Saving lives Annual report and accounts 2020 Oxford Biomedica in brief Oxford Biomedica is a leading, fully integrated, cell and gene therapy group focused on developing life changing treatments for serious diseases. Cell and gene therapy is the treatment of disease by the delivery of therapeutic DNA into a patient’s cells. This can be achieved either in vivo (referred to as gene therapy) or ex vivo (referred to as cell therapy), the latter being where the patient’s cells are genetically modified outside the body before being re-infused. Oxford Biomedica and its subsidiaries (the “Group”) have built a sector leading lentiviral vector delivery system, LentiVector® platform, which the Group leverages to develop in vivo and ex vivo products both in-house and with partners. The Group has created a valuable proprietary portfolio of cell and gene therapy product candidates in the areas of oncology, ophthalmology, CNS disorders and liver diseases. The Group has also entered into a number of partnerships, including with Novartis, Juno Therapeutics/Bristol Myers Squibb, SIO Gene Therapies, Orchard Therapeutics, Santen, Beam Therapeutics, Boehringer Ingelheim, the UK Cystic Fibrosis Gene Therapy Consortium and Imperial Innovations, through which it has long term economic interests in other potential cell and gene therapy products. 1 Saving lives 2 Questions and answers Additionally the Group has signed a three-year master supply and 8 The Group’s COVID-19 development agreement with AstraZeneca for large-scale manufacturing vaccine journey of the adenoviral based COVID-19 vaccine the (“Oxford AstraZeneca 12 Market overview COVID-19 vaccine”) Oxford Biomedica is based across several locations 15 Strategic Report in Oxfordshire, UK and employs more than 670 people. 16 Group at a glance 18 Product pipeline 20 The Group’s business model 22 The Group’s stakeholders 26 Operational highlights delivered in 2020 27 Financial highlights delivered in 2020 28 Chair’s statement 30 Chief Executive Officer’s and 2020 performance review 38 Management team 40 Delivery of 2020 objectives 41 Objectives set for 2021 42 Financial review 51 Environmental, Social and Governance Report 67 Non-financial statement
69 Corporate Governance 70 Principal risks, uncertainties and risk management 78 Board of Directors 80 Corporate Governance Report 96 Directors’ Remuneration Report 124 Directors’ Report
132 Independent auditors’ report
143 Group financial statements 144 Consolidated statement of comprehensive income 145 Statement of financial positions 146 Statements of cash flows 147 Statements of changes in equity attributable to owners of the parent 148 Notes to the consolidated financial statements
185 Other matters 185 Glossary 188 Advisers and contact details therapy medicine. of cell and gene at the leading edge healthcare company A life Biomedica. We are Oxford Oxford Biomedica plc Saving lives
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Annual r eport and accounts 2020
sa ving ving
Saving lives 1 2 Saving lives Questions and answers
Q&A
Our new Chair, Dr. Roch Doliveux, responds to the FAQs of the moment.
Q: What attracted you to the role of Chair “I am fascinated by the cell and at Oxford Biomedica? gene therapy space, which is A: I am fascinated by the cell and gene therapy space, which is poised to deliver the next wave poised to deliver the next wave of breakthroughs in medicine. of breakthroughs in medicine.” OXB has a clear leadership position in lentiviral vectors on which to build, with the potential to save and improve the lives of so many more people. Also, OXB enjoys a collegial culture both amongst the management team and the Board. This spirit of winning together is quite special and I particularly thrive in this environment.
Q: What impressed you most once you joined? “When I joined, I knew there A: When I joined, I knew there was great depth in the scientific was great depth in the scientific knowledge around lentiviral vectors at OXB. Having spent knowledge around lentiviral time with our scientists, I am now even more impressed. vectors at OXB. Having spent I am equally impressed by the Chemistry, Manufacturing and time with our scientists, I am Controls (CMC), knowhow and ability to deliver all the way now even more impressed.” through particularly competitive manufacturing: these are impressive combined strengths which differentiates OXB in the marketplace.
Oxford Biomedica plc | Annual report and accounts 2020 3
ving lives Sa Q: What surprised you most once you joined? “ OXB has become one of A: The biggest surprise was what OXB has been able to achieve the main manufacturers for and deliver with the Oxford AstraZeneca COVID-19 vaccine the Oxford AstraZeneca in such a short period of time. The team promptly applied its COVID-19 vaccine in the UK expertise to work with a new viral vector, a different process with amazing performance and scaling up to levels we have not worked at before. Using and a sense of urgency.” our knowhow in technology, CMC and manufacturing, OXB has become one of the main manufacturers for the Oxford AstraZeneca COVID-19 vaccine in the UK with amazing Q&A performance and a sense of urgency.
Q: How have the first 9 months in the role been? A: Busier than I thought! With the COVID-19 crisis, it has been an unusual time to join an organisation, as I have only met John Dawson, our CEO, in person. However, the culture and “A major concern for us was collegiality of OXB, combined with frequent interactions, have made it possible to achieve a lot. As I joined, the Group achieved preventing COVID-19 in our a successful fundraise quickly followed by the decision and workplace. Thankfully, our successful implementation of the manufacturing of the manufacturing staff were Oxford AstraZeneca COVID-19 vaccine. A major concern for vaccinated in February with the us was preventing COVID-19 in our workplace. Thankfully, vaccine we are manufacturing our manufacturing staff were vaccinated in February with and the risk and worry that the vaccine we are manufacturing and the risk and worry COVID-19 could disrupt that that COVID-19 could disrupt that important work dissipated. Perhaps more importantly for the long term, the Board important work dissipated.” committed to our strategy to grow our Contract Development and Manufacturing organisation (CDMO) leadership position and build our portfolio of medicines targeting severe diseases.
Q: What has your experience as CEO of UCB and in other roles, allowed you to bring to the OXB Board? A: Having been the CEO of an innovative biopharma company as well as mentoring many CEOs, there are certainly many experiences that could be relevant for OXB on the delivery of our services and new medicines. I bring to OXB my whole drive, purpose and my energy. The purpose drives the strategy and focus on implementation drives performance. I believe these involve both organic and inorganic developments and partnerships. I also trust that the connections I have built over the years will help future partnerships and therefore help enable OXB to maximise its full potential.
Dr. Roch Doliveux, Chair A biography detailing Dr. Roch’s extensive experience in the sector can be found on page 78.
Oxford Biomedica plc | Annual report and accounts 2020 4 “ Questions and answers Questions andanswers Saving lives Oxford Biomedica plc antibodies were 20yearsago.” the nextwave, justlike Cell andgenetherapyisclearly IP, accesstoknowledge,longtermcapitalandgreat talent. regulatory skills,customercentriccommercialisation, strong performant CMCandmanufacturing,solid developmentand including great technologyplatforms, therightdiseasetargets, 20 yearsago;manyof thesamekey successfactorswillapply, gene therapyisclearlythenextwave, justlike antibodieswere made manycompaniessuccessful,includingUCB. Celland been anamazingsource of innovative medicinesandhave A: Monoclonalantibodiesandotherlarge moleculeshave coming yearsandOXB’s opportunitytocapitaliseonthis? Q: Howdoyouseethecellandgenetherapyfieldin saving medicinestopatients. profitability, IP, share price and performance in bringing life- for example,performance inrevenues, market share, talent andteams.Thethird area istheneedtoperform, that drives meistalent,andmaximisingthepotentialof done through hard andsmartwork.Theseconddimension making thelivesof thosethat are suffering better. Thisis A: Iamdrivenmostlybythree things.Firstlysaving livesand Q: Whatdrivesyou?
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Annual r eport and accounts 2020
“ lives I amdrivenmostlybysaving those that are suffering better.” and making the lives of and makingthelivesof Oxford Biomedica plc a FTSE250 company like OXB? companylikea FTSE250 OXB? exciting timefor Oxford Biomedica. culture –astogetherwewillallbestronger. Thisisindeedavery continue torecruit therighttalentthat fitsintoourCompany work weneedtocontinuallybuildandexpand ourteamsand our own portfolio of medicines. As we continue to expand our growth of our lentiviral vector based leadership and invest in the businesswillallowustoreinvest inourtechnology, enabling CDMO profitability. Thecashgenerated by theCDMOpart of building onourstrengths, gainingmarket share andgrowing We willcontinuetofocus onexpandingourCDMObusiness, therapy partnersonourmanufacturingandCMCcommitments. AstraZeneca COVID-19 vaccineandwithallof ourcellandgene commitments topartners–botharound theOxford A: Obviously, weneedtocontinuedeliveronour Q: WhatdoyouseeasthemostimportantobjectivesforOXB? to jointheBoard. have attracted Professor DameKayDavies andDr. SamRasty translation intopatients’ needs.To thisend,weare delightedto area of focus for theBoard isscienceandtechnologyits within thewiderGroup tohelpmake therightdecisions.An of thought,talentandexperiencesaround theBoard table and In suchacomplexandrapidlymovingworld,weneeddiversity includes theimportanceof buildingastrong anddiverse Board. good auditingof theaccountsandregulatory compliance.This A: Good corporate governanceisa must in thesamewayas Q: Howimportantisgood partnerships asIhave discussedabove. our ownnewmedicinestopatients, thismayalsobedonevia on thisundermyleadership.We are also committedtobringing A: Ofcourse.We have astrong CDMObusinessandwillbuild as developingitsownportfolioofmedicines? Q: AreyoucommittedtoOXB beingaCDMOaswell whether itwasfor UCBasCEO, andnowfor OXB asChair. building strengths tomaximisethepotentialof thecompany, route. I am not driven by acquisitions but by continuously technology partnershipsnotjustviaatraditionalacquisition strengths andcombiningstrengths whichcouldbethrough A: Both;howeverthemostimportantpartistobuildon or inorganic? time atUCB,doyouseegrowthbeingmainlyorganic Q: You wereknownforbeingacquisitiveinyour
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Annual r eport and accounts 2020 corporate governance for corporate governancefor
“ “ make therightdecisions.” the widerGroup tohelp the Board tableandwithin and experiencesaround diversity of thought,talent moving world,weneed In suchacomplexandrapidly own portfolio of medicines leadership andinvestinour of our lentiviralvectorbased technology, enablinggrowth will allowustoreinvest inour CDMO partof thebusiness The cashgenera ted by the ted bythe
.”
Saving lives 5 6 Saving lives
We are saving lives. Right now.
We are the experts of choice When AstraZeneca needed a trusted partner to urgently manufacture large amounts of their COVID-19 vaccine in a race to save lives and economies, it was us they called. Our know-how and reputation is highly regarded in the industry.
Oxford Biomedica plc | Annual report and accounts 2020 7
ving lives Sa
World leading science making healthcare work Our lentiviral vector delivery system, LentiVector®, is enabling our customers to bring next generation treatments for serious diseases to market. For example, Novartis’ Kymriah® product for blood cancer; it’s the real thing, an available gene therapy that’s out there saving people’s lives.
Oxford Biomedica plc | Annual report and accounts 2020 8 Saving lives
The Group’s COVID-19 vaccine journey
“I have been truly proud of the Group’s achievements over the period. We not only secured major new partnerships, brought the Oxbox manufacturing “When people ask me what I want to achieve in life facility online in record time and or in my job I explain that what really matters to me is ‘to make a difference’ responded to the challenges of the pandemic, but the team has All my career I have worked in the pharmaceutical also been able to rapidly work industry, but since I have joined OXB I feel that what with AstraZeneca to provide a I do directly contributes to life changing treatments. vaccine solution for COVID-19. The work we have done on the vaccine in the last year This is a true testament to the has made this so real . . . on the day the MHRA approved world-class calibre and the use of the Oxford AstraZeneca COVID-19 vaccine dedication of our staff” for use in the UK it was such a strong feeling that what we do at OXB is making such difference. It is so real John Dawson, CEO and has got such an impact. It is a great feeling and gives me a sense of purpose to be part of this”
Aude Cazenave, Senior Director, Head of MSAT
08 April 2020 The Group joined a consortium, led by the Jenner Institute at Oxford University, to rapidly develop, scale-up and manufacture a potential vaccine for COVID-19, ChAdOx1 nCOV-19
29 January 2020 23 April 2020 13 May 2020 08 June 2020 First COVID-19 case Oxford University The Group receive UK The Group signs five-year reported in the UK begins Phase I/II trial for Medicines & Healthcare agreement with VMIC to ChAdOx1 nCOV-19 products Regulatory enable the rapid in the UK Agency (MHRA) approval manufacture of viral for the first two vector based vaccines 30 April 2020 manufacturing suites in and provides equipment AstraZeneca licensed Oxbox for two GMP suites in ChAdOx1 nCOV-1 from Oxbox to further scale up Oxford University to 28 May 2020 AZD1222 or other viral enable development, The Group signs initial vector vaccine candidates manufacture and one-year clinical and distribution of the commercial supply candidate vaccine agreement with globally, and it was AstraZeneca at 200L renamed AZD1222 scale. At this point, (Oxford AstraZeneca AZD1222 is in phase II of COVID-19 vaccine) clinical trials
Oxford Biomedica plc | Annual report and accounts 2020 “ Oxford Biomedica plc Oxbox manufacturing suitein MHRA approval for third The Group receives 02 September2020 1000L production AstraZeneca scalingupto services agreement with three-year master agreement undera 18-month supply The Group signs 01 September2020 Simon Simpkins,HeadofManufacturing for OXB” why thisissuchasignificantachievement downstream process. Allof thisreinforces to simplifyandstreamline the1000litre Plus, Process R&Dhave beenworkinghard logistics andtheteams’workinghours. understand andmanagetheimpacton and trainnewmembersof theteam, equipment needed.We neededtorecruit in suchashorttime.It’snotjustaboutthe in gettingusready for 1000litre production We can’toverstate thecomplexityinvolved
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Annual r oday myparents received theirfirstdose of theOxford AstraZeneca “ eport and accounts 2020 Rachael Nimmo,GroupLead–CellTechnology Group(Feb2021) manufactures. What ayearthishasbeen.Feelingproud” receive atherapythat mypartnerhelpeddevelopandemployer COVID-19 vaccine.Ineverimaginedthat myparents wouldoneday T C of theOxford AstraZeneca to make sure thesupply break withtheirfamilies giving uptheirChristmas over thefestive period team. 210peopleworked period for theOxbox A verydifferent festive December 2020 continue withoutdisruption supply intheUK authorised for emergency vaccine hasbeen COVID-19 vaccine Oxford AstraZeneca 30 December2020 OVID-19 vaccine would OVID-19 vaccinewould
“
was madetothe charity a donation of £21,000 in January extra man-days worked extra man-daysworked SeeSaw. Fortheextra210 chosen localcharity donate £100toOXB’s Group committedto the festive period, the man-day worked over the better. Foreveryextra Changing more livesfor 2021 28 January formally opensOxbox Boris JohnsonMP Prime MinisterRtHon 2021 18 January COVID-19 vaccine Oxford AstraZeneca first personto receive the Pinker, 82,becomesthe Dialysis patient Brian 2021 04 January the biggestinoculation programme inBritishhistory” the strong supplyof vaccinestothefrontline, andhelpdeliver years. Iurge youalltokeep upyourvitalworkinensuring manufacturing capabilityinmonthsthat wouldusuallytake protecting thevulnerable,whilstcreating adomestic should behugelyproud of therole you’veplayedin life-saving jabsare already inarmsacross theUK.You accelerate ourvaccinerollout, meaningmillionsof The tireless workof your250-strong teamhashelped Prime MinisterRtHonBorisJohnsonMP
e’re soproud of Oxford “ Director of SeeSaw Director ofSeeSaw Judith Mulligan, families our workwithbereaved grateful tothemfor supporting keep usallsafe. Andweare so of thefighttosave livesand Biomedica for beingavitalpart W fundraising –andhowapt” a real shotinthearmfor our a COVID-19 vaccine received thefirstdose of 15 millionpeoplehave UK governmentconfirms 2021 14 February in Oxfordshire. Thisis
Saving lives 9 10 Saving lives Saving lives Oxford Biomedica plc humans everywhere bypushingthemtowards approval. sights andare determinedtomake adifference for conditions like these.We have themsquarely inour We allknowsomeonewhohasbeenaffected by blindness, neurological disorders andliverdiseases. is aimedat healthcare’s biggestunmetneeds;cancer, Our ownpromising drugdevelopmentpipeline Developing new, in-housetreatments
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Annual r eport and accounts 2020
Oxford Biomedica plc successfully doneit. Someonelike us. want toworkwitha leading partnerwhohasalready gene therapyproducts through trialstomarket, Drug developmentcompanies wantingtodrive lives for peoplesuffering from disease. to helppharmafindnewwayssave, andimprove stream from fees androyalties. We share ourexpertise Organisation (CDMO)provides anincreasing revenue enabler andContractDevelopmentManufacturing Our workwithandfor othersbothasatechnology next bigbreakthroughs Developing andpartneringpharma’s ways to save lives. Developing new
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Annual r eport and accounts 2020
Saving lives 11 12 Saving lives Market overview
The Group is an organisation at the heart of the fast growing cell and gene therapy market.
The next wave of medical breakthroughs “We anticipate that by 2020 It took over 20 years to launch the first CAR-T cell therapy we will be receiving more than in 2017 and hail the arrival of the sector of medicine known 200 INDs (in cell and gene as cell and gene therapy. This type of therapy differs from therapy products) per year, earlier medicines in that they are a one-time only treatment building upon our total of that changes the body’s own cells to treat a disease. This more than 800 active cell-based area looks poised to revolutionise a multiple of medical treatments. The approvals seen in the cell and gene therapies or directly administered gene market over the last three years are seen by many as akin to therapy INDs currently on the key product launches that catalysed the antibody markets file with the FDA. And by 2025, in the late 1990’s and the start of a multibillion dollar market in we predict that the FDA will the years that followed. be approving 10 to 20 cell and gene therapy products a year.” The potential of the cell and gene therapy market was highlighted in a comment from the former FDA Commissioner, Scott Scott Gottlieb M.D. Former FDA Commissioner Gottlieb, who said in 2019 that ‘by 2025, we predict the FDA will 15 January 2019 be approving 10 to 20 cell and gene therapy products a year’.
The number of companies in the cell and gene therapy sector has reached around 1,000, with the sector having attracted c.$35 billion from venture capital in addition to internally funded R&D, in the period 2016–2019.
1000 14 2000 13 900 1800 987 12
800 906 11 1600 $13.3bn 854 10 700 1400
772 13.7% CAGR 9 600 1200
8 $9.8bn
500 7 1000 6 800
400 $7.5bn 5 300 4 600 3 200 $5.2bn 400 2 200 100 1
2016 20172018 2019 2016 20172018 2019 2019 20202021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Number of companies in Total global financings ($bn) Global integrating vector supply forecast gene/cell therapy and tissue Source: ARM Annual Reports New Company estimates (dark green) as of March 2020 and based on clinical trial data in Journal of Gene Medicine to December 2018 and engineering Company supply and forecast figures. Old forecasts (light green) Source: ARM Annual Reports calculated October 2017
Oxford Biomedica plc | Annual report and accounts 2020 scale uptheproduction of viralvectorsin-house. process, as well as produce commercial batches, or look to up who canalsodevelopanefficientmanufacturingscale scale lentiviralvectormanufacturer suchasOxford Biomedica stage,companies have theoptionof workingwithacommercial the decisiononhowtoachievecommercial scaleup.At this grade lentiviralvectors.Indeed,companiesneedtomake pre-clinical/early clinicalworkundertaken withresearch indicator of future potentialCDMOdealflowas following initiations. Thenumberof clinicaltrialsare seenasaleading 19.8% CompoundAnnualGrowth Rate (CAGR) inclinicaltrial vectors. Intheperiodof 2014–2019 thissectorhasseena The Group’s LentiVector® platform focuses on lentiviral global opportunity The Group’sLentiVector® platform–maximisingthe of themarket willbesignificantlyhigherthancurrently forecast. in thechartbelow),duetoamountof vectorneeded,thesize reach themarket (neitherof whichare includedintheestimates large CAGR of 13.7%. TheGroup, however, believesthat ifanyof the in excess of $1billion by 2026 growing to$1.8 billion by2030, a 2020 andshowsavectorsupplymarket estimated tobeworth programmes in development, this analysis wasupdated in March brought onlineduring2020. Withtheincrease inthenumberof manufacturing facilityOxbox wascommissionedand be $800millionby2026. Onthebackof thisanalysisthenew global market for integrating vectorsupplywasestimated to clinic andtheirindications andfrom thisforecasted that the In 2017, theGroup looked at thenumber of programmes inthe partner programmes byyearendto20. AstraZeneca COVID-19 vaccine,taking thetotalnumberof able topartnerwithAstraZeneca onproduction of theOxford the Group’s expertise in viral vector manufacture they were Beam Therapeuticstotheirlistof partners.Inaddition,dueto the fieldsuchasJunoTherapeutics/BristolMyersSquibband vector partnerprogrammes from 13to19, addingleadersin During 2020, theGroup hasincreased itsnumberof lentiviral 40 20 Oxford Biomedica plc Source: Clinicaltrials.gov Clinical trialinitiationsbyvector type 30 45 25 35 10 oviral vectors 15 5 Lentiviralvectors Retr 0421 0721 2019 2018 2017 2015 2014 16 in vivoindications suchascysticfibrosis orhaemophilia
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18 0421 0721 2019 2018 2017 2015 2014 17
15 19.8% CAGR 2016 27
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42 0421 0721 2019 2018 2017 2015 2014 32
39 2016 25 growing to$1.8billionby2030 to beworthinexcess of$1billionby2026 The vectorsupplymark from 13to19 of lentiviralvectorpartnerprogrammes The Grouphasincreasedtheirnumber
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Saving lives 13 14 got this. Together we lives. therapy to save Enabling gene ve ve Oxford Biomedica plc
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Annual r eport and accounts 2020
ving lives 143 185 132 188 1 1 1 185 12 1 1 69 80 40 48 44 46 20 9 30 28 38 42 2 45 70 15 22 78 47 67 27 18 41 16 12 51 8 4 6 6 6 2 1
vaccine journey delivered in2020 highlights Financial delivered in2020 highlights Operational The Gr The Gr Pr Gr Strategic R Mark Advisers andcontactdetails Glossary Other matters financial statements Notes totheconsolida of theparent equity attributable toowners S S S of comprehensive income statement Consolidated Group financialstatements Independent auditors’report Dir Dir Corpora Boar and riskmanagement uncertainties risks, Principal Corporate Governance statement Non-financial Governance Report Envir review Financial Objectives setf Delivery o Management team 2020 performance review Chief Ex Chair’s sta The Gr Questions andanswers Sa tatements of changes in tatements of changesin tatements of cashflows tatement of financialpositions oduct pipeline oup at aglance ectors’ Remuneration Report ectors’ Report d of Directors onmental, Social and onmental, Socialand et overview oup’s stakeholders oup’s businessmodel oup’s COVID-19 ecutive Officer’s and ecutive Officer’sand te GovernanceReport f 2020objectives tement eport or 2021
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Strategic Report 15 16 Group ataglance Strategic Report Oxford Biomedica plc * asof 31December2020 — Partners andcustomersinclude programmes Six proprietary 6 20 partnerprogrammes 20 Biotechcompany FTSE250 FTSE Key stats* oup’s CDMOrevenues provide — — oup isaleadinggloballentiviral — — Who istheGroup? programmes with rapidlyincreasing numberof partner Multiple partnershipswithleadingcompanies and genetherapymarket vector specialistinthefastgrowing cell The Gr COVID-19 vaccine AstraZeneca’s adenovirusbased Large scalemanufacturer of Oxford Industry leadingknow-howinmultiple and CNSdisorder therapies, ocular, liver, respiratory diseases therapeutic areas: Genemodifiedcell Group’s proprietary pipeline significant additionalupsidefrom the a growing financialfoundation with The Gr 250
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Annual r eport and accounts 2020 in Oxford,UK Six facilitiesoverfivesites 6 Over 670staff >670 excess of$1bn Market capitalisationin $1bn
Windrush Courtintofurtherlabora in to convertsomeof theexistingoffice area office in2020, developmentisunderway Team andsupportfunctionstoanewcorporate Following themoveof theSeniorExecutive laboratories aswellextensiveoffice space. Court. Thebuildinghas32,000 The Group’s registered office is atWindrush Windrush Court,Oxford,UK is available for flexibleexpansioninthefuture. The remaining 39,000 suites isexpectedtobeapproved during2021. in production. Thefirst of thefillandfinish the fourth quarterof 2020allfour suiteswere approved bytheMHRAduring2020and four GMPsuitesandsupportingareas were cold chainfacilitiesandQClaboratories. All and supportingareas suchaswarehouse, manufacturing suites,twofillandfinishsuites 45,000 2019. Thefirstphase of development,totalling facility, Oxbox, wasconstructedduring The Group’s 84,000 Oxbox, Oxford,UK(1) excellence inEurope andislessthananhourfrom Heathrow. in Oxford, UK.Oxford isoneof maincentres of scientific The Group hassixfacilitiesspread overfivesites,allbased Where istheGroupbased? support functions. the SeniorExecutive Team andvarious Corporate HeadOffice.Thisnewsite houses Business Park,closetoOxbox, asanew on anew11,000 During 2020, theGroup tookanewlease Corporate HeadOffice,Oxford,UK Windrush Court. Gate are located directly opposite room suites.Harrow HouseandChancery manufacturing spacewithtwoGMPclean in 2012.Ithasaround 4,000 received MHRAapproval tomanufacture The Group’s Harrow Housefacilityfirst Oxford, UK Gate, Harrow HouseandChancery including onecleanroom suite. around 6,000 has bothFDA andMHRAapproval. Ithas The GMPmanufacturingfacilityat Yarnton Yarnton, Oxford,UK product innovation. on bothplatform aswellproprietary Group’s dedicated innovation centre; working Once completedthiswillbecomethe currently intheprocess of beingrefurbished. 32,000 Innovation Centre, whichhasafurther Adjoining WindrushCourtisthe Oxford, UK Windrush InnovationCentre, from bothcurrent andpotential future partners. commercial developmentworkandanalytics This istomeetthegrowing demandfor
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, patents and knowhow that , patents andknowhowthat development andmanufacturing the Group usetoaiddiscovery, Revenue genera by theGroup’s Platform andCDMO Leveraging theGr vectors Driving industrialisa technologies to develop and technologies todevelopand suites toapplytheGroup’s Platform laboratories andmanufacturing and commercial supply incorporating theGroup’s IP/Know-how and royalties onsalesof products that makes ithappen facilities, qualitysystemsandexpertise of genetherapies;andallof the LentiVector royalty payments sales, orlicences,milestonesand Group benefitfrom through direct marketable drugproduct whichthe of anOXB originated (andIPprotected) Activities leadingtothedevelopment vector-based genetherapies to deliverinnovative newlentiviral activities andmilestones development fees, bioprocessing Revenue genera products for partners manufacture commercially scalable Expert pr Leading pr All IP 1 – Customer-centric –Customer-centric 1 – Innovation-centric –Innovation-centric ofessionals use the Group’s ofessionals usetheGroup’s f financial reporting thePlatform andCDMObothsitwithin the ‘Platform’ segment for segmental reporting. ovider of scale-up solutions ovider of scale-upsolutions ®
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Annual r ted via licensing ted vialicensing ted from commercial ted from commercial 1 oup’s expertise oup’s expertise – Patient-centric –Patient-centric tion of lentiviral tion of lentiviral eport and accounts 2020
platform lentiviral vectortechnology of new cell and gene therapy of newcellandgenetherapy centre role inthedevelopment The Group isplayingafront and LentiV by OxfordBiomedica’s based genetherapiesdriven New lentiviralvector and milestones. biopr from commercial development fees, The Group generates revenue Group andtheLentiVector Expert professionalsusethe — — LentiVector — Oculardiseases — Liverdiseases — CNSdisorders — Genemodifiedcelltherapies and partnerprogrammes Our currentproprietary healthcare need. treatments targeting unmet target: scaleable products manufacture commercially platform todevelopand technologies Pr manufacturing Early clinicalandcommer oprietary manufacturing oprietary manufacturing ocessing activities ocessing activities ector ® ®
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Analytics Programmes 13 20 (+54%) patients patients Partners Saving Saving lives 2020: 2019: 2019: 2018: 2018: (+44%) 9
Strategic Report 17 18 Product pipeline Strategic Report Oxford Biomedica plc ch 2021,Sanofi gave notice of theirintentiontoterminate thedevelopment of their Factor VIII and 2 1 LentiVector Product/ indication and royalties onsalesonceatherapyhasreached themarket. including licencefees, process developmentfees andmilestones,bioprocessing revenues over theprioryear. TheGroup receives multiplerevenue streams from workwithpartners By theendof 2020theGroup wasworkingon20partnerprogrammes, a54%increase CDMO pipeline and six active proprietary programmes. programmes. and sixactiveproprietary By December2020theGrouphad20partnerprogrammes COVID-19 Vaccine AZD1222 Inherited retinal disease Ocular gene Cystic Fibrosis gene CFTR Haemophilia B Factor IX Haemophilia A Factor VIII Cancer (multiple) CAR-T Undisclosed Other MPS-IIIA OTL-201 ADA SCID OTL-101 Undisclosed 4th CAR-T/ TCR-T Undisclosed 3rd CAR-T/ TCR-T Undisclosed 2nd CAR-T/ TCR-T Undisclosed 1st CAR-T/ TCR-T Parkinson’s disease AXO-Lenti-PD Cancer (multiple) 6th CAR-T Cancer (multiple) 5th CAR-T Cancer (multiple) 4th CAR-T Cancer (multiple) 3rd CAR-T Cancer (multiple) 2nd CAR-T r/r ALL/DLBCL Kymriah
Oxford Biomedica plc
In Mar Factor IXprogrammes inHaemophiliaAandB Potential scaleupand vaccinemanufacturingr Read more abouttheGroup’s CDMOpipelineonpages31and32. ® 1 2 1 ® platform
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Annual r |
Annual r eport and accounts 2020 eport and accounts 2020 evenues Pre-clinical 6 4 4 Phase I 7 2 2 1 1 1 1 4 1 1 1 Phase I/II 9 1 1
Phase II 5 Phase III Approved 3 9 1 1 2 3 Oxford Biomedica plc unencumberedproducts Oxford Biomedicaproprietary Oxford Biomedicapartneredproducts Product/indication Pipeline indications Revenues from The Group hassixprogrammes initsgenetherapeuticspipeline. Gene therapeuticspipeline
milestone androyalty payments. 10 Liver indication OXB-401 ALS OXB-103 LCA10 OXB-204 Wet AMD OXB-203 Haematological malignancies OXB-302 Parkinson’s disease AXO-Lenti-PD 4 8 9 9 6 2 3 5 7 1 1
Sanofi informed OXB of itsintentionto return theseprogrammes SAR422 of Endostatin/Angiostatinfor MacularDegeneration (GEM)Study. HumGeneTher. 2017 Builds onRetinoS AX Appr Appr Hepatology In Central NervousS Respiratory Ophthalmology Neurology Metabolic Immunology Haematology Oncology on pages33and34. Read more abouttheGroup’s genetherapeuticspipeline O-LENTI-PD formerly knownasOXB-102, whichOXB out-licensed toSiogenetherapies(formerly Axovant GeneTherapies) fectious Disease 4592 (Stargardt disease)andSAR421869 (Ushersyndrome 1B)were out-licensedtoSanofi in 2009. InJune2020, oved inmultiplegeographies oved inmultiplegeographies(28countries) 3 2 tat/OXB-201 –PhaseIclinicaltrialinUSA(NCT01301443), Campochiaroet al.,LentiviralVector GeneTransfer
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out-licensed programmes come in the form of licence, out-licensed programmes comeintheform of licence, ystem (CNS) Annual r eport and accounts 2020 Pre-clinical 1
Phase I 10 8 6 6 2 Phase I/II
Phase II
5 Phase III Approved
Strategic Report 19 20 The Group’sbusinessmodel Strategic Report Oxford Biomedica plc 1 The Group’s LentiVector flowing through totheGroup. approval, willmeanroyalty streams the products receive regulatory bearing agreements which,once the aimof having manyroyalty agreements withpartners hence arisingIPare builtinto The Platform innovations and per patient treated. bringing downtheoverallcost larger numbersof patients, by indications where there are far adoption bypayorsinto reduction incostwillhelpdrive required. Inaddition,the therefore costs)of thevector therapy duetotheamount(and inaccessible tocellandgene therapeutic markets currently IP innovation, itwillopenup down thecostperdosethrough vector production andbringing vectors. Byindustrialisinglentiviral industrialisation of lentiviral innovation, isdrivingthe The Platform, through it’s LentiVector Link torisks that itistoday. field butalsothegloballeader Group notonlyapioneerinthe ex vivotherapieshasmadethe technology for bothinvivoand in applyingitslentiviralvector Group’s 20plusyearsof expertise know-how, alongwiththe Group. TheIP, patents and platform isat theheartof the
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tents andknow-how|facilitiesexpertisequalitysystems IP– within the ‘Product’ segment within segmental reporting. within the‘Product’ segmentwithin segmentalreporting. which includesinternalpipeline(4) andout-licensedproducts (5)sits for segmentalreporting. The genetherapeuticsproprietary products (3) For thepurposesof financial reporting theLentiVector Financial reporting CDMO partner programmes (2) both sit with in the ‘Platform’ segment CDMO partnerprogrammes (2)bothsitwith inthe‘Platform’ segment LentiVector Partners’ programmes — Royalties — Bioprocessing revenues — — Process developmentfees 2 20 CDMOpartner’sprogrammes Pr pa the Group’s world-leading the Group’sworld-leading expert professionals use therapy field.TheGroup’s fast-growing cellandgene biotech companiesinthe supply topharmaceuticaland solutions andcommercial vector provider of scale-up and isaleadinglentiviral The CDMO is customer-centic Organisation Manufacturing Development and CDMO: Contract ocess developmentMilestones Facilities ® platform streams Multiple revenue 1 2 2 3
4 5 products are beingdeveloped. in whichcellandgenetherapy needs in all of the leading areas partners scale-upandsupply Gr and CNSdisorder) meansthe liver, respiratory diseases modified celltherapies,ocular, therapeutic areas (gene leading knowledgeinmultiple The Group’s industry- scalable products for partners. manufacture commercially technologies todevelopand toapplythePlatform facilities oup is able to help solve oup isabletohelpsolve scientific knowledgetransfer Arising IP and technical and Arising IPandtechnical ® — — Developmentfunding Out-licensed products platform (1) and platform (1)and royalties Upfr ont, milestones and ont, milestonesand
Out-licence
Link torisks Group’s CDMOservices. increased demandfor the came online,drivenbythe manufacturing facilityOxbox thr of manufacturingsuitesfrom year hasincreased thenumber the prioryearandduring increase of 54%from an 2020, standing at 20bytheendof of partnerprogrammes is growing fastwiththenumber The Group’s CDMObusiness 5 ee to seven as the new ee tosevenasthenew Quality systems Eight gene therapeutics Eight genetherapeutics proprietary products Internal pipeline — Wholly ownedproducts
1 A B development Internal C E 4 3
® Oxford Biomedica plc 4 3 Link torisks was initiated. OXB-401 (liverindication) pre-clinical programme, OXB-103 (ALS)andanew on OXB-204 (LCA10) and continuing pre-clinical work In addition,theGroup is its predecessor OXB-201. and usestheGroup’s technology OXB-203, currently inpre-clinical into theclinic. the programme ready for entry OXB-302 astheGroup gets advance pre-clinical workon The Group continuesto expression onnormaltissues. tumours withrestricted tumours aswellmostsolid various haematological to behighlyexpressed on 5T4 antigenhasbeenshown haematological tumours.The candidate andtargets currently theGroup’s priority OXB-302 (CAR-T 5T4)is liver andCNSdisorders. in ophthalmology, oncology, targeting anumberof indications consists of fiveprogrammes assets. Thecurrent portfolio owned early-stagepipeline will bemadeonitswholly- where pre-clinical investment pipeline review toprioritise Group undertookaninternal In thefirstquarter of 2020the products Internal pipeline Link torisks six programmes, of whichfiveare The current pipelineconsistsof to developfurtherin-house. and commercialisation orindeed funding for fulldevelopment before eitherseekingthird-party into earlyclinicaldevelopment, through proof-of-concept, and excellence. Theseare progressed candidates targeting clinical selects patient-centric product Group’s Platform andCDMO 20 yearsandsupportedbythe expertise developedover through itsinternalresearch significant upsidepotentialand gene therapypipelineoffers therapies. TheGroup’s celland IP-protected cellandgene to developinnovative new The Group leveragesitsexpertise Gene Therapeutics expression data seen with expression data seenwith demonstrated longtermgene programme buildsonthe afibercept (aVEGF-trap). This to deliverageneexpress one hasbeenout- being developedin-houseand studies, istargeting Wet AMD
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D C Annual r licensed D E E eport and accounts 2020
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5 OXB 102,renamed AXO- Stargardt’s andUsherSyndrome to return therightsfor the Link torisks to thesecandidate products. to commitfurtherresources evaluation todecidewhether will undertake itsowninternal Once returned, theGroup Group’s technologyplatform. an oldergeneration of the out-licensed in2008utilising programmes, originally payment, $55mindevelopment Lenti-PD toSioGeneTherapies it’s Parkinsondiseaseprogramme an agreement toout-license In June2018, theGroup signed pipeline products Out-licensed the Group that it intended the Group that itintended In June2020, Sanofi informed though clinicaldevelopment. the programme progressed January andOctober2020as positive clinicaltrialdata in related milestones.Sioreleased $757m for regulatory andsales milestones andinexcess of included a $30m upfront included a$30mupfront Therapies).The agreement (formerly Axovant Gene
A C
scheme in collaboration with scheme incollaboration with have establishedanapprenticeship jobs tothelocalcommunity, and that are amongstthebest. in office andlaboratory facilities of cell and gene therapy, working people inthecuttingedgeworld most highlyskilledandfocused The Group’s teamare someof the Employees its existingpartners. good relationship ithaswith continuing tomaintainthevery r target newstrategic commercial The Group willcontinueto Partners and considered indecisionmaking. are brought intoBoard discussions the Group byensuringtheirviews safeguarding thegovernanceof important role inmonitoringand The Group’s shareholders playan Shareholders Value creationforourstakeholders in2020 The mainrisks are: Principal risksfacingthebusiness regulators onbothsidesof theAtlantic. history of achievements,theGroup’s technologyisrecognised by The Group operates inahighlyregulatory environment. Withalong Governing bodiesandregulators Local communities Advanced TherapiesApprenticeship The Group hasprovided highskilled providers. Community andmultipletraining
ch 2021, Sanofi gave notice of their intention to terminate ch 2021,Sanofi gave notice of theirintentiontoterminate 1 D C A B E elationships in2020, whilst in HaemophiliaAandB. the developmentof theirFactor VIIIandFactor IXprogrammes In Mar ailure toout-license orspin-out theGroup’s product Inability toa development candidates sothat development stops. F the Group’s services. the Group’s to developtheirproducts andtherefore nolongerrequiring Exposur to manufacture lentiviralvectortotherequired standard. Risk to obtainregulatory approval. including product safety issues,lackof efficacy, andfailure Risks associated withpharmaceuticalproduct development managed and mitigated, are set out in detail on pages 70 to 77. to 70 managed andmitigated, are setoutindetailonpages The principalrisks facing theGroup, includinghowtheyare Read more abouttheGroup’s stakeholders onpages22and23. s tothe Group’s bioprocessing revenue from failure e tooneormore of the Group’s partnersceasing ttract and/orretain highlyskilledemployees.
New colleaguesin2020 120 Partner programmes 20 mainly heldvirtually in theinvestorcommunity over 180+meetings/calls In 2020theGroupattended 180 in 2020 Apprenticeships created 8 ¹ +
Strategic Report 21 22 sections now. sections Caption text6.5/8pt Caption heading6.5/8pt Half linespacebetweenregular paragraphs. Full linespacesbetweenheadingparagraphs. to theExecutives. forum for externalandindependentreview andchallenge non-Executive andExecutive directors andprovides the Board anditscommittees.TheBoard comprises both the businessandthisisultimately theresponsibility of the Good governanceisessentialfor thelongtermsuccessof Governance Reportfor 2015. I ampleasedtopresent Oxford BioMedica’sCorporate Body text: captions andheadings. Everything is10/11.5ptwith-20tracking(including (others are cyan,orangeanddarkblue) Each sectionhasitsowncolourcode.Thisoneispurple 4 Level Level 3 Level 2 Level 1 (others are cyan,orangeanddarkblue) Each sectionhasitsowncolourcode.Thisoneispurple The Group’sstakeholders Strategic Report Oxford Biomedica plc there that is now defunct. In theory they will all match in all all in match all will they theory In defunct. now is that there the old back section as we used to have an underline style style underline an have to used we as section back old the With the headings, you need to work out what is what in in what is what out work to need you headings, the With facilitated byanexternalspecialistconsultantandtheseare asfollows: The Group hasidentifiedsevenkey stakeholders through aworkshop Key stakeholders referred toastheResponsibleBusinessReport.) report onpages51to66. (Inprioryears,theGroup’s ESGreport was practice asseenintheEnvironmental, SocialandGovernance(ESG) and responsible mannerisacore elementof theGroup’s business achieve longtermsustainablereturns for itsinvestors.Actinginafair suppliers, tomake apositivecontributiontolocalcommunitiesand Group (as shownintheAstraZeneca casestudyonpages24 and25).The concerns, inaccordance withs172of theCompaniesAct2006 Boardroom discussionsandconsidersstakeholder needsand the potentialimpactof decisionsoneachstakeholder group into By understandingtheGroup’s stakeholders, theBoard factors effective andmutuallybeneficialrelationships. stakeholder group requires atailored engagementapproach tofoster material issuesandhowtheBoard engageswiththem.Each The adjacenttableidentifiestheGroup’s key stakeholder groups, s172 CompaniesAct2006 achieved throughproactiveandeffectiveengagement. of whatisimportanttokey stakeholders. Thisisbest long termsuccess,theDirectorsmusttake account The Boardbelievesthat,tomaximisevalueandsecure 4 6 2 3 5 7 1 Shareholders Regulators Suppliers Localcommunities Customers Patients Employees works effectively with its employees, patients, customers and works effectively withitsemployees,patients, customersand
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Annual r eport and accounts 2020
4 6 2 3 5 7 1 Customers Patients Employees Shareholders Regulators Suppliers communities Local to the Group as their businesses have moved into the cell and to theGroup astheirbusinesseshave movedintothecell and aspirations of itscustomers.Manycustomershave come not bepossiblewithoutunderstandingtheneedsandfuture The continuedperformance of theGroup’s businesswould treatments topatients either byitselforwithpartnersinorder toprovide life-changing The Group works onthedevelopmentof innovative products for individualsandteamstorealise theirfullpotential the rightenvironment toencourageandcreate opportunities Therefore, itisimportantthat theGroup continuestocreate workforce, whichitrecognises asakey assetof thebusiness. The Group hasanexperienced,diverseanddedicated Stakeholders and safeguarding thegovernanceof theGroup The Group’s shareholders playanimportantrole inmonitoring it isimportantthat itengageswiththeregulators asrequired The Group operates inahighlyregulated environment and enhance theefficiency ofthebusinessand create value r As aresult, itiscrucialthat theGroup developsstrong working some of itsactivitiestothird-party suppliersandproviders. The Group buysmanyitemsfrom key suppliersandoutsources schools andthewiderpublic in whichitoperates, includinglocalbusinesses,residents, The Group iscommittedtosupportingthecommunities manufacturing expertisehasattracted abroader customer base expertise andleadershipinthesector. Inaddition,theGroup’s gene therapysector, whichistestamenttotheGroup’s elationships withtheGroup’s suppliers,sotheGroup can
announcements and the Corporate website shareholders viatheAnnualreport and accountsandviaRNS major shareholders ontheBoard. TheGroup engageswith making. During2020, theBoard alsohadtherepresentatives of two brought intotheBoardroom andare considered inits decision- General Meeting(AGM), theGroup ensures shareholder viewsare meetings andinvestorroadshows aswelltheGroup’s Annual regular updates totheBoard oninvestorpresentations, one-to-one Through theGroup’s investorrelations programme, whichincludes advisers andprovides otheradhocregulatory updates asappropriate. for annualCorporate Governanceupdates for theBoard from external regulatory bodiesandbyitscustomers.TheGeneralCounselarranges Group has complianceauditsperformed bybothgovernment regulatory bodiesonaregular basisandattend industryforums. The Officer andGeneralCounsel are incontactwithgovernment The ChiefScientificOfficer, Chief TechnicalOfficer, Chief Operations business reviews andiscreating asuppliercodeof conduct and ChiefFinancialOfficer have regularsuppliermeetingsand business developmentteam,operations team,ChiefExecutive Officer relationships withitssupplierssothat bothpartiesbenefit.The Through effective collaboration, theGroup aimstobuildlongterm ESG (formerly ResponsibleBusiness)initiatives. The Board iskept updated onthevariouscommunityinitiatives on the Group hasonthecommunitiesandsectorinwhichitoperates. bodies andgovernmentorganisations toenhancethepositiveimpact work experienceopportunities.TheGroup liaiseswithindustry attends schoolsandcareer fairs,andprovides apprenticeships and f the planningprocess butalsothrough theGroup’s “Helping Hands” The Group engageswiththelocalcommunitynotonlythrough relationships at each Board meeting. Officer presents a regularupdate onthe Group’s customer/partner assists theminachievingtheirbusinessgoals.TheChiefBusiness ultimately ensures that theGroup meetstheircustomers’needsand meetings, engagementeventsandforums. Thisactiveengagement the Group’s schedules/strategy. TheGroup doesthisthrough customers/partners todiscusstheirgoalsandincorporate theminto Chief FinancialOfficer regularlycommunicate withexisting the businessdevelopmentteam,ChiefExecutive Officerand The Group’s clientpartnerandalliancemanagementdepartment, to accessabroad patient population inlinewithcustomerdemand consultations. TheGroup isabletoscale-upitsmanufacturingcapacity Technical Officer regularlyupdate theBoard onthe results ofsuch clinical trialsfor patients. TheChiefScientificOfficerandthe patient advocacygroups andregulatory expertsinorder todesignsafe the ChiefTechnical Officer, consultswith keyclinicalopinionleaders, and The ClinicalDevelopmentdepartment,theChiefScientificOfficer Panel, comprisingemployeerepresentatives from across thebusiness. recommended that theGroup establishaWorkforce Engagement and overseeingemployeeengagement.During2020, theBoard as theitsrepresentative for gathering theviewsof theworkforce frequently measured andtheBoard hasdesignated Stuart Henderson is newsletters anditswell-beingprogramme. Employeeengagement town hallmeetings,sitevisitsbyBoard members,emailbriefings, webinars andwebcasts,digitalsharingplatforms, Group presentations, management developmentprogrammes, employeesurveys, this through aregular appraisalprocess, structured career conversations, structure andengagesregularly withemployees.TheGroup does The Group hasanopen,collaborative andinclusivemanagement Materialissues How theBoardandwiderGroupengages orum, with volunteering, fundraising and charity work. The Group orum, withvolunteering,fundraisingandcharitywork.TheGroup
identified – – – – – – – – – – – – – – – – – – – – – Diversityandinclusion – – – – COVID-19 impact clinical trials Financial performance model Strategy andbusiness Business ethics Corporate Governance Code Corporate Governance Compliance withthe compliance Meeting regulatory early Engage withregulators Open termsof business Collaborative approach Long termpartnerships charities/organisations Volunteer for local charities Fundraise for local events School andcareers Apprenticeships capabilities topartners manufacturing Offer expert goals customers’ business Deliver tomeet expertise needs inorder torefine Understand customers’ Well-designed Patient safety difference ideas andmake a Opportunity toshare wellbeing Health, safety and progression development and Opportunities for as possible as possible market asquickly candidates tothe Progress product
– – – – – – – – – – – – – – – – – – – – – – – – – Developmento – Highlights 2020 in issues Material Addressing 8.1% to15.6% intheyear percentage of NorthAmericanshareholders from Group’s shareholder register takingthe New NorthAmericaninvestorsaddedtothe and votebyproxy Shareholders were invitedtolistenintheAGM community mainlyheldvirtuallyin2020 c.180+ meetings/callswiththeinvestor Review of theCorporate GovernanceCode Product safety updates reports (PSURs) Regulatory trainingfor employeesandDirectors Two auditsbycustomers Three audits bygovernmentregulatory bodies on itssuppliers Quality auditsperformed bytheGroup to localcharities Oxford charity, with£35,305 intotaldonated £4,003 inemployeefundraisingfor local Outreach programme inSTEMsubjects Eight apprenticeships offered in2020 as peragreements Progressed programmes withpartners Myers Squibb Therapeutics andJunoTherapeutics/Bristol New clientssuchasAstraZeneca, Beam 120 newcolleaguesrecruited Full roll outof theRewards programme development programme Continued roll-out of themanagement developed during2021 external facilitator, withastrategy andplanto be Diversity andInclusionworkshop heldwithan Engagement PanelmeetinginOctober representative, attended hisfirst Workforce Stuart Henderson,theBoard’s designated and three meetingsheldbefore theyear-end Workforce EngagementPanelwasestablished Upon therecommendation of theBoard, a vaccine vector-based Oxford AstraZeneca COVID-19 commercial manufacture of theadenovirus Expanded manufacturingcapacityfor large-scale lentiviral vectors Thousands of patients treated withtheGroup’s to interactwithsuppliersmore effectively Procurement andsupplierfunctionestablished on itssuppliers Due diligenceperformed bytheGroup organisations Employee volunteerworkfor localcharity f aSupplierCodeof Conduct
Further links . 84 p. ESG 51 p. Governance 95 p. p. 72 p. 30 Workforce 53 p. p. 54 annual Executive 106 p. p. 54 p. 106 p. 66 Financials 123 p. ESG p. 42 51 p. Governance 95 p. p. 64 p. 66 Brexit 76 p. p. 57 Community 56 p. People 52 p. p. 106
Shareholder Shareholder L annual bonusand Remuneration – – Remuneration Regulatory risk Engagement Panel inclusion Diversity and staff organisation and bonus, wellbeing People and 2020 engagement in Financial review Supply chain code of conduct confirmation and Modern Slavery Act Charity bonus Executive annual Operational review ethics Clinical trialsand TIP
4 6 2 3 5 7 1 Shareholders Regulators Suppliers communities Local Customers Patients Employees and safeguarding thegovernanceof theGroup The Group’s shareholders playanimportantrole inmonitoring it isimportantthat itengageswiththeregulators asrequired The Group operates inahighlyregulated environment and enhance theefficiency ofthebusinessand create value r As aresult, itiscrucialthat theGroup developsstrong working some of itsactivitiestothird-party suppliersandproviders. The Group buysmanyitemsfrom key suppliersandoutsources schools andthewiderpublic in whichitoperates, includinglocalbusinesses,residents, The Group iscommittedtosupportingthecommunities manufacturing expertisehasattracted abroader customer base expertise andleadershipinthesector. Inaddition,theGroup’s gene therapysector, whichistestamenttotheGroup’s to theGroup astheirbusinesseshave movedintothecell and aspirations of itscustomers.Manycustomershave come not bepossiblewithoutunderstandingtheneedsandfuture The continuedperformance of theGroup’s businesswould treatments topatients either byitselforwithpartnersinorder toprovide life-changing The Group works onthedevelopmentof innovative products for individualsandteamstorealise theirfullpotential the rightenvironment toencourageandcreate opportunities Therefore, itisimportantthat theGroup continuestocreate workforce, whichitrecognises asakey assetof thebusiness. The Group hasanexperienced,diverseanddedicated Stakeholders elationships withtheGroup’s suppliers,sotheGroup can
Oxford Biomedica plc is frequently measured and the Board has designated Stuart Henderson frequently measured andtheBoard hasdesignated Stuart Henderson is newsletters anditswell-beingprogramme. Employeeengagement town hallmeetings,sitevisitsbyBoard members,emailbriefings, webinars andwebcasts,digitalsharingplatforms, Group presentations, management developmentprogrammes, employeesurveys, this through aregular appraisalprocess, structured career conversations, structure andengagesregularly withemployees.TheGroup does The Group hasanopen,collaborative andinclusivemanagement Materialissues How theBoardandwiderGroupengages announcements and the Corporate website shareholders viatheAnnualreport and accountsandviaRNS major shareholders ontheBoard. TheGroup engageswith making. During2020, theBoard alsohadtherepresentatives of two brought intotheBoardroom andare considered inits decision- General Meeting(AGM), theGroup ensures shareholder viewsare meetings andinvestorroadshows aswelltheGroup’s Annual regular updates totheBoard oninvestorpresentations, one-to-one Through theGroup’s investorrelations programme, whichincludes advisers andprovides otheradhocregulatory updates asappropriate. for annualCorporate Governanceupdates for theBoard from external regulatory bodiesandbyitscustomers.TheGeneralCounselarranges Group has complianceauditsperformed bybothgovernment regulatory bodiesonaregular basisandattend industryforums. The Officer andGeneralCounsel are incontactwithgovernment The ChiefScientificOfficer, Chief TechnicalOfficer, Chief Operations business reviews andiscreating asuppliercodeof conduct and ChiefFinancialOfficer have regularsuppliermeetingsand business developmentteam,operations team,ChiefExecutive Officer relationships withitssupplierssothat bothpartiesbenefit.The Through effective collaboration, theGroup aimstobuildlongterm ESG (formerly ResponsibleBusiness)initiatives. The Board iskept updated onthevariouscommunityinitiatives on the Group hasonthecommunitiesandsectorinwhichitoperates. bodies andgovernmentorganisations toenhancethepositiveimpact work experienceopportunities.TheGroup liaiseswithindustry attends schoolsandcareer fairs,andprovides apprenticeships and f the planningprocess butalsothrough theGroup’s “Helping Hands” The Group engageswiththelocalcommunitynotonlythrough relationships at each Board meeting. Officer presents a regularupdate onthe Group’s customer/partner assists theminachievingtheirbusinessgoals.TheChiefBusiness ultimately ensures that theGroup meetstheircustomers’needsand meetings, engagementeventsandforums. Thisactiveengagement the Group’s schedules/strategy. TheGroup doesthisthrough customers/partners todiscusstheirgoalsandincorporate theminto Chief FinancialOfficer regularlycommunicate withexisting the businessdevelopmentteam,ChiefExecutive Officerand The Group’s clientpartnerandalliancemanagementdepartment, to accessabroad patient population inlinewithcustomerdemand consultations. TheGroup isabletoscale-upitsmanufacturingcapacity Technical Officer regularlyupdate theBoard onthe results ofsuch clinical trialsfor patients. TheChiefScientificOfficerandthe patient advocacygroups andregulatory expertsinorder todesignsafe the ChiefTechnical Officer, consultswith keyclinicalopinionleaders, and The ClinicalDevelopmentdepartment,theChiefScientificOfficer Panel, comprisingemployeerepresentatives from across thebusiness. recommended that theGroup establishaWorkforce Engagement and overseeingemployeeengagement.During2020, theBoard as theitsrepresentative for gathering theviewsof theworkforce orum, with volunteering, fundraising and charity work. The Group orum, withvolunteering,fundraisingandcharitywork.TheGroup
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Annual r eport and accounts 2020
identified – – – – – – – – – – Diversityandinclusion – – – – – – – – – – – – – – – COVID-19 impact Open termso Collabora Long termpartnerships V F School andcar Off Deliver tomeet Understand customers’ Pa Opportunity toshar Health, sa Opportunities f Financial perf S Business ethics Corpora Compliance withthe Meeting r Engage withr Code Corporate Governance compliance early charities events capabilities topartners manufacturing goals customers’ business difference ideas andmake a model charities/organisations Apprenticeships expertise needs inorder torefine clinical trials Well-designed wellbeing progression development and as possible as possible market asquickly candidates tothe Pr undraise for local undraise for local trategy and business trategy andbusiness olunteer for local olunteer for local ogress product ogress product tient safety er expert er expert te Governance egulatory egulatory tive approach fety and fety and ormance egulators egulators f business eers eers
or or
e e
– – – – – – – – – – – – – – – – – – – – – – – – – Developmento – Highlights 2020 in issues Material Addressing 8.1% to15.6% intheyear percentage of NorthAmericanshareholders from Group’s shareholder register takingthe and votebyproxy community mainlyheldvirtuallyin2020 on itssuppliers to localcharities Oxford charity, with£35,305 intotaldonated as peragreements Myers Squibb Therapeutics andJunoTherapeutics/Bristol development programme developed during2021 external facilitator, withastrategy andplanto be Engagement PanelmeetinginOctober representative, attended hisfirst Workforce and three meetingsheldbefore theyear-end Workforce EngagementPanelwasestablished New clientssuchasAstraZ 120 newcolleaguesr F Continued r Diversity andInclusionwork S Upon ther New NorthAmericaninvestorsaddedtothe Shar c.180+ meetings/callswiththeinvestor Review o Pr Regula T Thr Quality auditsperf £4 Outr Eight appr Pr Expanded manufacturingcapacityf Thousands o vaccine vector-based Oxford AstraZeneca COVID-19 commercial manufacture of theadenovirus lentiviral vectors to interactwithsuppliersmore effectively Pr on itssuppliers Due diligenceperf organisations Employee volunteerworkf wo auditsbycustomers ull roll out of the Rewards programme ull roll outof theRewards programme tuart Henderson, the Board’s designated tuart Henderson,theBoard’s designated oduct safety updates reports (PSURs) ogressed programmes withpartners ocurement and supplier function established ocurement andsupplierfunctionestablished ,003 inemployeefundraisingfor local ee auditsbygovernmentregulatory bodies eholders were invited to listen in to the AGM eholders were invitedtolistenintheAGM each programme in STEM subjects each programme inSTEMsubjects tory trainingfor employeesandDirectors f theCorporate GovernanceCode enticeships offered in2020 ecommendation of the Board, a ecommendation of theBoard, a oll-out of the management oll-out of themanagement f patients treated with the Group’s f patients treated withtheGroup’s f aSupplierCodeof Conduct ormed by the Group ormed bytheGroup ormed by the Group ormed bytheGroup ecruited eneca, Beam eneca, Beam or local charity or localcharity shop held with an shop heldwithan or large-scale or large-scale
p. Further links . 95 p. 53 p. p. 106 84 p. 51 p. p. 72 p. 30 p. 54 p. 54 . 106 p. p. 66 . 123 p. p. 42 95 p. p. 64 76 p. p. 66 p. 57 56 p. 52 p. p. 106 51
Governance L annual bonusand – Remuneration Diversity and People and Regula inclusion 2020 engagement in Shareholder ESG Governance Engagement Panel Workforce staff organisation and bonus, annual Executive wellbeing
Financials ESG Financial r Ex Opera Supply chain Modern Sla Charity code of conduct confirmation and Brexit Community People bonus Clinical trialsand ethics TIP ecutive annual ecutive annual tional review tory risk eview very Act very Act
Strategic Report 23 24 The Group’sstakeholders Strategic R Oxford Biomedica plc agreement The AstraZenecasupply Stakeholder CaseStudy on each of its stakeholders. on eachofitsstakeholders. potential impactofthisdecision considered anddiscussedthe COVID-19 vaccine.TheBoard vector-based OxfordAstraZeneca manufacture oftheadenovirus for thelarge-scalecommercial agreement withAstraZeneca opportunity toenterintoasupply During 2020, theGrouphad eport
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Annual r eport and accounts 2020
Employees wellbeing support working antisocial of increased activity. of increased activity. increase financial place tosplitteamsintodifferent shifts, embedded. Measures were putin training hadbeencompletedand until suchtimetherecruitment and on thewellbeingof existingstaff would require, aswelltheimpact training that thegreater workload increased needfor recruitment and Group’s employeesintermsof the First, theBoard considered theeffect the agreement would have on the the agreement wouldhave onthe es were put in es were putin “ Measur place to split teams into place tosplitteamsinto increased activity.” during theperiodof wellbeing support hours andprovide for workingantisocial financial compensation different shifts,increase
compensation for compensation for hours andprovide during the period during theperiod
“ to existing customers. to existingcustomers. Group’s contractualcommitments a material detrimentaleffect onthe the agreement wouldnothave work theGroup performed under the Board wascomfortable that the each case,after careful analysis, Group’s existingcustomersand,in agr Board considered theeffect the population. Furthermore, the COVID-19 vaccinestotheentire UK availability of vitalOxford AstraZeneca beneficial, asitcouldexpeditethe pandemic, itwouldbeextremely in lightof theongoingCOVID-19 population andconcludedthat, would have onthewiderpatient the impactthat theagreement In addition,theBoard assessed Patient population beneficial, as it could beneficial, asitcould entire UK population.” COVID-19 vaccinestothe vital Oxford AstraZeneca expedite It wouldbeextr eement would have on the eement wouldhave onthe the availability of theavailability of emely
Oxford Biomedica plc eation of new “ heavier traffic around the Oxbox site. heavier traffic around theOxbox site. an increased securitypresence and Board wascognisantthat, conversely, within thelocalcommunity, butthe of new employmentopportunities would have intermsof thecreation positive impactthat theagreement communities, theBoard notedthe In consideringtheeffect onlocal Local communities would also give rise to the need for would alsogiverisetotheneedfor the highernumberof employees the localcommunity.” opportunities within employment Cr
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Annual r eport and accounts 2020
“ for future commercial launch. for future commercial launch. order tomanufacture thevaccine the Oxbox facilitywascritical, in as gettingregulatory approval for discussions regarding theagreement, was at theforefront of theBoard’s with theUKregulatory authorities requirements aspossible.Working notice of theGroup’s rawmaterial suppliers withasmuchadvance raw materials andprovide the by findingsecondsources for the reduce thepressure onsuppliers chain. TheGroup haslooked to pressure onitsexistingsupply be substantiallyincreased putting demand for rawmaterials would affected bytheagreement, asthe suppliers wouldbesignificantly Board determinedthat theGroup’s Following athorough review, the Supply chainandregulators approval for the Oxbox approval for theOxbox regulatory Getting commercial launch.” the vaccinefor future in order tomanufacture facility wascritical,
“ best interests of the Group’s best interests of theGroup’s that the agreement wasinthe Finally, theBoard concluded Shareholders basis beyondtheoriginaldecision. on astakeholder-by-stakeholder implications of thisdecision Board continuestomonitorthe community andbeyond.The of the Group withintheinvestment could positivelyraisetheprofile AstraZeneca COVID-19 vaccine production of theOxford shareholders, asworkingon and beyond.” investment community of theGroup withinthe positively raisetheprofile COVID-19 vaccinecould of the Oxford AstraZeneca W orking on production orking onproduction
Strategic Report 25 26 Operational highlightsdeliveredin2020 Strategic Report Oxford Biomedica plc — — — Novartis partnership — — — Facilities andcapacityexpansion Corporate Governanceandorganisationalprogress — Other partnershipupdates COVID-19 vaccinepartnershipwithAstraZeneca Juno Therapeutics/BristolMyersSquibbpartnership — — — — — — —
oup’s collaboration with Novartis continued to strengthen with a sixth vector construct added oup’s collaboration withNovartiscontinuedtostrengthen withasixthvectorconstructadded oup has made significant strides forward in its commitment to best practice in Corporate oup hasmadesignificantstrides forward initscommitmenttobest practiceinCorporate oup isakey manufacturer of theOxford AstraZeneca COVID-19 vaccine,AZD1222.Having
ourth quarter, theGroup wasmanufacturingtheOxford AstraZeneca COVID-19
fee withadditionalrevenue inexcess of £35millionexpectedbytheendof 2021 the Oxford AstraZeneca COVID-19 vaccine.TheGroup received a£15millioncapacityreservation under athree-year mastersupplyanddevelopmentagreement for thelarge-scale manufacture of signed aninitialagreement inMay, inSeptembertheGroup signedan18-monthsupplyagreement The Gr Board since 2010 years. Dr. Andrew Heath willnotbestandingfor re-election at the2021AGM having served onthe Non-Executive Director andMartinDigglesteppeddown asaNon-Executive Director after nine 2021, theGroup announcedtheappointment of Professor DameKayDavies asanIndependent appointed totheBoard asanIndependentNon-Executive Director. Postperiod-endinFebruary Governance andthediversification of talentontheBoard. InNovember, Dr. SamRastywas The Gr The r December 2019 in in thefirstquarter of 2020, withthepartnership having beenpreviously extendedbyfiveyears The Gr revenues, andwithanundisclosedroyalty onsales and salesrelated milestonesinadditiontoundisclosedprocess development,scaleupandbatch fee wasrecognised bytheGroup andupto$217millioncouldbepaidindevelopment,regulatory for multipleCAR-T andTCR-T programmes, signedinMarch. A£7.8 million($10million)licence New licenceandfive-yearclinicalsupplyagr in 28countriesat leastoneindication inover300qualifiedtreatment centres leukaemia andrelapsed andrefractory diffuselarge B-cell lymphomawith reimbursement approved Oxford AstraZeneca COVID-19 vaccineinDecember vaccine inthree suitesat 1000Lscaleaheadof theMHRAgrantingemergency usefor the By thef producing lentiviralvector-based products for theGroup’s partnersat 200Lscale AstraZeneca COVID-19 vaccineat 1000Lscaleandonesuiteaddedtotheexisting capabilitiesof partnership that startedin2018 with Boehringer Ingelheim for the manufacture and supplyof viral vectors,building on the retirement of priorChair, Dr. Lorenzo Tallarigo throughout theyear, withthefirst of thelaboratories completedbytheend of 2020 the Group’s new84,000 and manufacturingof lentiviralvectorstotreat haemophilia intend toterminate the2018collaboration andlicenceagreement for theprocess development agreement Therapeutics for nextgeneration CAR-T programmes includingathree-year clinicalsupply on theworldwidelicenceagreement signedbetweenthetwocompaniesinJune2018 manufacture andsupplyof Parkinson’sdiseasegenetherapyprogramme AXO-Lenti-PD, building I In June,theGr Opening o Building worka By October Post periodendinApril2021,theGr Post periodendinMar In August,theGr n July, theGroup signedathree-year clinicalsupplyagreement withSioGeneTherapiesfor the oll outof Kymriah f thenewCorporate HeadOfficeonanewsitewithinthe Oxford BusinessPark , the MHRA had approved all four suites in the first phase of development of Oxbox, , theMHRAhadapproved allfour suitesinthefirstphase of development of Oxbox,
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Annual r oup welcomedDr. RochDoliveux asNon-Executive Chair, following the t Windrush Court to convert office space into GMP laboratories progressed t WindrushCourttoconvertoffice spaceintoGMPlaboratories progressed oup signed a development, manufacture and licence agreement with Beam oup signedadevelopment,manufacture andlicenceagreement withBeam eport and accounts 2020 ® continues to accelerate in relapsed and refractory B-cell acute lymphoblastic continuestoaccelerate inrelapsed andrefractory B-cell acutelymphoblastic ch 2021, the Group announced that Sanofi had given notice that they ch 2021,theGroup announcedthat Sanofi hadgivennoticethat they
sq.
