatory authorities on a regular basis and perform pricing and reimbursement studies on the Group’s products
to identify any serious issues in advance.
Corporate Governance
Principal risks, uncertainties and risk management
Corporate Governance 83
Oxford Biomedica plc | Annual report and accounts 2021
Intellectual property and patent protection risk
The Group’s success depends, amongst other things, on maintaining proprietary rights to its products and technologies
and the Board gives high priority to the strategic management of the Group’s intellectual property portfolio, with the
Board monitoring actions to bolster the intellectual property portfolio as appropriate from time to time. However, there
can be no guarantee that the Group’s product candidates and technologies are adequately protected by intellectual
property. Furthermore, if the Group’s patents are challenged, the defence of such rights could involve substantial costs
and an uncertain outcome.
Third party patents may emerge containing claims that impact the Group’s freedom to operate. There can be no
assurance that the Group will be able to obtain licences to these patents at reasonable cost, if at all, or be able to
develop or obtain alternative technology. Where copyright, design right and/or “know how” protect the Group’s product
candidates or technology, there can be no assurance that a competitor or potential competitor will not independently
develop the same or similar product candidates or technology.
Rights of ownership over and rights to license and use intellectual property depend on a number of factors, including
the circumstances under which the intellectual property was created and the provisions of any agreements covering
such intellectual property. There can be no assurance that changes to the terms within licence agreements will not
affect the entitlement of the Group to the relevant intellectual property or to license the relevant intellectual property
from others.
Financial risks
(a) Product liability and insurance risk
In carrying out its activities the Group potentially faces contractual and statutory claims or other types of claim from
customers, suppliers and/or investors. The Group monitors these potential claims on an ongoing basis and undertakes
mitigating actions, which include taking expert advice on the validity of the claim and using insurance coverage against
the claim to cover any loss as required. In addition, the Group is exposed to potential product liability risks that are
inherent in the research, pre-clinical and clinical evaluation, bioprocessing, marketing and use of pharmaceutical
products. While the Group is currently able to obtain insurance cover, there can be no assurance that any future
necessary insurance cover will be available to the Group at an acceptable cost, if at all, or that, in the event of any claim,
the level of insurance carried by the Group now or in the future will be adequate, or that a product liability or other claim
would not have a material and adverse effect on the Group’s future profitability and financial condition.
(b) Foreign currency exposure
The Group records its transactions and prepares its financial statements in pounds sterling, but some of the Group’s
income from collaborative agreements and patent licences is received in US dollars and the Group incurs a proportion
of its expenditure in US dollars and the Euro. Following the establishment of Oxford Biomedica Solutions, the Group
expects that the proportion of income received in US dollars and expenditure incurred in US dollars will increase
significantly. During 2021, the Group’s cash balances were predominantly held in pounds sterling, although the Group’s
Treasury Policy permits cash balances to be held in other currencies to hedge foreseen foreign currency expenses.
The Group keeps this unhedged position under constant review. To the extent that the Group’s foreign currency assets
and potential liabilities are not matched, fluctuations in exchange rates between pounds sterling, the US dollar and the
Euro may result in realised and unrealised gains and losses on translation of the underlying currency into pounds
sterling that may increase or decrease the Group’s results of operations and may adversely affect the Group’s financial
condition, each stated in pounds sterling. In addition, if the currencies in which the Group earns its revenues and/or
holds its cash balances weaken against the currencies in which it incurs its expenses, this could adversely affect the
Group’s future profitability.
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Loan facility
The Group entered into a $85 million short term loan facility in March 2022 provided by Oaktree Capital Management,
secured on the Group’s assets. Failure to comply with the terms of the loan agreement could potentially place the
Group in default, which could adversely affect the Group’s business operations, financial position and prospects.
Special interest groups and adverse public opinion
During 2021, the Group continued to perform large-scale commercial manufacture of the adenovirus-based Oxford
AstraZeneca COVID-19 vaccine. Such work can be subject to adverse public opinion and has attracted the attention of
special interest groups, including those opposed to vaccination programmes, also referred to as “anti-vaxxers”. To date,
the Group has not been targeted by anti-vax campaigners, but there can be no assurance that such groups will not, in
the future, focus on the Group’s activities, or that any such public opinion would not adversely affect the Group’s
operations. Adverse publicity about the Group, its role in the manufacture of the adenovirus-based Oxford AstraZeneca
COVID-19 vaccine, or any other part of the industry may hurt the Group’s public image, which could harm its operations,
cause its share price to decrease or impair its ability to gain market acceptance for its products. The Group has looked
to mitigate this risk through assistance from the UK government (Centre for Protection of National Infrastructure) on
the protection of its facilities/infrastructure and scenario planning with its external public relations agency with regard
to strategic communications.
Oxford Biomedica Solutions
In early 2022, together with Homology Medicines, the Group established Oxford Biomedica Solutions, a new US based
subsidiary AAV manufacturing and innovation business, based near Boston, Massachusetts, US. The Group has identified
risks associated with the successful transaction and proposed mitigation actions.
There is a risk that the Group fails to integrate Oxford Biomedica Solutions successfully into the Group. The Group is
mitigating this risk through implementation of a detailed alignment plan, with advice from advisors. The Group is aware
that the employment market in the Boston area is highly competitive and has sought to ensure that it has a competitive
compensation package in place and is able to offer additional non-financial benefits to employees such that Oxford
Biomedica Solutions can continue to retain and attract current and prospective employees. The potential for significant
risk to the Group associated with moving into the AAV manufacturing sector has been reduced based on the AAV
experience and track record of Oxford Biomedica Solutions. There is a risk to the Group that it now has an interest in
another jurisdiction outside of the UK, which is the US. The Group has looked to mitigate this through use of professional
advisors to provide appropriate guidance and advice tailored to the US market and applicable laws and regulations, so
as to minimise any resulting risk that may arise.
Cyber security
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. Indeed, with the Group operating in the manufacture of the adenovirus-based
Oxford AstraZeneca COVID-19 vaccine, this has increased the risk of cyber-attack to the Group. Compromised
confidentiality, integrity and availability of the Group’s assets resulting from a cyber-attack would impact the Group’s
ability to deliver to customers and, ultimately, its financial performance and damage the Group’s reputation. The Group
has looked to mitigate this risk through implementing robust security monitoring to provide early detection of hostile
activity on the Group’s networks and has sought assistance from the UK government (National Cyber Security Centre)
to protect the Group’s IT systems. Following the establishment of Oxford Biomedica Solutions, the Group has worked
to ensure that its US-based IT systems are subject to equally robust levels of security monitoring.
War in Ukraine
The Group has no operations, clients or suppliers arising in Russia or Ukraine and, therefore, the war in Ukraine has no
commercial consequences for the Group. Following discussion, the SET has assessed that the only possible effect the
war in Ukraine may have on the Group could be an increase in transportation costs as result of the increase in global
oil prices.
Corporate Governance
Principal risks, uncertainties and risk management
COVID-19
As a result of the COVID-19 pandemic during 2021, the Group assessed the potential financial and operational risks to
the business. While the Group is yet to experience any significant impact from the virus on revenues, the Group
continually monitors the potential impact on the Group’s supply chain, with a particular focus on key manufacturing
and process development inventories.
The Group complies with government COVID-19 safe working practices. During 2021, the Group continued to hold
weekly senior management working group meetings to monitor current COVID-19 developments and GOV.UK
guidance, to risk assess the Group’s supply chain and to direct the Group’s phased response. The Group has worked
with employees, customers and suppliers to monitor any potential disruption and, so far, the Group has not experienced
any, and does not currently expect to experience, significant supply issues or any changes in overall customer demand.
The Group recognises that COVID-19 restrictions and working practices will differ outside of the UK and it is expected
that Oxford Biomedica Solutions will similarly monitor and comply with all relevant COVID-19 developments and all
applicable US federal and state guidance for the purposes of risk assessing supply chain risk in the US and directing a
tailored response.
The Group is aware that there is the potential for global shortages in certain inventories especially in the UK. As part of
its mitigation strategy, the Group has increased, where possible, the level of incoming materials and components held
in warehouses in the UK, which will mitigate the risk in the short term against labour shortages and subsequent
production delays at its key suppliers. These mitigations have been successful to date but there is no guarantee against
future disruption. The Group is also seeking to mirror its approach of increasing the level of incoming materials and
components held by Oxford Biomedica Solutions in the US as part of its mitigation strategy.
The Group has a duty of care towards all employees, and therefore the Group expects some of its employees to be
required to self-isolate to prevent the possible spread of infection. There is also a risk that there could be disruption to
production in the event of employees becoming ill due to COVID-19. As a result, the Group has taken action to provide
a COVID-19 secure workplace and to mitigate the spread of infection at the Group’s facilities through enhanced
cleaning processes, staggering of shifts, regular lateral flow testing, the provision of hand sanitiser in common areas and
the recommendation that employees work from home if possible.
The Board is updated on positive COVID-19 cases amongst the workforce at every Board meeting and the SET receives
weekly updates. There have not been any employee fatalities resulting from COVID-19.
Climate change
The Group’s governance and approach to climate change, including its voluntary disclosure using recommendations
of the Taskforce for Climate-related Financial Disclosure (TCFD) is set out on pages 64 to 70 of the Strategic Report.
The Group has assessed the impact of climate change and concluded that there is likely to be some minor future
financial risks, which would need to be managed, but none that would materially impact the Group’s business model.
This assessment is consistent with the Sustainability Accounting Standards Board’s (SASB) Materiality Map, which
indicates that the issue is not likely to be material for the biotechnology and pharmaceutical sector. The Group will keep
this assessment under review with reference to any future work prepared on the Materiality Map by SASB or others. The
Group expects that the impacts are likely to be weather-related disruption at internal manufacturing sites and to the
Group’s suppliers, with the prospect of increased costs of resources and fuels. The Group plans to continue to develop
its business continuity plans with alternative manufacturing sites and a second sourcing strategy, if possible, to mitigate
these impacts.
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Corporate Governance
Board of Directors
Dr. Roch Doliveux
Chair
Dr. Roch Doliveux was appointed to the Board as
Non-Executive Chair in June 2020. Dr. Doliveux
also became Interim Chief Executive Officer in
January 2022, following the Company’s
announcement of John Dawson’s intention to
retire as Chief Executive Officer. Dr. Doliveux is
currently Chair of the Board of Directors at
Pierre Fabre S.A. 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. 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.
Appointment:
— Appointed as Non-Executive Director and Chair
in June 2020.
— Appointed as Interim Chief Executive Officer
in January 2022.
Committee membership:
—
Nomination Committee (Chair).
—
Remuneration Committee. (Dr. Doliveux will not be
a member of the Remuneration Committee whilst
he serves as Interim Chief Executive Officer).
Relevant skills:
— Corporate strategy.
— Corporate governance.
— Investor relations.
Stuart Henderson
Deputy Chair and Senior Independent
Non-Executive Director
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. Previously, Mr Henderson was a partner
at Deloitte, where he was Head of European
Healthcare and Life Sciences. Prior to this he was
a Partner at Arthur Andersen. Mr Henderson has
extensive audit and transaction experience and
has worked with life sciences businesses for
35 years. Mr Henderson is a former Director of
the Babraham Institute, Biocity Group Limited and
Norwich Research Partners LLP and a Non-
Executive Director at OneNucleus (the Life
Sciences trade body for Cambridge and London),
Cell Therapy Catapult Limited and The Theatre
Royal Bury St Edmunds Management Ltd.
Appointment:
— Appointed a Director in June 2016.
Committee membership:
— Audit Committee (Chair).
— Remuneration Committee.
— Nomination Committee.
Relevant skills:
—
Audit.
—
Corporate governance.
—
Corporate finance.
John Dawson
Chief Executive Officer (during 2021)
John Dawson joined the Board as a Non-
Executive Director in August 2008 and was
appointed Chief Executive Officer in October
2008 until January 2022, when the Company
announced his intention to retire. Previously,
Mr Dawson held senior management positions
in the European operations of Cephalon Inc.,
including Chief Financial Officer and Head
of Business Development Europe. While at
Cephalon Mr Dawson led many deals building
the European business to over 1,000 people
and to a turnover of several hundred million
US dollars. In 2005, Mr Dawson led the
$360 million acquisition of Zeneus by Cephalon.
Prior to his time at Cephalon, Mr Dawson
was Director of Finance and Administration
of Serono Laboratories (UK) Limited.
Appointment:
— Appointed a Director in August 2008 and became
Chief Executive Officer in October 2008.
— Retired as Chief Executive Officer January 2022 and
continues as an Executive Director.
Committee membership:
— None.
Stuart Paynter
Chief Financial Officer
Stuart Paynter joined the Board as Chief
Financial Officer in August 2017. Mr Paynter has
17 years’ experience in the pharmaceutical and
healthcare sectors. He qualified as a chartered
accountant with Haines Watts before moving
to EDS. Mr Paynter subsequently joined Steris,
and worked in a variety of roles within the
healthcare and life sciences divisions prior to
becoming the European Finance Director.
Mr Paynter then moved to Shire Pharmaceuticals
where he became the Senior Director of
Finance Business Partnering for all business
outside of the US, transitioning to a corporate
finance role before becoming the Global Head
of Internal Audit. Prior to joining Oxford
Biomedica Mr Paynter was Head of Finance
Business Partnering at De La Rue plc. He is a
member of the Institute of Chartered
Accountants in England and Wales.
Appointment:
— Appointed a Director and Chief Financial Officer
in August 2017.
Committee membership:
— None.
Dr. Heather Preston
Independent Non-Executive Director
Dr. Heather Preston was appointed to the
Board as a Non-Executive Director in
March 2018 and was appointed Chair of the
Remuneration Committee in June 2020.
Dr. Preston is a Partner and Managing Director
of TPG Biotech. She has over 25 years of
experience in healthcare, as a scientist, physician
and management consultant and she has been
an investor in life sciences and biotechnology
for the last 19 years. Dr. Preston holds a degree
in Medicine from the University of Oxford.
Appointment:
— Appointed a Director in March 2018.
Committee membership:
— Remuneration Committee (Chair).
— Audit Committee.
— Nomination Committee.
—
Scientific and Technology Advisory Committee.*
Relevant skills:
— Scientific advisory.
— Corporate finance.
— Investor relations.
Dr. Siyamak Rasty
Independent Non-Executive Director
Dr. Siyamak (Sam) Rasty was appointed
to the Board as a Non-Executive Director
in December 2020. Dr. Rasty was most recently
President, Chief Executive Officer and Board
Director at PlateletBio, a US-based pioneering
cell therapy company. Previously, he served as
Chief Operating Officer at Homology
Medicines, Inc., a genetic medicines company
that he helped launch in 2016 and transform
into an established, fully integrated public gene
therapy and gene editing company. Prior to
joining Homology Medicines, he held senior
positions at Shire Pharmaceuticals, Endo
Pharmaceuticals and at GlaxoSmithKline. Dr.
Rasty holds a Ph.D. in Biochemistry from
Louisiana State University, where he focused on
transcriptional regulation of lentiviruses,
completed a postdoctoral fellowship at the
University of Pittsburgh School of Medicine,
and received an MBA from Villanova University.
Appointment:
— Appointed a Director in December 2020.
Committee membership:
— Audit Committee (until December 2021).
—
Scientific and Technology Advisory Committee.*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
At the end of 2021 the Board comprised
the following 10 Directors:
Post period-end, the Board was delighted to welcome Namrata P Patel
to the Board as an [Independent] Non-Executive Director in April 2022.
1
2
3
7
8
9
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Oxford Biomedica plc | Annual report and accounts 2021
Dr. Michael Hayden
Non-Executive Director
Dr. Hayden was appointed to the Board as a
Non-Executive Director in July 2021. He was
previously the President of Global R&D and
Chief Scientific Officer at Teva Pharmaceuticals
Industries Ltd. and has co-founded five
biotechnology companies: Prilenia Therapeutics
B.V., NeuroVir Therapeutics Inc., Xenon
Pharmaceuticals Inc., Aspreva Pharmaceuticals
Corp and 89bio, Inc. He currently serves as CEO
of Prilenia Therapeutics and represents various
private biotech companies at board level.
Dr. Hayden has focused his research primarily
on translational medicine, including genetics of
diabetes, lipoprotein disorders, Huntington’s
disease, predictive and personalised medicine,
and drug development, and has authored
approximately 900 peer-reviewed publications
and invited submissions.
Appointment:
—
Appointed a Director in July 2021.
Committee membership:
—
Science and Technology Advisory Committee.*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
Robert Ghenchev
Non-Executive Director
Robert Ghenchev was appointed to the Board
as a Non-Executive Director in June 2019.
Mr Ghenchev is currently Head of Growth
Equity at Novo Holdings. Prior to joining
Novo Holdings, he was an investment banker
at Moelis & Company and Deutsche Bank
in London. Mr Ghenchev has deep corporate
finance experience advising life science
companies on a wide range of issues. He
holds a J.Hons. B.A. degree in Finance and
Economics from McGill University and
a M.Sc. degree in Financial Economics from
the University of Oxford.
Appointment:
— Appointed a Director in June 2019.
Committee membership:
— None.
Relevant skills:
— Corporate finance.
— Investor relations.
Catherine Moukheibir
Independent Non-Executive Director
Catherine Moukheibir was appointed
to the Board as a Non-Executive Director in
December 2021. Over the course of her career
Ms Moukheibir, has served in senior executive
roles and board positions including at Kymab
Limited, Innate Pharma S.A, Ablynx N.V,
Genkyotex S.A, MedDay Pharmaceuticals,
Zealand Pharma A/S, Zeltia S.A., and Creabilis.
Prior to that, she was the CFO of Movetis N.V,
overseeing the company’s IPO on Euronext and
subsequent sale to Shire Pharmaceuticals. She
started her career in investment banking and
capital markets working in the US and London.
She holds an MBA and a Masters in Economics
from Yale University. Ms Moukheibir has
extensive international experience in finance,
capital markets and life sciences and is currently
serving as a non-executive board member
with various companies, both listed (Biotalys,
Ironwood Pharmaceuticals, Inc), and privately-
owned (CMR Surgical Limited, Asceneuron SA.
DNA Script and Noema Pharma).
Appointment:
— Appointed a Director in December 2021.
Committee membership:
— Audit Committee.
Relevant skills:
— Corporate finance.
— Investor relations.
Professor Dame Kay Davies
Independent Non-Executive Director
Professor Dame Kay Davies was appointed to
the Board as a Non-Executive Director in March
2021. 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. She was
co-founder of Summit Therapeutics Plc, a
spinout from her research activities. Professor
Davies also sits on the Board of UCB S.A. and
was appointed a governor of the Welcome
Trust in 2008, serving as Deputy Chair between
2013 and 2017. Professor Davies was a former
director of the Biotech Growth Trust. Professor
Davies has a BA in Chemistry and a D.Phil. in
Biochemistry from the University of Oxford.
Appointment:
— Appointed a Director in March 2021.
Committee membership:
— Remuneration Committee.
— Nomination Committee.
— Science and Technology Advisory Committee (Chair).*
Relevant skills:
— Cell and gene therapy.
— Scientific advisory.
* The Science and Technology Advisory Committee (STAC)
is a committee comprising four external scientific advisors,
SET members and Board members. The STAC is chaired
by Professor Dame Kay Davies.
1
5
9
2
6
10
3
7
4
8
4
5
6
10
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Oxford Biomedica plc | Annual report and accounts 2021
Dear Shareholder
I am pleased to present the Oxford Biomedica’s Corporate Governance Report for 2021.
The COVID-19 pandemic has again hindered the Board’s ability to engage as fully as usual with some of its stakeholders
this year. In line with government guidelines, we held a closed AGM in 2021, encouraging shareholders to vote by proxy
in advance and inviting questions to be submitted to the Board in advance by post or email. These questions and our
responses were made available on our website. In light of public health guidance and legislation issued by the UK
Government in relation to the COVID-19 pandemic, together with the uncertainty as to any additional and/or alternative
measures that may be put in place by the UK Government, and in order to protect the health and safety of our
shareholders and Directors, the Company is proposing to hold its AGM as a combined physical and electronic meeting.
This means that attendance in person is likely to be restricted in terms of numbers and shareholders and other attendees
are encouraged not to attend the AGM in person, save for such persons nominated by the Chair of the meeting in order
to establish a quorum. Shareholders will be able to attend the meeting via the online meeting platform and will be able
to ask questions and submit their votes during the meeting. The Board is looking forward to returning to a more normal
level of engagement with shareholders, employees and other stakeholders as soon as it is safe to do so in 2022.
Corporate Governance continues to be an important area of focus for the Board. The Board believes that good
corporate governance is essential for the long-term success of the business and this is ultimately the responsibility of
the Board and its Committees. Following the commitments given by the Board last year, the Company are pleased to
report that from February 2021, the Board was in compliance with Provision 11 of the Corporate Governance Code,
meeting the requirement for at least half of the Board, not including the Chair, to comprise Independent Non-Executive
Directors.
In addition, the Board previously made a commitment to comply with the FTSE Women Leaders Review (formerly the
Hampton-Alexander recommendations) that the Board comprise at least one third women by the AGM in 2022. The
Board are delighted to announce that as at the end of 2021, the Board comprised 30 % women, with the appointments
of Professor Dame Kay Davies and Catherine Moukheibir during the year. Whilst the Board note that as at the end of the
year the one third FTSE Women Leaders Review had not been met, the Board has taken steps to address this. The Board
initiated a search for an additional Independent Non-Executive Director targeting the selection of female and ethnically
diverse candidates and in April 2022, we were pleased to welcome Namrata P Patel to the Board as an Independent
Non-Executive Director. Ms Patel brings extensive international experience in manufacturing and product supply
and
ESG. Following Ms Patel’s appointment, the Board comprises 36% women and is in compliance with the
recommendations of the FTSE Women Leaders Review.
During the year, Martin Diggle stepped down from the Board after serving nearly nine years and Dr. Andrew Heath
retired from the Board at the AGM after serving more than 11 years. Due to the length of his tenure as a Director,
Dr. Heath was not considered to be independent for the purposes of the Corporate Governance Code during his period
as a Non-Executive Director during 2021. In July 2021, the Board also welcomed Dr. Michael Hayden. In January 2022,
John Dawson notified the Group that he intended to retire as a Director and stepped down as CEO. Mr Dawson has
provided more than 13 years of dedicated service and leadership to the Group and, on behalf of the Board and all of our
employees, we thank him wholeheartedly. The Board has initiated a search for a successor to John Dawson and in the
meantime, I am acting as Interim CEO whilst remaining in my position as Chair.
Oxford Biomedica has had a good year in what was a difficult period due to the COVID-19 pandemic, with an increase
in headcount from around 670 to over 815 and an increase in the Group’s revenues during the year. The Board paid
particular attention to ensuring that the Group’s strategy continues to be appropriate by holding a one-day strategy
review meeting in September 2021. The strategy review ensured that management focused on delivering the Group’s
key priorities whilst managing the key risks facing the Group and considering how good corporate governance can
contribute towards delivering the Group’s strategy.
In November 2021, Deloitte LLP performed an external evaluation of the Board’s performance covering the period from
January 2021 to the fourth quarter of 2021. The review process comprised the completion of a questionnaire covering
the various aspects of Board activities and Committees and interviews with each Director individually by the external
evaluator. The resulting report was discussed at the Board meetings in January and March 2022 and the Board plans to
implement appropriate changes based on the recommendations of the report.
The following pages set out in more detail the activities and major matters considered by the Board in 2021.
Dr. Roch Doliveux
Chair and Interim Chief Executive Officer
Corporate Governance
Corporate Governance Report
Corporate Governance 89
Oxford Biomedica plc | Annual report and accounts 2021
Corporate Governance Framework
The current governance framework comprises the Board and the Senior Executive Team and their respective
sub-committees which, during the period under review, were as set out below:
SET – Senior Executive Team
PDC – Product Development Committee
TDC – Technical Development Committee
eOLT – Extended Operations Leadership Team (incorporates the Quality, Manufacturing and Operations Committee)
CDC – Commercial Development Committee
RMC – Risk Management Committee
John Dawson notified the Group in January 2022 that he intended to retire as a Director and stepped down as CEO of
the Group. The Board has initiated a search for a successor to Mr Dawson and in the meantime Dr. Roch Doliveux is
acting as Interim CEO whilst remaining in his position as Chair and he will not be a member of the Remuneration
Committee whilst he serves as Interim CEO. At the request of Dr. Doliveux, he will not be compensated for his interim
CEO duties.
The Board
The Board is collectively responsible for promoting the success of the Group by directing and supervising the Group’s
activities to create shareholder value. In doing so, it ensures that there are robust corporate governance and risk
management processes in place. The Board comprises both Non-Executive and Executive Directors and provides
the forum for external and independent review and challenge to the Executives. Following Board changes during 2021,
the Board comprised eight 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 cover
Research; Quality; Process Research and Development; Client Programmes and Alliance Management; Analytical
Services; Clinical Development and Regulatory; Digital Strategy and Business Change Projects; Business and Corporate
Development; Finance; Investor Relations; HR; Operations; Safety, Health and Environment; and Risk Management.
The Board
Chair – Dr. Roch Doliveux
Audit Committee
Chair – Stuart Henderson
Remuneration Committee
Chair – Dr. Heather Preston
Nomination Committee
Chair – Dr. Roch Doliveux
PDC TDC eOLT CDC RMC
SET
CEO – John Dawson
Science and Technology
Advisory Committee
Chair – Prof. Kay Davies
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Oxford Biomedica plc | Annual report and accounts 2021
Factoring stakeholder engagement into Board decisions
By thoroughly understanding the Group’s key stakeholder groups, the Group can factor their needs and concerns into
Boardroom discussions (further information on the Group’s stakeholders is on pages 16 to 21). The Board’s procedures
have been updated to require a stakeholder impact analysis to be completed for all material decisions requiring its
approval that could impact on one or more of its stakeholder groups. The stakeholder impact analysis assists the
Directors in performing their duties under s172 of the Companies Act 2006 and provides the Board with assurance that
the potential impacts on its stakeholders are being carefully considered by management when developing plans for
Board approval.
The stakeholder impact analysis identifies:
— Potential benefits and areas of concern for each stakeholder group;
— The procedures and plans being implemented to mitigate against any areas of concern; and
— Who is responsible for ensuring the mitigation plans are being effectively implemented.
As shown by way of example in the Homology Medicines transaction case study, the Board considers the potential
impact of decisions on each stakeholder group as well as stakeholder needs and concerns, in accordance with s172 of
the Companies Act 2006 (see pages 20 and 21).
During the period under review there was a clear division of responsibilities between the Chair and Chief Executive
Officer. Following John Dawson’s decision to step down, Dr. Roch Doliveux is acting as Interim Chief Executive Officer
whilst the Company undertakes a search for a new Chief Executive Officer and it is expected that there will once again
be a clear division of responsibilities between the Chair and Chief Executive Officer once John Dawson’s successor is
appointed.
Certain responsibilities are delegated to three Board Committees – the Audit, Nomination and Remuneration
Committees. These Committees operate under clearly defined terms of reference, which are disclosed on the Group’s
website (www.oxb.com). In addition, the Company has an advisory committee, the Science and Technology Advisory
Committee (STAC) which comprises four external scientific advisors, members of the SET and of the Board. The STAC
is chaired by Professor Dame Kay Davies and has clearly defined terms of reference, which are disclosed on the Group’s
website (www.oxb.com).
Reports from the Audit and Nomination Committees are included in this section and the Directors’ Remuneration
Report is on pages 104 to 109 incorporating the Remuneration Committee report.
At the end of 2021, the Board comprised the following Directors, whose biographies are set out on pages 86 and 87.
— Dr. Roch Doliveux 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.
— Stuart Henderson was appointed Senior Independent Director following the 2021 AGM. Stuart Henderson is also
Chair of the Audit Committee and designated Non-Executive Director for the Workforce Engagement Panel and also
acts as Deputy Chair. He is considered to be independent.
— Dr. Heather Preston was appointed Chair of Remuneration Committee following the 2021 AGM and is considered to
be independent;
— Robert Ghenchev is Senior Partner and Head of Growth Equity at Novo Holdings, which is a 10.0% investor in the
Group, and as such he is not considered independent under the Corporate Governance Code;
— Dr. Sam Rasty was appointed to the Board in December 2020 and is considered to be independent;
— Professor Dame Kay Davies was appointed to the Board in March 2021 and is considered independent. Professor
Davies also acts as Chair of the Science and Technology Advisory Committee, an advisory committee to the Board;
— Dr. Michael Hayden was appointed to the Board in July 2021 and is not considered to be independent, having
previously provided consultancy services to the Board; and
— Catherine Moukheibir was appointed to the Board in December 2021 and is considered to be independent.
During the year, Martin Diggle and Dr. Andrew Heath retired from the Board.
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
also 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.
Corporate Governance
Corporate Governance Report
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Oxford Biomedica plc | Annual report and accounts 2021
Board meetings
The Board meets regularly with meeting dates agreed for each year in advance. During 2021, there were seven 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 Audit Committee Remuneration Committee Nomination Committee
Possible Attended Possible Attended Possible Attended Possible Attended
John Dawson 6 6
Professor Dame Kay Davies
1
5 5 11 11 14 14
Martin Diggle
2
1 1
Dr. Roch Doliveux 6 6 15 15 19 19
Robert Ghenchev 6 6 2* 2*
Dr. Andrew Heath
3
2 2 1* 1* 1* 1 7* 8*
Dr. Michael Hayden
4
3 3 1* 1*
Stuart Henderson 6 6 3 3 15 15 19 19
Catherine Moukheibir
5
0 0 0 0
Stuart Paynter 6 6
Dr. Heather Preston 6 6 3 2 15 15 19 18
Dr. Sam Rasty 6 6 3 3 2* 2*
1 Professor Dame Kay Davies was appointed in March 2021.
2 Martin Diggle retired from the Board in February 2021.
3 Dr. Andrew Heath retired from the Board in May 2021 Dr. Heath was not considered to be independent for the purposes of the Corporate Governance Code during his period as a
Non-Executive Director during 2021.
4 Dr. Michael Hayden was appointed in July 2021.
5 Catherine Moukheibir was appointed in December 2021.
* attended as an observer
In addition to the above regular meetings, the Board (or an appointed sub-committee of the Board) met on 5 other
occasions to consider specific
ad hoc
matters including,
inter alia
, the approval of the 2020 financial statements, the
interim 2021 financial results and the acquisition of an 80% ownership interest in a newly formed AAV focused
manufacturing and innovation business, Oxford Biomedica Solutions LLC, established in March 2022 with Homology
Medicines.
The Chair holds meetings after each regular Board meeting with Non-Executive Directors, without the Executive
Directors in attendance.
Board activity during 2021
Board matters during 2021 included:
— Routinely recurring items such as the approvals of the 2021 financial budget and objectives; the 2020 preliminary
results and Annual report and accounts, the 2021 interim results announcement; and review of the basis for the
Group’s related going concern disclosures;
— A review of the Group’s strategy, conducted in September;
— Monitoring the progress of the Group’s priority product development programmes;
— Reviewing business development opportunities including partnering and collaboration transactions;
— The appointment of Professor Dame Kay Davies, Dr. Michael Hayden and Catherine Moukheibir as Directors;
— Ongoing reviews of the Group’s risk management processes and key risks;
— Reports on Health, Safety and Environment;
— The Group’s activities surrounding workforce engagement;
— Completion of an external evaluation on Board effectiveness; and
— Preparedness for the implications of the COVID-19 pandemic, ESG and climate change.
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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.
