Oxford BioDynamics

Fundraise of £7m provides much needed cash

Lighthouse | 15 January 2025

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  • Oxford BioDynamics has conditionally raised c £7m gross through a placing and subscription of 1,400,000,000 new shares; the Vulpes £1m loan is effectively being converted into shares. There will also be a retail offer to eligible investors to raise up to £0.5m. OAK Securities will receive a 10% commission in new shares, and 6% in warrants. The issue price for the fundraise is 0.5p, a 44% discount to the closing mid-market price on 13 January. The fundraise is contingent on shareholder approval at a meeting on 31 January, which will include a proposed share capital reorganisation to divide each current ordinary share of 1p nominal into one ordinary share of 0.1p and one deferred share of 0.9p; this is to overcome restrictions on issuing shares at a price below the current nominal. VCT/EIS shares are expected to be admitted to trading on 3 February, and other new ordinary shares on 4 February.
  • The new funds, together with anticipated business development income and test revenues, are expected to provide a 12-month runway. Proceeds will be used as working capital to support commercialisation of both EpiSwitch PSE and CiRT. Management, under the leadership of incoming Executive Chairman Iain Ross, will also focus on increasing revenues through partnerships, collaborations and licensing deals with diagnostic/pharma companies, whilst restructuring to an appropriate cost base.
  • Total EpiSwitch PSE tests ordered since launch to the end of December 2024 are 1,113, implying that 366 were ordered in October-December 2024, for an average of 122/month. This compares to 95 in September 2024. A recent UK report by Prostate Cancer Research highlighted that early diagnosis using tests such as PSE could bring positive socio-economic benefits. EpiSwitch PSE is, in our view, the commercially more relevant diagnostic.
  • Total EpiSwitch CiRT tests ordered since launch to end December 2024 are 1,527, implying that 261 were ordered in October-December 2024. This equates to an average of 87/month, a similar level as the 90/month in the previous quarter, and since the PROWES registry study was initiated in June. PROWES was initiated to support inclusion in key cancer guidelines. OBD plans to make an initial submission in early 2025. In addition, the planned clinical trial with a top ten pharma in endometrial cancer to include CiRT testing is expected to start shortly.

Trinity Delta view: New funds are welcome and will allow OBD to continue operating for the next 12-months. During this time, new management plans to review the business to right-size the cost base, whilst seeking business development opportunities to maximise near-term revenues. Recent test volumes, notably PSE, are showing encouraging signs of growth, although it remains to be seen if these are one-off upticks, or a new sustainable base. Early submission for CiRT guideline inclusion would also be a positive development. Whilst the fundraise provides operational headroom, longer-term sustainable test volume growth will require substantial ongoing commercial investment, in our view. As is usual in such situations, we suspend our valuation and forecasts.

Lighthouse

15 January 2025

Price0.60p
Market Cap£1.9m
Primary exchangeAIM
SectorHealthcare
Company CodeOBD
Corporate clientYes

Company description

Oxford BioDynamics (OBD) develops 3D genomic diagnostics using its proprietary EpiSwitch technology platform. Aiming to improve precision and clinical utility, the target applications are in oncology, autoimmune diseases, and neuro-degenerative disorders. Two tests, EpiSwitch CiRT (immuno-oncology response) and EpiSwitch PSE (prostate cancer) are being rolled out commercially.

Analysts

Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041

Philippa Gardner
pgardner@trinitydelta.org
+44 (0) 20 3637 5042

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