ft. manufacturingfacility oup signed a three-year development and supply agreement oup signedathree-year developmentandsupplyagreement eement with Juno Therapeutics/Bristol Myers Squibb eement withJunoTherapeutics/BristolMyersSquibb . Three suites are producing the Oxford . Three suitesare producing theOxford See page31. See page32. See page36. See page35. See pages32and33. See page31. of £7.3 million(2019:£5.2 millionloss) Operating EBITDA profit generated Oxford Biomedica plc ting expensesismadeupoutof Bioprocessing expenses,Research anddevelopmentexpensesAdministrative expenses. 2. 1. (2019: £5.7 millionprofit) segment madealosso (2019: £20.2 millionloss),whilsttheProduct an operating profit of £2.0 millionin2020 The Platform segmentgenerated Segment operatingprofit/(loss) £2.0m &( (2019: £14.5 million loss) Operating lossincurred of £5.7 million Operating loss £5.7m Operating EBITDA £7.3m £41.9 millionto£51.7 million Operating expensesincreased by23%from Operating expenses +23% (2019: £47.3 million) revenues increased by45%to£68.5 million Biopr development revenue Bioprocessing andcommercial +45% in thecellandgenetherapymarket Group’s facilitiesandexploitnewopportunities generated fundstobeusedexpandthe Successful £38.3 millionequityfundraising Equity fundraisinginJune2020 £38.3m Financial highlightsdeliveredin2020 Strategic Report
A reconciliation toGAAPmeasures isprovided onpage46. measures isprovided onpage47. payment associated withtheannual share optioncharge recognised inthestatement of comprehensive income.Areconciliation toGAAP operating profit orlossallnon-cashitems, includingthecharge for share options.Share optionsare considered non-cash asthere isnocash and loss,Share BasedPayments)isanon-GAAP measure often usedasasurrogate for operational cashflowasitexcludes from Opera Opera ocessing and commercial development ocessing andcommercial development ting EBITDA (EarningsBefore Interest, Tax, Depreciation, Amortisation, revaluation of investmentsandassetsat fairvaluethrough profit
2 | profit profit
1 Annual r f £7.7 million £7.7m) eport and accounts 2020
specification provision increase) inthebioprocessing outof £0.4 milliondecrease (2019:£1.8 million specification provision Decrease inthebioprocessingoutof £0.4m (2019: £6.6 million) decreased by£2.7 millionto£3.9 million Cash usedinoperations £3.9m (31 December2019:£16.2 million) Cash of £46.7 million Cash £46.7m (2019: £25.8 million) Capital expenditure of £13.4 million Capital expenditure £13.4m increased to£19.2 million(2019:£16.8 million) Licences, milestoneandroyalty revenues Licences, milestonesandroyalties revenue £19.2 m to £87.7 million Revenue increased by37%from £64.1 million Revenue £87.7m
–20 –10 –20 –15 –10 –15 –5 –5 10 15 10 15 0 5 0 5 £m Cash usedinoperations £m Operating EBITDA 0521 2017 2016 2015 0521 2017 2016 2015 0821 2020 2019 2018 2018 092020 2019
Strategic Report 27 28 time andasopportunitiesarise. using lentiviralbasedvectors, weare committedtomakingithappenover and thenumberof nascenttechnologiesandtherapeutic programmes wish tofirstbuildontheCDMOmomentum,butgiven themedicalneed re-balancing of theGroup towards products inthisway isnoteasy, aswe knowledge toourowntherapeuticproducts. TheBoard realises that the Significant value to stakeholders can also be provided by applying our Manufacturing Organisation (CDMO)tomore viralvectors. demonstrated ourabilitytoalsobroaden ourContract Developmentand adenovirus-based Oxford AstraZeneca COVID-19 vaccinehas also Bristol MyersSquibbandBeamTherapeutics.Oursuccessful workonthe both innewtechnologiesandcustomerssuchas Juno Therapeutics/ our customerbaseandservice.Significantprogress hasbeenmadein2020 of lentiviral basedvectorsfor cellandgenetherapycompanies,growing OXB continuestodeliveronitscore strategy of beingtheleadingprovider Our Strategy ensure allstaff benefit from the Group achievingitsobjectives. During theyearwealsoimplementedaGroup-wide bonusschemeto justifiably, proud tobeinvolvedinthiseffort. humankind hasrecently facedisinspirational andallstakeholders of OXB are, Utilising ourcapabilitiestoplaypartagainstoneof thebiggestchallenges to deliveronallfronts whilst adaptingtonewworkingenvironments. strategy, and I give my admiration and appreciation to the teamfor continuing has beenachieved whilst continuingtoexecute theunderlying Group has demonstrated that thesevaluesrundeepthrough ourorganisation. This challenging of circumstances givenglobaldemand,hasimpressed meand Our abilitytodelivertheOxford AstraZeneca COVID-19 vaccineinthemost values includingdeliveringinnovation withintegrity. has bothtestedandfortified that culture. We prideourselvesonourcore Underlying thepurposeof OXB isastrong culture. Thepandemicresponse Our Culture phase of growth. I couldnotbemore proud to leadthe Company’s Board through itsnext to supplementing the relationships built online with in-person discussions. part of theglobaleffort to return life tonormality, andIamlooking forward understanding of thebusiness.It’sinspiringtomethat OXB isnowakey team, key opinionleadersandinvestorsfor helpingmetogainanin-depth minimum for therightreasons, andIthanktheBoard andthewiderOXB found newwaysof working.Face tofacecontacthasbeenkept toa It hasbeenachallengingtimetoassumemyrole, asourorganisation has my partinrealising thispotentialismyduty. potential tobecurative for manyuntreated diseasesandtobeableplay AstraZeneca COVID-19 vaccine.Cellandgenetherapieshave the and genetherapywork,nowwiththemanufacture of theOxford industry strives to do and OXB is delivering on that promise in both its cell purpose andgreat technology. Saving patients’ livesiswhat the healthcare Biomedica (OXB). Iwasfirst attracted totheCompanybyitsstrong It is with great pride that I present my first statement as the Chair of Oxford Our Purpose A Purposeofwhichtobeproud Chair’s statement Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020 XB continues to deliver on XB continuestodeliveron “ our customerbaseandservice.” therapy companies,growing based vectorsfor cellandgene leading provider of lentiviral its core strategy of beingthe O Chair Dr. Roch Doliveux
Oxford Biomedica plc Chair Dr. Roch Doliveux rapidly expandingfield.Ilook forward toenabling OXB tofulfilitspotential. healthcare andOXB isparticularlywellpositionedtoplayamajor role in this We are intheinitialphaseof thecellandgenetherapy revolution in shareholders for theirsupport. resilience tothedemandswehave placeduponthem,and our our customersfor their trust,oursupplierswhohave responded with OXB for theveryimportantworkthat eachof themare doing.Ialsothank develop thecapabilitiesof theGroup andmythanks gotoallthestaff at We continuetopushtheboundariesof ourplatform technologies,and therapies to patients and continue to help in the fight against the pandemic. confidence tocontinuesucceedinourmissiondeliverlife-saving experienced leadershipandfinancialstrength whichgivesmegreat We enter2021andbeyondwitharapidgrowth, aproven strategy, The Future capabilities anddiversity, where appropriate. succession plansare inplace,andwewilllooktostrengthen these deliver strategy, applybestinclassgovernancepracticesandensure We continuetoassessthecapabilitiesneededat Board leveltosetand relentless supportof OXB at severaldefiningmomentsoverhistenure. invested in our journey as a supportive shareholder. I thank Martin for his Diggle hasalsosteppeddownasaNon-Executive Director, butremains on theBoard overthepast10years.After9yearsonBoard, Martin from the Board andI wish to thank him for his guidance and defining role enormous valuetotheBoard. Meanwhile,Dr. Andrew Heath isretiring very insightfulandIknowKaywillalsoaddsignificantinsights Dame KayDavies totheBoard. Sam’scontributionshave already been To that end,IamdelightedtowelcomebothDr. SamRastyandProfessor capabilities ontheBoard andincrease diversity. as wehave beendeliveringuponourcommitmenttobothstrengthen the The levelof engagementandcollegialityinallBoard membersisimpressive culminating withOXB enteringtheFTSE250index. Dr. Lorenzo Tallarigo for hisstewardship of theBoard priortothistime, times of 2020. I joined the Board in June 2020, and would like to thank viability of businesseshasneverbeenmore criticalthanintheuncertain The role of boards inensuringthesocietalimpact,sustainabilityand Governance partnerships intheseadjacencies. capabilities andfacilitiestohelpmore partners.We shallbepursuingmore inherently valuable,andthere istheopportunitytoleveragethese that ourmanufacturingcapabilitiesandstate of theartfacilitiesare It is also clear, through our Oxford AstraZeneca COVID-19 vaccineefforts, and builduponourleadershiprole inthisspace. for bothpartnersandpatients. We willaccelerate thiseffort, and retain The continuedinnovation of OXB’s platform iskey toproviding solutions
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Annual r eport and accounts 2020
in this rapidly expanding field. in thisrapidlyexpandingfield. well positionedtoplayamajorrole healthcar cell andgenetherapyrevolution in We are intheinitialphaseof the The cellandgenetherapyrevolution e and OXB is particularly e andOXB isparticularly
Strategic Report 29 30 therapy market. therapy market. opportunities that present themselvesinthefastgrowing cellandgene both sidesof theGroup, tocapitaliseonitsworldleadingpositionandthe Group the ability to progress itsplannedexpansionprojects andinvestin currently. Theoversubscribed£40milliongross fundraiseinJunegave the average capitalisation of c.£350millionin2018toover£750 addition, ourmarket capitalisation hasmore thandoubledfrom a12month growth incommercial developmentandbioprocessing revenues. In year withrevenues increasing by 37% to£87.7 milliondrivenby strong Financially, theGroup, whichentered theFTSE250thisyear, hadastrong based vaccine,to1000Lscale,inunderninemonths. and hasrapidlyscaledthemanufacturingof AZD1222,anadenovirus- brought three extra manufacturing suites online for vaccine production and thenAstraZeneca hasbeenhistoric.The Group has successfully Outside of cellandgenetherapy, theGroup’s workwithOxford University extended theirpartnershipswiththeGroup. collaborate with. Inthe period, Novartis and Sio Gene Therapiesalso Therapeutics to the list of cell and gene therapy leaders that the Group during theyear, addingJunoTherapeutics/BristolMyersSquibbandBeam The Group’s numberof partnerprogrammes grew by54%from 13to20 proprietary product development. provision of its cell and gene therapy CDMO offering coupled with itsown our staff, theGroup thrived.TheGroup’s modelisnow focused onthe leadership position in lentiviral vectors and the strength and expertise of COVID-19 viruswere managedwellbytheGroup and,duetoourworld- 2020 was an unprecedented year globally. The challenges borne by the Introduction support, andIlookforwardtoasuccessful2021.” throughout 2020andourshareholderspartnersfortheircontinued thank allofOxfordBiomedica’semployeesfortheirhardwork that ofourcurrentandfuturepartners’programmes. I wouldlike to pipelineand are wellpositionedtoadvancebothourownproprietary with theGroup’sleadershippositioninlentiviralvectorfield,we with the continuedtideofgrowthincellandgenetherapy, coupled totheFTSE250. Lookingtothefuture, year theGroupalsogainedentry a testament totheworld-classcalibreanddedicationofourstaff in AstraZeneca toprovideavaccinesolutionforCOVID-19. Thisisatrue pandemic, buttheteamhasalsobeenabletorapidlyworkwith facility onlineinrecordtimeandrespondedtothechallengesof only securedmajornewpartnerships,broughttheOxbox manufacturing “I amtruly proudoftheGroup’sachievementsoverperiod.We not 2020 performancereview Chief Executive Officer’sand Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020
“ Chief Executive Officer John Dawson of our staff, theGroup thrived.” and thestrength andexpertise position inlentiviralvectors Due toourworld-leadership
Oxford Biomedica plc end of 2021. fee andexpectstoreceive additional revenue inexcess of £35millionbythe running at 1000Lscale.TheGroup waspaida£15millioncapacityreservation of AZD1222.Thisagreement wasfor uptothree manufacturing suites master supplyanddevelopmentagreement for thelarge-scale manufacture which consistedof an18-monthsupplyagreement underathree-year September, theGroup announcedasecondagreement withAstraZeneca Following positivedata readouts from theearlyclinicaltrialsof AZD1222,in require acapitaloutlayof £3.8 milliontobe paidin2021. purchasing of thisequipmenttoallowfor longertermuse,whichwould The Group iscurrently engagedindiscussionswithVMIC regarding the manufacturing suitesinOxbox tofurtherscaleupproduction of AZD1222. VMIC provided equipmentfor 1000Lscaleproduction intwoGMP manufacture of viralvectorbasedvaccines.Aspartof theagreement (Vaccines ManufacturingandInnovation Centre) toenable the rapid In June,theGroup signedafive-yearcollaboration agreement with VMIC number of batches astheprogramme progressed through development. candidate. This initial agreement required the Group to manufacture a small to GMPmanufacture theadenovirusvector-based COVID-19 vaccine initial oneyearclinicalandcommercial supplyagreement withAstraZeneca renaming the programme AZD1222.In May, theGroup entered into an University for theglobaldevelopmentanddistributionof thevaccine, Shortly afterwards, AstraZeneca entered into an agreement with Oxford manufacture apotentialvaccinefor COVID-19, ChAdOx1nCOV-19. Oxford University, Jenner Institute, to rapidly develop,scaleand vaccine wasinApril2020whentheGroup joinedaconsortiumledbythe The Group’s firstinvolvementwiththeOxford AstraZeneca COVID-19 COVID-19 vaccineproductionandpartnershipwithAstraZeneca Therapeutics accesstoitsnewapproved manufacturingfacility, Oxbox. programmes. Aspartof theagreement theGroup willprovide Juno undisclosed process development,scaleupandbatch revenues for these undisclosed royalties onsales.Inaddition,theGroup willreceive up toafurther$131millioninsales-basedmilestonepaymentsaswell receive up to$86millionindevelopmentandregulatory milestonesand £7.8 million ($10 million) licence fee and announced OXB could potentially Under thetermsof theagreement theGroup received andrecognised a There are currently four activeprogrammes indevelopment. multiple CAR-T andTCR-T programmes inoncologyandotherindications. in thecellandgenetherapyfield.Thedealisworthupto$227million for owned subsidiaryof BristolMyersSquibbInc.),oneof themajorinnovators five-year clinical supply agreement with Juno Therapeutics Inc. (a wholly In March, the Group announced it had entered into a major new licence and Juno Therapeutics/BristolMyersSquibbpartnership CDMO –Partnerprogrammes
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Annual r eport and accounts 2020 supply agr with AstraZeneca whichconsistedof an18-month The Group announcedasecondagreement AstraZeneca COVID-19 vaccine by theendof 2021. additional revenue inexcess of £35million reservation fee andexpectstoreceive The Gr development agreement AstraZeneca mastersupplyand > £50m 13 to20during2020. Our partnerprogrammes grew by54%from Partnership programmes +54% large-scale manufacture of AZD1222. supply anddevelopmentagreement for the oup was paid a £15 million capacity oup waspaida£15millioncapacity eement under a three-year master eement underathree-year master
Strategic Report 31 32 vector for Kymriah The Group continuestobeNovartis’soleglobalsupplierof lentiviral expanded withasixthvectorconstructaddedinthefirstquarter of 2020. Global roll out of Kymriah one indication inover300qualifiedtreatment centres. Kymriah than 28countriesworldwidehaving approved reimbursement inat least B-cell lymphoma(r/rDLBCL)indications continuedat pacewithmore lymphoblastic leukaemia (r/r ALL) and relapsed or refractory diffuse large that utilisetheGroup’s LentiVector receive an undisclosed royalty on the net sales of products sold by Beam development andregulatory milestones.Inaddition,theGroup will manufacturing of lentiviralvectors for use in clinical trials, and certain licence fees, as well as payments related to development and Under thetermsof theagreement, theGroup couldreceive additional three-year clinicalsupplyagreement. generation CAR-T programmes inoncology, andalsoputsinplacea Indication expansionof Kymriah with salesof $474 million. to buildmomentumshowing71%growth for thefullyear2020over2019, (including Kymriah by a further five years and expansion of the number of vector constructs Following theextensionof theNovartiscollaboration inDecember2019 Novartis partnerprogress from the Group’s facilities. manufacturing continues at full pace to maximise production of vaccine AstraZeneca COVID-19 vaccinefor emergency useintheUKand At theendof December2020, theMHRA approved theOxford the earlypartof 2021. to ensure themaximumnumberof batches were abletobedelivered in Group’s history, production continuedthrough ChristmasandNewYear introduced tomaximisevaccineproduction andfor thefirsttimein cope withtheheighteneddemand,newextendedshiftpatterns were its three 1000L suitesfor thepurposeof vaccineproduction. To beableto By October, theGroup received approval from theMHRAfor thethird of 2020 performancereview Chief Executive Officer’sand Strategic Report Oxford Biomedica plc 2021. Novartisalsoplanstofile Kymriah with thefilinginthisindication anticipated intheUSsecondhalf of Oxford Biomedica’sLentiVector medicines. Theagreement grantsBeamanon-exclusive licenceto company whichutilisesbaseeditingtodevelopprecision genetic agreement withBeamTherapeutics(Beam),apioneeringbiotech In August,theGroup signedadevelopment,manufacture andlicence Beam Therapeutics and willupdate themarket whenfurtherdata isavailable. The Group continuestoprogress otherpartnerprogrammes withNovartis r/r DLBCLinfirst relapse inthesecondhalf of 2021. of Kymriah December, Novartisannouncedpositivedata from thePhaseIIELARAtrial ® in patients with relapsed or refractory follicular lymphoma, inpatients withrelapsed orrefractory follicular lymphoma,
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Annual r ® ® (tisagenlecleucel,formerly CTL019). ) from two to five, the partnership was further ) from two tofive,thepartnershipwasfurther eport and accounts 2020 ® in both relapsed or refractory B-cell acute ® ® platform for its application in next platform for itsapplication in next ® continued to progress well and in continuedtoprogress wellandin platform. ® for extended use in patients with for extendeduseinpatients with
® continued continued outside theOxbox facility. of vaccineproduction. Pictured: JohnDawson the third of itsthree 1000Lsuitesfor thepurpose The Group received approval from theMHRAfor MHRA approval Kymriah reimbursement inover300qualifiedtreatment centres. More than28countriesworldwidehave approved Global rolloutofKymriah >28 countries growth for thefullyear2020over2019. supplier of lentiviralvectorfor Kymriah The Group continuestobeNovartis’soleglobal Sole globalsupplier ® continued to build momentum showing 71% continuedtobuildmomentumshowing71% ® ® . Oxford Biomedica plc oncology, liverand CNSdisorders. of five programmes targeting anumber of indications inophthalmology, wholly-owned early-stagepipelineassets.Thecurrent portfolio consists review to prioritise where pre-clinical investment will be made on its In thefirstquarter of 2020, theGroup undertook aninternalpipeline pipelineprogrammes Unencumbered proprietary events at sixmonths. shown tobewell-tolerated withnotreatment-related seriousadverse the twoevaluablepatients inthestudy. AXO-Lenti-PD continuedtobe UPDRS PartIII‘OFF’ score, a40%improvement from baselinebasedon the secondcohortof thetrial,showinga21-pointmeanimprovement in PD. In October, Sio announced positive six-month follow up data from Sio is currently conducting a Phase2 SUNRISE-PD trial with AXO-Lenti- the ongoingandfuture clinicaldevelopmentof AXO-Lenti-PD. agreement, theGroup willmanufacture GMPbatches for Siotosupport disease genetherapyprogramme AXO-Lenti-PD. Underthetermsof the Sio GeneTherapies(Sio)for themanufacture andsupplyof Parkinson’s July 2020theGroup signedathree-year clinicalsupplyagreement with Following theinitialworldwidelicenceagreement signedinJune2018, in Sio GeneTherapies(formerlyAxovant GeneTherapies) productdevelopment: Proprietary that startedin2018. the manufacture and supply of viral vectors,building on the partnership year developmentandsupplyagreement withBoehringerIngelheimfor development. InApril2021,post period end,theGroup signedathree- Fibrosis Gene TherapyConsortiumalsocontinuedtoprogress through The Group’s partnershipwithBoehringerIngelheimandtheUKCystic revenue will benegligibleoverthecoming24 monthperiod. lentiviral vectorstotreat haemophilia.TheGroup expectstheimpacton licence agreement for theprocess developmentandmanufacturingof given notice that they intend to terminate the 2018collaboration and Post periodendinMarch 2021theGroup announcedthat Sanofi had released in 2021. with interimdata from theirproof-of-concept studyexpectedtobe such asADA-SCID (OTL-101). OLT-201 ismovingaheadinclinicaltrials (OLT-201) programme, whilereducing investmentonotherprogrammes with anemphasisonneurometabolic disorders, suchastheirMPS-IIIA In May, Orchard Therapeutics(Orchard) announcedanewstrategic plan Further partnerupdates
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Annual r eport and accounts 2020 evaluable pa a 40%improvement from baselinebasedonthetwo mean impr from thesecondcohortof thetrial,showinga21-point Sio announcedpositivesix-month follow updata AXO-Lenti-PD treatmentforParkinson’sdisease ovement in UPDRS Part III ’OFF’ score, ovement inUPDRSPartIII’OFF’score, tients inthestudy.
Strategic Report 33 34 the developmentof theGroup’s proprietary pipeline. Both of theseearlystagecollaborations highlightthecontinuedfocus on Group’s LentiVector SITESEEKER platform toidentifyactivepeptidesbedeployedwithinthe therapies withimproved efficacyanddurability. ThiswillusePhoreMost’s collaboration withPhoreMost todevelopnext-generation CAR-T cell In November, theGroup entered intoagenetherapydiscovery initially inpre-clinical invivo modelsof solidtumours. therapy, mayconfer onaCAR-T celltherapydevelopedbytheGroup, benefit Papyrus’PYTX-002, apotentialfirst-in-classgene replacement early stagecollaboration willassesswhat impactandpotentialtherapeutic tumour suppressor therapiesfor thetreatment of cancer, inAugust.This emerging biopharmaceuticalcompanydevelopingnovelextracellular The Group signedtheresearch collaboration agreement withPapyrus,an PhoreMost Limited(PhoreMost) later intheyear. firstly onewithPapyrusTherapeuticsInc.(Papyrus)then During theyear, theGroup entered intotwoCAR-T research collaborations, Research collaborations programmes anddecidewhethertocommitfurtherresources tothem. own internalevaluation todeterminethepotentialfuture for these process is stillongoingand,oncereturned, theGroup willundertake its for Stargardt’s diseaseandSAR421869for UsherSyndrome type1b.This intended toreturn therightstoophthalmologyprogrammes SAR422459 In June,theGroup announcedithadbeeninformed bySanofi that it Sanofi –Ocularassets and anewpre-clinical programme, OXB-401 (liverindication) wasinitiated. is continuingpre-clinical workon OXB-204 (LCA10) andOXB-103 (ALS) expression data seen with its predecessor OXB-201. In addition, the Group trap). Thisprogramme buildsonthedemonstrated longtermgene the Group’s technologytodeliverageneexpress afibercept (aVEGF- OXB-203, currently inpre-clinical studies,istargeting Wet AMDanduses the programme ready for entryintotheclinic. continues toadvancepre-clinical workonOXB-302 astheGroup gets tumours withrestricted expression onnormaltissues.TheGroup highly expressed onvarioushaematological tumoursaswellmostsolid targets haematological tumours.The5T4antigenhasbeenshowntobe OXB-302 (CART-5T4) iscurrently theGroup’s prioritycandidate and 2020 performancereview Chief Executive Officer’sand Strategic Report Oxford Biomedica plc
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Annual r ® deliverysystem. eport and accounts 2020
with an emerging biopharmaceutical company with anemerging biopharmaceuticalcompany The Group signedresearch collaboration agreements Two newresearchcollaborations impr to developnext-generation CAR-T celltherapieswith therapies for thetreatment of cancer, andanother developing novelextracellulartumoursuppressor 1 oved efficacyanddurability.
phase of developmentfitsoutapproximately 45,000 well and is expected to be completed and approved during2021. This first The installation of theequipmentfor thefirstfill/finishsuiteis progressing AstraZeneca COVID-19 vaccine. Oxford Biomedica plc Innovation andLentiVector LentiVector manufacturing wasunderway;oneat 200Lscalefor theGroup’s the fourth quarterof 2020, Oxbox hadfour suitesapproved and suites inSeptemberandOctober, respectively. Thismeantthat byearlyin further suites,theMHRAapproved thethird andfourth manufacturing Following onfrom theagreement withVMIC for equipmentfor thetwo end of thesecondquarter. 2020. Thefirstpartnerbatches were beingproduced within Oxbox bythe such asthewarehouse, coldchainfacilitiesandQClaboratories, inMay MHRA regulatory approval for thefirsttwosuitesandsupportingareas manufacturing facility(Oxbox) at theendof 2019, theGroup received Post completionof thebuildingphaseof thenew84,000 Facilities andcapacityexpansion machine learningtoimprove yieldsandqualityof nextgeneration vectors. with Microsoft inanexciting project usingartificialintelligenceand of robotics to further drive productivity improvements and is collaborating to moveahead.Inaddition,theGroup isutilisingautomation andtheuse and mostrecently U1andU2,alongwiththecorresponding IP, continue Development of technologies such as TRiPSystem per patient treated. larger numbers of patients, by potentially bringing down theoverall cost will helpdriveadoptionbypayorsintoindications where there are far vector neededtoaddress thesetargets. Inaddition,thereduction incost of cellandgenetherapyduetotheamount(andtherefore cost)of the open uptherapeuticindications that are currently inaccessibleinthefield production andreducing thecostthrough innovation, theGroup will goal of industrialisinglentiviralvectors.Byvector Innovation andthedevelopmentof theplatform are core totheGroup’s In thefirsthalf of 2020, aleasewastaken onanew11,000 building for bothplatform andproprietary product innovation. development of theWindrushInnovation Centre (WIC)adedicated converted duringthecourseof 2021andworkwillalso startonthe 2020 andisnowoperational. Afurtherarea withinWindrushCourt will be of thefirst of theseareas tolaboratories wascompletedbytheend of term demandincommercial developmentandanalytics.Theconversion convert office space into GMPlaboratories to meettheexpected near Building workisalsocurrently beingundertaken at WindrushCourtto manufacturing facility. the Rt.HonBorisJohnsonMP, toformally opentheGroup’s Oxbox In January2021,theGroup wasdelightedtohostthePrimeMinister, remaining fallowarea available for flexibleexpansioninthefuture. Office tohousetheSenior Executive Team andvarious support functions. the Oxford BusinessPark,closetoOxbox, asanewCorporate Head ® platform partnersandthree at 1000Lscalefor theOxford
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Annual r eport and accounts 2020 ® platformdevelopment ™ ,
SecNuc
sq. sq. ™ table ,
ft. sitewithin LentiS ft. withthe
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ft. ™
that are currently inaccessible. the Group willopenuptherapeuticindications and reducing thecostthrough innovation, By industrialisinglentiviralvectorproduction Industrialising lentiviralvectors in January2021. opened theGroup’s Oxbox manufacturingfacility The PrimeMinister, theRt.HonBorisJohnsonMP, PM opensOxbo x
Strategic Report 35 36 the endof 2019. by over20%reaching 673at theendof theyear, compared with554at of the scaleof vaccinemanufacture for AstraZeneca. Headcountincreased the expansionof thebusinessandextraemployeesrecruited aspart During theyear, thewiderGroup teamalsocontinuedtogrow, reflecting on theboard since2010. Heath willnotbestandingfor re-election at the2021AGM having served Board asaNon-Executive Director after nearlynineyears.Dr. Andrew a Partnerat Vulpes Investment Managementwouldstepdownfrom the the sametimeasKay’sappointment,itwasannouncedthat MartinDiggle, Kay is a world-renowned geneticist and Professor at Oxford University. At of Professor DameKayDavies asanIndependentNon-Executive Director. 2021, theGroup announcedtheappointmenttoBoard asof 1March growing successfulgenetherapycompanies.Postperiod-end,inFebruary Non-Executive Director, andbringsinvaluableexperienceinbuilding In December, Dr. SamRastywasappointedtotheBoard asanIndependent Non-Executive Director at Stryker Corporation andUCBSA. is currently theChairof theBoard of Directors at Pierre Fabre S.A anda diversified chemicalgroup intoa global biopharmaceutical leader and he SA for tenyearsduringwhichtimehetransformed thecompanyfrom a Tallarigo. Dr. Doliveuxwaspreviously theChiefExecutive Officer ofUCB Non-Executive Chairfollowing theretirement of former Chair, Dr. Lorenzo In June,theGroup announcedtheappointmentof Dr. RochDoliveuxas diversification of talentontheBoard. commitment tobestpracticeinCorporate Governanceandthe In the past 12 months the Group has made significant progress in its Organisational progress AstraZeneca COVID-19 vaccineorothercandidates asrequired. additional resources tobeusedfor theGroup’s involvementintheOxford and furtherdevelopitsownproprietary products. Italsoprovided and progress towards theGroup’s goalof industrialisinglentiviralvectors allowing it to remain at the forefront of innovation of lentiviral technology partners. Thefundraisealsostrengthened theGroup’s cashposition the growing cellandgenetherapymarket bothwithcurrent andfuture to enabletheGroup tocontinueexploitthesignificantopportunitiesin of £38.3 million.Theproceeds of theequityfundraisingprovided funding fundraising whichincludednewandexistinginvestors,withnetproceeds In June2020, theGroup successfullycompleted a£40millionequity Investment progress 2020 performancereview Chief Executive Officer’sand Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020
therapy market bothwithcurrent andfuture partners. significant opportunitiesinthegrowing cellandgene funding toenabletheGroup tocontinueexploitthe The proceeds of theequityfundraisingprovided £40 millionequityfundraising Chief Executive Officer John Dawson well positionedtomaximisetheopportunitiesahead. gene therapy, thefuture hasneverlooked more exciting andtheGroup is partner programmes andcontinuedbroader market growth incelland Looking to2021andbeyond,withtheGroup’s everincreasing numberof existing partnersduringthecourseof 2021. number of partnersbutalsothenumberof programmes worked onby and genetherapypartnerstheGroup aimstoincrease notonlythe Discussions andfeasibility studiesare ongoingwithvariouspotentialcell spend asweinvestfor thefuture. 2020, albeitat amore modestrate thanrevenues duetoincreased R&D At an operating EBITDA level,theGroup alsoexpectsanincrease from for theGroup shouldgrow strongly in2021. of £50millionbytheendof 2021.Itistherefore expectedthat revenues expects total cumulative revenues from this programme to be in excess well, subjecttothecontinuedmanufacture of thevaccine,Group and withproduction at theOxbox manufacturingfacilitiesprogressing addition, following approval of theOxford AstraZeneca COVID-19 vaccine from both bioprocessing andcommercial developmentactivities.In Oxford Biomedica plc an increase in underlying LentiVector With thegrowth inpartnerprogrammes during2020, theGroup expects Outlook recognition of ourvariousinitiatives. “Commitment toWorkforce Wellbeing” award from Oxfordshire Mind,in to mentalhealthprofessionals. We were delightedtoreceive the introduction of anumberof initiatives, including,workshops andaccess Group particularly focussed on the wellbeing of our staff with the embedded ineverythingthat theGroup does.Throughout 2020, the developed astrategy overthepastfew yearswhichisnowdeeply The Group remains committedtoitsrole asaresponsible businesshaving Environmental, SocialandGovernance
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Annual r eport and accounts 2020 ® platform based revenues in 2021 platform based revenues in 2021 therapy, thefuture hasneverlooked more exciting. continued broader market growth incellandgene increasing numberof partnerprogrammes and Looking to2021andbeyond,withtheGroup’s ever An exciting future
Strategic Report 37 38 Management team Strategic Report Oxford Biomedica plc Laboratories (UK) Limited. Laboratories (UK)Limited. Administration of Serono Dir time at Cephalonhewas Cephalon. Priortohis acquisition of Zeneus by 2005 ledtheUS$360million million USdollarsandin turnover of severalhundred 1,000 people,andtoa European businesstoover many dealsbuildingthe While at Cephalonheled Development Europe. and Headof Business Chief FinancialOfficer o in theEuropean operations management positions Previously, heheldsenior Officer inOctober2008. appointed ChiefExecutive August 2008andhewas Non-Executive Director in Biomedica’s Board asa John DawsonjoinedOxford Chief Executive Officer John Dawson 1 f Cephalon Inc., including f CephalonInc.,including ector of Finance and ector of Financeand can befound onpages78to79. Full biographies for theBoard of Directors
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eport and accounts 2020 2 Biomedica and the Board Biomedica andtheBoard Stuart PaynterjoinedOxford Chief FinancialOfficer Stuart Paynter and Wales. Accountants inEngland of theInstituteof Chartered La Rueplc.Heisamember Business Partneringat De he wasHeadof Finance to joiningOxford Biomedica head of internalaudit.Prior before becomingtheglobal corporate finance role US all businessoutsideof the Business Partneringfor Senior Director of Finance wher to Shire Pharmaceuticals Director. Hethenmoved the European Finance divisions priortobecoming healthcare andlife sciences variety of roles withinthe Steris, andworked ina He subsequentlyjoined Watts before movingtoEDS. accountant withHaines qualified asachartered healthcare sectors.He the pharmaceuticaland 16 years’experiencein in August2017. Hehas . He then moved to a . Hethenmovedtoa e he became the e hebecamethe
a 1st class BA (Hons) in a 1stclassBA(Hons)in Business Schoolin2002. distinction from London awarded anMBAwith London. Jasonwasalso from ImperialCollege in complexdiseasegenetics and alsocompletedaPhD College, Oxford University Pr founder andCEO of and waspromoted toChief of BusinessDevelopment Biomedica in2015asHead Dr. SlingsbyjoinedOxford Chief BusinessOfficer Jason Slingsby Biochemistry from Magdalen 1997–2000. Hewasawarded worked at thecompany Oxford Biomedicaandfirst post-doctoral scientistat started hiscar in AustriaandUK.Jason capital backed company Intercell AG andwasco- at SoseiCo.,Ltd. and business developmentroles worked ininternational and genetherapy. Hehas industry inbiologics,vaccines in thebiotechnology Business OfficerinMay2019. He has 20 years’ experience He has20years’experience 3 otAffin AG, a venture otAffin AG,aventure eer as a eer asa
Industry Partnership(MMIP). Medicines Manufacturing workstream leadfor The Advanced Therapies Committee andisthe Manufacturing Advisory BioIndustry Associa isamemberof theUK for anumberof years.He at ThePirbrightInstitute post-doctoral research and subsequently conducted from theUniversityof Leeds PhD inMolecularBiology of Sciencedegree anda field. HeholdsaBachelor on severalpatents inthe He isalsoanamedinventor and alliancemanagement. as well as client programmes bioprocessing development, and lentiviralbased systems, analyticaltesting Oxford Biomedica’sQuality overall responsibility for his current role, hehas practice) environment. In been intheGxP(good therapy, 14 of whichhave experience incellandgene has more than18years’ Biomedica in2000. He Dr. MiskinjoinedOxford Chief Technical Officer James Miskin 4 tion tion
the Universityo post-doctoral research at and hasconducted candidates andLentiVector Biomedica’s newproduct development of Oxford responsible for the In hiscurr of anumberof key papers. patents andanauthor numer a namedinventoron class expertinthefield, He isarecognised world- bioprocessing andanalytics. platform technologies, gene therapies,delivery development of celland disciplines, includingthe covering arangeof technical lentiviral vectorexperience He hasover20yearsof Oxford Biomedicain1997. Dr. Mitrophanous joined Chief ScientificOfficer Kyriacos Mitrophanous University CollegeLondon in MolecularBiologyfrom platform. HeholdsaPhD 5 ous lentiviral vector ous lentiviralvector ent role, he is ent role, heis f Oxford. f Oxford.
®
Oxford Biomedica plc Chemist andalsohasanMBA qualified asaChartered in Globalroles. Heoriginally in ChinaandIndiaaswell spent severalyearsworking During hiscareer hehas contract manufacturing. organisations encompassing manufacturing invarious and Radiopharmaceutical API, Solidoraldose,Sterile, industry experienceinclude Novartis. His40+yearsof Head of Anti-infectives within most r the pharmaceuticalindustry, leadership positionsin number of senioroperational Prior tojoininghehelda Biomedica inApril2019. Nick PagejoinedOxford Chief OperationsOfficer Nick Page innovative, generic and innovative, genericand from TheOpenUniversity. 6 ecently as Platform ecently asPlatform
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eport and accounts 2020 Biomedica in May 2019 as Biomedica inMay2019as Natalie Walter joinedOxford General Counsel Natalie Walter Natalie alsositsontheBoard and Corporate Governance. mergers andacquisitions capital markets transactions, transactional issues,equity on arangeof businessand including Oxford Biomedica, lif as acorporate lawyeradvising over 20years’experience General Counsel.Shehas Covington &BurlingLLP. most recently aPartnerwith Markets division.Shewas for theEquityCapital Director andLegalCounsel at LehmanBrothers asa law firms,aswellworking for anumberof UKandUS Director. Natalie hasworked plc asaNon-Executive of C4XDiscoveryHoldings 7 e sciences companies, e sciencescompanies,
Northumbria Universityin a BA(Hons)degree from UK andUSsites.Sheholds leading HRacross Vernalis’ Director for Vernalis plc, Group HumanResources Oxford Biomedica,shewas AstraZeneca. Priortojoining Global HRDirector within followed byaperiodas MedImmune’s sitethere, UK toheadupHRfor she movedtoCambridge acquisition of MedImmune, Following AstraZeneca’s Partnering roles inGSK. in variousHRBusiness including anumberof years Biopharmaceutical sector, Resources roles withinthe experience inseniorHuman 2018. Shebrings20years’ Oxford BiomedicainApril Personnel andDevelopment. of theChartered Instituteof the UKandisamember Helen Stephenson-Ellis joined Chief PeopleOfficer Helen Stephenson-Ellis 8 8
Management team his role inFebruary2021. He steppeddownfrom T of theSeniorExecutive as apermanentmember Dr. Zamoryakhinserved Chief MedicalOfficer Zamoryakhin Dmitry 4 8 6 2 3 5 7 1 eam from July2019. Helen Stephenson-Ellis Natalie Walter Nick Page Kyriacos Mitrophanous James Miskin Jason Slingsby Stuart Paynter John Dawson
Strategic Report 39 40 Delivery of2020objectives Delivery Strategic Report Oxford Biomedica plc 2020 objectives C A B 4 2 3 5 1 Not met Partly met Met feasibility studies. agree three platform technologydealsandtostarttwonew for financial reporting. with strictcontrol of costsandlooktocreate internaldivisions balance sheet.Setintheregime of aggressively growing sales and aproduct out-licensingdeal,alongwithstrengthening the driven bythebudget,whichincludesnewmanufacturingdeals To achieverevenue andOperating EBITDA targets, whichare Financial to theplatform tokeep theGroup aheadof thecompetition. and process innovations (rapidprocess andimproved process) portfolio, alongsidetechnical(twonewpatentable inventions) To advancetwonewplatform products intotheGroup’s Patent / product advancementandinnovation Receive appropriate regulatory approvals for Oxbox. key milestonesfor Novartisandotherkey partners. To servicetheGroup’s customersasagreed andreach Partners / Capacity / Technology advancement a businesschangeportfolio. Group’s organisation effectiveness programme, implementing Group’s ResponsibleBusinessstrategy. To enhancethe as welltheimplementation of ESGtargets through the workforce for thefuture. Focusonstakeholder engagement, and staff supportsystemstoensure abalancedproductive To buildaculture whichprovides competitive rewards/benefits Organisational development To continuetoexecute newdeals,toout- Business development
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Annual r eport and accounts 2020 license one product, oneproduct,
Biotech were alsoachieved.Theobjectivetospin-out/out-license Two newfeasibility studieswithJanssenPharmaceuticalsandLegend Squibb, BeamTherapeuticsandJanssenPharmaceuticals,respectively. technology dealswere signedwithJunoTherapeutics/BristolMyers Some objectiveswere partlymetandothersnotmet.Three platform Performance againstpriorities vaccine programme. vaccine programme. utilised thisvacancytomanufacture theOxford AstraZeneca COVID-19 development of theOxford AstraZeneca COVID-19 vaccineprogramme. and improved first-in-manprocess, inorder todivert resources tothe prioritise theinternalprogramme for innovation aimedat deliveringa rapid the decision,after carefully consideringallstakeholder groups, tore- through proof of conceptinasuitablediseasemodel.Managementmade also strengthened bytheadvancementof onenewproduct, OXB-401, two newpatentable inventionsfor theplatform process. Thepipelinewas successfully initiated animproved manufacturingprocess intoGMPand Some objectiveswere fullymetandotherspartlymet.TheGroup Oxbo of aclient,theGroup didnottransfer aprocess for theclientintoGroup’s of theGroup’s in-housefillandfinishinspectionbyMHRA. Atthe request The onsetof theCOVID-19 pandemicin2020delayedtheGroup’s initiation two GMPbatches for clientprogrammes, inadditiontothosefor Novartis. Oxbox inthefirsthalf of 2020. TheGroup alsoachievedtheinitiation of regulatory approval bytheUKregulator (MHRA)for vectorproduction in Some objectiveswere fullymetandotherspartlymet.TheGroup achieved Business), onpages51to66. more particularlysetoutinthefivepillars for ESG(formerly Responsible business. Detailsof theResponsibleBusinessobjectivesfor 2020are ESG (ResponsibleBusiness)objectives,whichinvolveseverypartof the In additiontothesecorporate objectives,theGroup alsosetsannual the electronic quality managementsystem(QPulse). introduction of Laboratory Information ManagementSystem (LIMS)and demonstrable business benefitfrom systeminvestmentsuch asthe The Group wasalsoabletodrivethebusiness changeportfolio todeliver a sustainabilityforum withinOxford Biomedicawere setand achieved. to landfill,increase innumber of apprenticeships andestablishing in theESGsectionof theStrategic Report)of reduction inwaste going community) were undertaken bytheGroup andtheESGtargets (asdescribed of theCompaniesAct2006(e.g.employees, suppliersandbroader programme. Projects todrivestakeholder engagementundersection172 and implementedanintegrated performance, developmentandtalent grading, paystructures, andassociated benefits.TheGroup alsodesigned successfully completedandrolled outwhichincludedcompetitive These objectiveswere metinfull.Theemployeereward strategy was was notachieved. one product intoaspecialpurposevehicleoralternative structure set inthebudget. achieving therevenue targets andexceeded theOperating EBITDA target accordance withexpectations inthebudget.TheGroup wasvery closeto completed a£40millioncapitalraiseinJune2020, achievingcashflowin to create internaldivisionsfor financial reporting andsuccessfully Some objectiveswere partlymetandothersnotmet.TheGroup managed A A A B B C C B B x facility. Thisprovided avacancyinOxbox for otherclients.TheGroup
Oxford Biomedica plc Objectives setfor2021 Strategic Report a partnershipfor theinvivoCAR-T programme. To useanalyticalautomation inaGMPorR&Dsettingandtoestablish and developmentstrategy andtodevelop astrategic workforce plan. Group’s ESGgoalsare meteffectively. To implementtheGroup’s learning deliver onyearoneof theemployeeengagementstrategy. To ensure the in variousways,includingthrough theWorkforce EngagementPanel to Group remains effective for itssize. To focus onstakeholder engagement To deliverondigitalisation projects planned for 2021toensure that the Organisational development by thebudgetapproved bytheBoard. To achieverevenue, Operating EBITDA andcashflowtargets asset Financial objectives To advanceaninternalproduct toameaningfulmilestone. identification andengagewithacompanyonproduct discussions. To establishonenewacademicrelationship focused onproduct Products into aGMPsettingandtoin- To achievefour newinventions,applyanOxford Biomedicainvention Platform and finishsuite at Oxbox bythethird quarter of 2021. project for commercial manufacture andtogainapproval for onefill new andcurrent partners).Inaddition,totarget theinitiation of one projects)and initiate sixadditionalnewviralvectorprojects (toinclude with newpartnersfor CDMOprojects (late stageand early stage on-boarding timefrom project initiation tobatch start.To signagreements satisfaction) from baseline.To launchaclientprocess that reduces the gates, alongwithimprovements innetpromoter score (customer To servicetheGroup’s customerstoachieveagreed milestones/decision CDMO Objectives setfor2021
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Annual r eport and accounts 2020 license technology for the platform. technologyfor theplatform.