At the AGM in 2022, Dr. Michael Hayden, Catherine Moukheibir and Namrata P Patel will stand for appointment having
been appointed to the Board since the last AGM. In line with the Corporate Governance Code, Dr. Roch Doliveux, Stuart
Henderson, Dr. Heather Preston, Robert Ghenchev, Dr. Sam Rasty, Professor Dame Kay Davies and Stuart Paynter will
retire and be subject to re-election at the AGM in 2022. John Dawson will be retiring from the Board and therefore will
not stand for re-election at the AGM in 2022.
Communication with shareholders
The Board recognises the importance of effective communication with shareholders and potential investors. The
primary points of contact are the Chief Executive Officer and Chief Financial Officer but the Chair, Senior Independent
Director and Chair of the Remuneration Committee are also available for meetings with investors, if required. Novo
Holdings (10.0% shareholder), continues to be represented on the Board by Robert Ghenchev, which ensured 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 John Dawson and Stuart Paynter met with major shareholders during 2021.
Dr. Roch Doliveux, Stuart Henderson and Dr. Heather Preston also met with major shareholders.
2021 Annual General Meeting The 2021 AGM was held on 27 May 2021. Shareholders were not allowed to attend the AGM in person in light
of the COVID-19 situation and the Stay at Home measures that were implemented by the UK Government.
Shareholders were invited to attend the AGM virtually, which lasted around 30 minutes and which, as well as
the formal business, included a Q&A session after the meeting closed with the answers posted on the Group’s
website (questions to the Group were submitted in advance of the meeting).
Meetings with potential investors John Dawson and Stuart Paynter regularly make presentations and meet potential investors on a one-to-one
basis at investor conferences in Europe and the US. The Group also conducts investor roadshows periodically,
which provide further opportunities to meet potential investors.
Results announcements and
presentations
The Group announced its 2020 full year performance and financial results in April 2021, and its 2021 half year interim
results in September 2021, through RNS announcements accompanied by analyst conference calls which are
accessible to all shareholders and recordings of which were made available on the Group’s website.
2020 Annual report The Group published its 2020 Annual report and accounts in April 2021.
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 [email protected]
Social media The Group uses LinkedIn and Twitter to alert followers to Company news flow.
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The Senior Executive Team (SET) and its committees
Operational management is conducted by the Executive Directors who, together with Dr. James Miskin, Dr. Kyriacos
Mitrophanous, Nick Page, Dr. Jason Slingsby, Helen Stephenson-Ellis, Natalie Walter, Matthew Treagus and Dave Backer
formed the Senior Executive Team (SET) during 2021. The Chief Executive Officer during 2021 was John Dawson.
During 2021, the SET met every week, had daily update meetings and had an extended SET meeting every two weeks,
with the agenda covering the full range of activities of the Group, including financial performance, organisational and
employment matters, risk management and Safety, Health and Environment.
There are three SET sub-committees covering the major business operational areas. During 2021, these sub-committees
met monthly and were attended by SET members and other relevant senior managers from the business. These sub-
committees are:
— Product Development Committee (PDC) – covering the development of new cell and gene therapy products from
initial concept through to clinical development;
— Technical Development Committee (TDC) – covering the development of new and improved assays and production
and other processes, including cell and vector engineering; and
— Extended Operational Leadership Team (eOLT) – incorporates the Quality and Manufacturing Operations Committee
and covers quality, operational and manufacturing matters.
Within their area of responsibility these committees cover objective and target setting, monitoring performance against
targets, ensuring compliance with GxP and other relevant requirements, monitoring expenditure against budget and
risk management.
There are three other important committees:
— Commercial Development Committee (CDC) – which covers the external opportunities to out-license and in-
license technology or product candidates and to generate partnership opportunities for manufacturing and product
development;
— Risk Management Committee (RMC) – this committee comprises senior managers from all parts of the business. The
committee meets at least quarterly to identify and assess risks facing the business and to propose risk mitigation and
management actions; and
— Science And Technology Committee (STAC) – this committee is Chaired by Professor Dame Kay Davies and
comprises four external scientific advisors, SET members and Board members. The committee met as required to
review and assess new technology and product opportunities. STAC provides an external independent view of assets
to SET and the Board.
Important matters from all of these committees are referred to the SET.
Risk management
The Board is responsible for determining the nature and extent of the risks it is willing to take in achieving the objectives
of the Group and it reviews current key risks at every Board meeting. The Audit Committee monitors the conduct of the
risk management processes within the Group whilst the SET is accountable for those processes, identifying the risks
facing the Group and formulating risk mitigation plans. The active involvement of the Executive Directors in the
management sub-committees allows them to monitor and assess significant business, operational, financial, compliance
and other risks.
The Board’s assessment of the prospects of the Board, its expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due, and the viability statement, are set out on page 133.
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Board committee reports
Audit Committee report
During 2021, the Audit Committee comprised Stuart Henderson (Chair), Dr. Heather Preston and Dr. Sam Rasty. In
December 2021, Dr. Sam Rasty stepped down from the Audit Committee and Catherine Moukheibir was appointed to
the Audit Committee. The Corporate Governance Code requires the Audit Committee to comprise at least three
Independent Non-Executive Directors and the Company complied with provision 24 of the Corporate Governance
Code during 2021.
Stuart Henderson, Dr. Heather Preston, Dr. Sam Rasty and Catherine Moukheibir all have relevant experience, which
qualified them for membership of the Audit Committee and, in Stuart Henderson’s case, to be Chair of the Audit
Committee. Their experience is set out in their brief biographies on pages 86 and 87.
The role of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities by reviewing and monitoring:
— The integrity of the financial and narrative statements and other financial information provided to shareholders;
— The internal controls and risk management for the Company and its subsidiaries (together the Group);
— The internal and external audit process and auditors; and
— The processes for compliance with laws, regulations and ethical codes of practice.
Key activities:
Statutory reporting
In relation to the financial statements, the Audit Committee ensures that the Group provides accurate and timely
financial results that reflect the relevant accounting standards and judgements appropriately. This includes the Group’s
status as a going concern and longer-term prospects and viability. The Audit Committee reviewed and recommended
the approval of the 2020 preliminary results and 2020 Annual report and accounts, the 2021 interim financial statements,
the Group’s 2021 preliminary results and this Annual report and accounts.
The Audit Committee is responsible for assisting the Board’s oversight of the quality and integrity of the Group’s financial
reporting and accounting policies and practices. The Audit Committee considered the viability and going concern
statements, their underlying assumptions and the longer-term prospects, including the appropriateness of a three-year
period assessment reflecting the dynamic and changing environment in which the Group operates (see pages 131 to 132).
As part of its review of the financial statements, the Audit Committee considered, and challenged as appropriate, the
accounting policies and significant judgements and estimates underpinning the financial statements. Details regarding the
significant financial reporting matters and how they were addressed by the Audit Committee are set out later in this report.
Risk and control
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. The Audit Committee
reviews the significant current and emerging risks (including climate change and the current war in Ukraine) and their
associated mitigations via updates from the Risk Committee. Further details of these risks can be found on pages 78 to 85
of the Annual report and accounts.
The Audit Committee also reviews and approves insurance levels and strategy, tax strategy, treasury policy, and performs
an annual review of the risk of fraud and misstatement within the financial statements and the related controls to
mitigate this risk. During the year, the Audit Committee oversaw the progression of the finance function transformation
programme. Significant steps were taken to progress the evolution of its internal control environment and its evaluation
of control procedures, with the project expected to be completed during 2022.
Compliance
The Audit Committee supports the Board in discharging its responsibilities in relation to whistleblowing, ethical
behaviour, and the prevention of bribery, fraud, and adherence to modern slavery legislation.
External audit
The Audit Committee considers the audit scope and auditor’s fees, auditor independence and non-audit fees, as well
as update reports, management letter observations and effectiveness reviews.
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Internal audit
The Corporate Governance Code recommends that the Audit Committee should review the effectiveness of the
Group’s internal audit function. The Audit Committee considers that, upon completion of the finance function
transformation referred to above, it will be appropriate to commission an annual third-party internal audit review of the
effectiveness of key controls on a cyclical basis.
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.
Meetings held
The Audit Committee met three times in 2021:
— 8 April 2021 – to review the 2020 audit findings and consider the auditors’ report. The auditors’ opinion, letter of
independence and representation letter were reviewed and were deemed to be satisfactory. The Audit Committee
reviewed all the material accounting and estimation judgments likely to have a material impact on the financial
statements. The auditors reported on their key areas of audit focus including going concern, bioprocessing and
process development revenue percentage of completion, and the out of specification provision. The Audit Committee
discussed the quality of the audit, and no significant concerns arose. The Audit Committee discussed and agreed the
wording of the going concern and the viability statement. Internal controls relating to operations under the COVID-19
situation and remote working were discussed. Risk actions relating to the status of operations in response to
COVID-19, the risk process and risk disclosures in the Annual report and accounts were reviewed. The timeline for
the Preliminary Results and the publication of the Annual report and accounts was also discussed.
— 8 September 2021 – to review the 2021 audit strategy, and also the 2021 interim results. The significant risks in the
audit strategy included revenue fraud (increased due to larger and more complex contractual customer arrangements)
and contract revenue recognition. As a result of the Group’s operating resilience during the year to date and the
successful equity fundraise, going concern risk had been significantly mitigated. The FRC focus on climate change
was noted by the auditors. The auditors reported on their key areas of review focus including contract revenue
recognition and the related licence fees. Progress on strategy to enhance internal controls was discussed.
— 8 November 2021 – risk management, insurance strategy, tax strategy, treasury policy and the financial control
environment and related controls were tabled and reviewed. The Risk Management Committee presented key risks
identified to the Audit Committee following an update of the risk register. The 2021/2022 insurance strategy was
discussed and agreed, including discussions around directors and officers and errors and omissions insurance. The
Audit Committee also agreed with the current tax strategy. The Audit Committee approved the current treasury
policy and discussed the progress on the Group’s strategy of enhancing its financial control environment and
related controls.
Correspondence with the Financial Reporting Council
During the year, the Financial Reporting Council (FRC) communicated with the Directors regarding the Group’s Annual
report for the year ended 31 December 2020. The FRC raised a limited number of matters for which, on some, the
Directors undertook to make additional disclosures in the financial statements for the year ended 31 December 2021.
Following the review by the FRC it was recognised that the movement in the loan to subsidiary of £13.9 million within
the Company only cash flow statement was incorrectly presented within cash flows from financing activities rather
than cash flows from investing activities. The Group has therefore restated the prior year financial statements to present
the movement in the loan to subsidiary within cash flows from investing activities in the Company only cash flow
statement. This change has no effect on the cash position of the Group or Company and has no further impact on the
Group or Company Financial Statements. The FRC have now concluded its review.
The scope of a FRC review is limited as it is based merely on what is included in the Group’s Annual report and accounts.
The FRC does not benefit from detailed knowledge of the Group’s business or an understanding of the underlying
transactions, and their review is limited to certain aspects of the Group’s Annual report and accounts. Therefore, there
are inherent limitations relating to their review and as such it provides no assurance that the Group’s Annual report and
accounts is correct in all material respects; the FRC’s role is not to verify the information provided but to consider
compliance with reporting requirements.
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Significant issues
The issues considered by the Audit Committee that are deemed to be significant to the Group are alternative performance
measures, going concern, contract revenue recognition and related licence fees, the percentage of completion of
bioprocessing and fixed price commercial development revenues, intangible asset received in lieu of cash payment for
bioprocessing services, customer contracts with varying bioprocessing batch prices and the bioprocessing out of
specification provision.
The Board has considered the Group’s going concern status and future viability of the business, the outcome of which
is detailed in the Directors Report on pages 130 to 136.
Alternative performance measures
Oxford Biomedica reports APMs to provide helpful supplementary information to the IFRS measures to enable a better
understanding of the Group’s financial performance and position. Management carefully analyses the presentation of
various items to ensure it is fair and balanced, and follows guidelines issued by ESMA and the SEC, as well as FRC
thematic reviews.
The Group evaluates its performance by making use of alternative performance measures as part of its Key Financial
Performance Indicators (refer page 47). 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 Audit Committee reviewed proposed disclosures for non-GAAP items in line with the various regulatory guidance,
and concurred with management that the presentation enabled additional helpful guidance.
Going concern
Management and the Directors have had to make estimates and important judgements when assessing the going
concern status of the Group.
At year-end, management provides to the Audit Committee an accounting paper on the going concern status and
future viability of the Group which is assessed by the Audit Committee as a sub-committee of the Board. The paper is
based on a detailed cash flow forecast, taking into consideration both a base case and a downside scenario where
specific sensitivities are stress tested, and a long-range plan prepared by management.
In the preparation of the downside scenario detailed cash flow forecast, management assessed the impact of the risks
currently facing the business. The Audit Committee also considered further potential downside risks to this forecast, as
well as the mitigating actions which could be required if these downside risks were to occur. This was to stress test an
aggregation of the worst scenario occurring that would represent the greatest potential financial impact in the short
term and over the longer term (currently assessed as three years) considered within the Group’s viability statement.
Having provided appropriate challenge to management and the external auditor, the Audit Committee has concluded
that the going concern status and future viability of the Group has been appropriately assessed. This is further explained
in the going concern note on page 96.
The Board concluded on the going concern status and future viability of the business, the outcome of which is detailed
in the Directors Report on page 132.
The Group’s external Auditor has reported to the Audit Committee that they have reviewed the going concern
status and future viability of the Group, as well as performing detailed testing of the cash flow forecast and found
the going concern status and future viability of the Group to be appropriately reflected in the 2021 Annual report
and accounts.
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
year. Firstly, in relation to the number of distinct performance obligations contained within each collaboration
agreement; secondly, the fair value allocation of revenue to each performance obligation; and thirdly, the timing of
revenue recognition based on the achievement of the relevant performance obligation. The sales royalties contained
within the collaboration agreements qualify for the royalty exemption available under IFRS 15 and will only be recognised
as the underlying sales are made.
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Recognition of customer 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 is 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 customer has
been achieved. If it was judged that the performance obligations on licences granted in 2021 had not been met,
revenues would have been £5.9 million lower with the revenue expected to be recognised in the future when the
performance obligations were deemed to have been met.
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 judgement 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 and the related contract asset raised with regard to the bioprocessing batches
which remain in progress at the year end is £15.2 million. The contract assets related to these batches as at the year end
was £6.4 million. If the assessed percentage of completion was 10 percentage points higher or lower, revenue recognised
in the year would have been £1,520,000 higher or lower.
Percentage of completion of fixed price process development revenues
As it satisfies its performance obligations the Group recognises revenue and the related contract asset with regard to
fixed price process development work packages. Revenues are recognised on a percentage of completion basis and as
such require judgement in terms of the assessment of the correct percentage of completion for that specific process
development work package. The value of the revenue recognised and the related contract asset raised with regard
to the work packages which remain in progress at year end is £8 million. The contract assets related to these work
packages as at the year end was £2.5
million
. If the assessed percentage of completion was 10 percentage points higher
or lower, revenue recognised in the period would have been £802,000 higher or lower.
Customer contract with varying bioprocessing batch prices
During 2020, the Group entered into a supply agreement with a customer for the supply of bioprocessing batches
where the batch price will vary across the period of the contract. The Group has deemed that the series guidance within
IFRS 15 applies and has therefore recognised revenue based on averaging the batch price over the period of the
contract for those bioprocessing batches. If the revenue had been recognised based on an actual batch price, revenues
would have been £0.3 million higher with a corresponding decrease in revenues in future years.
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, increasingly in a commercial supply
environment, 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 four years, and has applied the percentage of out of specification batches to total
batches produced across the assessed period to the revenue recognised on batches which have not yet completed the
bioprocessing process at year end. This estimate, based on the historical percentage, may be significantly higher or lower
depending on the number of bioprocessing batches actually going out of specification in future. If the historical percentage
had been 10% higher or lower, the estimate would be £67,000 higher or lower. The estimate will increase or decrease
based on the number of bioprocessing batches which go out of specification over the historic assessment period, but also
the number of bioprocessing batches which have not yet completed the bioprocessing process at year end.
Consequently, bioprocessing revenue of £0.7 million (2020: £1.4 million) has not been recognised during 2021 with the
corresponding credit to contract liabilities (note 20). This unrecognised revenue will be recognised as those batches
complete bioprocessing.
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Bioprocessing contract modification
On 13 December 2021, the Group announced an update to its commercial supply agreement with Novartis. The
changes to the agreement have been determined to be a licence modification under IFRS 15. The contract has been
accounted for prospectively as if it were terminated and a new contract created; with the remaining unrecognised
transaction price allocated to remaining performance obligations. This resulted in breakage revenue of £4.8 million
being recognised at modification from batch reservations to be manufactured in 2021, as there was no longer an
expectation that remaining batches would be ordered.
Actions and conclusion on significant issues identified
Upon identification of these significant issues, management provided the Audit Committee with a detailed update on
the nature, reasoning behind and risk of misstatement of these key accounting items, estimates and judgements,
including any related accounting papers and other supporting documents. Any significant change to the method of
calculation of these issues, or the judgement or estimates involved, is flagged to the Audit Committee, with regular
updates being provided until such time as these are finalised prior to release of the year end or interim results.
The Group’s external auditor has reported to the Audit Committee that they have reviewed the assumptions and
methods used in calculating these key accounting items, estimates and judgements, as well as performing detailed
testing of the year end position, and found these significant issues to be appropriately accounted for.
Having provided appropriate challenge to management and the external auditor, the Audit Committee has concluded
that these significant issues identified during 2021 have been appropriately accounted for.
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. The Audit Committee annually reviews the
effectiveness of all significant aspects of internal control, including financial, operational and compliance controls, and
risk management. The review for 2021 prepared by the Chief Financial Officer and the Group Financial Controller, was
further reviewed at the November 2021 Audit Committee meeting. 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.
Currently the main features of the internal control and risk management processes which apply to the Group’s financial
reporting processes include:
— A detailed review process of the Annual report and accounts, including review by the Senior Executive Team and the
Board;
— Preparation of accounting papers for significant accounting and judgemental issues and review by the Group
Financial Controller, Chief Financial Officer and the Audit Committee;
— Performance of an annual assessment of the risk of financial fraud and misstatement within the financial statements
and accounting records, and assessment of the appropriateness of controls in place to mitigate the risks identified to
an acceptable level;
— Preparation of detailed going concern and viability assessment papers and cash flow forecasts by the Head of Financial
Planning and Analysis, with subsequent detailed review and approval by the Chief Financial Officer and the Board
; and
— 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 detailed authorisation limits within the financial processes such as approval of invoices,
purchase orders, payroll and disbursements.
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At the October 2020 Audit Committee meeting, it was agreed that the Group should develop a finance function
transformation strategy to enhance the internal control environment. During 2021 the Group, led by the Audit Committee,
took firm steps to progress the finance function transformation strategy ahead of expected corporate governance
reforms published in the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) White Paper
“Restoring trust in audit and corporate governance”. The implementation of the transformation strategy is underway and
the Group has achieved the following:
— Appointment of a Director, Financial Controls to:
— Oversee the finance transformation projects;
— Work with the finance team to update and improve internal control policies, procedures, process flows and flow
chart and risk registers;
— Design and continually monitor the Group’s financial control framework; and
— Ensure appropriate monitoring and escalation is in place on key operating financial controls and metrics.
— Creation of a roadmap to achieve the Group’s goal of improving its internal control environment and internal control
systems, and to reduce the risk of failure to achieve business objectives (both financial and operational);
— On track to positioning the Group to achieve compliance with the expected internal control reforms set out in the
BEIS White Paper;
— Increased financial control headcount from 11 to 16, strengthening the finance function to reflect the growth and
complexity of the business, but also to implement and improve our financial control procedures;
— Partnered with a professional services firm to review and update our internal control policies, procedures, process
flows and flowcharts;
— Created a risk and controls library, capturing the key risks and mitigating controls across the end-to-end financial
reporting process;
— Performing monthly monitoring and testing of the Group’s financial control framework, with escalation in place on
key operating financial controls and metrics; and
— Reporting regularly to the Audit Committee on progress of the transformation strategy.
Over the course of the next 12 months, the Group will establish a relationship with an external firm to provide independent
assurance over the Group’s internal control environment and systems, looking at various key risks and controls on a
rotational basis, and reporting to the Audit Committee twice per year.
COVID-19
Due to the continued impact of COVID-19, the Group has continued encouraging working from home by some of its
employees where possible. As most of the internal controls implemented by the business are system based, this has not
had a detrimental impact on the control environment. The Group already has extensive remote working facilities in
place for its employees, including functionally limiting access from users’ own devices. Proactive monitoring of remote
usage is performed as a precaution.
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External audit
KPMG continued as the Group’s external auditor for the 2021 financial year. It is the Group’s intention to put the external
audit out to tender every 10 years and to rotate the lead partner at least every five years. Will Smith has been the lead
partner on the audit for the last three years after Charles Le Strange Meakin retired after one year following KPMG’s
initial appointment in 2018.
The Audit Committee regularly reviews the role of the external auditor and the scope of their audit. The Audit Committee
considers the effectiveness of the external auditor on an ongoing basis during the year, considering, among other
things, its independence, objectivity, appropriate mindset and professional scepticism, through its own observations
and interactions with the external auditor, and having regard to the:
— 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.
KPMG contributed a further independent perspective on certain aspects of the Group’s financial control systems arising
from their work and reported these to the Audit Committee. The process for approving all non-audit work provided by
the external auditor is overseen by the Audit Committee in order to safeguard the objectivity and independence of the
auditor, and in compliance with regulatory and ethical guidance. If KPMG 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 auditor’s review of the Group’s interim financial statements, there were
no non-audit fees received by KPMG in 2021. The non-audit fees policy is compliant with ethical Standards for Auditors.
In 2021, KPMG received total fees of £0.5 million (2020: £0.4 million) which is an increase of £0.1 million versus the
previous period. Fees paid to KPMG are set out in Note 8 to the financial statements.
Fair, balanced and understandable statement
The Audit Committee considered this Annual report and accounts, taken as a whole, and concluded that the disclosures,
as well as the processes and controls underlying its production, were appropriate and recommended to the Board that
the Annual report and accounts is fair, balanced and understandable while providing the necessary information to
assess the Group’s position and performance, business model and strategy.
Stuart Henderson
Audit Committee Chair
20 April 2022
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Nomination Committee report
The Nomination Committee, which is chaired by Dr. Roch Doliveux, 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 of whom are deemed Independent Non-Executive Directors. The primary duties of the
Nomination Committee are set out in its written terms of reference, which is available on the Group’s website.
Whilst the Board acknowledged in the 2020 Annual report and accounts that it was not in compliance with Provision
11 of the Corporate Governance Code during 2020, it confirmed that the Nomination Committee had initiated a search
for additional Independent Non-Executive Directors. The Nomination Committee met 19 times in 2021 on an
ad hoc
basis in order to discuss searches for additional Non-Executive Directors and succession planning.
During the year, the Company was pleased to announce that the Board had been further strengthened by the
appointment of Professor Dame Kay Davies in March 2021, Dr. Michael Hayden in July 2021 and Catherine Moukheibir
in December 2021 as Non-Executive Directors. In addition, Martin Diggle stepped down from the Board in February
2021 after serving nearly nine years and Dr. Andrew Heath retired from the Board in May 2021 after serving more
than 11 years. As such, from February 2021, the Board was in compliance with Provision 11 of the Corporate
Governance Code, meeting the requirement for half the Board, not including the Chair, to comprise Independent
Non-Executive Directors.
In January 2022, John Dawson notified the Group that he intended to retire as a Director and stepped down as CEO.
John has provided more than 13 years of dedicated service and leadership to the Group. The Board has initiated a
search for a successor to John and in the meantime, Dr. Roch Doliveux is acting as Interim CEO whilst remaining in his
position as Chair.
In addition, the Board previously made a commitment to comply with the recommendations that the Board comprise
at least one third women by the AGM in 2022. As at the end of 2021, the Board comprised 30% women, following the
appointments of Professor Dame Kay Davies and Catherine Moukheibir during the year. Whilst the Board note that as
at the end of the year the recommendation of the FTSE Women Leaders Review that one third of Board members
should be female had not been met, the Board had already initiated a search for an additional Independent Non-
Executive Director targeting the selection of female and ethnically diverse candidates and was delighted to welcome
Namrata P Patel to the Board as an Independent Non-Executive Director in April 2022. Ms Patel brings extensive
international experience in manufacturing and product supply and ESG. Following this appointment, the Board
comprises 36% women and is in compliance with the recommendations of the FTSE Women Leaders Review and the
recommendations of the Parker Review, relating to ethnic diversity in senior leadership.
Workforce Engagement Panel and Designated Non-Executive Director
In compliance with Corporate Governance Code, the Group has an established Workforce Engagement Panel (WEP)
comprising employees from all levels and functions across the Group. The purpose of the WEP is to enable employees
to discuss issues of importance to them and ensure that senior leaders and the Board hear the views of the workforce.
Stuart Henderson was appointed as the designated Non-Executive Director, to oversee engagement between the
Board and the workforce (further information on the WEP can be found on page 58). The WEP met eight times during
2021 and Stuart Henderson attended two of those meetings during 2021. The topics covered by the WEP during 2021
included discussion of the Equality, Diversity and Inclusion (EDI) practices and strategy within the Group and the resulting
three-year action plan; employee benefits package; the impact of COVID-19 on working; future ways of working;
employee training programmes; wellbeing practices; how Executive pay aligns with the wider Group pay policy; and
the review of results of the employee engagement survey.
Board evaluation
The Board complied with the Corporate Governance Code guidance that the Board evaluation should be externally
facilitated at least every three years, with the Company Secretary commissioning an external evaluation of the Board’s
performance by Deloitte LLP covering the period from January 2021 to the fourth quarter of 2021. The review process
comprised the completion of a questionnaire covering the various aspects of Board activities and Committees and
interviews with each Director individually by the external evaluator. The resulting report was discussed at the Board
meetings in January and March 2022 and the Board plans to implement appropriate changes based on the discussions
of the report.
The Company has also engaged the services of Deloitte LLP to advise the Board and the Remuneration Committee on
matters relating to remuneration however, the evaluation of the Board’s performance was undertaken by a separate
team within Deloitte LLP. Stuart Henderson, Deputy Chair and Senior Independent Non-Executive Director, was formerly
a partner at Deloitte LLP until 2016. Aside from the foregoing, the Company and the Directors have no connections with
Deloitte LLP.
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Board succession planning
During 2021, the Board reviewed the succession plans for both its composition and that of its Committees and the
continued development of the Board. In light of John Dawson’s decision to retire as CEO, announced in January 2022,
the Board initiated a search for a successor with an external search consultancy, Egon Zehnder. The Company and the
Directors have no connections with Egon Zehnder. The Board also initiated a search for additional Independent Non-
Executive Directors in 2021 to address the Corporate Governance Code requirement that half the Board should consist
of Independent Non-Executive Directors. Professor Dame Kay Davies was appointed in March 2021 and Dr. Michael
Hayden in July 2021, following introductions from Dr. Roch Doliveux. Catherine Moukheibir was appointed in December
2021, following an introduction from Spencer Stuart. The Board engaged Spencer Stuart to conduct a search for
additional Independent Non-Executive Directors to further strengthen and diversify the Board and, post-period end,
was delighted to welcome Namrata P Patel to the Board in April 2022. The external search consultancy, Spencer Stuart,
has no connection with the Company or its individual Directors.
Professor Dame Kay Davies was appointed a member of both the Nomination and Remuneration Committees, as well
as chairing the Science and Technology Advisory Committee. Catherine Moukheibir was appointed a member of the
Audit Committee. Following his decision to retire as CEO, John Dawson will not be standing for re-election as a
Director at the forthcoming AGM.
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 (formerly the Hampton Alexander Review) on
gender balance. During 2021, the Board comprised three woman and seven men (30%) and, therefore, did not meet
the FTSE Women Leaders’ recommendation that 33% of the Board for FTSE350 companies consists of women by the
end of 2021. In order to strengthen and diversify the Board to meet compliance requirements, the Board initiated a
search for an additional Independent Non-Executive Director targeting the selection of female and ethnically diverse
candidates and was delighted to welcome Namrata P Patel to the Board as an Independent Non-Executive Director in
April 2022. Following Ms Patel’s appointment, the Board comprises 36% women and is in compliance with the
recommendations of the FTSE Women Leaders Review. The Remuneration Committee and the Nomination Committees
comprised 50% women during 2021 and the Audit Committee, following Catherine Moukheibir’s appointment in
December 2021, now comprises 66% women. 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, during 2021, the SET, excluding the Executive Directors, totalled seven, of which there were two female
members. In the gender pay gap report for 2021, (for the full report see the Group’s website www.oxb.com) the Group
had more females than males at the Head of Department level and senior management level, thereby meeting the FTSE
Women Leaders Review’s recommendation that 33% of senior leadership roles (defined as the SET and their direct
reports) be held by women at the end of 2021. 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 be continued to be met during 2022/2023.
The Board is aware of the recommendations of the Parker Review on Ethnic Diversity. The Parker Review set a target
for companies to have at least one Board member from an ethnic minority background by 2021. Whilst during 2021
none of the serving Board members identified as belonging to an ethnic minority, the Nomination Committee had
initiated a search with external search consultants, Spencer Stuart, for an additional Independent Non-Executive
Director targeting female and ethnically diverse candidates whilst taking into account suitability for the role to ensure
that the Group has the right mix of skills, experience, independence and knowledge for the Group’s strategic objectives.
In April 2022, the Board welcomed Namrata P Patel to the Board, further strengthening and diversifying the Board and
aligning the Board's composition with the recommendations of the Parker Review.
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In addition, the Group has in place an internal management development programme which provides a structured
training programme for the purposes of identifying and progressing talent across all areas of the Group to senior
management level and beyond. At a more junior level, as part of its ESG objectives for 2022, the Group has included the
goal of fostering and encouraging a culture of innovation within the Group and the wider community promoting STEM
careers for school children through sponsorship and mentoring. The Group will work with partners, such as In2Science,
to promote STEM careers as a viable route for schoolchildren from demographics that have a low representation in
higher education particularly in STEM subjects. Through sponsorship, mentoring and support for careers workshops
and other activities, the Group aims to encourage these individuals to enrol in higher education and/or apprenticeships
to study STEM subjects and embark on careers in the field. For further information on the Group’s ESG objectives for
2022, please refer to pages 57 to 73.
Compliance with the Code
The Group considers that it was largely in compliance with the terms of the Corporate Governance Code during 2021
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 was in full compliance with the
Corporate Governance Code, save as set out below (with reference to the Corporate Governance Code provisions):
Corporate Governance Code Provision Explanation
Provision 11 – At least half the Board, excluding the Chair,
should comprise Independent Non-Executive Directors
The Company acknowledges that it was not in compliance with the
requirements of Provision 11 of the Corporate Governance Code for
a period of two months at the beginning of 2021. However, the Board
initiated searches for additional Independent Non-Executive Directors
during the course of 2021 which, due to the COVID-19 pandemic,
took slightly longer than expected.
In February 2021, the Board announced the appointment of Professor
Dame Kay Davies as an Independent Non-Executive Director following
which, the Board became compliant with the requirements of Provision 11.
In December 2021, the Board announced the appointment of Catherine
Moukheibir as an Independent Non-Executive Director.
At the end of 2021, there were seven Non-Executive Directors (excluding
the Chair), two of whom were deemed not to be independent. In April
2022, the Board announced the appointment of Namrata P Patel as an
Independent Non-Executive Director, further strengthening and
diversifying the Board.
