Portfolio update 21 June 2025
Weekly news and trading intentions featuring LON:OXB
Please bear in mind when reading this post that I own shares in Oxford BioMedica, 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.
A tedious week of no significant portfolio news.
The following are some questions I recently put to viral vector contract manufacturer Oxford BioMedica plc (LON:OXB) by email (since I was unable to attend the AGM) and the associated answers. As a reminder, viral vectors are used to deliver genetic material into patient cells in cell and gene therapies (CGTs).
How much of a threat are non-viral vector technologies to OXB today, and into the future?
“We don’t see non-viral technologies as a threat. They are an integral component of the cell and gene therapy space. We do actively monitor non-viral approaches to see if there are any potential development opportunities for future, as the technologies mature.”
What is the ratio of in vivo to ex vivo programs that you are currently working on now, and what does the ratio look like in your sales pipeline?
“We do not disclose this level of detail but can say that the split doesn’t differ greatly from the broader market.”
I understand that two of the disadvantages of viral vectors are that they are expensive to manufacture and can pose a safety risk to patients. What, if any, progress are you making to address these issues?
“To clarify on the first question, with the proper process, productivity and yields as well as with the right scale, the cost per dose competes with traditional treatments. It is more a pricing question rather than a cost question.”
“On safety - cell and gene therapies are subject to the same level of scrutiny and safety requirements as other modalities like biologics or small molecule, with Phase I studies required to demonstrate safety for patients.”
Now, I’m not very satisfied with these replies (even though I did send a chase up email after a couple days which may have contributed to the level of detail in the responses).
Firstly, there is no explanation as to why non-viral vectors are not a threat.
Secondly, on the question of safety, I don’t feel that the response really addresses the issue. Sure, all approved drugs have to go through Phase I studies, but that hasn’t stopped the FDA from investigating cancers occurring in patients who have received approved CAR-T therapies using viral vectors.
If a non-viral alternative (such as lipid nanoparticles (LNPs)) can do the work of viral vectors without the risk of causing additional cancer then this is clearly a threat to OXB’s business.
In last week’s update, I looked into the question of alternatives to viral vectors and in particular LNPs. I concluded that,
“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.”
However, since then I have become aware of the potential for LNPs to deliver CAR-T therapies. I will not go into the details here, but if interested, you can read this twitter exchange I had with a professional market participant and fellow OXB holder who kindly indulged my contrarianism.
CAR-T therapies currently account for a substantial proportion of total CGT commercial sales. That will probably change as other types of therapies come to market, but if LNPs can be used instead of viruses in many CAR-T therapies then this poses a major risk to the likes of OXB in my view.
LNP based CAR-Ts are still in the early stages of development and there are technical challenges remaining before they are likely to be used in the majority of cases, but the progress is clear. Perhaps it will take a decade, but I can’t shake the view that LNPs pose a longterm threat even if there is likely to always be a place for viral vectors.
That is one story; here is another:
Before I purchased OXB, I was worried about the risk of alternatives to viral vectors and this held me back from buying. I felt that to answer this question was outside my circle of competence and therefore I could not be confident that the company would thrive long into the future.
However, I bought the stock because it was so out of favour and, crucially, some of the best UK investors I am aware of bought shares which caused me to put aside my concern.
Throughout my investing life, I have followed investors that I perceive as more capable than me into positions. This works in part because you are diversifying across a talent pool which mitigates risk. You have to be able to identify the best investors, but that is easier than identifying the best stocks.
The problem with this approach is what is illustrated here. I was never comfortable with the longterm risk of technological obsolescence in the case of OXB. Maybe I just uncovered some compelling evidence which revealed the high risk of LNPs, or maybe I found what I wanted to find because I have never felt secure owning the stock. Form your own view.
Investing is about belief informed by evidence based research and you cannot outsource the belief. For one thing, we all have different risk tolerances.
You can follow systematic rules and these could incorporate selections from skilled investors, but that still requires trusting the system. Also, systems can lose their edge over time so require iteration.
I prefer to invest based on an informed, personal view of a company using timeless value principles. I find this the most rewarding approach in a broad sense (and I have tried others).
This is the essence of my process: buy the best quality companies in times of unrest, otherwise allocate spare capital to special situations.
I haven’t decided if I am going to sell my OXB shares. Did I say that I was bored this week?