Business), onpages51to66. particularly setoutinthefivepillars for ESG(formerly Responsible of thebusiness.Detailsof theESGobjectivesfor 2021are more (Responsible Business)objectivesfor 2021,whichinvolveseverypart In additiontothesecorporate objectives,theGroup hasalsosetESG
Strategic Report 41 42 £7.8 million($10million)wasrecognised in2020. a result of the execution of theJunoTherapeutics/BristolMyersSquibblicenceandsupplyagreement, a licence fee of AstraZeneca, and new research and development collaborations signed with PhoreMost and Papyrus Therapeutics. As New commercial agreements were signed with Juno Therapeutics/Bristol Myers Squibb, Beam Therapeutics and Juno Therapeutics/BristolMyersSquibbandAstraZeneca. profit of £7.3 million,withgrowth drivenbythecommercial developmentandbioprocessing activitiesundertaken for Bioprocessing andcommercial developmentrevenue increased by45%,andtheGroup achievedanOperating EBITDA The Group hashadaverygoodyearintermsof bothanincrease incommercial activitiesaswellrevenues. and toinnovate valuableintellectualproperty toaddtheGroup’s offering. Group will continue to look to make selective investments in infrastructure to both have the capacity for newcustomers end-to-end offering. Subjecttotheimpact of theglobal COVID-19 pandemic ontheGroup’s financialposition,the brought online during2021.Oncevalidated andoperational theGroup willbeabletoprovide itscustomerswithan requirements.be Constructionof theGroup’s fill/finishsuitewascompletedduring2020andthisisexpectedto second halfof 2020tomeetbothlentiviralvectorandadenovirusvaccineclinicalcommercial bioprocessing new Oxbox bioprocessing facility. Allfour cleanroom suitesendedupbeingapproved andextensivelyused inthe In thefirsthalf of theyearGroup obtainedMHRAapproval for thebioprocessing of batches intwo of itssuites at its activity andrevenues throughout 2020. Bristol MyersSquibbandBeamTherapeuticsearlierintheyear, hasseentheGroup deliver increased commercial vaccine bioprocessing batches, togetherwiththenewcommercial agreements entered intowithJunoTherapeutics/ vaccine, whichwasthenconvertedintoafullcommercial supplyagreement inSeptember2020. Theseadditional signed anagreement withAstraZeneca inMaytodevelopandbioprocess batches of theOxford AstraZeneca COVID-19 across the world.From firstjoiningtheOxford UniversityJennerInstituteconsortiuminApril,theGroup ultimately This great achievementallowedtheGroup togenerate revenue growth duringaverydifficultperiod forbusinesses the Group has been able to continue its bioprocessing and commercial development activities throughout the period. pandemic enforced changestotheGroup’s operating methods,withemployeesworkingfrom homewhere possible, 2020 has been a period of operational resilience, adaptability and revenue growth for the Group. Whilst the COVID-19 Operational resilience Financial review Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020 “ COVID-19 pandemic enforced changes growth for theGroup. Whilstthe resilience, adaptabilityandrevenue Chief FinancialOfficer Stuart Paynter the period.” throughout commercial activities development able tocontinueitsbioprocessing and been has Group where possible, the with employeesworkingfrom home to theGroup’s operating methods, 2020 hasbeenaperiodo
f operational f operational
— Oxford Biomedica plc — — — — Selected highlightsare asfollows: for theOxford AstraZeneca COVID-19 vaccine. Court sites,exploitnewopportunitiesinthecellandgenetherapymarket, and also provide additional resources required equity (£38.3 million net of expenses) in June 2020 in order to refurbish its Windrush Innovation Centre and Windrush The Group alsomadefurthersignificantimprovements toits Statement of financialposition,raising£40million ofnew — — — 400 600 200 300 500 450 700 250 350 550 100 150 50 0
Year-end headcount The Pla generating anOperating EBITDA Opera and royalties from customers. ($10 million)licencefee from JunoTherapeutics/BristolMyersSquibb,aswellvariousotherlicencefees, milestones Revenues fr areas now having increased by2,183%since2013. Therapeutics/Bristol MyersSquibb.Doubledigitgrowth wasachievedacross bothactivitieswithrevenues from these growing 45% due to additional activities performed for new customers AstraZeneca, Beam Therapeutics and Juno Revenues fr generating Platform divisionwascreated. T as explainedabove,offset byfurtheroperational investments required. Cash a a successfulequityfundraisinginJune2020. Gr Cash £6.6 million(2019:£6.5 millionprofit) andanoperating loss of £7.7 million(2019:£5.7 millionprofit). profit of £2.0 million(2019:£20.2 millionloss),whilsttheProduct divisionmadeanOperating EBITDA loss of otal revenues increased by37%over2019, andhave nowincreased by1,524% since2013whentherevenue oss proceeds of £40.0 million(£38.3 millionnetof expenses)were raisedfrom newandexistinginvestorsthrough 0321 0521 0721 092020 2019 2018 2017 2016 2015 2014 2013 used in operations of £3.9 million in 2020 (2019: £6.6 million) decreased as a result of the increased revenues ting EBITDA t 31Decemberwas£46.7 millionbolstered bytheequityfundraisinginyear. tform divisionmadeanOperating EBITDA om milestones,licencesandroyalties increased to£19.2 millionduetotherecognition of a£7.8 million om theunderlyingbioprocessing andcommercial developmentbusinesscontinueditsupward trend,
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Annual r 1 andoperating lossesimproved by£12.5millionand£8.8 millionrespectively, withtheGroup eport and accounts 2020 1 +21.5% profit of £7.3 millionandanoperating loss of £5.7 million. 80 40 60 90 20 30 50 45 65 70 25 35 55 10 15 0 5 £m Revenue ocessing and process ocessing andprocess 0321 0521 2017 2016 2015 2014 2013 Biopr Licence, milestonesandgrants development (darktints) (light tints) 1 profit of £13.9 million(2019:£11.7 millionloss)andanoperating
0821 2020 2019 2018 2 ting EBITDA (EarningsBefore Interest, 1
Opera GAAP measures isprovided onpage47. charge for share options.Areconciliation to loss allnon-cashitems,includingthe or flow asitexcludes from operating profit used asasurrogate for operational cash Payments) isanon-GAAP measure often through profit andloss, and Share Based of investmentsandassetsat fairvalue Tax, Depreciation, Amortisation, revaluation Non-cash itemsincludedepr GAAP measures isprovided onpage47. based paymentcharge. Areconciliation to value through profit andlosstheshare fair valueadjustmentsof assetsheldat fair amortisation, revaluation of investments, eciation, eciation,
Strategic Report 43 44 the prioryear. 3 2 ting EBITDA (EarningsBefore Interest, Tax, Depreciation, Amortisation, revaluation of investmentsandassetsat fairvaluethrougha profit andloss,Share BasedPayments)is 1 £m required this(e.g.revenue underIFRS15during2018to2020butIAS1820152017). in theAnnualReportsfor thoseyearsandhave notbeenrestated where achangeinaccountingstandards mayhave Operating EBITDA andOperating profit/(loss). Thefigures presented withinthissection forprioryears are those reported the decisionthat theKey FinancialPerformance Indicators againstwhichthebusinesswillbeassessedare Revenue, the relevant GAAPmeasures, provide anaccurate reflection of theGroup’s performance overtime.TheBoard hastaken Performance Indicators (refer tothetablebelow).TheGroup believesthat theseNon-GAAP measures, togetherwith The Group evaluates itsperformance bymakinguseof alternative performance measures as partof itsKey Financial Key FinancialandNon-Financial PerformanceIndicators 1 Operating costs,includingCostof Sales,grew by20%,and16%whennon-cashitems Juno Therapeutics/BristolMyersSquibblicencefee, aswellvariousmilestones androyalties. output since2013. Licences,milestonesandroyalty revenues increased 14% duetotheachievementof the£7.8 million both bioprocessing andcommercial developmentactivities.Thechartoppositeshowsthegrowth inbioprocessing and thevaccinedevelopmentbioprocessing contractssignedwithAstraZeneca. Doubledigitgrowth wasseenacross development revenues. Asaresult of thenewcommercial contractsignedwithJunoTherapeutics/BristolMyersSquibb The Group sawalarge increase inrevenues whichwasdrivenbya45%increase inbioprocessing andcommercial Overview Financial review Strategic Report Oxford Biomedica plc Operations Cash flow Financing non-cash items The Group madeanOperating EBITDA profit of £7.3 million,animprovement of £12.5millionfrom theprioryear. Once from 554 at December2019to673at theendof 2020. increasing customerdemandfor theGroup’s bioprocessing andcommercial developmentservices.Headcount rose AstraZeneca COVID-19 vaccine.TheGroup willcontinuetoinvestinitspeopleandfacilities2021allowitmeet required for theOxbox bioprocessing facilityandthedevelopment manufacture of batches of theOxford facility costshave increased astheGroup sawthefullyeareffect of itsinvestmentsinpeople,facilitiesandoperations Revenue Headcount Non-Financial Key Indicators
Non-cash itemsincludedepr Opera A reconciliation toGAAPmeasures isprovided onpage47. non-GAAP measure often usedasasurrogate for operational cashflowasitexcludes from operating profit orlossallnon-cashitems,includingthecharge forshare basedpayments. charge. Areconciliation toGAAPmeasures isprovided onpage47. Cash burnisnetcashgenera page 46. This isPur Capex Opera Loan Cash (usedin)/genera Operating loss Cash burn Cash Licences, milestonesandroyalties Bioprocessing / commercial development Average Year-end ting EBITDA 2 chases of property, plantandequipmentasperthecashflowstatement which excludes additionstoRight-of-use assets.A reconciliation toGAAPmeasures isprovided on 3
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1 are added back,theGroup madeanOperating lossof £5.7 million,animprovement of £8.8 millionon Annual r ted from operations ted from operations plusnetinterest paidpluscapitalexpenditure. Areconciliation toGAAPmeasures isprovided onpage48. eciation, amortisation, revaluation of investments,fairvalueadjustmentsof assets heldat fairvaluethrough profit andlosstheshare basedpayment eport and accounts 2020 2020 (3.9) 68.5 46. (5.7) 13.4 19.2 87.7 609 673 7.8 7.3 – 7 (14.5) 2019 (6.6) 26.3 25.8 (5.2) 16.8 64.1 16.2 47.3 500 554 – 2018 66.8 40.5 26.3 32.2 41.2 13.9 13.4 10.1 432 377 9.2 1.9 2017 36.9 1 31.8 (5.7) (1.9) (1.5) 14.3 37.6 295 are excluded. Manpower and are excluded. Manpowerand 321 2.0 9.8 5.8 (11.3) 2016 22.6 (5.9) 34.4 27.8 15.3 256 11.5 (7.1) 247 6.4 5.2 (14.9) (12.1) (14.1) 2015 29.8 16.6 15.9 27.3 11.3 196 231 4.6 9.4
Oxford Biomedica plc £m rollout. came from itsdevelopmentandsupplyagreement withAstraZeneca aspartof theirworldwideCOVID-19 vaccine The Group’s customerbaseandrevenue streams have continuedtodiversify, althoughthelargest portionof itsrevenues milestone wasachieved. royalties of £11.4 million,increased 14% from theprioryearwhen£11.5million($15million)SioGeneTherapies from Juno Therapeutics/BristolMyersSquibbof £7.8 million($10million),andothercustomerlicences,milestones Revenues from licence fees, milestones and royalties of £19.2 million (2019: £16.8 million), which included a licence fee provided tonewcustomersJunoTherapeutics/BristolMyersSquibb,BeamTherapeuticsandAstraZeneca. AstraZeneca aspartof thevaccinemanufacturingefforts, andalsoincreased commercial developmentservices contributor togrowth in2020hasbeentherevenues generated from increased bioprocessing batches produced for development increased by45%to£68.5 million(from £47.3 millionin2019),andisup2,183%since2013. Themain Revenue increased by 37% to £87.7 million (2019 £64.1 million). Revenue generated from bioprocessing/commercial Revenue relevant nature withtheyearonmovementexplainedinsecondtablenext page. and Net profit/(loss) section. Expense items included within Total Expenses are then categorised according to their year onmovementinthesenon-cashitemsis then individuallyanalysedandexplainedspecificallyintheOperating performance measure. AsOperating profit/(loss) isassessedseparately asa key financialperformance measure, the the share optioncharge astheseare non-cashitemswhichdonotform partof theOperating EBITDA alternative research anddevelopment,bioprocessing andadministrative costsandhasremoved depreciation, amortisation and movements of theGroup’s operational expensesincludedwithinOperating EBITDA, theGroup hasadded together In order toprovide theusersof theaccountswithamore detailedexplanation of thereasons for the yearon Total Expenses increase inrevenues whencompared totheprioryear. EBITDA profit of £7.3 millionis£12.5higherthan the£5.2 millionlossgenerated in2019, asa result of thelarge and manufacture of batches of Oxford AstraZeneca COVID-19 vaccineonbehalfof AstraZeneca. TheOperating capacity onlineinthefirsthalf of 2020. Further additionalinvestmentswere madeinorder tofacilitate thedevelopment effect of theGroup’s investmentsinpeople,facilitiesandoperations required tobringtheadditional Oxbox bioprocessing Revenue increased by37% in 2020 whilsttheGroup’s cost basegrew by 16%to£81.2millionaswesawthefullyear 2 ting EBITDA (EarningsBefore Interest, Tax, Depreciation, Amortisation, revaluation of investmentsandassetsat fairvaluethrougha profit andloss,Share BasedPayments)is 1 £m Operating EBITDA Revenue Revenue Operating (loss)/profit Non cashitems Other income Total expenses Operating EBITDA
Opera A reconciliation toGAAPmeasures isprovided onpage47. non-GAAP measure often usedasasurrogate for operational cashflowasitexcludes from operating profit orlossallnon-cashitems,includingthecharge forshare basedpayments. to GAAPmeasures isprovided onpage47. Non-cash itemsincludedepr 2 1
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Annual r eciation, amortisation, revaluation of investments,fairvalueadjustmentsof available-for-sale assetsand theshare basedpaymentcharge. Areconciliation eport and accounts 2020 (81.2) (13.0) 2020 2020 (5.7) 87.7 87.7 0.8 7.3 7.)(45 (41.3) (54.5) (70.2) (14.5) 2019 2019 (9.3) (5.2) 64.1 64.1 0.9 2018 2018 66.8 66.8 13.9 13.4 0.5 1.1 2017 2017 (3.8) (5.7) (1.9) 37.6 37.6 1.8 (37.9) (11.3) 2016 2016 (4.2) 27.8 27.8 (7.1) 3.0 (30.9) (12.1) (14.1) 2015 2015 (2.0) 15.9 15.9 2.9
Strategic Report 45 46 — — — — — £m 3 Costof goodsplusresearch, development,bioprocessing andadministrative expensesexcluding depreciation, amortisation andtheshare optioncharge. 2 1 IncludestheRDEC taxcredit. £m Financial review Strategic Report Oxford Biomedica plc other externalbioprocessing costs Raw materials, consumablesand Research anddevelopment Cost of sales Bioprocessing costs Manpower-related Total Expenses Administrative expenses External R&Dexpenditure Operating expenses Other costs Depreciation RDEC taxcredit Amortisation Total expenses Share optioncharge Adjusted OperatingExpenses Resear materials, consumables and other external bioprocessing costs have remained stable as, although volumes now beingeligibleundertheGovernment’slarge company RDEC tax credit scheme. small companyschemein2020(seeOperating andNetprofit/(loss) commentarybelow),withmost of thosecosts significantly astheGroup ceasedbeingeligibletoclaima research anddevelopmenttaxcredit undertheGovernment’s Whilst theRDE of £0.5 million(2019:£0.6 millionloss)assterlingstrengthened againstthedollar. Increased costsincluded£0.6 millionpaidtosettleacustomerdevelopmentclaim,andwere offset bya forex gain bioprocessing capacitycomingonline,aswelltheadditionallaboratory spaceputinplaceat WindrushCourt. Other costswer the impactof theCOVID-19 pandemic,before resuming more fullyinthesecondhalfof 2020. External R&Dexpenditur Group revenues. Group wasabletoincrease theGroup’s commercial developmentandbioprocessing capacityresulting inincreased 2020. AstheGroup wasabletobringOxbox andadditionallaboratory spaceat WindrushCourtonlinein2020, the The leading tolowerexternalbioprocessing costs. process. TheGroup isalsonotresponsible for fill/finish ofvaccine batches manufactured onbehalf ofAstraZeneca were higher, theGroup movedawayfrom performing highcostadherent manufacturingtothelowercostbioreactor Raw ch, development,bioprocessing andadministrative expensesexcluding depreciation, amortisation andtheshare optioncharge. increase in manpower-related costs is due to the increase in the average headcount from 500 in 2019 to 609 in 1 3
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Annual r C credit hasincreased to£4.6 million(2019:£1.2million), totalR&Drelated taxcredits have decreased e higherasaresult of theoperational andfacilitycostsincurred duetotheadditionalOxbox 1 eport and accounts 2020 2 e remained the same in 2020 with activities slowed down in the first half of the year due to e remained thesamein2020withactivitiessloweddownfirsthalf of theyeardueto 2020 2020 22.0 45.3 (4.6) (2.4) (9.8) 17.1 81.2 81.2 39.5 29.7 41.7 10.7 51.7 11.3 1.4 1.4 – 70.2 54.5 41.3 41.3 54.5 70.2 2019 2019 22.8 22.8 35.2 35.2 12.0 70.2 22.6 34.5 (5.8) 41.9 35.7 (1.6) (1.2) 11.9 1.4 1.4 7.4 – 2018 2018 26.7 26.7 18.3 18.3 54.5 26.6 (4.3) 33.3 18.0 21.2 (1.1) 1.9 1.9 7.6 7.6 1.2 7.4 – – 2017 2017 19.3 13.2 41.3 28.9 22.9 (0.7) 21.6 (4.1) 18.4 (1.2) 1.7 1.7 7.1 7.1 7.3 – – 2016 2016 37.9 37.9 (0.6) 30.3 (0.3) 24.3 (3.3) 26.1 11.8 17.4 6.0 2.8 8.4 9.3 – – 2015 2015 25.1 30.9 30.9 20.3 (0.2) (0.4) 27.0 (1.3) 13.6 8.2 5.8 6.7 6.1 – – 3 Operating (loss)/profit Oxford Biomedica plc £m I. within twosegments,namely: Reflecting thewaybusinessiscurrently beingmanagedbytheSeniorExecutive Team, theGroup reports its results Segmental analysis the Oaktree loanwasrepaid in2019. Other costswhichtheGroup isstillabletoclaim.There wasnoforeign exchange revaluation gain/(loss)during2020as prior years,anda£1.2millionliabilityonthelarge companyresearch anddevelopmenttaxation credit includedunder expenses intheprevious section). Thecredit of £0.3 millionismadeupof a£1.5 millionsmallcompanycredit related to being eligibletomake aclaimundertheGovernment’slarge companiesRDEC scheme(seethelastbulletunderTotal to claimaresearch anddevelopmenttaxcredit undertheGovernment’ssmallcompanyschemein2020, whilstnow as compared totheprioryear. TheR&Dtaxcredit in2020hasdecreased significantlyastheGroup ceasedbeingeligible result of theearlyrepayment of theOaktree loaninJune2019, withonlyinterest arisingontheIFRS16leasesremaining higher duetotheincreased employeeheadcount.Theinterest charge of £0.8 millionwaslowerthantheprioryearasa gains achievedin2017and2018. Amortisation of intangibleassetsisinsignificant,andtheshare optioncharge was year. The Orchard Therapeutics investment asset incurred a loss of £0.8 million after the share price gave up more of the The depreciation charge wasmuchhigherin2020duetoOxbox becomingoperationally activeinthefirsthalf of the In arrivingat Operating loss/profit itisnecessarytodeductfrom Operating EBITDA thenon-cashitems referred toabove. Net(loss)/profit Foreign exchange revaluation (noncash) R&D taxcredit Interest through profit andloss Change infairvalueof assetsat fairvalue Depreciation, Amortisation andshare optioncharge Operating EBITDA £m Operating andNetprofit/(loss) II. Operating profit/(loss) Revenue 2020 Operating EBITDA Revenue 2019 Operating EBITDA Operating (loss)/profit
the costs downwithintheLentiVector potentially saleabletechnology, improve theGroup’s current processes, andbringdevelopmentmanufacturing third parties(i.e.thePartnerprogrammes CDMObusiness),andinternaltechnologyprojects todevelopnew the ‘ ‘ Product Platform’ segmentwhichincludestherevenue generating bioprocessing andprocess developmentactivitiesfor ’ segment,whichincludesthecostsof researching anddevelopingnewgenetherapeuticproduct candidates.
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Annual r eport and accounts 2020 ® platform. platform. (12.2) 2020 (0.8) (0.8) (6.2) (5.7) 0.3 7.3 Platform – (20.2) (11.7) 13.9 87.1 51.0 2.0 (14.5) (16.1) 2019 (5.2) (5.4) (1.0) (1.9) (7.4) 4.8 2018 (6.2) (5.5) (2.7) 13.9 13.4 6.0 2.5 7.5 Product (6.6) (7.7) 13.1 0.6 6.5 5.7 2017 90 (16.6) (9.0) (9.3) (5.7) (1.9) (6.1) 2.3 3.3 2.7 (11.3) 2016 (4.9) (4.2) (4.1) (7.1) 3.7 – (13.0) (14.5) (12.1) (14.1) 2015 Total (5.7) 87.7 (2.0) (5.2) 64.1 (1.0) (1.9) 4.0 7.3 –
Strategic Report 47 48 — — — — — — — — £m movements across theyearare explainedbelow. The Group held£46.7 millionof cashat 31December2020, having beguntheyearwith£16.2 million.Significant Cash flow £11.5 million)orothercustomerswasachievedduring2020. £6.6 million(2019:£6.5 millionprofit), asnofurthersignificantlicencesormilestones from SioGeneTherapies(2019: The Product segment has generated revenues of £0.6 million (2019: £13.1 million) and an Operating EBITDA lossof increased licenceandroyalty paymentsfrom partners,andadditionalcommercial developmentservicestocustomers. 2020 operating margins andimprove revenues andoperating results from thissegmentthrough higherbioprocessing volumes, resulting in anOperating EBITDA profit of £13.9 million,andanoperating profit of£2.0 million.The Group willtarget maintaining impact of thelarge increases inrevenues butthisdidcomeat thecostof additionalinvestmentinheadcountandfacilities, the transitionovertomore profitable bioreactor process whichoccurred during2019. Operational results sawthepositive by adecrease inrevenues from existingcustomersOrchard andalsoNovartis,where revenues were impactedin2020dueto activities for customers AstraZeneca, Juno Therapeutics/Bristol Myers Squibb, Beam Therapeutics and Sanofi. This was offset Therapeutics/Bristol MyersSquibblicencefee received, aswellincreased bioprocessing andcommercial development The Platform segmentin2020sawanincrease inrevenue of 71%from £51.0 millionto£87.1 millionduetotheJuno Financial review Strategic Report Oxford Biomedica plc Operating (loss)/profit Non-cash itemsincludedinoperating loss Operating EBITDA Working capitalmovement Cash (usedin)/generatedfromoperations R&D taxcredit received Net cashgeneratedfrom/(usedin)operations Interest paid,lessreceived Sale of investmentasset Capex Cash burn Net proceeds from financing Movement inyear Group received £7.0 million R&D tax funding in 2020 in respect of the 2019 claim, up £3.9 million from the prior year.
est paidduringthe year wasnil,downfrom £3.3 millionintheprioryear astheOaktree loanfacilitywasrepaid tive workingcapitalmovementof 11.2millionisdrivenlargely byanincrease inTrade and otherdebtors The increase in2020wasdue tothetaxcredit received in2019beingcappedasaresult of theprofits achievedin2018. The These improved operational results flowedthrough toOperating EBITDA profit of £7.3 million (2019: £5.2 millionloss). The opera The r of £38.3 million,share optionissuesof £1.1million,andreduced byleasepayments of £1.1millionintheyear. The netpr measures putinplacethefirsthalf of 2020. main constructionphaseof thenewOxbox manufacturingfacilitybeingcompletedin2019andcashpreservation Pur through profit andloss. £2.5 milliono at theendof June2019. Inter impact of thisincrease ontheGroup’s operational activities. Contract liabilities(£13.4 million).Thesemovementswere drivenbyincreased revenue generating activitiesandthe (£25.9 million)andinventory(£4.3 million)offset byanincrease in Trade andotherpayables(£5.4 million)and The nega chases of property, plantandequipment decreased from £25.8 millionto£13.4 million,mainlyasa result of the esult of theabovemovementsisanetincrease incashof £30.5 millionfrom £16.2 millionto£46.7 million. ting lossin2020was£8.8 millionbetterthantheoperating lossof £14.5 millionachievedin2019. oceeds from financingduring2020was£38.3 million,consisting of theJune2020equityfundraise
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f fundswasgenerated from thesaleof shares inOrchard Therapeutics,anassetheldat fairvalue Annual r eport and accounts 2020 (13.4) (11.2) 2020 (3.9) (5.7) 30.5 38.3 (7.8) 13.0 2.5 7.0 3.1 7.3 – (26.3) (25.8) (16.0) (14.5) 2019 (6.6) (5.2) (3.3) (3.5) 10.3 (1.4) 6.3 9.3 3.1 (10.1) 2018 (0.5) (4.2) 47 (10.8) (4.7) 12.9 19.8 (1.9) 13.9 13.4 17.9 9.2 3.7 – 2017 (2.0) (9.8) (1.0) (5.7) (1.9) (1.5) 8.8 3.0 3.8 0.4 4.5 – (11.3) (11.5) 2016 (5.9) (6.4) (3.3) (1.8) (7.1) 17.5 6.0 4.2 4.1 1.2 – (29.8) (16.6) (14.9) (12.1) (14.1) (11.7) 2015 (2.8) (4.8) 25.0 (1.5) 2.0 3.2 –
Oxford Biomedica plc demands of theGroup’s existingcustomerbase. continue totarget newstrategic commercial relationships in2021,butalsoremain focused onmeetingthegrowing key totheGroup’s success,includingdrivinggrowth innewcustomerrelationships in2021andbeyond.TheGroup will relationships with theGroup’s customers,botholdandnew. Thesuccessof theGroup’s existingcustomersisseenas The Group continuestorecognise theimportanceof focusing onbuilding and maintainingtheGroup’s commercial expanded Oxbox facilitybeinginusethroughout 2021. partnerships inthefuture withtheGroup expectingtocontinueincrease itscommercial activities,assistedbyan growth inrevenues in2020. Additivebioprocessing andcommercial developmentrevenues are expectedfrom these continued bioprocessing andcommercial developmentactivitiesperformed for existingcustomers,have driventhe AstraZeneca, JunoTherapeutics/BristolMyers Squibb,BeamTherapeuticsandSioGeneTherapies,togetherwith The Group willcontinuetotarget improved financialperformance in2021.Thecontracts signedin2020with Financial outlook — — — — — — — — — — The mostnotableitemsontheStatement of financialposition,includingchangesfrom 31December2019, are as follows: Statement offinancialpositionreview
office andOxbox leases. including theincreased headcountlevels. company research anddevelopmenttaxation credit includedunderTrade andotherreceivables. up of a£1.0 millionsmallcompanycredit related toprioryears,anda£1.1millioncorporate taxliabilityonthelarge development taxcredit undertheGovernment’ssmallcompanyschemein2020. Thebalanceof £0.1 millionismade process development activitiesacross theyearend,aswellincreased RDEC taxcredit receivable. signing theCorporate HeadOfficeleaseinOxford. Oxbox manufacturingfacility, additionallaboratory spaceat WindrushCourt,andarighttouseassetrecognised upon partially offset additions of £19.7 million,mainlypurchases of equipmentandleaseholdimprovements for thenew equipment usedwithintheOxbox manufacturingfacility. the newcorporate office leaseentered intoin2020, aswella £3.8 millionliabilitywith regard tobioprocessing Lease Pr the Innovate UKcapexgrantfunding. Def bioprocessing andprocess developmentactivities. Contract liabilitiesincr T T T forecasted increased bioprocessing vaccine manufacturing activities, but also duetoBrexit and COVID-19 stockbuilding. Inventories ha Pr Orchard Therapeuticsshares. Assets a rade andotherpayablesincreased from £14.3 millionto£19.7 million,duetotheincreased levelof operational activity, rade andotherreceivables increased from £33.7 millionto£57.5 millionduetoincreased levelsof bioprocessing and ax assetsdecreased from £5.4 millionto£0.1 millionastheGroup ceasedbeingeligibletoclaim aresearch and ovisions increased asaresult of therecognition of a£0.8 millionliabilityfor future dilapidations costonthecorporate operty, plantandequipmenthasincreased by£10.4 millionto£72.3asdepreciation of £9.6 milliononly erred Income decreased from £4.3 million in 2019 to £3.5 million due to the release of amounts deferred as part of liabilities increased from £8.4 million to £13.8 million due to the recognition of an IFRS 16 liability with regard to t fairvaluethrough profit andlossdecreased by£2.5millionasa result of thesale of £2.5millionworth of
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ve increased from £2.6 millionto£6.9 millionduetoincreased rawmaterial balancesasaresult of Annual r eport and accounts 2020 eased from £14.9 millionin2019to£28.3 million due tofundsreceived inadvancefor future
Strategic Report 49 50 — consideration severe butplausibledownsidescenariosincluding: first instance on the Group’s 2021 annual budget and forecasts for 2022. These cash flow forecasts also take into flow forecasts for aperiod of at least12monthsfrom thedate of approval of thesefinancialstatements, basedinthe In consideringthebasisof preparation of theAnnualReportandfinancialstatements, theDirectors have prepared cash £46.7 million. through a successfulequityplacementinJune2020. TheGroup endedtheyearwithcashandequivalentsof operating activities for theyearof £3.1 million.Furthermore, theGroup raised anadditional£38.3 millionincash The Group made a loss for the year ended 31 December 2020 of £6.2 million, but generated net cash flows from Going concern increase shareholder value. investments initsproducts andenablingtechnologieswhere theopportunityexiststoimprove patient outcomesand Innovation Centre, ashighlightedintheequityfundraiseJune2020. TheGroup continuestomake selectivestrategic Capex for 2021willbeabove2020levelsduetotheexpansionbeingundertaken at bothWindrushCourtand 2020 levelsitwillnotgrow at thesamerate asrevenues. but bylowerlevelsthanseenin2020. Thisinvestmentmeansthat whileOperating EBITDA isexpectedtobeabove investment inR&Donpropriety programmes toprogress themtowards theclinic.Headcountisalsolikely toincrease development of itsplatform toaccelerate theambitiontoindustrialiselentiviralvectorproduction, aswellincreased R&D expenditure in2021isexpectedtobeabovethe£29.7 millionseenin2020. TheGroup intendstoinvestinthe Financial review Strategic Report Oxford Biomedica plc Chief FinancialOfficer Stuart Paynter and therefore have prepared thefinancialstatements onagoingconcernbasis. continue tomeetitsliabilitiesastheyfallduefor at least12monthsfrom thedate of approval of thefinancialstatements Taking accountof thematters describedabove, theDirectors are to confident that theGroup willhave sufficientfunds operations tobeminor. Further information regarding thisissueisprovided onpage76. significantly its affected thefiscal,monetaryand regulatory landscapeintheUK, Grouphasassesseditsimpacton The Directors have alsoconsidered theimpactof theUK’sdecisiontoleave theEuropean Union.AlthoughBrexit has The Board hasconfidence intheGroup’s abilitytocontinueasagoingconcern for the following reasons: — — — — — — — —
A substantialr customer base throughout the lockdown period, customer basethroughout thelockdown period, forecasts whichgiveadditionalcertaintytorevenues overthenext12months, end of March 2021, under longtermcontracts. The Gr The Gr A lar The Gr As notedabovetheGr The impactso Significant decr No r evenues from newcustomers, ge proportion of 2021forecasted revenues are covered bybindingpurchase orders androlling customer oup’s historyof beingabletoaccesscapitalmarkets. oup hastheabilitytocontrol capitalexpenditure costsandlowerotheroperational spend,asnecessary, oup haskey worker status whichallowscontinuityof providing servicestotheGroup’s financiallystable
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evenue downsideaffecting thecore LentiVector Annual r f COVID-19 ontheGroup anditscustomersincludingexpectedrevenues from existingcustomers eases inforecasted existingcustomermilestoneandroyalty revenues, eport and accounts 2020 oup hascashbalancesof £46.7 millionat theendof December2020and£65.9 millionat the ® platform business, Oxford Biomedica plc for thegovernanceandoversightof theGroup’s ESGcommitments. responsibility for ESGwithintheGroup, theESGCommitteeisresponsible and theGroup’s business. AlthoughtheBoard andtheSEThave review of ESG issuesthat have thepotentialtoimpactuponstakeholders the Group’s ChiefExecutive Officer, provides alinktotheBoard for regular (formerly theResponsibleBusinessCommittee)chaired byJohnDawson, and enhancingtheculture andvaluesof theGroup. TheESGCommittee Group considerstheESGobjectivestobefundamentalmaintaining with theSET, are inadditiontotheGroup’s corporate objectives.The internally bytheseniorleaderresponsible for eachpillar, inconjunction on itsESGstrategy andmission.Theseobjectives,whichare developed five pillars of ResponsibleBusiness(nowESG)toensure theGroup delivers In 2020, the Group introduced the concept of annual objectives for the The fivepillarsof Responsible Business pillars: People;Community;Environment; Innovation andSupplyChain. and sociallyresponsible way. TheGroup’s ESGstrategy isfocused onfive mission) istodeliverlife changinggenetherapiestopatients inanethical The Group’s ESGmission(formerly theGroup’s ResponsibleBusiness and sociallyresponsibleway Deliver lifechanginggenetherapiestopatientsinanethical throughout theGroup overthepastfew years. during 2020, withtheESGstrategy having becomedeeplyembedded (ESG). ESGhascontinuedtobeof fundamentalimportancetotheGroup last year, andisnowreferred toasEnvironmental, SocialandGovernance and SocialResponsibility. ThisbecameknownasResponsibleBusiness In prioryears,thissectionof theAnnualReportwasentitledCorporate Environmental, SocialandGovernanceReport Strategic Report 2 3
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Annual r of Responsible of Responsible Five pillars Five pillars Business 4 1 eport and accounts 2020
5 Values Our
Responsible Business Five pillarsof
4 2 3 5 1 Supply Chain Innovation Environment Community People
, the Group , theGroup “ In 2020 ESG strategy andmission.” the Group deliversonits Business (nowESG)toensure five pillars of Responsible of annualobjectivesfor the introduced theconcept
Strategic Report 51 52 Further detailsof 2021ESGpeopleobjectivesare setout onpage55 of all HealthandSafety regulation andbestpractice. of the business.TheGroup iscommittedtomeetboththeletterandspirit improve themetricsusedtomonitorperformance inthisimportantpart standing item on theBoard’s agenda and the Group has taken stepsto continued the trend of having no major injuries. Health and Safety is a The Group continues to have a first-class safety record, as the Group has informed andengagedinthechangeprogramme. the improvement planswere shared withemployeestokeep them aligned well with the Group’s existing improvement plans. The results and and Resources for HealthandSafety. Resultswere encouragingand of procedures; Engagement inHealthandSafety; Peergroup attitude; Health andSafety orientedbehaviours; HealthandSafety trust;Usability were Accidentandnearmissreporting; Organisational commitment; to apositivesafety culture, andtobenchmarkexternally. Theeightfactors the Group toassessitsperformance againsteightfactorsthat contribute engage allstaff andidentifyareas for improvement. Thesurveyenabled completed a Safety Climate Survey in the first quarter of 2020 to actively Improving employee engagement is a key area of focus. The Group and procedures toensure theyadequately reflect workingpractices. The Group hastaken stepstoimprove consultation indevelopingpolicies for allemployeesonthenewsystem. employees’ healthandsafety needsandtheGroup hasinitiated training managed toafullyelectronic systemthat provides aone-stop-shopfor assessments, policiesandprocedures that were previously locally investigation andtrackingof actions.TheGroup hasmovedrisk introduced in late 2020, enables the Group to improve the reporting, grow with theorganisation. Anewincidentmanagementsystem, equipment. TheSafety ManagementSystem hascontinuedtoevolveand its work, from working with biological materials, to use of display screen The Group’s HealthandSafety ManagementSystem coversallaspectsof maintain itsfacilitiesandequipmenttothehigheststandards. affected bytheGroup’s actsoromissions.TheGroup endeavours to controlled tominimisetheriskemployeesandanyoneelsewhomaybe of allactivities,theGroup ensures that significantrisks are identifiedand sustainable manneristhenumberonepriority. Viathesystematic evaluation Being abletodelivertheGroup’s products andservicesbothinasafe and Health andSafety People Oxford Biomedica plc Environmental, SocialandGovernanceReport Strategic Report
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Annual r eport and accounts 2020 . no majorinjuries. The Group hascontinuedthetrend of having First-class safety record 0 majorinjuries investigation andtrackingof actions. 2020 A newincidentmanagementsystem,introduced inlate continued toevolveandgrow withtheorganisation. The Group’s Safety ManagementSystem has Health andSafety ManagementSystem , enables the Group to improve the reporting, , enablestheGroup toimprove thereporting,
Oxford Biomedica plc and theGroup recognises andrewards adherence tothevalues. appointment; thevaluesare animportantfactorinmeasuringperformance; Group looks for evidencethat jobcandidates share the Group’s valuesupon The Group’s values are embedded throughout its people processes – the its stakeholders. how theGroup works togetherandtheinteractionsGroup haswithall The Group’s three valuesgovernthewaythat theGroup doesbusiness, Values details of the2021ESGpeopleobjectivesare setoutonpage55. all employees up to date and engaged as the business grows. Further internal socialmediaandvirtualevents,willenabletheGroup tokeep frequent two-waycommunication across avarietyof channels,including strategy willcreate furtheropportunityfor seniorleadershipvisibility, more by theSET. Thestrategy willbeimplementedthroughout 2021.The A new employee engagement strategy has been developed and approved employees andtakingappropriate action. will continuetorunduring2021,ensure that theGroup islisteningto on how the COVID-19 situation evolves. In addition, quarterly pulse surveys engagement surveyisplannedfor thethird quarter of 2021,butisdependent As partof the2021ESGpeopleobjectivesabroader Group-wide employee covered inthesurvey. throughout 2020showpositiveimprovements trackingacross allareas employees, and the overall results were shared with employees. The results mental wellbeingtoolsandoffering lateralto flow COVID-19 testing from the surveys were putinplacethroughout theyear, suchasrolling out and theirsuggestionsfor future improvement. Anumberof actionsresulting surveys provide arichinsightintohowemployeesare feeling, theirconcerns and three focused ontheimpactsof theCOVID-19 pandemic.These surveys were completedin2020, onefocused onemployeecommunication communication, safety andwellbeing.Fouremployeeengagementpulse their viewsandsuggestionsonavarietyof issues,includingleadership, The Group iscommittedtomakingsure that itregularly asks employeesfor planned for 2021,twoof whichwillbeattended byStuart Henderson. facilitate direct discussionandengagementat Board level.Sixmeetingsare Stuart Henderson, the Board’s designated Non-Executive Director, to workforce. Three meetingstookplacein2020, includingonemeetingwith ensure that theseniorleadersandGroup’s Board heartheviewsof the WEP istoenableemployeesdiscussissuesof importancetothemand representing alllevelsandfunctionsacross theGroup. Thepurposeof the Engagement Panel(WEP)in2020. TheWEPismadeupof employees Responsible Businessobjectives,theGroup establishedaWorkforce As recommended bytheBoard andinaccordance withthe2020 Engagement
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Annual r eport and accounts 2020 oup is committed to oup iscommittedto “ working tobringaboutbettersolutionsfor patients. improve bygenerating newideasandcreative waysof nurturing ex We deliverground-breaking scientificexcellence by Deliver innovation engages andexcites us. we create anenvironment whichpositivelychallenges, and teamwork.Thr We succeedtogetherthrough ourpassion,commitment Be inspiring and canbetrustedtodeliveronourcommitments. patients andpartners.We make objectivedecisions and consequences,wedowha We alwaysdotherightthing.Whatever thesituation Have integrity The Group’svalues
wellbeing. communication, safety and of issues,includingleadership, and suggestionsonavariety asks employeesfor theirviews making sure that itregularly The Gr ceptional talent.Together, wecontinually
ough our actions and behaviours, ough ouractionsandbehaviours, ” t’s right for employees, t’s rightfor employees,
Strategic Report 53 54 Total All otheremployees direct reports Senior managersand Board including rollout of unconsciousbiastrainingduring2021. plan. Thiswillincluderaisingawareness andeducating employeesthrough the employee group to turn this proposed strategy into a oneto three-year action for 2021 are toshare theseoutputswith the WEP and engageabroader and visionfor Equality, InclusionandDiversity withintheGroup. Thenextsteps diversity andinclusionspecialists,tohelptheGroup create apurpose,ambition In 2020, theGroup organised aninitialfocus group, facilitated byexternal for all. and ensure internalprocesses andculture promote equalityof opportunity its approach soemployeescanconfidently betheirtrueselves at work all forms of diversityare celebrated. TheGroup aimstoassessandevolve The Group iscommittedtobuildingamore inclusiveorganisation where Equality, InclusionandDiversity The Group have trained 16 staff in Mental Health First Aid. The Group have trained16staff inMentalHealthFirstAid. managers withtoolsandresources tohelpthemsupporttheiremployees. within theManagementDevelopmentProgramme, providing line of this.Duringtheyear, theGroup incorporated mentalhealthtraining associated withtheCOVID-19 pandemicfurtherincreased theimportance mental wellbeing.TheGroup recognised that thementalhealthrisks and asaconsequencetheGroup’s wellbeingstrategy for 2020focused on his ownlife. Manyof thestaff and colleagueswere impactedbythisissue In March 2020, theGroup received tragicnewsthat acolleaguehadtaken resources andinitiatives throughout theyear. supports colleaguesbyproviding accesstoanumberof wellbeing personal accountabilityfor theirwellbeingisimportantandtheGroup fostering apositivehealthculture. Empoweringcolleaguestotake The Group’s aimistohelpemployeesfeel goodat workandat homeby The healthandwellbeingof allof employeesisof upmostimportance. Health andWellbeing details of thereport pleasevisittheGroup’s websiteat www.oxb.com. positive impactontheGroup’s meanandmediangenderpayratio. Forfull employees at themore seniorlevelsof theorganisation. Thishashada Group ispleasedtoreport acontinuedincrease inrepresentation of female The GenderPayGapReportfor 2020hasbeenprepared bytheGroup. The Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc 2020: The tableshowsthegendersplitacross theorganisation asat 31December diversity inallforms. national origin,disabilityoranyotherpersonalcharacteristics,andembrace opportunities for allemployees,irrespective of race,gender, religion, The Board andseniormanagementare fullycommittedtoproviding equal ESG peopleobjectivesare setoutonpage55 Non-Executive Directors
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Annual r eport and accounts 2020 aeFml Total Female Male 4 4 8 0 50% 50% 681 341 340 311 11 75%43% 57% 37 16 21 8 324 1 . Further details of the 2021 Further detailsof the2021 3 9 51% 49% 635 9 ae%Female % Male 9 11% 89% b. d. c. a. Gender splitasat31December2020
Non-Executive Directors including Board T All otheremployees Senior managersanddir Female Male otal splitmale/female 43% 50% 51% 11% d. b. a. c. 50% 57% 89% 49%
ect reports Oxford Biomedica plc extra protection, suchasdailyonsiteCOVID-19 testing. as wellproviding regular updates onmeasures available toprovide communicates withstaff in respect of thecurrent governmentguidelines to maintainaCOVID-19 secure environment. TheGroup regularly continually assessestherisks totheworkforce whilstimplementingsteps The Group understandsithasadutyof care towards allemployees and help employeesstrike abalancebetweenworkandnon-worklife. course, onlineprogramme orotherstructured learningarrangementto or contributetocostsassociated withanystructured learning,bethat a lifestyle, mental and physical wellbeing and learning vouchers, to pay for platform that provides agateway toover3,000 experiences,covering package toincludetwonewwellbeingofferings. Anonlinewellbeing The Group isenhancingtheemployees‘Your Reward in2021’benefits awareness andexploringalternative therapyofferings (COVID-19 permitting). focusing onnutrition,hydration andactivity, promoting summerhealth wellbeing initiatives with plans including maintaining a healthy lifestyle, business. Throughout 2021, theGroup willbeoffering avariety of other that a varietyof wellbeingofferings isimportanttoemployeesacross the Through information gathered from the pulse surveys, the Group recognises Awareness Week. Awareness Week, SuicidePrevention DayandInternational Stress campaigns, viatheWorkplace Wellbeing Hub,includingMentalHealth The Group willbealigningotherinitiatives tokey mentalhealthawareness implement intotheirpersonalandprofessional lives. ‘Resilience’ whilstequippingemployeeswithkey takeaways for themto external storytellerswhosestoriesallbringtolife theumbrella theme have aparticularfocus onresilience in2021andwillbeworkingwith personal response totheseexternalfactors.TheGroup willtherefore can support employees andprovide them withthetoolsto manage their Group cannot control theexternalenvironment around us,theGroup wellbeing. TheCOVID-19 pandemichasemphasisedthat whilstthe In 2021,theGroup’s wellbeingstrategy willcontinuetofocus onmental initiatives offered toemployeesin2020. Wellbeing’ award from Oxfordshire Mindfor thevariouswellbeing The Group wasdelightedtoreceive the‘Commitment toWorkplace includes direct accesstoMentalHealthsupportwithoutseeingaGP. employees are covered byBUPA Private MedicalInsurance,which Health Advisor, aRegistered MentalHealthNurse.Inaddition,all The Group offered staff aHealthyMinds Catch-up withitsOccupational who hostedaninsightfulsessionintotheimportanceof goodsleep. Browning, sleepexpertandChartered Psychologist,from Trouble Sleeping Mindfulness inOxford. TheGroup wasdelightedtowelcomeDr. Lindsay how canitsupportyourwellbeing?’delivered againbyalocalcontact, delivered bylocalcharity, Oxfordshire Mind,and‘What isMindfulness,and Ways toWellbeing’ and‘Understanding AnxietyandTools toManageIt’ a numberof onlineworkshops tothewholeworkforce, including:‘Five In linewiththe2020ResponsibleBusinessobjectives,Group offered
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Annual r eport and accounts 2020 “ are delighted to be able to offer them this testing as are delightedtobeableoffer themthistestingas very proud of theworktheydoandasmanagerswe later confirmed byPCRtesting.Ouremployeesare number of asymptomatic caseseveryweek,whichwere colleagues. Ithasbeenverysuccessfulinpickingupa staff asnoonewantstobethe‘silentspreader’ totheir testing hasbeenvoluntaryittaken upwellby pilot for lateral flowtestingintheworkplace.While We were verypleasedtotake partinthegovernment employees unwittinglybrought thevirusintoourfacilities. the potentialimpacttovaccinesupplyifasymptomatic concerned, notonlyaboutthesafety of ourstaff, but COVID-19 vaccinewewere understandablyvery Being amajormanufactur safest environment possibletocarryouttheirvitalwork”. COVID-19 secure workingpractices,togivethemthe an additionalmeasure, beyondouralready enhanced at OxfordBiomedicasaid: Nick Page,ChiefOperationsOfficer — — — 2021 ESGpeopleobjectives:
health andresilience. initiatives withafocus onmental to intr roll outof unconsciousbiastraining. Inclusion andDiversity, toincludethe to cr pulse surveys. engagement surveyandquarterly to includeaGroup-wide employee employee engagementprogramme, to implementanewGr eate anactionplanfor Equality, oduce further wellbeing oduce furtherwellbeing er of the Oxford AstraZeneca er of theOxford AstraZeneca oup-wide oup-wide
Strategic Report 55 56 2021 ESGCommunityobjectivesare setouton the Group hasplannedfor afurthernineapprenticeships. Further detailsof the the schemeinfuture andinlinewiththe2021ESGCommunityobjectives, to supportingtheapprentices through in-postlearning,trainingandexpanding skilled areas of ManufacturingandAnalyticaltesting.TheGroup iscommitted community. Theapprentices are enrolled onatrainingschemeinthehighly 2020, with eighteen now in place, including school leavers from the local Business objectives,the Group addedanadditionaleightapprentices during and multipletrainingproviders. Inaccordance withthe2020Responsible scheme incollaboration withAdvancedTherapiesApprenticeship Community skilled jobstothelocalcommunity, theGroup hasestablishedanapprenticeship As partof theGroup’s focus ondeliveringlocalbenefitsandproviding high- Apprenticeship scheme help minimisethetraffic impactonthecommunity. established Cycle-To-Work schemeandinterest-free seasonticket loansto planning andthetraffic impactcausedbyemployees.The Group hasawell- and regulations, particularly with regard toemissions,waste, property behaves asaresponsible neighbour, complyingwithnational andlocallaws organisations for volunteeringinitiatives, suchasreading support.TheGroup Further links have beenestablishedwithschoolsandlocaleducational through volunteering for HomelessOxfordshire andotherlocalcharities. strong supporter of thecommunitieswhere employeesliveandwork develop its apprenticeship scheme, supporting science education, and is a levels across theorganisation duringtheyear. TheGroup continuedto community. The Group has created around 120 new appointments at all citizen. TheGroup hasachievedthisbydeliveringpositivebenefitstothe The Group hascontinuedtorecognise thevalueof beingagoodlocal Community Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020 page 57 . school leavers from thelocalcommunity. during 2020, witheighteennowinplace,including The Group addedanadditionaleightapprentices New apprenticeships +8 Community andmultipletrainingproviders. in collaboration withAdvancedTherapiesApprenticeship The Group hasestablishedanapprenticeship scheme Apprenticeships efficient manner. voluntary wayfor staff tosupportanyUK-registered charityinatax- good causesthrough monthlypayroll contributions.Payroll givingisa new friendships,andmostof allimprove employees members’ownwellbeing. Group regards community projects as a great way to meet people, develop work andhelpstosupportemployees that participate insuchinitiatives. The all communities. TheGroup encouragesstaff to getinvolvedin community The Group isexploringopportunitiestoensure that theGroup isinclusiveof For 2021,theGroup willprovide all Total Oxfordshire Mind(Group donation) SeeSaw (Group donation) SeeSaw (Employeedonation) Charity with hope. children, youngpeopleandtheirfamiliesinOxfordshire tofacethe future SeeSaw. TheGroup’s £21,000 donation willhelpSeeSawtosupport over theChristmasperiodin2020, theGroup decidedtodonate £100to COVID-19 vaccinewouldnotbeinterrupted.Foreverypersonwhoworked continued toworkmake sure that thesupplyof theOxford AstraZeneca Over the2020Christmasholidayperiod,210of theGroup’s incredible staff Biomedica employeesraisedover£4,003 for SeeSawin2020. Christmas wreath making,care boxes andaChristmasraffle. Oxford (which pre-dated theonsetof thepandemic),COVID-19 maskmaking, included participation inaBlenheimPalacesunrisewalk,cake sale organised andparticipated inanumberof COVID-19 secure events.This death inthefamily. During2020, theHelpingHandsteamandemployees bereaved children, youngpeopleandtheirfamilieswhentheyfacea registration 1076321),anOxford basedcharityproviding supportfor charity. For2020, employeeschosethelocalSeeSawcharity(charity forms partof theGroup’s commitmenttoprovide supporttoalocal The Group’s charityteam,HelpingHands,wassetupoverayearagoand important cause. to supportOxfordshire Mind,theGroup donated £10,000 tothis Mind. To showtheGroup’s supportfor this challengeandtocontinue to raise awareness of mental health issues with donations for Oxfordshire colleague andfriendtookonaSnowdonchallengeinSeptember2020 above) wasdeeplyfelt bymanyof thestaff. In response, one former The tragiclossof acolleaguewhohadtaken hisownlife, (referred to Charitable giving Oxford Biomedica plc
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Annual r eport and accounts 2020 employees the opportunity to support theopportunitytosupport Donation £35,305 £10,000 £21,302 £4,003 donation totalled£21,000. providing supportfor bereaved children. TheGroup’s donated £100toSeeSaw, anOxford basedcharity vaccine production wasnotinterrupted,theGroup period aswecontinuedtomake sure theCOVID-19 For everypersonwhoworked overtheChristmas £100 peremployee £21,000 — — 2021 ESGCommunityobjectives: —
charitable monthly payroll contributions to theapprenticeship scheme. to intr to addafurthernineappr to schoolsanduniversities. (with timeoff support). initiatives, suchasreading support, to continuesupportvolunteering to incr oduce a system for voluntary oduce asystemfor voluntary ease outreach programme ease outreach programme entices entices
Strategic Report 57 58 environmental impacttoitsstakeholders. and increase thetransparency withwhichtheGroup communicates its upgraded itsenergy andcarbonreporting tomeetthesenewrequirements and CarbonReport)Regulations 2018. Assuch,thisyeartheGroup has Companies (Directors’ Report)andLimitedLiabilityPartnerships(Energy year-on-year. The Group is aware of its reporting obligations under The and theGroup iscommittedtomonitoringandreducing itsemissions The Group recognises that itsoperations have anenvironmental impact The Group’sSECRCompliantDirectorsstatement details of the2021ESGenvironmental objectivesare setoutonpage61. sustainability performance of thebuilding,for exampleBREEAM. Further in 2021,theGroup intendstoincludeathird partyassessmentof during 2021.Withtheredevelopment of theWindrushInnovation Centre legal compliance(tradeeffluentdischarge consents,etc) forthefacility manufacturing sitecomingonlineduring2020, theGroup focussed on objectives, theGroup willengageitssuppliersonthissubject.Withanew organisation (e.g.packaging). In2021,inlinewith2021ESGenvironmental reduce thevolumeof waste-generating materials comingintothe As partof theGroup’s ESGstrategy theGroup hasidentifiedtheneedto for thegrid. the incineration of plastic and other disposable waste to generate energy was theashcreated bytheincineration of clinicalwaste,ortheashfrom that goes to landfill. By the end of 2020, the only waste going to landfill uses todisposeof itswastes,andtryingtominimisethevolumeof waste streams, undertaking dutyof care auditsonthecompaniesGroup management of waste,conductinganumberof internalsurveysonwaste Energy providers. TheGroup hascontinuedtheefforts toimprove the footprint, theGroup hasmovedallof itsenergy supplyovertoGreen course of theyear, andwiththeaimof reducing theGroup’s carbon In accordance withthe2020ResponsibleBusinessobjectives,during and disposalof chemicalwasteanddecontaminated biologicalmaterials. laboratory waste,andusesqualifiedlicensedcontractors for thecollection complies withallregulations coveringtheprocessing anddisposalof reporting yearinlinewith2021ESGenvironmental objectives.TheGroup aim of aligning with the principles of the standard bythe end of the next organisation. TheGroup ismappingitssystemagainstISO14001 withthe Management System hascontinuedtoevolveandgrow withthe Much like itsHealthandSafety ManagementSystem, theEnvironmental activities on the environment, its neighbours and the local community. The Group fullyrecognises itsresponsibility tominimisetheimpactof its Environmental policiesandinitiatives Environment Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020 dance with the 2020 dance withthe2020 “ to Green Energy providers.” reducing theGroup’s of theyear, andwiththeaimof objectives, duringthecourse Responsible Business In accor footprint, theGroup all of its energy supply over all of itsenergy supplyover etc) for thefacilityduring2021. compliance (tradeeffluentdischarge consents, during 2020, theGroup focussed onlegal With anewmanufacturingsitecomingonline Legal compliance has moved has moved carbon carbon
Oxford Biomedica plc — — — is inaccordance withtherequirements of thefollowing standards: The methodologyusedtocalculate theGreenhouse Gas(GHG)emissions 2020 results — — — — — has undertaken thefollowing emissionsandenergy reduction initiatives: environment. Assuch,overtheperiodcovered bythereport, theGroup The Group ismindfulof theimpactitsbuildingsandtravel have onthe Energy andcarbonaction Group’s total emissionsonamarket basis. purchasing of green tariffs at multiplesiteshasbeen reflected inthe reported belowandmadeup46%of totalemissionsin2020. The disclosures. Electricitywasthemostmaterial of theemissionsources will bemonitored totrackperformance initssubsequentenvironmental The Group hascalculated emissionintensitymetricsonaFTEbasis,which intensity) are 4,097tCO U.K. TheGroup’s emissionsonalocation basis(usingthe UKgridemissions required scope1,2and3(selectedcategories) emissionssources for the This year, theGroup hascalculated itsenvironmental impactacross the 2020 performance
orld Resources Institute(WRI)GHGProtocol (revised version). an coilunit(FCU)refurbishment –toincrease theefficiency ofthe fitted toLEDlighting. been installed,alongsidepassiveinfrared (PIR)sensorswhichhave been more energy efficient heating, ventilation andairconditioningunits have Windrush CourtEastWinglabora of theconversionfactorrepository. UK o Energy andCarbonReportingrequirements (March 2019). Defra’s Envir W Court – toreduce wastedenergy inoffices. Sound andhea This lightingiscontrolled bytimercontrols. LED unitswere installedat WindrushCourt,Oxbox andHarrow House. External lightingupgrades–toincr and WindrushCourt. units andtherefore reduce thecostof heating andcoolingat Oxbox F continued commitmenttolowertheGroup’s footprint. at Harrow House,WindrushCourtandYarnton demonstrates the Pur chases of renewable energy –aswitchtogreen tariffs for electricity ffice emissions have been calculated using the DEFRA 2020 issue ffice emissions have beencalculated usingtheDEFRA2020issue
| onmental Reporting Guidelines: Including Streamlined onmental ReportingGuidelines:IncludingStreamlined
Annual r t insulation installed on the second floor of Windrush t insulation installedonthesecondfloor of Windrush eport and accounts 2020 2 e, whichisanaverage impactof 7tCO tory refit –to reduce wastedenergy, ease theenergy efficiency, external 2 e per FTE. e perFTE. emissions in2020. sources reported belowandmadeup46%of total Electricity wasthemostmaterial of theemission Electricity use 46% an average impactof 7tCO UK gridemissionsintensity)are 4,097tCO The Group’s emissionsonalocation basis(usingthe Average emissionsimpact 7tCO 2 e perFTE 2 e perFTE. 2 e, which is e, whichis
Strategic Report 59 60 gy reporting includeskWh from scope1,2and3employeecarsonly(asrequired bytheSECR regulation). 1 from business activitieswhichfallwithinthereporting periodof January2020toDecemberare asfollows: Following anoperational control approach todefiningtheGroup’s organisational boundary, thecalculated GHGemissions Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc Scope 1 Total Energy Usage(kWh) Total (Location Based) Total (Market Based) Scope 3 Scope 2 Carbon intensityperemployee example iselectricity. by anothercompany. Themostprominent activities butfrom sources ownedorcontrolled Indirect emissionsresult from acompany’s Indirect emissions
Ener
| 2
Annual r Scope 2: Indirect 3 CO 1 2 eport and accounts 2020
SF 6 furnace. furnace. combustion of fuelinacompany’sboilersor like businesstravel inacompanycaror the sources that thecompanyownsorcontrols, company’s organisational boundaryfrom Direct emissionsare emissionswithina Direct emissions CH 1 Scope 1: 4 Direct Emissions Source Fleet Other fueltypes Natural gas Waste andRecycling Paper Business flights Public Transport Rail Employee cars Water distribution Electricity transmissionand Electricity tCO
2 e perFTE N 2 O HFCs Scope 3: Indirect 2020 EmissionsintCO
PFCs 17,058,312 1,900 4,097 2,647 1,614 163 212 152 18 14 13 2 6 3 e 7 1 1 Oxford Biomedica plc Management; andMetricsTargets. elements of howorganisations operate: Governance;Strategy; Risk recommendations around four thematic areas that represent core related risks andopportunitiesappropriately. TheTaskforce structured its investors, lenders, and insurance underwriters to assess and price climate The TCFD was establishedto help identifythe information needed by Taskforce forClimate-relatedFinancialDisclosure (TCFD) currently inuse. refurbished toensure lightingisextinguishedinareas that are not Group has passiveinfrared lightsensorsinallareas that have been its facilitieswithmore efficientsystemcontrols. InWindrushCourtthe The Group islookingat reducing thewater usagethroughout itssitesin are significantly more energy efficient than traditional lighting systems. existing lightingneedsreplacing theGroup switchestoLEDlightswhich policies todecrease energy usagewhere possible.Forinstance,when of is committedtoenergy efficiencyandhasimplementedanumber In accordance with the 2020 Responsible Business objectives, the Group — — Group. This hasincluded: order todeterminewaysof improving recycling andsustainabilitywithinthe waste more effectively and,as result, ithasestablishedaSustainabilityForumin The Group continuestoreview itswastemanagementsystemstomanage Waste management Energy efficiency ecycling allpaperandcardboard waste,aluminiumcans,glass,plastics use o and printertoner/cartridges r f different wastestreams toincrease processing efficiency
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Annual r eport and accounts 2020 — — — — — — 2021 ESGenvironmentalobjectives:
educe greenhouse gasemissions
organisation. generating materials comingintothe to reduce thevolumeof waste- to engagewiththeGr liquid wastesbeinggenerated. usage. by optimisingtheGroup’s energy and targets. to meettheT to r to r to maptheGr to commissionathir ISO14001. Management System against (eg. BREEAM). of theWindrushInnovation Centre performance ontheredevelopment assessment of sustainability educe the volume of hazardous educe thevolumeof hazardous CFD metrics CFD metrics oup’s Environmental oup’s Environmental d party d party oup’s suppliers oup’s suppliers
Strategic Report 61 62 Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc such information ismaterial. relevant climate-related risks andopportunitieswhere Disclose themetricsandtargets toassessandmanage Metrics andTargets manages climate-related risks. Disclose howtheorganisation identifies,assessand Risk Management material. strategy andfinancialplanningwhere information is related risks andopportunitiesontheGroup’s business, Disclose theactualandpotentialimpactsof climate Strategy around climate-related risks andopportunities. Disclose theorganisations governance Governance Recommendation
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Annual r eport and accounts 2020
– – – – Report. Thekey targets are: described initsEnvironmental, SocialandGovernance The Group’s environmental metricsandtargets are the biotechnologyandpharmaceuticalsector. indicates that theissueisnotlikely tobematerial for Standards Board’s (SASB)Materiality Map,which This assessmentisconsistentwiththeSustainability none that wouldmaterially impactitsbusinessmodel. financial risks that wouldneedtobemanagedand concluded that there islikely tobeminorfuture with applicableenvironmental legislation. responsible environmental practicesandcomplying its operations ontheenvironment byadopting of impact The Group iscommittedtominimisethe Responsible BusinessReport). and GovernanceReport(previously knownasthe as part of its normal risk management process and as partof itsnormalriskmanagementprocess and The Group hasassessedtheimpactof climate change are describedintheGroup’s Environmental, Social The Group’s environmental strategy andobjectives ESG strategy andtosetobjectivestargets. work withtheESGCommitteetodefineGroup’s Business Committee),chaired bytheCEO, who functional ESGCommittee(formerly theResponsible The Board andtheSETare supportedbyacross- their functionalareas. responsible for deliveringontheseobjectiveswithin of theGroup’s climate-related activities.TheSETis The Boar The Group’sapproach use sustainablesuppliers reduce packaging materials (plasticsused)and energy usage reduce carbonemissionsbyoptimisingtheGroup’s manufacturing suites minimise wastedisposalfrom laboratories and d is accountable for overseeing the delivery d isaccountablefor overseeingthedelivery Further information Risks (pages70to77). Governance Report(pages51to66). Environmental, Socialand Governance Report(pages51to66). Envir (pages 80to95). Corporate Governance Governance Report(pages51to66). Environmental, Socialand onmental, Social and onmental, Socialand
Oxford Biomedica plc — — — application inlinewiththecorporate objectives. transition newresearch technologiestowards therapeuticandcommercial the research anddevelopmentteamstomore effectively developand intends tofocus onimproving communication andcoordination amongst better streamline thecommercialisation process. Furthermore, theGroup new tools for innovation and will continue to assess ways in which to 2021, theGroup willmonitortherollout andapplication of thesethree selection of theGroup’s mostpromising technologicaldevelopments.In expected that thedecisionmatrix scoringwillassistinprioritisation and development process withgreater clarityandgranularity. Itisalso new programmes andtechnologiesallowtheGroup totrackthe It isintendedthat thesetoolswillexpeditetheprocess of commercialising innovation. Theseare: During thecourseof 2020theGroup hasdevelopedthree newtoolsfor implications canbeeasilyassessed To deliverinnovationthatisrelevantandunderstandablesoits New Technology andNewProduct Committees. innovation activities by the formal inclusion of ethical review within the ethical standards operate asaguidingprincipleinitsresearch and way andin2021theGroup willseektofurtherensure that thehighest changing genetherapiestopatients inanethicalandsociallyresponsible objective underpinstheGroup’s overallESGmissiontodeliverlife has continuedtoshapetheGroup’s platform innovation in2020. This historically beenembeddedinallresearch anddevelopmentactivities The Group’s commitmenttoachievingthehighestethicalstandards has highest ethicalstandards Ensure allresearchandinnovationattheGroupmaintains future for theGroup andthewidercommunity. and tofoster andencourageaculture of innovation tobuildasustainable is relevant andunderstandablesoitsimplications canbeeasilyassessed; Group maintains the highest ethical standards; to deliver innovation that strategy hadthree key aims:toensure allresearch andinnovation at the innovation. During2020, theInnovation pillar wasdevelopedandthe achieved by practicing and delivering ethical, relevant and sustainable therapies topatients inanethicalandresponsible way. Thiswillbe The Group iscommittedtodeliveringlife-changing cellandgene Innovation
C to officially transitionthemtogovernancebythe a decisionma points of thetechnologydevelopmentprocess a newtechnologypr progression of newtechnologies tocommercialisation a technologyr ommittee
| trix scoring which will evaluate promising technologies and trix scoringwhichwillevaluate promising technologiesand
oadmap designed to ensure the smooth and timely oadmap designedtoensure thesmoothandtimely Annual r ofile (NTP) to document the key stages and decision ofile (NTP)todocumentthe key stagesanddecision eport and accounts 2020 N ew T echnology echnology oup is committed oup iscommitted “ also volunteeringtomentorIn2Sciencestudents. In2Science. Anumberof Oxford Biomedicastaff are The Group hassigneduptosponsorfivestudentsvia backgrounds enterSTEMsubjectsinhighereducation. In2Science that helpschildren from disadvantaged In 2020theGroup identifiedanorganisation called Helping childrenfromdisadvantagedbackgrounds and sustainableinnovation. delivering ethical,relevant achieved bypracticingand responsible way. Thiswillbe patients inanethicaland cell andgenetherapiesto to deliveringlife-changing The Gr
”
Strategic Report 63 64 its suppliersandproviding themwithfeedback. supplier pageontheGroup’s websitewww.oxb.com andbenchmarking comprise thelaunchof acodeof conductfor suppliers,thecreation of a build ontheprogress madeduring2020ontheseareas. Theobjectives The Group hasthree mainESGsupplychainobjectivesfor 2021,which on thisperformance during2021. Group’s suppliers’invoiceswithin30days.TheGroup islookingtoimprove received bytheGroup. In2020, theGroup managedtopay94%of the The Group looks topayallitssupplierswithin30daysof theinvoicebeing for openness,ethicsandresilience inthefaceof environmental changes. relationships and ensuring that their conduct supports the Group’s principles to be achieved through establishing and maintainingrobust supplier while meetingitsgoalof sustainability. It isintendedthat thiswillcontinue building asupplychainthat deliverscommercial benefittothebusiness, During 2020, in line withthe2020objectives,Group committedto Supply chain placements toencouragewideraccessindustriallaboratory experience. field. Forcurrent universitystudentstheGroup is offering paidindustry apprenticeships tostudySTEMsubjectsandembarkoncareers inthe encourage theseindividualstoenrol inhighereducation and,or support for careers workshops andotheractivities,theGroup aimsto particularly inSTEMsubjects.Through sponsorship,mentoringand demographics that have a low representation inhighereducation, to promote STEMcareers asaviableroute for schoolchildren from intends tocontinueandexpanditsworkwithpartners,suchasIn2Science, a sustainablefuture for theGroup andthewidercommunity. TheGroup be on continuing to foster and encourage a culture of innovation to build The primaryfocus of theGroup’s ESGinnovation objectivesfor 2021will present on theirscientificworkandcareer experiences. Biomedica staff are alsovolunteeringtomentorIn2Sciencestudentsand signed uptosponsorfivestudentsviaIn2Science.Anumber of Oxford the biotechnologyandlife sciencessectorsand,assuch,theGroup has planning andencouraginginnovative thoughtfor future generations in subjects for awidervarietyof studentsisanimportantstepinsuccession education. TheGroup believesthat facilitating greater accesstoSTEM children from disadvantagedbackgrounds enterSTEMsubjectsinhigher In 2020theGroup identifiedanorganisation calledIn2Sciencethat helps future fortheGroupandwidercommunity Foster andencourageaculture ofinnovationtobuildasustainable Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc
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Annual r eport and accounts 2020 r a guidetotheGroup’s supplychainsustainability a supplierpageontheGroup’s websitetoprovide meeting itsgoalof sustainability. TheGroup iscreating delivers commercial benefittothebusiness,while The Group committedtobuildingasupplychainthat Our supplychain equirements. equirements. — — — 2021 ESGinnovationobjectives e research andinnovation oster and encourage a culture of oster and encourageaculture of be easilyassessed. understandable soitsimplications can to deliverinnova within the the formal inclusionof ethicalreview maintains highestethicalstandards by ensur for theGroup andthewidercommunity. innovation tobuildasustainablefuture f Product Committees. New Technology andNew tion that is relevant and tion that isrelevant and
Oxford Biomedica plc and reporting torelevant authorities. disciplinary actiontaken where necessary, uptoandincluding dismissal retaliation. Concernsandallegations are thoroughly investigated with suspected casesof misconductinconfidence andwithout fear of As partof thiseffort, the Group’s employees are encouragedto report of misconductthrough policyimplementation, trainingandmonitoring. The Group’s complianceactivitiesincludetheprevention anddetection Whistleblowing and eliminate bribery. is committedtoimplementingeffective measures toprevent, monitor consultants oranypersonbodyactingonitsbehalf. Seniormanagement does not tolerate any form of bribery by, orof, its employees, agents or legislation andallemployeesreceive traininginthismatter. TheGroup accordance withtheUKBriberyAct2010aswellotherrelevant overseas The Group’s policyonpreventing andprohibiting briberyisinfull Anti-bribery integrity initsbusinessactivitiestheUKandoverseas. The Group iscommittedtothehigheststandards of ethicalconductand Integrity andEthics Governance formally roll outitssuppliersfeedback programmes. Once thebenchmarkingprocess iscompleted,theGroup intendsto with customerstoestablishtheirexpectations of suppliers. internally andexternally, for exampletheGroup willengageindiscussions being developed during 2021 and will involve gathering data both and creating a ranking system. Planning for this benchmarking process is introduce afurtherlevelof review bybenchmarkingtheGroup’s suppliers chain managementprocesses. However, theGroup haselectedto expectations is already in place as part of its procurement and supply Giving theGroup’s suppliersfeedback ontheirperformance against Benchmark suppliers use bysuppliersduringthecourseof 2021. amongst comparator groups. TheGroup isaimingtolaunchthepagefor is currently undertakingareview process toestablishbestpractice requirements. Thisproject iscurrently at theplanningstageandGroup This willprovide aguidetotheGroup’s supplychainsustainability Create asupplierpageontheGroup’swebsitewww.OXB.com contractual supplyrelationships movingforwards. existing suppliersandincorporate thecodeof conductintoallnew finalised, theGroup intendsto formally roll outthecode of conducttoits now theGroup has notformally publishedacodeof conduct. Once issues aspartof itsduediligenceprocess for newsuppliers,butpriorto and childlaboursustainability. TheGroup already refers tothese This codewillrefer toethicalsupplychain,environmental impact,slave Launch acodeofconductforsuppliersworkingwiththeGroup
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Annual r eport and accounts 2020 2021 ESGsupplychainobjectives: — — —
and provide supplierswithfeedback. to benchmarktheGr to cr suppliers. to launchacodeo Group’s website. eate a supplier page on the eate asupplierpageonthe f conduct for f conductfor oup’s suppliers oup’s suppliers
Strategic Report 65 66 the use of animal models by cross-referring LentiVector necessary andwhere there are noalternatives. TheGroup minimises testing. Theseprinciplesensure that animaltestingisonlyemployedwhen “Rs” insafety testing:replacement, refinement and reduction of animal process. TheGroup iscommittedtofollowing theprinciplesof thethree and there iscurrently noalternative tousinganimalmodelsaspartof this appropriately testedfor safety before theyare administered topatients, It isaregulatory requirement that allnewtherapeuticproducts mustbe Animal testing with strong commitmentstohumanrightssafeguarding. with human rights regulations and its supply chain operates in territories The Group’s facilitiesare alllocated intheUK,where itspoliciesaccord Slavery Act,whichcanbefound ontheGroup’s websitewww.oxb.com. Transparency Statement incompliancewithsection54of theUKModern the UKModernSlavery Act2015. TheBoard hasapproved aModernSlavery accordance withtheletterandspiritof UKHumanRightslegislation and The Group fully respects human rights and it conducts its business in Human rightsandanti-slavery on aUSgovernment-sponsored website(www.clinicaltrials.gov). Register (www.clinicaltrialsregister.eu) andtheGroup disclosesitstrials trials intheEUandEEAare automatically postedontheEUClinicalTrials (www.oxb.com) provides information onongoingclinicaltrials.Relevant The Group iscommittedtotransparency, andtheGroup’s website and legislation. Management System toensure compliancewithappropriate guidelines standard operating procedures inplaceunderacontrolled Quality boards at clinical trial sites, before any patients are treated. The Group has authorities, aswelllocalethicscommitteesandinstitutionalreview and the protocols are agreed withthe relevant national regulatory clinical studies are designed with patient safety as a paramount concern business, includingthedesignandconductof itsclinicaltrials.TheGroup’s The Group instilstransparency, safety andethicsinallaspectsof its Clinical trials Environmental, SocialandGovernanceReport Strategic Report Oxford Biomedica plc packages for regulatory authorities.