Provision 38 – The pension contribution rates for Executive Directors
should be aligned with those available for the workforce
The Executive Directors currently receive a 15% pension contribution
(or cash allowance) unlike the wider workforce who currently receive
a 7.5% pension contribution. In line with Provision 38 of the Corporate
Governance Code, the Executive Directors have received written
notification that, from 31 December 2022, their pension contribution
will be reduced to align with the wider workforce.
Provision 41 – Engagement with the workforce to explain how Executive
pay aligns with the wider Company pay policy.
Although the Group was not in compliance with Provision 41 of the
Corporate Governance Code at the beginning of 2021, the Group
engaged with the workforce at the WEP in September 2021 to explain
how Executive pay aligns with the wider Group pay policy. In particular,
the WEP received a briefing on the role of the Remuneration Committee
and the key highlights from the 2021-2024 Remuneration Policy,
including the underlying context for increases in base pay and
adjustments to the maximum bonus and long term incentive (share
based) opportunity. In addition, WEP members received information
relating to recent trends in executive pay and the WEP members were
given the opportunity to provide feedback and discuss the topic with their
respective wider teams.
Share capital
The information about the share capital required by Article 10 of the Takeover Directive is in the Directors’ Report on
page 131.
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Directors’ Remuneration Report
Annual statement from the Remuneration Committee Chair
Dear Shareholder
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended 31 December 2021.
This report, which is subject to an advisory shareholder vote at the 2022 AGM, explains the work of the Remuneration
Committee, how we have implemented our Remuneration Policy (the Policy) in 2021 and how we intend to apply it in 2022.
For ease of reference, a summary of the key elements of the Policy is included on pages 123 to 125. The full Policy
as approved at the AGM on 27 May 2021 is included in the Directors’ Remuneration Report for the year ended
31 December 2020, which is available on the Company’s website at www.oxb.com.
2021 remuneration in the context of our business performance and outcomes for our key stakeholders
2021 was another year of strong progress for Oxford Biomedica, reflected by the exceptional financial results we have
reported as we continue to demonstrate our world leading expertise in cell and gene therapy. As detailed in our
Strategic Report, Oxford Biomedica is in a strong position to enable our customers to bring their life-changing therapies
to more patients. Key achievements include:
— Large-scale commercial manufacture of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine with Oxford
Biomedica now having successfully manufactured over 100 million doses of vaccine. Cumulative revenues from
AstraZeneca by the end of 2021 were in excess of £100 million, contributing to significant growth in Group Operating
EBITDA in 2021
;
— New customer partnerships and expanded collaborations with partners including Boehringer Ingelheim, Immatics
and Arcellx
;
— An equity investment of £50 million by Serum Life Sciences in September 2021 which will allow us to expand
capacity at Oxbox, creating new highly skilled jobs at a time when we have a strong development pipeline
;
— Extension of the commercial supply agreement with Novartis for the manufacture of lentiviral vectors for several
Novartis CAR-T products to the end of 2028, with Oxford Biomedica regaining the rights to three CAR-T targets,
including CD19 targeted therapies
;
— Following the year end we announced the broadening of our leading viral vector offerings by incorporating Homology
Medicines AAV capabilities into a newly formed AAV manufacturing and innovation business in the US with Homology
Medicines as 20% owner (Homology Transaction). This is a major advancement in our goal to become an innovative
global viral vector leader and allows Oxford Biomedica to offer global pharmaceutical and biotechnology clients
innovative manufacturing expertise in AAV as well as lentiviral-based cell and gene therapies. This transaction also
provides the Group a physical footprint in the US, located close to customers, talent, innovation in academia and pools
of capital
;
— In addition to the above, in 2021 we offered an additional 16 apprenticeships and launched the Collaborative
Training Partnership (CTP) programme with Oxford University and University College London (UCL); and
— We have continued the roll-out of the management development programme and our Rewards and Talent
programme and have recruited in excess of 200 new colleagues.
The Remuneration Committee considers that the incentive outcomes summarised below are a fair reflection of the
Group’s performance achieved during 2021 and the past three years, and are appropriate in the context of the
stakeholder experience. As a result, the Remuneration Committee determined the outcomes to be appropriate.
2021 Executive Director Remuneration and Variable Pay Outcomes
The table below summarises the implementation of the Policy for Executive Directors for the year ended 31 December 2021.
John Dawson Stuart Paynter
Base salary £455,000 £310,000
Pension 15% of salary 15% of salary
Bonus (maximum) 150% of salary 150% of salary
LTIP (maximum) 200% of salary 175% of salary
Single Figure Total for 2021 £1,828,000 £1,091,000
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As set out in the Remuneration Report last year, the 2021 base salary increases for John Dawson and Stuart Paynter,
reflected the third year of a phased base salary increase. In the case of Stuart Paynter, the increase also reflected that he
has been in role since August 2017 and that his performance and contribution have been exceptional. Specifically, this
has included several successful fundraises, the transition to FTSE250 status, and ensuring growth has been managed in
a financially positive way, prioritising OPEX and CAPEX expenditure appropriately, resulting in a healthy balance sheet and
strong cash position. These achievements have strongly positioned the Group to take advantage of strategic
opportunities.
The 2021 increases positioned base salaries for both John Dawson and Stuart Paynter in the lower quartile for comparable
UK companies.
The maximum annual bonus and LTIP opportunities for 2021 are aligned with market practice for UK companies of a
similar size and complexity.
The 2021 annual bonus was subject to a financial and non-financial performance measures aligned with key strategic
priorities. John Dawson’s bonus was based solely on Group objectives. Stuart Paynter’s bonus was based 80% on Group
objectives and 20% on personal objectives.
Reflecting the strong performance over the year, John Dawson earned a bonus of 126% of salary and Stuart Paynter
earned a bonus of 125% of salary. 50% of the bonus earned will be deferred into shares. Further details are set out on
page 115.
In line with the requirements of the reporting regulations, the total single figure of remuneration for 2021 includes the
vesting outturn for the following LTIP awards:
— The LTIP award granted on 7 August 2018 was subject to share price growth targets assessed over the three year
period to 6 August 2021. The 2018 award vested at 30.6% of the maximum award for John Dawson and 35% of the
maximum award for Stuart Paynter. The different vesting levels reflect the fact that the amount which John could
earn at threshold was 25% of salary (or 20% of the total award granted). The maximum Stuart could earn at threshold
was also 25% of salary (which equated to 25% of the total award granted); and
— The LTIP award granted on 18 April 2019 was subject to revenue growth targets measured over the three years ending
31 December 2021 for 50% of the award and growth in share price targets assessed over the three year period to
17 April 2022 for 50% of the award. Although the 2019 LTIP awards will not vest until April 2022, the total single figure
of remuneration for 2021 includes the revenue growth performance element of the 2019 LTIP awards. This is because
this element of the 2019 LTIP vests by reference to revenue performance over the three financial year period to
31 December 2021. Over the three year performance period the compound annual growth rate of the Group’s revenue
was 28.8% resulting in an estimated vesting outturn of 100% of this element. The vesting value of the share price
performance element of the 2019 LTIP award will be included in the single total figure of remuneration for 2022.
Further details of the performance targets and outturns are set out on pages 116 to 117. In line with the Corporate
Governance Code, the 2019 LTIP awards are subject to a further two year holding period following the three year
vesting period before they can be exercised.
For the LTIP awards granted in 2021, the performance measures were weighted 40% relative Total Shareholder Return
(TSR); 40% revenue growth; and 20% strategic goals. Further details are set out on page 117. As noted in the Remuneration
Report last year, the Remuneration Committee was mindful of the need to ensure that the increases in incentive
quantum for 2021 were commensurate with appropriately stretching targets for maximum vesting. As detailed on
page 100 of the Annual report and accounts, the revenue growth measure for the 2021 LTIP awards requires a 30%
CAGR for maximum vesting, compared to a 24% CAGR for the 2020 awards.
Board changes
In January 2022, we announced that after more than 13 years of service John Dawson had signalled his intention to
retire. He remained in post as CEO for the full duration of 2021 and his remuneration for 2021 is reported in the usual
way in this report.
John Dawson stepped down as CEO and Dr. Roch Doliveux assumed the role of Interim CEO on 28 January 2022. He
will remain an Executive Director until the AGM in 2022 and an employee and advisor to Oxford Biomedica throughout
2022. His final day of employment will be 17 January 2023 (12 months after the date of the formal Company
announcement communicating his intention to retire as CEO). The approach to John Dawson’s remuneration for 2022
is summarised on the next page.
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Directors’ Remuneration Report
At the request of Dr. Roch Doliveux, no changes have been made to his remuneration arrangements in connection with
his taking on the Interim CEO role. A process to appoint a new CEO is underway, as previously announced.
Dr. Andrew Heath stepped down from the Board on 27 May 2021.
Professor Dame Kay Davies was appointed to the Board with effect from 1 March 2021. Dr. Michael Hayden was
appointed to the Board with effect from 15 July 2021. Catherine Moukheibir was appointed to the Board with effect
from 14 December 2021.
Our approach to Directors’ Remuneration in 2022
The Directors’ Remuneration Policy approved at the 2021 AGM will continue to apply in 2022. We have summarised
below the way in which it will be implemented.
Executive Directors
Base salary As noted above, no change to Dr. Roch Doliveux’s remuneration arrangements have been made in connection with his taking
on the Interim CEO role. Dr. Roch Doliveux will continue to receive a fee of £225,000 for 2022.
With effect from 1 January 2022:
– John Dawson’s salary was increased £468,650 (a 3% increase). This increase was agreed before his intention to retire was
announced.
– Stuart Paynter’s salary has been increased to £341,000 (a 10% increase).
The 10% increase for Stuart Paynter is aligned with the base salary increases for the Senior Executive Team. The base salary
increases for the wider workforce for 2022 (excluding promotions) ranged from circa. 3% to over 10% depending on the
individual’s performance in the role and base salary positioning against the market.
The increase for Stuart Paynter also takes into account the permanent increase in the scope and complexity of Stuart Paynter’s
role in light of the establishment of Oxford Biomedica Solutions (which materially expands our geographic presence in the US).
Stuart Paynter’s base salary continues to be positioned below median when compared to companies of a similar size and
complexity.
The Remuneration Committee is mindful of the impact of base salary increases on the value of the overall total package. In line
with the commitment made last year we will continue to ensure that stretching targets for annual variable and long term
compensation are set commensurate with the overall level of total compensation. This will deliver alignment to shareholders’
interests as we continue to grow.
Pension Dr. Roch Doliveux will not receive an employer pension contribution or cash supplement for 2022.
The maximum employer pension contribution or cash supplement will continue to be 15% of salary for John Dawson and
Stuart Paynter up to 31 December 2022. With effect from 1 January 2023, the contribution will be aligned with the contribution
available to the wider workforce (currently 7.5%).
Annual bonus Dr. Roch Doliveux has waived any entitlement to an annual bonus in respect of 2022.
For 2022, John Dawson and Stuart Paynter will be eligible to earn a bonus of up to 150% of salary. The intention is that
John Dawson’s bonus opportunity will be on a pro-rata basis for the period he is in active employment for 2022. Any bonus
earned will be paid at the usual time.
50% of any bonus earned will be delivered in the form of deferred shares.
The performance measures and targets will be disclosed in the 2022 Directors’ Remuneration Report to the extent they are not
commercially sensitive.
LTIP Neither Dr. Roch Doliveux nor John Dawson will receive an award under the LTIP in respect of 2022.
The Remuneration Committee are aware that, in line with sector peers, the Company’s share price has fallen over the last 12
months and is lower than when the 2021 LTIP awards were granted.
It is intended that the 2022 LTIP awards will be granted in the 42 days following the announcement of the Group’s full year
results. The Remuneration Committee will finalise the quantum of the grants at that time having regard to share price
performance and market conditions at that time.
In line with best practice and investor guidance it is the Remuneration Committee’s intention is to scale back the quantum of the
2022 LTIP to be granted to Stuart Paynter from 175% of salary to 155% of salary.
The performance conditions are summarised below.
A two year holding period will to apply following the three-year performance period.
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Performance conditions and targets for 2022 Performance Shares Award under the LTIP
For the grants to be made in 2022, it is intended that the performance measures will be weighted 40% Relative TSR;
40% revenue growth; and 20% strategic goals.
Measure Weighting Approach
Relative TSR 40% Vesting based on the Company’s TSR over a three-year performance
period relative to the TSR performance of companies in the NASDAQ
Biotechnology Index.
– Threshold vesting 25%: Median performance
– Maximum vesting: Upper quartile performance
TSR will be assessed over a three-year period from the date of grant
of the awards, consistent with our current approach to the share price
measure, with a three month averaging period applied, again consistent
with our current approach to the share price measure.
Revenue Growth 40% Threshold vesting 25%: 15% CAGR per annum over a three-year
performance period Maximum vesting: 30% CAGR per annum over
a three-year performance period.
The Revenue Growth targets for the 2022 award have been reviewed
taking into account the Homology transaction and the replacement of
transitory revenue of the COVID-19 pandemic with long term, strategic
growth potential. These stretching targets require continued double digit
growth from the strong performance delivered in 2021.
Product related
strategic milestones
20% The strategic measure and targets are commercially sensitive and will
be disclosed when this is no longer the case, and no later than when
the awards vest. The measure will be aligned with the Group’s strategy
with the level of vesting determined by reference to the achievements,
with 25% vesting for delivery of a threshold milestone.
Underpin Applies to the whole award Consistent with previous awards, the whole award will be subject to an
underpin such that it will only vest to the extent that the Remuneration
Committee considers the overall performance of the business over the
performance period justifies it.
As disclosed in the Remuneration Report last year, in future years, the share price/TSR measure may be substituted for
a measure based on the profitability of the CDMO, once we have further refined our segmental reporting. It is our
current intention that up to 30% of the overall long term incentive opportunity may be based on the delivery of specific
strategic milestones in the future.
Remuneration arrangements in connection with John Dawson’s retirement
As noted above, John Dawson will remain an Executive Director until the 2022 AGM, at which point he will step down
from the Board. He will remain an employee and advisor to the Group until the 17 January 2023 (the end of his
12 month notice period). During this period he will continue to receive his base salary, pension and benefits.
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Existing share awards
John Dawson has provided exceptional service to Oxford Biomedica and under his leadership the Group has grown
into an industry leader in lentiviral vectors. Having regard to his service and that he is retiring, the Remuneration
Committee determined that John Dawson shall be treated as a “good leaver” as regards his existing share awards.
Therefore:
— Any awards under Group’s share plans which are fully vested but remain unexercised at 17 January 2023 can be
exercised for up to twelve months, following which they will lapse and no longer be capable of exercise;
— In relation to deferred share awards or awards under the LTIP plan which remain unvested at 17 January 2023:
– Unvested deferred share awards will be retained. These awards will continue to be subject to the normal vesting
schedule and exercisable for a period of twelve months following the relevant vesting date (after which they will
lapse and no longer be capable of exercise);
– Unvested LTIP awards will be retained, with performance to be assessed at the normal time following the end of
the applicable three-year performance period and time pro-ration for the proportion of the three-year period he
was employed by the Group. LTIP awards will be released following the end of the two year holding period
following the end of the applicable three-year performance period;
– All awards shall continue to be subject to malus and clawback provisions in line with the Policy; and
– For deferred share awards and LTIP awards granted after 1 January 2019, the post-employment shareholding
requirement applies in line with the Policy.
In addition, we will seek to facilitate ongoing BUPA coverage at preferential rates (but at John’s cost) for a period of five
years after the termination of his employment.
Non-Executive Directors
No increases are proposed to Non-Executive Director fees for 2022.
Fee element 2022 level
Base fee £65,000
Additional fee for holding the office of Senior Independent Director £10,000
Additional fee for holding the position of Chair of the Remuneration Committee £10,000
Additional fee for holding the position of Chair of the Audit Committee £10,000
Base fee uplift for Non-Executive Directors based outside the UK to recognise the additional time commitment
(including but not limited to the additional expected time commitment for travel to the UK as well as the additional time
commitment where the Non-Executive Director is based in a different time zone).
£15,000
In line with the Policy approved by shareholders at the 2021 AGM, Non-Executive Directors recruited from or based in
the United States each receive an additional fee of £50,000 per annum. This additional fee is payable subject to their
agreement that the after tax amount of this additional fee will be applied in the acquisition of shares at market value
which must be retained for at least 12 months from acquisition. This seeks to address the significant gap to market
practice in the United States that we face when attracting and retaining Non-Executive Directors in competition with,
or from NASDAQ listed businesses where equity awards are an ongoing feature of the overall package. This also
provides alignment with shareholders whilst ensuring that our Non-Executive Directors continue to be independent.
This additional fee is currently paid to Dr. Heather Preston, Dr. Michael Hayden, Sam Rasty and Catherine Moukheibir.
Corporate Governance
Directors’ Remuneration Report
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Other matters
The Remuneration Committee reviewed the Group’s Gender Pay Gap Report for 2021 and was pleased to see the
Group’s gender pay gap has reduced for a third year in a row, and the Group is now aligned with the Government
benchmark and is lower than others in the same industry. Over the last few years, we have instigated a number of
projects which have already contributed, and continue to contribute, to the reduction in the gender pay gap.
It had been recognised that one of the main disparities in pay between the Senior Executive Team together with the
leadership and senior management teams seen against the rest of the business, was the extent to which bonus eligibility
was available throughout the business. In 2020, the Group announced that all employees would be eligible to receive
a bonus, payable for the first time in 2021. Following the first year of bonus payment to all levels of roles in 2021, the
Group has seen a 22.7% reduction in its bonus pay gap. Oxford Biomedica will continue to review its bonus eligibility
across the business for opportunities to further reduce the bonus pay gap in the coming years.
Our focus on development and progression in 2020 and 2021 has had an impact on the male to female ratio in each
pay quartile. The proportion of female employees in the lowest pay quartile has reduced, while the proportion of female
employees in the upper-middle and upper quartiles has increased. The male to female ratio in each quartile now closely
reflects the male to female ratio across the Group, resulting in a more equitable balance of both men and women at all
pay levels across the Group following the progression and development of those at the lower pay quartiles.
Alongside the Oxford Biomedica Management Development Programme which has been running since 2019 we have
introduced informal mentoring across all levels in 2021, which allows for both men and women to take ownership of
their development, and gain valuable knowledge and skills from others within the Group.
We have also introduced our new Ways of Working Policy which introduced flexible working hours and hybrid working
as the norm for all employees where possible. A three year Equality, Diversity and Inclusion (EDI) action plan is being
created and will be implemented in 2022.
Stakeholder engagement
As detailed on page 19, the Group has an established Workforce Engagement Panel (“WEP”) comprising employees
from all levels and functions across the Group. The WEP sessions have provided an upward channel for views, comments
and debate, as well as an opportunity to provide feedback on our ED&I practices, reward principles and employee
benefits package, future ways of working, employee training programmes, wellbeing practices and how Executive pay
aligns with the wider Group pay policy.
We also engage directly with major shareholders and their representative bodies, where the Remuneration Committee
considers there to be material changes to the Policy or our Executive remuneration framework. Some shareholders and
proxy firms raised concerns regarding the increase in opportunity for any future overseas Executives. However, others
acknowledged that the changes to the Policy last year were beneficial in terms of the Company’s Executive succession
planning and noted that the maximum opportunities are at the lower end compared with opportunities available for
Executives at NASDAQ listed biotechnology businesses. Overall we were pleased that the majority of our shareholders
voted in favour of the Policy at the 2021 AGM. Given the US market is critical to the Group we firmly believe that the
ability to adequately incentivise overseas Executives will be beneficial to the Group and its shareholders.
Conclusion
The decisions made as regards remuneration earned in respect of 2021 and the proposals for 2022 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 2022 AGM, where I will be available to respond to any questions that
shareholders may have on this report, or our intended approach to reward for 2022.
Dr. Heather Preston
Chair, Remuneration Committee
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Alignment of the Directors’ Remuneration Policy with the 2018 Corporate Governance Code
(not audited)
In determining the Directors’ Remuneration Policy, the Remuneration Committee took into account the principles of
clarity, simplicity, risk, predictability, proportionality and alignment to culture, as set out in the Corporate Governance Code.
Principle
Clarity: Remuneration arrangements should be transparent and promote
effective engagement with shareholders and the workforce.
The Remuneration Committee engages regularly with Executives,
shareholders and their representative bodies in order to explain the
approach to Executive pay.
Simplicity: Remuneration structures should avoid complexity and their
rationale and operation should be easy to understand.
The purpose, structure and strategic alignment of each element of pay
has been clearly laid out in the Remuneration Policy.
Risk: Remuneration arrangements should ensure reputational and other
risks from excessive rewards, and behavioural risks that can arise from
target-based incentive plans, are identified and mitigated.
Both the annual bonus and LTIP are subject to malus and clawback
provisions. This allows the Remuneration Committee to have appropriate
regard to risk considerations. Annual bonus deferral and the application of
the two-year holding period to awards under the LTIP provide longer
term alignment with shareholders’ interests. The Remuneration
Committee also has discretion to override formulaic outcomes, which
may not accurately reflect the underlying performance of the Group.
Predictability: The range of possible values of rewards to individual
directors and other limits or discretions should be identified and explained
at the time of approving the policy.
Details of the range of possible values of rewards and other limits or
discretions can be found in the full Directors’ Remuneration Policy
included in the 2020 Annual report and accounts.
Proportionality: The link between individual awards, the delivery of
strategy and the long-term performance of the company should be clear.
Outcomes should not reward poor performance.
The Remuneration Committee believes total remuneration should fairly
reflect performance of the Executive Directors and the Group as a whole,
taking into account underlying performance and shareholder experience.
The Remuneration Committee considers the approach to wider
workforce pay and policies when determining Directors’ remuneration to
ensure that it is appropriate in this context.
Alignment to Culture: Incentive schemes should drive behaviours
consistent with company purpose, values and strategy.
The Group’s values are: ’Have integrity’, ’Be inspiring’ and ’Deliver innovation’.
These three values govern the way that the Group does business, how the
Group works together and the interactions the Group has with all its
stakeholders. The Group’s values are an important factor in measuring
performance, and the Group recognises and rewards adherence to the
values. Executive Directors are rewarded on both what they deliver and how
that is delivered, which reinforces the Group’s purpose and values.
Annual report on remuneration
In this report:
— Nil or nominal cost shares awards under the Company’s LTIP are referred to as “Performance Shares Awards”; and
— An “Overseas Executive Director” means any Executive Director appointed after 1 January 2021 in respect of which
appointment, in the opinion of the Remuneration Committee, the Company is competing for talent with US
competitors (including NASDAQ listed US biotechnology businesses) including but not limited to Executive Directors
recruited from or based in the US and having regard to the fact that over 80% of cell and gene therapy is based in the
United States, that United States’ regulatory requirements are critical to the future success of the Group and that the
United States’ market has the largest commercial potential for the Group.
Corporate Governance
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Remuneration Committee role and members
The responsibilities of the Remuneration Committee are set out in its terms of reference which are available on the Group’s
website and include:
— Recommending to the Board the policy and framework for the remuneration of the Executive Directors. The
remuneration of the Non-Executive Directors is a matter for the Board;
— Approval of individual remuneration packages for the Chair, the Executive Directors and the Senior Executive Team
(including the Company Secretary);
— Approval of annual performance incentive plans and bonuses payable;
— Approval of Performance Shares Awards for Executive Directors and the Senior Executive Team (including the
Company Secretary); and
— Approval of awards granted to all employees under the Group’s share plans.
The Remuneration Committee members during 2021 comprised Dr. Heather Preston (Chair), Stuart Henderson, Dr.
Roch Doliveux (Dr. Roch Doliveux will not be a member of the Remuneration Committee whilst he serves as Interim
CEO during 2022) and Professor Dame Kay Davies (with effect from 1 March 2021). Other Directors are invited to attend
meetings on an agenda driven basis.
Remuneration Committee activities during 2021
During 2021, the Remuneration Committee met 15 times. The main activities and decisions were as follows:
— 19 January 2021 – the Remuneration Committee considered whether or not bonuses should be paid to the Executive
Directors in respect of 2020 in light of the performance against the Group’s 2020 objectives. The outcome of these
discussions was reported in the 2020 Annual report and accounts. The objectives for 2021 were also discussed and
approved;
— 5 February 2021 – the Remuneration Committee reviewed the proposed new Remuneration Policy to be proposed
to shareholders for approval at the 2021 AGM;
— 1 March, 8 March, 16 March and 13 April 2021 – the Remuneration Committee reviewed and considered feedback
from shareholders in relation to the proposed new Remuneration Policy and made amendments to the Policy as
appropriate;
— 22 April 2021 – the Remuneration Committee approved the 2021 salary adjustments in line with the wider workforce
increases and the 2020 bonuses for SET members, excluding Executive Directors;
— 27 May 2021 – the Remuneration Committee considered the granting of options to employees under the Group’s
Long Term Incentive Plan (including both Performance Shares Awards and, for below Board members of staff,
Restricted Stock Awards) and Deferred Bonus Plan;
— 11 August 2021 – the Remuneration Committee considered the extent to which the share price performance
conditions for the August 2018 grants of options had been met and whether vesting was appropriate by reference to
the performance underpin. The outcome was that 35% of the options granted in August 2018 would vest for Stuart
Paynter and 30.6% for John Dawson, more information is included on page 105; and
— 9 September 2021 – the Remuneration Committee approved an invitation to all employees to participate in the 2021
offer under the Group’s Sharesave scheme.
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Oxford Biomedica plc | Annual report and accounts 2021
Single total figure of remuneration
(audited)
The following tables show a single total figure of remuneration for 2021 for each Director and comparative figures
for 2020.
2021
Salary
£’000
Benefits
1
£’000
Bonus
£’000
LTIP
2
£’000
Pension
4
£’000
Total
£’000
Total fixed
remuneration
Total variable
remuneration
John Dawson 455 11 573 721 68
1,828
534 1,294
Stuart Paynter 310 11 387 336 47 1,091 368 723
Total 765 22 960 1,057 115 2,919 902 2,017
2020
Salary
£’000
Benefits
1
£’000
Bonus
£’000
LTIP
3
£’000
Pension
4
£’000
Total
£’000
Total fixed
remuneration
Total variable
remuneration
John Dawson 431 11 457 294 65
1,258
507 751
Stuart Paynter 239 11 263 533 36 1,082 286 796
Total 670 22 720 827 101 2,340 793 1,547
1 Benefits comprise medical insurance and the provision of a car allowance.
2 This comprises:
(a) the Performance Shares Awards granted under the LTIP in 2018 which vested on 11 August 2021; and
(b) the portion of the Performance Share Awards granted in 2019 which vest by reference to performance to 31 December 2021.
The performance criteria, performance against them and details of the calculations of the values included in the single total figure of remuneration table are set out on pages 112 to 115.
3 This comprises the Performance Shares Awards granted under the LTIP in 2017 which vested on 13 July 2020 (in the case of John Dawson) and on 25 September 2020 (in the case
of Stuart Paynter). The relevant performance criteria and the performance against them are set out on pages 108 and 109 of the 2020 Directors’ Remuneration Report. The values are
calculated by reference to the share price at the last day of the period over which the share price was averaged to determine the extent of vesting (751p in the case of John Dawson
and 819p in the case of Stuart Paynter).
4 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 –
John Dawson and Stuart Paynter elected to receive such a cash allowance.
2021 Annual Bonus
Each Executive Director was eligible to earn a bonus of up to 150% of salary for 2021, subject to the satisfaction of
performance objectives.
John Dawson’s bonus was based solely on Group objectives. Stuart Paynter’s bonus was based on Group objectives as
regards 80% of the opportunity and personal objectives as regards 20% of the opportunity.
In January 2022, the Remuneration Committee met to consider the achievement of the 2021 objectives and the extent
to which bonuses were earned for 2021. The performance of the business in 2021 is set out in detail in the Strategic
Report from pages 12 to 76.
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Group objectives element
Performance against the applicable Group objectives for 2021 was as follows:
Objective Weighting Performance assessed
Assessment
against objective % of bonus awarded
CDMO
To service the Group’s customers
to achieve agreed milestones/
decision gates, along with
improvements in net promoter
score (customer satisfaction) from
baseline
To launch a client process that
reduces the on-boarding time
from project initiation to batch
start
To sign agreements with new
partners for CDMO projects
(late-stage and early-stage
projects)
To initiate six additional new viral
vector projects (to include new
and current partners)
To target the initiation of one
project for commercial
manufacture
To gain approval for one Fill &
Finish suite at Oxbox by the third
quarter of 2021
25%
– Whilst the Remuneration Committee recognised the
strong service provided to customers to achieve
agreed milestones/decision gates, as there was no
improvement in the net promoter score (customer
satisfaction) from baseline, no bonus was earned by
reference to this objective (0% earned from maximum
of 5%)
– The Group launched a process that reduced the
onboarding time from project initiation to batch start,
so this objective was met (2.5% of bonus earned from
maximum 2.5%)
– The objective of signing new partners for CDMO
projects was met, with projects for Boehringer
Ingelheim and Arcellx announced in 2021 (5% of
bonus earned from maximum 5%)
– Although six new additional viral vector projects
inititated in 2021 cannot be disclosed for confidentiality
reasons, the Remuneration Committee noted that this
objective was achieved with projects initiated with both
new and current partners (5% of bonus earned from
maximum 5%)
– This objective was achieved by the commercial
manufacture of the adenovirus-based Oxford
AstraZeneca vaccine for AstraZeneca (2.5% of bonus
earned from maximum 2.5%)
– As the Fill & Finish A suite at Oxbox was not MHRA
licensed by third quarter 2021,this objective was not
achieved(0% earned from maximum of 5%)
Partially met
equivalent to
target
performance
15%
Platform
To achieve four new inventions
To apply a Group invention
into a GMP setting
To in-license technology
for the platform
To use analytical automation
in a GMP or R&D setting
To establish a partnership
for the in vivo CAR-T programme
15%
— The Group successfully filed six new patent
applications so that this objective was achieved
(4% of bonus earned from maximum 4%)
— The application and/exemplification of a Group
invention in a GMP setting was met, with the Process
C: U1 and perfusion USP exemplified in second half
of 2021 (3% of bonus earned from maximum 3%)
— The objective to bring in new technology for the
platform was not met in 2021 (0% of bonus earned
from maximum 3%)
— R&D automation was exemplified as a service across
PR&D/R&D in the second half of 2021 and initiation
of GMP automation for integration assay towards the
end of 2021. Accordingly, this objective was achieved
in full (3% earned from maximum of 3%)
— The objective of establishing a partnership to enable
in vivo CAR-T platform development was met with
agreements signed with a biopharmaceutical
company (whose identity cannot be disclosed for
confidentiality reasons) and an academic partner
(whose identity cannot be disclosed for confidentiality
reasons) (2% earned from maximum of 2%)
Largely met –
equivalent to
performance
between target
and maximum
12%
Products
To establish one new academic
relationship focused on product
identification
To engage with a company on
product discussions
To advance an internal product to
a meaningful milestone
15%
— One new academic relationship focused on product
identification was successfully established with a UK
university (not disclosed for confidentiality reasons)
and two projects have been agreed at the end of
2021 (2.5% of bonus earned from maximum of 2.5%)
— The Group successfully engaged with several
companies (undisclosed for confidentiality reasons)
for clinical products and, therefore, this objective was
fully met (10% of bonus earned from maximum 10%)
— The objective to advance an internal product
candidate to a meaningful milestone was not achieved
(0% of bonus earned from maximum of 2.5%)
Largely met –
equivalent to
performance
between target
and maximum
12.5%
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Oxford Biomedica plc | Annual report and accounts 2021
Objective Weighting Performance assessed
Assessment
against objective % of bonus awarded
Financial objectives
To achieve revenue
To achieve Operating EBITDA
To achieve cash flow targets as set
by the budget approved by the
Board
35%
— The Group outperfomed the revenue targets, with the
budget of £125.4m set and £142.8m achieved (20% of
bonus earned from maximum of 20%)
— The Group significantly exceeded the Operating
EBITDA target set in the budget, with the budget of
£8.9m set and £35.9m achieved (10% of bonus
earned from maximum of 10%)
— The Group completed a £50 million capital raise in
September 2021, achieving stretch cash flow targets
in the budget (5% earned from maximum of 5%)
Met in full –
equivalent to
maximum
performance
35%
Organisational development
To deliver on digitalisation projects
planned for 2021 to ensure that the
Group remains effective for its size
To focus on stakeholder
engagement in various ways,
including through the Workforce
Engagement Panel to deliver on
year one of the employee
engagement strategy
To ensure the Group’s ESG goals
are set for 2021 and are met
effectively
To implement the Group’s learning
and development strategy
To develop a strategic workforce
plan
10%
— The digitalisation projects including the Laboratory
Information Management System (LIMS), the
Human Resources (HR), system and iManage were
delivered during 2021 (2% of bonus earned from
maximum of 2%)
— Stakeholder engagement under section 172 such as
the Workforce Engagement Panel (WEP) being
embedded into the business and adding significant
value was achieved. The employment engagement
strategy was rolled out to include Pulse surveys,
Team talk and a full employment engagement survey
completed in November 2021 (2% of bonus earned
from maximum of 2%)
— The Group’s ESG objectives for the five pillars
(People; Community; Environmental; Innovation
and Supply Chain: see ESG report on pages 57 to 73)
were effectively set in 2021 and targets set were
mainly met (1.5% earned from maximum of 2%)
— The learning and development strategy for the
Group was successfully developed and delivered and
as a result this objective was met in full (2% of bonus
earned from maximum of 2%)
— The Group developed a strategic workforce plan for
the HR team as a pilot and successfully planned a
strategic workforce plan and organisation design to
reflect the strategy review in 2021, therefore this
objective was met in full (2% of bonus earned from
maximum of 2%)
Largely met –
equivalent to
performance
between target
and maximum
9.5%
In aggregate, the Group objectives were achieved as to 84%.
