Oxford BioMedica shares fall after it seeks £30 million for vaccine trial

Shares in Oxford BioMedica, an Oxford University spin-out that specialises in gene therapy, fell 8.3 per cent on 2 November on news that the company was seeking to £20 million to £30 million from institutional investors to fund the Phase III trial of its a TroVax cancer immunotherapy product.

Analaysts said the exercise might indicate the company is having more difficulty than it anticipated in licensing the technology. “The company has been talking about partnership (on TroVax.) But this could mean the environment for licensing cancer vaccine isn’t very good,” said Chris Redhead, an analyst at Code Securities Ltd., in a telephone interview. “In our view, Trovax ticks many of the boxes with respect to a potential cancer vaccine candidate.” But he added: “These big companies may have asked ‘are they likely to work?’”

Code Securities has downgraded the stock from Hold to Sell with a target price of 18 pence. Oxford BioMedica shares, which are traded on the Alternative Investment Market, dropped 8.3 per cent Wednesday to 27.5 pence.

In response, Oxford BioMedica said the fund raising exercise “to commence the Phase III trial will maximise value from a commercial partnership, as it allows the company to complete its negotiations from a position of greater financial strength.”

The company said it has started “commercial negotiations, and it remains its intention to secure a partner for TroVax.” These potential partners include “multinational companies with oncology franchises in the US, Europe and Japan,” the company added. On 17 October, Oxford BioMedica said in another statement that it intended to secure a development partner for TroVax within the next 12 months.

In February 2005, Oxford BioMedica announced that it had terminated talks on merger with an unidentified company. The potential merger was earlier announced on 19 January 2005.

Oxford BioMedica said on 2 November that TroVax has the potential to be used for the treatment of most solid tumours, targeting a market that currently exceeds $15 billion.

Oxford BioMedica has about 70 staff. It has collaborations with Wyeth, Intervet, Viragen, MolMed and Kiadis, and has licensed technology to companies including Merck & Co, Biogen Idec and Pfizer.