Shares in Oxford BioMedica PLC (LSE:OXB) rose 3% to 684p after Deutsche Bank upgraded the gene and cell therapy specialist to a 'buy', citing a stronger business profile and growing confidence in its long-term earnings potential.
Oxford Biomedica plc has spent the past two years reshaping itself into a pure contract development and manufacturing organisation, or CDMO, moving away from earlier, more volatile business lines.
Deutsche said that the transition has created a higher-quality company, supported by more predictable manufacturing revenues and a growing pipeline of late-stage customer contracts.
While demand for viral vector manufacturing can fluctuate, the bank believes Oxford Biomedica is now well-positioned and adequately funded to deliver faster growth, improving profitability and rising cash generation.
On its forecasts, the group could be generating around £100 million of EBITDA within five years.
The shares have already risen about 45% so far this year, but Deutsche Bank argues there is still scope for a further re-rating.
On its estimates, Oxford Biomedica is trading at around three times expected 2026 sales, roughly a 20% discount to global CDMO peers, despite what the bank views as an above-average growth outlook.
Deutsche lifted its target price sharply to 735p from 380p, reflecting greater confidence in the group’s strategy and execution. The move was enough to push the shares higher on the day, even after a strong recent run.