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Annual r eport and accounts 2020 ® platform data platform data
are treated. review boards at clinicaltrialsites,before anypatients as welllocalethicscommitteesandinstitutional agreed withtherelevant national regulatory authorities, safety asaparamountconcernandtheprotocols are The Group’s clinicalstudiesare designedwithpatient Clinical studies anti-bribery Anti-corruption and Oxford Biomedica plc Non-financial statement Strategic Report Description of business model business of Description activity on business Principal risks and impact Social matters rights Human Employees Environment Requirement the Group’s positiononkey non-financialmatters of theCompaniesAct2006. Thetablebelow, andinformation itrefers to,isintendedtohelpstakeholders understand The Group aimstocomplywiththenewNon-Financial Reportingrequirements containedinsection414CA and414CB Chief Executive Officer John Dawson The Strategic Reportonpages15to67wasapproved bytheBoard on15April2021andsigneditsbehalfby: indicators Non-financial key performance and outcomes Policy embedding due diligence
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Annual r eport and accounts 2020
– Anti-bribery policy – Anti-briberypolicy the Group’sapproach – – PrivacyNotice – Equalopportunitiespolicy – – – – community andtheenvironment. customers/suppliers, patients, thelocal the Group’s wayof workingwithemployees, Responsible Businesspolicy),whichcovers Governance Policy(previously knownasthe The Group hasanEnvironmental, Societyand Policies andstandardswhichgovern Responsible Businesspolicy) policy (previously knownasthe IT andin Whistleblowing policy Health andSa Envir Envir onmental, Society and Governance onmental, SocietyandGovernance onment statement formation securitypolicy fety policy
Anti-corruption/anti-bribery and charitablework Risk managementandadditionalinformation Stakeholders Whistleblowing page65. human trafficking statement page66; Stakeholders page Review andapproval of theGroup’s modernslavery and published ontheGroup’s website. to employeespage112;Genderpaygapreport page54and page 53;Diversity54;CEO’s remuneration compared by genderpage54;Board engagementwiththebusiness Stakeholders page22;People52;Employeenumbers on page60. pages 22and23;Environment, greenhouse gasemissions Health andSafety disclosures onpage52;Stakeholders page The Group at aglancepage The Group’s businessmodelpages 20 to 21. regulatory disclosure page Audit Committeereport page Principal risks andeffective management pages 70 to 77; during theyearpage Governance frameworkandstructure page Business) and Governance(previously knownastheResponsible
2 6;Stakeholders pages 22 to 23. pages 51to66 page
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8 page ; engaging with the local community ; engagingwiththelocalcommunity 3; AuditCommitteereport page .
57 8
6. 1 ; Environmental, Society ; Environmental, Society 6; Operational highlights 6; Operational highlights
page 8 6; Risk management and 6; Riskmanagementand
65 .
81; Board activity 81; Board activity
8 6.
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Strategic Report 67 68 numbers ofpatients. healthcare payorsintoindications wheretherearefarlarger These reductionsincostwillalsohelpdriveadoptionby therefore cost)ofthevectorneededtoaddressthesetargets. in thefieldofcellandgenetherapyduetoamount(and open uptherapeuticindicationsthatarecurrentlyinaccessible Our goalofindustrialisinglentiviralvectorproductionwill Running subhead Running head Oxford Biomedica plc
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Annual r eport and accounts 2020
ving lives 143 185 132 188 1 1 1 185 12 1 1 69 80 40 48 44 46 20 9 30 28 38 42 2 45 70 15 22 78 47 67 27 18 41 16 12 51 8 4 6 6 6 2 1
vaccine journey delivered in2020 highlights Financial delivered in2020 highlights Operational The Gr The Gr Pr Gr Strategic R Mark Advisers andcontactdetails Glossary Other matters financial statements Notes totheconsolida of theparent equity attributable toowners S S S of comprehensive income statement Consolidated Group financialstatements Independent auditors’report Dir Dir Corpora Boar and riskmanagement uncertainties risks, Principal Corporate Governance statement Non-financial Governance Report Envir review Financial Objectives setf Delivery o Management team 2020 performance review Chief Ex Chair’s sta The Gr Questions andanswers Sa tatements of changes in tatements of changesin tatements of cashflows tatement of financialpositions oduct pipeline oup at aglance ectors’ Remuneration Report ectors’ Report d of Directors onmental, Social and onmental, Socialand et overview oup’s stakeholders oup’s businessmodel oup’s COVID-19 ecutive Officer’s and ecutive Officer’sand te GovernanceReport f 2020objectives tement eport or 2021
ted ted
Corporate Governance 69 70 — — — — — The Group’sriskmanagementframeworkisasfollows: Risk managementframework to thedisclosure of risks. its operations during the period,representing an important development compared to theGroup’s prior year approach specific riskinquestion.TheGroup hastaken thedecisiontodisclosestepsithastaken tomitigate therisks facing Group’s risk managementframeworkincorporates theimplementation of amitigation strategy, eachtailored tothe Risk assessmentandevaluation isanintegralandwell-establishedpartof theGroup’s managementprocesses. The risks inthesector, andtheregulatory authoritieshave showncautionintheirregulation of suchproducts. products that have beenapproved for commercial useand,consequently, there are significant financial anddevelopment compared withotherindustrysectors.During2020, there have onlybeenafew additionalcellandgenetherapy The Group operates inthecellandgenetherapybiotechnologysectorwhich,byitsnature, isrelatively highrisk the risks facingtheGroup, includingthosewhichcouldthreaten itsbusinessmodelandfuture performance. common toalldevelopment-stagebiopharmaceuticalcompanies.TheBoard have carriedoutarobust assessmentof The Group isexposedtoarangeof risks. Someof themare specifictotheGroup’s current operations, othersare Principal risks,uncertaintiesandriskmanagement Corporate Governance processes, are alsosubjecttoaudits. with suchSOPsare routinely subjecttoauditbytherelevant regulators andcustomers.OtherSOPs,suchasfinancial are required for GMP, GCPandGLPanydeviations from theSOPsmustbeidentifiedandinvestigated. Compliance (SOPs) whichare required befollowed inorder tominimisetherisks inherent inthebusinessoperations. Where these S is regularly reviewed bytheSETandkey risks are highlightedtotheBoard at eachformal meeting. assess risks inthebusinessandtoconsidermitigation andriskmanagementstepsthat canbetaken. Theriskregister each area of the businessandchaired bytheChiefof Staff. Thisgroup meetsquarterlywitha remit toidentifyand Risk ManagementCommittee–TheGr management isakey feature of eachsub-committee. Development Committee and the Technical Development Committee. SET members attend these meetings and risk Leadership Team (whichincorporates theQualityandManufacturingOperations Committee),theProduct monthly andthrough whichmuchof theday-to-daybusinessismanaged.Theseare theextendedOperational K consider theoperational riskmanagementprocesses andrisks identified. update sessions. At least twice a year, the SET meetswith representatives from the Risk Management Committee to order to discuss current business issues and consider relevant risks. During 2020, SET also held daily COVID-19 Senior Ex judgements containedinthem. formal announcementsrelating totheGroup’s financialperformance, reviewing significantfinancial reporting control systems.TheAuditCommitteealsomonitorstheintegrityof thefinancialstatements of theGroup andany processes and their implementation as well as reviewing the Group’s internal financial controls and the internal management processes are theresponsibility of theSeniorExecutive Team buttheAudit Committeemonitorsthe and Septemberafullpresentation totheBoard onriskisprovided bytheRiskManagementCommittee.Therisk its agendaitemsat eachof itsformal meetings,of whichthere at leastsixannually. However, twiceayearinMarch and for ensuringthemaintenanceof asoundsystemof internalcontrol. TheBoard considersriskinthecontextof Boar tandard Operating Procedures –allareas of thebusinesshave wellestablishedStandard Operating Procedures ey managementcommittees–theGroup currently hasthree key management sub-committeeswhichmeet d of Directors –theBoard hasoverallresponsibility for riskmanagement,determiningtheGroup’s risktolerance, ecutive Team –theSETgenerallymeetseveryweek, withtwicemonthly-extendedSETsessionsin (SET) oup has a Risk Management Committee comprising senior managers from oup hasaRiskManagementCommitteecomprisingseniormanagersfrom expertise incollaboration withitscustomerstomitigate thisrisk. such technicalimprovements orsolutionscanbeidentified.The Group continuestoinnovate inthisarea usingitsR&D candidate’s characteristicssuchasthedeliverymechanism orthebioprocessing process. There isnocertaintythat During thecourseof aproduct’s development,furthertechnicaldevelopment mayberequired toimprove theproduct (iii) Technical risks regulatory authoritiesearlyinthedevelopmentprocess todeterminewhat isrequired for market authorisation. Group hasacceptedthisriskbutlooks tomitigate theimpactasmuchpossiblethrough consultation withthe sufficient to satisfy the relevant regulatory authoritiesthat the product shouldbegivena marketing authorisation. The that theefficacy data collected from the be pre-clinical studiesandclinicaltrials ofthe Group’s product candidates will may fail to show thedesired efficacy despite having progressed through initialclinicaltrials. There canbe noassurance necessarily predict theresults of later stageclinicaltrials.Unapproved product candidates inlater stagesof clinicaltrials alternative therapies.Theresults of pre-clinical studiesandinitialclinicaltrialsof theGroup’s product candidates donot Human clinical studies are required to demonstrate efficacyin humans when compared againstplaceboand/or existing (ii) Efficacy risks development ifrequired. careful assessmentof anysafety issuesarisingfrom theproduct earlyinthedevelopmentprocess andtostopthe successfully completed.TheGroup hasacceptedthisriskbutlooks tomitigate theimpactasmuchpossiblethrough study after review by the DSMB or review body does not necessarily indicate that all clinical trials will ultimately be of product candidates, consequentlyaffecting theGroup’s timeline for profitability. Thecontinuation ofaparticular Adverse orinconclusiveresults from pre-clinical testingorclinicaltrialsmaysubstantiallydelay, orhalt,thedevelopment can benoassurancesthat anyof theGroup’s product candidates willultimately prove tobesafe for humanuse. (DSMB), therelevant regulatory authoritiesortheGroup itselfmaysuspendorterminate clinicaltrialsat anytime.There Safety issuesmayariseat anystageof thedrugdevelopmentprocess. Anindependentdrugsafety monitoringboard (i) Safety risks in thepipelineandalsoseeks tocollaborate withotherlarger more experiencedpartnersonproduct development. The Group hasacceptedthisriskbutlooks tomitigate viaensuringthat ithasseveralproduct candidates underdevelopment collaborations inrespect of product candidates. could have anadverseeffect onthedevelopment of otherproduct candidates, orontheGroup’s abilitytoenterinto impact ontheGroup’s share price.There isalsotheriskthat thefailure of oneproduct candidate inclinicaldevelopment the Group. There isariskthat thefailure of anyoneproduct candidate couldhave asignificantandsustainedadverse The failure of theGroup tosuccessfullydevelopaproduct candidate couldadverselyaffectof thefuture profitability — — — — — — The Group mayfailtosuccessfullydevelopaproduct candidate for manyreasons, including: conduct clinicaltrialsandbioprocess drugsbefore theycanbemarketed. Thisdevelopmentprocess takes manyyears. to theparticularproduct candidate. Inaddition,theGroup oritspartnerswillneedtoobtainregulatory approvals to varies dependingontheproduct candidate, theindication beingevaluated, thetrialresults andtheregulations applicable candidates todemonstrate safety andefficacy. Thenumber of pre-clinical studiesandclinicaltrialsthat willbe required To developapharmaceuticalproduct itisnecessarytoconductpre-clinical studiesandhumanclinicaltrialsfor product Pharmaceutical productdevelopmentrisks Key risksspecifictotheGroup’scurrentoperations
F F F F F F ailure to recruit sufficient patients intoclinicalstudies. ailure to obtain regulatory approvals toconductclinicalstudiesor, ultimately, tomarket theproduct; and ailure to establish robust bioprocessing processes; ailure to develop technicalsolutionstoachievenecessarydosinglevelsoracceptabledeliverymechanisms; ailure to demonstrate efficacy; ailure to demonstrate longtermsafety;
Corporate Governance 71 72 Product DevelopmentCommittee. to plan,implementandmonitoritsproduct developmentactivitiesandtoreview progress regularly intheGroup’s mitigate theserisks byemployingexperiencedstaff andotherexternalparties,suchascontract research organisations, The threats from theabove product developmentrisks are inherent inthepharmaceuticalindustry. TheGroup aimsto stage of development. of suitable patients, ortheemergence of acompetingdrug,eitheronethat isapproved oranotherdrugintheclinical a variety of reasons, such as the specified characteristics being too tightly defined resulting in a very small population specified characteristics,potentiallycausingdelaysorevenabandonment of theclinicalstudy. Thiscouldbecausedby accepted into the study. There is a risk that it proves difficult in practice to recruit the number of patients with the specify thenumberof patients toberecruited intothestudyandcharacteristicsof patients whocanandcannotbe Clinical trialsare established underspecificprotocols whichspecifyhowthetrialsshouldbeconducted.Protocols (vi) Failure torecruit sufficient patients intoclinicalstudies to understandanyconcernsidentifiedandlooks to remedy thesebefore theybecomeamajorissue. implemented andacceptedbytheregulator. TheGroup consultswiththeregulator earlyinthedevelopmentprocess laboratories orthebioprocessing sitebeingclosedortheclinicalstudiessuspendeduntilcorrective actionshave been MHRA toensure that theycomplywithGMP, GCPandGLPstandards. Failure tomeetsuchstandards couldresult inthe Group’s laboratories, bioprocessing facilityand conduct of clinical studiesare alsosubject to regular audits by the to continualreview andthere canbenoassurancethat suchanapproval willnotbewithdrawnorrestricted. The data before grantingapproval. Ifregulatory approval isobtained,theproduct candidate andbioprocessor willbesubject in development.Regulatory authoritiesmayimposerestrictions onaproduct candidate’s useormayrequire additional timelines. Similarly, there canbenoassuranceof gainingthenecessarymarketing approvals tocommercialise products the developmentstage,regulatory reviews of clinicaltrialapplications oramendmentscanprolong development facility, are regulated byhealthcare regulatory agencies,suchastheFDA (USA),EMA(Europe) andMHRA(UK).During The clinicaldevelopmentandmarketing approval of theGroup’s product candidates andtheGroup’s bioprocessing (v) Regulatory risk platform andproduction processes toensure that innovative stepsare taken inorder toincrease production yields. will be able to provide sufficient bioprocessing capacity when required. The Group continues tomonitor and review the stages of clinicaldevelopmentorcommercial supplyinatimelyorcost-effective manner, northat contractbioprocessors that theGroup willbeabletoadaptcurrent processes ordevelopnewprocesses suitablefor the scalerequired by later the larger scalerequired for later stagesof clinicaldevelopmentorfor commercial supply. There canbenoassurance effective andpractical at thesmallscale required bytheearlystages of clinicaldevelopmentmaynotbeappropriate at available at economicprices,orthat suitablenewcontractorswillenterthemarket. Bioprocessing processes that are contractors whoare currently abletobioprocess theGroup’s product candidates willcontinuetomake capacity that theGroup willbeabletobioprocess theGroup’s product candidates at aneconomicallyviablecostorthat processes for whichthere are onlyafew suitablebioprocessors includingtheGroup itself. There canbenoassurance quantities at acceptablecost.TheGroup’s LentiVector There can benoassurancethat theGroup’s product candidates willbecapableof beingproduced incommercial (iv) Bioprocessing process risk Principal risks,uncertaintiesandriskmanagement Corporate Governance ® platform product candidates usespecialisedbioprocessing of theAnnualReport. package offered toemployeesiscomparablewithcompetingemployersas indicated bytheGroup onpages53and55 an attractive working environment and conducting benchmarking reviews in order to ensure that the remuneration required skillsandexperiencecouldadverselyaffect theGroup’s performance. TheGroup mitigates thisriskbycreating needs. Themarket for suchemployeesisincreasingly competitiveandfailure torecruit ortoretain staff withthe The Group dependsonrecruiting andretaining highlyskilledemployeestodeliveritsobjectivesandmeetcustomers’ Attraction andretentionofhighlyskilledemployees service theyexpect,asindicated bytheGroup onpages31and32of theAnnualReport. also takes customerrelationship managementextremely seriouslytoensure that customersandpartnersreceive the The Group isbuildingarevenue generating businessbyproviding itsLentiVector developing theGroup’s otherproduct candidates. Group andisthusputtingsignificant in resources behindtheeffort tofindgoodstrategic partnersin ordertoassist of the products to be delayed or curtailed. The Group has enhanced the commercial development function within the The Group maynotbesuccessful initsefforts tobuildthesethird party relationships, which maycausethedevelopment vehicles andmayseektodevelopstrategic partnershipsfor developingcertainof theGroup’s otherproduct candidates. The Group mayseektoout-licenseorspinoutitsin-houseproduct developmentprogrammes intoexternallyfunded Business development candidate selectionandprogression. looks tomitigate thisriskthrough having acloserelationship withourpartnersviasteeringgroup meetingsthat lookat develop therelevant product candidates for anyreason couldresult intheGroup losingpotentialrevenues. TheGroup partners inwhichtheGroup hasafinancialinterest through IPlicences. Failure of theGroup’s partnerstocontinue The Group hasentered severalcollaborations andpartnerships,involvingthedevelopmentof product candidates by Collaborator andpartnerrisk over theprocess. of fillandfinishhasalsobeenseenasarisk,butthe Group islookingtobringthisin-housein order to have more control also asked key supplierstoholdstocks inUKwarehouses inorder tocoveranyimmediate supplyissues.Outsourcing issues withlookingtosource secondsuppliersandstockpilethree monthsof criticalmaterial supplies.TheGroup has and employeesand,inparticular, inqualitymanagementprocesses. Inaddition,theGroup mitigates thesupplychain The Group mitigates theriskof failingtomeetrequired specifications byinvestinginhighqualityfacilities,equipment As theGroup’s revenues from bioprocessing are growing, therisktoGroup hasincreased inthelasttwelvemonths. production operations beingsuspendeduntiltheissuesare rectified withthepotential for loss of revenue. inspection andapproval byregulators andcustomers.Failure tocomplywiththestandards required couldresult in manner itcouldharmtheGroup’s business.TheGroup’s bioprocessing andanalyticalfacilitiesare subjecttoregular suppliers, for thesupplyof rawmaterials andcertainout-sourced services.Ifsuchsuppliersperform inanunsatisfactory required specification may lead to loss of revenues. Furthermore, the Group relies on third parties, in some cases sole fail tomeettherequired specification duetocontamination orinadequate yield. Failure todeliverbatches tothe parties. Bioprocessing of lentiviralvectorsandadenovirus-basedvaccinesiscomplexbioprocessing batches may The Group receives significant revenues from bioprocessing lentiviralvectorsandadenoviralbasedvaccines for third Bioprocessing revenuerisk and collaborators. TheGroup iscontinuingtoinvestinitsLentiVector becoming uncompetitivefrom apricingperspective;andc)failure toprovide anadequate servicetobusinesspartners building thisbusinessfor reasons including:a)failingtomaintainaleadershippositioninlentiviralvectortechnology;b) revenues derivedfrom process development,bioprocessing andfuture royalties. TheGroup maybeunsuccessfulin ® technology in order to reduce this risk, and it technologyinorder toreduce thisrisk,andit ® platform tothird partiesinreturn for
Corporate Governance 73 74 — — — and commercial environment severalyearsintothefuture. Future commercialisation risks include: In thelongerterm,successof theGroup’s product candidates andthoseof itspartnerswilldependontheregulatory Longer-term commercialisationrisks the sectorandtodevelopeitherin-houseorviain-licensing,newtechnologiesfor theGroups products andplatform. mitigate thisriskthrough ahorizon scanningproject inorder toidentifythecompetitionandtechnologyadvancesin Advances inothertechnologiesthesectorcouldundermineGroup’s commercial prospects. TheGroup looks to The cellandgenetherapysectorischaracterisedbyrapidlychangingtechnologiessignificantcompetition. Rapid technicalchange pathway andconductspricingreimbursement studiesfor thecellandgenetherapyproduct. gene therapyproducts. TheGroup looks tomitigate thisriskthrough market assessmentsof theproduct development will notbeimposedinthefuture. Thismayincrease thecostandtimerequired for successfuldevelopmentof celland imposed onotherproducts, applytocellandgenetherapiesthere canbenoassurancethat additionalrequirements been approved eitherinEurope and/orintheUS. Furthermore, specific regulatory requirements, overandabovethose prevention and/ortreatment of diseases.To date there are onlyasmallnumberof genetherapyproducts whichhave the sector, willdependontheacceptanceof cellandgenetherapybythemedicalcommunitypublicfor the The Group’s commercial success,bothfrom itsownproduct developmentandfrom supportingothercompaniesin Cell andgenetherapyrisk actions for thebusinessdevelopmentteam,SETandultimately theBoard tofollow bywayof mitigation. risks earlythrough ahorizon scanningproject withtheassistanceof externalhealthcare consultantsandthenoutlines The broader businessrisks, whichtheGroup faceasoutlinedbeloware importantandtheGroup looks toidentifythese Broader businessriskswhichareapplicabletotheGroup Principal risks,uncertaintiesandriskmanagement Corporate Governance to identifyanyseriousissuesinadvance. with regulatory authoritiesonaregular basisandperform pricingandreimbursement studiesontheGroup’s products risk through ahorizon scanningproject inorder toidentifythecompetitionandtechnologyadvancesearly, consult milestones from commercial partners couldbereduced. TheGroup looks tomitigate thislongtermcommercialisation Any orallof theserisks couldresult intheGroup’s future profitability beingadversely affected asfuture royaltiesand —
justify theinvestment.Basedonclinicalstudiestodate, theGroup’s LentiVector Governments orotherpayersbeingunwillingtopayf Regula product candidates ormake themobsolete; pharmaceutical industriesare subjecttorapidtechnologicalchangewhichcouldaffect the success of theGroup’s The emer The willingnesso therapies willdependonassessmentsof theircost-benefitandcosteffectiveness; and the uniquepotentialtoprovide permanenttherapeuticbenefitfrom asingleadministration. Thepricing of these tory authoritiesbecomingincreasingly demandingregarding efficacystandards orrisk averse regarding safety; gence of new and/or unexpected competitor products or technologies. The biotechnology and gence of newand/orunexpectedcompetitorproducts ortechnologies.Thebiotechnologyand f physiciansand/orhealthcare systemstoadoptnewtreatment regimes. or/reimburse gene therapy products at a level which would or/reimburse genetherapyproducts at alevelwhichwould ® platform product candidates have platform product candidates have adversely affect theGroup’s future profitability. revenues and/orholdsitscashbalancesweaken against thecurrencies inwhichitincursitsexpenses,thiscould the Group’s financialcondition,eachstated inpoundssterling.Inadditionifthecurrencies inwhichtheGroup earnsits currency intopoundssterlingthat mayincrease ordecrease theGroup’s results of operations andmayadverselyaffect sterling, the US dollar and the Euro may result in realised and unrealised gains and losses on translation of the underlying Group’s foreign currency assetsandpotentialliabilitiesare notmatched, fluctuations inexchange rates betweenpounds foreign currency expenses.TheGroup keeps thisunhedgedpositionunderconstantreview. To theextentthat the although theGroup’s Treasury Policypermitscashbalancestobeheldinother currencies inorder tohedgeforeseen of its expenditure inUSdollarsandtheEuro. TheGroup’s cashbalancesare predominantly heldinpoundssterling, income from collaborative agreements andpatent licencesisreceived inUSdollarsandtheGroup incursaproportion The Group records itstransactionsandprepares itsfinancialstatements inpoundssterling,butsome of theGroup’s (b) Foreign currency exposure would nothave amaterial andadverseeffect ontheGroup’s future profitability andfinancialcondition. the levelof insurancecarriedbytheGroup noworinthefuture willbeadequate, orthat aproduct liabilityorotherclaim necessary insurancecoverwillbeavailable totheGroup at anacceptablecost,ifat all,orthat, intheeventof anyclaim, products. WhiletheGroup iscurrently abletoobtaininsurancecover, there canbenoassurancethat anyfuture inherent intheresearch, pre-clinical andclinicalevaluation, bioprocessing, marketing anduseof pharmaceutical the claimtocoveranylossasrequired. Inaddition,theGroup isexposedtopotentialproduct liabilityrisks that are mitigating actions, whichincludetakingexpertadviceonthe validity of theclaimand usinginsurancecoverageagainst customers, suppliersand/orinvestors.TheGroup monitorsthesepotentialclaimsonanongoingbasisandundertakes In carryingoutitsactivitiestheGroup potentiallyfacescontractualandstatutory claimsorothertypesof claimfrom (a) Product liabilityandinsurancerisk Financial risks from others. affect theentitlement of theGroup tothe relevant intellectualproperty ortolicensethe relevant intellectualproperty such intellectualproperty. There canbenoassurancethat changestothetermswithinlicenceagreements willnot the circumstances under which the intellectual property was created and the provisions of any agreements covering Rights of ownershipoverandrightstolicenseuseintellectualproperty dependonanumberof factors,including develop thesameorsimilarproduct candidates ortechnology. candidates ortechnology, there canbenoassurancethat acompetitororpotentialwillnotindependently develop orobtainalternative technology. Where copyright,designrightand/or“knowhow”protect theGroup’s product assurance that theGroup willbeabletoobtainlicencesthesepatents at reasonable cost,ifat all,orbeableto Third party patents may emerge containing claims that impact the Group’s freedom to operate. There can be no substantial costsandanuncertainoutcome. by intellectualproperty. Furthermore, iftheGroup’s patents are challenged,thedefence of suchrightscould involve However, there canbenoguaranteethat theGroup’s product candidates andtechnologiesare adequately protected Board monitoringactionsinorder tobolstertheintellectualproperty portfolio asappropriate from timetotime. and theBoard giveshighprioritytothestrategic managementof theGroup’s intellectualproperty portfolio, withthe The Group’s successdepends,amongstotherthings,onmaintainingproprietary rightstoitsproducts andtechnologies Intellectual propertyandpatentprotectionrisk
Corporate Governance 75 76 Corporate Governance Principal risks, uncertainties and risk management
Special interest groups and adverse public opinion During 2020 the Group entered into a supply agreement with AstraZeneca for large-scale commercial manufacture of the adenovirus vector-based COVID-19 vaccine. Such work can be subject to adverse public opinion and has attracted the attention of special interest groups, including those opposed to vaccination programmes, also referred to as “anti-
vaxxers”. To date, the Group has not been targeted by anti-vax campaigners, but there can be no assurance that such groups will not, in the future, focus on the Group’s activities, or that any such public opinion would not adversely affect the Group’s operations. Adverse publicity about the Group, its role in the manufacture of the Oxford AstraZeneca COVID-19 vaccine, or any other part of the industry may hurt the Group’s public image, which could harm its operations, cause its share price to decrease or impair its ability to gain market acceptance for its products. The Group has looked to mitigate this risk through assistance from the UK government (Centre for Protection of National Infrastructure) on the protection of our facilities/infrastructure and scenario planning with our external public relations agency with regard to strategic communications.
Cyber security Cyber attacks seeking to compromise the confidentiality, integrity and availability of IT systems and the data held on them are a continuing risk to the Group. Indeed, with the Group operating in manufacture of the Oxford AstraZeneca COVID-19 vaccine this has increased the risk of cyber attack to the Group. Compromised confidentiality, integrity and availability of our assets resulting from a cyber attack would impact the Group’s ability to deliver to customers and, ultimately, its financial performance and damage the Group’s reputation. The Group has looked to mitigate this risk through implementing robust security monitoring to provide early detection of hostile activity on the Group’s networks and has sought assistance from the UK government (National Cyber Security Centre) to protect the Group’s IT systems.
UK’s departure from European Union (“Brexit”) The Group completed its Brexit preparations at the end of 2020. The Group established a Brexit Taskforce that assessed the potential impact on the Group’s business following advice from the UK and EU governing bodies and put in place mitigation actions against issues that may arise from Brexit. The Group’s priority was to maintain supply of products to any customers in the EU, post Brexit. This involved the Group establishing an Irish office, which will enable the Group to release UK manufactured products within the EU. The Group stockpiled three months of critical material supplies and asked key suppliers to hold stocks in UK warehouses in order to cover any immediate Brexit supply issues. The Group has currently assessed the impact on its operations to be minor. However it is not possible at this point in time to predict the full impact of the free trade agreement with the European Union on the Group and it could still have a material adverse effect on the Group’s business, financial condition and results of operations.
COVID-19 As a result of the COVID-19 pandemic, the Group has conducted an assessment of the potential financial and operational risks to the business. While the Group is yet to experience any significant impact from the virus on revenues, the Group continually monitors the potential impact on the Group’s supply chain, with a particular focus on key manufacturing and process development inventories. The Group complies with government COVID-19 safe working practices. In addition, the Group implemented a daily senior management working group to monitor current COVID-19 developments and GOV.UK guidance, to risk assess the Group’s supply chain and to direct the Group’s phased response. The Group has worked with staff, customers and suppliers to monitor any potential disruption and, so far, the Group has not experienced any, and does not currently expect to experience, significant supply issues or any changes in overall customer demand. 77
The Group is aware that there is the potential for global shortages in certain inventories. As part of its mitigation strategy, the Group has increased, where possible, the level of incoming materials and components held in warehouses, which will mitigate the risk in the short term against labour shortages and subsequent production delays at its key suppliers. Corporate Governance These mitigations have been successful to date but there is no guarantee against future disruption. The Group has a duty of care towards all employees, and therefore the Group expects some of its staff to be required to self-isolate to prevent the possible spread of infection. There is also a risk that there could be disruption to production in the event of employees becoming ill due to COVID-19. As a result, the Group has taken action to provide a COVID secure workplace and to mitigate the spread of infection at the Group’s facilities through enhanced cleaning processes, staggering of shifts, the provision of hand sanitiser in common areas and the recommendation that employees work from home if possible. The Group was also pleased to take part in the government pilot for lateral flow testing in the workplace and, while the testing has been voluntary, the Group has seen high take-up of testing by employees. The Board is updated on positive COVID-19 cases amongst the workforce at every Board meeting and the SET receives weekly updates. Since rolling out the lateral flow testing in the workforce, the Group has seen 15 positive cases of COVID-19, all of whom have since recovered. There have not been any employee fatalities resulting from COVID-19. In addition, front line production employees have been vaccinated against COVID-19 as per the government’s recommendations.
Climate change The Group’s governance and approach to climate change, including its first voluntary disclosure using recommendations of the Taskforce for Climate-related Financial Disclosure (TCFD) is set out on page 62 of the Strategic Report. The Group has assessed the impact of climate change and concluded that there is likely to be some minor future financial risks, which would need to be managed, but none that would materially impact the Group’s business model. This assessment is consistent with the Sustainability Accounting Standards Board’s (SASB) Materiality Map, which indicates that the issue is not likely to be material for the biotechnology and pharmaceutical sector. The Group will keep this assessment under review with reference to any future work prepared on the Materiality Map by SASB or others. The Group expects that the impacts are likely to be weather-related disruption at internal manufacturing sites and to the Group’s suppliers, with the prospect of increased costs of resources and fuels. The Group plans to continue to develop its business continuity plans with alternative manufacturing sites and a second sourcing strategy if possible to mitigate these impacts.
Oxford Biomedica plc | Annual report and accounts 2020 78 — Investorrelations. — Corporate governance. — Corpora Relevant skills: — Remuneration Committee. — Nomina Committee membership: — Appointment: and hasanMBAfrom INSEAD. Dr. DoliveuxisaVeterinary Surgeon bytraining Ciba-Geigy AG (nowNovartis)from 1982. International, Inc.from 1990–2003andat to thisDr. Doliveuxworked at Schering-Plough into aglobalbiopharmaceuticalleader. Prior company from adiversifiedchemicalgroup years duringwhichtimehetransformed the the ChiefExecutive Officer ofUCB S.A. forten and UCBS.A. Dr. Doliveuxwaspreviously Non-Executive Director at Stryker Corporation Boar in June2020. Heiscurrently Chairof the Biomedica’s Board asNon-Executive Chair Dr. RochDoliveuxwasappointedto Chair Dr. Roch Doliveux — None. Committee membership: — Appointment: (UK) Limited. and Administration of Serono Laboratories Cephalon hewasDirector of Finance of Zeneus byCephalon.Priortohistimeat Mr Dawsonledthe$360millionacquisition several hundred millionUSdollars.In2005, to over1,000 peopleandtoaturnoverof led manydealsbuildingtheEuropean business Development Europe. Whileat Cephalonhe Chief FinancialOfficerandHead ofBusiness operations of CephalonInc.,including senior managementpositionsintheEuropean Officer inOctober2008. Priortothisheheld 2008, andwasappointedChiefExecutive Board asaNon-Executive Director inAugust John DawsonjoinedOxford Biomedica’s Chief Executive Officer John Dawson the following 9Directors: At theendof 2020theBoard comprised Board ofDirectors Corporate Oxford Biomedica plc in June2020. Appointed asNon- Chief Executive OfficerinOctober2008. Appointed aDir d of Directors at Pierre Fabre S.A. anda tion Committee(Chair). te strategy. ector in August 2008 and became ector inAugust2008andbecame Executive Director and Chair Executive Director andChair
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Annual r overnance eport and accounts 2020 Oxford Oxford
o De LaRueplc.Heisamemberof theInstitute was Headof FinanceBusinessPartneringat Prior tojoiningOxford BiomedicaMr Paynter moved toacorporate finance role for allbusinessoutsideof theUS. Hethen Senior Director of FinanceBusinessPartnering to Shire Pharmaceuticalswhere hebecamethe Eur life sciencesdivisionspriortobecomingthe a varietyof roles withinthehealthcare and He subsequentlyjoinedSteris, andworked in with HainesWatts before movingtoEDS. sectors. He qualified asachartered accountant the pharmaceuticalandhealthcare in experience Board inAugust2017. MrPaynterhas17years’ Stuart PaynterjoinedOxford Biomedicaandthe Chief FinancialOfficer Stuart Paynter — — — Relevant skills: — Nomination Committee. — Remuneration Committee. — AuditCommittee(Chair). Committee membership: — Appointment: Limited. Biocity Group LimitedandCellTherapyCatapult Sciences tradebodyfor CambridgeandLondon), Executive Director at sciences businesses transaction experienceandhasworked withlife Andersen. MrHendersonhasextensiveauditand Sciences. he wasHeadof European Healthcare andLife Mr Hendersonwasapartnerat Deloitte,where Independent Director inJune2020. Previously, He becameDeputyChairandSenior and Chairof theAuditCommitteeinJune2016. Biomedica’s Board asaNon-Executive Director Stuart HendersonwasappointedtoOxford Non-Executive Director Deputy ChairandSeniorIndependent Stuart Henderson — None. Committee membership: — Appointment: becoming the Global Head of Internal Audit. becoming theGlobalHeadof InternalAudit. Norwich Resear is aformer Director of theBabrahamInstituteand f Chartered AccountantsinEnglandandWales. in August2017. Appointed aDir Corporate finance. Corporate governance. Audit. Appointed aDir opean FinanceDirector. MrPayntermoved Prior tothishewasaPartner ector and Chief Financial Officer ector andChiefFinancialOfficer ector inJune2016. ch PartnersLLP for 35years OneNucleus (the Life OneNucleus (theLife and aNon- . Mr Henderson MrHenderson before before t Arthur t Arthur
— Investorrelations. — Corporate finance. — Scientificadvisory Relevant skills: — Nomination Committee. — AuditCommittee. — Remuneration Committee(Chair). Committee membership: — AppointedaDirector inMarch 2018. Appointment: in Medicinefrom theUniversityof Oxford. for thelast19years.Dr. Preston holdsadegree an investorinlife sciencesandbiotechnology and managementconsultantshehasbeen experience inhealthcare, asascientist,physician of TPGBiotech.Shehasover25yearsof Dr. Preston isaPartnerandManagingDirector the Remuneration CommitteeinJune2020. in March 2018andwasappointedChairof Biomedica’s Board asaNon-Executive Director Dr. Heather Preston wasappointedtoOxford Independent Non-Executive Director Dr. HeatherPreston — Corporate finance. — Scientificadvisory. — Relevant skills: — AuditCommittee. Committee membership: — AppointedaDirector inDecember2020. Appointment: and received anMBAfrom VillanovaUniversity. University of Pittsburgh Schoolof Medicine, completed apostdoctoralfellowship at the on transcriptionalregulation of lentiviruses, Louisiana State University, where hefocused Dr. RastyholdsaPh.D. inBiochemistryfrom Pharmaceuticals, andat GlaxoSmithKline. positions at Shire Pharmaceuticals,Endo public genetherapyandeditingcompany. transform intoanestablished,fullyintegrated company that hehelpedlaunchin2016and Homology Medicines,Inc.,ageneticmedicines at he servedasChiefOperating Officer cell-based therapeuticscompany. Previously, Officer ofPlateletBio, a US-based pioneering currently thePresident andChiefExecutive Director inDecember2020. Dr. Rastyis Oxford Biomedica’sBoard asaNon-Executive Dr. Siyamak (“Sam”)Rastywasappointedto Independent Non-Executive Director Dr. SiyamakRasty Prior tojoiningHomology, heheldsenior Cell andgene
therapy. .
Oxford Biomedica plc — Investorrelations. — Corporate governance. — Corpora Relevant skills: — Committee membership: — Appointment: Director of theUKBioindustryAssociation. Chairman of ShieldTherapeuticsplcanda Director of NovacytS.A. Hewaspreviously of TauC3 BiologicsLtd andNon-Executive and Sales.Dr. Heath iscurrently Chairman Astra USA,includingVicePresident Marketing this, heheldseniorpositionsat AstraABand acquisition byBTG for £220million.Priorto the company’ssignificantgrowth andeventual Officer of Protherics plcwhere hemanaged Previously, Dr. Heath wasChiefExecutive Chair andSeniorIndependentDirector. In June2020, hesteppeddownasDeputy and SeniorIndependentDirector inMay2011. in January2010andbecameDeputyChair Biomedica’s Board asaNon-Executive Director Dr. Andrew Heath wasappointedtoOxford Non-Executive Director Dr. AndrewHeath 4 7 1
Audit CommitteeuntilDecember2020. Appointed aDirector inJanuary2010. te strategy.
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Annual r eport and accounts 2020 8 2 5
— Investorrelations. — Corpora Relevant skills: — None. Committee membership: — AppointedaDirector inJune2019. Appointment: Economics from theUniversityof Oxford. University andaM.Sc. degree inFinancial in FinanceandEconomics from McGill of issues.HeholdsaJ.Hons. B.A. degree life sciencecompaniesonawiderange corporate financeexperienceadvising Bank inLondon.MrGhenchevhasdeep banker at Moelis&CompanyandDeutsche joining NovoHoldings,hewasaninvestment Growth Equityat NovoHoldings.Priorto in June2019. Robertiscurrently Headof Biomedica’s Board asaNon-Executive Director Robert GhenchevwasappointedtoOxford Non-Executive Director Robert Ghenchev te finance. 9 6 3
— Investorrelations. — None. Committee membership: — Corpora Relevant skills: — Appointment: Holdings plcandProteome Sciencesplc. He isaNon-Executive Director of Scancell and Economics from the holds aMaster’sDegree inPhilosophy, Politics and Director of UBSBrunswick.MrDiggle in particular, where hewaspreviously apartner also anexpertinemerging markets andRussia, sciences andbiotechfor nearly20years.Heis management, andhasbeenaninvestorinlife experience ininvestmentbankingandfund largest shareholder. Hehasover30years’ Vulpes Life SciencesFund, Oxford Biomedica’s manages anumberof funds,includingthe of Vulpes InvestmentManagementwhich Board inFebruary2021.MrDiggleisafounder in October2012,steppingdownfrom the Biomedica’s Board asaNon-Executive Director Martin DigglewasappointedtoOxford Non-Executive Director Martin Diggle Oxford Biomedica’sBoardofDirectors
4 8 9 6 2 3 5 7 1 until February2021. Appointed aDir Martin Diggle Robert Ghenchev Dr Dr S John Dawson Dr Henderson Stuart Dr. Roch Doliveux tuart Paynter . Andrew Heath . Siyamak(“Sam”)Rasty . Heather Preston te finance. ector inOctober2012.
University of Oxford. University of Oxford.
Corporate Governance 79 80 Chair Dr. Roch Doliveux The following pagessetoutinmore detailtheactivitiesandmajormatters considered bytheBoard in2020. of the report. the Board meetinginJanuary2021andtheBoard planstoimplementappropriate changesbasedonthediscussions questionnaire coveringthevariousaspectsof Board activitiesandCommittees.Theresulting report was discussed at period from January2020tothefourth quarterof 2020. Thereview process comprisedthecompletionof ananonymous In October2020, theCompanySecretary conductedaninternal evaluation of theBoard’s performance coveringthe contribute towards deliveringtheGroup’s strategy. priorities whilstmanagingthekey risks facingtheGroup andconsideringhowgoodcorporate governancecan meeting inSeptember2020. Thestrategy review ensured that managementfocused ondeliveringtheGroup’s key particular attention to ensuring that the Group’s strategy remains appropriate by holding a two-day strategy review headcount from around 550 to over 670 and an increase in the Group’s revenues during the year. The Board paid The Group has hadagood year in what was a difficultperioddueto thein COVID-19 pandemic.Withanincrease in 2022. comply withtheHampton-Alexander recommendations that theBoard compriseat leastonethird womenbytheAGM of skills, experience,independenceandknowledgefor theGroup’s strategic objectives.TheBoard intendtofully and ethnicallydiversecandidates whilsttakingintoaccountsuitabilityfor therole toensure theGroup hastherightmix Board, having initiated asearch for anadditionalIndependentNon-Executive Director, targeting theselectionof female and wishthembothwellintheirfuture endeavours. TheBoard intendstocontinuestrengthen anddiversifythe both MartinandAndrew for theirconsiderabletimeontheBoard andtheexperiencesupporttheyhave provided Andrew Heath shallberetiring at theforthcoming AGM, having joinedtheBoard inJanuary2010. Iwouldlike tothank Board inFebruary2021,having joinedtheBoard of Directors in October2012asaNon-Executive Director andDr. Davies asanIndependentNon-Executive Director inFebruary2021.Inaddition,MartinDigglesteppeddownfrom the Rasty asanIndependentNon-Executive Director inDecember2020andtheappointmentof Professor DameKay (further detailsof whichare setoutonpage95).TheBoard wasdelightedtoannouncetheappointmentof Dr. Sam 2020, althoughtheBoard hastaken stepstoaddress thisandshallbecompliantfollowing theforthcoming AGM Following areview, theBoard notedthat it wasnotinfullcompliancewiththeCorporate GovernanceCodeduring published bytheFinancialReportingCouncilinJuly2018(the“Corporate GovernanceCode”). and itsCommittees,bothof whichhave beenreviewed during2020inlightof theUKCorporate GovernanceCode governance isessentialfor thelongtermsuccessof thebusinessandthisisultimately theresponsibility of theBoard Corporate Governancecontinuestobeanimportantfocus for theBoard. TheBoard believesthat goodcorporate in 2021. more normal levelof engagementwithshareholders, employeesandotherstakeholders assoonitissafe todoso ability toholda“hybrid”AGM toenableinteraction withshareholders. TheBoard islookingforward toreturning toa available on our website. Whilst it is unlikely that we will be able to hold an AGM in person this year, we now have the invited questionstobesubmittedtheBoard bypostoremail.Thesequestions andourresponses were made year. We hadtoholdaclosedAGM in2020, althoughweencouragedshareholders tovotebyproxy inadvanceand The COVID-19 pandemichashindered theBoard’s abilitytoengageasfully asusualwithsomeof itsstakeholders this Non-Executive Chairon24 June2020, following Dr. Lorenzo Tallarigo’s retirement. I ampleasedtopresent theGroup’s Corporate GovernanceReportfor 2020, having beenappointedtotheBoard as Dear Shareholder Corporate GovernanceReport Corporate Governance
Finance; InvestorRelations; HR;Operations; andSafety, Healthand Services; ClinicalDevelopmentandRegulatory; DigitalStrategy and BusinessChangeProjects; BusinessDevelopment; Research; Quality;Process Research andDevelopment;ClientProgrammes andAllianceManagement;Analytical s172 of theCompaniesAct2006, are circulated severaldaysaheadof eachmeeting.RegularBoard paperscover secretary. Board papers,coveringtheagendaandtakingintoaccountitemsrelating totheBoard’s responsibilities under The Chairsetstheagendafor theBoard meeting inconsultation withtheChiefExecutive OfficerandtheCompany areas prepare reports for theBoard aheadof eachBoard meeting. The Board also takes a close interest in Quality, Health,Safety and Environment andRisk Management. Each of these of matters reserved for theBoard’s approval. The Board’s powersandresponsibilities are setoutintheCompany’sarticlesof association andithasaformal schedule Ghenchev andDr. Andrew Heath were considered nottobeindependent. Board comprisedsevenNon-Executive Directors andtwoExecutive Directors at yearend. MartinDiggle,Robert forum for externalandindependentreview andchallenge totheExecutives. FollowingBoard changesduring 2020, the management processes inplace.TheBoard comprisesbothNon-Executive andExecutive Directors andprovides the activities tocreate shareholder value.Indoingso,itensures that there are robust corporate governanceandrisk The Board iscollectivelyresponsible for promoting thesuccess of theGroup bydirecting andsupervisingtheGroup’s The Board RMC –RiskManagementCommittee CDC –Commercial DevelopmentCommittee eOLT –ExtendedOperations LeadershipTeam (incorporates theQuality, ManufacturingandOperations Committee) TDC –Technical DevelopmentCommittee PDC –Pr SET –SeniorExecutive Team the Board andtheSeniorExecutive Team andtheirrespective sub-committeesassetoutbelow: reviewed andrestructured toensure theywere fit for alarger company. Thecurrent governanceframeworkcomprises As theGroup hascontinuedtogrow overtheyear, thecorporate governanceframeworkandBoard Committeeswere Corporate GovernanceFramework oduct Development Committee oduct DevelopmentCommittee PDC TDC CEO –JohnDawson eOLT SET CDC Chair –Dr. The Board Roch Doliveux RMC Environment; andRiskManagement. Remuneration Committee Chair –Dr. Chair –Dr. Chair –Stuart Henderson Nomination Committee Audit Committee Heather Preston Roch Doliveux
Corporate Governance 81 82 — — — for theBoard asawholetoconsider. also toexternalprofessional advisers asrequired. The appointmentandremoval of theCompanySecretary isamatter All Directors andtheBoard anditsCommitteeshave access toadviceandtheservicesof theCompanySecretary, and Each Director isprovided withanappropriate inductiononappointment. Non-Executive Director. In February2021,theCompanyannouncedappointment of Professor DameKayDavies totheBoard asan Independent At the endof 2020, theBoard comprisedthefollowing Directors, whosebiographiesare setouton Report isonpages96to113incorporating theRemuneration Committeereport. Reports from theAuditand Nomination Committeesare includedinthissectionandtheDirectors’ Remuneration website (www.oxb.com). Committees. TheseCommitteesoperate underclearlydefinedterms of reference, whichare disclosedonthe Group’s Certain responsibilities are delegated to three Board Committees–theAudit,Nomination andRemuneration There isa cleardivisionof responsibilities betweentheChairandChiefExecutive Officer. pages 24 to25). stakeholder group as well as stakeholder needs and concerns, in accordance with s172 of theCompaniesAct 2006 (see As shown by way of example in the AstraZeneca case study, the Board considers the potential impact of decisions on each — — — The stakeholder impactanalysisidentifies: impacts onitsstakeholders are beingcarefully considered bymanagementwhendeveloping plansfor Board approval. performing theirdutiesunders172of theCompaniesAct2006andprovides theBoard withassurancethat thepotential that couldimpactononeormore of itsstakeholder groups. Thestakeholder impactanalysisassiststheDirectors in have beenupdated torequire astakeholder impactanalysistobecompletedfor allmaterial decisionsrequiring itsapproval Boardroom discussions(furtherinformation ontheGroup’s stakeholders isonpages22to23).TheBoard’s procedures By thoroughly understandingtheGroup’s key stakeholder groups, theGroup canfactortheirneedsandconcernsinto Factoring stakeholder engagementintoBoarddecisions Corporate GovernanceReport Corporate Governance — — — —
Martin Digglesteppeddownfrom theBoard inFebruary2021. Group’s largest investorandassuchhewasnotconsidered independentundertheCorporate GovernanceCode. Martin Diggleisaf Dr Group, andassuchheisnotconsidered independentundertheCorporate Governance Code. Robert GhenchevisSeniorPartnerandHeado who isr the pr potential benefitsandar Dr to beindependent. Dr Corporate GovernanceCodefollowing the2020AGM. Dr. Heath willberetiring at theforthcoming AGM. considered tobeindependent. Chair of theAuditCommitteeanddesignated Non-Executive Director for theWorkforce EngagementPanel.Heis S his appointment. 2020. Dr. Doliveux mettheindependencecriteriarecommended bytheCorporate GovernanceCodeat thetimeof Dr tuart HendersonwasappointedSeniorIndependentDirector following the2020AGM. Stuart Hendersonisalso . SamRastywasappointedtotheBoard inDecember2020andisconsidered tobeindependent. . Heather Preston wasappointedChairof Remuneration Committeefollowing the2020AGM andisconsidered . Andrew Heath,ofhis length dueto tenure asaDirector, wasnotconsideredbe independentunderthe to . RochDoliveuxwasappointedNon-Executive Chairof theBoard andChairof Nomination CommitteeinJune ocedures andplansbeingimplementedtomitigate againstanyareas of concern;and esponsible for ensuringthemitigation plansare beingeffectively implemented. ounder of Vulpes Investment Managementwhich,through itsVulpes Life SciencesFund, isthe eas of concernfor eachstakeholder group; f Growth Equityat NovoHoldings,whichisa10.0% investorinthe pages 78to79 . Martin Diggle Board meetings.Theattendance of individualDirectors at Board andCommitteemeetingswasasfollows: The Board meetsregularly withmeetingdates agreed for eachyearinadvance.During2020, there were sevenregular Board meetings — — — — — — Board matters during2020included: Board activityduring2020 The Chairholdsmeetingsfrom timetowithNon-Executive Directors, withouttheExecutive Directors inattendance. interim 2020financial results. of other occasionstoconsiderspecificadhocmatters includingtheapproval of the2019financialstatements andthe In additiontotheaboveregular meetings,theBoard (oranappointedsub-committeeof theBoard) metonanumber ttended asanObserver 6 5 4 3 . RochDoliveuxwasappointedinJune2020 2 1 Dr. Heather Preston Stuart Henderson Dr. Andrew Heath — — — Dr. Lorenzo Tallarigo Dr. RochDoliveux John Dawson Robert Ghenchev Dr. SamRasty Stuart Paynter
Dr Dr Dr Dr A Dr
Ongoing r The appointmento Reviewing businessdevelopmentopportunitiesincludingpartneringandcollabora Monitoring thepr A r results andAnnualReport,the2020interimresults announcement Routinely r Pr Completion o The Gr . Andrew Heath attended 9Nomination CommitteemeetingsasanObserver . Lorenzo Tallarigo retired inJune2020 . SamRastywasappointedinDecember2020 . Andrew Heath attended 10Remuneration CommitteemeetingsasanObserver eparedness for theimplications of theCOVID-19 pandemic, Brexit, ESGandclimate change eview of theGroup’s strategy, conductedinSeptember oup’s activitiessurrounding workforce engagement 2 eviews of theGroup’s riskmanagementprocesses andkey risks ecurring items such as the approvals of the 2020 financial budget and objectives, the 2019 preliminary ecurring itemssuchastheapprovals of the2020financialbudgetandobjectives,2019preliminary 1 3 f anevaluation onBoard effectiveness ogress of the Group’s priorityproduct developmentprogrammes f Dr. SamRastyasaDirector osbeAtne osbeAtne osbeAtne osbeAttended Possible Attended Possible Attended Possible Attended Possible 2 5 7 7 7 7 7 7 7 1 Regular Board 2 5 7 7 7 7 7 7 7 1
3 3 3 3 ui omte Rmnrto omte Nomination Committee Remuneration Committee Audit Committee 6 3 3 3 3 6 12 10 12 12 1 1 4 6 6 tion transactions 12 10 12 12 1 1 4 6 6 11 2 11 11 1 9 1 6 6 5 11 2 11 11 1 9 1 6 6 5
Corporate Governance 83 84 Social media 2019 AnnualReport presentations Results announcementsand Meetings withexistingshareholders The Group hasengagedwithshareholders andpotentialinvestorsthrough thevariouschannelsbelow: communication withbothVulpes Life ScienceFund andNovoHoldingsduringtheyear. (10.0% shareholder), continues to be represented on theBoard by Robert Ghenchev, which ensured a clear channelof Fund, theGroup’s largest investor, wasrepresented ontheBoard byMartinDiggleduring2020andNovoHoldings and Chairof theRemuneration Committeeare alsoavailable for meetingswithinvestors,ifrequired. Vulpes Life Sciences points of contactare theChiefExecutive OfficerandChiefFinancialbuttheChair, SeniorIndependent Director The Board recognises theimportanceof effective communication withshareholders andpotentialinvestors.Theprimary Communication withshareholders therefore notbestandingfor re-election at theAGM in2021. having servedontheBoard for more than11years.Martin Diggleretired from theBoard inFebruary2021,andwill in 2021.Dr. Andrew Heath shallberetiring from theBoard andtherefore willnotstandfor re-election at theAGM in2021, Heather Preston, RobertGhenchev, John Dawson andStuart Paynter willretire and be subject to re-election at the AGM been appointedtotheBoard sincethelastAGM. InlinewiththeCorporate GovernanceCode,Stuart Henderson,Dr. At theAGM in2021,Dr. Roch Doliveux,Dr. SamRastyandProfessor DameKayDavies willstandfor appointmenthaving Directors willnowbesubjecttoannualre-election. In accordance with the articlesof association and to ensure compliance with the Corporate GovernanceCode all Retirement ofDirectors Corporate GovernanceReport Corporate Governance Investor relations Website 2020 AnnualGeneralMeeting Meetings withpotentialinvestors Government. Shar in lightof theCOVID-19 situation andtheStay at Homemeasures that were implementedbytheUK which provide further opportunities to meet potential investors. which provide furtheropportunitiestomeetpotentialinvestors. basis at investorconferences inEurope andtheUS. TheGroup alsoconductsinvestorroadshows periodically, The Gr its enquiryinbox [email protected] provides notifications of announcements. reference for theBoard Committees.Investorsandotherscansubscribetoane-mailalertservice,which regulatory announcementsandpress releases, copiesof theGroup’s financialstatements, andterms of The Gr accessible toallshareholders andrecordings of whichwere madeavailable ontheGroup’s website. results inSeptember2020, through RNSannouncementsaccompaniedbyanalystconference callswhichare The Gr Dr. Roch Doliveux,Stuart HendersonandDr. Heather Preston alsometwithmajorshareholders. John DawsonandStuart Payntermetwithmajorshareholders during2020. Dr. Lorenzo Tallarigo, The Gr The Gr The 2020A posted ontheGroup’s website(questionstotheGroup were submittedinadvanceof themeeting). which, aswelltheformal business,includedaQ&A sessionafter themeetingclosedwithanswers John DawsonandS oup announced its 2019 full year performance and financial results in May 2020, and its 2020 half year interim oup announcedits2019fullyearperformance andfinancial results inMay2020, andits2020halfyear interim oup usesLinkedIn andTwitter toalertfollowers toCompanynewsflow. oup endeavours torespond toallenquiriesfrom shareholders andpotentialinvestorsreceived through oup’s websitehttp://www.oxb.com containsdetailsof theGroup’s activitiesaswellcopies of oup publishedits2019AnnualReportinMay2020. GM washeldon23June2020. Shareholders were notallowedtoattend theAGM inperson eholders were invitedtoattend theAGM virtually, whichlastedaround 30minutesand tuart Paynter regularly make presentations and meet potential investors on a one-to-one tuart Paynterregularly make presentations andmeetpotentialinvestorsonaone-to-one
— — — — operation and meet its liabilities as they fall due, and the viability statement, is set out on page 128. operation andmeetitsliabilitiesastheyfalldue,theviabilitystatement, issetoutonpage128. The Board’s assessmentof theprospects of the Board, itsexpectation that theGroup will be ableto continue in committees allowsthemtomonitorandassesssignificantbusiness,operational, financial,complianceandotherrisks. Group andformulating riskmitigation plans.Theactiveinvolvementof theExecutive Directors inthemanagementsub- management processes withintheGroup whilsttheSETisaccountablefor thoseprocesses, identifyingtherisks facingthe the Group anditreviews current key risks at everyBoard meeting.TheAuditCommitteemonitorstheconductof therisk The Board isresponsible for determiningthenature andextentof therisks itiswillingtotake inachievingtheobjectivesof There are twootherimportantcommittees: ensuring compliance withGxP and otherrelevant requirements, monitoring expenditure againstbudget and risk management. Within theirarea of responsibility thesecommitteescoverobjectiveandtarget setting,monitoringperformance againsttargets, and are attended bySETmembersandotherrelevant seniormanagersfrom thebusiness.Thesesub-committeesare: There are three SETsub-committees covering the major business operational areas. Thesesub-committeesmeet monthly performance, organisational andemploymentmatters, riskmanagementandSafety, HealthandEnvironment. SET meetingheldeverytwoweeks, withtheagendacoveringfullrangeof activitiesof theGroup, includingfinancial 2021. TheChiefExecutive OfficerisJohnDawson.TheSETmeetseveryweek,hasdaily update meetingsandhasan extended Senior Executive Team during2020. (SET) Dr. Zamoryakhin steppeddownfrom hisrole asChiefMedicalOfficerinFebruary Mitrophanous, NickPage,Dr. JasonSlingsby, HelenStephenson-Ellis, Natalie Walter andDr. DmitryZamoryakhinformed the Operational managementisconductedbytheExecutive Directors who,togetherwithDr. JamesMiskin,Dr. Kyriacos The SeniorExecutive Team andits committees (SET) Risk management Important matters from allof thesecommitteesare referred totheSET. — cial Development Committee (CDC) – which covers the external opportunities to out-license and in-license cial Development Committee (CDC) – which covers the external opportunities to out-license and in-license oduct Development Committee (PDC) – covering thedevelopmentof new cell and genetherapyproducts from
technology orproduct candidates, andalsotogenerate partnershipopportunitiesfor manufacturingandproduct development Commer and coversquality, operational andmanufacturingmatters. Extended Opera and otherprocesses, includingcellandvectorengineering. T initial conceptthrough toclinicaldevelopment. Pr management actions. committee meetsat leastquarterlytoidentifyandassessrisks facingthebusinessandtopropose riskmitigation and Risk ManagementCommittee(RMC)–thiscommitteecomprisesseniormanagersfr echnical Development Committee (TDC) – covering the development of new and improved assays and production –coveringthedevelopmentof newandimproved assaysandproduction echnical DevelopmentCommittee(TDC) tional LeadershipTeam (eOLT) –incorporates theQualityandManufacturingOperations Committee om all parts of the business. The om allpartsof thebusiness.The .
