Portfolio update 14 June 2025

Weekly news and trading intentions featuring LON:OXB, LON:TRST and LON:SAG

Please bear in mind when reading this post that I own shares in the stocks mentioned, which likely distorts my perspective. Also, the following content represents my personal views only and is not investment advice. Please see the about page for my disclosure policy.

The UK investing portfolio, UK trading portfolio and Australian portfolio pages are all up to date as at COB on Friday.

Panmure Liberum analysts downgraded Trustpilot Group (LON:TRST) to a ‘Sell’ on Monday. The share price fell double digits at one point, but has since mostly recovered. I haven’t read the full note; nor do I intend to.

On Wednesday, Ricardo plc (LON:RCDO) announced a takeover offer from WSP Group. Science Group (LON:SAG) has a 21.8% strategic holding in Ricardo, acquired on market since February this year. Science group will receive cash in front of other holders, at the offer price, and by the end of June for 20% of Ricardo. Science anticipates a pre-tax return of over 70% on its investment. As a bonus, Science now has a counter case to point to the next time they are accused of being a bogeyman to existing shareholders of their targets.

This is a remarkable outcome. Science should generate a £26 million pre-tax return on its investment and has a £229 million market cap at the time of writing, which explains the 11% rise in its shares this week. I estimate that the company’s pro forma net funds stand at over £50 million and it also owns properties independently valued at between £16.9 million to £31.6 million. Analyst consensus forecast NPAT for 2025 is £16.4 million.

Science Group’s shares are modestly priced and it is run by exceptional capital allocators (principally, Martyn Ratcliffe), in my view. The operating companies are perhaps not always of the highest quality (eg Frontier Smart Technologies), but that is to be expected with a deep value approach.

On Wednesday, Oxford BioMedica (LON:OXB) had its AGM and stated that the business is tracking in line with prior expectations. I had intended to attend this meeting, but unfortunately something happened which meant I had to collect my children from school instead.

For some time, I have been preoccupied by the possible threat of non-viral vectors when it comes to OXB. I wrote about electroporation company Maxcyte recently in order to try to understand this perceived menace better.

OXB manufactures viruses for its pharmaceutical customers, which are used to deliver cell and gene therapies (CGTs). Maxcyte uses electroporation technology where brief, high-voltage electrical pulses create temporary openings in cell membranes to introduce genetic material.

Casgevy is the first approved drug which uses electroporation and is used to treat sickle cell disease. It competes with Lyfgenia, which uses lentiviruses (such as those which OXB specialises in making) and was approved at the same time as Casgevy. Both treatments have struggled since launch, with a major stumbling block being the complex and lengthy treatment process.

Lyfgenia owner Bluebird Bio was recently taken private for ~$50 million by Carlyle and SK Capital, despite having three approved gene therapies targeting rare diseases. OXB is a contract manufacturer for the likes of Bluebird Bio, rather than a competitor. Bluebird’s difficulties reflect the immaturity of the CGT market, but the industry’s longterm potential remains strong and OXB is aligned with the overall industry rather than any individual company.

Electroporation can only be used in ex vivo medicines, which are treatments where the cells are extracted from the body, undergo the genetic change and then put back in. In contrast, viral vectors lend themselves to in vivo treatments, such as a simple injection.

Some of the biggest selling CGTs today are CAR-T therapies which involve extracting a patient's own immune cells, genetically modifying them to recognise cancer, and then re-infusing them. In other words, they are ex vivo treatments and suffer from the same drawbacks as Casgevy and Lyfgenia.

Fortunately, a new generation of in vivo CAR-T drugs are in development which promise to simplify things. Roche and AstraZeneca have both recently signed billion dollar deals to create more targeted viral vectors for in vivo gene therapies. Therefore, it seems that my concerns regarding the threat of electroporation might prove to be exaggerated.

However, another promising non-viral delivery technology which does work in vivo is lipid nanoparticles (LNPs). LNPs were used in the Pfizer-BioNTec and Moderna covid jabs, whereas AstraZeneca’s vaccine utilised viruses.

Biotech companies including Beam, Intellia and CRISPR are developing drugs based on LNPs that have already entered human trials. But all these drugs target the liver because LNPs are preferentially absorbed there. This makes it difficult to develop LNP based therapies for other organs.

Some progress has been made designing LNPs to target the lungs and spleen using the so-called SORT method. Indeed, ReCode Therapeutics is developing LNP based genetic medicines for various lung diseases. It has an impressive shareholder base, too:

For now at least, it seems that LNPs are limited to a narrow range of organs that they can target in vivo. This may change with new scientific advancements, but viral vectors are also likely to continue progressing at the same time. Viral vectors can already be engineered to target specific cell types by modifying the viral receptor, or capsid.

In another approach to improve precision, Oxford Biomedica customer, Coave Therapeutics, is developing a technology which chemically joins molecules to the surface of LNPs and viral vectors, which in turn bind to specific receptors on cells.

As a contract viral vector manufacturer, OXB benefits from the growth of viral vector-based therapies regardless of whether they're administered ex vivo or in vivo. Currently, almost all approved CGTs use viral vectors and, as the industry shifts towards in vivo solutions, I think viruses will continue to be preferred due to their superior targeting ability. This makes for an attractive business environment for OXB given expected continued strong growth in the overall CGT market as the limitations of earlier therapies, such as those developed by Bluebird Bio, are overcome.

Contract drug manufacturing is a fairly capital intensive and low gross margin business, but I think that rapid growth combined with operating leverage will ultimately dominate and drive shareholder returns in the case of OXB. This is my current overall view of the company, although I have only touched on substitution threat in this post.

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As an aside, I read “The Sense of an Ending” by Julian Barnes on Tuesday. It is a short book, but one I couldn’t put down and ended up spending the day reading it. To me, the book is about history.

I enjoyed studying history at school for a reason that is common to investing - it is about piecing together indirect, incomplete and often misleading evidence about an inherently uncertain situation. The following quote from the book puts it better:

“History is that certainty produced at the point where the imperfections of memory meet the inadequacies of documentation”

This diary serves me in part by providing documentation of my research, which might otherwise become distorted or lost memories. I choose to make it public because it provides an opportunity for me to learn from others and creates social pressure (imagined or otherwise) to help me fight laziness.

Perhaps this is intellectual signalling, but that’s for you to decide. For my part, I’d welcome any comments, direct messages or book recommendations.