Personal objectives element – Stuart Paynter
The personal element of the bonus for Stuart 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 our competitors insight into our strategic plans,
and so are not disclosed in detail. However, the principal areas of the personal objectives were related to leading a
successful fundraise, optimising the financial strategy for the Group, enhancing the internal controls within the financial
function of the Group, establish business partnering organisation for the finance function and improve the timeframe
for the audit sign off for the annual accounts.
The Remuneration Committee undertook a robust assessment of the achievements of Stuart Paynter with respect to
his personal objectives, and based on achievements against those objectives determined that they were satisfied as to
80% such that a bonus of 24% of salary was earned by reference to these objectives.
Corporate Governance
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Oxford Biomedica plc | Annual report and accounts 2021
Overall bonus outturn
Accordingly, bonuses earned by the Executive Directors in respect of 2021 were:
— John Dawson: £573,000 (126% of salary); and
— Stuart Paynter: £387,000 (125% of salary).
The Remuneration Committee reviewed performance against the annual bonus out-turn and concluded the overall
bonus payments to be appropriate. The bonuses will be paid 50% in cash and 50% in deferred share awards.
The deferred share awards are not subject to further performance targets and will become exercisable in three equal
instalments on the first three anniversaries of the award date.
The single total figures of remuneration for Non-Executive Directors are shown in the table below. Because the Non-
Executive Directors do not receive any remuneration other than fees, no separate totals are included in the table below.
Both Martin Diggle (who left the Board on 3 February 2021) and Robert Ghenchev elected to receive no fees for their
services as Directors.
Fees (audited)
2021
£’000
2020
£’000
Dr. Roch Doliveux
1
225 119
Dr. Andrew Heath
2
26 65
Stuart Henderson 85 67
Dr. Heather Preston 140
4
67
Dr. Sam Rasty 130
4
7
Professor Dame Kay Davies
3
54 n/a
Dr. Michael Hayden
3
83
4
n/a
Catherine Moukheibir
3
4 n/a
Lorenzo Tallarigo – 72
Total 747 397
1 Dr. Roch Doliveux’s 2020 fees was for seven months.
2 Dr. Andrew Heath stepped down from the Board on 27 May 2021. In the table above his fees for 2021 are his fees to the date on which he stepped down from the Board.
3 Professor Dame Kay Davies was appointed to the Board with effect from 1 March 2021. Dr. Michael Hayden was appointed to the Board with effect from 15 July 2021.
Catherine Moukheibir was appointed to the Board with effect from 14 December 2021.
4 This includes the additional fee of £50,000 payable to Non-Executive Directors recruited from or based in the United States. The after tax amount of this additional fee was used
to acquire shares at market value.
Aggregate Directors’ emoluments (audited)
2021
£’000
2020
£’000
Salaries 765 670
Benefits 22 22
Pension/cash alternative 115 101
LTIP 1,057 827
Bonuses 960 720
Non-Executive Directors fees 747 397
Total 3,666 2,737
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Performance Shares Awards granted under the LTIP and vesting during 2021
(audited)
2018 Awards
Performance Shares Awards were granted under the LTIP on 7 August 2018 to John Dawson and Stuart Paynter when
the share price was 904p. The performance conditions were as follows:
Average annual compound share price growth
over the three-year period starting with the date of grant
Percentage of the awards that will vest
Less than 10% 0%
10% (i.e. 33.1% over 3 years) John Dawson: 20%
Stuart Paynter: 25%
Between 10% and 17.5%
Calculated on a straight-line basis between 20% (in the case of John Dawson)
or 25% (in the case of Stuart Paynter) and 100%
17.5% or more (i.e. 62.2% over 3 years) 100%
These Performance Shares Awards vested during 2021. The share price was averaged across three months prior to the
end of the applicable assessment period. Over the three-year performance period, the annual compound share price
growth was 11.05% resulting in a vesting outturn of 30.6% for John Dawson and 35% for Stuart Paynter.
For the purposes of the single total figure of remuneration table the value of these awards is calculated as follows.
Executive Director
Shares subject
to award Vesting outturn Vested shares
Value attributable
to share price
at grant
1
Value attributable to
the growth in share
price vesting
2
Total value
John Dawson 52,555 30.6% 16,081 145,375 73,009 218,384
Stuart Paynter 23,647 35% 8,276 74,819 37,575 112,394
1 Share price at grant: 904p.
2 Share price at vesting: 1358p.
The awards were also subject to a performance underpin, such that they would vest only to the extent that the
Remuneration Committee considers that the overall performance of the business across the period justifies it. The
Remuneration Committee reviewed performance against this underpin and concluded the overall payments to be
appropriate. Clawback and malus provisions will apply to the awards.
2019 Awards
Performance Shares Awards were granted under the LTIP on 18 April 2019 to John Dawson and Stuart Paynter when
the share price was 704.6p. The performance conditions were based on growth in revenue between 2018 and 2021 as
regards 50% of the award and growth in share price over the three years starting with the date of grant as regards 50%
of the award.
The share price performance condition will be assessed in April 2022 and the vesting outturn in respect of that element
will be confirmed in the 2022 Directors’ Remuneration Report. The revenue growth performance condition was as
follows:
Compound annual growth rate of the Group’s revenue
between 2018 and 2021 Percentage of the award subject to the revenue measure that vest
Less than 15% 0%
15% (i.e. 52.1% over three years) 25%
Between 15% and 24% Calculated on a straight-line basis between 25% and 100%
24% or more (i.e. 90.7% over 3 years) 100%
Over the three-year performance period, the compound annual growth rate of the Group’s revenue was 28.8% resulting
in an estimated vesting outturn of 100%.
Corporate Governance
Directors’ Remuneration Report
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For the purposes of the single total figure of remuneration table the value of these awards is calculated as follows.
Executive Director
Shares subject
to award
Shares subject
to the revenue
performance
condition
1
Estimated
vesting outturn
of the elements
of the awards
subject to
the revenue
performance
condition
Estimated
number
of shares that
will vest
by reference to
the revenue
performance
condition
1
Value
attributable
to share price
at grant
2
Value
attributable
to the growth
in share price
to vesting
2,3
Total value
John Dawson 72,736 36,368 100% 36,368 256,394 247,302 503,696
Stuart Paynter 32,358 16,179 100% 16,179 114,062 110,017 224,079
1 As noted above, the share price performance condition will be assessed in April 2022 so that only the element of the award subject to the revenue performance condition is included in
this table.
2 Share price at grant: 704.6p.
3 The awards will not vest until the share price performance condition has been assessed. In line with the applicable regulations, the share price for these purposes is taken to be the
average share price over October, November and December 2021, being 1,384.94p.
The awards are also subject to a performance underpin, such that they would vest only to the extent that the
Remuneration Committee considers that the overall performance of the business across the period justifies it. The
Remuneration Committee will review performance against this underpin following the end of the share price
performance period.
Performance Shares Awards granted under the LTIP during 2021
(audited)
On 8 June 2021, the Executive Directors were awarded the following Performance Shares Awards under the LTIP:
Basis of award
(% of salary)
Number of shares
under award
Face value
of grant
John Dawson 200% 80,460 £910,000
Stuart Paynter 175% 47,966 £542,495
The number of shares under award was calculated by reference to the average share price of 1131p 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 set
out below.
TSR and Revenue performance conditions
Vesting amount
TSR
1
– relative TSR performance
(40% of the award)
Revenue
2
– compound annual growth rate
(40% of the award)
0% Below median Less than 15%
25% Median 15%
100% Upper quartile 30%
1 Company’s TSR over a three-year performance period relative to the TSR performance of companies in the NASDAQ Biotechnology Index.
TSR will be assessed over a three-year period from the date of grant of the awards, with a three-month averaging period applied.
2 Assessed over the three financial-year performance period 2021 – 2023.
Strategic milestones performance conditions (20% of the award)
The measures and targets relating to these performance conditions are commercially sensitive and will be disclosed
when this is no longer the case, and no later than when the awards vest. The measures are aligned with the Group’s
strategy with the level of vesting determined by reference to the achievements, with 25% vesting for delivery of a
threshold milestone and 50% vesting for delivery of a target milestone.
A performance underpin also applies, such that the awards will only vest to the extent that the Remuneration Committee
considers that the overall performance of the business across the period justifies it.
Although the awards will vest following the assessment of the performance period (subject to satisfaction of the
performance conditions), they cannot be exercised until the end of a further holding period of two years.
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Oxford Biomedica plc | Annual report and accounts 2021
Statement of Directors’ shareholding and share interests
(audited)
The Remuneration Committee has adopted a shareholding guideline for the Executive Directors, which specifies
a shareholding equivalent to 200% of base salary.
The value of the shares as at 31 December 2021 has been determined based on a share price of 1,230p (being the
prevailing closing share price on 31 December 2021). Under this criteria John Dawson meets the shareholding guideline,
with Stuart Paynter working towards meeting this guideline.
The interests in shares of the Directors who served during the year as at 31 December 2021 were as follows:
Shares held outright
Vested but
unexercised options
Deferred bonus
plan not yet
exercisable
Unvested Performance
Shares Awards subject to
performance conditions
Executive Directors 2021 2020 2021 2020 2021 2020 2021 2020
John Dawson 90,343 90,343 553,820 476,249 46,349 51,251 155,139 196,096
Stuart Paynter 10,742 10,742 101,462 65,115 26,582 26,382 130,254 89,620
Non-Executive Directors
Dr. Roch Doliveux 125,000 125,000
Martin Diggle
1
9,768,615 10,738,616
Dr. Andrew Heath
3
11,628 11,628
Stuart Henderson 8,862 8,862
Dr. Heather Preston 2,235 –
Robert Ghenchev
2
– –
Dr. Sam Rasty 2,235 –
Professor Dame Kay Davies – –
Dr. Michael Hayden 1,910 –
Catherine Moukheibir – –
1 Includes the interest of Vulpes Life Science Fund, Vulpes Testudo Fund and other parties connected to Martin Diggle, as at 3 February 2021 when Martin Diggle stepped down from the
Board.
2 Robert Ghenchev is Head of Growth Equity at Novo Holdings which has a holding of 8,253,000 shares.
3 Dr. Andrew Heath stepped down from the Board on 27 May 2021 and his 2021 numbers of shares is at that date.
Reflecting best practice, the Remuneration Committee has adopted, with effect from 1 January 2019, a post-cessation
shareholding guideline, as set out in the Directors’ Remuneration Policy.
During 2021 the following options have vested and lapsed:
LTIP
Unvested at
1 January 2021
Vesting
during 2021
Lapsed
during 2021
Awarded
during 2021
Unvested at
31 December 2021
John Dawson 196,096 52,449 36,474 47,966 155,139
Stuart Paynter 89,620 24,455 15,371 80,460 130,254
Deferred bonus
Unvested at
1 January 2021
Vesting
during 2021
Awarded
during 2021
Unvested at
31 December 2021
John Dawson 51,251 25,122 20,221 46,350
Stuart Paynter 26,382 11,892 11,642 26,132
During 2020 and 2021, John Dawson and Stuart Paynter did not exercise any options.
In 2022, the share price performance criteria for the Performance Shares Awards granted in respect of 2019 will be
assessed. The vesting outturn will be confirmed in the 2022 Directors’ Remuneration Report.
Corporate Governance
Directors’ Remuneration Report
1.600
1.400
1.200
1.000
800
600
400
200
0
Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21
Key:
Oxford Biomedica plc
FTSE 350 Pharma and Biotech index
FTSE all-share index
NASDAQ Biotech index
Corporate Governance 119
Oxford Biomedica plc | Annual report and accounts 2021
Payment to past Directors and payments for loss of office
(audited)
No payments for loss of office or payments to past directors were made during 2021.
As announced on 17 January 2022, John Dawson signalled his intention to retire. Information in relation to the
remuneration arrangements associated with his retirement is set out in the statement from the Remuneration
Committee’s Chair on page 105.
Performance graph and comparison with CEO’s remuneration
The chart below illustrates the Company’s TSR performance since January 2012 relative to the FTSE all-share index, the
FTSE 350 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 FTSE 350 Pharma and Biotech
index, comprising Pharma and biotech companies listed in the UK and are constituents of the FTSE 350 index, and the
NASDAQ Biotech index in the United States (NASDAQ Biotech) market, provide further benchmarks that are more
specific comparators.
CEO’s remuneration in last ten years
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CEO’s total single figure
of remuneration £’000 401 468 680 732 653 811 1,311 1,220 1,258 1,828
LTIP vesting % of maximum 40% 0% 0% 100% 50% 25% 80% 100% 62% 42%
1
Annual bonus % of maximum 17% 30% 75% 42% 50% 85% 92% 70% 85% 84%
1 The vesting percentage has been calculated by calculating the weighted average vesting percentage of the 2018 LTIP award and the revenue element of the 2019 LTIP award.
120
Oxford Biomedica plc | Annual report and accounts 2021
Percentage change in remuneration of Directors and employees
The table below shows the percentage change in salary/fees, benefits and bonus between 2019, 2020 and 2021 for the
Directors. Professor Dame Kay Davies, Dr. Michael Hayden and Catherine Moukheibir were appointed during 2021 and,
accordingly, they have been excluded from the table below. Neither Martin Diggle nor Robert Ghenchev received any
remuneration for their role, and accordingly they have been excluded from the table below. The average percentage
change in the same elements of remuneration over the same period are in respect of a comparator group of employees.
The regulations require that the comparator group is all employees of the Company; however, as the Company (Oxford
Biomedica plc) has no employees and for consistency with prior years the Remuneration Committee has chosen as the
comparator group all those employees other than the Directors who were employed by Oxford Biomedica UK Ltd
throughout the whole of the relevant years.
Salary/Fees Benefits Bonus
Year
2020 – 2021
% change
2019 – 2020
% change
2020 – 2021
% change
2019 – 2020
% change
2020 – 2021
% change
2019 – 2020
% change
John Dawson 6 5 0 0 25 27
Stuart Paynter 30 5 0 0 47 28
Dr. Andrew Heath
1
(60) 0 – – – –
Stuart Henderson 27 3 – – – –
Dr. Heather Preston 109 3 – – – –
Dr. Roch Doliveux
2
89 N/A – N/A – N/A
Dr. Sam Rasty
3
1,757 N/A – N/A – N/A
Comparator
employee group 8 9 9 11 22 98
1 Dr. Andrew Heath retired from the Board on 27 May 2021. The reduction in his fees between 2020 and 2021 reflects that 2021 was a part year only.
2 Dr. Roch Doliveux was appointed as a Director in June 2020. The increase in his fees between 2020 and 2021 reflects that 2020 was a part year only.
3 Dr. Sam Rasty was appointed as Director in December 2020. The increase in his fees between 2020 and 2021 reflects that 2020 was a part year only.
CEO’s pay ratio
The table below sets out the CEO’s pay ratio at the 25th, median and 75th percentile employee within the organisation.
The Group used Option A as defined in The Companies (Miscellaneous Reporting) Regulations 2018, as this calculation
methodology for the ratios was considered to be the most accurate method. The 25th, median and 75th percentile pay
ratios were calculated using the full-time equivalent remuneration for all UK employees as at the end of 2018, 2019,
2020 and 2021 respectively. Employees’ involvement in the Group’s performance is encouraged, with all employees
eligible to participate in the Share Option Scheme or the LTIP. From 2020 all eligible employees (previously only certain
employees) may participate in discretionary bonus schemes. The Group aims to provide a competitive remuneration
package which is appropriate to promote the long-term success of the Group and to apply this policy fairly and
consistently to attract and motivate employees. The Group considers the median pay ratio to be consistent with the
Group’s wider policies on employee pay, reward and progression.
Financial year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2018 Option A 1:48 1:37 1:27
2019 Option A 1:42 1:32 1:24
2020 Option A 1:40 1:30 1:23
2021 Option A 1:59 1:44 1:32
Corporate Governance
Directors’ Remuneration Report
£m
200
150
100
50
0
-50
Cash revenuesNet cash inflow/(burn)Cash generated from / (used in)
operations
Non-payroll costsStaff pay
2019
2020
2021
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Pay details for the individuals are set out below:
2018 CEO 25th percentile Median 75th percentile
Salary (£’000) £380 £25 £32 £44
Total remuneration (£’000) £1,311 £27 £35 £48
2019 CEO 25th percentile Median 75th percentile
Salary (£’000) £410 £26 £35 £45
Total remuneration (£’000) £1,220 £29 £38 £50
2020 CEO 25th percentile Median 75th percentile
Salary (£’000) £431 £28 £37 £47
Total remuneration (£’000) £1,258 £31 £42 £55
2021 CEO 25th percentile Median 75th percentile
Salary (£’000) £455 £27 £36 £50
Total remuneration (£’000) £1,828 £31 £42 £57
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 our activities, as well as the continued
investment of the business in its people. The key cash measure amounts were identified as being:
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Approach to Directors’ Remuneration in 2022
The Company’s approach to Directors’ Remuneration in 2022 is set out in the statement from the Remuneration
Committee Chair on pages 104 to 109.
Statement of voting at AGM
At the 2021 AGM, the 2020Directors’ Remuneration Report was approved by shareholders as follows:
Resolution
Votes for (including
discretionary)
% for
Votes against
% against
Total votes cast (excluding
votes withheld)
Votes withheld
(abstentions)
Approval of the Directors’
Remuneration Report 57,042,439 98.73% 731,131 1.27% 57,773,570 630,076
At the 2021 AGM, the 2020 Directors’ Remuneration Policy was approved by shareholders as follows:
Resolution
Votes for (including
discretionary)
% for
Votes against
% against
Total votes cast (excluding
votes withheld)
Votes withheld
(abstentions)
Approval of the Directors’
Remuneration Policy 46,437,980 80.95% 10,926,461 19.05% 57,364,441 1,039,205
Advisers to the Remuneration Committee
Deloitte LLP acted as adviser to the Remuneration Committee during 2021. Deloitte is a founding member of the
Remuneration Consultants Group and adheres to its Code of Conduct in relation to Executive remuneration consulting
in the UK. Deloitte’s fees for advice to the Remuneration Committee during 2021 were £46,550 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 corporate tax matters, on internal controls, and on the tax
treatment of non-UK resident Directors during 2021.
The Remuneration Committee reviewed the potential conflicts of interest and the safeguards against them and is
satisfied that Deloitte does not have any such interests or connections with the Group that may impair independence.
Dr. Heather Preston
Chair, Remuneration Committee
20 April 2022
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Directors’ Remuneration Policy
(not subject to audit)
We have included below the parts of the Directors’ Remuneration Policy that we think shareholders will find most
useful, but with the table of service contracts updated to reflect the current circumstances. The full Policy as approved
at the AGM on 27 May 2021 is included in the Company’s Directors’ Remuneration Report for the year ended
31 December 2020, which is available on the Company’s website at www.oxb.com.
Policy table
Component and purpose Operation Maximum potential Performance targets and metrics
Executive Directors
Base salary
To provide a base salary which
is sufficient to attract and
retain Executive Directors of a
suitable calibre.
Base salaries are initially set by reference to
market information at the time of appointment
and taking into account the experience and
previous package of the new Executive Director.
Base salaries are normally reviewed annually
taking into account a number of factors which
may include (but are not limited to):
– underlying Group performance;
– role, experience and individual performance;
– competitive salary levels and market forces;
and
– pay and conditions elsewhere in the Group.
Any changes are normally effective from
1 January.
While there is no maximum salary, increases will
normally be in line with the level of salary
increase awarded (in percentage of salary terms)
to other employees in the Group.
Salary increases above this level may be
awarded in appropriate circumstances, such as,
but not limited to:
– where an Executive Director has been
promoted or has had a change in scope or
responsibility;
– to reflect an individual’s development or
performance in role (e.g. to align a newly
appointed Executive Director’s salary with
the market over time);
– where there has been a change in market
practice; or
– where there has been a change in size and/or
complexity of the business.
Such increases may be implemented over such
time period as the Remuneration Committee
deems appropriate.
While no formal performance conditions apply,
an individual’s performance in role is taken into
account in determining any salary increase.
Benefits
To provide benefits on a
market competitive basis.
Benefits are provided in line with market
practice and may include medical insurance
(including for the Executive Director’s spouse
or partner and dependants), life assurance,
permanent health insurance, provision of a
company car or a car allowance, assistance with
the preparation of tax returns, tax equalisation
arrangements, other benefits consistent with
those typically offered in their country of
residence and other appropriate benefits
determined by the Remuneration Committee.
Additional benefits may be provided based on
individual circumstances, including the location
of the Executive Director. These may include, for
example, travel expenses.
There is no predetermined maximum but the
totals are reviewed annually by the
Remuneration Committee.
Not applicable.
Retirement benefits
To provide funding for
retirement.
The Group operates a defined contribution
scheme for all employees, including Executive
Directors. In appropriate circumstances, such
as where contributions exceed the annual or
lifetime allowance, Executive Directors may
be permitted to take a cash supplement instead
of some or all of the contributions to a pension
plan. Non-UK national Executive Directors may
be permitted to participate in home country
pension arrangements where appropriate.
Any Executive Director appointed
before 1 January 2021
A maximum employer contribution or cash
supplement (or combination thereof):
− of 15% of base salary up to 31 December 2022;
and
− with effect from 1 January 2023, not
exceeding the contribution available to the
wider workforce (currently 7.5%).
Any Executive Director appointed
after 1 January 2021
A maximum employer contribution or cash
supplement (or combination thereof) not
exceeding the contribution available to the
wider workforce (currently 7.5%).
Not applicable.
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Component and purpose Operation Maximum potential Performance targets and metrics
Sharesave scheme
To create alignment with the
Group and promote a sense
of ownership.
Executive Directors are entitled to participate in
a tax qualifying all employee Sharesave scheme
under which they may make monthly savings
contributions over a period of three or five years
linked to the grant of an option over the
Company’s shares with an option price which
can be at a discount of up to 20% to the market
value of shares at grant (or such other discount
as may be permitted by the applicable legislation
from time to time).
Executive Directors will be able to participate on
the same basis as other qualifying employees in
any other all-employee share scheme adopted
by the Group.
For the Sharesave scheme, participation limits
and the level of discount permitted in setting the
exercise price are those set by the UK tax
authorities from time to time.
For any other all-employee share plan, the
maximum will be determined in accordance
with the plan rules and will be the same as for
other qualifying employees.
Not subject to performance measures in line with
usual practice.
Annual bonus
To incentivise and reward
delivery of the Group’s
objectives.
Delivery of part of the bonus
in deferred shares aligns the
incentive package with
shareholders’ interests.
Bonus targets and measures are typically
reviewed annually and any pay-out is determined
by the Remuneration Committee after the year
end.
The Remuneration Committee has discretion
to amend the pay-out should: (1) any potential
pay-out not reflect the Remuneration Committee’s
assessment of overall performance; (2) any
potential pay-out be inappropriate in the
context of circumstances that were unexpected
or unforeseen at the start of the performance
period; or (3) there be any other reason why an
amendment is appropriate.
Ordinarily, 50% of the bonus is delivered as
cash and 50% is delivered in deferred shares.
The Remuneration Committee may permit
or require the deferral of a greater proportion
of any bonus earned.
Deferred shares ordinarily become exercisable in
three equal instalments on the first, second and
third anniversaries of the award. The deferred
shares are not subject to further performance
targets.
Additional shares may be awarded in respect of
deferred shares to reflect the value of dividends
over the deferral period. These dividend
equivalents may assume the reinvestment
of dividends into shares on a cumulative basis.
Recovery provisions apply as summarised on the
next page.
Any Overseas Executive Director
The maximum bonus opportunity is 200%
of base salary.
Any Executive Director appointed before
1 January 2021 and any Executive Director
appointed after that date who is not an
Overseas Executive Director
The maximum bonus opportunity is 150%
of base salary.
The performance metrics may be based on
financial or strategic objectives (which may
include ESG metrics and individual objectives).
Metrics and targets are set by the Remuneration
Committee taking into account the strategic
needs of the business. Financial objectives are
typically assessed over a financial year, but may
be assessed over part of the year.
Given the nature of the business, these objectives
and metrics may change significantly each year.
There is no minimum bonus earned if threshold
performance is not met. For financial metrics,
up to 50% of the maximum which may be earned
for a metric is earned for on-target performance,
rising to 100% for meeting or exceeding the
maximum level of performance. For strategic
objectives, the bonus will be earned between 0%
and 100% based on the Remuneration Committee’s
assessment of the extent to which the objective
has been achieved.
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Component and purpose Operation Maximum potential Performance targets and metrics
Long Term Incentives
To augment shareholder
alignment by providing
Executive Directors with
longer term interests in shares
whilst requiring challenging
performance before the
awards vest.
At the discretion of the Remuneration Committee,
annual grants of nil or nominal cost shares
awards (“Performance Shares Awards”) which
vest subject to the achievement of performance
targets, typically assessed over a three-year
performance period.
Holding period
Vested shares will be subject to a holding period
of two years after vesting before they are
“released”. The holding period will be structured
either on the basis that: (1) the Executive
Director is not entitled to acquire shares until
the end of it; or (2) the Executive Director is
entitled to acquire shares following vesting but
that (other than as regards sales to cover tax
liabilities and any exercise price) the Executive
Director is not able to dispose of those shares
until the end of it.
Dividend equivalents
Additional shares may be awarded in respect
of any Performance Shares Award to reflect
the value of dividends over the period between
the grant and the date on which the Executive
Director is first able to acquire the vested shares.
These dividend equivalents may assume the
reinvestment of dividends into shares on a
cumulative basis.
Recovery provisions apply as summarised
below.
Any Overseas Executive Director
The maximum Performance Shares Award in
respect of a financial year is 500% of base salary.
Any Executive Director appointed
before 1 January 2021 and any
Executive Director appointed after
that date who is not an Overseas Executive
Director
The maximum Performance Shares Award is:
− 175% of base salary in respect of a financial
year for an Executive Director other than the
CEO; and
− 200% of base salary in respect of a financial
year for the CEO.
Performance conditions will be based on
financial measures or the achievement of
strategic objectives (which may include ESG
metrics). Financial measures may include (but are
not limited to) share price and revenue measures.
The Remuneration Committee has discretion to
amend the formulaic vesting out-turn should: (1)
any formulaic output not reflect the
Remuneration Committee’s assessment of overall
performance; (2) any formulaic output be
inappropriate in the context of circumstances that
were unexpected or unforeseen at the date of
grant; or (3) there be any other reason why an
amendment is appropriate.
For the achievement of threshold performance in
respect of a financial measure, up to 25% of the
award will vest rising to 100% of the award
vesting for achieving or exceeding maximum
performance; for below threshold performance,
none of the award will vest.
For strategic measures, vesting will be
determined between 0% and 100% depending
upon the Remuneration Committee’s assessment
of the extent to which the measure has been
achieved.
Notes to the policy table
Recovery provisions
The annual bonus and long-term incentive awards are subject to malus and clawback provisions as follows:
Annual bonus:
For up to two years following the payment of an annual bonus award the Remuneration Committee may require the
repayment of some or all of the cash award in the relevant circumstances (clawback). Deferred bonus awards which
have not yet become exercisable may be cancelled or reduced in the relevant circumstances (malus). For up to one
year following the first instalment of deferred shares becoming exercisable, the Remuneration Committee may require
the repayment of some or all of the deferred shares in the relevant circumstances (clawback).
Long term incentive awards:
The Remuneration Committee has the right to reduce, cancel or impose further conditions on unvested awards in the
relevant circumstances (malus). For up to two years following the vesting of a long term incentive award the Remuneration
Committee may require the repayment of some or all of the award in the relevant circumstances (clawback).
Circumstances in which malus and/or clawback may be applied Malus or clawback may be applied in the event of:
— A material misstatement of the Group’s financial results;
— An error in the information or assumptions on which the award was granted or vests including an error in assessing
any applicable performance conditions;
— A material failure of risk management by the Group;
— Serious reputational damage to the Group;
— Material misconduct on the part of the participant; or
— Material corporate failure.
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Share ownership guidelines
To align Executives with shareholders and provide an ongoing incentive for continued performance, the Remuneration
Committee has adopted formal share ownership guidelines, which apply both during and after employment.
Shareholding guidelines during employment
Executive Directors are required to build and maintain a minimum level of shareholding equal to their normal annual
LTIP opportunity. Executive Directors will be required to retain half of any post-tax (and if relevant, post exercise price)
awards which vest under the long-term incentive plans, and half of any post-tax deferred shares becoming exercisable
under the annual bonus, until the share ownership guideline has been satisfied. Shares which are fully owned with no
outstanding vesting criteria count towards the shareholding guideline together with deferred annual bonus shares and
shares subject to Performance Shares Awards which have vested but which are in a holding period (in each case, on a
net of tax basis).
Shareholding requirement after employment
Shares are subject to this requirement only if they are acquired from long term incentive or deferred bonus awards
granted after 1 January 2019. Following employment, an Executive Director must retain such of the relevant shares as
have a value at cessation equal to their in-service shareholding requirement, with the required holding tapering to zero
over a two-year period. If the Executive Director holds less than the required number of relevant shares at any time, they
will be required to retain all of those shares.
Performance targets and metrics
Performance targets for the annual bonus are set by the Remuneration Committee after taking into account the strategic
needs of the business. A key component of the Group’s strategy is to develop cell and gene therapy products from pre-
clinical proof of concept through to the end of Phase I or Phase II clinical studies before partnering or out-licencing.