Corporate Governance 85 86 2020 preliminary results andthisAnnualReport. the approval of the 2019preliminary results and2019 Annual Report, the 2020 interim financial statements, the Group’s status asagoingconcernandlonger-term prospects and viability. TheAuditCommitteereviewed andrecommended financial results that reflect the relevant accounting standards and judgements appropriately. This includes the Group’s In relation tothefinancialstatements, theAuditCommitteeensures that theGroup provides accurate andtimely Statutory reporting Key activities: The role of theAuditCommitteeistoassistBoard infulfillingitsoversight responsibilities by reviewing andmonitoring: — — — — mitigations viaupdates from theRiskCommittee.Further detailsof theserisks canbefound on reviews thesignificantcurrent andemerging risks (includingclimate change,Brexit and COVID-19) and theirassociated and effectiveness of internal control processes, andCorporate GovernanceCodecompliance.TheAuditCommittee On behalfof theBoard, theAuditCommitteeoverseesriskmanagementstrategy andappetite,theappropriateness Risk andcontrol financial reporting matters andhowtheywere addressed bytheAuditCommitteeare setoutlater inthis report. policies andsignificantjudgementsestimates underpinningthefinancialstatements. Details regarding thesignificant of its review of thefinancialstatements, theAuditCommitteeconsidered, andchallengedasappropriate, theaccounting period assessmentreflecting thedynamicandchangingenvironment inwhichtheGroup operates, (seepage126).Aspart statements, their underlying assumptions and the longer term prospects, including the appropriateness of a three-year reporting andaccountingpoliciespractices.TheAuditCommitteeconsidered theviabilityandgoingconcern The AuditCommitteeisresponsible for assistingtheBoard’s oversightof thequalityandintegrityof theGroup’s financial Their experienceissetoutintheirbriefbiographieson them for membershipof theAuditCommitteeand,inStuart Henderson’scase,tobeChairof theAuditCommittee. Stuart Henderson,Dr. Heather Preston, Dr. SamRastyandDr. Andrew Heath allhave relevant experience,whichqualified whereupon theCompanycompliedwithprovision 24 of theCorporate Governance Codeoncemore. Director in December2020. Dr. RastyjoinedtheAuditCommitteeinDecember2020andDr. Heath stepped down, the AuditCommitteeinanadvisorycapacityuntilDr. SamRastywasappointedasanIndependentNon-Executive Independent Non-Executive Director withrelevant experiencetoreplace Dr. Heath, soDr. Heath continuedtoattend Heath wasnolongerdeemedindependentduetohislengthof tenure ontheBoard. TheBoard didnothave another of theCorporate GovernanceCodeduringthefirsthalf of 2020, however, following the AGM inJune2020, Dr. Andrew Committee tocompriseat leastthree IndependentNon-Executive Directors. TheCompanycompliedwiththisprovision December 2020)andDr. Andrew Heath (untilDecember2020).TheCorporate GovernanceCoderequires theAudit During 2020, theAuditCommitteecomprisedStuart Henderson(Chair),Dr. Heather Preston, Dr. SamRasty(from Audit Committeereport Board committeereports Corporate GovernanceReport Corporate Governance programme toprogress theevolutionof itsinternalcontrol environment andits evaluation of control procedures. mitigate thisrisk.Duringtheyear, the AuditCommitteehasreceived andreviewed afinancefunctiontransformation an annualreview of theriskof fraudandmisstatement withinthefinancial statements andthe related controls to The Audit Committee also reviews and approves insurance levels and strategy, tax strategy, treasury policy and performs Annual Report.
The pr The internalandexternalauditpr The internalcontr The integrityo ocesses for compliancewithlaws,regulations andethicalcodesof practice f thefinancialandnarrative statements andotherfinancial information provided toshareholders ols andriskmanagementfor theCompanyanditssubsidiaries(togetherGroup) ocess andauditors pages 78and79 . pages 70to77 of the of the — — — The AuditCommitteemetthree timesin2020: Meetings held considers itstermsof reference andrecommends anychangesitdeemsnecessaryorbeneficialtotheBoard. carried outannually. Goingforward thisreview willbeperformed onastand-alone basis.EachyeartheAuditCommittee The AuditCommitteehashistoricallyconsidered itseffectiveness aspart of theoverall review of Board effectiveness Other governancematters controls on acyclicalbasis. referred toabove,itwillbeappropriate tocommissionathird partyinternal auditreview of theeffectiveness of key Group’s internal auditfunction.TheAuditCommitteeconsidersthat, aspartof thefinancefunctiontransformation The Corporate GovernanceCoderecommends that theAuditCommitteeshouldreview theeffectiveness of the Internal audit as update reports, managementletterobservations andeffectiveness reviews. The AuditCommitteeconsiderstheauditscopeandauditor’sfees, auditorindependence andnon-audit fees, aswell External audit behaviour, andtheprevention of bribery, fraud,andadherence tomodern slavery legislation. The AuditCommitteesupportstheBoard indischarging itsresponsibilities inrelation towhistleblowing,ethical Compliance
October 2020 – insurance strategy, tax strategy, treasury policy and the financial control environment and related
Management Committeepresented key risks identifiedtotheAuditCommittee following anupdate of therisk register. recognition andtherelated licencefees. Progress onstrategy toenhanceinternalcontrols wasdiscussed.TheRisk was notedbytheauditors.Theauditorsreported ontheirkey areas of review focus includingcontractrevenue successful equityfundraise,going concern riskhadbeensignificantlymitigated. TheFRC focus onclimate change and contractrevenue recognition. Asaresult of theGroup’s operating resilience duringtheyeartodate andthe audit strategy includedrevenue fraud(increased duetolarger andmore complexcontractualcustomerarrangements) 15 September2020–tor the Group’s strategy of enhancingitsfinancialcontrol environment and related controls. the current taxstrategy. TheAudit Committee approved the current treasury policy anddiscussedtheprogress on discussions around directors andofficers anderrors andomissionsinsurance.The AuditCommitteealsoagreed with controls were tabledandreviewed. The2020/2021insurancestrategy wasdiscussedandagreed, including 16 Results andthepublication of theAnnualReportwasalsodiscussed. COVID-19, theriskprocess andriskdisclosures intheAnnualReportwere reviewed. Thetimelinefor thePreliminary situation and remote working were discussed. Risk actionsrelating to thestatus of operations in response to wording of thegoingconcern and the viability statement. Internal controls relating to operations under the COVID-19 discussed thequalityof theauditandnosignificantconcernsarose. TheAuditCommitteediscussedandagreed the process developmentrevenue percentage of completion,andtheoutof specification provision. TheAuditCommittee statements. Theauditorsreported ontheirkey areas of auditfocus includinggoingconcern,bioprocessing and reviewed allthematerial accountingandestimation judgmentslikely tohave amaterial impactontheaccounting independence andrepresentation letterwere reviewed andwere deemedtobesatisfactory. TheAuditCommittee 29 April 2020 – to review the 2019 audit findings and consider the auditors’ report. The auditors’ opinion, letter of eview the 2020 audit strategy and also the 2020 interim results. The significant risks in the eview the2020auditstrategy andalsothe2020interimresults. Thesignificantrisks inthe
Corporate Governance 87 88 10 percentage pointshigherorlower, revenue recognised intheperiodwouldhave been£667,000 the workpackages whichremain inprogress at yearendis£6,677,000. Iftheassessedpercentage of completionwas development workpackage. Thevalueof therevenue recognised andtherelated contract assetraisedwithregard to such require judgementintermsof theassessmentof thecorrect percentage of completionfor that specificprocess fixed priceprocess developmentworkpackages. Revenuesare recognised onapercentage of completionbasisandas As it satisfies its performance obligations the Group recognises revenue and the related contract asset with regard to Percentage of completionof fixed priceprocess development revenues higher orlower. completion was10percentage pointshigherorlower, revenue recognised intheyearwouldhave been£2,126,000 the bioprocessing batches which remain in progress at the year end is £21,260,000. If the assessed percentage of specific bioprocessing batch. Thevalue of the revenue recognised andthe related contractassetraisedwith regard to in termsof theassessmentof thecorrect stageof completionincludingtheexpectedcostsof completionfor that bioprocessing process. Revenues are recognised on a percentage of completionbasis and as such require judgement as the processes are carried out. Progress is determined based on the achievement of verifiable stages of the Bioprocessing of clinical/commercial product for partnersisrecognised onapercentage of completionbasisovertime Percentage of completionof bioprocessing batch revenues performance obligations were deemedtohave beenmet. revenues wouldhave been£9.4 millionlowerwiththerevenue expectedtoberecognised inthefuture whenthe been achieved. If it was judged that the performance obligations on licences granted in 2020 had not been met, made astowhetherthelicencefee performance obligation related tothegrantingof thelicencetocustomerhas to licencerevenue isassessed aspartof theIFRS15accountingpaperprepared for eachagreement andajudgementis revenue basedontheachievementof therelevant performance obligation. Theindividual factorsandaspectsrelating revenues One of the key judgemental areas identified within the collaboration agreements is the timing of recognition of licence licence customer of Recognition as theunderlyingsalesare made. within thecollaboration agreements qualifyfor theroyalty exemption available underIFRS15andwillonlyberecognised revenue recognition basedontheachievementof therelevant performance obligation. Thesalesroyalties contained agreement; secondly, thefairvalueallocation of revenue toeachperformance obligation; andthirdly, thetimingof year. Firstly, inrelation tothenumberof distinctperformance obligations containedwithineachcollaboration The Group hasidentifiedthree key areas of judgementwithinthecollaboration agreements entered intoduringthe Contract revenues: Identification of performance obligations, allocation of revenue andtiming of revenue recognition outcome of whichisdetailedintheDirectors Reportonpage126. risk in 2020. The Board has considered the Group’s going concern status and future viability of the business, the as wellthevisibilityoverrevenues across thenext12months,goingconcernwasnotidentifiedasbeingasignificant Due tothecashbalancesheldbyGroup at theyearendandat thedate of approval of thesefinancialstatements, services, customercontractswithvaryingbioprocessing batch pricesandthebioprocessing outof specification provision. development revenues, stockandequipmentreceived inlieuof cashpaymentfor bioprocessing anddevelopment recognition and related licencefees, thepercentage of completionof bioprocessing and fixed pricecommercial The issuesconsidered bytheAuditCommitteethat are deemedtobesignificanttheGroup are contract revenue Significant issues Corporate GovernanceReport Corporate Governance higher orlower. that thesesignificantissuesidentifiedduring2020 have been appropriately accounted for. Having provided appropriate challengetomanagementandtheexternalauditor, theAuditCommitteehasconcluded testing of theyearendposition,andfound thesesignificantissuestobeappropriately accounted for. methods usedincalculating thesekey accountingitems,estimates andjudgements,aswellperforming detailed The Group’s externalauditorhasreported totheAuditCommitteethat theyhave reviewed theassumptionsand updates beingprovided untilsuchtimeastheseare finalisedpriorto release of theyearendorinterim results. calculation of theseissues,orthejudgementestimates involved,isflaggedtotheAuditCommittee,with regular including anyrelated accountingpapersandothersupportingdocuments.Anysignificantchangetothemethod of the nature, reasoning behindandriskof misstatement of thesekey accountingitems,estimates andjudgements, on Upon identification of thesesignificantissues,management provided theAuditCommitteewithadetailedupdate Actions andconclusiononsignificantissuesidentified complete bioprocessing. corresponding credit tocontractliabilities(note19).Thisunrecognised revenue willberecognised asthosebatches Consequently, bioprocessing revenue of £1.4 million(2019:£1.8 million)hasnotbeenrecognised during2020withthe process at year end. assessment period,butalsothenumberof bioprocessing batches whichhave notyetcompletedthebioprocessing increase ordecrease basedonthenumberof bioprocessing batches whichgooutof specification overthehistoric historical percentage hadbeen10%higherorlower, theestimate wouldbe£137,000 higherorlower. Theestimate will higher orlowerdependingonthenumberof bioprocessing batches actuallygoingoutof specification infuture. Ifthe completed thebioprocessing process at yearend.Thisestimate, basedonthehistoricalpercentage, maybesignificantly to totalbatches produced across theassessedperiodtorevenue recognised onbatches whichhave notyet out of specification batches across thelast four years,andhasappliedthepercentage of out of specification batches period overwhichtheproduct isbioprocessed. Incalculating thisestimate theGroup haslooked at historical rates of previously beenrecognised andwhichmaybereversed shouldtheproduct gooutof specification duringthe remaining environment, theGroup hasassessedtheneedtoincludeanestimate of bioprocessed product for whichrevenue has As theGroup hasnowbeenbioprocessing product across anumberof years,increasingly inacommercial supply as theprocesses are carriedout.Progress isdeterminedbasedontheachievementof verifiablestages of theprocess. Bioprocessing of clinical/commercial product for partnersisrecognised onapercentage of completionbasisovertime Provision for outof specification bioprocessing batches would have been£2.4 millionhigherwithacorresponding decrease inrevenues infuture years. contract where theseriesguidanceapplies.Ifrevenue hadbeenrecognised basedonanactualbatch price,revenues IFRS 15appliesandhastherefore recognised revenue basedonaveraging thebatch priceovertheperiodof the where the batch price will vary across the period of the contract. The Group has deemed that the series guidance within During 2020, the Group entered intoa supply agreement with acustomer for thesupply of bioprocessing batches Customer contractwithvaryingbioprocessing batch prices amounts to£3.3 million(2019:nil). payments toaccountfor thecostof theseitems.Thevalueof revenue recognised during2020related totheseitems recognition purposes,withacorresponding entrybeingpassedwithincostof goods,depreciation andoperating lease commercial developmentservicesandbioprocessing batches ithasprovided at theirmarket valuefor revenue and fixed assets in partial lieu of cash payments from customers. As required by IFRS 15, the Group has valued the During 2020, aspartof itssupplyanddevelopmentagreements withcustomers,theGroup received certainstockitems Stock andequipmentreceived inlieuof cashpaymentfor bioprocessing anddevelopmentservices
Corporate Governance 89 90 in future reporting. The progress of thisproject andtheresults of thisreporting andtheAuditCommittee’s review thereof will bedisclosed — — — — of the AuditCommitteethefollowing summaryimplementation planwasagreed: transformation strategy toenhancetheinternalcontrol environment. Through subsequentdiscussionswiththeChair At the October2020AuditCommitteemeeting,itwasagreed that theGroup shoulddevelopafinancefunction — — — — — — — reporting processes include: Currently themainfeatures of theinternalcontrol andriskmanagementprocesses whichapplytotheGroup’s financial off theAnnualReportand related accounts. its review the Audit Committee has concluded that the system of internal control provides a reasonable basis for signing was further reviewed at the October 2020 Audit Committee meeting and wasfurther updated in April2021. Based on and risk management. The review for 2020 prepared by the Chief Financial Officer and the Group Financial Controller, the effectiveness of all significant aspects of internal control, including financial, operational and compliance controls, reasonable, andnotabsolute,assuranceagainstmaterial misstatement orloss.TheAuditCommitteeannuallyreviews is designedtomanage,rather thaneliminate, theriskof failure toachievebusinessobjectives,andcanonlyprovide The Directors are responsible for theGroup’s systemof internalcontrol andfor reviewing itseffectiveness. Thesystem Internal control Corporate GovernanceReport Corporate Governance
Executive Team andtheBoard. Board. Financial PlanningandAnalysis,withsubsequentdetailedreview andapproval bytheChiefFinancialOfficerand Financial Controller, ChiefFinancialOfficerandtheAuditCommittee. Committee onanannualbasis. environment and systems, looking at various key risks and controls on a rotational basis, and reporting to the Audit Establish ar • • Reportonthecontr • Ensur • DesignandcontinuallymonitortheGr • Upda Establish afinancialcontr F operational). and internalcontrol systems,andtoreduce theriskof failure toachievebusinessobjectives(bothfinancialand Establish ar purchase orders, payroll anddisbursements. Clear separa have thegreatest riskof misstatement. Perf and theChiefFinancialOfficer. statements are subjecttothorough review bytheGroup FinancialController, Headof FinancialPlanningandAnalysis Or Pr an acceptablelevel. and accountingrecords, andassessmentof theappropriateness of controls inplacetomitigate therisks identifiedto Perf Pr A andultima urther strengthen thefinancefunctionto reflect the growth andthecomplexity ofthebusiness. eparation of detailed going concern and viability assessment papers and cash flow forecasts by the Head of eparation of detailedgoingconcernandviabilityassessmentpaperscashflow forecasts bytheHead of eparation of accountingpapersfor significantaccountingandjudgementalissues review bytheGroup detailed review process of the Annual Report and related financial statements, including review by the Senior ganisation of thefinancefunctionsuchthat monthlymanagement results andexternally reported financial ormance of control procedures overkey statement of financialpositionaccountswhichhave beenassessedto ormance of anannualassessmentof theriskof financialfraudandmisstatement withinthefinancialstatements te andimprove internalcontrol policies,procedures, process flowsandflowcharts,risk registers. e appropriate monitoringandescalation isinplaceonkey operating financialcontrols andmetrics. oadmap withkey deliverablestoachievetheGroup’s goal of improving itsinternalcontrol environment tely abi-annual basis. elationship withanexternalfirmtoprovide independentassurance overtheGroup’s internalcontrol tion of dutiesanddetailedauthorisation limitswithinthefinancialprocesses suchasapproval of invoices, ol environment andtheresults of control testingtotheAuditCommittee,firstly on anannual ol departmentwiththefollowing remit: oup’s financialcontrol framework. previous period. Fees paid to KPMG are set out in Note 7 to the financial statements. previous period.FeespaidtoKPMGare setoutinNote7tothefinancial statements. In 2020, KPMGreceived totalfees of £0.4 million (2019:£0.3 million)whichisan increase of £0.1 millionversusthe no non-audit fees received by KPMGin2020. Thenon-audit fees policyiscompliantwithethicalStandards for Auditors. With theexception of fees paidinrespect of theauditor'sreview of theGroup's interimfinancial statements, there were external auditor, andhasdonethisat 10%of theauditfees paidintheprevious financialyear. cap onnon-audit fees. Inlinewiththeregulations, theGroup isrequired tocapthelevelof non-audit fees paidtoits prohibit theprovision of certainnon-audit services,suchaspayroll services,bytheexternalauditorandintroduces a undertake theworkinacost-effective manner. TheGroup’s policy for non-audit services reflects the regulations that it wouldbetheresult of theirdemonstrating therelevant skillsandexperiencetomake itanappropriate supplierto auditor, andcompliancewithregulatory andethicalguidance.IfKPMGwere tobechosenprovide non-audit services the externalauditorisoverseenbyAuditCommitteeinorder tosafeguard theobjectivityandindependenceof the from theirwork,andreported thesetotheAuditCommittee.Theprocess for approving allnon-audit workprovided by KPMG contributed a furtherindependentperspective on certainaspects of the Group’s financial control systems arising — — — — — — — and interactionswiththeexternalauditor, andhaving regard tothe: things, its independence, objectivity, appropriate mindset and professional scepticism, through its own observations considers theeffectiveness of theexternalauditoronanongoingbasisduringyear, considering,amongother The AuditCommitteeregularly reviews therole of theexternalauditorandscopeof theiraudit.TheAuditCommittee KPMG’s initialappointmentin2018. the leadpartneronauditfor thelasttwoyearsafter CharlesLeStrange Meakinretired after oneyearfollowing external auditouttotenderevery10yearsandrotate theleadpartnerat leasteveryfiveyears.WillSmithhasbeen KPMG continuedastheGroup’s externalauditorfor the2020financialyear. ItistheGroup’s intentiontoputthe External audit monitoring of remote usagehasbeenincreased asaprecaution. from users’ owndevices.Nomajorchangeswere required toenablethesignificantshift remote usage.Proactive successfully. TheGroup already hadextensiveremote working facilitiesinplaceincludingfunctionallylimitingaccess ensure adequate availability of supporting documentation during the payment process, but this has been implemented control environment. Thebusinessdidhave toimplementsomechangesthesign-off process for bankpayments to internal controls implementedbythebusinessare systembased,thischangehasnothadadetrimentalimpactonthe As a result of COVID-19, the Group has implemented extensive working from home byitsemployees.As most of the COVID-19
Committee; other r pr sufficient timetotheaudit process; the interactionbetweenmanagementandexternalauditor r fulfilment o content, qualityo experience andexpertiseo obustness andperceptiveness of theexternalauditorintheirhandlingof key accountingandauditjudgements; ovision of non-audit services, as set out below; and ovision of non-audit services,assetoutbelow;and elevant UKprofessional andregulatory requirements. f theagreed externalauditplan; f insightsandvalueof theirreports; f the external auditor in their direct communication with, and support to, the Audit f theexternalauditorintheirdirect communication with,andsupportto,theAudit , including ensuring that management dedicates , includingensuringthat managementdedicates
Corporate Governance 91 92 working; employeetrainingprogrammes; wellbeingpractices;andthereview of results of theemployeePulsesurvey. how toraiseawareness of theemployeesbenefitspackage; theimpact of COVID-19 onworking;future ways of Henderson attended oneof thosemeetingsinOctober2020. Thetopicscovered bytheWEPduring2020included (further information ontheWEPcanbefound on was appointedasthedesignated Non-Executive Director, tooverseeengagementbetweentheBoard andtheworkforce importance tothemandensure that seniorleadersandtheBoard heartheviewsof theworkforce. Stuart Henderson from alllevelsandfunctionsacross theGroup. Thepurposeof theWEPistoenableemployeesdiscussissuesof During the second half of 2020, the Group established a Workforce Engagement Panel (“WEP”) comprising employees Workforce EngagementPanel–DesignatedNon-Executive Director third womenbytheAGM in2022. The Board intendtofullycomplywiththeHampton-Alexander recommendation that theBoard compriseat leastone additional IndependentNon-Executive Director targeting theselectionof female andethnicallydiversecandidates. continue to strengthen and diversify the Board to meetcompliance requirements, having initiated a search for an be incompliancewithProvision 11of theCorporate GovernanceCode,following theAGM. TheBoard intends to the Board (excluding theChair)shallcompriseIndependentNon-Executive Directors. TheCompany, therefore, shall Executive Director. In addition Dr. Andrew Heath shall be retiring at the forthcoming AGM whereupon at least half of down from theBoard andProfessor DameKayDavies hasbeenappointedtotheBoard asanIndependentNon- Rasty anIndependentNon-Executive Director inDecember2020. Followingtheyearend,MartinDigglehasstepped than expectedasaresult of theCOVID-19 pandemic,theBoard waspleasedtoannouncetheappointmentof Dr. Sam initiating a search for additionalIndependentNon-Executive Directors. Whilst the search process tookslightlylonger Independent Non-Executive Directors during2020. TheBoard begantoaddress thisissueinthefirsthalf of 2020by 2020. TheBoard didnotmeettherequirement for halftheBoard, notincludingtheChair, tocomprisesolely Following areview, theBoard considersthat itwasnotinfullcompliancewiththeCorporate GovernanceCodeduring Chair, additionalNon-Executive Directors andsuccessionplanning. The Nomination Committeemeteleventimesin2020onanadhocbasisorder todiscusssearches for thenew Nomination Committeeare setoutinitswrittentermsof reference, whichisavailable ontheGroup’s website. recently, Professor DameKayDavies allof whomare IndependentNon-Executive Directors. Theprimarydutiesof the appointments totheBoard andsuccessionplanning,comprisesStuart Henderson,Dr. Heather Preston and,most The Nomination Committee,whichischaired byDr. RochDoliveux,theCompany’sChair, leadstheprocess for making Nomination Committeereport the necessaryinformation toassesstheGroup’s positionandperformance, businessmodelandstrategy. to theBoard that theAnnualReportandfinancialstatements 2020isfair, balancedandunderstandablewhileproviding that thedisclosures, aswelltheprocesses andcontrols underlyingitsproduction, were appropriate andrecommended The AuditCommitteeconsidered thisAnnualReportandfinancialstatements 2020, taken asawhole,andconcluded Fair, balancedandunderstandablestatement Corporate GovernanceReport Corporate Governance pages 23and53 ). The WEP met three times during 2020 and Stuart ). TheWEPmetthree timesduring2020andStuart diversity withnorestrictions onage,gender, religion, ethnicbackground, whosecompetencieswillenhancetheBoard. and makes recommendations basedonthecapabilitiesof individual candidates, having dueregard for thebenefits of The Nomination Committeehasaformal andrigorous appointmentprocess involvingmostifnotallBoard members right mixof skills,experience,independence,knowledgeandconsideration of theGroup’s strategic objectives. merit takingintoaccountsuitabilityfor therole, composition and balanceof theBoard toensure that theGroup hasthe achieve adiverseBoard and,justasimportantly, diversemanagementteams.AppointmentstotheBoard are basedon it toattract andretain themosttalentedpeoplefrom allbackgrounds andcultures. TheGroup isalsoworkingto workforce. TheGroup aimstocreate aninclusiveworkingenvironment basedonmerit,fairnessandrespect toenable The Group recognises theimportanceof diversityandiscommittedtoencouragingequality among its Diversity andInclusion appointment totheBoard. Dr. Heath willnotbestandingfor re-election at theforthcoming AGM. Committee. Dr. SamRastyreplaced Dr. Heath asamemberof theAuditCommittee inDecember2020uponhis Senior IndependentNon-Executive Director andDr. Heather Preston replaced himasChairof theRemuneration Committee inJune2020. At therequest of theNomination Committee,Stuart Hendersonreplaced Dr. Heath asthe accordingly steppeddownastheSeniorIndependentNon-Executive Director and Chair of theRemuneration Following Dr. Andrew Heath’s re-appointment at the2020AGM, hewasnolongerdeemedtobeindependentand consultancy, SpencerStuart, hasnoconnectionwiththeCompanyoritsindividual Directors. additional IndependentNon-Executive Director tofurtherstrengthen anddiversifytheBoard. Theexternalsearch following anintroduction from Dr. RochDoliveux.TheBoard hasinitiated afurthersearch withSpencerStuart, for an 2020 following anintroduction from SpencerStuart andProfessor DameKayDavies wasappointedinMarch 2021 that halftheBoard shouldconsistof IndependentNon-Executive Directors. Dr. SamRastywasappointedinDecember search for additionalIndependentNon-Executive Directors toaddress theCorporate GovernanceCoderequirement in June2020. TheCompanyandtheDirectors have noconnectionswithSpencerStuart. TheBoard alsoinitiated a for anewChairwithanexternalsearch consultancy, SpencerStuart, andDr. RochDoliveuxwassuccessfullyappointed continued developmentof theBoard. FollowingDr. Lorenzo Tallarigo’s decisiontoretire, theBoard initiated asearch During 2020, theBoard reviewed thesuccessionplansfor bothitscompositionandthat of itsCommitteesandthe Board successionplanning facilitated at leasteverythree yearsandexpectstocommissionthenextexternallyfacilitated review in2021. intends tocontinuecomplywiththeCorporate GovernanceCodeguidancethat theevaluation shouldbeexternally of thereport, includinganincrease inDirector’s trainingandeffective ways of workingtogether remotely. TheBoard the Board meetinginJanuary2021andtheBoard planstoimplementappropriate changesbasedonthediscussions questionnaire coveringthevariousaspectsof Board activitiesandCommittees.Theresulting report wasdiscussedat period from January2020tothefourth quarterof 2020. Thereview process comprisedthecompletionof ananonymous In October2020, theCompanySecretary conductedaninternalevaluation of theBoard’s performance coveringthe Board evaluation
Corporate Governance 93 94 2021, pleaserefer to to studySTEMsubjectsandembarkoncareers inthefield.Forfurtherinformation ontheGroup’s ESGobjectives for and otheractivities,theGroup aimstoencouragetheseindividualsenrol inhighereducation higher education particularlyinSTEMsubjects.Through sponsorship,mentoringandsupportfor careers workshops to promote STEMcareers asaviableroute for schoolchildren from demographicsthat have alowrepresentation in careers for schoolchildren through sponsorshipandmentoring.TheGroup willworkwithpartners,suchasIn2Science, goal of fostering andencouragingaculture of innovation withintheGroup andthewidercommunitypromoting STEM management levelandbeyond.At amore juniorlevel,aspartof itsESGobjectivesfor 2021,theGroup hasincludedthe training programme for thepurposesof identifyingandprogressing talentacross allareas of theGroup tosenior In addition,theGroup hasinplaceaninternalmanagementdevelopmentprogramme whichprovides astructured independence andknowledgefor theGroup’s strategic objectives. whilst takingintoaccountsuitabilityfor therole toensure that theGroup hastherightmixof skills,experience, Director. TheNomination Committeehasrequested that thesearch target female andethnicallydiversecandidates initiated asearch withexternalsearch consultants,SpencerStuart, for anadditionalIndependentNon-Executive strengthen anddiversifytheBoard. Aspartof itssuccessionplanningactivities,theNomination Committeehasalready serving Board members identifies as belonging to an ethnic minority, the Board has a clear intention to continue to for companiestohave at leastoneBoard memberfrom anethnicminoritybackground by2021.Whilstnoneof the The Board isaware of therecommendations of theParker ReviewonEthnic Diversity. TheParker Reviewsetatarget the objectivesof theHampton-Alexander Reviewwillbemetinfullduring2021/2022. the endof 2020. Partof theGroup’s strategy willbetomaintainandimprove onthefulfilment of thesetargets, sothat recommendation that 33%of seniorleadershiproles (definedastheSETandtheirdirect reports) beheldbywomen at Management level,there were more females thanmalesthereby meeting theHampton-Alexander Review’s Group was progressing towards anequal male/female split at theHeadof Department level, and at the Senior female members.Inthegenderpaygapreport for 2020, (for thefullreport seetheGroup’s websitewww.oxb.com) the level of management,during2020, theSET, excluding theExecutive Directors, totaledseven,of whichthere were two should collectivelypossessadiverserangeof skills,expertiseandethnicsocietalbackgrounds. Intermsof thenext comprise onethird womenbytheAGM in2022.TheGroup believesthat membersof theBoard andseniormanagement forthcoming AGM, theBoard willcomprisetwowomenandsixmenequaling25%theBoard hascommittedto Independent Non-Executive Director tomeettheHampton-Alexander Reviewrecommendations. Followingthe appointed Professor KayDavies totheBoard inMarch 2021.TheBoard hasinitiated asearch toappointafurtherfemale 33% of theBoard for FTSE 350companiesconsistsof womenbytheendof 2020. TheBoard isaware of thisissueand comprised onewomanandeightmenand,therefore, didnotmeettheHampton-Alexander recommendation that The Group supportstheprinciplesof theHampton-Alexander Reviewongenderbalance.During2020, theBoard Corporate GovernanceReport Corporate Governance pages 51to66 . and/or apprenticeships and/or apprenticeships Pr should bealignedwiththoseavailable for theworkforce Provision 38–Thepensioncontributionrates for Executive Directors page 125. The information abouttheshare capital required byArticle 10of theTakeover Directive isintheDirectors’ Reporton Share capital should compriseIndependentNon-Executive Directors Provision 11–At leasthalftheBoard, excluding theChair, Corporate GovernanceCodeProvision with reference totheCorporate GovernanceCodeprovisions: the Group hasnotbeenincompliancewiththeCorporate GovernanceCodeandhassetoutbelowthespecificareas but acknowledgesthat itdidnotcomplyinfull.TheGroup hashighlightedthroughout theAnnualReportareas where The Group considersthat itwaslargely incompliancewiththetermsof theCorporate GovernanceCodeduring2020 Compliance withtheCode three IndependentNon-Executive Directors. Provision 24 –TheAuditCommitteeshouldcomprise how Executive payalignswiththewiderCompanypolicy ovision 41 – Engagement with the workforce to explain ovision 41–Engagementwiththeworkforce toexplain
of tenure ontheBoard. Dr. Andrew Heath continuedtoattend theAudit Dr. Andrew Heath was nolongerdeemedindependentduetohislength Code duringthefirsthalf of 2020, however, following the AGM inJune2020, The Companycompliedwiththisprovision of theCorporate Governance ( comprise three Directors whoare deemednottobeindependent Provision 11of theCorporate GovernanceCodeastheBoard will Following theforthcoming AGM, theCompanywillcomplywith Executive Director tofurtherstrengthen anddiversifytheBoard. The Companyhasinitiated afurthersearch for anIndependentNon- Davies asanIndependentNon-Executive Director inFebruary2021. Non-Executive Director inDecember2020andProfessor DameKay Board announcedtheappointmentof Dr. SamRastyasanIndependent due totheCOVID-19 pandemictookslightlylongerthanexpected.The Independent Non-Executive Directors duringthecourseof 2020which Directors, excluding theChair. TheBoard initiated searches for additional Non-Executive Directors) andthree IndependentNon-Executive deemed nottobeindependent(twoExecutive Directors andthree At theendof 2020, theCompanycomprisedfiveDirectors whowere once more. Company compliedwithProvision 24 of theCorporate GovernanceCode Rasty joinedtheAuditCommitteeinDecember2020whereupon the as anIndependentNon-Executive Director inDecember2020. Dr. Sam experience toreplace Dr. Andrew Heath untilDr. SamRastywasappointed did nothave another IndependentNon-Executive Director withrelevant Committee inanadvisorycapacityfollowing theAGM astheBoard will bereduced toalignwiththewiderworkforce. notification that, from 31December2022,theirpensioncontribution Governance Code,theExecutive Directors have received written pension contribution.InlinewithProvision 38of theCorporate cash allowance)unlike thewiderworkforce whocurrently receive a7.5% The Executive Directors currently receive a15%pensioncontribution(or Independent Non-Executive Directors, excluding theChair. addressed in2021oncethenewRemuneration Policyhasbeenfinalised. how Executive payalignswiththewiderGroup paypolicy. Thiswillbe Corporate GovernanceCodetoengagewiththeworkforce toexplain during 2020, theGroup hasnotcompliedwithProvision 41of the completed theconsultation process withshareholders. Forthisreason, share thepolicy, detailingExecutive paywiththeworkforce untilithad of shareholders. TheRemuneration Committeemadethedecisionnotto years (setoutonpages114 to123)whichincludedcanvassingtheviews of 2020formulating theGroup’s Remuneration Policyfor thenextthree Explanation The Remunera two Executive Directors andoneNon-Executive Director) andfour tion Committee spent considerable time in the second half tion Committeespentconsiderabletimeinthesecondhalf
Corporate Governance 95 96 — — shareholders for thenextthree-year cycle.Ourapproach tothenewpolicyhasbeenformulated inthelightof thefollowing. The Remuneration Policy was last approved by shareholders at the2018AGM and is now due for review and approval by alignment of market-competitive paywithperformance againsttheGroup’s strategic objectivesandshareholder returns. and retention requirements againsttheneedtoensure ourpackages promote thelongtermsuccessof theGroup andthe Remuneration isakey partof attracting andretaining thebestpeopletoleadourbusiness.We balancetherecruitment Our approachtothenewpolicy and BiotechNASDAQ Biotechindicesoverthelast10years. As showninthechartonpage111,ourTotal Shareholder Returnhasoutperformed theFTSEall-share, FTSE350Pharma incredibly proud of all of theteamfor trulyexcelling inthese challengingtimes. agreement withAstraZeneca for large-scale manufacturingof theadenovirusbasedCOVID-19 vaccine.We are and commercial developmentrevenues by45%andhave signedathree-year mastersupplyanddevelopment new agreement withJunoTherapeutics/BristolMyersSquibb,butwehave alsogrown theunderlyingbioprocessing onset of theCOVID-19 pandemic, notonlyhave wesignedsevenpartner/collaboration agreements includingamajor During 2020, theGroup’s positionasaglobalpioneerincell andgenetherapieshascontinuedtogrow andsincethe requirements, asreferred tobelow. shareholders duringtheconsultation wehave increased boththein-employmentandpost-employmentshareholding constructive inshapingthefinalpolicyweare presenting here. Inparticular, takingintoaccount feedback from proposals for thenewpolicyandIwanttothankthemfor theirtimeandinput,whichhasbeenveryhelpful The Remuneration Committeehadtheopportunitytoconsultwithanumberof shareholders asweconsidered our Performance Shares Awards grantedundertheLongTerm IncentivePlan(LTIP) in2017. decisions in relation to remuneration in 2020, including in relation to the 2020 bonuses and the vestingof the Policy approved byshareholders at the2018AnnualGeneralMeeting,howwepropose toimplementitin2021,thekey In thisstatement Ihave setoutourapproach tothenewpolicy, includinghowitdiffers from theDirectors’ Remuneration — — — This report isdividedintothree sections: Heath for hisdedicated contributionandserviceastheprevious Chairof theCommitteefor nineyearstoJune2020. 2020; myfirst report asChair of theRemuneration Committee.Iwouldlike totake thisopportunitytothankDr. Andrew On behalfof theBoard, Iampleasedtopresent theDirectors’ Remuneration Reportfor theyearended31December Dear Shareholder Annual statementfromtheRemuneration CommitteeChair Directors’ Remuneration Report Corporate Governance
against the significantly higher incentive pay norms amongst our peers in the United States. against thesignificantlyhigherincentivepaynormsamongst ourpeersintheUnited States. businesses and thecorporate governance environment in the UKpresents significant challenges when considered have therighttoolsinplacetoattract bothExecutive andNon-Executive talentfrom NASDAQ listedbiotechnology Over 80%o therapies topatients. vector companyandtheGroup isideallyplacedtodelivervaluebypursuingitsmissionof deliveringlife-changing Under theleadershipo the pr the annualr “Corporate GovernanceCode”); this statement and a summary of how our policy is aligned with the 2018 UK Corporate Governance Code (the statement and a summary of how our policy is aligned with the 2018 UK Corporate Governance Code (the oposed Directors’ Remuneration Policy, tobeapproved at the2021AGM. f cellandgenetherapy(research, customers,andcompetitors)isbased intheUnitedStates. We needto eport onremuneration whichsetsoutamountsearnedbyDirectors inrespect of 2020;and f ourCEO, JohnDawson,Oxford Biomedicahasestablisheditselfasa worldleadinglentiviral — — — — — o giveusflexibilityto offer anoverallcompensationis package toanincomingOverseas Executive Director that voidance of doubt,more modestincreases inincentiveopportunitiesare proposed for theincumbent ey strategic imperative istoensure that thenewthree-year policysupportstheGroup’s successionplanning.We workforce, butwillbefrom 31December2022. noted onpage98, ourExecutive Directors’ pensionsare notcurrently alignedwiththoseavailable tothewider year performance periodandtwoyearholdingperiod);apost-employmentshareholding guideline.However, as a proportion of theannualbonusindeferred shares; longervestingtimehorizons for longtermincentives(i.e.athree- The newpolicycomplieswithther but notlimitedtoExecutive Directors recruited from orbasedintheUSandhaving regard tothefactthat over80%of Company iscompetingfor talentwithUScompetitors(includingNASDAQ listedUSbiotechnologybusinesses)including appointed after 1January2021inrespect of whichappointment,intheopinionof theRemuneration Committee,the term incentiveopportunity. Forthesepurposes,an“Overseas Executive Director” meansanyExecutive Director competitive againstNASDAQ listedbiotechnologybusinessesthenewpolicyincreases theoverallannualandlong T cell andgene Non-Executive Directors continuetobeindependent. Directors recruited from orbasedintheUnitedStates provides alignmentwithshareholders whilstensuringthat our constraints of beingaUKmainmarket listedcompany).Theproposed changestothepolicyfor Non-Executive attracting andretaining Non-Executives whencompetingwithNASDAQ listedBoard opportunities(within theoverall The newpolicyseek incentive quantumwillalsobecommensurate withanincrease instretch inperformance targets. to attract andretain seniorexecutives toachievetheGroup’s future growth ambitions.Allproposed increases in years. We are nowanestablishedFTSE 250companyandtheGroup wantstoensure that thepolicyhasflexibility with UKlistedmarket practice.Thisreflects thesignificant growth andperformance ofthe Group overthelastthree Executive Directors whoare notOverseasExecutive Directors, ourproposal istoincrease theincentives tobeinline Executive Directors (andwillapplytoanynewExecutive Director whoisnotanOverseasExecutive Director). For For thea makes thischoiceappropriate. leading edgetechnologyinourplatform businessandourcontinuedfocus onourownandpartnered products than withthetraditionalCDMOsector. TheRemuneration Committeebelievesthat thesignificant application of noted below, inchoosingourcomparator peergroup wehave alignedourselves withabiotechnologycohortrather attract CEO talentwiththerightskillsandexperiencetodeliveronfuture growth aspirations of thebusiness.As are aware that when John Dawson retires we will be competing against NASDAQ listed biotechnology businesses to A k incoming OverseasExecutive Director iscriticaltothebusinessandinbestinterests of allourshareholders. biotechnology businesses. We strongly believe that having the ability to offer higher incentive opportunitiesto an increases positiontheoverallincentiveopportunitytowards thelowerendof themarket compared toNASDAQ listed success of theGroup andthat theUnitedStates’ market hasthelargest commercial potentialfor theGroup. These therapyisbasedintheUnitedStates, that UnitedStates’ regulatory requirements are criticaltothefuture s toaddress thesignificantgaptomarket practiceinthe United States that wehave facedwhen equirements of the UK Corporate Governance Code, in so far as it includes paying equirements of theUKCorporate GovernanceCode,insofarasitincludespaying
Corporate Governance 97 98 Directors’ Remuneration Report Corporate Governance incentives salaries continuetobepositionedat thelowerquartile. companies of asimilarsize andcomplexity. Thesehigherincentiveopportunitiesalsotake intoaccountthat base complexity of thebusinessoverlastthree years. Maximumopportunitiesare alignedwithmarket practice for UK The increases in the annual bonus and long term incentive opportunities also reflect the significant increase in size and base salariesfor bothJohnDawsonandStuart Paynterinthelowerquartilefor comparableUKcompanies. achievements have strongly positionedtheGroup totake advantageof strategic opportunities.Theseincreases position OPEX andCAPEXexpenditure appropriately, resulting inahealthybalancesheetandstrong cashposition.These fundraises, thetransitiontoFTSE250status, andensuringgrowth hasbeenmanagedinafinanciallypositiveway, prioritising and that hisperformance andcontributionhave beenexceptional. Specifically, thishasincludedseveralsuccessful increase. Inthecaseof Stuart Paynter, theincrease alsoreflects that hehasbeenin role for more thanthree andahalfyears The 2021basesalaryincrease for bothJohnDawsonandStuart Paynter, reflects thethird year of aphasedbasesalary to over£750millioncurrently andweare nowanestablishedFTSE 250company. market capitalisation hasmore thandoubledfrom a12monthaverage market capitalisation of c.£350millionin2018 three-year period.Sincethenthesize andcomplexityof thebusinesshascontinuedtoincrease significantly. Our significantly belowmarket for companies of oursize andcomplexity andourintentiontoaddress thisoveratwoto In the2018Directors’ Remuneration Report,weexplained that JohnDawson’s and Stuart Paynter’s salaries were benefits Base salaryand Reward Element implementation of thenewpolicyin2021for theincumbentExecutive Directors. approval willbesoughtat the2021AGM asregards theincumbentExecutive Directors alongwiththeintended The following tablesummarisestheprincipaldifferences betweenthepolicyapproved in2018andthepolicy for which ofchangesforExecutive DirectorswhoarenotOverseasExecutive Directors Summary Retirement benefits Defined pension contribution (or cash allowance) Definedpensioncontribution(orcashallowance) Retirement benefits Long term Maximumo Annual Bonus
ex is paidincashand50%deferred shares become of upto15%of salary. Current Policy 100% of salaryfor anyotherExecutive Director. Maximum award of 125%of salaryfor theCEO and assessed overathree-year performance period. achievement of performance targets, typically (“Performance Shares Awards”) vestingsubjecttothe Annual grantof nilornominalcostshares awards A typical range of benefits is provided. A typicalrangeof benefitsisprovided. circumstances. included toaward higherincreases inappropriate employees intheGroup). Typical provisions are line withthelevelof increase awarded (toother No maximumsalary, butincreases are normallyin ercisable overthree years. f 125%of salary. 50%of anybonus
The 15%contributionwillcontinuef Dawson andStuart Paynterwillhave abonusopportunityof 150%of salary. the samedeferral arrangementscontinuingtoapply. For2021,John The maximumbonusopportunityisincreased to150%of basesalary, with the contributionavailable tothewiderworkforce (currently 7.5%). until theendof 2022,at whichpointtheircontributionwillbealignedwith Proposed PolicyforEx The proposed performance measures andtargets are setoutbelow. Two yearholdingperiodwillcontinuetoapply. — — For 2021:- base salaryfor theCEO and175%of salaryfor otherExecutive Directors. The maximumlongtermincentiveopportunityisincreased to200%of — For 2021,theExecutive Directors’ salarieshave beenincreased to: No significantchanges. for 2021is4.3% For reference theproposed basesalaryincrease for thewiderworkforce No significantchangesare proposed in relation tobenefits. — and 2021implementation
of basesalary. of basesalary. S John DawsonwillbegrantedaPerf S John Dawson:£455 tuart Paynter will be granted a Performance Shares Award over 175% tuart PaynterwillbegrantedaPerformance Shares Award over175% tuart Paynter:£310,000 (a29.5% increase). ecutive Directors who are not Overseas Executive Directors ecutive DirectorswhoarenotOverseasExecutive Directors ,000 (a5.7% increase); and or incumbent Executive Directors or incumbentExecutive Directors ormance Shares Award over 200% ormance Shares Award over200%
value termsasmarket valueoptionstoanyOverseasExecutive Director inrespect of anyyear. within thismaximum500%(facevalue)willbearequirement that nomore than375%of salarywillbeawarded inface performance share equivalents)where amarket valueoptionisvaluedat one-third of aperformance share. Furthermore, The overallmaximumlongtermincentiveopportunity wouldcontinuetobecappedat upto500%of basesalary(in consider thistobeanabsolutenecessityfor therecruitment of anOverseasExecutive Director. Performance Shares Award). Thisflexibilityinthe recruitment policywouldonlybeusediftheRemuneration Committee to thesatisfaction of performance conditions–inlinewithbestpracticetheUKfor Executive Directors andaswithany the flexibilitytograntPerformance Shares Awards and/ormarket valueoptions(albeitwithanymarket value optionsubject NASDAQ listed biotechnologybusinessesintheUnitedStates, weare proposing that thenewrecruitment policyincludes because grantingmarket valueoptions(typically withoutanyperformance conditions)isstandard market practicein Our intentionwouldbetooffer Performance Shares Awards toanincomingOverseasExecutive Director. However, higher shareholding requirement. guidelines withtheLTIP opportunitysothat anyLTIP award in linewiththishigheropportunityisbalanceda are commensurate withappropriately stretching targets for maximumvesting.We have alsoalignedtheshareholding As notedabove,weare mindfulof theneedtoensure that potentialincreases inincentivequantumthefuture CEO iscriticaltothebusinessandinbestinterests of allshareholders. However, westrongly believethat having theabilitytooffer incentiveopportunitiesuptotheselevelssuchanincoming The useof thesemaximumincentiveopportunitiesfor anincomingOverseasExecutive Director willnotbeautomatic. business astheCompanyislikely toneedrecruit anew CEO during thecourseof thenextthree years. ability tograntacomparableincentivequantumNASDAQ listedbiotechnologybusinesses,presents areal risktothe of the market compared toNASDAQ listedbiotechnologybusinesses.Inacompetitivemarket for talent,nothaving the This positionstheoverallmaximumincentiveopportunityfor anewOverseasExecutive Director towards thelowerend platform businessandourcontinuedfocus onourownandpartnered products makes thischoiceappropriate. sector. TheRemuneration Committeebelievesthat thesignificantapplication of leadingedgetechnologyinour comparator peergroup wehave alignedourselveswithabiotechnologycohortrather thanwiththetraditionalCDMO Regenxbio; Voyager Therapeutics;AvroBio; Beam;AutolusTherapeutics;Akouos; PassageBio.Inchoosingour Adverum Biotechnologies; Rocket Pharmaceuticals; NGM Biopharmaceuticals; Sangamo Therapeutics; Bluebird Bio; MeiraGTX; RubiusTherapeutics;HomologyMedicines;G1Orchard Therapeutics;GossamerBio; The following comparator group of US-based biotechnologycompanieswasusedfor benchmarkingpurposes: incentives Long term Themaximumbonusopportunityis200%of basesalary, ProposedPolicyforOverseasExecutive Directors Annual Bonus Reward Element following tablesummarisestheincrease inincentiveopportunitiesreserved for anewOverseasExecutive Director. (or cashinlieu)for anynewOverseasExecutive Directors will bealignedtothewiderworkforce (currently 7.5%). The Retirement benefits:InlinewithbestpracticeundertheCorporate GovernanceCode,thepensioncontribution into accounttherelevant skillsandexperienceof theindividualandoverallcompensation package. Base salary: Thebase salary of an Overseas Executive Director would be determined at the time of recruitment taking ofchangesforOverseasExecutive Directors Summary A twoyearholdingperiodwillalsotoapplyfollowing thethree-year performance period. a periodof three years Annual grantof Performance Shares Awards whichvestsubjecttoaperformance testandcontinuedemployment,normallyover Maximum longtermincentiveis500%o three years. No changetodeferral arrangements:50%of anybonusispaidincashand50%deferred shares becomeexercisable over
f base salary f basesalary
Corporate Governance 99 100 measure for the2021awards requires a30%CAGR for maximumvesting,compared toa24% CAGR for the2020awards. commensurate withappropriately stretching targets for maximumvestingandasnotedabovetheRevenueGrowth We are mindfulof theneedtoensure that theproposed increases inincentivequantum for 2021andinthefuture are for shorttermspikes inperformance. also bedeterminedbyaveraging theCompany’sshare priceoverthe three monthspriortovestingavoid rewarding Committee considers that theoverallperformance of thebusinessacross the period justifies it. Share price growth will There willcontinuetobeaperformance underpin,such that the awards willonlyvesttotheextent that theRemuneration specific strategic milestonesinthefuture. It isourcurrent intention that upto30%of the overall longtermincentiveopportunitymaybebasedonthedeliveryof once wehave furtherrefined oursegmental reporting. In future years,theshare price/TSRmeasure maybesubstitutedfor ameasure basedontheprofitability of theCDMO, Product related strategic milestones Relative TSR/share price Measure share price/TSR; 40%revenue growth; and20%strategic goals. term incentive.Forthegrantstobemadein2021,itisintendedthat theperformance measures willbeweighted 40% intending tointroduce astrategic measure linked toachievementof specificdevelopmentmilestonesintothelong price/Total measure. Taking Shareholder Return(TSR) intoaccountthefeedback from shareholders, from 2021,weare for the2021grants,althoughwepropose toreplace theabsoluteshare priceperformance measure witharelative share Remuneration Committeebelievesthat share pricegrowth andrevenue growth remain key measures of performance targets are setfor theGroup’s situation at thetime.Aswithlongtermincentiveawards grantedin2020, the The performance metricsfor thelongtermincentiveawards are determinedtoensure that themostappropriate recurring revenues suchasfrom manufacturingordevelopmentservicestothird parties. of developmentof eachopportunity. Theannual bonus objectivesare also likely toincludetargets related to generating targets for aparticularyearare therefore likely toincludespecificproduct developmenttargets dependingonthestage concept through totheendof PhaseIorIIclinicalstudiesbefore partneringorout-licencing.Annualbonus A key componentof theGroup’s strategy istodevelopcellandgenetherapyproducts from pre-clinical proof of the business. We willincludeflexibilityunderthenewpolicytosetmeasures andtargets takingintoaccountthestrategic needs of Performance measuresandtargets Directors’ Remuneration Report Corporate Governance Underpin Revenue Growth Weighting 20% 40% Applies tothewholeawar 40% d Consistent with previous awards, the whole award will be subject to an Consistentwithprevious awards, thewholeaward willbesubjecttoan d Approach Thestra — — performance periodjustifiesit. Committee considerstheoverallperformance of thebusiness overthe underpin suchthat itwillonlyvesttotheextentthat theRemuneration 25% vestingfor deliveryof athreshold milestone. the levelof vestingdeterminedbyreference totheachievements,with awards vest.Themeasure willbealignedwiththeGroup’s strategy with disclosed whenthisisnolongerthecase,andlater thanwhenthe — — — —
performance period performance period consistent withourcurrent approach totheshare pricemeasure. measure, withathree monthaveraging periodapplied,again the awards, consistentwithourcurrent approach totheshare price TSR willbeassessedoverathr Maximum vesting:Upperquartileperf Thr V Maximum vesting:30%CA Thr Biotechnology Index period relative totheTSRperformance of companiesintheNASDAQ esting based on the Company’s TSR over a three-year performance esting basedontheCompany’sTSRoverathree-year performance eshold vesting 25%: 15% CAGR per annum over a three-year eshold vesting25%:15%CAGR perannumoverathree-year eshold vesting25%:Medianperformance tegic measure andtargets are commercially sensitiveandwillbe
GR per annum over a three-year GR perannumoverathree-year
ee-year period from the date of grant of ee-year periodfrom thedate of grantof ormance
commitment, additionalfee elementshave beenintroduced witheffect from 1December2020, asoutlinedbelow. the increased size andcomplexityof theGroup andcorresponding increase inthe scopeof therole andexpectedtime base fee hasnotbeenincreased for 2021andsowillremain at the2020levelof £65,000. However, having regard to providing that theseare settakingintoaccounttheresponsibilities of therole andexpectedtimecommitment.The In linewithusualpractice,ourcurrent policydoesnotincludealimitonthequantumof Non-Executive Directors’ fees, The newpolicyasitrelates toNon-Executive Directors hasbeendeterminedbyBoard. Non-Executive Directors to aidtheoperation of thepolicyortotake accountof developments inpracticesince2018. Other minorchangeshave beenmadetothepolicyapproved in2018asaconsequenceof theseprincipalchangesor — — — In linewithbestpracticeandtheCorporate GovernanceCode: UK governanceandCorporateGovernanceCodefeaturesofthePolicy performance. Independent Non-Executive Directors should not receive incentive awards geared to the share price or corporate We recognise that asaUKmainmarket listedbusiness,from aCorporate GovernanceCodeperspectiveChairsand to recruit. This hasbeenanon-goingchallengeinnegotiations withnon-UK basedNon-Executive Directors theGroup isseeking attracting experiencednon-UK basedNon-Executive Directors from biotechnologybusinessesintheUnitedStates. or restricted stockgrantstonon-UK basedNon-Executive Directors hasapresented uswithasignificantchallengein Non-Executive Directors onappointmentandthereafter onanannualbasis.Thefactthat wecannotoffer stockoptions unanimous practicefor ourpeersintheUnitedStates for stockoptionsand/orrestricted stockawards tobemade We are alsocompetingagainstNASDAQ listedbiotechnologybusinessesfor Non-Executive Directors. Itisalmost time commitmentwhere theNon-Executive Director isbasedinadifferent time zone). (including butnotlimitedtotheadditionalexpectedtimecommitmentfor travel totheUKaswelladditional Base fee upliftfor Non-Executive Directors basedoutsidetheUKtorecognise theadditionaltimecommitment Additional fee for holdingthepositionof Chairof theAuditCommittee Additional fee for holdingthepositionof Chairof theRemuneration Committee Additional fee for holdingtheoffice ofSeniorIndependentDirector Fee element
reputational damage. Recovery pr time, theywillberequired toretain allof thoseshares. zero overatwoyearperiod.IftheExecutive Director holdslessthantherequired numberof relevant shares at any as have avalueat cessation equaltotheirin-serviceshareholding requirement, withtherequired holdingtaperingto granted after 1January2019. Followingemployment,anExecutive Director mustretain suchof therelevant shares Shares are subjecttothisrequirement onlyiftheyare acquired from longtermincentiveordeferred bonusawards The Remunera the higherof 200%of salaryandtherelevant Executive Director’s normalannualLTIP opportunity. although in practice this was increased to 200% with effect from 1 January 2019. In the newpolicy, this limit willbe The curr ent policyincludesarequirement that theExecutive Directors buildandmaintainaholdingof 150%of salary, ovisions enhanced to enable their application in the event of material corporate failure and serious ovisions enhancedtoenabletheirapplication intheeventof material corporate failure andserious tion Committeehasformally includedapost-employmentshareholding requirement inthepolicy.
