Oxford Biomedica PLC announced an agreement with US company Homology Medicines Inc. to form an adeno-associated virus (AAV)-focused manufacturing and innovation business, Oxford Biomedica Solutions.
The company also said it will raise £80mln in a placing with certain existing shareholders and other institutional investors of up to 4.85mln new shares, equivalent to 5.6% of its share capital.
John Dawson is stepping down as CEO, while current chairman Dr Roch Doliveux will become interim CEO. Dawson will remain a board director and advisor to the company, and a process to appoint a new CEO is underway.
Oxford Biomedica will acquire an 80% interest in the new business for a US$130mln cash consideration payable to Homology and a US$50mln capital injection into Oxford Biomedia Solutions to fund growth. Homology will retain a 20% stake in the new business.
The company said the move broadens its viral vector capabilities into the largest and fast growing AAV segment and expands its geographic presence with the addition of technical operational expertise in the US biopharma market.
The transaction is immediately accretive to revenue growth with contribution from Homology and potential new customers, it noted.
Through a multi-year supply agreement, Oxford Biomedica Solutions' AAV Manufacturing and Innovation Business will receive a minimum contracted revenue of US$25mln (£19mln) from Homology for the first 12 months.
Tim Kelly, chief operating officer of Homology, will join Oxford Biomedica Solutions' AAV Manufacturing and Innovation Business as chief executive officer and will also become a member of Oxford Biomedica's senior executive team.
Oxford Biomedica chair Dr Roch Doliveux commented: "Accessing Homology's unique AAV capabilities is a major advancement in Oxford Biomedica's goal to become an innovative global viral vector leader that provides solutions to Cell and Gene Therapy (C>) Biotech and Biopharma companies for their process development and manufacturing needs across key viral vectors.
"We look forward to working with Homology's impressive team and uniquely robust processes to achieve world-leadership as a provider of AAV solutions in addition to enhancing our leadership in lentiviral vectors.
"Having a US base brings us closer to customers, talent, innovation in academia and pools of capital all of which will allow growth and building a market leadership position."
Arthur Tzianabos, president and CEO of Homology, said: "We believe the opportunity in Oxford Biomedica Solutions' AAV Manufacturing and Innovation Business further leverages the value we created in this broad capability, including the demonstrated expertise of our team, to provide much-needed high-quality viral vector to other companies and, importantly, more patients around the world."
In addition to the placing, Oxford Biomedica has entered into a commitment letter for a secured short term loan facility of US$85mln (£64mln), repayable over 12 months.
The company also invited its retail investors to participate in a retail offer available by applying through the PrimaryBid mobile app.
Commeting on Dawson's departure, Doliveux said: "I would like to express my sincere appreciation for John Dawson's leadership and achievements as CEO. He and the world-class management team he has built have worked relentlessly in selecting the best AAV partner and creating this potentially transformative deal for the group."
Updating on trading, Oxford Biomedica said full-year revenues expected to be in line with analyst consensus.
The group had net cash of £109mln at end-2021.