Annual bonus targets for a particular year are therefore likely to include specific product development targets depending
on the stage of development of each opportunity. The annual bonus objectives are also likely to include targets related
to generating recurring revenues such as from manufacturing or development services to third parties.
The performance metrics for long term incentives are determined to ensure that the most appropriate targets are set
for the Group’s situation at the time. The approach to performance measures for the awards to be granted in 2022 is
set out on page 107. It is the Group’s current intention that up to 30% of the overall long term incentive opportunity may
be based on the delivery of specific strategic milestones in the future. It is intended that there will continue to be a
performance underpin, such that the awards will only vest to the extent that the Remuneration Committee considers
that the overall performance of the business across the period justifies it.
The Remuneration Committee retains the ability to adjust or set different performance measures if events occur (such
as a change in strategy, a material acquisition and/or a divestment of a Group business, or a change in prevailing market
conditions) which cause the Remuneration Committee to determine that the measures are no longer appropriate, and
that amendment is required so that they achieve their original purpose.
Operation of share plans
Awards and options may be adjusted in the event of a variation of share capital or other relevant event in accordance
with the rules of the applicable share plan. The Group’s share plans may be operated in accordance with their terms,
including that awards may be granted as cash based awards over a notional number of shares, and that share awards
may be settled in whole or in part in cash at the election of the Remuneration Committee; the Remuneration Committee
would only use these cash provisions for operational flexibility, for example if a regulatory restriction in any territory
prevented the Company from offering shares to an Executive Director. Where a long-term incentive award is granted
as a “Market Value Option” as referred to in the “Approach to recruitment remuneration” section below, it may be settled
on the basis that the participant receives for nil-cost a number of shares with a market value equal to the “gain” at
exercise in the vested shares.
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Differences in remuneration policy for all employees
The structure of the reward package for the wider employee population is based on the principle that it should be
sufficient to attract and retain the best talent and be competitive within the biotech sector, remunerating employees for
their contribution linked to the Group’s holistic performance.
All employees receive a base salary and are entitled to participate in benefits, including the Group’s defined contribution
pension scheme to which the Group contributes.
In 2020, the Group introduced a Group-wide cash bonus scheme which will give employees at all levels the opportunity
to share in the success of the Group by receiving a cash bonus linked to their grade level and their own personal
performance. The maximum bonus receivable varies between the participating employees. 50% of the bonuses of the
Executive Directors’ and Senior Executive Team are delivered in deferred shares, whereas all other staff receive 100% of
their bonuses in cash.
Where possible, the Group also encourages employee share ownership through a number of share plans that allow
employees to benefit from the Group’s success. Generally speaking, a much higher proportion of total remuneration
for the Executive Directors is linked to business performance, compared to the rest of the employee population, so that
remuneration will increase or decrease in line with business performance and to align the interests of Executive Directors
and shareholders.
Consideration of employment conditions elsewhere in the Group
Each year the Remuneration Committee is briefed on the structure and quantum of the all-employee remuneration
framework as well as throughout the year being informed about the context, challenges and opportunities relating to
the remuneration of the wider workforce to enable the Remuneration Committee to consider the broader employee
context when making Executive remuneration decisions.
The Chief Executive Officer determines the overall salary increases and bonuses for all employees, other than the
Executive Directors, the Senior Executive Team and Company Secretary which are subject to the approval of the
Remuneration Committee. The Group is committed to offering highly competitive reward packages for all employees.
Every year, the Group benchmarks salaries and benefits against the local biotech and pharmaceutical market which
informs the decision making process. The Chief Executive Officer discusses the overall increase in payroll cost and the
total amount to be paid in bonuses with the Chair of the Remuneration Committee before implementing the salary
increases and bonuses.
The Remuneration Committee spent considerable time in the second half of 2020 formulating this Remuneration
Policy (set out on pages 123 to 125) which included canvassing the views of shareholders. Post consultation the
Remuneration Committee engaged with the workforce on the Policy and Executive pay via the WEP in compliance with
Provision 41 of the Corporate Governance Code.
Component and purpose
Operation
Maximum potential
Non-Executive Directors
Non-Executive Directors’ fees
and benefits
To compensate Non-Executive
Directors for their services to the
Group.
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 Board meetings (and any tax thereon) are
paid by the Company.
The Chair and Non-Executive Directors do not
participate in any of the Group’s incentive plans and
do not receive pension contributions.
There is no overall maximum, but fees are set taking
into account the responsibilities of the role and
expected time commitment.
Base fee and additional fees
Non-Executive Directors receive a base fee, with
additional fees for chairing Board Committees and
holding the office of Senior Independent Director.
Supplementary fees may be paid for other
responsibilities or time commitments.
Additional fees for Non-Executive Directors
based outside the UK
An additional fee may be paid to any Non-Executive
Director outside the UK to recognise the additional
time commitment associated with their role.
An additional fee of up to £50,000 per annum may be
paid to any Non-Executive Director recruited from or
based in the United States to reflect market levels of
remuneration in the United States for Non-Executive
Directors, subject to their agreement that the after tax
amount of this additional fee will be applied in the
acquisition of shares at market value which must be
retained for at least 12 months from acquisition.
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Service contracts and policy on payment for loss of office
Executive Directors’ service contracts are subject to 12 months’ notice from both the Group and from the Director.
Executive Directors may be required to work during the notice period or be paid in lieu of notice if not required to work
for the full notice period.
The details of service contracts and letters of appointment of those who served as Directors during the year are:
Service contracts
Contract date
Unexpired term at
31 December 2021
Notice period
John Dawson 10 October 2008 N/A 12 months 12 months
Stuart Paynter 29 August 2017 N/A 12 months 12 months
Letters of appointment
Date of appointment
Unexpired term at
31 December 2021
Notice period
Dr. Roch Doliveux 24 June 2020 17 months 3 months
Martin Diggle 4 October 2015 N/A
1
3 months
Dr. Andrew Heath 1 January 2016 N/A
2
3 months
Stuart Henderson 1 June 2016 5 months 3 months
Dr. Heather Preston 15 March 2018 25 months 3 months
Robert Ghenchev 24 June 2019 5 months 3 months
Dr. Sam Rasty 1 December 2020 23 months 3 months
Professor Dame Kay Davis 1 March 2021 26 months 3 months
Dr. Michael Hayden 15 July 2021 31 months 3 months
Catherine Moukeibir 14 December 2021 35 months 3 months
1 Martin Diggle retired from the Board on 3 February 2021.
2 Dr. Andrew Heath retired from the Board on 27 May 2021.
All Directors are subject to re-election by shareholders on an annual basis.
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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
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. Any bonus amounts paid will typically be pro-rated for time in service
during the bonus period and will, subject to performance, be paid at the usual time (although the Remuneration Committee retains
discretion to pay the bonus earlier in appropriate circumstances). The Remuneration Committee has discretion to pay the whole of
any bonus earned for the year of departure and preceding year in cash.
Deferred
Bonus
Awards
The extent to which any unvested award will vest will be determined in accordance with the applicable share plan rules.
Unvested awards will normally lapse on cessation of employment. However, if a participant leaves due to death, ill-health, injury, disability,
the sale of his employer or any other reason at the discretion of the Remuneration Committee, the Remuneration Committee shall
determine whether the award will vest at cessation or at the normal date. In either case, this will be determined by the Remuneration
Committee, taking into account, unless the Remuneration Committee determines otherwise, the period of time elapsed from the date
of grant to the date of cessation relative to the deferral period. Awards may then be exercised during such period as the Remuneration
Committee determines. Awards which have already become exercisable at the date of cessation may be exercised for such period as the
Remuneration Committee determines.
Long Term
Incentives
The treatment of long term incentive awards will be determined in accordance with the applicable share plan rules.
Unvested awards
Unvested long term incentive awards will normally lapse on cessation of employment. However, if a participant leaves due to death, ill-health,
injury, disability, the sale of his employer or any other reason at the discretion of the Remuneration Committee, the Remuneration Committee
shall determine whether the award will vest at cessation or continue until the end of the performance period. In either case, the extent of vesting
will be determined by the Remuneration Committee taking into account the extent to which the performance condition is satisfied and, unless
the Remuneration Committee determines otherwise, the period of time elapsed from the date of grant to the date of cessation relative to the
performance period. If the award continues, the holding period will ordinarily apply until its originally anticipated end date, although the
Remuneration Committee has discretion to release the award at an earlier date.
Vested awards in a holding period
If an Executive Director ceases employment with the Group after an award has vested but before the end of its holding period, the
award will continue to the end of the holding period (unless the cessation is for summary dismissal, in which case it will lapse). The
award will be released to the extent it has vested by reference to the performance conditions. The Remuneration Committee retains
discretion to release the award at cessation.
Change
of control
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.
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 cases where an Executive Director was recruited from outside the UK and has been relocated to the UK as part of their appointment,
the Company will pay reasonable repatriation costs for leavers at the Remuneration Committee’s discretion. The Remuneration
Committee retains discretion to make additional exit payments where such payments are made in good faith in discharge of an existing
legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim arising in
connection with the termination of a Director’s office or employment.
Where a ’buyout’ or other award is made in connection with recruitment, the leaver provisions would be determined no later than the
time of the award.
The Directors’ Remuneration Report is approved by the Remuneration Committee and the Board and signed on
their behalf
Dr. Heather Preston
Chair, Remuneration Committee
20 April 2022
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Corporate Governance
Directors’ Report
for the year ended 31 December 2021
The Directors present their Annual report and audited consolidated financial statements (Annual report and accounts)
for the year ended 31 December 2021 as set out on pages 148 to 151. This report should be read in conjunction with
the Corporate Governance Report on pages 88 to 103. Discussions regarding financial information contained in this
Annual report and accounts may contain forward-looking statements with respect to certain of the plans, current goals
and expectations relating to the future financial condition, business performance and results of the Group and Company.
By their nature, all forward looking statements involve risk and uncertainty because they relate to future events and
circumstances that are beyond the control of the Group and Company. Readers are cautioned that, as a result, the
actual future financial condition, business performance and results of the Group may differ materially from the plans,
goals and expectations expressed or implied in such forward looking statements.
Strategic Report
The Strategic Report, including the outlook for 2022 on page 36, is on pages 12 to 76. 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
2021 audit, and the full Board have had an opportunity to review and comment on the contents of the report. Since the
Board met seven times for routine meetings in 2021 the Directors consider that they are sufficiently well informed to
be able to make this judgement.
Key financial performance indicators (KPIs)
Key financial performance indicators are outlined in the Chief Financial Officer’s review on pages 44 to 53.
Corporate Governance
The Group’s statement on corporate governance is included in the Corporate Governance Report on pages 88 to 103
which forms part of this Directors’ Report.
Risk management
The Group’s exposure to risks is set out on pages 78 to 85 (Principal risks, uncertainties and risk management) and on
page 163 (note 4: financial risk management).
Dividends
The Directors do not recommend payment of a dividend (2020: £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 86 to 87 and page 90. The contracts of employment of the Executive Directors are
subject to a twelve months’ notice period. The Directors’ remuneration and their interests in the share capital of the
Company at 31 December 2021 are disclosed in the Directors’ Remuneration Report on pages 104 to 129.
Appointment and replacement of Directors
Directors may be appointed by an ordinary resolution at any general meeting of shareholders, or may be appointed by
the existing Directors, provided that any Director so appointed shall retire at the next AGM and may offer themselves
for re-election. In order to ensure that the Company complies with the Corporate Governance Code all Directors will
retire at each AGM and may offer themselves for re-election. A Director may be removed in the following ways: by an
ordinary resolution at a general meeting; if he or she is prohibited by law from being a Director; in the event of
bankruptcy; if he or she is suffering from specified mental disorders; if he or she is absent without consent for more
than six months; or by request in writing by all the other Directors. Any Director may appoint another Director or
another person approved by the other Directors as an alternate Director.
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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 2021 and up to the date of approval of the financial statements.
Share capital
Structure of the Company’s capital
At 31 December 2021, the Company had 86,175,055 ordinary shares in issue, all allotted and fully paid. There are no
restrictions on the transfer of shares in the Company or on voting rights. All shares are admitted to trading on the
premium segment of the main market of the London Stock Exchange.
Rights to issue and buy back shares
Each year at the AGM the Directors seek rights to allot shares. The authority, when granted, lasts for 15 months or until
the conclusion of the next AGM if sooner. At the last AGM held remotely on 27 May 2021, authority was given to allot
up to 27,471,206 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 27,471,206 shares, solely in a rights issue. Authority was also given, subject to certain conditions, to waive
pre-emption rights over up to 8,241,360 shares, being 10% of the shares then in issue. No rights have been granted to
the Directors to buy back shares.
Substantial shareholdings
At 15 March 2021, the latest practical 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 Number of ordinary shares Percentage of issued share capital
Novo Holdings 9,681,230 10.0%
Vulpes Investment Management 9,303,802 9.7%
Liontrust Asset Management 7,632,077 7.9%
M&G Investment 5,267,297 5.5%
Nine Ten Capital 3,387,228 3.5%
Serum Life Sciences Ltd (UK) 3,382,950 3.5%
Vitruvian Partners 3,004,567 3.1%
Mr S.M.H. Shah 2,925,298 3.0%
No other person has reported an interest in the ordinary shares of the Company required to be notified to the Company.
No person holds shares carrying special rights with regard to control of the Company.
Employees
In accordance with s172 of the Companies Act 2006, the Group communicates and consults regularly with employees
throughout the year. During 2020, the Group established a Workforce Engagement Panel comprising employees
representing all levels and functions across the Group. In addition, the Group has designated Non-Executive Director,
Stuart Henderson, for gathering the views of the workforce and will oversee employee engagement between the Board
and the workforce. Employees’ involvement in the Group’s performance is encouraged, with all employees eligible to
participate in the Group’s Sharesave Scheme. All employees who have completed probation participate in discretionary
bonus schemes.
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 does all that is practicable to meet its responsibility towards the employment and training of disabled people.
Further details on employees, health and safety, environmental matters and corporate social responsibility are in the
ESG statement on pages 54 to 75.
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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. The EBT currently holds
93,726 shares with a value of £1,153,000 at year end on which all the related options have vested. The EBT also
administers the 2015 Deferred Bonus Plan in as far as subscribing for and applying the share capital for nil cost options
in the Company exercised by senior management. Settlement of the funds occurs through the Group. At the end of
2021 bonuses to senior management with a value of £1,073,000 vested and will be converted to nil cost options
during 2022. Refer 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.
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the primary statements and
notes to these financial statements.
The Group made a profit for the year ended 31 December 2021 of £19 million, and generated net cash flows from
operating activities for the year of £25.5 million. The Group also raised an additional £50 million in cash through a
successful equity placement by Serum Life Sciences Ltd in September 2021 and post year end has raised £80 million in
January to March 2022. The Group ended the year with cash and cash equivalents of £108.9 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 2022 annual budget and forecasts for 2023. 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:
— A substantial manufacturing and development revenue downside affecting the core LentiVector
®
platform business;
— Vaccine manufacturing revenues only included to the extent contracted;
— No revenues from new customers;
— Significant decreases in forecasted existing customer milestone and royalty revenues; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its customers including expected
revenues from existing customers under long term contracts.
The Group entered into an $85 million (£64 million) loan facility with Oaktree Capital Management as part of the Group’s
acquisition of an 80% stake in Oxford Biomedica Solutions in March 2022. The facility was drawn down in full and the
Group is required to repay this one year facility in March 2023. In both the Group’s cash flow forecast and the mitigated
downside scenarios, the Group is able to repay this loan in March 2023, but in the mitigated downside scenarios the
Group would need to obtain additional equity or loan financing in the third quarter of 2023 to continue operations.
However, despite the above requirement, the Board has confidence in the Group’s ability to continue as a going
concern for the following reasons:
— The Group’s history of being able to access capital markets including raising £130 million of equity during the last
nine months;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure and
operational purposes, as recently evidenced by the $85 million one year facility obtained with Oaktree Capital Management;
— The Group’s ability to continue to be successful in winning new customers and building its brand as demonstrated by
successfully entering into new customer agreements with Arcellx, Immatics, Caballetta Bio and Boehringer Ingelheim
;
— As noted above, the Group has cash balances of £108.9 million at the end of December 2021 and £144 million at the
end of March 2022;
— More than two thirds of 2022 forecasted revenues are covered by binding purchase orders and rolling customer
forecasts which give confidence in the level of revenues forecast over the next 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 remain confident that the Group will have sufficient funds
to continue to meet its 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.
Corporate Governance
Directors’ Report
for the year ended 31 December 2021
Corporate Governance 133
Oxford Biomedica plc | Annual report and accounts 2021
Viability Statement
Assessment of prospects
In accordance with the UK Corporate Governance Code, the Directors have assessed the prospects of the Group over
the three years to December 2024. They believe three years to be appropriate due to the inherent significant uncertainties
of forecasting within and beyond this time horizon given the nature of the business sector in which the Group operates.
The assessment has been informed by refreshing in 2021, the strategy adopted by the Board in 2016, and the evolution
of the business over the last twelve months.
The Group’s strategy is to exploit its platform technologies in lentiviral vectors (LentiVector
®
) and AAV to support the
development of other companies’ cell and gene therapy products, while also continuing to develop its own product
pipeline. The Group is generating growing revenues and other operating income from licensing its platform technology,
generating upfront receipts and royalties, and from fees for providing process development and bioprocessing services
to other companies. Over the three years to December 2024 the Directors believe that revenues from licensing its
technology to third parties and from providing process development and bioprocessing services to its partners will be
sufficient to support a sustainable Group.
The following factors are considered both in the formulation of the Group’s strategy, and in the assessment of the
Group’s prospects over the three-year period:
— The principal risks and uncertainties faced by the Group, including emerging risks as they are identified (such as
climate change), and the Group’s response to these;
— The prevailing economic climate and global economy, competitor activity, market dynamics and changing customer
behaviours;
— The potential short and longer term economic impact of the war in Ukraine;
— How the Group can best position itself to take advantage of the current opportunities within the cell and gene
therapy, and adenovirus markets;
— Opportunities for further product and 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 an incredibly challenging, yet transformative two years since the pandemic begun and has
played a hugely successful part in the production of the adenovirus-based Oxford AstraZeneca COVID-19 vaccine.
During this period, the robustness of the Group’s operations and the long term nature of our customers’ investments has
also been proven, and through the inspiring innovation and integrity of our employees during the last twelve months the
Group has continued to add new LentiVector
®
platform customers such as Arcellx, Immatics and Caballetta Bio, while
expanding on its existing partnerships with both Boehinger Ingelheim and Juno/BMS. During the period, the group was
also able to successfully raise £130 million in equity finance and to secure a $85 million debt facility which has allowed
it to make its first major US acquisition, with the acquisition of an 80% ownership interest in a newly formed AAV focused
manufacturing and innovation business, Oxford Biomedica Solutions, established in March 2022 with Homology
Medicines; to add market leading AAV platform technology, expertise and high quality facilities into its core customer
offering to increase its future sales growth potential. The Group has now entered an extremely exciting stage in its
development, and while there is an inherent risk in the level of COVID-19 vaccine demand, the Group is immensely
proud of the role it has played, and by making this acquisition has crystallised the value from its role in the pandemic in
a way that enhances its already strong position in the expanding cell and gene therapy market.
The financial viability of the Group has been assessed, taking into account the Group’s current financial position, and
assuming the group continues to execute on its growth strategy. This assessment has been made using long range
financial planning assumptions, augmented by the preparation of more detailed cash flow forecasts over the period
to the end of 2023 that also consider the impact of severe but plausible downside scenarios, including scenarios
arising from the Group’s principal risks as outlined on pages 78 to 85. 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’s important to note that while each risk could adversely affect the Group’s
financial performance, as the Group’s customer product portfolio expands its resilience to individual product setbacks
and its reliance on securing individual new products reduces. Hence, the combination of downside risks that would
need to 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
realistically balanced.
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Scenario Risk Description
No revenues from
new customers
Business development risk The Group is unable to attract new customers, or existing customers do not
add additional products to their existing programmes.
A substantial downside affecting
the core multi-vector platform
business
Collaborator and partner risk Customers discontinue their existing programmes or transfer them to other
suppliers.
Bioprocessing revenue risk The Group is unable to produce batches for customers meeting the required
specification.
COVID-19 AstraZeneca decides to discontinue its vaccine, or substantially decrease its
supply which leads to a drop in revenue.
Significant decreases in
forecasted existing customer
milestones and royalties
Pharmaceutical and product
development risks
Customers terminate or delay their existing programmes due to the products
under development not meeting safety and efficacy requirements.
In addition to the above, there is also a risk that in an increasingly competitive market the Group is unable to access
sufficient capital to maximise the value from its leading position. While the Group does not expect to need to raise
additional capital in the near term to fund its current operating activities, it continues to assess whether additional
capital is required to make further beneficial investments in pursuit of the Group’s long term growth strategy to maximise
shareholder value.
Management also 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 in the case of a vaccine for a pandemic.
However, over the last twelve months the business has demonstrated that it has solid foundations, and the necessary
controls in place to successfully manage its financial resources dynamically and effectively, and with the addition of
Oxford Biomedica Solutions, now has a broadened offering to help mitigate that risk.
As mentioned above, the hypothetical downside scenarios modelled over the period to the end of 2023 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) refinancing its debt facility, (ii) accessing new external funding;
(iii) more radical short term cost reduction actions; and (iv) reducing capital expenditure. Over the longer 3 year viability
assessment period, assuming the Group continues to execute its hybrid growth strategy it has strong prospects for
revenue growth arising from its expanding customer 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
customer programmes, and in doing so being able to continue the recent growth in customer 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 2024.
Corporate Governance
Directors’ Report
for the year ended 31 December 2021
Corporate Governance 135
Oxford Biomedica plc | Annual report and accounts 2021
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.
Martin Diggle and Robert Ghenchev elected to receive no fees for their
services as Directors (page 115).
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 179 to 181).
Allotment of shares in accordance with the equity fundraise in September 2021
(note 24, page 178).
Statement of Directors’ responsibilities in respect of the Annual report and accounts
The Directors are responsible for preparing the Annual report and the Group and parent Company financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial statements in accordance with UK-adopted international
accounting standards and applicable law and have elected to prepare the parent Company financial statements on the
same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that
period. In preparing each of the Group and parent Company financial statements, the Directors are required to:
— Select suitable accounting policies and then apply them consistently;
— Make judgements and estimates that are reasonable, relevant and reliable;
— State whether they have been prepared in accordance with UK-adopted international accounting standards;
— Assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
— Use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company
and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for
such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance Report that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
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Oxford Biomedica plc | Annual report and accounts 2021
Responsibility statement of the Directors in respect of the Annual report and accounts
We confirm that to the best of our knowledge:
— The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
— The Strategic Report includes a fair review of the development and performance of the business and the position of
the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
We consider the Annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position and performance, business model and strategy.
Statement as to disclosure of information to auditors
In accordance with s418 of the Companies Act 2006, so far as each Director is aware, there is no relevant audit
information of which the Group and Company’s auditors are unaware, and each Director has taken all the steps that he
ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that
the Group and Company’s auditors are aware of that information.
Independent auditors
The auditors, KPMG LLP, have indicated their willingness to continue in office and a resolution concerning their
reappointment will be proposed at the AGM.
Greenhouse gas emissions report
Details on greenhouse gas emissions are set out in the ESG Report in the Strategic Report on page 65.
Statement of employee engagement
Details of the actions that has been taken during the financial year in order to keep employees informed of matters of
concern and awareness of the financial and economic factors affecting the performance of the Group is described in
Group’s Stakeholders section of the Strategic Report for Employees on pages 18 to 19.
Statement of engagement with suppliers, customers and others
The statement of how the Directors has engaged with suppliers, customers and others is described in the Group’s
Stakeholders section of the Strategic Report on pages 18 to 19, with a working example in action on pages 20 to 21.
Annual General Meeting
The AGM will be held on Friday, 27 May 2022 at our offices at Windrush Court, Transport Way, Oxford, OX4 6LT but the
Group encourages shareholders to attend the AGM by webcast and vote by proxy.
By order of the Board
Stuart Paynter
Director
20 April 2022
Corporate Governance
Directors’ Report
for the year ended 31 December 2021
Corporate Governance 137
Oxford Biomedica plc | Annual report and accounts 2021
1. Our opinion is unmodified
We have audited the financial statements of Oxford Biomedica plc (“the Company”) for the year ended 31 December
2021 which comprise the consolidated statement of comprehensive income, the consolidated and company statements
of financial position, consolidated and company statements of cash flows, the consolidated and company statements of
changes in equity attributable to owners of the parent, and the related notes, including the accounting policies in note 1.
In our opinion:
— the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs
as at 31 December 2021 and of the Group’s profit for the year then ended;
— the Group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
— the parent Company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act 2006;
and
— the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 29 May 2018. The period of total uninterrupted engagement
is for the four financial years ended 31 December 2021. We have fulfilled our ethical responsibilities under, and we
remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as
applied to listed public interest entities. No non-audit services prohibited by that standard were provided.
Overview
Materiality: Group financial statements as a whole £1,140k (2020: £716k) 0.80% (2020: 0.82%) of revenue
Coverage: 100% (2020: 82%) of group revenue
Key audit matters vs 2020
Event driven New: Bioprocessing revenue contract modification accounting treatment
Recurring risks Contract revenue recognition
Going concern
Recoverability of parent Company’s investment in and loan due from subsidiaries
Independent auditors’ report
To the members of Oxford Biomedica plc
138
Oxford Biomedica plc | Annual report and accounts 2021
Independent auditors’ report
To the members of Oxford Biomedica plc
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to
fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters,
in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures
to address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of,
our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental
to that opinion, and we do not provide a separate opinion on these matters.
The risk Our response
Contract revenue recognition
(Customer license revenues
£5.9 million)
Refer to
page 96 (Audit Committee Report),
pages 154 to 155 (accounting policy)
and page 164 to 165 (financial
disclosures)
Accounting treatment
The Group enters into a number of multiple
element contracts with differing terms. There
are inherent judgements required to be
made by the Group in the following areas:
— Identification of performance obligations
of the contract, primarily the licence fees
and milestones;
— Assessing the allocation of the total
transaction price to each performance
obligation with reference to their
standalone selling price; and
— Whether revenue for each performance
obligation satisfies the criteria for
recognition over time or at a point
in time.
Depending on the outcome of the
judgements made on each of the areas
described above, there is a risk that
revenue is recognised in the wrong period.
We performed the detailed tests below rather than seeking to rely
on any of the Group’s controls because our knowledge of the
design of these controls indicated that we would not be able to
obtain the required evidence to support reliance on controls.
Our procedures included:
— Accounting analysis: We evaluated of the Group’s revenue
accounting policy against the relevant accounting standard.
— Testing application: We assessed and challenged the directors’
judgements made, in line with accounting policies and with
reference to significant contracts, including:
• Assessment of the goods or services promised in the
contract and whether they are distinct and therefore
separate performance obligations;
• Assessment of the stand-alone selling prices of individual
components, through benchmarking across the other
customer contracts; and
• Assessment of the contract terms against the requirements
of the relevant accounting standard to determine whether the
timing of revenue recognition should be recorded over time
or at a point in time.
Our results: We found the Group’s treatment of revenues derived
from new contracts entered into to be acceptable (2020: acceptable).
Bioprocessing revenue
contract modification
accounting treatment
(£4.8 million; 2020: £– million)
Refer to
page 98 (Audit Committee Report)
and page 162 (critical accounting
judgements and estimates –
estimation)
Accounting treatment
Bioprocessing revenue relates to the
manufacture of lentiviral vectors and is
recognised over time.
Bioprocessing of lentiviral vectors is
complex. The many and sometimes unique
contractual arrangements that underpin
the measurement and recognition of
revenue by the Group, particularly in
relation to contract modification requires
judgement. The key judgements impacting
the recognition of revenue include:
— Interpretations of modifications to
contractual arrangements; and
— Assessing the allocation of the
transaction price to each performance
obligation.
Depending on the outcome of the
judgements made on each of the areas
described above, there is a risk that revenue
from allocations to each performance
obligation is incorrectly recognised.
We performed the detailed tests below rather than seeking to rely
on any of the Group’s controls because our knowledge of the design
of these controls indicated that we would not be able to obtain the
required evidence to support reliance on controls.
Modified contracts were selected for substantive audit procedures
based on qualitative factors, such as commercial complexity, and
quantitative factors, such as financial significance that we considered
to be indicative of risk. Our audit testing for the contracts selected
included the following:
— Accounting analysis: We evaluated the Group’s revenue
accounting policy against the relevant accounting standard.
— Testing application: We assessed the directors’ judgements
made, in line with accounting policies and with reference to
significant contracts, including:
• We inspected and challenged accounting papers prepared
by the Group based on our knowledge of the entity and
experience of the industry in which it operates to explain the
positions taken in the contract, including modifications; and;
• We assessed the assumptions made by the Group in
determining the allocation of transaction price to each
performance obligation.
— Assessing transparency: We assessed adequacy of the Group’s
disclosures about the judgement involved in the accounting for
contract modifications.
Our results: We found the Group’s treatment of bioprocessing revenues
derived from contract modifications entered into to be acceptable.
Independent auditors’ report 139
Oxford Biomedica plc | Annual report and accounts 2021
The risk Our response
Going concern
Refer to
page 96 (Audit Committee Report),
page 132 (Directors’ Report)
and pages 152 to 153 (accounting
policy)
Disclosure quality
The financial statements explain how the
directors have formed a judgement that it
is appropriate to adopt the going concern
basis of preparation for the Group and
parent Company.
Their judgement is based on the evaluation
of the inherent risks to the Group and
parent Company’s business model and
how those risks might affect the Group’s
and parent Company’s financial resources
or ability to continue operations over a
period of at least a year from the date of
approval of the financial statements.
The risk most likely to adversely affect the
Group’s and parent Company’s available
financial resources over this period is the
ability to mitigate and control expenditures
due to the non-materialisation of expected
revenues in the LentiVector business, no
revenues from new customers,
nonmaterialisation of expected revenues
from existing customer milestone and
royalty revenues, and uncertainties around
the expected revenues from existing
customers under long term contracts.
The risk for our audit is whether or not
those risks are such that they amount to a
material uncertainty that may cast
significant doubt about the ability to
continue as a going concern. Had they
been such, then that fact would have been
required to have been disclosed.
We considered whether these risks could plausibly affect the
liquidity in the going concern period by assessing the directors’
sensitivities over the level of available financial resources indicated
by the Group’s financial forecasts taking account of severe, but
plausible, adverse effects that could arise from these risks
individually and collectively. Our procedures also included:
— Benchmarking assumptions: We critically assessed the
Group’s revenue downside scenario, comparing to prior results
and our wider knowledge of the business and markets served.
— Evaluating directors’ ability: We evaluated the achievability of
the actions the directors consider they would take to improve
the position should the risks materialise, which included
reductions in employee related costs, discretionary project
expenditure and capital expenditure in the forecast period,
taking into account the extent to which the directors can
control the timing and outcome of these.
— Assessing transparency: We considered whether the going
concern disclosure in note 1 to the financial statements gives a
full and accurate description of the directors’ assessment of
going concern, including the identified risks, and related
downsides.
Our results: We found the Group's judgement that there was no
material uncertainty to be disclosed to be appropriate (2020: no
disclosure of a material uncertainty).
Recoverability of parent
Company’s investment in and
intercompany loans due from
subsidiaries
(£181.2 million; 2020: £166.4 million)
Refer to
page 159 (accounting policy)
and page 171 (financial
disclosures)
Low risk, high value
The carrying amount of the parent
Company’s investment and intercompany
loans due from the sole trading subsidiary
represents 74.62% (2020: 87.56%) of the
parent Company’s total assets.