£15 £10,000 £10,000 £10,000 2021 level ,000
Corporate Governance 101 102 of thereport pleasevisitourwebsiteat www.oxb.com. the organisation andthat thishashadapositive impactontheGroup’s medianandmeangenderpaygap. Forfulldetails growth of theGroup overtheyearandprogression towards anequalmale/female splitat themore seniorlevelsof The Remuneration Committee reviewed the Group’s Gender Pay GapReportfor 2020andwas pleased tosee the Other matters be appropriate. The Remuneration Committee reviewed performance against this underpinand concluded the overall payments to Remuneration Committeeconsidered that theoverallperformance of thebusinessacross theperiodjustifiedit. The awards were alsosubjectto aperformance underpin,suchthat theywouldvestonlytotheextentthat the across three monthspriortotheendof theapplicableassessmentperiod. Detailsare provided onpage108. The Performance Shares Awards grantedunder theLTIP in2017vestedduring2020. Theshare pricewasaveraged 1 20% ormore (i.e.72.8% over3years) Between 10%and20% 10% (i.e.33.1% over3years) Less than10% starting withthedateofgrant Average annualcompoundsharepricegrowthoverthethree-yearperiod Remuneration Report.Theperformance conditionswere asfollows: element of theaward grantedon7August2018asmentionedpage78 of theCompany’s2018Directors’ In thecaseof Stuart Paynter, theaward includesboththeelement of theaward grantedon25September2017andthe adjustment for the50to1share consolidation inMay2018). Stuart Paynteron25September2017whentheshare pricewas430p(withtheshare priceineachcasestated after Performance Shares Awards were grantedon13July2017toJohnDawsonwhentheshare pricewas495pandto Vesting ofthePerformanceShares Awards grantedundertheLTIP in2017 of salary. Thebonuseswillbepaid50% incashand50%deferred shares. accordingly approved theaward toJohnDawsonof abonusof 106%of salaryandtoStuart Paynterabonusof 110% overall bonuspaymentsearnedbyreference totheannualbonusperformance measures tobeappropriate, and considered overallbusinessperformance aspartof itsassessmentof theannualbonusout-turnandconcluded performance againstbonusobjectivesisdescribedonpage41andpages106107. TheRemuneration Committee The performance of thebusinessin2020issetoutdetailStrategic Reportfrom pages30to37andthe bonus award for 2020. In January2021,theRemuneration Committeemettoconsidertheachievementof the2020objectivesandannual 2020 businessperformanceandincentiveimpact Executive Directors withappropriate skillsandexperience. and market remuneration levelsandtheneedtoensure that theCompanyhasabilitytoattract andretain Non- However, theBoard wasof theunanimousopinionthat theapproach wasappropriate giventhedifferent circumstances upon thelocation of theNon-Executive Directors wouldnegatively impactthecollegiate approach of theBoard. In settingtheseadditionalfee elements,theBoard considered inparticularwhetherthedifferent fee elementsdepending We willreassess thiselementof thepolicyafter three years,inlinewiththenextscheduledreview of thepolicy. provides alignment withshareholders whilstensuringthat ourNon-Executive Directors continuetobeindependent. Directors thispositionstheoverallfee levelsclosertothelowerendof themarket compared toUSpeers.Thisalso listed businesseswhere equityawards are anongoingfeature of theoverallpackage. ForUSbasedNon-Executive United States that wefacewhenattracting andretaining Non-Executive Directors incompetitionwith,orfrom NASDAQ retained for at least 12 months from acquisition. This seeks to address the significant gap to market practicein the the after taxamountof thisadditionalfee willbeappliedintheacquisitionof shares at market valuewhichmustbe levels of remuneration for Non-Executive Directors. Thisadditionalfee will bepayablesubjecttotheiragreement that £50,000 perannumtoanyNon-Executive Director recruited from orbasedintheUnitedStates toreflect USmarket Therefore, subjecttotheapproval of thenewpolicyat theAGM, wepropose toaward anadditionalfee of upto Directors’ Remuneration Report Corporate Governance
In thecaseo f theelementof Stuart Paynter’saward grantedon7August2018, theperformance conditionisassessedfrom 25September2017. 1
Percentage oftheoptionsgrantedthatwillvest 100% Calculated onastraightlinebasisbetween25%and100% 25% 0%
consistent withCompanypurpose,valuesandstrategy. Alignment toCulture: incentiveschemesshoulddrivebehaviours Outcomes shouldnotreward poorperformance. strategy andthelongtermperformance of thecompanyshould beclear. Proportionality: thelinkbetweenindividualawards, thedeliveryof at thetimeof approving the policy. directors andotherlimitsordiscretions shouldbeidentifiedandexplained Predictability: therangeof possiblevaluesof rewards toindividual target-based incentiveplans,are identifiedandmitigated. risk Risk: remuneration arrangementsshouldensure reputational andother ra Simplicity: remuneration structures shouldavoid complexityandtheir effective engagementwithshareholders andtheworkforce. Clarity: remuneration arrangementsshouldbetransparent andpromote Principle predictability, proportionality andalignmenttoculture, assetoutintheCorporate GovernanceCode. In determiningthenewpolicy, theRemuneration Committeetookintoaccount theprinciplesof clarity, simplicity, risk, (not audited) Alignment ofthePolicywith2018CorporateGovernanceCode Chair, Remuneration Committee Dr. HeatherPreston I hopethat wewillearnyoursupportat theforthcoming AGM. I welcomefeedback at anypointintimefrom ourentire shareholder baseregarding ourpolicyanditsapplication, and of shareholders andemployees. Directors inrespect of 2020wasappropriate, takingintoaccountGroup andpersonalperformance, andtheexperience We believethat thecurrent policyoperated asintendedandconsiderthat theremuneration received bytheExecutive different stakeholder views. 59.8% of theshares intheCompany. We have triedtoincorporate asmuchinvestorfeedback aspossiblewhilstbalancing new policy, theRemuneration Committeehadtheopportunitytoconsult with shareholders representing more than constructive inputandengagementinrelation todevelopingthenewpolicy. Asweconsidered ourproposals for the AGM, withover98%of votescastinfavour. Iwouldalsolike tothankshareholders andinvestorbodiesfor their I amgrateful toshareholders for theirsupportinapproving ourprevious AnnualReportonRemuneration at the2020 Shareholder engagement tionale andoperation shouldbeeasytounderstand. s from excessive rewards, andbehavioural risks that canarisefrom is delivered, whichreinforces theGroup’s purposeandvalues. Executive Directors are rewarded onbothwhat theydeliverandhow that adherence tothevalues. measuring perf with allitsstakeholders. TheGroup’s valuesare animportant factorin how theGroup works togetherandtheinteractionsGroup has These three valuesgovernthewaythat theGroup doesbusiness, The Group’s valuesare: ‘Have integrity’,‘Be inspiring’and‘Deliver innovation’. ensure that itisappropriate inthiscontext. workforce payandpolicieswhendeterminingDirectors’ remuneration to The Remuneration Committeeconsiderstheapproach towider taking intoaccountunderlyingperformance andshareholder experience. reflect performance of theExecutive Directors andtheGroup asawhole, The Remuneration Committeebelievestotalremuneration shouldfairly Details o of theGroup. outcomes, whichmaynotaccurately reflect theunderlyingperformance The Remuneration Committeealsohasdiscretion tooverrideformulaic shareholders’ interests. to awards undertheLTIP provide longertermalignmentwith Annual bonusdeferral andtheapplication of thetwoyearholding period regard toriskconsiderations. provisions. ThisallowstheRemuneration Committeetohave appropriate Both theannualbonusandLTIP are subjecttomalusandclawback has beenclearlylaidoutintheRemuneration Policy. The purpose,structure andstrategic alignmentof eachelementof pay approach toExecutive pay. shareholders andtheirrepresentative bodiesinorder toexplainthe The Remuneration Committeeengagesregularly withExecutives, discretions canbefound onpage105. f the range of possible values of rewards and other limits or f therangeof possiblevaluesof rewards andotherlimitsor ormance, andtheGroup recognises andrewards
Corporate Governance 103 104 Group’s website andinclude: The responsibilities of theRemuneration Committeeare setoutinitstermsof reference whichare available onthe Remuneration Committeeroleandmembers (audited) Single totalfigureofremuneration — — — — — — During 2020theRemuneration Committeemet12times.Themainactivitiesanddecisionswere asfollows: Remuneration Committeeactivitiesduring2020 1 January2020until23June2020. OtherDirectors are invitedtoattend meetingsonanagendadrivenbasis. 2020), Stuart HendersonandDr. RochDoliveux.Dr. Andrew Heath wasChair of theRemuneration Committeefrom The Remuneration Committeemembersduring2020comprisedDr. Heather Preston (Chair, witheffect from 24 June — — — — — — — In thisreport: Annual Report onremuneration Directors’ Remuneration Report Corporate Governance
United States’ market hasthelargest commercial potentialfor theGroup. United States, that United States’ regulatory requirements are critical to the future success of theGroup and that the recruited from orbasedintheUSandhaving regard tothefactthat over80%of cellandgenetherapyisbasedinthe competitors (includingNASDAQ listedUSbiotechnologybusinesses)includingbutnotlimitedtoExecutive Directors appointment, intheopinionof theRemuneration Committee,theCompanyiscompetingfor talentwithUS their grade level and their own personal performance. their gradelevelandownpersonalperformance. give employeesat alllevelstheopportunitytoshare inthesuccess of the Group byreceiving acashbonuslinked to The Remunera offer undertheCompany’s Sharesave scheme. 7 September2020–theRemunera July 2017and100%of theoptionsgrantedinSeptember2017 wouldvest,more information isincludedonpage108. was appropriate byreference totheperformance underpin.Theoutcomewasthat 61.6% of theoptions grantedin performance conditionsfor theJuly2017andSeptember 2017grantsof optionshadbeenmetandwhethervesting 13 Julyand28September2020–theRemunera Long Term IncentivePlan,Deferred BonusPlanandEmployeeShare OptionScheme. 22 June2020–theRemunera of these discussionswasreported inthe2019AnnualReport. Executive Directors inrespect of 2019 in lightof the performance against the Group’s 2019objectives. The outcome 12 February2020–theRemunera Development o appr Company Secretary); and appr appr (including theCompanySecretary); appr remuneration of theNon-Executive Directors isamatter for theBoard; r an “ nil ornominalcostshar ecommending to the Board the policy and framework for the remuneration of the Executive Directors. The Overseas Executive Director” meansanyExecutive Director appointedafter 1January2021inrespect of which oval of awards grantedtoallemployeesundertheGroup’s share plans. oval of Performance Shares Awards for Executive Directors andtheSeniorExecutive Team (includingthe oval of annualperformance incentiveplansandbonusespayable; oval of individualremuneration packages for theChair, theExecutive Directors andtheSeniorExecutive Team tion Committee had oversight of the introduction of a Group-wide cash bonus scheme which will tion Committeehadoversightof theintroduction of aGroup-wide cashbonus schemewhichwill f the new policy and engagement with shareholders in relation to its terms. f thenewpolicyandengagementwithshareholders inrelation toitsterms. es awards undertheCompany’sLTIP are referred toas“Performance Shares Awards”; and tion Committee considered the granting of options to employees under the Group’s tion Committeeconsidered thegrantingof optionstoemployeesundertheGroup’s tion Committee approved an invitation to all employees to participate in the 2020 tion Committee approved aninvitation toallemployeesparticipate inthe2020 tion Committee considered whether or not bonuses should be paid to the tion Committeeconsidered whetherornotbonusesshouldbepaidtothe tion Committee considered the extent to which the share price tion Committeeconsidered theextenttowhichshare price
2 Performance againsttheGroup objectivesfor 2020, onwhichtheExecutives’ bonusesare based,wasasfollows: to 37. bonus award for 2020. Theperformance of thebusiness 2020issetoutindetailtheStrategic Reportfrom pages30 In January2021,theRemuneration Committeemettoconsidertheachievementof the2020objectivesandannual 1 Stuart Paynter John Dawson Stuart Paynter 2019 2020 for 2019. The following tablesshowasingletotalfigure of remuneration for 2020 for eachDirector andcomparative figures in share pricetovesting.Nodiscretion hasbeenexercised inrespect of vestingasaresult of share priceperformance. of the valueattributable totheshare priceat thegrantof theawards andtheamountthat isattributable tothegrowth The following tablesetsoutinrespect of thePerformance Shares Awards granted undertheLTIP in2017theamount 4 3 2 1 Total Stuart Paynter John Dawson John Dawson Total
In thecaseo 25 September2017andtheelementof theaward grantedon7August2018asmentionedpage78of theCompany’s2018Directors’ Remuneration Report. Benefits comprisemedicalinsuranceandthepr This comprisesthePerf awarded todeterminetheextentof vesting(690p). out onpage83of the2019Directors’ Remuneration Report.Thevaluesare calculated byreference totheshare priceat thelastdayof theperiodoverwhichshare pricewas In thecaseo This comprisesthePerf day of theperiodoverwhichshare pricewasaveraged todeterminetheextentof vesting(751pinthecaseof John Dawsonand819pinthecaseof Stuart Paynter). Stuart Paynter).Therelevant performance criteriaandtheperformance againstthemare setoutonpage105to108. Thevaluesare calculated byreference totheshare priceat thelast Dawson andStuart Paynterhadelectedtoreceive suchacashallowance. Pension contributionsar f JohnDawson,thepriceat grantis495p.Inthecaseof Stuart Paynter, thepriceat grantis430p,withthispricebeingusedfor boththeelementof theaward grantedon f JohnDawson,thepriceat vestwas751p.Inthecaseof Stuart Paynter, thepriceat vestwas819p. ormance Shares Awards grantedundertheLTIP in2016, whichvestedinMay2019. Therelevant performance criteriaandtheperformance againstthemare set ormance Shares Awards grantedundertheLTIP in2017whichvestedon13July2020(inthecaseof JohnDawson)andon25September2020(inthecaseof e madeintotheGroup’s definedcontributionscheme,or at theelection of theDirector, asacashallowanceinlieu of acompanypensioncontribution –John £’000 £’000 Salary Salary Salary 670 638 239 410 228 431
ovision of acarallowance. Benefits Benefits £’000 £’000 22 22 11 11 11 11 1 1
Bonus Bonus Bonus £’000 £’000 720 564 T 263 205 457 359 otal value £293,633 £533,292
£’000 £’000 LTIP LTIP 294 827 386 386 533 – 2 3
to share priceat grant Pension Pension £’000 £’000 Value attributable 101 61,696 86 61,082 36 65 41,220 54 32 4 4
£193,540 £279,995 2,340 £’000 £’000 1 1,258 Total Total
476
remuneration remuneration Value attributable togrowth Total fixed Total fixed in share pricetoat vesting 793 746 286 507 475 271 remuneration remuneration Total variable Total variable £100,093 £253,297 1,547 751 950 796 205 745 2
Corporate Governance 105 106 regulatory approvals for Oxbox. key partners.Receiveappropriate milestones for Novartisandother as agreed andreach key To servicetheGroup’s customers Advancement Partners / Capacity / Technology Objective Directors’ Remuneration Report Corporate Governance studies. and tostarttwonewfeasibility three platform technologydeals to out-licenseoneproduct, agree divisions for financial reporting. costs andlooktocreate internal growing saleswithstrictcontrol of Set intheregime of aggressively strengthening thebalancesheet. out-licensing deal,alongwith manufacturing dealsandaproduct by thebudget,whichincludesnew EBITDA targets, whichare driven of thecompetition. platform tokeep theGroup ahead and improved process) tothe process innovations (rapidprocess new patentable inventions)and portfolio, alongsidetechnical(two products intotheGroup’s To advancetwonewplatform and innovation T Business development T Financial objectives Patent / product advancement o continue to execute new deals, o continuetoexecute newdeals, o achieverevenue andOperating
Weighting 20% 15% 35% 20% — ee platform technologydealswere signedwith — — — oup successfullyinitiated animproved — tory approval byMHRAof vectorproduction — — — — — Performance assessed — — — — Regula Thr The Gr Cash in-flowachievedinlinewithbudget(5%o Successfully completeda£40millioncapitalraisein Internal divisionswer (0% earnedfrom bonusopportunityof 5%) Oxford AstraZeneca COVID-19 vaccineprogramme in order todivertresources tothedevelopmentof the Management madethedecision,a The pipelinewasalsostr T The Gr The f The Gr The objectivetoSpin-out/out-licenseassetsintoSPV T earned from bonusopportunityof 5%) or otheralternative structure wasnotachieved(0% respectively (5%of bonusearnedfrom maximum5%) Therapeutics andJanssenPharmaceuticals, Juno Therapeutics/BristolMyersSquibb,Beam maximum 20%) set inthebudget(15%of bonusearnedfrom targets andexceeded theOperating EBITDA target bonus earnedfrom maximum5%) June 2020(5%of bonusearnedfrom maximum5%) (5% of bonusearnedfrom maximum5%) delivering arapidandimpr the internalprogramme for innovation aimedat considering allstakeholder groups, tore-prioritise earned from maximum5%) manufacturing process intoGMP(5%of bonus from maximum5%) in Oxbox byfirsthalf of 2020(5% of bonusearned achieved. (5%of bonusearnedfrom maximum5%) Pharmaceuticals andLegendBiotechwere also (2.5% of bonusearnedfrom maximum5%) through proof of conceptinasuitablediseasemodel. advancement of onenewproduct, OXB—401, (5% of bonusearnedfrom maximum5%) for Novartis(5%of bonusearnedfrom maximum5%) batches for clientprogrammes, inadditiontothose · · wo new feasibility studies with Janssen wo newfeasibility studieswithJanssen wo newpatentable inventionsfor platform process earned from bonusopportunityof 5%) in-house fillandfinishinspectionbyMHRA(0% delayed theGroup’s initiation of theGroup’s opportunity of 5%) vaccine programme. (0%earnedfrom bonus manufacture theOxford AstraZeneca COVID-19 clients. TheGroup utilisedthisvacancyto facility. Thisprovided avacancyinOxbox for other a process for theclientintoGroup’s Oxbox A The onseto t the request of a client, the Group did not transfer t therequest of aclient,theGroup didnottransfer ollowing objectiveswere notachieved: oup also achieved the initiation of two GMP oup alsoachievedtheinitiation of twoGMP oup was very close to achieving the revenue oup wasveryclosetoachievingtherevenue f the COVID-19 pandemic in 2020 f theCOVID-19 pandemicin2020 e created for financial reporting e created for financial reporting engthened by the engthened bythe oved first-in-man process, oved first-in-manprocess, fter carefully fter carefully f f
performance performance target performance target and maximum between target and maximum between target equivalent to Partially met perf equivalent to Mainly met– perf equivalent to Largely met– equivalent to Partially met against objective Assessment ormance ormance ormance
12.5% 10% 10% 30% % of bonus awarded instalments on the first three anniversary dates after the award date. instalments onthefirstthree anniversarydates after theaward date. The deferred share awards are notsubject tofurtherperformance targets andwillbecomeexercisable inthree equal bonus paymentstobeappropriate. Thebonuseswillbepaid50%in cashand50%indeferred share awards. The Remuneration Committeereviewed performance againsttheannualbonusout-turnandconcludedoverall — — Accordingly, bonusesearnedbytheExecutive Directors inrespect of 2020were: his personalobjectives,andbasedonachievementsagainst thoseobjectives,awarded abonusequalto110%of salary. The Remuneration Committeeundertookarobust assessmentof theachievements of Stuart Paynterwithrespect to financial function of theGroup. successful fundraise,optimisingthefinancialstrategy for theGroup andenhancingtheinternalcontrols withinthe and soare notdisclosedin detail.However, theprincipalareas of thepersonalobjectiveswere related toleadinga considered bytheGroup tobecommercially sensitive,astheywillgiveourcompetitorsinsightintostrategic plans, objectives andtargets, whichsupportedthestrategic objectivesof thebusiness.Theobjectivesandtargets are The personalelementof thebonusfor Stuart Paynterwasassessed by reference totheachievementof clearpersonal Paynter is80%linked tocorporate objectivesand20%linked topersonalobjectives. John Dawson’sbonusisentirely (100%)linked totheachievementof thecorporate objectives.Thebonusfor Stuart out inthefivepillars for ESG(formerly Responsible Business),onpages51to66. which involveeverypartof thebusiness.Detailof theResponsibleBusinessobjectivesfor 2020ismore particularly set In additiontothesecorporate objectives,theGroup alsosetsannualESG(formerly Responsible Business)objectives, and objectiveshadbeenset. the successof thecontractwithAstraZeneca andrelated work which hadnotbeenenvisagedwhenthe2020goals recommended, and the Board approved, that an additional“vaccineadjustment”of 12.5% be awarded toacknowledge no adjustmentmadetocompensate for theeffects of the COVID-19 pandemic.TheRemuneration Committee The Remuneration Committeenotedthat performance againsteachof theGroup’s objectiveshad beenmarked with business changeportfolio. programme, implementinga Group’s organisation effectiveness Business strategy. To enhancethe through theGroup’s Responsible implementation of ESGtargets engagement, aswellthe the future. Focusonstakeholder balanced productive workforce for a staff supportsystemstoensure competitive rewards/benefits and To buildaculture whichprovides Organisational development Objective
S John Dawson:£457 tuart Paynter:£263,000 (110%of salary). ,000 (106%of salary);and Weighting 10% — — — — Performance assessed —
maximum 2%) talent programme. (2%of bonusawarded from an integrated performance, developmentand benefits. (2% of bonusawarded from maximum2%). competitive grading,paystructures, andassociated completed androlled outwhichincluded The employeer The Gr from maximum2%) Management System QPulse(2%of bonusawarded Management System (LIMS)andtheQuality introduction of aLaboratory Information benefit from systeminvestmentsuchasthe change portfolio todeliverdemonstrablebusiness The Gr awarded from maximum2%) Biomedica were setandachieved(2%of bonus establishing asustainabilityforum withinOxford landfill, increase innumber of apprenticeships and Strategic Report)of reduction inwastegoingto ESG tar from maximum2%) undertaken bytheGroup (2%of bonusawarded employees, suppliersandbroader community)were section 172of theCompaniesAct2006(e.g. Pr ojects to drive stakeholder engagement under ojects todrivestakeholder engagementunder oup also designed and implemented oup alsodesignedandimplemented oup was also able to drive the business oup wasalsoabletodrivethebusiness gets (as described in the ESG section of the gets (asdescribedintheESGsectionof the eward strategy was successfully eward strategy wassuccessfully
performance maximum against objective Assessment equivalent to Met infull–
10% % of bonus awarded
Corporate Governance 107 108 10% (i.e.33 Less than10% 20% ormore (i.e.72.8% over3years) Between 10%and20% Award grantedtoStuartPaynter A annual compoundshare pricegrowth andvestingout-turnwasasfollows: across three monthspriortotheendof theapplicableassessmentperiod.Over thethree-year performance period,the The Performance Shares Awards grantedunder theLTIP in2017vestedduring2020. Theshare pricewasaveraged 1 over thethree-year periodstartingwiththedate of grant Average annualcompoundshare pricegrowth Report. Theperformance conditionswere asfollows: of the award grantedon7August2018asmentionedpage78of theCompany’s2018Directors’ Remuneration of Stuart Paynter, the award includes both the element of the award granted on 25 September 2017 and the element (with the share pricein each case stated after adjustment for the 50 to 1 share consolidation in May2018). In the case retired) whentheshare pricewas495pandtoStuart Paynteron25September2017whentheshare pricewas430p Performance Shares Awards were granted under the LTIP on 13 July 2017 to John Dawson and Peter Nolan (now (audited) Performance SharesAwards grantedundertheLTIP andvestingduring2020 eviously disclosed,PeterNolan retained thebenefit of hisPerformance Shares Award grantedin2017. 1 Aggregate Directors’emoluments Both RobertGhenchevandMartinDiggleelectedtoreceive nofees for theirservicesasDirectors. Board witheffect from 1December2020. Dr. Lorenzo Tallarigo retired from theBoard witheffect from 23June2020. Dr. RochDoliveuxwasappointedtotheBoard witheffect from 24 June2020. Dr. SamRastywasappointedtothe . Lorenzo Tallarigo steppeddownfrom theBoard on23June2020. Inthetableabovehisfees for 2020are hisfees tothedate onwhichhesteppeddownfrom theBoard. Payments 1 Fees Executive Directors donotreceive anyremuneration otherthanfees, noseparate totalsare includedinthetablebelow. The singletotalfigures of remuneration for Non-Executive Directors are showninthetablebelow. BecausetheNon- Directors’ Remuneration Report Corporate Governance Total Salaries Dr Benefits Dr. Andrew Heath Pension/cash alterna Stuart Henderson LTIP Dr. Heather Preston Bonuses Dr. SamRasty Non-Executive Directors fees Dr. Lorenzo Tallarigo Total
wards grantedtoJohnDawson andPeterNolan As pr In thecaseo Dr to himafter that date are describedonpage111. . RochDoliveux .1% over3years) f theelementof Stuart Paynter’saward grantedon7August2018, theperformance conditionisassessedfrom 25September2017. tive
1 1 81% 44.8% growth overthree years Annual compoundshare price Calculated onastraightlinebasisbetween25%and100% Percentage of theoptionsgrantedthat willvest 100% 61.6% Vesting out-turn £’000 £’000 2,737 2020 2020 827 397 397 670 720 101 119 72 65 22 67 67 7 1 100% £’000 £’000 2,041 2019 2019 25% 638 386 564 0% 345 345 150 86 65 65 65 22 – –
John Dawson The valueof theawards vestingduring2020are detailedbelow: appropriate. Clawbackandmalusprovisions willapplytotheawards. Remuneration Committeereviewed performance againstthisunderpinandconcludedtheoverallpaymentstobe Remuneration Committee considersthat the overallperformance of thebusinessacross the periodjustifiesit.The The awards were alsosubjecttoaperformance underpin,suchthat theywouldvestonlytotheextentthat the 2 1 starting withthedate of grant over thethree-year period of thecompany’sshare price Compound annualgrowth rate revenue measure: the performance conditions setout below, whichare weighted equallybetween the share price measure and the The awards are nilcostoptionsandare subjecttoathree-year vestingperiod.Theyare subjecttotheachievementof days endingwiththedate of theaward. The number of shares under award was calculated by reference tothe average share price of 760p in the five business On 26June2020, theExecutive Directors were awarded thefollowing Performance Shares Awards undertheLTIP: (audited) Performance SharesAwards grantedunder theLTIP during2020 2 1 performance conditions), theycannotbeexercised untiltheendof afurtherholding periodof twoyears. Although the awards will vest following the assessment of the performance period (subject to satisfaction of the considers that theoverallperformance of thebusinessacross theperiodjustifiesit. A performance underpin alsoapplies,suchthat theawards willonlyvesttotheextentthat theRemuneration Committee 17.5% ormore (i.e.62.2%over3years) Between 10%and17.5% 10% (i.e.33 Less than10% Stuart Paynter John Dawson Peter Nolan Stuart Paynter
The startingshar Number o closing pricefor thethree monthsperiodpriorto26June2023. Calcula The valuesar case of Stuart Paynter’sawards). ted bycomparingtheauditedrevenue figure as of 31December2019 of £64.1million withtheaudited revenue figure as of31December2022. f shares post30May2018share consolidation. .1% over3years) e calculated byreference totheshare priceonthelastdayof theapplicableaveraging period(751pinthecaseof JohnDawson’sandPeterNolan’sawards and819pinthe e priceis760p,beingtheaverage share priceoverthefive businessdaysendingwiththedate of grant.Theendshare priceshallbecalculated asthe average of the
1
tha subject totheshare pricemeasure Percentage of the options Percentage of theoptions 100% between 25%and100% Calculated onastraightlinebasis 0% 25% t willvest
Number of awards granted Number of awards granted 2018 and202 of thecompany’srevenue between Compound annualgrowth rate 24% ormore (i.e.90.7% over3years) Between 15%and24% Less than15% 15% (i.e.52.1%over3years) Basis of award (% of salary) that vested 39,099 16,107 65,115 100% 125% 1 2 1
Share price at the date on Share priceat thedate on which theshares vest Number o
under award f shares f shares 100% between 25%and100% Calculated onastraightlinebasis 0% 25% measure that willvest subject totherevenue Percentage of theoptions 70,805 31,500 819p 751p 751p
Value of awards
on vesting F
£239,400 ace value ace value £120,964 £293,633 £533,292 £538,118 of grant 2
Corporate Governance 109 110 Stuart Paynter John Dawson Stuart Paynter Stuart Paynter Dr. Lorenzo Tallarigo Dr. Sam Rasty Robert Ghenchev Dr. Heather Preston Stuart Henderson Dr. Andrew Heath Executive Directors During 2020, JohnDawsonandStuart Paynterdidnotexercise anyoptions. John Dawson Deferred bonus John Dawson LTIP During 2020thefollowing optionshave vestedandlapsed: shareholding guideline,assetoutinthepolicy. Reflecting bestpractice,theRemuneration Committeehasadopted,witheffect from 1January 2019, apost-cessation 3 2 1 Martin Diggle Dr. Roch Doliveux Non-Executive Directors The interests inshares of theDirectors whoservedduringtheyearasat 31December2020were asfollows: with Stuart Paynterworkingtowards meetingthisguideline. prevailing closingshare priceon31December2020).UnderthiscriteriaJohnDawsonmeetstheshareholding guideline, The valueof theshares asat 31December2020hasbeendeterminedbasedonashare priceof 1,030p (beingthe shareholding equivalentto200%of basesalary. The Remuneration Committeehasadoptedashareholdinga guidelinefor theExecutive Directors, whichspecifies (audited) Statement ofDirectors’shareholdingandshareinterests the Remuneration CommitteeChair. Details of thePerformance Shares Awards tobegrantedunderthe LTIP in2021are setoutintheannualstatement from Performance SharesAwards tobegranted undertheLTIP during2021 Directors’ Remuneration Report Corporate Governance
Includes theinter Dr Robert GhenchevwasappointedtotheBoar Robert GhenchevisHeadof Growth Equityat NovoHoldingswhichhasaholdingof 8,253,000 shares. . Lorenzo Tallarigo retired from theBoard witheffect from 23June2020andhisnumber of shares isas at that date.
1 est of Vulpes Life ScienceFund, Vulpes Testudo Fund andotherpartiesconnectedtoMartinDiggle.
2 3 d asaNon-Executive Director witheffect from 24 June2019. 10,738,616 125,000 54,988 90,343 10,742 11,628 1 January2020 8,862 Shares heldoutright 2020 Unvested at Unvested at – – – 188,767 121,120 11,668,640 55,000 88,468 52,891 6,770
7,925 2019 – – – –
1 January2020 during 2020 Unvested at Unvested at 476,249 65,115 unexercised options 2020 V 39,009 52,002 20,723 65,115 esting esting
V ested but 394,516
2019 – during 2020 during 2020 V Lapsed 24,353 24,467 esting esting 7,391 35,674 75,367 2020 –
Deferred bonus Deferred bonus plan not yet plan notyet exercisable 52,002 20,723 during 2020 during 2020 2019 A Awarded Awarded warded warded 70,805 23,602 31,500 13,500
Shares Awards subject to Shares Awards subjectto performance conditions 196,096 Unvested Perf
87,505 2020 31 December2020 31 December2020 Unvested at Unvested at Unvested a ormance ormance 196,096 188,765 121,120 89,620 26,832 51,251 2019 t t
CEO’s remunerationinlasttenyears specific comparators. NASDAQ Biotech indexintheUnitedStates (NASDAQ Biotech) market, provide further benchmarks that are more index, comprisingPharmaandbiotechcompanieslistedintheUKare constituentsof theFTSE 350index,and because itrepresents abroad-based measure of investmentreturn from equities.TheFTSE 350PharmaandBiotech FTSE 350 PharmaandBiotechindextheNASDAQ Biotechindex.TheFTSEall-share indexhasbeenselected The chartbelowillustrates theCompany’sTSRperformance sinceJanuary2012relative totheFTSE all-share index,the Performance graphandcomparisonwithCEO’sremuneration awards are subjecttoashare pricegrowth target byreference toapriceof 904p.Thevestingconditionsare asfollows: In 2021,theperformance criteriafor thePerformance Shares Awards grantedinrespect of 2018willbeassessed.The of whichisdisclosedon As previously disclosed,PeterNolanretained thebenefit of hisPerformance Shares Award grantedin2017, thevesting total figure of remuneration tableonpage108. Dr. Lorenzo Tallarigo received apayment of £38,000 inlieu of notice. Dr. Lorenzo Tallarigo steppeddownfrom the Board on23 June 2020. His fees in2020to this date are includedinthesingle (audited) Payment topastDirectorsandpaymentsforlossofoffice 10% (i.e.33 Less than10% the three-year periodstartingwiththedate of grant Average annualcompoundshare pricegrowth over of remuneration Year 17.5% ormore (i.e.62.2% over3years) Between 10%and17.5% L CEO’s total single figure CEO’s totalsinglefigure Annual bonus 400 600 200 300 500 100 TIP vesting 0 Dec 11 Key: .1% over3years)
FTSE all-share index Oxford Biomedicaplc
Dec 12
% o % o
f maximum f maximum page 108 Dec 13 £’000 .
NASDAQ Biotechindex FTSE 350 PharmaandBiotechindex 0121 0321 0521 0721 2019 2018 2017 2016 2015 2014 2013 2012 2011 1 0 6 8 3 5 1 ,1 1,220 1,311 811 653 732 680 468 401 413 %4%0 %10 0 5 0 100% 80% 25% 50% 100% 0% 0% 40% 0% %1%3%7%4%5%8%9%70% 92% 85% 50% 42% 75% 30% 17% 0% Dec 14 0% that willvest Percentage of theoptionsgranted 100% Calculated onastraightlinebasisbetween25%and100% 25% Dec 15 Dec 16
Dec 17 Dec 18 Dec 19 1,258 2020 Dec 20 62% 85%
Corporate Governance 111 112 2020 2019 2018 Pay detailsfor theindividuals are setoutbelow: Financial year on employeepay, reward andprogression. attract andmotivate staff. TheGroup considersthemedianpayratio tobeconsistentwiththeGroup’s widerpolicies which isappropriate topromote thelongtermsuccessof theGroup andtoapplythispolicyfairlyconsistently may participate indiscretionary bonusschemes.TheGroup aimstoprovide acompetitiveremuneration package participate intheShare OptionSchemeortheLTIP. From 2020alleligibleemployees(previously onlycertainemployees) 2020 respectively. Employees’involvementintheGroup’s performance isencouraged,withallemployeeseligibleto ratios were calculated usingthefulltimeequivalentremuneration for allUKemployeesasat theendof 2018, 2019, and methodology for theratios wasconsidered tobethemostaccurate method.The25th,medianand75thpercentile pay The Group usedOptionAasdefinedinTheCompanies(MiscellaneousReporting)Regulations 2018, asthiscalculation The tablebelowsetsouttheCEO’s payratio at the25th,medianand75thpercentile employeewithintheorganisation. CEO’s payratio . Lorenzo Tallarigo retired from theBoard on23June2020. 1 both 2019and2020. those employeesotherthantheDirectors whowere employed by Oxford BiomedicaUKLtd throughout the wholeof employees andfor consistencywithprioryearstheRemuneration Committeehaschosenasthecomparator group all the comparator group isallemployeesof theCompany;however, astheCompany(Oxford Biomedicaplc)hasno remuneration overthesameperiodare inrespect of acomparator group of employees.Theregulations require that accordingly theyhave beenexcluded from thetablebelow. Theaverage percentage changeinthesameelementsof from the tablebelow. NeitherMartinDigglenorRobertGhenchevreceived anyremuneration for theirrole, and Directors. Dr. RochDoliveuxandDr. SamRastywere appointedduring2020and,accordingly, theyhave beenexcluded The table below showsthe percentage change in salary/fees, benefitsandbonusbetween2019 2020 for the Percentage changeinremunerationofDirectorsandemployees Directors’ Remuneration Report Corporate Governance employee group Year Salary (£’000) Salary (£’000) Salary (£’000) 2018 Comparator Comparator John Dawson Total remuneration (£’000) Total remuneration (£’000) Total remuneration (£’000) 2019 Stuart Paynter 2020 Dr. Andrew Heath Stuart Henderson Dr. Heather Preston Dr. Lorenzo Tallarigo
Dr
1 14 CEO CEO CEO Method £431 £410 £380 Option A £1,258 £1,220 £1,311 Option A Option A 2020 ,965 239 431 72 65 67 67 Salary/Fees 13,726 2019 228 410 5 N/A 150 65 65 65 % increase 25th percentile 25th percentile 25th percentile Medianpayratio 25th percentile payratio £28 £26 £25 1:48 £31 £29 £27 1:42 1:40 9 0 3 3 5 5 2020 337 11 11 – – – – Benefits 2019 303 Median Median Median £37 £35 £32 1:37 £42 £38 £35 1:32 1:30 11 11 – – – – % increase 11 – – – – 0 0 2,025 2020 263 457 – – – – 75th percentile 75th percentile 75th percentile 75th percentile payratio £47 £45 £44 1:27 £55 £50 £48 1:24 1:23 Bonus 1,023 2019 205 359 – – – – % increase 98 28 27 – – – – At the 2020AGM, the2019Directors’ Remuneration Reportwasapproved byshareholders asfollows: Statement ofvotingatAGM investment of thebusinessinitspeople.Thekey cashmeasure amountswere identifiedasbeing: employee remuneration asafundamentalelementof operational spendandouractivities,aswellthecontinued The Group’s key cashmeasures were chosenbytheDirectors becausetheyillustrate veryclearlytheimportanceof Since theGroup doesnotmake dividendorotherdistributions,thesehave notbeenincludedinthetable. The chartbelowillustrates thespendonemployeeremuneration compared withtheGroup’s key cashmeasures. Relative importanceofspendonpay At the 2018AGM, the2018Directors’ Remuneration Policywasapproved byshareholders asfollows: * Thenumberof votesreflects that thevotetookplace after the50to1share consolidation inMay2018. Resolution Resolution 15 April2021 Chair, Remuneration Committee Dr. HeatherPreston satisfied that Deloittedoesnothave anysuchinterests orconnectionswith theGroup that mayimpairindependence. The Remuneration Committeereviewed thepotentialconflicts of interest andthe safeguards againstthemandis remuneration andinrelation totheoperation of itsshare plansduring2020. received from DeloitteLLPwasbothobjectiveandindependent. alsoadvisedtheGroup onbelowBoard in theUK.Deloitte’sfees for advicetotheRemuneration Committeeduring2020were £32,400 plusVAT. Theadvice Remuneration ConsultantsGroup andadheres toitsCodeof Conductinrelation toexecutive remuneration consulting Deloitte LLPactedasadvisertotheRemuneration Committee during2020. Deloitteisa founding memberof the Advisers totheRemuneration Committee Remuneration Report Approval of theDirectors’ Remuneration Policy Approval of theDirectors’
£m -10 80 40 60 90 20 30 50 70 10 0 Staff pay V V otes for (including otes for (including otes for (including otes for (including ,3,3,5 72 56,288,698 97.2% 1,930,039,150 discretionary) discretionary) Non-payroll costs 89123 82 909,694* 98.2% 48,971,273* Cash generated from / (used in) Cash generated from / (used in) % for % for
operations Votes against Votes against
Net cashburn % against % against 2.8% 1.8%
T T otal votes cast (excluding otal votescast(excluding otal votes cast (excluding otal votescast(excluding Cash revenues votes withheld) votes withheld) ,8,2,4 8,903,541 1,986,327,848 49,880,967* Votes withheld Votes withheld (abstentions) (abstentions)
2020 2019 2018 74,856*
Corporate Governance 113 114 — — In thispolicy: sought at the2021AGM. Subjecttoshareholder approval, thepolicywillapplywitheffect from theclose of that meeting. The following sectionof thisDirectors’ Remuneration Reportsetsoutthepolicyfor whichshareholder approval willbe Chair onpages96to123. policy approved byshareholders at the 2018 AGM are describedinthestatement from theRemuneration Committee Remuneration Committeetothedetermination of thenewpolicyanddifferences betweenthenewpolicyand is required toseekapproval for anewDirectors’ Remuneration Policyat the2021AGM. Theapproach taken bythe 2018 AGM andtookeffect from theclose of that meeting.Inaccordance withtheapplicablelegislation, the Company The Company’sDirectors’ Remuneration Policysetoutinthe2017AnnualReportwasapproved byshareholders at the (not subjecttoaudit) Directors’ Remuneration Policy Directors’ Remuneration Report Corporate Governance
United States’ market hasthelargest commercial potentialfor theGroup. United States, that United States’ regulatory requirements are critical to the future success of theGroup and that the recruited from orbasedintheUSandhaving regard tothefactthat over80%of cellandgenetherapyisbasedinthe competitors (includingNASDAQ listedUSbiotechnologybusinesses)includingbutnotlimitedtoExecutive Directors appointment, intheopinionof theRemuneration Committee,theCompanyiscompetingfor talentwithUS an “ nil ornominalcostshar Overseas Executive Director” meansanyExecutive Director appointedafter 1January2021inrespect of which es awards undertheCompany’sLTIP are referred toas“Performance Shares Awards”; and ownership. Group and promote asenseof To create alignment withthe Sharesave scheme for retirement. To provide funding Retirement benefits market competitivebasis. Toa provide benefitson Benefits suitable calibre. retain Executive Directors of a is sufficientto attractand To provide abasesalarywhich Base salary Executive Directors Component andpurpose Policy table by theGroup. any otherall-employeeshare schemeadopted the samebasisasotherqualifyingemployeesin Executive Directors willbeableto participate on from time totime). as maybepermittedbytheapplicablelegislation value of shares at grant(orsuchotherdiscount can beat adiscountof upto20%themarket Company’s shares withanoptionpricewhich linked tothegrantof anoptionoverthe contributions overaperiodof three orfiveyears under whichtheymaymake monthlysavings arrangements where appropriate. permitted toparticipate inhomecountrypension Non-UK national Executive Directors maybe of thecontributionstoapensionplan. to take acashsupplementinsteadof someorall allowance, Executive Directors maybepermitted contributions exceed theannualorlifetime In appropriate circumstances, suchaswhere Directors. include, for example,travel expenses. location of theExecutive Director. Thesemay based onindividualcircumstances, includingthe Committee. Additionalbenefitsmaybeprovided benefits determinedbytheRemuneration their countryof residence andotherappropriate in benefits consistentwiththosetypically offered returns, taxequalisation arrangements,other allowance, assistancewiththepreparation of tax insurance, provision of acompanycaror dependants), life assurance,permanenthealth the Executive Director’s spouseorpartnerand Any changesare normallyeffective from 1January. − − − − may include(butare notlimitedto): taking intoaccountanumberof factorswhich Base salariesare normallyreviewed annually previous package of thenewExecutive Director. and takingintoaccounttheexperience tax qualifyingallemployeeShar Executive Directors are entitledtoparticipate ina scheme f The Group operates adefinedcontribution and mayincludemedicalinsurance(includingf Benefits are provided inlinewithmarket practice mark Base salariesare initiallysetbyreference to Operation
pay andconditionselsewher competitive salarylevelsandmark r underlying Gr ole, experienceandindividualperformance; et information at the time of appointment et information at thetimeof appointment or all employees, including Executive or allemployees,includingExecutive
oup performance; e intheGroup. esave scheme esave scheme et forces; and
or or and thelevelo For theSharesave scheme,participation limits A maximumemployercontributionorcash 2021 before 1January Any Executive Directorappointed normally beinlinewiththelevelo While there isnomaximumsalary, increases will Maximum potential A maximumemployercontributionorcash 2021 after 1January Any Executive Directorappointed − Committee. deems appropriate time periodastheRemuneration Committee Such increases maybeimplementedoversuch − − − − limited to: in appropriate circumstances, suchas,butnot Salary increases abovethislevelmaybeawarded to otheremployeesintheGroup. increase awarded (inpercentage of salaryterms) qualifying employees. qualifying employees. the planrulesandwillbesameasfor other maximum willbedeterminedinaccordance with For anyotherall-employeeshare plan,the authorities from timetotime. exercise priceare thosesetbytheUKtax workforce (currently 7.5%). exceeding thecontributionavailable tothewider not supplement (orcombination thereof) − supplement (orcombination thereof): totals ar There isnopredetermined maximumbutthe workforce (currently 7.5%). the contributionavailable tothewider and complexity of thebusiness. practice; or market overtime); appointed Executive Director’s salarywiththe performance inrole (e.g.toalignanewly responsibility; promoted orhashadachangeinscope wher wher to r wher with eff o f 15% of base salary up to 31 December 2022; f 15%of basesalaryupto31December2022; eflect an individual’s development or eflect anindividual’sdevelopmentor e there has been a change in size and/or e there hasbeenachangeinsize and/or e there hasbeenachangeinmarket e anExecutive Director hasbeen e reviewed annually by the Remuneration e reviewed annuallybytheRemuneration ect from 1January2023, notexceeding f discount permitted in setting the f discountpermittedinsettingthe
f salary f salary
Performance targetsandmetrics Not applicable. account indetermininganysalaryincr an individual’sperformance inrole istaken into While noformal performance conditionsapply, usual practice. Not subjecttoperformance measures inlinewith
Not applicable. ease.
Corporate Governance 115 116 awards vest. performance before the whilst requiring challenging longer terminterests inshares Executive Directors with alignment byproviding To augmentshareholder Long Term Incentives shareholders’ interests. incentive package with deferred shares alignsthe Delivery of partof thebonusin objectives. delivery of theGroup’s To incentiviseandreward Annual bonus Component andpurpose Directors’ Remuneration Report Corporate Governance Recovery provisions applyassummarisedbelow. cumulative basis. reinvestment of dividendsintoshares ona These dividendequivalentsmayassumethe Director isfirstabletoacquire thevestedshares. grant andthedate onwhichtheExecutive value of dividendsovertheperiodbetween any Performance Shares Award toreflect the Additional shares maybeawarded inrespect of Dividend equivalents to disposeof thoseshares untiltheendof it. exercise price)theExecutive Director isnotable regards salestocovertaxliabilitiesandany shares following vestingbutthat (otherthanas or (2)theExecutive Director isentitledtoacquire is notentitledtoacquire shares untiltheendof it; either onthebasisthat: (1)theExecutive Director “released”. Theholdingperiodwillbestructured of twoyearsafter vestingbefore theyare Vested shares willbesubjecttoaholdingperiod Holding period performance period. targets, typicallyassessedoverathree-year vest subjecttotheachievementof performance awards (“Performance Shares Awards”) which Recovery provisions applyassummarisedbelow. dividends intoshares onacumulative basis. equivalents mayassumethereinvestment of over thedeferral period.Thesedividend deferred shares toreflect thevalue of dividends Additional shares maybeawarded inrespect of targets. shares are notsubjecttofurtherperformance third anniversariesof the award. Thedeferred three equalinstalmentsonthefirst,secondand Def of anybonusearned. or require thedeferral of agreater proportion The Remuneration Committeemaypermit cash and50%isdelivered indeferred shares. Ordinarily, 50%of thebonusisdelivered as amendment isappropriate. period; or(3)there beanyotherreason whyan unforeseen at thestartof theperformance of circumstances that were unexpectedor potential pay-outbeinappropriate inthecontext assessment of overallperformance; (2)any pay-out notr to amendthepay-outshould:(1)anypotential The Remuneration Committeehasdiscretion Remuneration Committeeafter theyearend. annual grantso At thediscretion of theRemuneration Committee, annually andanypay-outisdeterminedbythe Bonus targets andmeasures are typicallyreviewed Operation erred shares ordinarily becomeexercisable in eflect the Remuneration Committee’s eflect theRemuneration Committee’s f nil or nominal cost shares f nilornominalcostshares
Maximum potential of basesalary. The maximumbonusopportunityis150% Overseas Executive Director − − The maximumPerf Director that datewhoisnotanOverseasExecutive Executive Directorappointedafter 2021andany before 1January Any Executive Directorappointed appointed a 2021andanyExecutive Director 1 January r The maximumPerformance Shares Award in Any OverseasExecutive Director Any Ex of basesalary. The maximumbonusopportunityis200% Any OverseasExecutive Director espect of afinancialyearis500% of basesalary. year for theCEO. CEO; and year for anExecutive Director otherthanthe 200% o 175% o ecutive Director appointed before ecutive Directorappointedbefore f base salary in respect of a financial f basesalaryinrespect of afinancial f base salary in respect of a financial f basesalaryinrespect of afinancial fter that date who is not an fter thatdatewhoisnotan ormance Shares Award is:
Performance targetsandmetrics financial orstra The performance metricsmaybebasedon measur Performance conditionswillbebasedonfinancial has been achieved. has beenachieved. assessment of theextenttowhichobjective and 100%basedontheRemuneration Committee’s objectives, thebonuswillbeearnedbetween0% maximum levelof performance. Forstrategic rising to100%for meetingorexceeding the f up to50%of themaximumwhichmaybeearned performance isnotmet.Forfinancialmetrics, There isnominimumbonusearnedifthreshold and metricsmaychangesignificantlyeachyear. Given thenature of thebusiness,theseobjectives assessed overpartof theyear. typically assessedoverafinancialyear, butmaybe needs of thebusiness.Financialobjectivesare Committee takingintoaccountthestrategic Metrics andtargets are setbytheRemuneration include ESGmetricsandindividualobjectives). extent towhichthemeasure hasbeenachieved. Remuneration Committee’sassessmentof the between 0%and100%dependinguponthe For strategic measures, vestingwillbedetermined none of theaward willvest. performance; for belowthreshold performance, for achievingorexceeding maximum award willvestrisingto100%of theaward vesting respect of afinancialmeasure, upto25% of the For theachievementof threshold performance in other reason whyanamendmentisappropriate. unforeseen at thedate of grant;or(3)there beany context of circumstances that were unexpectedor (2) anyformulaic outputbeinappropriate inthe Committee’s assessmentof overallperformance; any formulaic outputnotreflect theRemuneration amend theformulaic vestingout-turnshould:(1) The Remuneration Committeehasdiscretion to limited to)share priceandrevenue measures. Financial measures mayinclude(butare not objectives (whichmayincludeESGmetrics). or a metric is earned for on-target performance, or ametricisearnedfor on-target performance, es or the achievement of strategic es ortheachievementof strategic tegic objectives (which may tegic objectives(whichmay will berequired toretain allof thoseshares. over atwoyearperiod.IftheExecutive Director holdslessthantherequired numberof relevant shares at anytime,they have avalueat cessation equaltotheirin-serviceshareholding requirement, withtherequired holdingtapering tozero granted after 1 January 2019. Following employment, an Executive Director must retain such of the relevant shares as Shares are subjecttothisrequirement onlyiftheyare acquired from longtermincentiveordeferred bonusawards Shareholding requirement after employment net of taxbasis). shares subjecttoPerformance Shares Awards whichhave vestedbutwhichare inaholdingperiod(ineachcase,on outstanding vestingcriteriacounttowards theshareholding guidelinetogetherwithdeferred annualbonusshares and under theannualbonus,untilshare ownershipguidelinehasbeensatisfied. Shares whichare fullyownedwithno awards whichvestunderthelongtermincentiveplans,andhalfof anypost-taxdeferred shares becomingexercisable LTIP opportunity. Executive Directors will be required to retain half of any post-tax (and if relevant, post exercise price) Executive Directors are required tobuildandmaintainaminimumlevelof shareholding equaltotheirnormalannual Shareholding guidelinesduringemployment Committee hasadoptedformal share ownershipguidelines,whichapplybothduringandafter employment. To align Executives with shareholders and provide an ongoing incentive for continued performance, the Remuneration Share ownershipguidelines — — — — — — Malus orclawbackmaybeappliedintheeventof: Circumstances inwhichmalusand/orclawbackmaybeapplied Committee mayrequire therepayment of someorallof theaward intherelevant circumstances (clawback). relevant circumstances (malus).Foruptotwoyearsfollowing thevestingof alongtermincentiveaward theRemuneration The Remuneration Committeehastherighttoreduce, cancelorimposefurtherconditionsonunvestedawards inthe Long termincentiveawards: the repayment of someorallof thedeferred shares intherelevant circumstances (clawback). year following thefirstinstalment of deferred shares becomingexercisable, theRemuneration Committeemay require have notyetbecomeexercisable maybecancelledorreduced intherelevant circumstances (malus).Foruptoone repayment of someorallof thecashaward intherelevant circumstances (clawback).Deferred bonusawards which For uptotwoyearsfollowing thepaymentof anannualbonusaward theRemuneration Committeemayrequire the Annual bonus: The annualbonusandlongtermincentiveawards are subjecttomalusandclawbackprovisions asfollows: provisions Recovery Notes tothepolicytable
Ma Ma Serious r A ma any applicableperformance conditions; An err A ma terial corporate failure. terial misconductonthepartof theparticipant;or terial failure of riskmanagementbytheGroup; terial misstatement of theGroup’s financial results; or intheinformation orassumptionsonwhichtheaward wasgrantedorvestsincludinganerror inassessing eputational damagetotheGroup;
Corporate Governance 117 118 and shareholders. remuneration will increase ordecrease inlinewithbusinessperformance and to aligntheinterests of Executive Directors for theExecutive Directors islinked tobusinessperformance, compared totherest of theemployeepopulation, sothat employees to benefit from the Group’s success.Generally speaking, a muchhigher proportion of total remuneration Where possible,theGroup alsoencouragesemployeeshare ownershipthrough anumberof share plansthat allow their bonusesincash. Executive Directors’ andSeniorExecutive Team are delivered indeferred shares, whereas allotherstaff receive 100% of performance. Themaximumbonusreceivable variesbetweentheparticipating employees. 50%of thebonusesof the to share inthesuccessof theGroup byreceiving acashbonuslinked totheirgradelevelandownpersonal In 2020, theGroup introduced aGroup-wide cashbonusschemewhichwillgiveemployeesat alllevelstheopportunity pension schemetowhichtheGroup contributes. All employeesreceive abasesalaryandare entitledtoparticipate inbenefits,includingtheGroup’s definedcontribution their contributionlinked totheGroup’s holisticperformance. sufficient to attractand retainthebesttalentandbecompetitivewithinbiotechsector, remunerating employees for The structure of thereward package for thewideremployeepopulation isbasedontheprinciplethat itshouldbe Differences inremunerationpolicyforallemployees exercise inthevestedshares. on thebasisthat theparticipantreceives for nil-costanumberof shares withamarket valueequaltothe“gain” at as a“Market Value Option”asreferred tointhe“Approach torecruitment remuneration” sectionbelow, itmaybesettled prevented theCompanyfrom offering shares toanExecutive Director. Where alongtermincentiveaward isgranted would onlyusethesecashprovisions for operational flexibility, for exampleifa regulatory restriction inanyterritory may besettledinwholeorpartcashat theelectionof theRemuneration Committee;theRemuneration Committee including that awards maybegrantedascashbasedawards overanotionalnumberof shares, andthat share awards with therulesof theapplicableshare plan.TheGroup’s share plansmaybeoperated inaccordance withtheirterms, Awards andoptions maybeadjustedintheeventof avariation of share capitalorotherrelevant eventinaccordance Operation ofshareplans that amendmentisrequired sothat theyachievetheiroriginalpurpose. conditions) whichcausetheRemuneration Committeetodeterminethat themeasures are nolongerappropriate and as a changein strategy, a material acquisition and/or a divestmentof a Group business, or a change in prevailing market The Remuneration Committeeretains theabilitytoadjustorsetdifferent performance measures ifeventsoccur(such that theoverallperformance of thebusinessacross theperiodjustifiesit. a performance underpin,suchthat theawards willonlyvesttotheextentthat theRemuneration Committeeconsiders may bebasedonthedeliveryof specificstrategic milestonesinthefuture. Itisintendedthat there willcontinuetobe set outonpage 100. It istheGroup’s current intention that upto 30% of theoveralllong term incentiveopportunity for theGroup’s situation at thetime.Theapproach toperformance measures for theawards tobegrantedin2021is The performance metricsfor longtermincentivesare determinedtoensure that themostappropriate targets are set to generating recurring revenues suchasfrom manufacturingordevelopmentservicestothird parties. on thestageof developmentof eachopportunity. Theannualbonusobjectivesare alsolikely toincludetargets related Annual bonustargets for aparticularyearare therefore likely toincludespecificproduct developmenttargets depending clinical proof of conceptthrough totheendof PhaseIorIIclinicalstudiesbefore partneringorout-licencing. needs of thebusiness.Akey componentof theGroup’s strategy istodevelopcellandgenetherapyproducts from pre- Performance targets for theannualbonusare setbytheRemuneration Committeeafter takingintoaccountthestrategic Performance targetsandmetrics Directors’ Remuneration Report Corporate Governance Group Directors for theirservicestothe To compensate Non-Executive and benefits Non-Executive Directors’fees Non-Executive Directors Component andpurpose with theworkforce onthisoncethenewRemuneration Policyhasbeenfinalised. compliance withProvision 41of theCorporate GovernanceCode.TheRemuneration Committeeintendstoengage Executive paywiththeworkforce untilithadcompletedthe consultation process withshareholders, ithasnotbeenin Executive Directors. TheRemuneration Committeeacknowledgesthat bydecidingnottoshare thepolicy, detailing the levelof salaryincrease for thewiderworkforce istaken intoaccountwhendetermininganysalaryincrease for pay andemploymentconditionsof allotheremployeeswhensettingandimplementingthepolicy, andasnotedabove, Committee hasnotconsultedwithemployeeswhenpreparing thispolicy, theRemuneration Committeeconsidersthe Policy (setoutonpages114 to123)whichincludedcanvassing theviewsof shareholders. WhiletheRemuneration The Remuneration Committeespentconsiderabletimeinthesecondhalfof 2020formulating thisRemuneration increases andbonuses. total amounttobepaidinbonuseswiththeChairof theRemuneration Committeebefore implementing thesalary informs thedecisionmakingprocess. TheChiefExecutive Officerdiscussestheoverallincrease inpayroll costandthe Every year, the Group benchmarks salaries and benefits against the local biotech and pharmaceutical market which Remuneration Committee.TheGroup iscommittedtooffering highlycompetitive reward packages for allemployees. Executive Directors, theSeniorExecutive Team andCompanySecretary whichare subjecttotheapproval of the The ChiefExecutive Officerdeterminestheoverallsalaryincreases andbonuses forallemployees,otherthanthe context whenmakingExecutive remuneration decisions. the remuneration of thewiderworkforce toenabletheRemuneration Committeetoconsiderthebroader employee framework aswellthroughout theyearbeinginformed aboutthecontext,challengesandopportunitiesrelating to Each yeartheRemuneration Committeeisbriefed onthestructure andquantumof theall-employee remuneration Consideration ofemploymentconditionselsewhereintheGroup do notreceive pensioncontributions. participate inanyof theGroup’s incentiveplansand The ChairandNon-Executive Directors donot paid bytheCompany. Directors at Board meetings(andanytaxthereon) are with attendance bytheChairandNon-Executive Travel andaccommodation expensesinconnection tax returns, orotherbenefitsthat maybeappropriate. secretarial support,assistancewiththepreparation of eligible toreceive benefitssuchastheuse of The ChairandNon-Executive Directors maybe determined bytheBoard. Operation The f Committee. The Chair’sfees are setbytheRemuneration ees of otherNon-Executive Directors are retained for at least 12 months from acquisition. retained for at least12monthsfrom acquisition. acquisition of shares at market valuewhichmustbe amount of thisadditionalfee willbeappliedinthe Directors, subjecttotheiragreement that theafter tax remuneration intheUnited States for Non-Executive based intheUnitedStates toreflect market levels of paid toanyNon-Executive Director recruited from or An additionalfee of upto£50,000 perannummaybe time commitmentassociated withtheirrole. Director outsidetheUKtorecognise theadditional An additionalf based outsidetheUK Additional feesforNon-Executive Directors responsibilities ortimecommitments. Supplementary fees maybepaidfor other holding theoffice ofSeniorIndependentDirector. additional fees for chairingBoard Committeesand Non-Executive Directors receive abasefee, with Base feeandadditionalfees expected timecommitment. into accountther There isnooverallmaximum,butfees are settaking Maximum potential ee maybepaidtoanyNon-Executive esponsibilities of the role and esponsibilities of therole and
Corporate Governance 119 120 the LTIP share priceforthepurposesof assumed 50%increaseinthe Maximum performanceplusan Maximum performance interests of allshareholders. Overseas Executive Director recruited from orbased intheUnitedStates iscriticaltothebusinessandinbest Company strongly believesthat having theabilitytooffer incentiveopportunitiesuptotheselevelsanincoming maximum incentiveopportunitiesfor anincomingOverseasExecutive Director willnotbeautomatic. However, the plan opportunitywilldependonwhetheranewExecutive Director isanOverseasExecutive Director. The useof these listed biotechnologybusinessesintheUnitedStates) themaximumannualbonusandlongtermincentive take accountof differences incompetitivemarket practicebetweentheUKandUnited States (inparticular, NASDAQ experience, aswelltheimportanceof securingthebestperson for therole. Asdetailedinthepolicytableorder to factors including,butnotlimitedto,theskillsandexperienceof theindividual,market rate for anindividualof that pay andthepackage asawholeuponrecruitment, theRemuneration Committeewilltake intoaccountallrelevant that the Group competesfor talentwithNASDAQ listedUSbiotechnologybusinesses.Indeterminingeachelementof to attract an Executive Director of the calibre required to shapeand deliver theGroup’s business strategy, recognising The Remuneration Committee’soverarching principlefor recruitment remuneration istopaynomore thanisnecessary Approach torecruitmentremuneration Minimum performance Performance level in 2021underfour different performance levelsisshownbelow. The totalremuneration for JohnDawsonandStuart Paynterthat couldresult from theproposed remuneration policy Total remunerationopportunity Directors’ Remuneration Report Corporate Governance On-target performance As above. − − − Fixed pay As above. As above. only: Fixed elementsof remuneration on page111. stated inthesinglefigure table as benefits – for2020 15%; and contribution/supplement rate of supplement –assuminga pension contributionorsalary salary for 2021 base salary–beingtheproposed awar 75% of salary(50%of maximum) As above. achieving maximumperf 150% of salaryawarded for performance. deferred undertheDBP) Annual Bonus(includinganyamount No bonus. ded for achieving target ded for achievingtarget ormance.
