BIOTECH firm Oxford BioMedica is set to increase its workforce by 25 per cent in the next few months following a landmark deal with a pharmaceutical giant worth up to £56m.

Oxford BioMedica chief executive John Dawson said the listed company would boost its number of employees from 120 to 150 by mid-2015.

He said: “If we can find people locally, then fantastic.”

The majority of new posts would be for manufacturing and analytics, with recruits requiring a science background, he added.

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Swiss-based Novartis has paid US$4.3m (£2.7m) for a 2.8 per cent equity stake in Oxford BioMedica under a new agreement between the two companies.

This builds on their initial partnership struck in May 2013.

Novartis will pay US$14m (£8.7m) up-front for a non-exclusive global development and commercialisation licence in oncology for the biotech’s LentiVector platform.

It will use the platform to treat T-cells, which play a vital role in human immunity, taken from cancer patients and subsequently reinsert the T-cells back into patients.

Oxford BioMedica, which specialises in gene and cell therapy and has a market capitalisation of £100m, also develops drugs for cancer, Parkinson’s disease and motor neurone disease, in addition to its LentiVector platform.

Novartis’s total investment may be worth up to US$90m (£56m) over three years. Oxford BioMedica will receive undisclosed royalties from the sale of products developed under their joint agreement.

Mr Dawson, CEO of the company’s restructured balance sheet, said: “We believe we’re in a very strong position.”

He said the £20m capital raising in June, which involved the issue of one billion new shares, helped in striking the new arrangement with Novartis.

He added: “It gave us the ability to negotiate a stronger deal with Novartis and gave us balance sheet liquidity.”

One of Oxford BioMedica’s main problems has been cash burn. In its 2013 annual report, chairman Nick Rodgers warned shareholders that cash levels would support operating activities only until the third quarter of 2014.

However, the capital raising and the Novartis deal, announced last Friday, have provided liquidity and strengthened the balance sheet.

In the first half of 2014, net cash burn was £5m, down from £7.3m in the first half of 2013. The company posted a net loss of £4.8m in the 2014 June half.

The firm’s share price has rebounded off a recent low of just under two pence in May 2014 to four pence.

Mr Dawson said he expected the company to reach a cash-flow break-even point in March 2016.

This will be assisted by Oxford BioMedica’s £3.2m purchase of the Windrush Court office and laboratory facilities, across the road from its existing headquarters at Oxford Science Park, enabling the company to save on leasing expenses. Its lease at the Medawar Centre expires in March 2016.


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