Their recoverability is not at a high risk of
significant misstatement or subject to
significant judgement. However, due to its
materiality in the context of the parent
Company financial statements, this is
considered to be the area that had the
greatest effect on our overall parent
Company audit.
We performed the tests below rather than seeking to rely on any of
the Group’s controls because the nature of the account balance
meant that detailed testing is inherently the most effective means of
obtaining audit evidence. Our procedures included:
— Test of details: We confirmed the mathematical integrity of the
parent Company’s value in use cash flow model.
— We compared the carrying amount of the investment and
intercompany loans owed from subsidiary undertakings to the
value in use amount derived from the Group’s cash flow
forecasts, being an indication of its recoverable amount.
— We compared the carrying amount of the investment and loans
owed from subsidiary undertakings with the expected value of
the business based on the Group’s market capitalisation.
— Historical comparisons: We assessed cash flow forecasts
against historical results achieved in the year and in previous
years to assess historical reliability of the forecasts.
— Sensitivity analysis: We performed sensitivity analysis to
evaluate the impact of reasonably possible changes to key
assumptions in the Group’s cash flow forecasts.
Our results: We found the Company’s conclusion that there is no
additional impairment of its investment in and intercompany loans
due from subsidiaries to be acceptable (2020: acceptable).
The bioprocessing revenue recognition and related contact liabilities risk has reduced in the year; this is due to the
volume and value of bioprocessing open batches as at the year end. Therefore, it is not separately identified in our
report this year as a key audit matter.
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Independent auditors’ report
To the members of Oxford Biomedica plc
3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £1,140k (2020: £716k), determined with reference
to a benchmark of Group revenue of which it represents 0.80% (2020: 0.82%).
Materiality for the parent Company financial statements as a whole was set at £395k (2020: £182k), determined with
reference to a benchmark of the parent Company total assets, of which it represents 0.21% (2020: 0.10%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to
a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 65% (2020: 65%) of materiality for the financial statements as a whole, which
equates to £741k (2020: £465k) for the Group and £256k (2020: £117k) for the parent Company. We applied this
percentage in our determination of performance materiality based on the level of identified misstatements and control
deficiencies identified during the prior period.
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £57k
(2020: £36k), in addition to other identified misstatements that warranted reporting on qualitative grounds. Of the
Group’s 2 (2020: 2) reporting components, we subjected 2 (2020: 2) to full scope audits for group purposes. The
components within the scope of our work accounted for 100% of Group revenues, Group profit before tax and Group
total assets (2020: all 100%) and were audited by one engagement team (2020: one engagement team).
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s
internal control over financial reporting.
Revenue
Group materiality
Revenue
£142,797k (2020: £87,728k)
Group materiality
£1,140k (2020: £716k)
£1,140k
Whole financial statements materiality
(2020: £716k)
£741k
Whole financial statements performance
materiality (2020: £465k)
£1,080k
Range of materiality at 2 components
(£395k – £1,080k) (2020: £182k – £680k)
£57k
Misstatements reported to the audit
committee (2020: £36k)
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Oxford Biomedica plc | Annual report and accounts 2021
4. The impact of climate change on our audit
In planning our audit, we have considered the potential impact of risks arising from climate change on the Group’s
business and its financial statements. Further information is provided in the Group’s Environment, Social and Governance
report which has been incorporated into the 2021 Annual Report on pages 54 to 75.
Climate change risks and opportunities has had a limited impact on the Group. There is enhanced narrative in the
Annual Report on climate matters.
As part of our audit we performed a risk assessment of the impact of climate change risk made by the Group in respect
of climate change on the financial statement and our audit approach. In doing this we performed the following:
— Understanding management’s processes: we made enquiries to understand management’s assessment of the
potential impact of climate change risk on the Group’s Annual Report and Accounts and the Group’s preparedness
for this. As a part of this we made enquiries to understand management’s risk assessment process as it relates to
possible effects of climate change on the Annual Report and Accounts including the way in which the accounting
policies of the Group are updated to reflect climate change risks.
— Annual report narrative: We made enquiries of management to understand the process by which climate related
narrative is developed including the primary sources of data used and the governance process in place over the
narrative. As a part of our risk assessment, we read the climate related information in the front half of the Annual
Report and considered consistency with the financial statements and our audit knowledge.
On the basis of the procedures performed above, we concluded that the risk of climate change was not significant
when we considered the nature of the assets and relevant contractual terms. As a result, there was no material impact
from this on our key audit matters.
5. Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the
Group or the parent Company or to cease their operations, and as they have concluded that the Group’s and the parent
Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties
that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date
of approval of the financial statements (“the going concern period”).
An explanation of how we evaluated management’s assessment of going concern is set out in the related key audit
matter in section 2 of this report.
Our conclusions based on this work are:
— we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is appropriate;
— we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast significant doubt on the Group’s or parent Company’s
ability to continue as a going concern for the going concern period;
— we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial
statements on the use of the going concern basis of accounting with no material uncertainties that may cast
significant doubt over the Group and parent Company’s use of that basis for the going concern period; and
— the related statement under the Listing Rules set out on page 132 is materially consistent with the financial statements
and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a
guarantee that the Group or the parent Company will continue in operation.
142
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Independent auditors’ report
To the members of Oxford Biomedica plc
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment
procedures included:
— Enquiring of the directors, other management and the audit committee and inspection of policy documentation as
to the Group’s high-level policies and procedures to prevent and detect fraud, including the Group’s channel for
“whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
— Reading Board, audit committee and other relevant meeting minutes.
— Considering remuneration incentive schemes and performance targets for management and the directors.
— Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud
throughout the audit.
As required by auditing standards and taking into account possible incentives and pressures to increase the Group’s
share price or earnings trend, our overall knowledge of the control environment and the nature of revenues that involve
subjective estimates and judgements, we performed procedures to address the risk of management override of controls
and the risk of fraudulent revenue recognition. In particular the risk that the judgements taken in recognising contract
revenue are inappropriate and that bioprocessing and process development revenues are recorded in the wrong period
through the percentage of completion derived at the reporting date, and the risk that Group management may be in a
position to make inappropriate accounting entries.
We did not identify any additional fraud risks.
We performed procedures including:
— Assessing the judgements made by the Group in recognition of contract revenues, as described in more detail in
section 2 of our audit report.
— Assessing the accuracy and appropriateness of underlying data and assumptions used to determine the percentage
of completion of bioprocessing batches and process development work packages in progress at the year end
reporting date.
— Assessing whether credit notes issued after the year end report date were indicative of inappropriate revenues having
been recognised in the year.
— Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to
supporting documentation. These included those posted with key words included in the description, those posted
to seldom used accounts and those posted to unusual account combinations, including those with entries to
revenue, estimates and cash with an unexpected double entry.
— Evaluated the business purpose of significant unusual transactions.
— Assessing significant accounting estimates for bias.
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Oxford Biomedica plc | Annual report and accounts 2021
Identifying and responding to risks of material misstatement due to non-compliance
with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience and through discussion with the directors and other
management, including legal counsel (as required by auditing standards), and discussed with the directors and other
management, the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-
compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial
reporting legislation (including related companies legislation) and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could
have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines
or litigation. We identified the following areas as those most likely to have such an effect: healthcare regulations, such
as good manufacturing practice (GMP), good clinical practice (GCP) and good laboratory practice (GLP) standards for
laboratories and manufacturing facilities (through audits by the MHRA), health and safety, anti-bribery, employment law
and liquidity and certain aspects of company legislation recognising the financial nature of the Group’s activities and
regulated nature of the industry in which it operates.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to
enquiry of management, including legal counsel, and the directors and inspection of regulatory and legal correspondence,
if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence,
an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in
accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot
be expected to detect noncompliance with all laws and regulations.
7. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
— we have not identified material misstatements in the strategic report and the directors’ report;
— in our opinion the information given in those reports for the financial year is consistent with the financial statements;
and
— in our opinion those reports have been prepared in accordance with the Companies Act 2006.
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Independent auditors’ report
To the members of Oxford Biomedica plc
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our
audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
— the directors’ confirmation on page 78 that they have carried out a robust assessment of the emerging and principal
risks facing the Group, including those that would threaten its business model, future performance, solvency and
liquidity;
— the principal risks, uncertainties and risk management disclosures describing these risks and how emerging risks are
identified, and explaining how they are being managed and mitigated; and
— the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what
period they have done so and why they considered that period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the viability statement, set out on pages 133 to 134 under the Listing Rules. Based on the
above procedures, we have concluded that the above disclosures are materially consistent with the financial statements
and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial
statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes
that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to
report on these statements is not a guarantee as to the Group’s and parent Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’
corporate governance disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial
statements and our audit knowledge:
— the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair,
balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position
and performance, business model and strategy;
— the section of the annual report describing the work of the Audit Committee, including the significant issues that the
audit committee considered in relation to the financial statements, and how these issues were addressed; and
— the section of the annual report that describes the review of the effectiveness of the Group’s risk management and
internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the
provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to
report in this respect.
Independent auditors’ report 145
Oxford Biomedica plc | Annual report and accounts 2021
8. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
— adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
— the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
— certain disclosures of directors’ remuneration specified by law are not made; or
— we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on pages 135 to 136, the directors are responsible for: the preparation
of the financial statements including being satisfied that they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error; assessing the Group and parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members,
as a body, for our audit work, for this report, or for the opinions we have formed.
William Smith (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
2 Forbury Place
33 Forbury Road
Reading
RG1 3AD
20 April 2022
146
Oxford Biomedica plc | Annual report and accounts 2021
The innovative work we do
allows our customers to deliver
the breakthroughs of cell and
gene therapies which have the
potential to cure patients
Corporate Governance 147
Oxford Biomedica plc | Annual report and accounts 2021
Corporate Governance
Running subhead
Each section has its own colour code. This one is purple (others are cyan, orange and dark blue)
Level 1
Level 2
Level 3
Level 4
With the headings, you need to work out what is what in the old back section as we used to have an underline style
there that is now defunct. In theory they will all match in all sections now.
Each section has its own colour code. This one is purple (others are cyan, orange and dark blue)
Everything is 10/11.5pt with -20 tracking (including captions and headings.
Body text:
I am pleased to present Oxford BioMedica’s Corporate Governance Report for 2015.
Good governance is essential for the long term success of the business and this is ultimately the responsibility of the
Board and its committees. The Board comprises both non-Executive and Executive directors and provides the forum
for external and independent review and challenge to the Executives.
Full line spaces between heading paragraphs.
Half line space between regular paragraphs.
Caption heading 6.5/8pt
Caption text 6.5/8pt
Group financial statements 147
Oxford Biomedica plc | Annual report and accounts 2021
1 Saving lives
through innovation
2 Innovating viral vectors
to an industrial level
4 Expanding our innovative
process development and
manufacturing services
6 Transforming science
into life-saving healthcare
8 Market overview
11 Strategic Report
12 Group at a glance
14 Product pipeline
16 The Group’s business model
18 The Group’s stakeholders
22 Operational highlights
delivered in 2021
24 Financial highlights
delivered in 2021
26 Chair’s statement
30 2021 performance review
38 Management team
40 Delivery of 2021 Objectives
42 Objectives set for 2022
44 Financial review
54 Environmental, Social
and Governance Report
76 Non-financial statement
77 Corporate Governance
78 Principal risks, uncertainties
and risk management
86 Board of Directors
88 Corporate Governance Report
104 Directors’ Remuneration Report
130 Directors’ Report
137 Independent auditors’ report
147 Group financial statements
148 Consolidated statement
of comprehensive income
149 Statement of financial positions
150 Statements of cash flows
151 Statements of changes in equity
attributable to owners of the parent
152 Notes to the consolidated
financial statements
187 Other matters
187 Glossary
190 Advisors and contact details
148
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Consolidated statement of comprehensive income
for the year ended 31 December 2021
Continuing operations Note
2021
£’000
2020
£’000
Revenue
5 142.797 87 ,728
Cost of sales (60,157 ) (41,655 )
Gross profit 82,640 46, 073
Research and development costs (40,189 ) (29,7 49 )
Bioprocessing costs (7 ,233 ) (10,720 )
Administrative expenses (15,152 ) (11,262 )
Other operating income
5 867 795
Change in fair value of asset held at
fair value through profit and loss (165 ) (831 )
Operating profit/(loss)
5 20,768 (5 ,694 )
Finance income
7 – 34
Finance costs
7 (888 ) (912 )
Profit/ (Loss) before tax 19,880 (6,572 )
Taxation
9 (869 ) 327
Profit/ (Loss) and
total comprehensive expense
for the year 10, 28 19,011 6,2 45
Basic profit/(loss) per share
10 22.77 p (7 .81 p)
Diluted profit/(loss) per share
10 22.20 p (7 .81 p)
There was no other comprehensive income or loss.
The profit for the year is attributable to the owners of the parent.
Group financial statements 149
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Statement of financial positions
for the year ended 31 December 2021
Group Company
Note
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Assets
Non-current assets
Intangible assets
12 52 73 – –
Property, plant and equipment
13 69, 728 72,304 – –
Investments and loans in subsidiary
15 – – 181,163 166,388
Trade and other receivables
17 3,605 3,605 – –
Current assets
Inventories
16 9,521 6,912 – –
Assets at fair value through profit and loss
14 74 239 – –
Trade and other receivables
17 44,7 47 53,926 – –
Current tax assets
9 558 126 – –
Cash and cash equivalents
18 108,944 46,743 61,630 23,630
Current liabilities
Trade and other payables
19 19,058 19,716 152 134
Contract liabilities
20 12,502 27 ,258 –
Deferred income
20 894 1, 006 – –
Lease liabilities
32 853 4, 475 – –
Net current assets 130,537 55, 491 61,478 23,496
Non-current liabilities
Provisions
21 6,244 5 ,839 – –
Contract Liabilities
20 92 1, 003 – –
Deferred income
20 1, 760 2,515 – –
Lease liabilities
32 8,488 9 ,370 – –
Net assets 187 ,338 112, 746 242,641 189,884
Equity attributable to owners
of the parent
Ordinary shares
24 43,088 41,161 43,088 41,161
Share premium account
25 307 ,765 258,017 307,765 258,017
Other reserves
29 2,291 2,291 20,372 16,849
Accumulated losses
28 (165,806 ) (188, 723 ) (128,584) (126,143)
Total equity 187 ,338 112,746 242,641 189,884
The Company’s registered number is 03252665.
The Company made a loss for the year of £2,366,000 (2020: £2,242,000).
The financial statements on pages 148 to 186 were approved by the Board of Directors on 20 April 2022 and were
signed on its behalf by:
Roch Doliveux
Interim Chief Executive Officer
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Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Statements of cash flows
for the year ended 31 December 2021
Group Company
Note
2021
£’000
2020
£’000
2021
£’000
2020
(Restated)
1
£’000
Cash flows
from operating activities
Cash generated from/(used in)
operations
30 24,461 (3, 889 ) (2,349) ( 1,858)
Tax credit received 994 7 ,005 – –
Net cash generated from/(used in)
operating activities 25,455 3,116 (2,349) (1,858)
Cash flows
from investing activities
Purchases of property,
plant and equipment 13 (9,461 ) (13,358 ) – –
Proceeds on disposal
of investment assets – 2,523 – –
Loan to subsidiary – – (11,251) (13,850)
Interest received – 34 – –
Net cash used in investing activities (9,461 ) (10 ,801 ) (11,251) (13,850)
Cash flows
from financing activities
Proceeds from issue
of ordinary share capital 24, 25 51,600 41,060 51,600 41,060
Costs of share issues
25 – (1,724 ) – (1,724)
Payment of lease liabilities (4,520 ) (292 ) – –
Interest paid (873 ) (859 ) – –
Net cash generated
from financing activities 46,207 38,185 51,600 39,336
Net increase in cash and
cash equivalents 62,201 30,500 38,000 23,628
Cash and cash equivalents
at 1 January 46,743 16,243 23,630 2
Cash and cash equivalents
at 31 December 18 108,944 46,743 61,630 23,630
1 The Company’s 2020 Cash flow statement has been restated as set out in note 2.
Group financial statements 151
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Statements of changes in equity attributable to owners of the parent
for the year ended 31 December 2021
Group Notes
Ordinary
shares
£’000
Share
premium
account
£’000
Merger
Reserve
£’000
Accumulated
losses
£’000
Total
equity
£’000
At 1 January 2020 38, 416 222, 618 2,291 (187 ,695 ) 75, 630
Year ended 31 December 2020:
Loss for the year – – – (6,2 45 ) (6,2 45 )
Total comprehensive expense for the year – – – (6,2 45 ) (6,2 45 )
Transactions with owners:
Share options
Proceeds from shares issued
23, 24 24 5 841 – (26 ) 1.060
Value of employee services
27 – – – 3, 752 3,752
Deferred tax on share options
8 – – – 273 273
Issue of shares excluding options
23, 24 2,500 37 ,500 – – 40, 000
Cost of share issues
24 – (1,72 4 ) – – (1,72 4 )
Transfer of share premium related to warrants ²
24 – (1,218 )
2
2
At 31 December 2020 41,161 258,017 2,291 (188, 723 ) 112,746
Year ended 31 December 2021:
Profit for the year – – – 19,011 19 ,011
Total comprehensive income for the year – – – 19,011 19 ,011
Transactions with owners:
Share options
Proceeds from shares issued
23, 24 236 1,439 – (75 ) 1,600
Value of employee services
27 – – – 3,523 3,523
Tax on share options
27 – – – 458 458
Deferred tax on share options
8 – – – – –
Issue of shares excluding options
23, 24 1,691 48,309 – – 50,000
At 31 December 2021 43,088 307 ,765 2,291 (165,806 ) 187 ,338
Company Notes
Ordinary
shares
£’000
Share
premium
account
£’000
Reserves
Accumulated
losses
£’000
Total
equity
£’000
Merger
£’000
Other
£’000
At 1 January 2020 38,416 222,618 1,580 9,492 (125,093) 147,013
Year ended 31 December 2020:
Loss for the year – – – – (2,242) (2,242)
Total comprehensive expense for the year
10 – – – – (2,242) (2,242)
Transactions with owners:
Share options
Proceeds from shares issued
23, 24 245 841 – – (26) 1,060
Credit in relation to employee share schemes
25, 26 – – – 5,777
1
– 5,777
Issue of shares excluding options
23, 24 2,500 37,500 – – – 40,000
Cost of share issues
24 – (1,724) – – – (1,724)
Transfer of share premium related to warrants ²
24 1,218² – – 1,218² –
At 31 December 2020 41,161 258,017 1,580 15,269 (126,143) 189,884
Year ended 31 December 2021:
Loss for the year (2,366) (2,366)
Total comprehensive expense for the year
10 – – – – (2,366) (2,366)
Share options
Proceeds from shares issued
23, 24 236 1,439 – – (75) 1,600
Credit in relation to employee share schemes
25, 26 – – – 3,523 – 3,523
Issue of shares excluding options
23, 24 1,691 48,309 – – – 50,000
At 31 December 2021 43,088 307,765 1,580 18,792 (128,584) 242,641
Note 1 – In 2020, the Company recognised a £3.4 million increase in its investment in its operating subsidiary Oxford Biomedica (UK) Ltd (refer note 14 of the financial statements) due
to equity settled share based payments granted to employees and service providers in subsidiaries. Of the £3.4 million, £2.7 million relates to amounts which should have been
recognised at 31 December 2020. In addition £700,000 of deferred bonus that was included in the 2020 consolidated balance sheet has been recognised within group equity in the
2020 financial year. The disclosure relating to such share based payment awards is detailed in Note 25 of the of the accompanying Consolidated Financial Statements.
Note 2 – During 2020 the Directors reviewed their presentation of share premium and found that the share premium has been overstated following the issue of warrants in the
comparative period – to correct this they have transferred £1,218,000 from share premium to retained earnings.
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1, Accounting policies
domiciled in England
ended 31 December 2021 comprise the results of the Company and its subsidiary undertakings (together referred to as
the Group).
The Company’s principal subsidiary is Oxford Biomedica (UK) Limited.
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
Financial Reporting Standards (IFRS). As more fully explained in the Directors’ Report on pages 130 to 136 and below,
the going concern basis has been adopted in preparing the financial statements.
A summary of the more important Group accounting policies are set out below.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are
significant to the financial statements, are disclosed in note 3.
Going concern
The financial position of the Group, its cash flows and liquidity position are described in the primary statements and
notes to these financial statements.
The Group made a profit for the year ended 31 December 2021 of £19 million, and generated net cash flows from
operating activities for the year of £25.5 million. The Group also raised an additional £50 million in cash through a
successful equity placement by Serum Life Sciences Ltd in September 2021 and post year end has raised £80 million in
January to March 2022. The Group ended the year with cash and cash equivalents of £108.9 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 2022 annual budget and forecasts for 2023. The Directors have undertaken a rigourous
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:
— A substantial manufacturing and development revenue downside affecting the core LentiVector
®
platform business;
— Vaccine manufacturing revenues only included to the extent contracted;
— No revenues from new customers;
— Significant decreases in forecasted existing customer milestone and royalty revenues; and
— The potential impacts of the current ongoing war in Ukraine on the Group and its customers including expected
revenues from existing customers under long term contracts.
The Group entered into an $85 million (£64 million) loan facility with Oaktree Capital Management as part of the Group’s
acquisition of an 80% stake in Oxford Biomedica Solutions in March 2022. The facility was drawn down in full and the
Group is required to repay this one year facility in March 2023. In both the Group’s cash flow forecast and the mitigated
downside scenarios, the Group is able to repay this loan in March 2023, but in the mitigated downside scenarios the
Group would need to obtain additional equity or loan financing in the third quarter of 2023 to continue operations.
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Group financial statements 153
Oxford Biomedica plc | Annual report and accounts 2021
However, despite the above requirement, the Board has confidence in the Group’s ability to continue as a going
concern for the following reasons:
— The Group’s history of being able to access capital markets including raising £130 million of equity during the last
nine months
;
— The Group’s history of being able to obtain loan financing when required for purposes of both capital expenditure
and operational purposes, as recently evidenced by the $85 million one year facility obtained with Oaktree Capital
Management;
— The Group’s ability to continue to be successful in winning new customers and building its brand as demonstrated by
successfully entering into new customer agreements with Arcellx, Immatics, Caballetta Bio and Boehringer Ingelheim
;
— As noted above, the Group has cash balances of £108.9 million at the end of December 2021 and £144 million at the
end of March 2022;
— More than two thirds of 2022 forecasted revenues are covered by binding purchase orders and rolling customer
forecasts which give confidence in the level of revenues forecast over the next 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 remain confident that the Group will have sufficient funds
to continue to meet its 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.
— Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16).
Of the amendments to these Standards that became effective from 1 January 2021, none had a material impact on the
Group financial statements.
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 have been adopted early by the Group.
The Directors anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year
have not been disclosed as they are not expected to have a material impact on the Group financial statements.
Basis of consolidation
The consolidated financial statements comprise the Company and its subsidiary undertakings for the year to
31 December each year. Subsidiaries are entities that are directly or indirectly controlled by the Group. Subsidiaries are
consolidated from the date at which control is transferred to the Group. Control exists where the Group has the power
to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The Group does
not currently have any associates.
All intragroup transactions and balances are eliminated on consolidation.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
fair value of the assets transferred, equity instruments issued, and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Any excess of the
cost of the acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as
goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is
recognised directly in the statement of comprehensive income. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring accounting policies used into line with those of the Group.
The Group and Company have elected not to apply IFRS 3 ’Business combinations’ retrospectively to business
combinations which took place prior to 1 January 2004, namely the acquisition in 1996 of 100% of the issued share
capital of Oxford Biomedica (UK) Limited that has been accounted for by the merger accounting method.
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Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Foreign currencies
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the transaction date.
Assets and liabilities in foreign currencies are retranslated into sterling at the rates of exchange ruling at the statement
of financial position date. Differences arising due to exchange rate fluctuations are taken to the statement of
comprehensive income in the period in which they arise.
Revenue
Revenue comprises income derived from bioprocessing of clinical product for partners, fees charged for providing
development services to partners, product and technology licence transactions, royalties, options, and funded research
and development programmes.
Platform
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.
The gross amount due from customers, on all partnerships, 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 customers do not contain a significant
financing component.
Revenues for providing process development activities to partners are recognised during the period in which the
service is rendered on a percentage of completion basis.
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 customer.
The granting of the technology licences to the Group’s background intellectual property and know-how constitutes a
“right to use” licence as our customers are able to conduct development work on the licence independent of the
Group. The Group is incentivised separately for its performance obligations in relation to development work and
milestone payments. The criteria for recognising these technology licences as “right to access” licences has therefore
not been met.
Milestones relating to bioprocessing or process development activities have been identified as separate performance
obligations as they involve the transfer of a distinct good or service, determined with reference to conditions stipulated
in the relevant agreements or contracts. Each milestone is determined as either binary or non-binary.
Milestones that are considered to be binary relate to the achievement of specific events rather than the provision of, for
example, support. Milestones related to the achievement of specific deliverables are considered to be binary Milestones
and will be recognised in full once it is deemed highly probable that the obligation will be met.
Milestones related to the provision of support services are considered to be non-binary Milestones and are recognised
on a percentage of completion basis, but taking into account the likelihood of achievement of the deliverable. Amounts
receivable on delivery of a milestone performance obligation represents variable consideration and have been allocated
to the relevant performance obligation.
Options to technology licences are considered to form part of the technology licence performance obligation and as
such are recognised when the customer exercises the option to obtain that licence. Options to technology licences are
not considered to be material rights.
Non-cash consideration is recognised at fair value through profit and loss. As required by IFRS 15, stock, intangible
assets and fixed assets received in partial lieu of cash payments from customers for commercial development services
and bioprocessing batches are recognised at the fair value of the goods/services provided in relation those stock and
fixed assets for revenue recognition purposes, with a corresponding entry being passed within cost of goods and
depreciation to account for the cost of these items.
Group financial statements 155
Oxford Biomedica plc | Annual report and accounts 2021
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 customer.
The granting of the product licences to the Group’s background intellectual property and know-how constitutes a
“right to use” licence as our customers are able to conduct development work on the licence independent of the
Group. The Group is incentivised separately for its performance obligations in relation to development work and
milestone payments. The criteria for recognising these technology licences as “right to access” licences has therefore
not been met.
Amounts receivable in respect of milestone payments are considered to be separate performance obligations which
are binary and will be recognised in full once it is deemed highly probable that the specific performance obligations
stipulated in the licence agreement have been met. Payments linked to “success” such as regulatory filing or approval,
or achievement of specified sales volumes, are recognised in full when the relevant event has occurred.
Non-binary milestones are recognised on a percentage of completion basis in the period in which related costs are
incurred, or over the estimated period to completion of the relevant phase of development or associated clinical trials.
Amounts receivable on delivery of a milestone performance obligation represents variable consideration and have been
allocated to the relevant performance obligation.
Royalty revenue is recognised as the underlying sales occur.
Research and development revenue and associated costs are recognised over time. Progress is determined based on
the cost-to-cost method.
Cost of sales
Cost of sales comprises the cost of bioprocessing clinical product for partners, the cost of customer development
project activities, and royalties arising on partners’ licences.
The cost of customer development project activities includes the labour costs, overheads and other directly attributable
material and third party costs. Costs are recognised as incurred.
The cost of bioprocessing clinical product for partners includes the raw materials, labour costs, overheads and other
directly attributable third party costs. Costs are recognised as incurred.
The Group’s products and technologies include technology elements that are licensed from third parties. Royalties
arising from such partners’ 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.
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Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
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. The fair value of options granted under the share option schemes and
share save scheme is measured using the Black-Scholes model. The fair value of options granted under the LTIP
schemes, which includes market condition performance criteria, is measured using a Monte Carlo model taking into
account the performance conditions under which the options were granted. The fair value of options granted under
the deferred bonus plan is based on the market value of the underlying shares at the date of grant of these options.
At each financial year end, the Group revises its estimate of the number of options that are expected to become
exercisable based on forfeiture such that at the end of the vesting period the cumulative charge reflects the actual
options that have vested, with no charge for those options which were forfeit prior to vesting. When share options are
exercised the proceeds received are credited to equity.
Options over the Company’s shares have been awarded to employees of Oxford Biomedica (UK) Ltd. In accordance
with IFRS 2 ’Share-based Payments’, the expense in respect of these awards is recognised in the subsidiaries’ financial
statements. In accordance with IFRS 2 the Company has treated the awards as a capital contribution to the subsidiaries,
resulting in an increase in the cost of investment and a corresponding credit to reserves.
Employee Benefit Trust
The Oxford Biomedica Employee Benefit Trust (EBT) has been set up to hold market-purchased shares to settle the
2013 Deferred Bonus Share Awards made to Executive Directors and employees. Within the Company financial
statements, the investment in the Oxford Biomedica Employee Trust forms part of the Investments and loans in
subsidiary taking the form of a loan to subsidiaries. The EBT is consolidated within the Group financial statements.
Leases
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the
leases of property the Group has elected to separate non-lease components and account for the lease and non-lease
components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or site on which it is located less any
lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the
lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the
right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis
as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain re-measurements of the lease liability.
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.
Group financial statements 157
Oxford Biomedica plc | Annual report and accounts 2021
The lease liability is measured at amortised cost using the effective interest method. It is re-measured if:
— There is a change in the Group’s estimate of the amount expected to be payable under a residual future lease
payments;
— The Group changes its assessment of whether it will exercise a purchase, extension or termination options; or
— There is a revised in-substance fixed lease payment.
If a lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the right-of-use asset,
or is recorded in the Profit or Loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in ’property, plant and equipment’ and lease liabilities as a category on the face
of the Statement of Financial Position.
Short term or low-value leases
The Group has elected not to recognise right-of-use assets and lease liabilities of short term and low-value lease. The
Group recognises lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Grants
Income from government and other grants is recognised over the period necessary to match them with the related
costs which they are intended to compensate. Grant income is included as other operating income within the statement
of comprehensive income, and the related costs are included within research, development and bioprocessing costs,
and administrative expenses. Where grant income received exceeds grant income recognised, it is included within
deferred income on the Statement of financial position, whilst where grant income recognised exceeds grant income
received, it is included within accrued income on the Statement of financial position.
Finance income and costs
Finance income and costs comprise interest income and interest payable during the year, calculated using the effective
interest rate method. It also includes the revaluation of external loans denominated in a foreign currency.
Taxation
In 2021 and before, the Group was entitled to claim tax credits in the United Kingdom for certain research and
development expenditure. The Group receives a Research and Development Expenditure Credit (’RDEC’) which is
accounted for as a reduction in research and development costs in the statement of comprehensive income, and
within trade and other receivables in the Statement of financial position. The credit is paid in arrears once tax returns
have been filed and agreed.
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted, or substantially enacted, by the Statement of financial position date.
Deferred tax is calculated in respect of all temporary differences identified at the Statement of financial position date.
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.
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Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Property, plant and equipment
Property, plant and equipment are carried at cost, together with any incidental expenses of acquisition, less depreciation.
Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working
condition for its intended use.
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values on
a straight-line basis over the expected useful economic lives of the assets concerned. Depreciation of an asset begins
when it is available for use. The principal annual rates used for this purpose are:
Freehold property 10%
Leasehold improvements 10%
(or the remaining lease term if shorter)
Office equipment and computers 20 – 33%
Bioprocessing and laboratory equipment 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.
Intangibles
Initial recognition
Intellectual property and in-process research and development acquired through business combinations are
recognised as intangible assets at fair value. Other acquired intangible assets are initially recognised at cost.