100% vestingf maximum perf 100% vestingfor achieving achieving tar 25% of maximumvestingfor price, being: assumed 50%increase intheshare maximum performance plusan No award vesting. − − − being: − − − LTIP 200% of salary;and for JohnDawsonequivalentto 43.75% of salary. for Stuart Paynterequivalentto 50% of salary;and for JohnDawson,equivalentto 262.5% of salary. for Stuart Paynterequivalentto 300% of salary;and for JohnDawsonequivalentto 175% of salary. for Stuart Paynterequivalentto get performance, get performance, or achieving or achieving ormance, being: — — — Fees for newNon-Executive Directors willbeinlinewiththepolicy. allowed tocontinueaccording totheoriginalterms. Where apositionisfilledinternally, anyongoing remuneration obligations oroutstandingvariablepayelementsshallbe forfeiture or“malus”and/or“clawback” onearlydeparture. expected value of theforfeited awards. Where considered appropriate, suchspecial recruitment awards will be liableto on a like for like basis to the remuneration arrangements forfeited. Anysuch payments or awards are limited to the a case-by-casebasis.TheRemuneration Committeewillgenerally seektostructure such“buyout”awards orpayments Compensation for theforfeiture of anyremuneration arrangementswithaprevious employerwouldbeconsidered on Listing Ruleswhichallowfor thegrantof awards tofacilitate, inunusualcircumstances, therecruitment of anExecutive Director. and subjecttothelimitsreferred toabove,recruitment awards maybegrantedoutsideof theseplansaspermittedunderthe Any share awards referred tointhissection willbegrantedasfarpossibleundertheGroup’s existingshare plans.Ifnecessary, ecutive Director willberequired torelocate inorder totake uptheposition,itisGroup’s policytoallowreasonable — — — — The remuneration package of thenewExecutive Director willbesubjecttotheprinciplesandlimitsreferred tobelow:
awarded inface-valuetermsMarket Value OptionstoanyExecutive Director inrespect of afinancialyear. at one-third of aPerformance Shares Award. Includedwithinthat maximum,nomore than375%of basesalarywillbe be cappedat upto500%of basesalaryinPerformance Shares Award equivalents,where aMarket Value Optionisvalued an OverseasExecutive Director inthefuture. Theoverallmaximumlongtermincentiveopportunitywouldcontinueto would onlybeusediftheRemuneration Committeeconsidered thistobeanabsolutenecessityfor therecruitment of Directors a two year holding period will also apply in line with the policy table. This flexibility in the recruitment policy a three-year performance period,aswithPerformance Shares Awards. Inlinewith bestpracticeintheUKfor Executive Options albeit with any Market Value Option subject to the satisfaction of performance conditions typically assessed over businesses the recruitment policy includes the flexibility to grant Performance Shares Awards and/or Market Value Options”) (typically without any performance conditions) is standard market practice in NASDAQ listed biotechnology because granting share options with a per share exercise price equal to the market value of a share at grant (“Market Value The intentionwouldbetoo · will beclearlyexplainedinthefollowing Directors’ Remuneration Report Remuneration Committeedeterminesthat thecircumstances of therecruitment meritsuchalteration. Therationale deferral periodandholdingof theannualbonus,deferred bonusawards orlongtermincentivesifthe Overseas Executive Director on the basis described above. Overseas Executive Director onthebasisdescribedabove. as referred tobelow)willfollow thelimitsin“policytable”onpages115to116, as amended in the case of any The maximumlevelo The Remunera Overseas Executive Director and not just their initial awards. Overseas Executive Director andnotjusttheirinitialawards. · · · aninterimappointmentbeingmadetofillEx Other elementsmaybeincludedinthef sign-on bonus”). The Remunera For thea Retir responsibilities, subjecttogoodperformance, where itisconsidered appropriate. This mayincludeagreement onfuture increases uptoamarket rate, inlinewithincreased experienceand/or Base salarywillbeseta relocation, travel andsubsistencepayments.Anysuchpaymentswillbeat thediscretion of theRemuneration Committee if theEx a shorttermbasis transferred tothesubsequentyearsothat reward is provided onafairandappropriate basis on variableremuneration setoutbelow, thequantuminrespect of themonthsemployedduringyearmaybe term incentiveaward for that yearasthere wouldnotbesufficienttimetoassessperformance. Subjecttothelimit if anEx if ex ement andotherbenefitswillbeprovided inlinewiththepolicy. ceptional circumstances require that theChairoraNon-Executive Director takes onan executive functionon ecutive Director isrecruited at atimeintheyearwhenitwouldbeinappropriate toprovide abonusorlong voidance of doubt,thesearrangementswouldbeavailable for theongoingremuneration package for an tion Committeewillnotoffer non-performance related incentive payments(for examplea “guaranteed tion Committee may also alter the performance measures, performance period, vesting period, tion Committeemayalsoaltertheperformance measures, performance period,vesting f short and long term incentive opportunity which may be granted (excluding “buyout” awards f shortandlongtermincentiveopportunitywhichmaybegranted(excluding “buyout” awards t alevelappropriate totherole andtheexperienceof theExecutive Director beingappointed. ffer Performance Shares Awards toanincomingOverseasExecutive Director. However, ollowing circumstances: ecutive Director role onashorttermbasis
Corporate Governance 121 122 Letters ofappointment contracts Service The detailsof servicecontractsandlettersof appointmentof thosewhoservedasDirectors duringtheyearare: for thefullnoticeperiod. Executive Directors mayberequired toworkduringthenoticeperiodorbepaidinlieuof noticeifnotrequired towork Executive Directors’ servicecontractsare subjectto12months’noticefrom boththeGroup andfrom theDirector. contractsandpolicyonpaymentforlossofoffice Service Directors’ Remuneration Report Corporate Governance Incentives Long Term Awards Bonus Deferred Bonus Annual lieu ofnotice Payment in The principlesonwhichthedetermination of paymentsfor lossof office willbeapproached are setoutbelow: All Directors are subjecttore-election byshareholders onanannualbasis. enzo Tallarigo retired from theBoard on23June2020. 1 John Dawson Dr Dr. SamRasty Robert Ghenchev Dr. Heather Preston Stuart Henderson Dr. Andrew Heath Martin Diggle Dr. RochDoliveux S
tuart Paynter Lor . Lorenzo Tallarigo discretion torelease theaward at cessation. award willbereleased tothe extentithasvestedbyreference totheperformance conditions.TheRemuneration Committeeretains award willcontinuetotheendof theholdingperiod(unlesscessation isfor summarydismissal,inwhichcaseitwilllapse).The If anExecutive Director ceasesemploymentwiththeGroup after anaward hasvestedbutbefore theendof itsholdingperiod, the Vested awards inaholdingperiod until itsoriginallyanticipated enddate, althoughtheRemuneration Committeehasdiscretion torelease the award at anearlierdate. from thedate of granttothedate of cessation relative totheperformance period.Iftheaward continues,theholdingperiodwillordinarily apply to whichtheperformance conditionissatisfied and,unlesstheRemuneration Committeedeterminesotherwise,theperiod of timeelapsed the performance period.Ineithercase,theextentof vestingwillbedeterminedbytheRemuneration Committeetakingintoaccounttheextent Remuneration Committee,theRemuneration Committeeshalldeterminewhether theaward willvestat cessation orcontinueuntiltheendof However, ifaparticipantleaves duetodeath, ill-health,injury, disability, thesaleof hisemployeroranyotherreason at thediscretion of the Unvested longtermincentiveawards willnormallylapseoncessation of employment. Unvested awards The treatment of longtermincentiveawards willbedeterminedinaccordance withtheapplicableshare planrules. Remuneration Committeedetermines. Committee determines.Awards whichhave already becomeexercisable at thedate of cessation maybeexercised for suchperiodasthe grant tothedate of cessation relative tothedeferral period.Awards maythenbeexercised duringsuchperiodastheRemuneration Committee, takingintoaccount,unlesstheRemuneration Committeedeterminesotherwise,theperiodof timeelapsedfrom thedate of determine whethertheaward willvestat cessation orat thenormal date. Ineithercase,thiswillbedeterminedbytheRemuneration the saleof hisemployeroranyotherreason at thediscretion of theRemuneration Committee,theRemuneration Committeeshall Unvested awards willnormallylapseoncessation of employment.However, ifaparticipantleaves duetodeath, ill-health,injury, disability, The extenttowhichanyunvestedaward willvest bedeterminedinaccordance withtheapplicableshare planrules. bonus earnedfor theyearof departure andpreceding yearincash. discretion topaythebonusearlierinappropriate circumstances). TheRemuneration Committeehasdiscretion topaythewholeof any during thebonusperiodandwill,subjecttoperformance, bepaidat theusualtime(althoughRemuneration Committeeretains contribution tothebusinessduringbonusperiodinquestion.Anyamountspaidwilltypicallybepro-rated for timeinservice bonus infullorpartwillbedependentonanumberof factors,includingthecircumstances of theindividual’sdeparture andtheir This willbea applicable salarysupplement)for thenoticeperiod. Alternatively, theCompanymaycontinuetoprovide therelevant benefits. Contractual termination paymentsmaynotexceed theDirector’s current salary andbenefits(includingpensioncontributionsany Policy t the discretion of the Remuneration Committee on an individual basis and the decision as to whether or not to award a t thediscretion of theRemuneration Committeeonanindividualbasisandthedecisionastowhetherornotaward a 10 October2008 29 August2017 Date of appointment 1 December2020 1 February2016 4 October2015 1 January2016 15 March 2018 24 June2020 Contract date 24 June2019 1 June2016
N/A N/A
31 December2020 31 December2020 Unexpir Unexpir 29 months 35 months 10 months 12 months 12 months 17 months ed term at ed termat ed term at ed termat 6 months 2 months 5 months N/A 1
Notice period Notice period 12 months 12 months
3 months 3 months 3 months 3 months 3 months 3 months 3 months 3 months
of control Change Committee Chair’sletteronpages96to103 Remuneration Policyreview. More detailontheengagementwithshareholders in2021canbefound intheRemuneration remuneration policies.TheCompanyengagedextensivelywithshareholders andtheirproxy advisorsonthe2021 shareholders andrepresentative bodiestotake theirviewsintoaccountwhensettingandimplementingtheCompany’s The Remuneration Committeegreatly valuesthecontinueddialoguewithshareholders andregularly engageswith Statement ofconsiderationshareholderviews over shares, thetermsof thepaymentare agreed at thetimeaward isgranted. For thesepurposes,“payments”includesthesatisfaction of awards of variableremuneration and,inrelation toanaward — — — outside thepolicyinthisreport (includingexercising anydiscretions available toitinconnectionwithanysuchpayment): The Remuneration Committeeretains discretion tomake anyremuneration payment orpaymentfor lossof office Existing contractualarrangements payments Other
to sa becoming aDirector of theCompany;and Company and,intheopinionof theRemuneration Committee,thepaymentwasnotinconsideration of theindividual wher time thetermswere agreed orwere otherwiseapproved byshareholders); or payment agreed after theCompany’s2018AnnualGeneralMeeting,theyare inlinewiththepolicyplaceat the wher
tisfy contractualcommitmentsunderlegacyremuneration arrangements. e thetermsof thepaymentwere agreed at atimewhentherelevant individualwasnotaDirector of the e thetermsof thepaymentwere agreed before thepolicycameintoeffect (provided that, inthecase of any the rulesof therelevant plan. The extenttowhichunvesteddeferred bonusawards andlongtermincentiveawards willvestbedeterminedinaccordance with U time of the award. time of theaward. Where a‘buyout’orotheraward ismadeinconnectionwithrecruitment, theleaver provisions wouldbedeterminednolater thanthe connection withthetermination of aDirector’s office oremployment. legal obligation (orbywayof damagesfor breach of suchanobligation) orbywayof settlementorcompromise of anyclaimarisingin Committee retains discretion tomake additionalexitpaymentswhere suchpaymentsare madeingoodfaithdischarge of anexisting the Companywillpayreasonable repatriation costsfor leavers at theRemuneration Committee’sdiscretion. TheRemuneration In caseswhere anExecutive Director wasrecruited from outsidetheUKandhasbeenrelocated totheUKaspartof theirappointment, all-employee share plan. In appropriate circumstances, paymentsmayalsobemadeinrespect of accruedholiday, outplacementandlegalfees andanyother under thisscheme. its rulesandthelegislation relating tosuchtaxqualifyingplans.There isnodiscretionary treatment for leavers oronachangeof control Payments maybemadeeitherintheeventof alossof officeby orachange ofcontrol undertheSharesave scheme,whichisgoverned vested byreference totheperformance conditions. Vested longtermincentiveawards willbereleased onatakeover, merger orotherrelevant corporate eventtotheextenttheyhave Vested awards inaholdingperiod − − Policy nvested awards relative totheperformance period. Remuneration Committeedeterminesotherwise,theperiodof timeelapsedfrom thedate of granttothedate of therelevant event determine thelevelof vestingtakingintoaccounttheextenttowhichperformance conditionissatisfied and,unlessthe Long termincentiveawards willvestearlyonatakeover, merger orotherrelevant corporate event.TheRemuneration Committeewill Deferred bonusawards willvestinfulltheeventof atakeover, merger orotherrelevant corporate event. .
Corporate Governance 123 124 another personapproved bytheotherDirectors asanalternate Director. than sixmonths;orbyrequest inwritingbyalltheotherDirectors. Any Director mayappointanotherDirector or bankruptcy; ifheorsheissuffering from specifiedmentaldisorders; ifheorsheisabsentwithoutconsent formore ordinary resolution at ageneralmeeting; ifheorsheisprohibited bylawfrom beingaDirector; intheeventof retire at eachAGM andmayoffer themselves for re-election. ADirector may be removed inthe following ways:byan for re-election. Inorder toensure that theCompanycomplieswithCorporate GovernanceCodeallDirectors will the existingDirectors, provided that anyDirector soappointedshallretire at thenextAGM andmayoffer themselves Directors maybeappointedbyanordinary resolution at anygeneralmeetingof shareholders, ormaybeappointedby Appointment andreplacementofDirectors Company at 31December2020are disclosedintheDirectors’ Remuneration Reportonpages96to113. subject toatwelvemonths’noticeperiod.TheDirectors’ remuneration andtheirinterests intheshare capitalof the statements are detailedonpages78to79andpage82.Thecontractsof employmentof theExecutive Directors are Details of theDirectors of theCompanywhowere inoffice duringtheyearandupto date ofsigningthefinancial Directors The Directors donotrecommend paymentof adividend(2019:£nil). Dividends page 159(note3:financialriskmanagement). The Group’s exposure torisks issetoutonpages70to77(Principalrisks, uncertaintiesandriskmanagement)on Risk management The Group’s statement oncorporate governanceisincludedintheCorporate GovernanceReportonpages80to95. Corporate Governance Key financialperformance indicators are outlinedintheChiefFinancialOfficer’s reviewonpages42to 50. Key financialperformanceindicators(KPIs) to beablemake thisjudgement. the Board met seven times for routine meetings in 2020 the Directors consider that they are sufficiently well informed the 2020audit,andfullBoard have hadanopportunitytoreview andcommentonthecontentsof thereport. Since the AuditCommitteeinitiallydiscussedrequirements withtheGroup’s auditorswhendiscussingthestrategy for Annual ReportandAccounts,taken asawhole,are fair, balancedandunderstandable.Inreaching thisconclusion, The Strategic Reportincludingtheoutlookfor 2021onpage37, isonpages15to67. TheDirectors considerthat the Strategic Report forward lookingstatements. and results of theGroup maydiffer materially from theplans,goalsandexpectations expressed orimpliedinsuch Group and Company. Readersare cautionedthat, asaresult, theactualfuture financialcondition, businessperformance involve riskanduncertaintybecausetheyrelate tofuture eventsandcircumstances that are beyondthecontrol of the condition, businessperformance andresults of theGroup andCompany. Bytheirnature, allforward lookingstatements looking statements withrespect tocertainof theplans,current goalsandexpectations relating tothefuture financial on pages80to85. Discussionsregarding financialinformation containedinthisAnnualReportmaycontain forward- 2020 as set out on pages 144 to 147. This report should be read in conjunction with the Corporate Governance Report The Directors present theirAnnualReportandauditedconsolidated financialstatements for theyearended31December for theyearended31December2020 Directors’ Report Corporate Governance
the following shareholdings amountingto3%ormore of theordinary share capitalof theCompany. At 15 March 2021, thelatest practicaldate priortoapproval of theDirectors’ Report,theCompanyhadbeennotified of Substantial shareholdings Directors tobuybackshares. emption rightsoverupto7,698,504 shares, being10%of theshares theninissue.Norightshave beengrantedtothe further 25,661,692 shares, solelyinarightsissue.Authoritywasalsogiven,subjecttocertainconditions,waive pre- to thenormalpre-emption rightsreserved toshareholders containedintheCompaniesAct2006, andtoallotupa up to25,661,692 shares (that numberbeingonethird of totalissuedshare capitalof theCompanyat thetime),subject the conclusionof thenextAGM ifsooner. At thelastAGM heldremotely on23June2020, authoritywasgiventoallot Each yearat theAGM theDirectors seekrightstoallotshares. Theauthority, whengranted,lastsfor 15monthsoruntil Rights toissueandbuybackshares premium segmentof themainmarket of theLondonStock Exchange. restrictions on the transfer of shares in the Company or on voting rights. All shares are admitted to trading on the At 31December2020, theCompanyhad83,320,585 ordinary shares inissue,allallottedandfullypaid.There are no Structure oftheCompany’scapital Share capital Directors. Thiswasinforce throughout 2020anduptothedate of approval of thefinancialstatements. The Group maintainsaqualifyingthird partyindemnityinsurancepolicytoprovide coverfor legalactionagainstits Directors’ thirdpartyindemnityprovision No personholdsshares carryingspecialrightswithregard tocontrol of theCompany. No otherpersonhasreported aninterest intheordinary shares of theCompanyrequired tobenotifiedtheCompany. Vulpes InvestmentManagement Shareholder Novo Holdings M&G Investments Liontrust AssetManagement Nine Ten Capital Hargreaves LansdownAssetManagement Mr. S M HShah Artisan Partners Number of ordinary shares 2,620,800 8,253,000 2,898,750 3,086,179 4,132,643 9,768,615 7,134,434 3,117,228 Percentage of issuedshare capital 10.0% 11.9% 5.0% 3.8% 3.2% 3.5% 8.7% 3.7%
Corporate Governance 125 126 a successfulequityfundraiseinJune2020. TheGroup endedtheyearwithcashandequivalentsof £46.7 million. operating activitiesfor theyearof £3.1 million.Furthermore, theGroup raised anadditional£38.3 millionincashthrough The Group madealossfor theyearended31December2020of £6.2 million,butgenerated netcashflowsfrom notes tothesefinancialstatements. The financialposition of theGroup, itscashflowsandliquidityposition are describedintheprimarystatements and Going concern compensation for lossof office forDirectors or employees intheevent ofatakeover bid. There are nosuchagreements that theDirectors considerare material. There are noagreements providing for Agreements thattake effect,alter, orterminatebecauseofatakeover bidoronchangeofcontrol 25 of theconsolidated financialstatements for furtherinformation. Senior Managementwithavalueof £667,000 vestedandwillbeconvertedtonilcostoptionsduring2021.Refer note exercised bySeniorManagement.Settlementof thefundsoccursthrough theGroup. At theendof 2020bonusesto 2015 Deferred BonusPlaninasfarsubscribingfor andapplyingtheshare capitalfor nilcostoptionsintheCompany shares with avalueof £965,000 at yearendonwhichalltherelated optionshave vested.TheEBTalsoadministersthe to Executive Directors andotherseniormanagersunderthe2013Deferred BonusPlan.TheEBTcurrently holds93,726 The Group hasestablishedanEmployeeBenefit toholdshares purchased inorderTrust (EBT) tosettleshares awarded Employee shareschemes ESG statement onpages51to66. Further detailsonemployees,healthandsafety, environmental matters andcorporate socialresponsibility are inthe Group does allthat ispracticabletomeetitsresponsibility towards theemployment andtrainingof disabledpeople. each individualtotheappropriate job,andtoprovide equalopportunityregardless of sex,religion orethnicorigin.The The Group’s aimforof allmembersof staff andapplicants for employmentistofitthequalifications, aptitudeandability probation participate indiscretionary bonusschemes. participate in the Group’s Sharesave Scheme, share option scheme or the LTIP. All employees who have completed and the workforce. Employees’ involvement in the Group’s performance is encouraged, with all employees eligible to Stuart Henderson,for gathering theviewsof theworkforce andwilloverseeemployeeengagementbetweentheBoard representing alllevelsandfunctionsacross theGroup. Inaddition,theGroup hasdesignated Non-Executive Director, throughout the year. During 2020, the Group established a Workforce Engagement Panel comprising employees In accordance withs172of theCompaniesAct2006, theGroup communicates andconsultsregularly withemployees Employees for theyearended31December2020 Directors’ Report Corporate Governance — consideration severe butplausibledownsidescenariosincluding: first instance on the Group’s 2021 annual budget and forecasts for 2022. These cashflow forecasts also take into flow forecasts for aperiod of at least12monthsfrom thedate of approval of thesefinancialstatements, basedinthe In consideringthebasisof preparation of theAnnualReportandfinancialstatements, theDirectors have prepared cash The Board hasconfidence intheGroup’s abilitytocontinueasagoingconcern for the following reasons: and therefore have prepared thefinancialstatements onagoingconcernbasis. continue tomeetitsliabilitiesastheyfallduefor at least12monthsfrom thedate of approval of thefinancialstatements Taking accountof thematters describedabove,theDirectors are to confident that theGroup willhave sufficientfunds operations tobeminor. Further information regarding thisissueisprovided onpage76. significantly its affected thefiscal,monetaryand regulatory landscapeintheUK, Grouphasassesseditsimpacton The Directors have alsoconsidered theimpactof theUK’sdecisiontoleave theEuropean Union.AlthoughBrexit has — — — — — — — —
A substantialr customer base throughout the lockdown period, customer basethroughout thelockdown period, forecasts whichgiveadditionalcertaintytorevenues overthenext12months, end of March 2021, under longtermcontracts. The Gr The Gr A lar The Gr The impactso Significant decr No r As noted above the Group has cash balances of £46.7 million at the end of December 2020 and £65.9 million at the evenues from newcustomers, ge proportion of 2021forecasted revenues are covered bybindingpurchase orders androlling customer oup’s historyof beingabletoaccesscapitalmarkets. oup hastheabilitytocontrol capitalexpenditure costsandlowerotheroperational spend,asnecessary, oup haskey worker status whichallowscontinuityof providing servicestotheGroup’s financiallystable evenue downsideaffecting thecore LentiVector f COVID-19 ontheGroup anditscustomersincludingexpectedrevenues from existingcustomers eases inforecasted existingcustomermilestoneandroyalty revenues, ® platform business,
Corporate Governance 127 128 — — — — — — Group’s prospects overthe3yearperiod: The following factorsare considered bothintheformulation of theGroup’s strategy, andintheassessmentof the development andbioprocessing servicestoitspartnerswillbesufficientsupportasustainable Group. 2023 theDirectors believethat revenues from licensingitstechnologytothird partiesandfrom providing process providing process developmentandbioprocessing servicestoothercompanies.Overthethree yearstoDecember operating incomefrom licensingitsplatform technology, generating upfront receipts androyalties, andfrom fees for and tosupportthedevelopmentof othercompanies’products. TheGroup isgenerating growing revenues andother added new LentiVector investments hasbeenproven, andthrough theinspiringinnovation andintegrityof ouremployeestheGroup has chain. Duringthisperiod,therobustness of theGroup’s operations andthelongtermnature of ourcustomers’ on-stream extraGMPsuitestobecomeaninstrumentalpartof theOxford AstraZeneca COVID-19 vaccinesupply in March 2020, rangingfrom initialimplementation of cashpreservation steps,through torapidrecruitment andbringing The Group hasexperiencedanincredibly challenging,yettransformative twelvemonthssincethe pandemic hittheUK Assessment ofviability scenarios modelledare considered realistically balanced. remote. Inaddition,there are significantupsideopportunitiesthat aren’t assumedintheGroup’s financialplans,so the combination of downsiderisks that wouldneedtocrystalize tomake thebusinessunviablebecomesincreasingly resilience to individual product setbacks and its reliance on securing individual new products reduces. Hence, the risk couldadverselyaffect the Group’s financialperformance, asthe Group’s customer product portfolio expandsits and material impactontheviabilityof theGroup. Theserisks are outlinedbelow. It’simportant tonotethat whileeach In modellingthesedownsidescenarios,theGroup hasconsidered theprincipal risks that are mostlikely tohave adirect downside scenarios,includingscenariosarisingfrom theGroup’s principal risks asoutlinedonpages70to77. detailed cashflow forecasts over theperiodtoend of 2022that alsoconsidertheimpact of severe butplausible assessment hasbeenmadeusinglongrangefinancialplanningassumptions,augmentedbythepreparation of more capabilities inadenovirusvaccineproduction, andassumesthegroup continuestoexecute onitsgrowth strategy. This market leadingexpertiseintheuseof Lentiviralvectorsincellandgenetherapy, anditsmore recently developed The financialviability of theGroup hasbeenassessed,takingintoaccounttheGroup’s current financialposition,its raised £38.3 millioninequityfinance,appointedanewChairandfurtherstrengthened theBoard. The Group’s strategy istoexploititsLentiVector of thebusinessoverlasttwelvemonths. The assessment has been informed by refreshing in 2020, the strategy adopted by the Board in of forecasting withinandbeyondthistimehorizon giventhenature of thebusinesssectorinwhichGroup operates. the three yearstoDecember2023. Theybelievethree yearstobeappropriate duetotheinherent significantuncertainties In accordance withtheUKCorporate GovernanceCode,theDirectors have assessedtheprospects of theGroup over Assessment ofprospects Viability Statement for theyearended31December2020 Directors’ Report Corporate Governance
The r Opportunities f therapy, andadenovirusmarkets. How theGr The potentialshortandlongertermeconomicimpacto behaviours. The pr climate change),andtheGroup’s response tothese. The principalrisk esilience afforded bytheGroup’s enviabletechnologyplatform andinnovation capabilities. evailing economicclimate andglobaleconomy, competitoractivity, market dynamicsandchangingcustomer oup can best position itself to take advantage of the current opportunities within the cell and gene oup canbestpositionitselftotake advantage of thecurrent opportunitieswithinthecellandgene or furtherproduct andtechnologyinvestmentinnovation. s and uncertainties faced by the Group, including emerging risks as they are identified (such as s anduncertaintiesfacedbytheGroup, includingemerging risks astheyare identified(suchas ® platform customers such as Juno/Bristol Myers Squibb and Beam Therapeutics, successfully platform customerssuch as Juno/BristolMyers Squibb and Beam Therapeutics, successfully ® platform to develop cell and gene therapy products in its own portfolio platform todevelopcellandgenetherapyproducts initsownportfolio f Brexit. and the evolution 2016, and the evolution milestones androyalties forecasted existingcustomer Significant decreasesin business the coreLentiVector A substantialdownsideaffecting liabilities astheyfalldueoverthethree-year periodtoDecember2023. is areasonable expectation, althoughnotacertainty, that theGroup willbeabletocontinueinoperation andmeetits future. TheGroup’s financial forecasts reflect theseassumptionsandtherefore theDirectors have concludedthat there customer programmes, andindoingsobeingabletocontinuetherecent growth incustomeractivityfor theforeseeable The Directors anticipate that theGroup hasstrong prospects for attracting andfulfillingthedemandsfrom more Conclusion broad spectrumof capabilities,andassuchtheDirectors are confident intheongoingviability of thebusiness. it hasstrong prospects for revenue growth arisingfrom itsexpandingcustomerproduct portfolio andincreasingly Over thelonger3yearviabilityassessmentperiod,assumingGroup continuestoexecute itshybridgrowth strategy cost reduction actions;and(iii)reducing capitalexpenditure. to maintainitsliquidityandcontinueoperations e.g.(i)accessingnewexternalfunding;(ii)more radicalshortterm viability of theGroup. However, intheeventof thesescenariosarisingthere are variousoptionsavailable totheGroup purposefully severe whilst remaining realistically plausible,withtheaimof creating outcomesthat couldthreaten the As mentionedabove,thehypotheticaldownsidescenariosmodelledoverperiodtoendof 2022were its financial resources dynamically and effectively. the businesshasdemonstrated that ithassolidfoundations, andthenecessarycontrols inplaceto successfullymanage lumpy, or could potentially stop quickly in the case of a vaccinefor a pandemic. However, overthe last twelvemonths Management alsoneedstoensure that costsstayflexibleandcanbealignedwith revenues whichcansometimesbe shareholder value. required tomake furtherbeneficialinvestmentsinpursuit of theGroup’s longtermgrowth strategy tomaximise capital intheneartermtofunditscurrent operating activities,itcontinuestoassesswhetheradditionalcapitalis sufficient capitaltomaximisethevalue from itsleadingposition.Whilethe Group hasno requirement toraiseadditional In additiontotheabove,there isalsoariskthat inanincreasingly competitivemarket theGroup isunabletoaccess new customers No revenuesfrom Scenario
® platform platform
development risk Pharmaceutical andproduct COVID-19 Bioprocessing revenue risk Collaborator andpartnerrisk Risk uiesdvlpetrs TheGr Business developmentrisk s uncertainty around thefuture impactof theglobalpandemic. New andexistingcustomersdiscontinueordelaytheirprogrammes dueto specification. The Group isunabletoproduce batches for customersmeetingthe required suppliers. Customers discontinuetheirexistingprogrammes ortransfer themtoother under developmentnotmeetingsafety andefficacy requirements. Customers terminate ordelaytheirexistingprogrammes duetotheproducts add additionalproducts totheirexistingprogrammes. Description oup is unable to attract new customers, or existing customers do not oup isunabletoattract newcustomers,orexistingcustomersdonot
Corporate Governance 129 130 Directors’ Remuneration ReportandCorporate GovernanceReportthat complies withthat lawandthoseregulations. differ from legislation inotherjurisdictions. the company’swebsite.Legislation intheUKgoverning preparation anddissemination of financialstatements may The Directors are responsible for themaintenance andintegrityof thecorporate andfinancialinformation includedon Under applicablelawand regulations, the The — — — — — period. Inpreparing eachof theGroup andparent Companyfinancialstatements, theDirectors are required to: true andfairviewof thestate of affairs of theGroup andparent Companyand of theGroup’s profit orloss forthat Under company law the Directors must not approve a the financialstatements unless theyare satisfied that theygive Financial ReportingStandards adoptedpursuanttoRegulation (EC) No1606/2002asitappliesintheEuropean Union. required undertheUKDisclosure GuidanceandTransparency Rulestobeprepared inaccordance withInternational prepare theparent Companyfinancialstatements onthesamebasis.Inaddition,Group financialstatements are standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to Under that lawtheyare required toprepare theGroup financialstatements inaccordance withinternational accounting Company lawrequires theDirectors toprepare Group andparent Companyfinancialstatements for eachfinancialyear. in accordance withapplicablelawandregulations. The Directors are responsible for preparing theAnnualReportandGroup andparent Companyfinancialstatements Statement ofDirectors’responsibilitiesinrespecttheAnnualReport andthefinancialstatements LR 9.8.4 (7)and(8) LR 9.8.4 (5)and(6) Listing Rule following are applicable. The Directors have reviewed therequirements of LR9.8.4R. Themajorityof thesedonotapplytotheGroup butthe Compliance withListingRule 9.8.4R Amendment of theCompany’sarticlesmaybemadebyspecialresolution at ageneralmeetingof shareholders. Amendment oftheCompany’sarticlesassociation for theyearended31December2020 Directors’ Report Corporate Governance reasonably opentothemsafeguard theassetsof theGroup andtoprevent anddetectfraudotherirregularities. material misstatement, whetherduetofraudorerror, andhave generalresponsibility for takingsuchstepsasare such internalcontrol astheydetermineisnecessarytoenablethe preparation of financialstatements that are free from and enablethemtoensure that itsfinancialstatements complywiththe CompaniesAct2006. Theyare responsible for Company’s transactionsanddisclosewithreasonable accuracyat anytimethefinancialposition of theparent Company
or toceaseoperations, orhave norealistic alternative buttodoso. use thegoingconcernbasiso related togoing concern;and assess theGr Reporting Standards adoptedpursuanttoRegulation (EC) No1606/2002asitappliesintheEuropean Union; the requirements of the CompaniesAct2006and,asregards theGroup financialstatements, International Financial sta mak select suitableaccountingpoliciesandthenapplythemconsistently; Directors te whethertheyhave beenprepared inaccordance withinternational accounting standards inconformity with e judgementsandestimates that are reasonable, relevant andreliable; are responsible for keeping adequate accountingrecords that are sufficienttoshowandexplaintheparent oup and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters oup andparent Company’s abilitytocontinueasagoingconcern,disclosing,applicable,matters Information required proportion toholdings. existing shareholders in Allotment of shares otherthanto future emoluments. Director haswaivedcurrent or Arrangement underwhicha f accounting unless they either intend to liquidate the Group or the parent Company f accountingunlesstheyeitherintendtoliquidate theGroup ortheparent Company D irectors are alsoresponsible for preparing a Strategic Report, Directors’ Report, Allotment of shares in accordance with the equity fundraise in June 2020 Allotment of shares inaccordance withtheequityfundraiseinJune2020 share schemes(note23, page175). Allotment of shares onexercise of optionsbyemployeesunderapproved services asDirectors (page108). Martin DiggleandRobertGhenchevelectedtoreceive nofees for their Response (page 125)
15 April2021 Director Stuart Paynter By order of theBoard shareholders toattend theAGM bywebcastandvote proxy. The AGM willbeheldonThursday, 27May2021at ourWindrushCourtlaboratories andoffices butthe Group encourages Annual GeneralMeeting 24 and25. Stakeholders sectionof theStrategic Reportonpages22and page23, withaworkingexampleinactiononpages The statement of how the Directors has engaged with suppliers, customers and othersis described in the Group’s Statement ofengagementwithsuppliers,customersandothers in Group’s Stakeholders sectionof theStrategic Reportfor Employeesonpages22and23. of concern andawareness of thefinancialandeconomicfactors affecting theperformance ofthe Group isdescribed Details of theactionsthat hasbeentaken duringthefinancial yearinorder to keep employeesinformed of matters Statement ofemployeeengagement Details ongreenhouse gas emissions are setoutintheESGReportStrategic Reportonpage60. Greenhouse gasemissionsreport reappointment willbeproposed at theAGM. The auditors,KPMGLLP, have indicated theirwillingnesstocontinueinoffice anda resolutionconcerningtheir Independent auditors the Group andCompany’sauditorsare aware of that information. ought tohave taken asaDirector inorder tomake himselfaware of anyrelevant auditinformation andtoestablishthat information of whichtheGroup andCompany’sauditorsare unaware, andeachDirector hastaken allthestepsthat he In accordance withs418of theCompaniesAct2006, sofaraseachDirector isaware, there isnorelevant audit Statement astodisclosureofinformation toauditors information necessaryfor shareholders toassesstheGroup’s positionandperformance, businessmodelandstrategy. We considertheAnnualReportandAccounts,taken asawhole,isfair, balancedandunderstandableprovides the — — We confirm that tothebest of ourknowledge: Responsibility statementoftheDirectors inrespectoftheAnnualReport andfinancialstatements
principal risks anduncertaintiesthat theyface. the issuerandundertakingsincludedinconsolidation taken asawhole,togetherwithdescriptionof the the S consolidation taken asawhole;and view of theassets,liabilities,financialpositionandprofit orloss oftheCompanyandundertakingsincludedin the financialsta trategic Reportincludesafairreview of thedevelopmentandperformance of thebusinessandpositionof tements, prepared inaccordance withtheapplicablesetof accountingstandards, giveatrueandfair
Corporate Governance 131 132 Event driven Key auditmattersvs2019 Coverage: 100%(2019:100%)of group revenue Materiality: Overview applied tolistedpublicinterest entities.Nonon-audit servicesprohibited bythat standard were provided. remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as is for thethree financialyearsended31December2020. We have fulfilledourethical responsibilitiesunder,we and We were firstappointedasauditorbytheshareholders on29May2018. Theperiod of totaluninterruptedengagement appropriate basis for ouropinion.Ourauditopinionisconsistentwithreport totheAuditCommittee. Our responsibilities are describedbelow. We believethat theauditevidencewehave obtainedisasufficientand We conductedourauditinaccordance withInternational Standards onAuditing(UK)(“ISAs (UK)”)andapplicablelaw. Basis foropinion — — — — this year. The uncertaincustomerclaimwassettledintheyear andtherefore notbeenseparately identifiedinouraudit report Recurring risks In ouropinion: statements of cashflows for theyearthenended,and related notes,includingtheaccountingpoliciesinnote1. comprehensive income,theconsolidated andCompanystatements of changesinequity, andconsolidated andCompany 2020 whichcomprisethe consolidated andCompanystatements of financialposition,theconsolidated statement of We have auditedthefinancialstatements of Oxford Biomedicaplc(“theCompany”) for theyearended31December 1. Ouropinionisunmodified To themembersofOxfordBiomedicaplc Independent auditors’report ent Companyfinancialstatements have beenproperly prepared inaccordance withinternational accounting oup financialstatements have beenproperly prepared inaccordance withinternational accountingstandards financial statements give a true and fair view of the state of the Group’sat and parent Company’s affairs as Act 2006;and standards inconformity withtherequirements of, andasappliedinaccordance withtheprovisions of, theCompanies the par as regards theGroup financialstatements, Article4 of theIASRegulation totheextentapplicable. the financialsta in conformity withtherequirements of theCompaniesAct2006; the Gr 31 December 2020 and of the Group’s loss for the year then ended; 31 December2020andof theGroup’s lossfor theyearthenended; the Group financialstatements asawhole£716k(2019:£520k) 0.82% (2019: 0.81%) of revenue
tements have beenprepared inaccordance withtherequirements of theCompaniesAct2006and, New: Recoverability o Going concern Biopr ocessing revenue recognition Contractrevenue recognition
f parent Company’sinvestment inandloanduefrom subsidiaries
Oxford Biomedica plc to that opinion,andwedonotprovide aseparate opiniononthesematters. our auditof thefinancialstatements asawhole,andin forming ouropinionthereon, andconsequently are incidental were addressed, and our results are based on procedures undertaken, in thecontextof, and solely for the purpose of, to address thosematters and,asrequired for publicinterest entities,ourresults from thoseprocedures. Thesematters in decreasing order of auditsignificance,inarriving at ourauditopinionabove,togetherwith key auditprocedures resources intheaudit;anddirecting theefforts of theengagementteam. We summarisebelowthe key auditmatters, fraud) identifiedbyus,includingthosewhichhadthegreatestof effect on:theoverallauditstrategy; theallocation to financial statements andincludethemostsignificantassessedrisks of material misstatement (whetherornotdue Key auditmatters are thosematters that, inourprofessional judgment,were of mostsignificanceintheaudit of the 2. Key auditmatters:ourassessmentofrisksmaterialmisstatement and page158(criticalaccounting page 89(AuditCommitteeReport) Refer to (£1. contract liabilities disclosures). and pages160 – 161(financial pages 150 – 151(accountingpolicy) page 88(AuditCommitteeReport), Ref £9.4 million) (Customer licenserevenues Contract revenuerecognition estimation). judgements andestimates – recognition andrelated Bioprocessing revenue er to er to 4 million;2019:£1.8 million)
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Annual r
eport and accounts 2020
— — — as awhole. our materiality for thefinancialstatements range o of estimation uncertainty, withapotential of therefund liabilityhasahighdegree assessment, wedeterminedtha of thismatter isthat, aspartof ourrisk at thebalancesheetdate. Theeffect contract liability)for future batch failures estimate arefund liability(bioprocessing Management useshistoricaldata to time willsubsequentlybereversed. that amountsrecognised asrevenue over inadequate yield.Therefore, there isarisk specifications duetocontamination or batches mayfailtomeettherequired lentiviral vectorsiscomplex,suchthat recognised overtime.Bioprocessing of manufacture of lentiviralvectorsandis Bioprocessing revenue relates tothe Subjective estimate of thecontractsentered intointheyear. The risk is new compared to 2019 as a result revenue isrecognised inthewrong period. described above,there isariskthat judgements madeoneachof theareas Depending ontheoutcomeof the The risk following areas: be madebytheGroup inthe to required terms. There are inherent judgements multiple elementcontractswithdiffering The Group entersintoanumberof Accounting treatment tion of performance obligations tion of performance obligations
in time. recognition overtimeorat apoint obligation satisfies thecriteria for Whether r standalone sellingprice,and obligation withreference totheir transaction pricetoeachperformance Assessing thealloca fees andmilestones, of thecontract,primarilylicence Identifica f reasonable outcomes greater than f reasonable outcomesgreater than evenue for each performance evenue for eachperformance tion of the total tion of thetotal t the value t thevalue
— — procedures included: obtain therequired evidencetosupportreliance oncontrols. Our design of thesecontrols indicated that wewouldnotbeableto on anyof theGroup’s controls becauseourknowledgeof the We performed thedetailedtestsbelowrather thanseekingtorely refund liabilitytobeacceptable(2019:acceptable). Our results: We found theresulting estimate of thebioprocessing — — — from newcontractsentered intotobeacceptable. Our results: We found theGroup’s treatment of revenues derived evidence tosupportreliance oncontrols. Ourprocedures included: these controls indicated that wewouldnotbeabletoobtaintherequired any of theGroup’s controls becauseourknowledgeof thedesignof We performed thedetailedtestsbelowrather thanseekingtorely on Our response — —
rate aspreviously recognised, basedondevelopments Group indeterminingtheirestimate of future batch failures. • reference tosignificantcontracts,including: judgements made,inlinewithaccountingpoliciesand T accounting policyagainstthestandard. Accounting analysis: Historical comparisons: Accounting analysis: • • finished products. Qualified Person,whoholdsthe regulatory license for releasing assumptions withindividualsinthetechnicalteam,including Personnel inter the recognition of thebioprocessing contractliability. Group’sin disclosures abouttheestimation uncertaintyinvolved Assessing transparency: the reasonable rangeof potentialoutcomes. Sensitivity analysis: the year. Assessing and challenging management’s esting application:Assessingandchallengingmanagement’s performance obligations, and whethertheyare distinctandtherefore separate revenue recognition, overtimeorat apointintime. of theaccountingstandard todeterminedthetimingof customer contracts,and components, through benchmarkingacross theother Assessment o Assessment o Assessment o f the goods or services promised in the contract f thegoodsorservicespromised inthecontract f the contract terms against the requirements f thecontracttermsagainstrequirements f thestand-alone sellingpricesof individual Corroborating reasonableness of views: Corroborating reasonableness of Performing sensitivity analysis to assess Performing sensitivityanalysistoassess Evaluation of theGroup’s revenue Assessing the assumptions made by the Assessingtheassumptionsmadeby Evaluating theaccuracyof the Assessing the adequacy of the Assessingtheadequacyof the
through through failure failure
IndependentCorporate auditors’ Governance report 133 134 and page1 page 88(AuditCommitteeReport) Refer to Going concern To themembersofOxfordBiomedicaplc Independent auditors’report Oxford Biomedica plc page 167(financialdisclosur page 154(accountingpolicy)and Refer to (£166.4 million;2019:£146.8 million) subsidiaries intercompany loansduefrom Company’s investmentinand Recoverability ofparent
48 (accountingpolicy)
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Annual r es). eport and accounts 2020 to significantjudgement.However, of significantmisstatement orsubject those risks are such that they amount those risks are suchthat theyamount The riskfor ourauditiswhetherornot customers underlongtermcontracts. the expected revenues from existing revenues, anduncertaintiesaround royalty s to amaterial uncertaintythat maycast Company audit. the greatest effect parent overall our on this isconsidered tobethe area that had due toitsmateriality inthecontext required tohave beendisclosed. been such,thenthat factwouldhave been they Had continue asagoingconcern. revenues intheLentiVector to thenon-ma to mitigate andcontrol expenditures due resources over thisperiodistheability Group’sand Company’savailable financial The riskmostlikely toadverselyaffect the the financialstatements least ayearfrom thedate of approval of continue operations overaperiodof at financial resources orabilityto Company’s risks mightaffect theGroup’s and Company’s businessmodelandhowthose of theinherent risks totheGroup and Their judgementisbasedontheevalua Company. parent The risk Its recoverability is not at a high risk Its recoverability isnotat ahighrisk Company’s totalassets. subsidiary represents 87.34% of the Company’s investmentinthesoletrading The carryingamountof theparent highvalue Low risk, basis o it isappropriate toadoptthegoingconcern management has formed a judgement that management hasformed ajudgementthat The financialstatements explainhow Disclosure quality from materialisation of expectedrevenues revenues from newcustomers,non- the parent Companyfinancial ignificant doubt about the ability to abouttheabilityto doubt ignificant existing customer milestone and existing customermilestoneand f preparation for the Group and f preparation for theGroup and terialisation of expected ® business, statements, statements,
of of
no no
tion tion
— — — — — — — — disclosur was nomaterial uncertaintytobedisclosedappropriate (2019: Our results: We found thegroup's judgementthat there individually andcollectively. Ourprocedures alsoincluded: plausible, adverseeffects that couldarisefrom theserisks by theGroup’s financial forecasts takingaccount of severe, but sensitivities overthelevelof available financial resources indicated liquidity inthegoingconcernperiodbyassessingDirectors’ We considered whethertheserisks couldplausiblyaffect the (2019: acceptable). in andintercompany loansduefrom subsidiariestobeacceptable thevaluation of theparent Company’sinvestment considered Our results: Theresults of ourtestingwere satisfactory andwe obtaining auditevidence.Ourprocedures included: meant tha the Group's controls becausethenature of theaccountbalance We performed thetestsbelowrather thanseekingtorely onanyof Our response
est ofdetails:Confirming themathematical integrity of the downsides. going concern,includingtheidentifiedrisks, and related full andaccurate descriptionof theDirectors’ assessmentof a concern disclosure innote1tothefinancialstatements gives control thetimingandoutcomeof these. taking intoaccounttheextenttowhichDirectors can project spendandcapitalexpenditure intheforecast period, included reductions inemployeerelated costs,discretionary improve thepositionshouldrisks materialise, which of theactionsDirectors considertheywouldtake to wider knowledgeof thebusinessandmarkets served. revenue downsidescenario,comparingtopriorresults andour Assessing transparency: Evaluating Directors’intent: Benchmarking assumptions: the impact of reasonably possible changes to key assumptions. the impactof reasonably possiblechangestokey assumptions. Sensitivity analysis: assess historicalreliability of theforecasts. historical results achievedintheyearandprevious yearsto Historical comparisons: business basedontheGroup’s market capitalisation. owed byGroup undertakingswiththeexpectedvalueof the Comparing thecarryingamounto of itsrecoverable amount. in useof theGroup’s cashflow forecasts, beinganindication Comparing thecarryingamounto company’s valueinusemodel T e of amaterial uncertainty). t detailed testing is inherently the most effective means of t detailedtestingisinherently themosteffective means of Performing sensitivity analysis to evaluate Performing sensitivityanalysistoevaluate Assessing cashflow forecasts against Assessingcashflow forecasts against Considering whether the going Consideringwhetherthegoing Evaluating the achievability Evaluating theachievability Critically assessing the Group’s CriticallyassessingtheGroup’s f the investment and loans f theinvestmentandloans f theinvestmenttovalue
Oxford Biomedica plc total assets(2019:all100%)andwere auditedbyoneengagementteam(2019:team). components withinthescopeof ourworkaccountedfor 100%of Group revenues, Group profit before taxandGroup Of theGroup’s 2(2019:3)reporting components,wesubjected2(2019:2)tofullscopeauditsfor group purposes.The (2019: £26k),inadditiontootheridentifiedmisstatements that warranted reporting onqualitative grounds. We agreed toreport totheAuditCommitteeanycorrected oruncorrected identifiedmisstatements exceeding £36k identified duringthepriorperiod. our determination of performance materiality basedonthelevelof identifiedmisstatements andcontrol deficiencies to £465k(2019:£338k)for thegroup and£117k(2019:£117k)for theparent Company. We appliedthispercentage in Performance materiality wassetat 65%(2019:65%)of materiality for thefinancialstatements asawhole,whichequates misstatements inindividualaccountbalancesadduptoamaterial amountacross thefinancialstatements asawhole. a lowerthreshold, performance materiality, soastoreduce toanacceptableleveltheriskthat individuallyimmaterial In linewithourauditmethodology, ourprocedures onindividualaccountbalancesanddisclosures were performed to reference toabenchmarkof Companytotalassets,of whichitrepresents 0.10% (2019:0.12%). Materiality for theparent Companyfinancialstatements asawholewasset at £182k(2019:£180k),determinedwith a benchmarkof group revenue of whichitrepresents 0.82% (2019:0.81%). Materiality for thegroup financialstatements asawholewasset at £716k(2019:£520k),determinedwith reference to ofthescopeouraudit 3. Ourapplicationofmaterialityandanoverview £87,728k (2019:£64,060k) Revenue
ru materiality Group Revenue
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Annual r eport and accounts 2020 £716k (2019:£520k) Group materiality the auditcommittee(2019:£26k) Misstatements reported to £36k (£182k –£680k)(2019:£180k£484k) Range of materiality at 2components £680k materiality (2019:£338k) Whole financialstatements performance £465k (2019: £520k) Whole financialstatements materiality £716k
IndependentCorporate auditors’ Governance report 135 136 guarantee that the Group or the Company will continue in operation. guarantee that theGroup ortheCompanywillcontinueinoperation. are inconsistentwithjudgementsthat were reasonable at thetimetheywere made,theaboveconclusionsare nota However, aswecannotpredict allfuture eventsorconditionsandassubsequentmayresult inoutcomesthat — — — — matter insection2of thisreport. Ourconclusionsbasedonthisworkare: An explanation of howweevaluated management’sassessmentof goingconcernissetoutintherelated key audit approval of thefinancialstatements (“thegoingconcernperiod”). could have castsignificant doubtovertheirabilitytocontinueasagoingconcern for at leastayearfrom thedate of financial positionmeansthat thisis realistic. Theyhave alsoconcludedthat there are nomaterial uncertaintiesthat Group or theCompanyortoceasetheiroperations, andastheyhave concludedthat theGroup’s andtheCompany’s The Dir 4. To themembersofOxfordBiomedicaplc Independent auditors’report Oxford Biomedica plc
to continueasagoingconcernfor thegoingconcernperiod; events orconditionsthat, individuallyorcollectively, maycastsignificantdoubt ontheGroup’s orCompany'sability statements and our audit knowledge. statements andourauditknowledge. the r significant doubtovertheGroup andCompany’suse of that basis for thegoingconcernperiod; and statements ontheuseof thegoingconcernbasisof accountingwithnomaterial uncertaintiesthat maycast we ha we ha statements isappropriate; we Going concern consider that the Directors’ useof the goingconcern basis of accounting inthe preparation of the financial ectors have prepared thefinancialstatements onthegoingconcernbasisastheydonotintendtoliquidate the elated statement under the Listing Rules set out on pages 126–127 is materially consistent with the financial elated statement undertheListingRulessetoutonpages126–127ismaterially consistentwiththefinancial ve nothingmaterial toaddordrawattention toinrelation totheDirectors’ statement innote1tothefinancial ve notidentified,andconcurwiththeDirectors’ assessmentthat there isnot,amaterial uncertainty related to
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Annual r eport and accounts 2020 Oxford Biomedica plc — — — — — — We performed procedures including: We didnotidentifyanyadditionalfraudrisks. to thebioprocessing refund liability. may be in apositiontomake inappropriate accounting entries, and the riskof bias inthe accounting estimate relating through the percentage of completion derived at the year end reporting date, and the risk that Group management revenue are inappropriate and that bioprocessing andprocess developmentrevenues are recorded inthewrong period and theriskof fraudulentrevenue recognition. Inparticulartheriskthat thejudgementstaken inrecognising contract subjective estimates andjudgements,weperform procedures toaddress theriskof managementoverrideof controls stock priceorearningstrend, ouroverallknowledgeof thecontrol environment andthenature of revenues that involve As required byauditingstandards, andtakingintoaccountpossibleincentivespressures toincrease theGroup’s throughout theaudit. We communicated identifiedfraudrisks throughout theauditteamand remained alerttoanyindications of fraud — — — — procedures included: indicate anincentiveorpressure tocommitfraudorprovide anopportunitytocommitfraud.Ourriskassessment To identifyrisks of material misstatement duetofraud(“fraudrisks”) weassessedeventsorconditionsthat could andrespondingtorisksofmaterialmisstatementduefraud Identifying raud andbreachesoflaws andregulations–abilitytodetect 5.
Assessing significantaccountingestima E revenue, estimates andcashwithanunexpecteddoubleentry. to seldomusedaccountsandthosepostedunusualaccountcombinations, including those withentriesto supporting documentation. Theseincludedthosepostedwithkey words includedinthedescription,thoseposted Identifying journalentriesandotheradjustmentstotestbasedonriskcriteriacomparingtheidentified entries to been recognised intheyear. Assessing whethercr reporting date. of completion of bioprocessing batches andprocess developmentworkpackages inprogress at theyearend Assessing theaccuracyandappr section 2of ourauditreport. Assessing Using analyticalpr Considering r Reading Boar “whistleblowing”, aswellwhethertheyhave knowledgeof anyactual,suspectedorallegedfraud. Group’s high-level policiesandprocedures toprevent anddetectfraud,includingtheGroup’s channelfor Enquiring o F valuated thebusinesspurposeof significantunusualtransactions. the judgements made by the Group in recognition of contract revenues, as described in more detail in f management, the Directors and the Audit Committee and inspection of policy documentation as to the f management,theDirectors andtheAuditCommitteeinspectionof policydocumentation astothe
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d, AuditCommitteeandotherrelevant meetingminutes. emuneration incentiveschemesandperformance targets for managementandtheDirectors. Annual r ocedures to identify any unusual or unexpected relationships. ocedures toidentifyanyunusualorunexpectedrelationships. eport and accounts 2020 edit notesissuedafter theyearendreport date were indicative of inappropriate revenues having opriateness of underlying data and assumptions used to determine the percentage opriateness of underlyingdata andassumptionsusedtodeterminethepercentage tes for bias.
IndependentCorporate auditors’ Governance report 137 138 be expectedtodetectnon-compliancewithalllawsandregulations. designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot forgery, intentionalomissions,misrepresentations, ortheoverrideof internalcontrols. Ourauditprocedures are In addition,aswith any audit, there remained a higher risk of non-detectionof fraud,asthese may involve collusion, required byauditingstandards wouldidentifyit. from theeventsandtransactionsreflected inthefinancialstatements, thelesslikely theinherently limited procedures accordance withauditingstandards. Forexample, thefurtherremoved non-compliancewithlawsandregulations is misstatements inthefinancialstatements, eventhoughwehave properly plannedandperformed ourauditin Owing totheinherent limitations of anaudit,there isanunavoidable riskthat wemaynothave detectedsomematerial Context oftheabilityaudittodetectfraudorbreacheslaw orregulation an auditwillnotdetectthat breach. if any. Therefore ifabreach of operational regulations isnotdisclosedtousorevidentfrom relevant correspondence, enquiry of management,includinglegalcounsel,andtheDirectors andinspectionof regulatory andlegalcorrespondence, Auditing standards limittherequired auditprocedures toidentifynon-compliancewiththeselawsandregulations to activities andregulated nature of theindustryinwhichitoperates. regulatory capitalandliquiditycertainaspectsof companylegislation recognising thefinancialnature of theGroup’s laboratories andmanufacturingfacilities(through auditsbytheMHRA),healthandsafety, anti-bribery, employmentlaw, as goodmanufacturingpractice(GMP),clinical(GCP)andlaboratory practice(GLP)standards for or litigation. We identifiedthe following areas asthosemostlikely tohave suchaneffect: healthcare regulations, such have a material effect on amounts ordisclosures inthe financial statements, forinstance through theimposition offines Secondly, theGroup issubjecttomanyotherlawsandregulations where theconsequencesof non-compliancecould financial statement items. and weassessedtheextentof compliancewiththeselawsandregulations aspartof ourprocedures ontherelated reporting legislation (includingrelated companieslegislation), distributableprofits legislation andtaxation legislation Firstly, theGroup issubjecttolawsandregulations that directly affect thefinancialstatements includingfinancial The potentialeffect of theselawsand regulations onthefinancialstatements variesconsiderably. compliance throughout theaudit. We communicated identifiedlawsand regulations throughout ourteamand remained alerttoanyindications of non- counsel, andtheDirectors thepoliciesandprocedures regarding compliancewithlawsandregulations. legal counsel,andtheDirectors (asrequired byauditingstandards), anddiscussedwithmanagement,includinglegal statements from ourgeneralcommercial andsectorexperiencethrough discussionwithmanagement,including We identifiedareas of lawsand regulations that could reasonably beexpectedtohave amaterial effect onthefinancial andrespondingtorisksofmaterialmisstatementduenon-compliancewithlaws andregulations Identifying To themembersofOxfordBiomedicaplc Independent auditors’report Oxford Biomedica plc
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Annual r eport and accounts 2020 Oxford Biomedica plc report onthesestatements isnotaguaranteeastotheGroup’s andCompany’s longer-term viability. that are inconsistentwithjudgementsthat were reasonable at thetimethey were made,theabsenceof anythingto statements audit.Aswecannotpredict allfuture eventsorconditionsandas subsequenteventsmayresult inoutcomes Our workislimitedtoassessingthesematters inthecontext of onlytheknowledgeacquired duringourfinancial and ourauditknowledge. above procedures, wehave concludedthat theabovedisclosures are materially consistentwiththefinancialstatements We are also required to review the viability statement, set out on pages 128–129 under the Listing Rules. Based on the — — — — audit knowledge. disclosures inrespect of emerging andprincipalrisks andtheviabilitystatement, andthefinancialstatements andour We are required toperform procedures toidentifywhetherthere isamaterial inconsistencybetweentheDirectors’ Disclosures ofemergingandprincipalriskslonger-termviability with theCompaniesAct2006. In ouropinionthepartof theDirectors’ Remuneration Reporttobeauditedhasbeenproperly prepared inaccordance Directors’ Remuneration Report — — — Based solelyonourworktheotherinformation: Strategic Report andDirectors’Report knowledge. Basedsolelyonthat workwehave notidentifiedmaterial misstatements intheotherinformation. audit work,theinformation therein ismaterially misstated orinconsistentwiththefinancialstatements orouraudit Our responsibility is to read the other information and, in doing so, considerwhether, based on our financial statements express an auditopinionor, except asexplicitlystated below, anyform of assuranceconclusionthereon. statements. Ouropiniononthefinancialstatements doesnotcovertheotherinformation and, accordingly, wedonot The Directors are responsible for theotherinformation presented intheAnnualReporttogetherwithfinancial 6. We have nothingtoreportontheotherinformation intheAnnualReport
qualifications or assumptions. qualifications orassumptions. fall dueovertheperiodof theirassessment,includinganyrelated disclosures drawingattention toanynecessary they have areasonable expectation that theGroup willbeabletocontinueinoperation andmeetitsliabilitiesasthey period theyhave donesoandwhytheyconsidered that periodtobeappropriate, andtheirstatement astowhether the Dir identified, andexplaininghowtheyare beingmanagedandmitigated; and the Principalrisk model, future performance, solvencyandliquidity; assessment of theemerging andprincipalrisks facingtheGroup, includingthosethat wouldthreaten itsbusiness the Dir Based onthosepr in ouropinionthoser and in ouropinionthe we ha ve not identified material misstatements in the Strategic Report and the Directors’ Report; ve notidentifiedmaterial misstatements inthe Strategic ReportandtheDirectors’ Report; ectors’ explanation intheviabilitystatement of howtheyhave assessedtheprospects of theGroup, overwhat ectors’ confirmation withintheviabilitystatement (pages128–129)that theyhave carriedouta robust
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Annual r s, uncertaintiesandriskmanagementdisclosures describingtheserisks andhowemerging risks are ocedures, wehave nothingmaterial toaddordrawattention toinrelation to: eport and accounts 2020 formation giveninthosereports for thefinancialyearisconsistent withthefinancialstatements; eports have beenprepared inaccordance withtheCompaniesAct2006.
