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Investing.com -- Shares of Oxford Biomedica (LON:OXB) fell more than 3% on Wednesday after the company reported full-year 2024 results that met revenue expectations but came with a softer outlook on near-term profitability.
While revenue guidance for 2025 was strong and largely secured through existing contracts, a more cautious stance on EBITDA dampened investor sentiment.
For 2025, the company expects revenue between £160 million and £170 million, up 24% to 32% year-on-year. High visibility is ensured by the 83% to 88% already covered by signed contracts.
This aligns with RBC Capital Markets’ estimate of £170 million and market consensus at £165 million.
Oxford Biomedica also reaffirmed its longer-term targets, including a revenue CAGR of over 35% between 2023 and 2026, and annual growth above 20% through 2029.
However, the company now forecasts operating EBITDA in the low-single-digit millions for 2025—below consensus expectations of £8 million and RBC’s estimate of £11 million.
Additionally, guidance for 2026 EBITDA margin has shifted from "in excess of 20%" to "approximately 20%" by the end of the year, which RBC interprets as targeting around 20% in the second half of 2026 rather than across the full year.
Despite the conservative profitability guidance, commercial performance was a bright spot. Contracted orders rose 35% to £186 million, with adeno-associated virus (AAV) vector orders now approaching parity with lentiviral vectors.
Backlog climbed 60%, and the unadjusted pipeline increased 30%. Importantly, the number of late-stage clinical programmes remains at four—recovering from a drop to three in September following a discontinued customer project—underscoring continued momentum in the company’s pipeline despite broader sector headwinds.
Oxford Biomedica also introduced clearer financial disclosures under its new CFO. Revenue is now split into manufacturing, development, procurement, and licences/milestones/royalties, alongside four years of historical data.
Costs are segmented more granularly, with separate lines for cost of goods sold and operating expenses categorised into operational, innovation, commercial, and administrative spend. RBC analysts welcomed the added transparency, noting it should improve financial modelling.
Valuation remains compelling, according to RBC, which maintains an “Outperform” rating and a 740p price target. At 256p, shares trade at just 1.5 times 2025 EV/sales—a level RBC believes undervalues the business by a factor of three to four.