Amortisation
Where the intangible asset has a finite life, amortisation is charged on a straight-line basis over the remaining useful
economic life from the time it becomes available for use. Where the useful life of the intangible asset cannot be
determined, the asset is carried at cost but tested annually for impairment. Intangible assets are amortised over the
length of the patent life; current lives range from 5 to 19 years.
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 ion the discounted future cash flows are management estimates, based where possible on available
market information and information for similar products.
Impairment and amortisation charges are included within research, development and bioprocessing costs in the
statement of comprehensive income.
Intellectual property rights comprise third party patent rights or rights to market our commercial products for key
therapeutic indications that have been purchased by the Group.
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Oxford Biomedica plc | Annual report and accounts 2021
Investments in subsidiaries
Investments are carried at cost less any provision made for impairment. Options over the Company’s shares have been
awarded to employees of subsidiary companies. In accordance with IFRS2, the Company treats the value of these
awards as a capital contribution to the subsidiaries, resulting in an increase in the cost of investment.
Investments in subsidiary undertakings, including shares and loans, are carried at cost less any impairment provision.
Such investments are subject to review, and any impairment is charged to the statement of comprehensive income.
At each year end the Directors review the carrying value of the Company’s investment in subsidiaries. Where there is a
material and sustained shortfall in the market capitalisation, or a significant and sustained change in the business
resulting in a decrease in market capitalisation, the Directors consider this to be a trigger of an impairment review as set
out in IAS 36, and the carrying value of the Company’s investments in subsidiaries is adjusted. The Directors consider
that reference to the market capitalisation of the Group is an appropriate external measure of the value of the Company’s
subsidiaries for this purpose.
At year end the Directors will assess the requirement to write back a portion or all of any impairment previously
recognised on its investment in subsidiaries. Factors which will be taken into account with regard to this decision will
be the Groups track record of improved financial results across the last three to four years, as well as the expectation of
future impairments being required after a write back was accounted for.
Financial assets
Assets at fair value through profit and loss
The gain or loss on Assets at fair value through profit and loss is recognised in the statement of comprehensive income.
Investments
Other investments held by the Group are classified as at fair value through profit and loss.
Bank deposits
Bank deposits with original maturities between three months and twelve months are included in current assets and are
valued at amortised cost.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average
method. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business,
less applicable variable selling expenses.
Trade receivables
Trade receivables are recognised initially at the transaction price as these assets do not have significant financing
components and are subsequently measured at amortised cost. The Group recognises loss allowances for receivables
under the expected credit loss model as established by evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits repayable on demand, and other short term highly liquid
investments with original maturities of three months or less.
Deposits
Deposits consist of amounts held in escrow and is included within other receivables within the Statement of financial
position until such time as the restrictions relating to those amounts have been lifted.
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Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
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 customers for commercial development
work and bioprocessing batches, as well as options and funded research and development activities.
Capacity reservation fees:
Capacity reservation fees are considered contract liabilities upon receipt, with the balance being recognised as revenue
as the related performance obligation, being the manufacture of batches by the Group, is satisfied.
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
a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific
to the obligations. 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.
2, Prior period restatement
During the year, the Financial Reporting Council (FRC) communicated with the Directors regarding the Group’s Annual
report and accounts for the year ended 31 December 2020 following their review of those Annual report and accounts.
As a result of the FRC’s review, it is now recognised by the Directors that the movement in the loan to subsidiary of
£13.9 million presented within the Company cash flow statement for the year ended 31 December 2020 was incorrectly
presented within cash flows from financing activities when it should have been included within cash flows from
investing activities.
In preparing Company cash flow statement in the financial statements for the year ended
31 December 2021, the Directors have therefore restated the comparative amounts to now present the movement in
the loan to subsidiary of £13.9 million within cash flows from investing activities.
This change in presentation within the Company cash flow statement has no effect on the cash position of the Group
or Company in their balance sheets, and has no further impact on the Group’s or Company’s financial statements.
The effect of the restatement on the Company cash flow statement in respect of the comparative amount for the year
ended 31 December 2020 is set out below:
Statement of cash flows
Company
2020 as
previously
reported
Company
2020
restated
amount
Cash flows from investing activities
Loan to subsidiaries (13,850)
Cash flow from financing activities
Loan to subsidiaries (13,850)
Group financial statements 161
Oxford Biomedica plc | Annual report and accounts 2021
3, 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; 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 respect of the technology licence, has
already been met.
Number of distinct performance obligations
Upon review of certain customer contracts and preparation of accounting papers setting out the accounting treatment
as per IFRS 15, the Group is required to exercise judgement in identifying the distinct performance obligations contained
within the contract. These have been identified as being:
— The granting of technology licences; and
— Milestones relating to bioprocessing or process development activities.
The fair value allocation of revenue to each performance obligation
Because there is no readily available market price for many of the performance obligations contained in the customer
contracts, the Group exercises judgment in estimating the stand alone selling price of each of these performance
obligations. Key areas of judgement are assessed to be:
— The stand alone selling price of technology licences. The Group assesses the stand alone selling price of licences by
reference to the stand alone selling price of previously recognised customer technology licences, and the size of the
market of the target indication and other market related observable inputs;
— The stand alone selling price of bioprocessing batches. The Group assesses the stand alone selling price of the
batches in terms the stand alone selling price of its other customer 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
customer contract equivalent rates.
Timing of revenue recognition: technology licence revenues
One of the key judgemental areas identified within the collaboration agreements is the timing of recognition of licence
revenue based on the achievement of the relevant performance obligation. The individual factors and aspects relating
to licence revenue are assessed as part of the IFRS 15 accounting paper prepared for each agreement and a judgement
is made as to whether the licence fee performance obligation related to the granting of the licence to the customer has
been achieved. If it was judged that the performance obligations on licences granted in 2021 had not been met,
revenues would have been £5.9 million lower with the revenue expected to be recognised in future when the
performance obligations were deemed to have been met.
Customer contract with varying bioprocessing batch prices
During 2020, the Group entered into a supply agreement with a customer for the supply of bioprocessing batches
where the batch price will vary across the period of the contract. The Group has deemed that the series guidance within
IFRS 15 applies and has therefore recognised revenue based on averaging the batch price over the period of the
contract where the series guidance applies. If the revenue had been recognised based on an actual batch price, revenues
would have been £0.3 million (2020: £2.4 million) higher with a corresponding decrease in revenues in future years.
162
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Estimations
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below. The nature of estimation means that actual outcomes could differ from those estimates.
Percentage of completion of bioprocessing batch revenues
Bioprocessing of clinical/commercial product for 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 to completion for that
specific bioprocessing batch. The value of the revenue recognised with regard to the bioprocessing batches which
remain in progress at year end is £15,195,000. The contract assets related to these batches as at the year end was
£6,404,000. If the assessed percentage of completion was 10 percentage points higher or lower, revenue recognised
in the period would have been £1,520,000 higher or lower.
Percentage of completion of fixed price process development revenues
As it satisfies its performance obligations the Group recognises revenue and the related contract asset with regard to
fixed price process development work packages. Revenues are recognised on a percentage of completion basis and as
such require estimation in terms of the assessment of the correct percentage of completion for that specific process
development work package. The value of the revenue recognised with regard to the work packages which remain in
progress at year end is £8,022,000. The contract assets related to these work packages as at the year end was £2,493,000.
If the assessed percentage of completion was 10 percentage points higher or lower, revenue recognised in the period
would have been £802,000 higher or lower.
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 four years, and has applied the percentage of out of specification batches to total
batches produced across the assessed period to the revenue recognised on batches which have not yet completed the
bioprocessing process at year end. This estimate, based on the historical percentage, may be significantly higher or
lower depending on the number of bioprocessing batches actually going out of specification in future. If the historical
percentage had been 10% higher or lower, the estimate would be £67,000 higher or lower. The estimate will increase
or decrease based on the number of bioprocessing batches undertaken, the percentage of completion of those
bioprocessing batches, and the number of batches which go out of specification over the assessment period.
Consequently, bioprocessing revenue of £0.7 million (2020: £1.4 million) has not been recognised during 2021 with
the corresponding credit to contract liabilities (note 20). This revenue will be recognised as the batches complete
bioprocessing.
Bioprocessing contract modification
On 13 December 2021, the Group announced an update to its commercial supply agreement with Novartis. The
changes to the agreement have been determined to be a licence modification under IFRS 15. The contract has been
accounted for prospectively as if it were terminated and a new contract created; with the remaining unrecognised
transaction price allocated to remaining performance obligations. This resulted in breakage revenue of £4.8 million
being recognised at modification from batch reservations to be manufactured in 2021, as there was no longer an
expectation that remaining batches would be ordered.
Group financial statements 163
Oxford Biomedica plc | Annual report and accounts 2021
4, Financial risk management
Financial risk factors
During 2021, the Group has a simple corporate structure with the Company and its only operating subsidiary both being
UK domiciled. Monitoring of financial risk is part of the Board’s ongoing risk management, the effectiveness of which is
reviewed annually. The Group’s agreed policies are implemented by the Chief Financial Officer, who submits reports at
each Board meeting. The Group does not use financial derivatives, and it is the Group’s policy not to undertake any
trading in financial instruments.
(a) Foreign exchange risk
In 2021, 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 operating costs are denominated in Sterling. A 10% difference in the
£/$ exchange rate would have had an impact of approximately £712,000 (2020: £1,351,000) over the year.
The Group also has exposure to the £/€ exchange rate due to the need to fund certain expenditure denominated in
Euros. Had the £/€ exchange rate been 10% different, the impact on cost in 2021 would have been approximately
£305,000 (2020: £228,000). The Group’s policy is to hold the majority of its funds in Sterling and US Dollars. No other
hedging of foreign currency cash flows is undertaken.
(b) Interest rate risk
The Group’s policy is to maximise interest receivable on deposits, subject to maintaining access to sufficient liquid funds
to meet day to day operational requirements and preserving the security of invested funds. With the current low level
of bank interest rates, interest receivable on bank deposits in 2021 was £nil (2020: £34,000).
If interest rates had been 1% higher in 2021 the impact on cash interest paid would have been £nil (2020: £nil).
(c) Credit risks
Cash balances are mainly held on short term deposits with financial institutions with a credit rating of at least A, in line
with the Group’s policy to minimise the risk of loss.
Trade debtors are monitored to minimise the risk of loss (note 17).
Derivative financial instruments and hedging
There were no material derivatives at 31 December 2021 or 31 December 2020 which have required separation, and
hedge accounting has not been used.
Fair value estimates
The fair value of short term deposits with a maturity of one year or less is assumed to be the book value.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to provide returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure
to minimise the cost of capital. There was no debt in 2021 or 2020, refer to note 34 for further information regarding
financing activities which occurred post year end.
164
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
5, Segmental analysis Segmental reporting
The chief operating decision-maker has been identified as the Senior Executive Team (SET), comprising the Executive
Directors, Chief Commercial Officer, Chief Technical Officer, Chief Scientific Officer, Chief Business Officer, Chief
Operations Officer, Chief People Officer and General Counsel. The SET monitors the performance of the Group in two
business segments:
(i) Platform – this segment consists of the revenue generating bioprocessing and process development activities
undertaken for third parties (i.e the partner programmes CDMO business). It also includes internal technology
developments and technical intellectual property within the LentiVector
®
platform.
(ii) Product – this segment consists of the clinical and pre-clinical development of in vivo and
ex vivo
cell and gene
therapy products (gene therapeutics) which are owned by the Group.
Revenues, other operating income and operating loss by segment
Revenues, Operating EBITDA and Operating profit/(loss) represent our measures of segment profit and loss as they are
a primary measure used for the purpose of making decisions about allocating resources and assessing performance
of segments.
2021
Platform
£’000
Product
£’000
Total
£’000
Revenue
142,693 104 142,797
Other operating income 867 – 867
Operating EBITDA
¹
45,292 (9,368) 35,924
Depreciation, amortisation and share based payment (13,702) (1,288) (14,990)
Change in fair value of asset held at fair value through profit and loss (165) – (165)
Operating profit/(loss) 31,425 (10,657) 20,768
Net finance cost (888)
Profit before tax 19,880
2020
Platform
£’000
Product
£’000
Total
£’000
Revenue
87,117 611 87,728
Other operating income 795 – 795
Operating EBITDA
¹
13,857 (6,518) 7,339
Depreciation, amortisation and share based payment (11,048) (1,154) (12,203)
Revaluation of investments (831) – (831)
Operating profit/(loss) 1,979 (7,673) (5,694)
Net finance cost (878)
Loss before tax (6,572)
1 Operating EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation, revaluation of investments and Assets at fair value through profit and loss, and Share Based Payments) is a
non-GAAP measure often used as a surrogate for operational cash flow as it excludes from operating profit or loss all non-cash items, including the charge for share based payments
options. 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 50.
Other operating income of £0.9 million (2020: £0.8 million) includes grant income to develop our supply chain
capabilities of £0.9 million (2020: £0.8 million) and is included within the Platform segment.
Costs are allocated to the segments on a specific basis as far as possible. Costs which cannot readily be allocated
specifically are apportioned between the segments using relevant metrics such as headcount or direct costs.
A geographical split of operating loss is not provided because this information is not received or reviewed by the chief
operating decision-maker and the origin of all revenues is the United Kingdom.
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.
Group financial statements 165
Oxford Biomedica plc | Annual report and accounts 2021
Disaggregation of revenue
Revenue is disaggregated by the type of revenue which is generated by the commercial arrangement. Revenue shown
in the table below is denominated in GBP and is generated in the UK.
2021
Platform
£’000
Product
£’000
Total
£’000
Bioprocessing/Commercial development
128,318 104 128,422
Licence fees, milestones and royalties 14,375 – 14,375
Total 142,693 104 142,797
2020
Platform
£’000
Product
£’000
Total
£’000
Bioprocessing/Commercial development
67,893 611 68,504
Licence fees, milestones and royalties 19,224 – 19,224
Total 87,117 611 87,728
Revenue by geographical location
The Group’s revenue derives wholly from assets located in the United Kingdom. Analysed by location the Group’s
revenues derive predominantly from Europe:
Revenue by customer location
2021
£’000
2020
£’000
Europe 115,748 52,817
Rest of world 27,049 34,911
Total revenue 142,797 87,728
In 2020, AstraZeneca, Novartis, and Juno/Bristol Myers Squibb each generated more than 10% of the Group’s
revenues. In 2021, customers providing more than 10% of the Group’s revenues were AstraZeneca 50% –65% and
Novartis 10% – 25%. The change year on year is due to the volume of the adenovirus-based Oxford AstraZeneca
COVID-19 vaccine manufactured for AstraZeneca.
166
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
6, Employees and directors
The monthly average number of persons (including Executive Directors) employed by the Group during the year was:
By activity
2021
Number
2020
Number
Office and management 56 46
Research, development
and bioprocessing 703 563
Total 759 609
Employee benefit costs
2021
£’000
2020
£’000
Wages and salaries 43,174 35,909
Social security costs 5,122 4,486
Other pension costs (note 31) 2,839 2,244
Share based payments (note 26) 3,523 3,030
Total employee benefit costs 54,658 45,669
Key management compensation
2021
£’000
2020
£’000
Wages and salaries 3,167 3,177
Social security costs 893 1,038
Other pension costs 250 207
Share based payments 2,075 1,804
Total 6,385 6,226
The key management figures above include Executive and Non-Executive Directors and the other members of the
Senior Executive Team. 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 112 which forms part of these
financial statements.
The Company had no employees during the year (2020: zero).
7, Finance income and costs
Group
2021
£’000
2020
£’000
Finance income:
Bank interest receivable – 34
Total finance income – 34
Finance costs:
Unwinding of discount in provisions (note 21) (27) (38)
Interest payable (861) (874)
Total finance costs (888) (912)
Net finance costs (888) (878)
Group financial statements 167
Oxford Biomedica plc | Annual report and accounts 2021
8, Expenses by nature
Group Company
Notes
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Employee benefit costs
6 54,658 45,669 823 494
Depreciation of property, plant
and equipment 13 12,435 9,598 – –
Amortisation
12 21 22 – –
Raw materials and consumables
used in bioprocessing 23,026 11,971 – –
Operating lease payments 236 173 – –
Net loss on foreign exchange (115) (627) – –
Company employee benefit costs of £823,000 (2020: £494,000) relates to Non-Executive costs paid by Oxford
Biomedica UK Ltd and recharged to the Company.
Depreciation is charged to cost of goods, research and development, and bioprocessing costs in the statement of
comprehensive income.
During the year the Group (including its subsidiaries) obtained services from the Group’s auditors and their associates
as detailed below:
Group
Services provided
by the Group’s auditors
2021
£’000
2020
£’000
Fees payable for the audit of the parent company and consolidated financial statements 50 50
Fees payable for other services:
The audit of the Company’s subsidiaries 350 251
Additional fees relating to prior year audit 70 98
Review of interim results 35 25
Total 505 424
168
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
9, Taxation
During 2020, the Group ceased being eligible to claim a research and development tax credits under the Government’s
small company scheme.
Group
Current tax
2021
£’000
2020
£’000
Corporation tax (1,427) (1,140)
(1,427) (1,140)
Adjustments in respect of prior periods:
United Kingdom corporation tax research and development credit 558 1,467
Current tax (869) 327
Taxation (Charge)/Credit (869) 327
The amount of £1,427,000 (2020: £1,140,000) included as part of the taxation charge within the statement of
comprehensive income for the year ended 31 December 2021 comprises the corporation tax payable on the amount
claimed as a Large Company Tax credit (RDEC) within research and development expenses in the statement of
comprehensive income.
The adjustment of current tax in respect of the prior year of £558,000 (2020: £1,467,000) relates to a higher than
anticipated tax receipt received in 2021: £nil (2020: £473,000), and an expected tax repayment relating to prior years
of £558,000 (2020: £994,000).
The United Kingdom corporation tax research and development credit 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 current tax assets
in the Statement of financial position.
During 2021, the Group recognised £458,000 (2020: £273,000) 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 (2020: £nil).
The tax credit for the year is lower (2020: lower) than the standard rate of corporation tax in the UK. The differences are
explained below:
Group Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Profit/(loss) on ordinary activities before tax 19,880 (6,572) (2,366) (1,883)
Profit/(loss) on ordinary activities before tax multiplied
by the standard rate of corporation tax in the UK of 19% (2018: 19%) (3,777) 1,249 450 358
Effects of:
Expenses not deductible for tax purposes (649) (1,046) (101) (18)
Income not taxable 344 26 – –
Current tax relief less than accounting charge on share options (174) (277) – –
Effects of group relief/other reliefs – – 349 –
Tax Rate Changes – – – 41
Deferred tax not recognised 2,829 (753) – –
Origination and reversal of timing differences on deferred tax – 15 – (386)
Taxable gains on disposal of shares – (354) – (354)
Adjustments in respect of prior periods 558 1,467 – –
Total tax (charge)/credit for the year (869) 327 – (359)
At 31 December 2021, the Group had tax losses to be carried forward all arising in the United Kingdom of approximately
£78.3 million (2020: £89.3 million).
Group financial statements 169
Oxford Biomedica plc | Annual report and accounts 2021
10, Basic and diluted profit/(loss) per ordinary share
The basic profit per share of 22.77p (2020: loss of 7.81p) has been calculated by dividing the profit for the period by the
weighted average number of shares in issue during the year ended 31 December 2021 (83,484,173; 2020: 79,944,911).
The diluted earnings per share of 22.20p has been calculated by dividing the earnings for the period by the weighted
average number of shares in issue during the period after adjusting for the dilutive effect of the share options outstanding
at 31 December 2021 (2,134,494).
The Group made a loss in the prior period. There were no potentially dilutive options in the prior period. There is therefore
no difference between the basic loss per ordinary share and the diluted loss per ordinary share in the prior period.
11, 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 £2,366,000 (2020: £2,242,000).
12, Intangible assets
2021
£’000
2020
£’000
Cost
At 1 January 5,636 5,636
At 31 December 5,636 5,636
Accumulated amortisation and impairment
At 1 January 5,563 5,541
Amortisation charge for the year 21 22
At 31December 5,584 5,563
Net book amount at 31December 52 73
Intangible assets comprise intellectual property rights. The Group has not capitalised any internally generated
intangible assets.
170
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
13, Property, plant and equipment
Freehold
property
£’000
Leasehold
improvements
£’000
Office
equipment and
computers
£’000
Bioprocessing
and Laboratory
equipment
£’000
Right of use
asset
£’000
Total
£’000
Cost
At 1 January 2021 23,331 27,219 9,106 24,606 18,012 102,274
Additions at cost 2,078 939 1,557 4,886 21 9,481
Reclassification – (13) – 13 – –
Change in estimate – – – – 378 378
At 31 December 2021 25,409 28,145 10,663 29,505 18,411 112,133
Accumulated depreciation
At 1 January 2021 10,444 3,519 4,610 9,177 2,220 29,970
Charge for the year 2,208 2,707 2,253 3,342 1,925 12,435
At 31 December 2021 12,652 6,226 6,863 12,519 4,145 42,405
Net book amount at 31 December 2021 12,757 21,919 3,800 16,986 14,266 69,728
Freehold
property
£’000
Leasehold
improvements
£’000
Office
equipment and
computers
£’000
Bioprocessing
and Laboratory
equipment
£’000
Right of use
asset
£’000
Total
£’000
Cost
At 1 January 2020 21,427 21,908 7,395 20,174 11,400 82,304
Additions at cost 1,678 4,659 1,484 5,537 6,361 19,719
Reclassification 226 652 227 (1,105) – –
Disposals – – – – 251 251
At 31 December 2020 23,331 27,219 9,106 24,606 18,012 102,274
Accumulated depreciation
At 1 January 2020 8,360 1,679 3,054 6,440 839 20,372
Charge for the year 2,084 1,840 1,556 2,737 1,381 9,598
Reclassification – – – – – –
At 31 December 2020 10,444 3,519 4,610 9,177 2,220 29,970
Net book amount at 31 December 2020 12,887 23,700 4,496 15,429 15,792 72,304
Leasehold improvements are capital improvements to buildings which the Group leases. Bioprocessing and laboratory
equipment is equipment purchased for laboratory and bioprocessing processes, and is generally movable from one
facility to another.
The Company had no property, plant and equipment at 31 December 2021 or 31 December 2020.
14, Assets at fair value through profit and loss
Assets at fair value through profit and loss (FVTPL): Group
2021
£’000
2020
£’000
At 1 January 239 2,719
Additions – 874
Sale of shares – (2,523)
Change in fair value of FVTPL asset (165) (831)
At 31 December 74 239
Additions in 2020 relate to a contract asset milestone which was met in 2019 with the shares received in 2020 as part
of a non-cash consideration.
Group financial statements 171
Oxford Biomedica plc | Annual report and accounts 2021
15, Investments and loans in subsidiaries
2021
£’000
2020
£’000
Shares in group undertakings
At 1 January and 31 December 15,182 15,182
Loans to group undertakings
At 1 January 262,002 248,152
Loan advanced in the year (net) 11,251 13,850
At 31 December 273,253 262,002
Total investments in shares and loans to group undertakings 288,435 277,184
Accumulated impairment
At 1 January and 31 December 126,065 126,065
Net book amount at 31December 162,370 151,119
Capital contribution in respect of employee share schemes
At 1 January 15,269 9,492
Additions in the year (note 26 and 27) 3,523 5,777
At 31December 18,793 15,269
Total investments 181,163 166,388
The Company recognised a loss allowance for expected credit losses on financial assets. The expected credit losses are
estimated by reference to an analysis of the subsidiary’s current financial position and future repayment expectations.
The loss allowance recognised on loans in subsidiaries at the end of the year was £93.1 million. In addition to the loss
allowance recognised on loans in subsidiaries, an impairment loss is recognised under IAS 36 for shares in Group
undertakings and for capital contribution in respect of employee share schemes in amount of £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.
Please refer note 34, Events after the balance sheet date with regards to Oxford Biomedica Solutions established post
year end.
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 Great Britain 1p ordinary shares 100%
Gene therapy research
and development
Oxford Biomedica (Ireland) Limited Ireland 1p ordinary shares 100% Product release
Oxxon Therapeutics Limited Great Britain 1p ordinary shares 100% Dormant
The registered office of both Oxford Biomedica (UK) Ltd and Oxxon Therapeutics Limited is Windrush Court,
Transport Way, Oxford, OX4 6LT. The registered office of Oxford Biomedica (Ireland) Ltd is Earlsfort Terrace, Dublin 2,
DO2 T380, Ireland.
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 £126.0 million has been recognised up to 31 December 2021.
172
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
16, Inventories
Group
2021
£’000
2020
£’000
Raw Materials 9,521 6,912
Total inventory 9,521 6,912
17, Trade and other receivables
Group Company
Current
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Trade receivables 22,398 30,819 – –
Contract assets 13,547 16,508 – –
Other receivables 365 558 – –
Other tax receivable 5,227 3,412 – –
Prepayments 3,210 2,629 – –
Total trade and other receivables 44,747 53,926 – –
Non-current trade and other receivables constitute other receivables of £3,605,000 (2020: £3,605,000) are deposits
held in escrow as part of the Windrush Innovation Centre and Oxbox lease arrangements.
The other tax receivable constitutes RDEC receivable £4,137,000; VAT receivable £536,000 and recoverable Withholding
Tax £554,000.
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:
2021
£’000
2020
£’000
Sterling 45,084 57,517
US Dollar 3,825 14
48,909 57,531
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 £3,800,000 (2020: £9,523,000)
which were past due at the reporting date and of which £3,800,000 (2020: £9,460,000) has been received after the
reporting date.
Ageing of past due but not impaired trade receivables:
2021
£’000
2020
£’000
0–30 days 3,266 9,502
30–60 days 389 21
60+ days 145 –
3,800 9,523
Group financial statements 173
Oxford Biomedica plc | Annual report and accounts 2021
Contract assets
Contract assets relates to the Group’s rights to consideration for work completed but not invoiced at the reporting date
for commercial development work and bioprocessing batches. The contract assets are transferred to receivables when
the rights become unconditional. This usually occurs when the Group issues an invoice to the customer.
The balance of £13.5 million (2020: £16.5 million) mainly relates to commercial development milestones which have
been accrued as the specific conditions stipulated in the licence agreement have been met, commercial development
work orders accrued on a percentage complete basis which will be invoiced as the related work package completes
and bioprocessing batches accrued on a percentage of completion basis which will be invoiced as the manufacturing
of the batch is completed.
Contract assets have decreased from £16.5 million at the end of 2020 to £13.5 million at the end of 2021 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. (2020: Contract assets have increased from £13.4 million at the
end of 2019 to £16.5 million at the end of 2020 due to the increased levels of bioprocessing and commercial development
activities undertaken during the year leading to a higher level of consideration for work completed but not yet billed.)
A portion of contract assets relates to fixed price process development work packages which are recognised on a
percentage of completion basis and as such requires estimation in terms of the assessment of the correct percentage
of completion for that specific work package. The value of the contract asset raised with regard to these work packages
is £8,022,000 (2020: £6,677,000). If the assessed percentage of completion was 1 percentage point higher or lower,
revenue recognised in the period would have been £80,000 higher or lower (2020: £67,000).
The Group performed an impairment assessment under IFRS 9 and has concluded that the application of the expected
credit loss model has had an immaterial impact on the level of impairment on contract assets. We have noted there has
been no change in the time frame for a right to consideration to become unconditional and the performance obligation
to be satisfied.
18, Cash and cash equivalents
Group Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Cash at bank and in hand 108,944 46,743 61,630 23,630
19, Trade and other payables
Group Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Trade payables 5,260 7,777 – –
Other taxation and social security 1,899 1,585 – –
Accruals 11,899 10,354 152 134
Total trade and other payables 19,058 19,716 152 134
174
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
20, 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 decreased from £31.8 million at the end of 2020 to £15.3 million at the
end of 2021 due to funds received in advance for future bioprocessing and process development activities. These
amounts received in advance are short term and do not consitute a significant financing component. Of the £31.8 million
balance included in the statement of financial position at the end of 2020, £27.5 million has been recognised as revenue
during the 2021 financial year. (2020: Contract liabilities and deferred income have increased from £14.9 million at the
end of 2019 to £28.3 million at the end of 2020 due to funds received in advance for future bioprocessing and process
development activities.)
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:
Years
0–1
£’000
1–3
£’000
3–5
£’000
5–10
£’000 Total
Contract liabilities 12,502 48 44 – 12,594
Bioprocessing income 9,755 – – – 9,755
Process development income 2,325 – – – 2,325
Licence fees and Milestones 422 48 44 – 514
Deferred Income 894 1,760 – – 2,654
Grant 894 1,760 – – 2,654
Included within bioprocessing contract liabilities is revenue of £0.8 million which has not been recognised during 2021
(2020: £1.4 million) relating to the estimate of out of specification batches (see note 3: ’Estimations’ for additional
information).
Deferred income relates to grant funding received from the UK Government for capital equipment purchased as part
of the Oxbox bioprocessing facility expansion. The income will be recognised over the period over which the purchased
assets are depreciated.
The Company had no contract liabilities or deferred income in 2021 or 2020.
21, Provisions
2021
£’000
2020
£’000
At 1 January 5,839 5,086
Unwinding of discount 27 38
Change in estimate 378 251
Additional provision recognised – 464
At 31 December 6,244 5,839
2021
£’000
2020
£’000
Current – –
Non-current 6,244 5,839
Total provisions 6,244 5,839
Provisions are exclusively in respect of dilapidations. The dilapidations provisions relate to anticipated costs of restoring
the leasehold Yarnton, Oxbox, Windrush Innovation Centre and Corporate Office properties in Oxford, UK to their
original condition at the end of the lease terms in 2024, 2033, 2028 and 2030 respectively, discounted using the rate
per the Bank of England nominal yield curve. The equivalent rate was used in 2020. The provisions will be utilised at the
end of the leases if they are not renewed.
Group financial statements 175
Oxford Biomedica plc | Annual report and accounts 2021
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, and trade and other payables. Additional disclosures are set out in the
Corporate Governance Report and in note 4 relating to risk management.
The Group had the following financial instruments at 31 December each year:
Financial assets at fair value
through profit and loss
Cash and
receivables
Amortised costs, loans
and other liabilities
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Cash and cash equivalents (note 18) – – 108,944 46,743 – –
Trade receivables and other receivables (note 17) – – 45,142 54,902 – –
Assets at fair value through profit and loss (note 14) 74 239 – – – –
Trade and other payables excluding tax (note 19) – – – – 17,160 18,131
74 239 154,086 101,645 17,160 18,131
Floating rate instant access deposits earned interest at prevailing bank rates.
2021 2020
Year average Year average
Weighted
average rate
Weighted
average rate
Sterling 0.02% 0.01%
US Dollars 0.00% 0.00%
Assessment of financial assets by credit risk rating:
Cash and cash equivalents are held with reputable banks with a long term A credit rating as assessed by Moody’s and 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 2021, therefore no
reconciliation between the 2020 and 2021 closing debtor balance assessed by risk of default has been provided. The
opening and closing position was low (2020: 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.
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:
2021
£’000
2020
£’000
Sterling 96,477 37,299
Euro 524 439
US Dollar 11,943 9,005
108,944 46,743
Financial assets classified as level 1 in hierarchy
The investment asset represented by ordinary shares in Orchard Therapeutics is classified as at fair value through profit
and loss. Please refer to note 14 for further information.
