Investment bank raises price target to £8.27, citing Bristol Myers Squibb manufacturing deal as key de-risking event
Jefferies has resumed coverage of Oxford BioMedica PLC (LSE: OXB), the cell and gene therapy contract manufacturer, with a buy rating and a price target of £8.27, implying upside of around 41% from the current share price of £5.88.
The investment bank raised its medium-term earnings estimates by around 4% and lifted its price target by roughly 20%, citing greater confidence in the company's path to profitability and a newly announced manufacturing agreement with Bristol Myers Squibb (BMY), the American pharmaceutical giant.
The five-year extendable deal, announced in February, will see Oxford BioMedica manufacture lentiviral vectors, the biological delivery vehicles used in cell therapies, for BMY's chimeric antigen receptor T-cell (CAR-T) programme at facilities in Oxford and Durham, North Carolina.
Jefferies described the contract as a meaningful de-risking of Oxford BioMedica's medium-term growth targets, building on a collaboration first established with Juno Therapeutics, a BMY subsidiary, in 2020.
The note was published ahead of full-year 2025 results, due on 26 March, following a trading update in which Oxford BioMedica confirmed revenues of £166 million to £169 million, at the top end of its guidance range and representing growth of around 30% on a constant-currency basis.
The company's contracted order book rose 20% year-on-year to £224 million, while its revenue backlog reached £204 million at the end of December 2025, up from £150 million a year earlier.
Jefferies forecast revenues of £232 million for 2026, ahead of a consensus estimate of £228 million, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margins expected to exceed 10% this year and surpass 20% in 2027, rising towards 30% over the longer term as manufacturing capacity fills.
The analysts noted that Oxford BioMedica's share price still does not fully reflect the company's medium-term targets, with implied growth rates in the current valuation running below management guidance of more than 20% per year.
Oxford BioMedica will host a capital markets day on 2 June, where Jefferies expects management to provide greater detail on its commercial pipeline, order visibility and longer-term competitive positioning within the cell and gene therapy manufacturing sector.