176
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Reconciliation of movements of liabilities to cash flows
arising from financing activities
Liabilities Equity Total
Lease
liabilities
£’000
Share
capital
£’000
Share
Premium
£’000
Total
£’000
Balance at 1 January 2020 8,389 38,416 222,618 269,423
Changes from financing cash flows
Share options – Proceeds from shares issued – 245 841 1,086
Issue of shares excluding options – 2,500 37,500 40,000
Cost of share issues – – (1,724) (1,724)
Payments for the principal portion of lease liabilities (292) – – (292)
Payments for the interest portion of lease liabilities (859) – – (859)
Total changes from financing cash flows (1,151) 2,745 36,617 38,211
Other changes:
Additions 5,733 – – 5,733
Interest 874 – – 874
Transfer of share premium to warrants – – (1,218) (1,218)
Balance at 31 December 2020 13,845 41,161 258,017 313,023
Changes from financing cash flows
Share options – Proceeds from shares issued – 236 1,439 1,675
Issue of shares excluding options – 1,691 48,309 50,000
Payments for the principal portion of lease liabilities (4,520) – – (4,520)
Payments for the interest portion of lease liabilities (873) – – (873)
Total changes from financing cash flows (5,393) 1,927 49,748 46,282
Other changes:
Additions 16 – – 16
Interest 873 – – 873
Closing balance at 31 December 2021 9,341 43,088 307,765 360,194
Exposure to Liquidity Risk
Contractual Cash flows
Carrying
Amount
£’000
Total
£’000
2 months
or less
£’000
2–12
months
£’000
1–2 years
£’000
2–5 years
£’000
>5 years
£’000
Non derivative financial liabilities:
Lease Liabilities 9,341 13,456 – 1,590 3,033 2,850 5,983
Group financial statements 177
Oxford Biomedica plc | Annual report and accounts 2021
23, Deferred taxation
The Company and the Group have recognised deferred tax assets and liabilities at 31 December 2021 and 31 December
2020. 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 2020. Finance Act
2021 which was Substantively Enacted on 24 May 2021 included provisions to increase the rate further to 25% effective
from 1 April 2023 and this rate has been applied when calculating the deferred tax at the year end.
Group – recognised
Deferred tax (assets)/liabilities – recognised
Fixed assets
£’000
Tax losses
£’000
Revaluation of
investments
£’000
Total
£’000
At 1 January 2020 – – – –
Origination and reversal of temporary differences 3,051 (3,051) – –
At 31 December 2021 3,051 (3,051) – –
At 1 January 2020 – (359) 359 –
Origination and reversal of temporary differences – 359 (359) –
At 31 December 2020 – – – –
Company – recognised
Deferred tax (assets)/liabilities – not recognised
Tax losses
£’000
Revaluation of
investments
£’000
Total
£’000
At 1 January 2020 – – –
Origination and reversal of temporary differences – – –
At 31 December 2021 – – –
At 1 January 2020 359 – 359
Origination and reversal of temporary differences (359) – (359)
At 31 December 2020 – – –
Group – not recognised
Deferred tax (assets)/liabilities – not recognised
Tax
depreciation
£’000
Loan
relationships
£’000
Provisions
£’000
Tax losses
£’000
Share options
£’000
Total
£’000
At 1 January 2021 – (1,267) (206) (17,443) (3,239) (22,155)
Origination and reversal of temporary differences – (401) (92) (4,317) (2,937) (7,747)
At 31 December 2021 – (1,668) (298) (21,760) (6,176) (29,902)
At 1 January 2020 (62) (1,218) (441) (15,874) (1,664) (19,259)
Origination and reversal of temporary differences 62 (49) 235 (1,569) (1,575) (2,896)
At 31 December 2020 – (1,267) (206) (17,443) (3,239) (22,155)
178
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
24, Ordinary shares
Group and Company
Issued and fully paid
2021
£’000
2020
£’000
Ordinary shares of 50p each
At 1 January – 82,320,585 (2020: 76,859,131) shares 41,161 38,416
Allotted for cash in placing and subscription – 3,382,950 (2020: 5,000,000) shares 1,691 2,500
Allotted on exercise of share options – 471,520 (2020: 461,454)
236 245
At 31 December – 86,175,055 (2020: 82,320,585) shares 43,088 41,161
On 19 June 2020, the Group announced an equity fundraising of 5,000,000 new ordinary shares at a price of £8.00 per
share. Gross proceeds from the fundraising were £40.0 million; net proceeds were £38.3 million.
On 22 September 2021, the Group announced an equity fundraising of 3,382,950 new ordinary shares at a price of
£14.78 per share. Gross proceeds from the fundraising were £50.0 million.
Please refer note 34, Events after the balance sheet date, for further information regarding equity fundraises which
occurred post year end.
25, Share premium account
Group and Company
2021
£’000
2020
£’000
At 1 January 258,017 222,618
Premium on shares issued for cash in placing and subscription 48,309 37,500
Transfer of share premium related to warrants – (1,218)
Premium on exercise of share options 1,439 841
Costs associated with the issue of shares
– (1,724)
At 31 December 307,765 258,017
During 2020, the Directors reviewed their presentation of share premium and found that the share premium had been
overstated following the issue of warrants in the comparative period. As a result £1,218,000 was transferred from share
premium to retained earnings in the prior year.
Group financial statements 179
Oxford Biomedica plc | Annual report and accounts 2021
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 2015 Executive Share Option Scheme (approved May 2015);
— The 2007 Long Term Incentive Plan (LTIP) (approved February 2007);
— The 2015 Long Term Incentive Plan (LTIP) (approved May 2015);
— The 2013 Deferred Bonus Plan (approved February 2014);
— The 2015 Deferred Bonus Plan (approved May 2015); and
— The 2015 Sharesave scheme (approved May 2015).
Share options are granted to Executive Directors and selected senior managers under the Company’s Long Term
Incentive Plans (LTIP), and Deferred Bonus Plans, and to other employees under the Share Option Schemes and
Sharesave scheme. All option grants are at the discretion of the Remuneration Committee.
Options granted under the 2007 and 2015 LTIP to Directors and other senior managers are subject to both revenue and
market condition performance criteria and will vest only if, at the third anniversary of the grant, the performance criteria
have been met. Failure to meet the minimum performance criteria by the third anniversary results in all the granted
options lapsing.
The performance criteria are described in the Directors’ Remuneration Report. LTIP awards made to date are exercisable
at either par or a nil cost on the third anniversary of the date of grant, and lapse 10 years after being granted. For
Directors, options granted between 2019 and 2021 also have a two year holding period post vesting.
Restricted stock units (RSUs) granted 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.
Options granted under the 2007 Share Option Scheme have fixed exercise prices based on the market price at the date
of grant. They are not subject to market condition performance criteria and the lives of the options are ten years, after
which the options expire. Options granted prior to 2012 cannot normally be exercised before the third anniversary of
the date of grant. Options granted under the 2007 Scheme during 2012 to 2014, with one exception, vest in tranches
of 25% from the first to fourth anniversaries of the grant dates.
Options granted under the 2015 Executive Share Option Scheme have fixed exercise prices based on the market price
at the date of grant. They are not subject to market condition performance criteria and the lives of the options are ten
years, after which the options expire. Options granted under the 2015 Scheme cannot normally be exercised before the
third anniversary of the date of grant.
Options granted under the 2015 Sharesave Scheme have fixed exercise prices based on the market price at the date of
grant. They are not subject to market condition performance criteria and the lives of the options are four years, after
which the options expire and the cash saved is returned. Options cannot be exercised before the third anniversary of
the date of grant.
180
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Share options outstanding at 31 December 2021 have the following expiry date and exercise prices:
Options granted to employees under the Oxford Biomedica 2007 and 2015 Share Option Schemes
2021 Number of shares 2020 Number of shares Exercise price per share Date from which exercisable Expiry date
919 5,829 270p to 290p Vested 15/03/21 to 04/10/21
5,560 10,888 115p to 155p Vested 08/05/22 to 21/12/22
15,155 21,562 80p to 140p Vested 22/05/23 to 19/11/23
16,518 25,870 100p to 200p Vested 03/06/24 to 17/10/24
39,873
1
49,561
1
490p Vested 13/03/25 to 10/06/25
55,309
1
78,362
1
275p Vested 16/05/26 to 13/10/26
106,026
1
176,562
1
495p Vested 13/07/27
141,060
1
225,073
1
502p to 904p Vested 15/02/2028 to 07 08 2028
379,808
1
441,336
1
618p to 705p 04/01/2022 to 12/9/2022 04/01/2029 to 12/09/2029
520,824
1
573,318
1
760p to 817p 26/06/2023 to 05/10/2023 26/06/2030 to 05/10/2030
1,281,052 1,608,361
Note 1 – Options granted under the 2015 Executive share option scheme.
Options granted to employees under the Oxford Biomedica 2015 Sharesave scheme
2021 Number of shares 2020 Number of shares Exercise price per share Date from which exercisable Expiry date
– 17,225 330p 12/10/20 12/04/21
29,682 67,849 725p 10/10/21 10/04/22
237,069 258,882 422p 09/10/22 09/04/23
154,756 165,724 672p 31/10/23 30/04/24
143,345 – 1,226p 20/10/24 30/04/25
564,852 509,680
Options granted under the Oxford Biomedica 2007 and 2015 Long Term Incentive Plans
2021 Number of shares 2020 Number of shares Exercise price per share Date from which exercisable Expiry date
132,000 139,000 50p Vested 30/06/22
55,774 66,679 50p Vested 12/06/23
29,524 34,539 50p Vested 20/6/24 to 17/10/24
43,824 93,535 0p Vested 10/01/25
82,185 108,395 0p Vested 16/05/26
143,294
2
143,294
2
0p Vested 17/07/27 to 25/09/27
62,913
1,2
191,195
1,2
0p Vested 15/02/2021 to 7/8/2021
282,093
1,2
298,323
1,2
0p 18/04/2022 to 12/09/2022 18/04/2029 to 12/09/2029
260,577
1,2
– 0p 26/06/2023 26/06/2030
263,297
1,2
– 0p 08/06/2024 08/06/2031
234,883
3
286,869
1,2
0p 08/06/2024 08/06/2031
1,590,364 1,361,829
3,436,268 3,479,870
Note 1 – These LTIP awards will vest provided that performance conditions specified in the Directors’ Remuneration Report are met.
Note 2 – Options granted under the 2015 LTIP.
Note 3 – Restricted Share Options (RSUs) granted under the 2015 LTIP issued to employees vesting over 3 years.
Group financial statements 181
Oxford Biomedica plc | Annual report and accounts 2021
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 pence on either the first three anniversaries of the grant or the third anniversary
of the grant dependent on the option conditions. Options with a value of £1,037,000 vested during 2021 (2020: £667,000).
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 2020, 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 no shares
(2020: nil) from the EBT were exercised.
The options granted under the 2015 Deferred Bonus Plan will be satisfied by new issue shares at the time of exercise.
Options granted to employees under the Oxford Biomedica 2013 and 2015 Deferred Bonus Plan
2021 Number of shares 2020 Number of shares Exercise price per share Date from which exercisable Expiry date
68,725
93,725
0p Exercisable 15/06/24 and 14/10/24
27,402
28,924
0p Exercisable 04/05/25
32,010
48,082
0p Exercisable 14/05/26
27,696
32,544
0p Exercisable 11/07/27
36,205
39,642
0p Exercisable 07/08/28
67,793
83,909
0p 18/04/20 to 18/04/22 18/04/29
65,576
68,035
0p 20/06/21 to 20/06/23 20/06/30
58,943
–
0p 08/06/22 to 08/06/24 20/06/31
384,350
394,861
National insurance liability
Certain options granted to UK employees could give rise to a national insurance (NI) liability on exercise. A liability of
£1,305,000 (2020: £1,043,000) 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 1,230p (2020: 1,030p) per share.
27, Share based payments
Sharesave Scheme awards
(Model used: Black Scholes)
Options awarded
20 Oct 2021
Share price at grant date 1,536.00p
Exercise price 1,226.00p
Vesting period (years) 3
Total number of shares under option 144,079
Expected volatility (weighted average) 43.49%
Expected life (years) 3
Risk free rate (weighted average) 0.68%
Fair value per option 589.17p
LTIP awards
(Model used: Monte Carlo)
LTIPs awarded
08 Jun 2021
LTIPs awarded
02 Aug 2021
LTIPs awarded
01 Nov 2021
Share price at grant date 1,148p 1,368p 1,524p
Exercise price 0p 0p 0p
Vesting period (years) 3 3 3
Total number of shares under option 233,766 12,597 16,934
Expected volatility (weighted average) 44.20% 43.77% 43.23%
Expected life (years) 3 3 3
Risk free rate (weighted average) 0.14% 0.12% 0.69%
Fair value per option 784p 934p 1,060p
182
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
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 1,226.0p (2020: 740.7p).
471,520 options were exercised in 2021 (2020: 482,073), including 69,454 of deferred bonus options (2020: 51,057).
The total charge for the year relating to employee share-based payment plans was £3,523,000 (2020: £3,752,000), all
of which related to equity-settled share based payment transactions.
2021 2020
Share options excluding LTIP Number
Weighted average
exercise price Number
Weighted average
exercise price
Outstanding at 1 January 2,118,041 548.7p 1,769,698 419.2p
Granted 144,079 1,226.0p 749,245 602.8p
Forfeited (147,282) 706.4p (58,429) 654.9p
Exercised (252,676) 577.5p (323,794) 243.0p
Cancelled (16,258) 587.7p (18,176) 673.8p
Outstanding at 31December 1,845,904 695.5p 2,118,041 548.7p
Exercisable at 31December 410,102 588.4p 385,859 384.5p
Exercisable and where market price exceeds
exercise price at 31December 410,102 588.4p 385,859 384.5p
LTIP awards (options exercisable at par value 1p or nil cost)
2021
Number
2020
Number
Outstanding at 1 January 1,361,829 1,240,962
Granted 507,604 286,869
Expired (168,796) (58,780)
Exercised (110,273) (107,222)
Outstanding at 31December 1,590,364 1,361,829
Exercisable at 31December 549,514 585,442
2021 2020
Range of exercise prices
Weighted
average
exercise price
Number
of shares
Weighted
average
remaining
life (years)
Weighted
average
exercise price
Number
of shares
Weighted
average
remaining
life (years)
LTIP:
Exercisable at par or at nil cost 6.8p 1,590,364 6.9 8.8p 1,361,829 6.7
Deferred bonus:
Exercisable at par or at nil cost 0p 384,350 6.3 0p 394,861 6.5
Options:
50p to 150p 101p 25,197 1.8 103p 35,459 2.9
150p to 250p 183p 12,036 1.9 181p 22,861 2.7
250p to 350p 275p 56,228 4.3 284p 101,416 5.3
350p to 650p 454p 393,529 6.7 459p 495,566 7.5
650+p 798p 1,358,914 8.1 754p 1,462,739 8.8
3,820,618 3,874,731
Group financial statements 183
Oxford Biomedica plc | Annual report and accounts 2021
28, Accumulated losses
Group Company
2021
£’000
2020
£’000
2021
£’000
2020
£’000
At 1 January (188,723) (187,695) (126,143) (125,093)
Profit/(loss) for the year 19,011 (6,245) (2,366) (2,242)
Share based payments 3,523 3,752
1
– –
Deferred tax on share options 458 273 – –
Transfer of share premium related to warrants – 1,218
2
– 1,218
2
Exercise of nil cost option (75) (26) (75) (26)
At 31 December (165,806) (188,723) (128,584) (126,143)
Note 1 – The credit to accumulated losses is made up out of the charge for the year relating to employee share-based payment plans of £2,486,000 (2020: £2,363,000) (note 26) and
£1,037,000 (2020: £1,389,000) related to the vesting of deferred share awards made to Executive Directors and senior managers.
Note 2 – During 2020, the Directors reviewed their presentation of share premium and found that the share premium has been overstated following the issue of warrants in the
comparative period – to correct this they have transferred £1,218,000 from share premium to retained earnings.
Neither the Company nor its subsidiary undertakings had reserves available for distribution at 31 December 2021 or
31 December 2020.
29, Other reserves
Group
Merger
reserve
£’000
Total
£’000
At 1 January 2021 2,291 2,291
At 31 December 2021 2,291 2,291
Group
Merger
reserve
£’000
Total
£’000
At 1 January 2020 2,291 2,291
At 31 December 2020 2,291 2,291
Company
Merger
reserve
£’000
Share
Scheme
reserve
£’000
Total
£’000
At 1 January 2021 1,580 15,269 16,849
Credit in relation to employee share schemes – 3,523 3,523
At 31 December 2021 1,580 18,792 20,372
Company
Merger
reserve
£’000
Share
Scheme
reserve
£’000
Total
£’000
At 1 January 2020 1,580 9,492 11,072
Credit in relation to employee share schemes – 5,777
1
5,777
At 31 December 2020 1,580 15,269 16,849
Note 1 – In 2020, the Company recognised a £3.4 million increase in its investment in its operating subsidiary Oxford Biomedica (UK) Ltd (refer note 15 of the financial statements)
due to equity settled share based payments granted to employees and service providers in subsidiaries. Of the £3.4 million, £2.7 million relates to amounts which should
have been recognised at 31 December 2019. In addition £700,000 of deferred bonus that was included in the 2019 consolidated balance sheet has been recognised within
Group equity in 2020. The disclosure relating to such share based payment awards is detailed in Note 26.
184
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
Merger reserve
The Group merger reserve at 31 December 2021 and 2020 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. The Company merger reserve at 31 December
2021 and 2020 comprised the merger relief arising in respect of the Oxxon Therapeutics purchase only.
Share scheme reserve
Options over the Company’s shares have been awarded to employees of Oxford Biomedica (UK) Ltd. In accordance
with IFRS 2 ’Share-based Payment’ the expense in respect of these awards is recognised in the subsidiaries’ financial
statements (see note 26). 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 £3,523,000 (2020: £5,777,000) (see note 14) and
a corresponding credit to reserves.
30, Cash flows from operating activities
Reconciliation of loss before tax to net cash used in operations:
Group Company
2021
£’000
2020
(Restated
2
)
£’000
2021
£’000
2020
£’000
Continuing operations
Profit/(loss) before taxation 19,880 (6,572) (2,366) (1,883)
Adjustment for:
Depreciation 12,435 9,817 – –
Amortisation of intangible assets 21 22 – –
Net finance costs 888 878 – –
Charge in relation to employee share schemes
1
3,981 3,289 – –
Non-cash loss 165 831 – –
Changes in working capital:
Increase/(decrease) in trade and other receivables 6,891 (25,893) – –
Increase in trade and other payables (657) 5,419 17 25
Decrease in deferred income (867) (795) – –
(Decrease)/increase in contract liabilities (15,667) 13,410 –
Increase in provisions – 38 – –
Increase in inventory (2,609) (4,333) – –
Net cash generated from/(used in) operations 24,461 (3,889) (2,349) (1,858)
1 The charge in relation to employee share scheme is made up out of the charge for the year relating to employee share-based payment plans of £2,486,000 (2020: £2,363,000) and
£1,037,000 (2020: £653,000) related to the vesting of deferred share awards made to executive directors and senior managers, and £457,000 (2020: £273,000) relating to deferred
tax on share options recognised within equity.
2 The presentation has changed from Operating profit/(loss) in prior year to Profit/(loss) before taxation in current year.
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 £2,839,000 (2020: £2,244,000) represents
amounts payable by the Group to the scheme. Contributions of £392,000 (2020: £308,000), included in accruals, were
payable to the scheme at the year-end.
32, Leases
The Group leases land and buildings and IT equipment. Information about leases for which the Group is a lessee is
presented below:
Group financial statements 185
Oxford Biomedica plc | Annual report and accounts 2021
Right-of-use assets:
Group
Property
£’000
Equipment
£’000
IT equipment
£’000
Total
£’000
Balance at 1 January 2021 12,261 3,442 89 15,792
Additions – 21 – 21
Change in estimate 378 – – 378
Depreciation charge for the period (1,189) (683) (53) (1,925)
Balance at 31 December 2021 11,450 2,780 36 14,266
Lease liabilities:
2021
£’000
2020
£’000
Maturity analysis – contractual undiscounted cash flows
Less than one year 1,590 5,357
One to five years 5,883 5,966
Six to ten years 5,071 5,765
More than ten years 913 1,643
Total undiscounted cash flows at 31 December 2021 13,457 18,731
Lease liabilities included in the Statement of Financial Position
2021
£’000
2020
£’000
Current 853 4,475
Non-current 8,488 9,370
Total lease liabilities at 31 December 2021 9,341 13,845
Amounts recognised in the Statement of Comprehensive Income
2021
£’000
2020
£’000
Interest on lease liabilities 873 859
Expense relating to short term leases 369 247
Amounts recognised in the statement of cash flows
2021
£’000
2020
£’000
Total cash outflow for leases 5,393 1,151
33, Contingent liabilities and capital commitments
The Group had commitments of £3,974,000 for capital expenditure for leasehold improvements, plant and equipment
not provided for in the financial statements at 31 December 2021 (2020: £176,000).
34, Events subsequent to the reporting date
On the 10th of March 2022 the Group acquired an 80% stake in the newly established Oxford Biomedica Solutions LLC
(Oxford Biomedica Solutions) from Homology Medicines Inc., an AAV Manufacturing and Innovation Business, for £96 million
($130 million). Homology Medicines will continue to own 20% of the new company with both the Group and Homology
Medicines retaining a put/call option to buy or sell the remaining 20% of Oxford Biomedica Solutions to the Group at any
time subsequent to the 3 year anniversary of the acquisition. As part of the acquisition of the 80% stake, the Group also
agreed to inject £37 million ($50 million) into Oxford Biomedica Solutions LLC for working capital purposes. Oxford
Biomedica Solutions leases a GMP facility near Boston, Massachusetts, operating three 500L bioreactors using a serum-free
suspension process, which has also been successfully scaled to 2,000L.
This acquisition will be treated as a business combination under IFRS 3. The total estimated purchase consideration of
100% of Oxford Biomedica Solutions is $225 million with a provisional fair value consideration of £167 million
($225 million). The provisional value of acquired net tangible assets is $49 million with fair value adjustments relating to
the current cost of acquiring or constructing these assets. The remaining consideration will be allocated between
identifiable intangible assets (AAV platform-related) and goodwill, with the majority expected to be intangibles being the
AAV platform IP and Know-how acquired from Homology Medicines as part of the acquisition. Goodwill represents the
control premium, the acquired workforce and the synergies expected from integrating Oxford Biomedica Solutions
into the Group’s existing business. The Group did not disclose an accounting method for non-controlling interest
recognition, amounts for each major class of asset and liability acquired, and other requirements per IFRS 3, due to the
short period of time from the date of acquisition till issuance of the annual accounts.
186
Oxford Biomedica plc | Annual report and accounts 2021
Group financial statements
Notes to the consolidated financial statements
for the year ended 31 December 2021
As part of the financing arrangements, the Group raised gross proceeds of £80 million through a placing of 9,876,544
shares at 810 pence per share. The placing was done in two tranches with 5,018,134 shares placed on the 28th of
January 2022, and a further 4,858,410 shares were placed on the 10th of March 2022.
Oxford Biomedica PLC also entered into a secured short term loan with Oaktree Capital Management for US$85 million
(£64 million) which is repayable in twelve months after completion of the acquisition.
The $85 million Oaktree loan is repayable no later than 10 March 2023 although it may be repaid, at the Group’s
discretion, at any time subject to early prepayment fees and an exit fee. The loan carries an interest rate of 8.5%. The
terms also include a financial covenant relating to the a requirement to hold a minimum of $10 million cash at all times.
The Oaktree facility is secured by a pledge over substantially all of the Group’s assets.
35, Related party transactions Identity of related parties
As at 31 December 2021, the Group consisted of a parent, Oxford Biomedica plc , one wholly-owned trading subsidiary
(Oxford Biomedica (UK) Limited), the principal trading company the newly established US subsidiary, Oxford Biomedica
(US) Inc., and two dormant subsidiaries, Oxxon Therapeutics Limited which was acquired and became dormant in
2007 when its assets and trade were transferred to Oxford Biomedica (UK) Limited, and Oxford Biomedica (Ireland) Ltd
which was incorporated in 2019 as a wholly owned subsidiary of the parent company. The registered address for the
Company and all of its UK subsidiaries is Windrush Court, Transport Way, Oxford OX4 6LT. The registered office of
Oxford Biomedica (Ireland) Ltd is Earlsfort Terrace, Dublin 2, DO2 T380, Ireland.
Please refer to note 34 for further information relating to the acquisition of an 80% ownership interest in a newly formed AAV
focused manufacturing and innovation business, Oxford Biomedica Solutions, established in March 2022 with Homology
Medicines.
The parent company is responsible for financing and setting Group strategy. Oxford Biomedica (UK) Limited carries out
the Group strategy, employs all the UK staff including the Executive Directors, and owns and manages all of the Group’s
intellectual property. The proceeds from the issue of shares by the parent are passed from Oxford Biomedica plc to
Oxford Biomedica (UK) Limited as a loan, and Oxford Biomedica (UK) Limited manages Group funds and makes
payments, including the expenses of the parent company.
Company: transactions with subsidiaries
2021
£’000
2020
£’000
Purchases:
Parent company expenses paid by subsidiary (749) (1,150)
Cash management:
Cash loaned by parent to subsidiary 12,000 15,000
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. The
year-end balance on the loan was:
Company: year-end balance of loan
2021
£’000
2020
£’000
Loan to subsidiary 273,253 262,002
The investment in the subsidiary, of which the loan forms part, has been impaired by £126 million (note 15) 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 £17,755,000 (2020: £15,269,000).
There were no transactions (2020: 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 2021 (2020: none). Key person remuneration can be seen in note 6 of the financial statements.
Group financial statements 187
Oxford Biomedica plc | Annual report and accounts 2021
Other matters
Glossary
Oxford Biomedica specific terminology
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.
AXO-Lenti-PD (formerly OXB-102: Parkinson’s disease)
Axo-Lenti-PD (formerly OXB-102) is a gene-based treatment
for Parkinson’s disease, a progressive movement disorder
caused by the degeneration of dopamine producing nerve
cells in the brain. OXB-102 uses the Company’s LentiVector
®
platform technology to deliver the genes for three enzymes
that are required for the synthesis of dopamine. The product
is administered locally to the region of the brain called the
striatum, converting cells into a replacement dopamine
factory within the brain, thus replacing the patient’s own lost
source of the neurotransmitter.
OXB-302 (CAR-T 5T4): cancer
OXB-302 aims to destroy cancerous cells expressing the
5T4 tumour antigen. It uses the Group’s LentiVector
®
platform
™
to deliver a Chimeric Antigen Receptor (CAR)
to target the 5T4 tumour antigen expressed on the
surface of most solid tumours and some haematological
malignancies.
Terminology not specific to Oxford Biomedica
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.
Biologics License Application (BLA)
The BLA is a request for permission to introduce or deliver
for introduction, a biological product into the US market.
BREEAM
BREEAM (Building Research Establishment Environmental
Assessment Method), first published by the Building
Research Establishment (BRE) in 1990, is the world’s longest
established method of assessing, rating, and certifying the
sustainability of buildings.
CAR-T therapy
Adoptive transfer of T cells expressing Chimeric Antigen
Receptors (CAR) is an anti-cancer therapeutic as CAR
modified T cells can be engineered to target virtually any
tumour associated antigen.
CDMO
(Contract Development and Manufacturing Organisation)
A CDMO is a company that serves other companies in the
pharmaceutical industry on a contract basis to provide
comprehensive services from drug development through
to drug manufacturing.
Cell therapy
Cell therapy is defined as the administration of live whole
cells in a patient for the treatment of a disease often in an
ex vivo
setting.
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
188
Oxford Biomedica plc | Annual report and accounts 2021
CMC (Chemistry, Manufacturing and Controls)
To appropriately manufacture a pharmaceutical or biologic
product, specific manufacturing processes, product
characteristics, and product testing must be defined in
order to ensure that the product is safe, effective and
consistent between batches. These activities are known as
CMC, chemistry, manufacturing and controls.
CTL019
CTL019 is a CAR-T cell therapy for patients with B cell
cancers such as acute lymphoblastic leukemia (ALL), B
cell non-Hodgkin lymphoma (NHL), adult disease
chronic lymphocytic leukemia (CLL) and diffuse large B
cell lymphoma.
DLBCL
Diffuse large B-cell lymphoma (DLBCL) is a cancer of B cells,
a type of white blood cell responsible for producing antibodies.
It is the most common type of non-Hodgkin lymphoma
among adults.
DLT
Dose-limiting toxicity.
DNA
Deoxyribonucleic acid (DNA) is a molecule that carries
genetic information.
EMA
European Medicines Agency (EMA) is an agency of the
European Union in charge of the evaluation and supervision
of medicinal products.
ex vivo
Latin term used to describe biological events that take
place outside the bodies of living organisms.
FDA
US Food and Drug Administration (FDA) is responsible for
protecting the public health by assuring the safety,
effectiveness, quality, and security of human and veterinary
drugs, vaccines and other biological products, and medical
devices.
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 vitro
Latin term (for within the glass) refers to the technique of
performing a given procedure in a controlled environment
outside of a living organism.
in vivo
Latin term used to describe biological events that take
place inside the bodies of living organisms.
IP
Intellectual Property (IP) refers to creative work which can
be treated as an asset or physical property. Intellectual
property rights fall principally into four main areas; copyright,
trademarks, design rights and patents.
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.
MSAT
Manufacturing Science and Technology.
MHRA
Medicines and Healthcare products Regulatory Agency
(MHRA) is an Executive agency of the Department of
Health and Social Care in the United Kingdom which is
responsible for ensuring that medicines and medical
devices work and are acceptably safe.
Other matters
Glossary
Group financial statements 189
Oxford Biomedica plc | Annual report and accounts 2021
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.
Pre-clinical studies
Pre-clinical studies (also known as non-clinical studies) is
the stage of research that takes place before clinical trials
can begin during which important feasibility, iterative
testing and drug safety data is collected.
r/r paediatric ALL
Relapsed or refractory (r/r) acute lymphoblastic leukaemia
(ALL) is a type of cancer in which the bone marrow in
children and young adults make too many immature B
lymphocytes (a type of white blood cell) that are resistant
to treatment.
UK Corporate Governance Code
The UK Corporate Governance Code is published by the UK
Financial Reporting Council and sets out standards of good
practice in relationship to board leadership and effectiveness,
remuneration, accountability and relations with shareholders.
Viral vectors
Are tools commonly based on viruses used by molecular
biologists to deliver genetic material into cells.
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.
A reconciliation to GAAP measures is provided on page 50.
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.
190
Oxford Biomedica plc | Annual report and accounts 2021
Other matters
Advisors and contact details
Advisors
Financial adviser and broker
Peel Hunt
7th Floor
100 Liverpool Street
London EC2M 2AT
United Kingdom
Financial adviser and joint broker
WG Partners
85 Gresham Street
London EC2V 7NQ
United Kingdom
Financial and corporate
communications
Consilium Strategic Communications
85 Gresham Street
London EC2V 7NQ
United Kingdom
Registered independent auditors
KPMG LLP
2 Forbury Place
33 Forbury Road
Reading
RG1 3AD
United Kingdom
Solicitors
Covington & Burling LLP
22 Bishopsgate
London EC2N 4BQ
United Kingdom
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Company secretary
and registered office
Natalie Walter
Windrush Court
Transport Way
Oxford OX4 6LT
United Kingdom
Contact details
Oxford Biomedica plc
Windrush Court
Transport Way
Oxford OX4 6LT
United Kingdom
Tel: +44 (0) 1865 783 000
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Tel: +44 (0) 1865 783 000
www.oxb.com