IndependentCorporate auditors’ Governance report 139 140 A fullerdescriptionof ourresponsibilities isprovided ontheFRC’swebsiteat www.frc.org.uk/auditorsresponsibilities. taken onthebasisof thefinancialstatements. material if, individuallyorinaggregate, theycouldreasonably beexpectedtoinfluence theeconomicdecisions of users always detectamaterial misstatement whenitexists.Misstatements canarisefrom fraudorerror andare considered assurance isahighlevelof assurance,butdoesnotguarantee that anauditconductedinaccordance withISAs(UK)will material misstatement, whetherduetofraudorerror, andtoissue ouropinioninanauditor’sreport. Reasonable Our objectivesare toobtainreasonable assuranceaboutwhetherthe financialstatements asawholeare free from Auditor’s responsibilities but todoso. they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative disclosing, asapplicable,matters related togoingconcern;andusingtheconcernbasisof accounting unless whether duetofraudorerror; assessingtheGroup andparent Company’sabilitytocontinueasagoingconcern, determine isnecessarytoenablethepreparation of financialstatements that are free from material misstatement, of the financial statements including being satisfied that they give a true and fairview; such internalcontrol as they As explainedmore fullyintheirstatement setoutonpages130–131,theDirectors are responsible for: thepreparation Directors’ responsibilities — — — — 7. report in this respect. provisions of theUKCorporate GovernanceCodespecifiedbytheListingRules for our review. We have nothingto We are required toreview thepartof theCorporate GovernanceStatement relating totheGroup’s compliancewiththe — — — statements andourauditknowledge: Based onthoseprocedures, wehave concludedthat eachof thefollowing ismaterially consistentwiththe financial corporate governancedisclosures andthefinancialstatements andourauditknowledge. We are required toperform procedures toidentifywhetherthere isamaterial inconsistencybetweentheDirectors’ Corporate governancedisclosures To themembersofOxfordBiomedicaplc Independent auditors’report 8. We have nothingtoreport intheserespects. Under theCompaniesAct2006, weare required toreport toyouif, inouropinion:
R we ha certain disclosur in agreement withtheaccountingrecords andreturns; or the par been received from branchesnotvisited byus;or adequa W internal control systems. the Audit Committeeconsidered inrelation tothefinancialstatements, andhowtheseissueswere addressed; and the sectiono and performance, businessmodelandstrategy; balanced andunderstandable,provides theinformation necessaryfor shareholders toassesstheGroup’s position the Dir espective responsibilities e have nothingtoreportontheothermatterswhichwearerequired reportbyexception section of the Annual Report that describes the review of the effectiveness of the Group’s risk management and ve notreceived alltheinformation andexplanations werequire for ouraudit. ectors’ statement that theyconsiderthat theAnnualReportandfinancialstatements taken asawholeisfair, ent Companyfinancialstatements andthepart of theDirectors’ Remuneration Reporttobeauditedare not te accountingrecords have notbeenkept bytheparent Company, orreturns adequate for ouraudithave not f the annual report describing the work of the Audit Committee, including the significant issues that the f theannualreport describingtheworkof theAuditCommittee,includingsignificantissuesthat the es of Directors’ remuneration specifiedbylaware notmade;or 15 April2021 RG1 3AD Reading 33 ForburyRoad 2 ForburyPlace Chartered Accountants for andonbehalf ofKPMGLLP, Auditor Statutory Auditor) William Smith(SeniorStatutory as abody, for ourauditwork,for thisreport, orfor theopinionswehave formed. by law, wedonotacceptorassumeresponsibility toanyoneotherthantheCompanyandCompany’smembers, matters weare required tostate totheminanauditor’sreport andfor nootherpurpose.To thefullestextentpermitted Companies Act2006. Ourauditworkhasbeenundertaken sothat wemightstate totheCompany’smembersthose This report ismadesolelytotheCompany’smembers,asabody, inaccordance withChapter3of Part16of the 9. Thepurposeofourauditworkandtowhomweoweresponsibilities
Independent auditors’ report 141 Oxford Biomedica enter 2021 and beyond with a rapid growth, a proven strategy, experienced leadership and financial strength.
With an ever increasing number of partner programmes and continued broader market growth in cell and gene therapy, the future has never looked more exciting and the Group is well positioned to maximise the opportunities ahead. Oxford Biomedica plc
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Annual r eport and accounts 2020
ving lives 143 185 132 188 1 1 1 185 12 1 1 69 80 40 48 44 46 20 9 30 28 38 42 2 45 70 15 22 78 47 67 27 18 41 16 12 51 8 4 6 6 6 2 1
vaccine journey delivered in2020 highlights Financial delivered in2020 highlights Operational The Gr The Gr Pr Gr Strategic R Mark Advisers andcontactdetails Glossary Other matters financial statements Notes totheconsolida of theparent equity attributable toowners S S positions S of comprehensive income statement Consolidated Group financialstatements report auditors’ Independent Dir Dir Corpora Boar and riskmanagement uncertainties risks, Principal Corporate Governance statement Non-financial Governance Report Envir review Financial Objectives setf Delivery o Management team 2020 performance review Chief Ex Chair’s sta The Gr Questions andanswers Sa tatements of changes in tatements of changesin tatements of cashflows tatement of financial oduct pipeline oup at aglance ectors’ Remuneration Report ectors’ Report d of Directors onmental, Social and onmental, Socialand et overview oup’s stakeholders oup’s businessmodel oup’s COVID-19 ecutive Officer’s and ecutive Officer’sand te GovernanceReport f 2020objectives tement eport or 2021
ted ted
Group financial statements 143 144 The lossfor theyearisattributable totheownersof theparent. There was noothercomprehensive incomeorloss. Continuing operations for theyearended31December2020 Consolidated statementofcomprehensiveincome Group financial statements Finance costs Revenue expense for theyear Loss andtotalcomprehensive Finance income Operating loss fair valuethrough profit andloss Change infairvalueof assetheldat Taxation Loss beforetax Other operating income Administrative expenses Bioprocessing costs Research anddevelopmentcosts Gross profit Cost of sales Note 9, 27 8 4 4 4 6 6 (29,749) (10,720) (41,655) (11.262) (5,694) (6,245) 46,073 (6,572) 87,728 £’000 2020 (912) (831) 795 327 34 (20,889) (22,546) (16,066) (35,723) (14,467) (11,881) 64,060 (6,526) 28,337 (1,883) (7,378) £’000 4,823 2019 884 104 Equity attributable to owners Equity attributabletoowners Net assets Inventories Current assets Trade andotherpayables Current liabilities Provisions Non-current liabilities Net currentassets/(liabilities) Or of theparent Trade andotherreceivables Deferred taxassets Intangible assets Non-current assets Assets Other reserves Lease liabilities Accumulated losses Deferred income Total equity Cash andcashequivalents Trade andotherreceivables Property, plantandequipment Contract Liabilities Lease liabilities Current taxassets Assets at fairvaluethrough profit andloss Deferred taxliabilities Contract liabilities Deferred income Share premium account Investments andloansinsubsidiary Chief Executive Officer John Dawson signed onitsbehalfby: The financialstatements onpages 144 to184were approved bytheBoard of Directors on15April2021andwere The Companymadealossfor theyearof £2,242,000 (2019:£2,016,000). The Company’sregistered number is 03252665. for theyearended31December2020 Statement offinancialpositions Group financial statements dinary shares
Note 20 28 24 22 22 23 27 18 16 16 19 19 19 19 14 12 31 31 13 15 17 11 8 (188,723) 107,946 258,017 112,746 112,746 72,304 52,455 53,926 75,982 27,258 18,727 46,743 55,491 41,161 19,716 £’000 1,006 4,475 3,605 1,003 5,839 9,370 6,912 2,291 2,515 2020 239 126 Group 73 – – – (187,695) 222,618 30,045 75,630 75,630 56,937 28,941 27,996 65,991 61,932 16,243 38,416 14,297 18,357 13,156 £’000 5,086 3,605 1,006 2,579 3,310 2,291 1,695 7,907 5,351 2,719 2019 482 359 359 95 – (126,143) 166,388 189,884 189,884 166,388 258,017 23,496 16,849 23,630 23,630 41,161 £’000 2020 Company 134 134 – – – – – – – – – – – – – – – –
(125,093) 146,761 222,618 147,120 147,013 147,013 38,416 11,072 £’000 2019 (107) 359 359 109 109 – – – – – – – – – – – – – – – 2 2
Group financial statements 145 146 from financingactivities Net cashgenerated Loans repaid Payment of leaseliabilities Redemption fee Interest paid Loan tosubsidiary Cash flows Costs of share issues of warrants Proceeds from theexercise of investmentassets Proceeds ondisposal plant andequipment Proceeds ondisposalof property, Pur from investingactivities Cash flows operating activities Net cashgenerated from/(used in) Tax credit received ordinary share capital Pr from financingactivities Cash flows Net cashusedininvestingactivities Interest received plant andequipment at 31December Cash andcashequivalents for theyearended31December2020 Statements ofcashflows Group financial statements at 1January Cash andcashequivalents and cashequivalents Net increase/(decrease)incash Cash usedinopera from operatingactivities oceeds from issue of oceeds from issueof chases of property,
tions
23, 24 Note 29 24 23 12 17 (10,801) (13,358) 38 (3,889) 41,060 30,500 46,743 (1,724) 16,243 (1,151) £’000 2,523 7,005 3,116 2020 ,185 Group 34 – – – – – – (43,589) (19,398) (16,001) (25,774) (3,508) (6,636) 32,2 16,243 54,132 (2,513) £’000 6,905 6 1,345 3,128 (866) (835) (769) 2019 ,270 104 44 – 2 (13,850) ( 1,858) 41,060 25,486 (1,858) 23,630 23,628 (1,724) £’000 2020 Company – – – – – – – – – – – 2
(53,416) ( 1,301) 54,132 (1,301) £’000 1,292 1,345 (769) 2019 (9) 11 – – – – – – – – – – 2 Share options Transactions withowners: Share options Transactions withowners: Total comprehensiveexpensefortheyear Total comprehensive expensefortheyear Total comprehensive expensefor theyear Total comprehensive expensefor theyear Loss fortheyear Year ended31December2020: Cost of share issues Cost of share issues Cost of share issues Loss fortheyear Year ended 31December2020: At 31December 2020 Transfer ofsharepremiumrelatedtowarrants Share options At 31December2020 Transfer ofsharepremiumrelatedtowarrants Issue ofsharesexcluding options Deferred taxonshareoptions Cost ofshareissues Issue of shares excluding options Share options Transactions with owners: Cost ofshareissues At 31December2019 Issue of shares excluding options Exercise of warrants Exercise of warrants Loss for theyear Year ended31December2019: Loss for theyear Year ended31December2019: At 31December2019 A A for the year ended 31 December 2020 for theyearended31December2020 Statements ofchangesinequityattributabletoownerstheparent Group financial statements Company Group comparative period–tocorrect this theyhave transferred £1,218,000 from share premium toretained earnings. Note 2–During theperiodDirectors reviewed theirpresentation of share premium andfound that theshare premium hasbeenoverstated following theissueof warrants inthe accompanying Consolida of the financialstatements, ithasnoimpactondistributable reserves of theCompany. Thedisclosure relating tosuchshare based paymentawards isdetailedinNote25 of the of the current period.Theprioryearbalancesheethasnot beenadjustedonthegrounds that theDirectors donotbelievethisitemisqualitatively material tousers r due toequitysettledshare basedpaymentsgranted toemployeesandserviceproviders insubsidiaries.Ofthe£3.4 million,£2.7million relates toamounts whichshouldhave been Note 1–In2020, theCompanyrecognized a£3.4 millionincrease initsinvestmentoperating subsidiaryOxford Biomedica(UK)Ltd (refer note14 of thefinancialstatements) Issue ofsharesexcluding options ecognised at 31December2019. Inaddition£700,000 of deferred bonusthat wasincludedinthe2019consolidated balancesheethasbeenrecognised withingroup equityinthe t 1January2019 t 1January2019 Proceeds fromsharesissued Proceeds from shares issued Value ofemployeeservices Credit inrelationtoemployeeshareschemes Credit inrelation toemployeeshare schemes Value of employeeservices Proceeds fromsharesissued Proceeds from shares issued ted FinancialStatements. 2 2 26, 27 Notes Notes 23, 24 23, 24 23, 24 23, 24 23, 24 23, 24 23, 24 25, 26 25, 26 23, 24 27 24 24 24 24 24 24 10 10 8 Ordinary Ordinary Ordinary Ordinary 84622682,291 222,618 38,416 84622681,580 222,618 38,416 11128071,580 258,017 41,161 2,291 258,017 41,161 3041204150128793(2,7)92,762 (123,077) 7,933 1,218 1,580 172,074 33,034 2,291 172,074 33,034 shares shares ,0 37,500 2,500 ,0 37,500 2,500 £’000 £’000 ,7 49,600 3,875 ,7 49,600 3,875 ,4 1,218 1,345 ,4 1,218 1,345 4 841 245 4 841 245 6 495 162 6 495 162 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
premium premium premium premium account account (1,724) (1,724) (1,218) (1,218) £’000 £’000 Shar Shar (769) (769) e e e e
Mer Mer £’000 £’000 ger ger – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Reserves Reserves T W reasury (1,218) £’000 £’000 arrant – – – – – – –
W 529(2,4)189,884 (126,143) 15,269 (1,218) 5,777 ,9 1503 147,013 (125,093) 9,492 £’000 £’000 Other arrant 1,559 ,1 1386 34,741 (173,876) 1,218 – 1
Accumulated Accumulated
1873 112,746 (188,723) 1765 75,630 (187,695) 1,6)(16,066) (16,066) 1,6)(16,066) (16,066) 625 (6,245) (6,245) 625 (6,245) (6,245) 222 (2,242) (2,242) 222 (2,242) (2,242) 206 (2,016) (2,016) 206 (2,016) (2,016) losses losses £’000 £’000 1,218 1,218 ,5 3,752 3,752 ,4 2,247 2,247 2)1.060 (26) 2)1,060 (26) 273 – – – – – – – – – – – – – – 40,000 40,000 (1,724) (1,724)
53,475 53,475 equity equity £’000 £’000 5,777 1,345 1,345 1,559 (769) (769) Total Total 273 657 657 – –
Group financial statements 147 148 — consideration severe butplausibledownsidescenariosincluding: first instance on the Group’s 2021 annual budget and forecasts for 2022. These cash flow forecasts also take into flow forecasts for aperiod of at least12monthsfrom thedate of approval of thesefinancialstatements, basedinthe In consideringthebasisof preparation of theAnnualReportandfinancialstatements, theDirectors have prepared cash a successfulequityfundraiseinJune2020. TheGroup endedtheyearwithcashandequivalentsof £46.7 million. operating activitiesfor theyearof £3.1 million.Furthermore, theGroup raised anadditional£38.3 millionincashthrough The Group madealossfor theyearended31December2020of £6.2 million,butgenerated netcashflowsfrom notes tothesefinancialstatements. The financialposition of theGroup, itscashflowsandliquidityposition are describedintheprimarystatements and Going concern significant tothefinancialstatements, are disclosedinnote2. policies. Theareas involvingahigherdegree of judgementorcomplexity, orwhere assumptionsandestimates are estimates. Italsorequires managementtoexercise itsjudgementintheprocess of applyingtheGroup’s accounting The preparation of thefinancialstatements inconformity withIFRS requires theuse of certaincriticalaccounting A summaryof themore importantGroup accountingpoliciesare setoutbelow. going concernbasishasbeenadoptedinpreparing thefinancialstatements. as itappliesintheEuropean Union.Asmore fullyexplainedintheDirectors’ Reportonpages124 to136andbelow, the also inaccordance withinternational financial reporting standards adoptedpursuanttoRegulation (EC) No1606/2002 standards inconformity withtherequirements of theCompaniesAct2006andtheseGroup financialstatements were The Group andparent Companyfinancialstatements were prepared inaccordance withinternational accounting policies have beenconsistentlyappliedtoallthefinancialyearspresented, unlessotherwisestated. The principalaccountingpoliciesadoptedinthepreparation of thesefinancialstatements are setoutbelow. These Basis ofpreparation marketed pharmaceuticalproducts. parties aswellperforming internalresearch anddevelopmentfor itsownpurposes.TheGroup currently hasno The Group isacellandgenetherapyresearch, developmentandbioprocessing businessproviding servicestothird The Company’sprincipalsubsidiaryisOxford Biomedica(UK)Limited. 31 December2020comprisetheresults of theCompanyanditssubsidiaryundertakings(togetherreferred toastheGroup). domiciled inEngland,andlistedontheLondonStock Exchange. Theconsolidated financialstatements for theyearended Oxford Biomedicaplc(Oxford BiomedicaortheCompany)isapubliccompanylimitedbyshares, incorporated and 1, Accountingpolicies for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements — — The Board hasconfidence in theGroup’s abilitytocontinueasagoingconcern for the following reasons: — — —
A substantialr The Gr end of March 2021, under longtermcontracts. The impactso Significant decr No r As noted above the Group has cash balances of £46.7 million at the end of December 2020 and £65.9 million at the evenues from newcustomers, oup hastheabilitytocontrol capitalexpenditure costsandlowerother operational spend,asnecessary, evenue downsideaffecting thecore LentiVector f COVID-19 ontheGroup anditscustomersincludingexpectedrevenues from existingcustomers eases inforecasted existingcustomermilestoneandroyalty revenues, ® platform business, capital of Oxford Biomedica(UK)Limitedthat hasbeenaccountedfor bythemerger accountingmethod. combinations whichtookplacepriorto1January2004, namelytheacquisitionin1996of 100%of theissuedshare The Group andCompanyhave electednottoapplyIFRS3’Business combinations’ retrospectively tobusiness statements of subsidiariestobringaccountingpoliciesusedinto linewiththoseof theGroup. recognised directly inthestatement of comprehensive income.Where necessary, adjustmentsare madetothefinancial goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is cost of the acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as initially at theirfairvaluesat theacquisitiondate, irrespective of theextentof anyminorityinterest. Anyexcess of the Identifiable assetsacquired, andliabilities andcontingentliabilities assumedinabusinesscombination are measured fair valueof theassetstransferred, equityinstrumentsissued,andliabilitiesincurred orassumedat thedate of exchange. Business combinations are accountedfor usingtheacquisitionmethod.Thecostof anacquisitionismeasured asthe All intragroup transactionsandbalancesare eliminated onconsolidation. not currently have anyassociates. to governthefinancialandoperating policies of theentitysoastoobtainbenefits from itsactivities.The Group does consolidated from thedate at whichcontrol istransferred totheGroup. Control existswhere theGroup hasthepower 31 Decembereachyear. Subsidiariesare entitiesthat are directly orindirectly controlled bytheGroup. Subsidiariesare The consolidated financialstatements comprisetheCompanyanditssubsidiaryundertakings for theyearto Basis ofconsolidation financial statements. Of thesestandards that becameeffective from 1January2019, onlyIFRS16hadamaterial impactonthe Group — — — — — — The Group hasadoptedthefollowing IFRSsinthesefinancialstatements. Accounting developments and therefore have prepared thefinancialstatements onagoingconcernbasis. continue tomeetitsliabilitiesastheyfallduefor at least12monthsfrom thedate of approval of thefinancialstatements Taking accountof thematters describedabove,theDirectors are to confident that theGroup willhave sufficientfunds operations tobeminor. Further information regarding thisissueisprovided onpage76. significantly its affected thefiscal,monetaryand regulatory landscapeintheUK, Grouphasassesseditsimpacton The Directors have alsoconsidered theimpactof theUK’sdecisiontoleave theEuropean Union.AlthoughBrexit has — — — ge proportion of 2021forecasted revenues are covered bybindingpurchase orders androlling customer have notbeenrestated andare reported underIAS17. Annual Impr Amendments toIFRS9:Pr Amendments toIAS28:LongtermInter Amendments toIAS19:PlanAmendment,CurtailmentorSettlement. IFRIC 23:UncertaintyoverIncomeT IFRS 16:Leases.Thishasbeenadoptedusingthemodifiedr The Gr customer basethroughout thelockdown period, The Gr forecasts whichgiveadditionalcertaintytorevenues overthenext12months, A lar oup’s historyof beingabletoaccesscapitalmarkets. oup haskey worker status whichallowscontinuityof providing servicestotheGroup’s financiallystable ovements toIFRSStandards 2015-2017Cycle. epayments Features withNegative Compensation ax Treatments. ests inAssociates andJointVentures. etrospective method and as a result the comparatives etrospective methodandasaresult thecomparatives
Group financial statements 149 150 account for thecostof these items. revenue recognition purposes,withacorresponding entrybeingpassedwithin costof goodsanddepreciation to batches are recognised at thefairvalueof thegoods/servicesprovided inrelation thosestockand fixed assets for received inpartiallieuof cashpaymentsfrom customersfor commercial developmentservicesandbioprocessing Non-cash consideration isrecognised at fairvaluethrough profit andloss.As required byIFRS15, stockandfixed assets not considered tobematerial rights. such are recognised whenthecustomerexercises the optiontoobtainthat licence.Optionstotechnologylicencesare Options totechnologylicencesare considered toform partof thetechnologylicenceperformance obligation andas to therelevant performance obligation. receivable ondeliveryof amilestoneperformance obligation represents variableconsideration andhave beenallocated on a percentage of completionbasis,but taking into account the likelihood of achievement of the deliverable. Amounts Milestones related totheprovision of supportservicesare considered tobenon-binaryMilestonesandare recognised and willberecognised infullonceitisdeemedhighlyprobable that theobligation willbemet. example, support.Milestonesrelated totheachievementof specificdeliverablesare considered tobebinaryMilestones Milestones that are considered tobebinaryrelate to theachievementof specificeventsrather thantheprovision of, for in therelevant agreements orcontracts.Eachmilestoneisdeterminedaseitherbinarynon-binary. obligations astheyinvolvethetransfer of adistinctgoodorservice,determinedwithreference toconditionsstipulated Milestones relating tobioprocessing orprocess developmentactivitieshave beenidentifiedasseparate performance not beenmet. milestone payments.Thecriteriafor recognising thesetechnologylicencesas“righttoaccess”hastherefore Group. The Group is incentivised separately for its performance obligations in relation to development work and “right touse”licenceasourcustomersare abletoconductdevelopmentworkonthelicenceindependentof the The grantingof thetechnologylicencestoGroup’s background intellectualproperty andknow-howconstitutesa licence transfers tothecustomer. than “righttoaccess”licences.Assuch,therevenue from theselicencesisrecognised at thepointintimeat whichthe Technology licences that have been established by the Group have all been determined as “right to use” licences, rather service isrendered onapercentage of completionbasis. Revenues for providing process developmentactivitiestopartnersare recognised duringtheperiodinwhich recognise therevenue. Consideration received inexcess of thestageof completionwillbedeferred untilsuchtimeasitisappropriate to presented intheStatement of financialposition. exceed progress billingsispresented separately asacontractassetwithinthenotetoTrade andOtherreceivables as The gross amountduefrom customersonallpartnershipsinprogress for whichcostsincurred plusrecognised profits as theprocesses are carriedout.Progress isdeterminedbasedontheachievementof verifiablestages of theprocess. Bioprocessing of clinical/commercial product for partnersisrecognised onapercentage of completionbasisovertime Platform and developmentprogrammes. development servicestopartners,product andtechnologylicencetransactions,royalties, options,andfundedresearch Revenue comprisesincome derived from bioprocessing of clinical product for partners,fees charged for providing Revenue comprehensive incomeintheperiodwhichtheyarise. of financialpositiondate. Differences arisingdueto exchange rate fluctuations of are taken tothe statement Assets andliabilitiesinforeign currencies are retranslated intosterlingat therates of exchange rulingat theStatement Transactions inforeign currencies are translated intosterlingat therate of exchange rulingat thetransactiondate. Foreign currencies for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements retirement benefits. separately from thoseof theGroup inindependentlyadministered funds.TheGroup doesnotoffer anyotherpost- charged tothestatement of comprehensive incomeonanaccrualsbasis.Theassetsof thepension schemeare held Employee benefitcosts,notablyholidaypayandcontributions totheGroup’s defined contributionpensionplan, are Employee benefitcosts period inwhichitisincurred. Research, development andbioprocessing expenditure is charged tothestatement of comprehensive income inthe Research, developmentandbioprocessing deferred revenue isincludedinprepayments. included in accruals. Where revenue is spread over a number of accounting periods, the royalty attributable to the arising from suchpartners’ licencesare treated ascostof sales.Where royalties duehave notbeenpaidtheyare The Group’s products andtechnologiesincludetechnologyelementsthat are licensedfrom third parties.Royalties directly attributable third partycosts.Costsare recognised asincurred. The costof bioprocessing clinicalproduct for partnersincludestherawmaterials, labourcosts,overheadsandother material andthird partycosts.Costsare recognised asincurred. The costof customerdevelopmentproject activitiesincludesthelabourcosts,overheadsandotherdirectly attributable project activities,androyalties arisingonpartners’licences. Cost of salescomprisesthecostof bioprocessing clinicalproduct for partners,thecostof customerdevelopment Cost ofsales the cost-to-costmethod. Research anddevelopmentrevenue andassociated costsare recognised overtime.Progress isdeterminedbasedon Royalty revenue isrecognised astheunderlyingsalesoccur. allocated totherelevant performance obligation. Amounts receivable ondeliveryof amilestoneperformance obligation represents variableconsideration andhave been incurred, orovertheestimated periodtocompletionof therelevant phaseof developmentorassociated clinicaltrials. Non-binary milestonesare recognised ona percentage of completion basis in the period in which related costsare or achievementof specifiedsalesvolumes,are recognised infullwhenthe relevant eventhasoccurred. stipulated inthelicenceagreement have beenmet.Paymentslinked to“success”suchasregulatory filingorapproval, are binary and will be recognised in full once it is deemed highly probable that the specific performance obligations Amounts receivable inrespect of milestonepaymentsare considered tobeseparate performance obligations which not beenmet. milestone payments.Thecriteriafor recognising thesetechnologylicencesas“righttoaccess”hastherefore Group. The Group is incentivised separately for its performance obligations in relation to development work and “right touse”licenceasourcustomersare abletoconductdevelopmentworkonthelicenceindependentof the The grantingof theproduct licencestotheGroup’s background intellectualproperty andknow-howconstitutesa licence transfers tothecustomer. than “righttoaccess”licences.Assuch,therevenue from theselicencesisrecognised at thepointintimeat whichthe Product licences that have beenestablishedbytheGroup have allbeendeterminedas“righttouse”licences,rather Product
Group financial statements 151 152 Lease paymentsincludedinthemeasurement of theleaseliabilitycomprise fixed payments. sources andmakes certainadjustmentstoreflect theterms of theleaseandtype of theassetleased. The Group determinesitsincremental borrowing rate byobtainingrelevant interest rates from externalfinancing incremental borrowing rate. Generally, the Group usesitsincremental borrowing rate as thediscountrate. date, discountedusingtheinterest rate implicitintheleaseor, ifthat rate cannotbereadily determined,theGroup’s The lease liability is initially measured at the present valueof the lease payments that are not paidat the commencement any, andadjustedfor certainre-measurements of theleaseliability. as thoseof property andequipment.Inaddition,theright-of-use asset is periodicallyreduced byimpairmentlosses,if right-of-use assetwillbedepreciated overtheusefullife of theunderlyingasset,whichisdetermined onthesamebasis lease termorthecostof theright-of-use assetreflects that theGroup willexercise apurchase option.Inthat casethe the endof theleaseterm,unlesstransfers ownershipof theunderlyingassettoGroup bytheendof the The right-of-use assetissubsequentlydepreciated usingthestraight-linemethodfrom thecommencementdate to lease incentivesreceived. to dismantleandremove theunderlyingassetortorestore theunderlyingassetorsiteonwhichitislocated lessany payments madeat orbefore thecommencementdate, plusanyinitialdirect costsincurred andanestimate of costs asset isinitiallymeasured at cost,whichcomprisestheinitialamountof theleaseliabilityadjustedfor anylease The Group recognises aright-of-use assetandaleaseliabilityat theleasecommencementdate. Theright-of-use components asasingleleasecomponent. leases of property the Group has elected to separate non-lease components and account for the lease and non-lease consideration inthecontracttoeachleasecomponentonbasisof itsrelative stand-alone prices.However, for the At commencement or on modification of a contract that containsa leasecomponent,theGroup allocates the As alessee Leases subsidiary takingtheform of aloantosubsidiaries.TheEBTisconsolidated withintheGroup financialstatements. statements, theinvestmentinOxford BiomedicaEmployeeTrust forms partof theInvestmentsandloansin 2013 Deferred BonusShare Awards madetoExecutive Directors andemployees.Within theCompanyfinancial The Oxford BiomedicaEmployeeBenefit hasbeensetuptoholdmarket-purchased sharesTrust (EBT) tosettlethe Employee Benefit Trust resulting inanincrease inthecostof investmentandacorresponding credit toreserves. statements. Inaccordance withIFRS2theCompanyhastreated theawards asacapitalcontributiontothesubsidiaries, with IFRS2’Share-based Payments’,theexpenseinrespect of theseawards isrecognised inthesubsidiaries’financial Options over the Company’s shares have been awarded to employeesof Oxford Biomedica (UK) Ltd. In accordance exercised theproceeds received are credited toequity. options that have vested, with no charge for those options which were forfeit prior to vesting. When share options are exercisable basedonforfeiture suchthat at theendof thevestingperiodcumulative charge reflects theactual At eachfinancialyearend,theGroup revises itsestimate of thenumber of optionsthat are expectedtobecome the deferred bonusplanisbasedonthemarket valueof theunderlyingshares at thedate of grantof theseoptions. account theperformance conditionsunderwhichtheoptionswere granted.Thefairvalueof optionsgrantedunder schemes, whichincludesmarket conditionperformance criteria,ismeasured usingaMonteCarlomodeltaking into share save schemeismeasured usingtheBlack-Scholes model.Thefairvalueof optionsgrantedundertheLTIP become unconditionallyentitledtotheoptions.Thefairvalueof optionsgrantedundertheshare optionschemesand in equity. Thefairvalueismeasured at thedate of grantandspread overtheperiodduringwhichemployees is recognised asanexpenseof employmentinthestatement of comprehensive incomewithacorresponding increase allow group employeestoacquire shares of theCompanysubjecttocertaincriteria.Thefairvalueof optionsgranted The Group’s employee share optionschemes, long termincentiveplans, a Sharesave scheme and deferred bonus plans Share basedpayments for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Short termorlow-valueleases of theStatement of FinancialPosition. The Group presents right-of-use assets in ’property, plant andequipment’ and lease liabilitiesas a category on the face or isrecorded intheProfit orLossifthecarryingamount of theright-of-use assethasbeen reduced to zero. If aleaseliabilityisre-measured, acorresponding adjustmentismadetothecarryingamountof theright-of-use asset, — — — which theassetorliabilityisrecovered orsettled. Measurement of deferred taxliabilitiesandassets reflects thetaxconsequenceexpectedtofallfrom themannerin financial positiondate. or liability settled, based on tax rates and laws that have been enacted or substantially enacted by the Statement of Deferred taxismeasured at theaverage taxrates that are expected toapplyintheperiodswhichassetisrealised against whichthedeductibletemporarydifference canbeutilised. regarded asprobable that there willbesuitabletaxableprofits withinthesamejurisdictionin foreseeable future tax group. Anyremaining deferred taxassetisrecognised only when,onthe basis of allavailable evidence, itcanbe base. Deferred taxliabilitiesmaybeoffset againstdeferred taxassetswithinthesametaxableentityorqualifyinglocal Temporary differences are differences betweenthecarryingamount ofthe Group’s assetsandliabilitiestheirtax Deferred tax is calculated in respect of all temporary differences identified at the Statement of financial position date. using the tax rates and laws that have been enacted, or substantially enacted, by the Statement of financial position date. Current tax,includingUKcorporation taxandforeign tax,isprovided at amountsexpectedtobepaid(orrecovered) have beenfiledandagreed. within tradeandotherreceivables intheStatement of financialposition.Thecredit ispaidinarrears oncetax returns accounted for asareduction inresearch anddevelopmentcostsinthestatement of comprehensive income,and development expenditure. TheGroup receives aResearch andDevelopmentExpenditure Credit (‘RDEC’) whichis In 2020andbefore, theGroup wasentitledtoclaimtaxcredits intheUnitedKingdomfor certainresearch and Taxation interest rate method. Italsoincludestherevaluation of externalloansdenominated inaforeign currency. Finance incomeandcostscompriseinterest incomeandinterest payableduringtheyear, calculated usingthe effective Finance incomeandcosts received, itisincludedwithinaccruedincomeontheStatement of financialposition. deferred incomeontheStatement of financialposition,whilstwhere grantincome recognised exceeds grantincome and administrative expenses.Where grantincomereceived exceeds grantincomerecognised, itisincludedwithin of comprehensive income,andtherelated costsare includedwithinresearch, developmentandbioprocessing costs, costs whichtheyare intendedtocompensate. Grantincomeisincludedasotheroperating incomewithinthestatement Income from governmentandothergrantsisrecognised overtheperiodnecessarytomatch themwiththerelated Grants Group recognises leasepaymentsassociated withtheseleasesasanexpenseonastraight-linebasisovertheleaseterm. The Group haselectednottorecognise right-of-use assetsandleaseliabilitiesof shorttermandlow-valuelease.The The leaseliabilityismeasured at amortisedcostusingtheeffective interest method.Itis re-measured if: e isachangeintheGroup’s estimate of theamountexpected tobepayableunderaresidual future leasepayments; oup changesitsassessmentof whetheritwillexercise apurchase, extensionortermination options;or ther ther the Gr e isarevised in-substancefixed leasepayment.
Group financial statements 153 154 Leasehold improvements Freehold property future impairmentsbeingrequired after awritebackwasaccountedfor. be theGroups trackrecord of improved financial results across thelast three to four years,aswelltheexpectation of recognised onitsinvestmentinsubsidiaries.Factors whichwillbetaken intoaccountwithregard tothisdecisionwill At yearendtheDirectors willassesstherequirement towritebackaportionor allof anyimpairmentpreviously subsidiaries for thispurpose. that reference tothemarket capitalisation of theGroup isanappropriate externalmeasure of thevalueof theCompany’s out inIAS36, andthecarryingvalueof theCompany’sinvestmentsinsubsidiariesisadjusted.TheDirectors consider resulting inadecrease inmarket capitalisation, theDirectors considerthistobeatriggerof animpairmentreview asset material andsustainedshortfallinthemarket capitalisation, orasignificantandsustainedchangeinthebusiness At each yearendtheDirectors review thecarryingvalueof theCompany’sinvestmentinsubsidiaries.Where there isa Such investmentsare subjecttoreview, andanyimpairmentischarged tothestatement of comprehensive income. Investments in subsidiary undertakings, including shares and loans, are carried at cost less any impairment provision. awards asacapitalcontributiontothesubsidiaries,resulting inanincrease inthecostof investment. awarded toemployeesof subsidiarycompanies.Inaccordance withIFRS2,theCompanytreats thevalueof these Investments are carriedat costlessanyprovision madefor impairment.OptionsovertheCompany’s shares have been Investments insubsidiaries length of thepatent life; current livesrangefrom 5to19years. determined, theassetiscarriedat costbuttestedannuallyfor impairment.Intangible assetsare amortisedoverthe economic life from thetimeitbecomesavailable for use.Where theusefullife of theintangibleassetcannotbe Where theintangibleassethasafinitelife, amortisation ischarged onastraight-linebasisoverthe remaining useful Intangibles review, itisidentifiedthat theassetismore appropriately identifiablewiththat other category of fixed asset. Assets capitalisedunderacategory of fixed assetsmaybetransferred toanothercategory withinfixed assets if, upon once theassetisavailable for use. Assets underconstructionare capitalisedthroughout thecourseof theconstructionperiodwithdepreciation starting is performed. The bioprocessing plantsare reviewed annuallyfor impairmenttriggersand,where necessary, afullimpairmentreview should theasset’ssellingpriceexceed itsnetbookvalue. The assets’residual valuesandusefullivesare reviewed annually. Residualvaluesare setat zero andwillbereassessed Bioprocessing andlaboratory equipment Office equipmentandcomputers when itisavailable for use.Theprincipalannualrates usedfor thispurposeare: a straight-linebasisovertheexpectedusefuleconomiclivesof theassetsconcerned.Depreciation of anassetbegins Depreciation iscalculated towriteoff thecost of property, plantandequipmentlesstheirestimated residual valueson condition for itsintendeduse. Cost includestheoriginalpurchase priceof theassetandanycostsattributable tobringingtheassetitsworking Property, plantandequipmentare carriedat cost,togetherwithanyincidentalexpensesof acquisition,lessdepreciation. Property, plantandequipment for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements (or theremaining leasetermifshorter) 20 – 33% 20% 10% 10% 10% Deferred incomeprimarilyrelates totheadvance consideration received for grantsandleaseincentives. Deferred income work andbioprocessing batches, aswelloptionsandfundedresearch anddevelopmentactivities. Contract liabilitiesprimarilyrelate totheadvanceconsideration received from customersfor commercial development Contract liabilities are presented asnon-current liabilities. interest method.Trade payables are classified ascurrent liabilitiesifpaymentisduewithinoneyearorless.Ifnot,they Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective Trade payables position untilsuchtimeastherestrictions relating tothoseamountshave beenlifted. Deposits consistof amountsheldinescrow andisincludedwithinotherreceivables withintheStatement of financial Deposits investments withoriginalmaturities of three monthsorless. Cash andcashequivalentsincludeinhand,bankdepositsrepayable ondemand,andothershorttermhighlyliquid Cash andcashequivalents due according totheoriginaltermsof thereceivables. under theexpectedcredit lossmodelasestablishedbyevidencethat theGroup willnotbeabletocollectall amounts components andare subsequentlymeasured at amortisedcost.TheGroup recognises lossallowancesfor receivables Trade receivables are recognised initiallyat thetransactionpriceastheseassetsdonothave significantfinancing Trade receivables less applicablevariablesellingexpenses. method. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, Inventories are stated at thelowerof costandnetrealisable value.Costisdeterminedusingtheweightedaverage Inventories valued at amortisedcost. Bank deposits with originalmaturities betweenthree months and twelvemonthsare includedin current assetsandare Bank deposits Other investmentsheldbytheGroup are classifiedas at fairvaluethrough profit andloss. Investments The gainorlossonAssetsat fairvaluethrough profit andlossis recognised inthestatement of comprehensive income. Assets at fairvaluethrough profit andloss Financial assets
Group financial statements 155 156 — — within thecontract.Thesehave beenidentifiedasbeing: as perIFRS15, theGroup isrequired toexercise judgementinidentifying thedistinctperformance obligations contained obligations Upon review of certaincustomercontractsandpreparation of accountingpaperssettingoutthetreatment performance distinct of Number already beenmet. as the underlying sales are madeeven though the performance obligation, in terms of the technology license, has within thecollaboration agreements qualifyfor theroyalty exemption available underIFRS15andwillonlyberecognised recognition revenue of revenue recognition basedontheachievementof therelevant performance obligation. The salesroyalties contained timing and revenue of agreement; secondlythefairvalueallocation of revenue toeachperformance obligation; andthirdly thetimingof allocation obligations, period. Firstly, inrelation tothenumberof distinctperformance obligations containedwithineachcollaboration performance of The Group hasidentified three key areas of judgementwithinthecollaboration agreements entered intoduringthe Identification revenues: Contract Judgements Key accountingmatters discussed below. risk of causingamaterial adjustmenttothecarryingamountsof assetsandliabilitieswithinthenextfinancialyearare assumptions. Thekey sources of estimation uncertaintyandthecriticalaccountingjudgementsthat have asignificant the future inanumberof areas. Actual results maybedifferent from thoseestimated usingthesejudgementsand In applyingtheGroup’s accountingpolicies,managementisrequired tomake judgementsand assumptionsconcerning 2, Criticalaccountingjudgementsandestimates the issueof newshares bytheCompany, thereby attracting merger relief unders612ands613of theCompaniesAct2006. A merger reserve isusedwhere more than90%of theshares inasubsidiaryare acquired andtheconsideration includes Merger reserve Ordinary shares are classifiedasequity. Costs of share issuesare charged totheshare premium account. Share capital to theobligations. Theincrease intheprovision duetothepassageof timeisrecognised asafinancecost. a pre-tax discountrate that reflects thecurrent market assessments of thetimevalue of moneyandtherisks specific Provisions are measured at thepresent valueof theexpenditure expectedtoberequired tosettletheobligation using obligation; andtheamounthasbeenreliably estimated. Provisions are notrecognised for future operating losses. constructive obligation asaresult of pastevents;itisprobable that anoutflow of resources willbe required tosettlethe Provisions for dilapidation costs and otherpotentialliabilitiesare recognised whenthe Group hasapresent legalor Provisions for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements
Milestones r The grantingo elating tobioprocessing orprocess developmentactivities f thetechnologylicences those estimates. the next financial year, are discussed below. The nature of estimation means that actual outcomes could differ from that have asignificantrisk of causingamaterial adjustmenttothecarryingamounts of assetsandliabilitieswithin The key assumptionsconcerningthefuture, andother key sources of estimation uncertaintyat thereporting date, Estimations would have been£2.4 millionhigherwithacorresponding decrease inrevenues infuture years. contract where theseriesguidanceapplies.Ifrevenue hadbeenrecognised basedonanactualbatch price,revenues IFRS 15appliesandhastherefore recognised revenue basedonaveraging thebatch priceovertheperiodof the prices where the batch price will vary across the period of the contract. The Group has deemed that the series guidance within batch bioprocessing During 2020theGroup entered intoasupplyagreement withacustomerfor thesupplyof bioprocessing batches varying with contract Customer obligations were deemedtohave been met. would have been£9.4 millionlowerwiththerevenue expectedtoberecognised infuture whentheperformance been achieved.Ifitwasjudgedthat theperformance obligations onlicencesgrantedin2020hadnotbeenmet,revenues made astowhetherthelicencefee performance obligation related tothegrantingof thelicencetocustomerhas licence revenue isassessedaspartof theIFRS15accountingpaperprepared for eachagreement andajudgementis revenues revenue based ontheachievementof therelevant performance obligation. Theindividualfactorsandaspectsrelating to licence technology One of thekey judgementalareas identifiedwithinthecollaboration agreements isthetiming of recognition of licence recognition: revenue of Timing — — — obligations. Key areas of judgementare assessedtobe: obligation contracts, theGroup exercises judgmentinestimating thestandalonesellingpriceof eachof theseperformance performance each to Because thererevenue isnoreadily available market pricefor manyof theperformance obligations containedinthecustomer of allocation value fair The
customer contractequivalentrates, activities. TheGroup assessesthefulltimeequivalentrate intermsthestandaloneequivalentrate of itsother The standalonesellingpriceintermso batches intermsthestandalonesellingpriceof itsothercustomercontractbatch sellingprices, The standalonesellingpriceo market of thetarget indication andothermarket related observableinputs, terms thestandalonesellingpriceof previously recognised customertechnologylicences,butalsothesize of the The standalonesellingpriceo f technology licences. The Group assesses the stand alone selling price of licences in f technologylicences.TheGroup assessesthestandalonesellingpriceof licencesin f bioprocessing batches. The Group assesses the stand alone selling price of the f bioprocessing batches. TheGroup assesses thestandalonesellingpriceof the f the annual full time equivalent rate to charge for process development f theannualfulltimeequivalentrate tocharge for process development
Group financial statements 157 158 corresponding credit tocontractliabilities(note19).Thisrevenue willberecognised asthebatches completebioprocessing. Consequently, bioprocessing revenue of £1.4 million(2019:£1.8 million)hasnotbeenrecognised during2020withthe number of batches whichgooutof specification overtheassessmentperiod. number of bioprocessing batches undertaken, thepercentage of completionof thosebioprocessing batches, andthe 10% higher or lower, the estimate would be £137,000 higher or lower. The estimate will increase or decrease based on the the numberof bioprocessing batches actuallygoingoutof specification infuture. Ifthehistoricalpercentage hadbeen process at year end. This estimate, basedon the historical percentage, may be significantly higher orlower depending on across theassessedperiodtorevenue recognised onbatches whichhave notyetcompletedthebioprocessing batches across thelastfour years,andhasappliedthepercentage of outof specification batches tototalbatches produced which theproduct isbioprocessed. In calculating thisestimate theGroup haslooked at historicalrates of outof specification recognised andwhichmaybereversed shouldtheproduct gooutof specification duringthe remaining periodover Group hasassessedtheneedtoincludeanestimate of bioprocessed product for whichrevenue haspreviously been As theGroup hasnowbeenbioprocessing product across anumberof years,andalsoinacommercial capacity, the as theprocesses are carriedout.Progress isdeterminedbasedontheachievementof verifiablestages of theprocess. Bioprocessing of clinical/commercial product for partnersisrecognised onapercentage of completionbasisovertime Provision for outof specification bioprocessing batches amounts to£3.3 million(2019:nil). payments toaccountfor thecostof theseitems.Thevalueof revenue recognised during2020related totheseitems recognition purposes,withacorresponding entrybeingpassedwithincostof goods,depreciation andoperating lease commercial developmentservicesandbioprocessing batches ithasprovided at theirmarket valuefor revenue and fixed assets in partial lieu of cash payments from customers. As required by IFRS 15, the Group has valued the During 2020, aspartof itssupplyanddevelopmentagreements withcustomers,theGroup received certainstockitems Stock andequipmentreceived inlieuof cashpaymentfor bioprocessing anddevelopmentservices percentage pointshigherorlower, revenue recognised intheperiodwouldhave been£667,000 higherorlower. the workpackages whichremain inprogress at yearendis£6,677,000. Iftheassessedpercentage of completionwas10 development workpackage. Thevalueof therevenue recognised andtherelated contractassetraisedwithregard to such require estimation in terms of the assessment of the correct percentage of completion for that specific process fixed priceprocess developmentworkpackages. Revenuesare recognised onapercentage of completionbasisandas As itsatisfies itsperformance obligations theGroup recognises revenue andthe related contractassetwith regard to Percentage of completionof fixed priceprocess development revenues higher orlower, revenue recognised intheperiodwouldhave been£2,126,000 higherorlower. which remain inprogress at yearendis£21,260,000. Iftheassessedpercentage of completionwas10percentage points batch. Thevalueof therevenue recognised andtherelated contractassetraisedwithregard tothebioprocessing batches assessment of thecorrect stage of completion includingtheexpectedcostsof completionfor that specificbioprocessing process. Revenues are recognised onapercentage of completionbasisandassuchrequire estimation intermsof the as theprocesses are carriedout.Progress isdeterminedbasedontheachievementof verifiablestages of thebioprocessing Bioprocessing of clinical/commercial product for partnersisrecognised onapercentage of completionbasisovertime Percentage of completionof bioprocessing batch revenues for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Net debt to minimise the cost of capital. to minimisethecostof capital. order to provide returns to shareholders and benefits for other stakeholders, and tomaintain anoptimalcapital structure The Group’s objectiveswhenmanagingcapitalare tosafeguard theGroup’s abilitytocontinueasagoingconcernin Capital Management The fairvalueof shorttermdepositswithamaturity of oneyearorlessisassumedtobethebookvalue. Fair valueestimates hedge accountinghasnotbeenused. There were no material derivatives at 31 December 2020 or 31 December 2019 which have required separation, and Derivative financialinstrumentsandhedging Trade debtorsare monitored tominimisetheriskof loss(note16). with theGroup’s policytominimisetheriskof loss. Cash balancesare mainlyheldonshorttermdepositswithfinancialinstitutionsacredit rating of at leastA,inline (c) Credit risks If interest rates hadbeen1%higherin2020theimpactoncashinterest paidwouldhave been£nil(2019:£215,000). of £43.6 millionplusaredemption fee of £0.9 million, andthesecurityoverassetsof theGroup wasremoved. financed through £53.5 million of equityissuedtoNovoHoldingsinMay2019. Theloanfacilitywasfully repaid at acost On 28June2019theGroup repaid its$55million(£43.6 million)loanfacilitywithOaktree CapitalManagement(“Oaktree”) of bank interest rates, interest receivable onbankdepositsin2020wasjust£34,000 (2019:£104,000). to meetdayoperational requirements andpreserving thesecurityof investedfunds.Withthecurrent lowlevel The Group’s policyistomaximiseinterest receivable ondeposits,subjecttomaintainingaccesssufficientliquidfunds (b) Interest rate risk hedging of foreign currency cashflowsisundertaken. £228,000 (2019:£343,000). TheGroup’s policyistoholdthemajorityof itsfundsinSterling andUSDollars.Noother Euros. Had the£/€exchange rate been10%different, theimpactoncostin2020wouldhave beenapproximately The Group also has exposure to the £/€ exchange rate due to the need to fund certain expenditure denominated in lead toanunrealised foreign exchange gain/lossof £nilmillion(2019:£4.3 million)onanyoutstandingloan balance. £/$ exchange rate wouldhave hadanimpactof approximately £1,351,000 (2019:£1,373,000) overtheyearandwould payable inEuros andUSDollars.Themajorityof operating costsare denominated inSterling. A10%difference inthe In 2020 the Group’s revenues were mostly receivable in Sterling and US Dollars,andcertain of its expenditures were (a) Foreign exchange risk trading infinancialinstruments. each Board meeting.TheGroup doesnotusefinancialderivatives, anditistheGroup’s policynottoundertake any reviewed annually. TheGroup’s agreed policiesare implementedbytheChiefFinancialOfficer,at whosubmits reports is domiciled. Monitoringof financialriskispart of theBoard’s ongoingriskmanagement,theeffectiveness ofwhich The Group hasasimplecorporate structure withtheCompanyanditsonlyoperating subsidiarybothbeingUK Financial riskfactors 3, Financialriskmanagement Note 1:Represents Cashbalanceonlyasnodebt. Debt/equity Equity Group (46, 115,071 £’000 (41%) 2020 2020 743) 1
(16,243) 75,630 £’000 2019 (21%)
1
Group financial statements 159 160 Revenue 2020 measure used for thepurposeof makingdecisionsaboutallocating resources andassessingperformance of segments. Revenues, Operating EBITDA andOperating lossrepresent ourmeasures of segmentprofit andlossastheyare aprimary tform –thissegmentconsistsof therevenue generating bioprocessing andprocess developmentactivities (i) Officer, ChiefPeopleOfficerandGeneralCounsel. TheSETmonitors the performance of the Group intwo businesssegments: Directors, ChiefMedicalOfficer, Chief TechnicalOfficer, ChiefScientific Officer, ChiefBusiness Officer,Chief Operations The chiefoperating decision-maker hasbeenidentifiedastheSeniorExecutive comprisingtheExecutive Team (SET), Segmental reporting 4, Segmental analysis for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements 2019 reviewed bythechiefoperating decision-maker. Allassetsare located withintheUnited Kingdom. A segmentalorgeographicalsplitof assetsandliabilities is notprovided becausethisinformation isnotreceived or operating decision-maker andtheoriginof allrevenues istheUnitedKingdom. A geographicalsplitof operating lossisnotprovided becausethisinformation isnotreceived orreviewed bythechief specifically are apportionedbetweenthesegmentsusing relevant metrics suchasheadcountordirect costs. Costs are allocated tothesegmentsonaspecificbasisasfar possible.Costswhichcannot readily beallocated capabilities of £0.8 million(2019:£0.9 million)andisincludedwithinthePlatform segment. Other operating incomeof £0.8 million(2019:£0.9 million)includesgrantincometodevelopoursupplychain ting EBITDA (EarningsBefore Interest, Tax, Depreciation, Amortisation, revaluation of investmentsandAssetsat fairvaluethrougha profit andloss,Share BasedPayments)is 1 Revenue Revenues, otheroperatingincomeand lossbysegment (ii) Operating EBITDA Other operating income Loss before tax Net financecost Operating profit/(loss) Change infairvalueof assetheldat fairvaluethrough profit andloss Depreciation, amortisation andshare basedpayment Operating EBITDA Other operating income Loss before tax Net financecost Operating profit Revaluation of investments Depreciation, amortisation andshare basedpayment
Opera options. Areconciliation toGAAPmeasures isprovided onpage42. non-GAAP measure often usedasasurrogate for operational cashflowasitexcludes from operating profit orlossallnon-cashitems,includingthecharge forshare basedpayments developments andtechnicalintellectualproperty withintheLentiVector undertaken for third parties(i.ethepartnerprogrammes CDMObusiness).Italsoincludesinternaltechnology Pla therapy products (genetherapeutics)whichare ownedbytheGroup. Pr cell and gene oduct –thissegmentconsistsof theclinicalandpre-clinical developmentof invivoandexcellgene ¹ ¹ ® platform. Platform Platform (20,166) (11,048) (11,699) 13,857 (6,584) 50,997 (1,883) £’000 £’000 87,117 1,979 (831) 884 795
Pr Pr (6,518) (7,673) 13,063 (1,155) oduct oduct £’000 £’000 5,699 6,458 (759) 611 – – – –
(20,889) (12,203) (14,467) (5,694) (6,572) 64,060 (6,422) (1,883) (7,343) £’000 £’000 87,728 (5,241) 7,339 T T (878) (831) otal otal otal otal 884 795
2020 in thetablebelowisdenominated inGBPandisgenerated intheUK. Revenue isdisaggregated bythetypeof revenue whichisgenerated bythecommercial arrangement.Revenueshown Disaggregation ofrevenue 2019 Bioprocessing/Commercial development significant licences or milestones were achieved (2019: £11.5 million). significant licencesormilestoneswere achieved(2019:£11.5million). for Orchard therapeutics.SioGeneTherapies(formerly Axovant GeneTherapies) is notincludedin2020 as nofurther AstraZeneca andJuno/BristolMyersSquibb, adecrease inthelevelof developmentandmanufacturingactivities more than10% of the Group’s revenues. The change year on year is due to thevolumeof activitiesfor new customers, In 2019Novartis,SioGeneTherapies(formerly Axovant GeneTherapies)andOrchard Therapeuticseachgenerated In 2020AstraZeneca, Novartis,andJuno/Bristol MyersSquibbeachgenerated more than10%of theGroup’s revenues. Revenue bycustomerlocation revenues derivepredominantly from Europe: The Group’s revenue deriveswhollyfrom assetslocated intheUnitedKingdom.Analysedbylocation theGroup’s Revenue bygeographicallocation Bioprocessing/Commercial development Total revenue Rest of world Total Licence fees, milestonesandroyalties Total Licence fees, milestonesandroyalties Eur ope Platform Platform 87,117 50,997 67,893 19,224 45,715 £’000 £’000 5,282
Pr Pr 34,911 87,728 13,063 52,817 11,510 £’000 oduct oduct £’000 £’000 2020 2020 1,553 611 611 –
68,504 64,060 87,728 64,060 46,602 47,268 19,224 £’000 £’000 £’000 16,792 17,458 2019 T T otal otal otal otal
Group financial statements 161 162 6, Financeincomeandcosts The Companyhadnoemployeesduringtheyear(2019:zero). financial statements. Resear Office andmanagement three month LIBOR, subject to a minimum of 1%. three monthLIBOR,subjecttoaminimumof 1%. Up to29June2019, interest payableconsistedof thecashinterest paidontheOaktree loanfacilityat 9.0% plusUS$ of £43.6 millionplusaredemption fee of £0.9 million,andthesecurityoverassetsof theGroup wasremoved. financed through £53.5 million of equityissuedtoNovoHoldingsinMay2019. The loanfacilitywasfully repaid at acost On 28June2019theGroup repaid its$55million(£43.6 million)loanfacilitywithOaktree CapitalManagement(“Oaktree”) Net financecosts Total finance costs Interest payable Revaluation of liabilitiesinforeign currency Bank inter Finance income: Group D Senior Executive Team. Further information abouttheremuneration of individualDirectors, includingthehighestpaid The key managementfigures aboveincludeExecutive andNon-Executive Directors andtheothermembers of the Key managementcompensation Employee benefitcosts By activity The monthlyaverage numberof persons(includingExecutive Directors) employed bytheGroup duringtheyearwas: 5, Employeesanddirectors for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Total Share basedpayments Other pensioncosts Social securitycosts Total employeebenefitcosts Share basedpayments(note25) Other pensioncosts(note30) Social securitycosts Unwinding o Finance costs: Total financeincome T and bioprocessing W W otal ages andsalaries ages andsalaries irector, isprovided intheauditedpartof theDirectors’ Remuneration Reportonpage105whichforms partof these ch, development ch, development est receivable f discountinprovisions (note20)
Number 45,669 35,909 4,486 £’000 £’000 £’000 2,244 1,804 3,030 6,226 1,038 3,177 2020 2020 2020 2020 2020 (874) (878) (912) 207 609 (38) 563 46 34 34 –
Number (5,500) (6,526) £’000 £’000 £’000 (6,422) 33,627 27,438 2019 2019 2019 2019 4,984 2,861 1,559 1,769 (969) 3,417 500 869 462 104 104 186 (57) 512 38
Total Fees payablef by theGroup’sauditors Net lossonforeign exchange Operating leasepayments used inbioprocessing Raw materials andconsumables Employee benefitcosts Amortisation and equipment Depreciation of property, plant
Fees payablefor otherservices: as detailedbelow: During theyearGroup (includingitssubsidiaries)obtainedservicesfrom theGroup’s auditorsandtheirassociates comprehensive income. Depreciation is charged to cost of goods, research and development, and bioprocessing costs in the statement of Biomedica UKLtd andrecharged totheCompany. Company employee benefit costs of £494,000 (2019: £382,000) relates to non-executive costs paid by Oxford 7, Expensesbynature Services provided provided Services and grantincomeaudits Audit related assuranceservices Review of interimresults Additional fees relating toprioryearaudit The auditof theCompany’ssubsidiaries or theauditof theparent companyandconsolidated financialstatements
Notes 12 11 5 45,669 11,971 £’000 9,598 2020 (627) 173 Group 22 33,627 13,374 £’000 5,765 2019 (255) 104 22 £’000 £’000 2020 2020 Company 494 418 235 Group 98 50 35 – – – – – – £’000 £’000 2019 2019 330 382 165 94 20 26 25 – – – – –
Group financial statements 163 164 Taxation Credit Deferred Tax (note22) Relating totheorigination of timingallowances Deferred tax The Companyhasnotaxliability, norisitentitledtotaxcredits (2019:£nil). directly withinequity. During 2020theGroup recognised £273,000 of current taxrelating totaxrelief obtainedonexercise of share options in theStatement of financialposition. and agreed. Thetaxcredit recognised inthefinancialstatements butnotyet received isincludedincurrent taxassets The United Kingdomcorporation tax research anddevelopmentcredit is paid in arrears oncetax returns have been filed The 2019sumof £5,018,000 represents theSmallcompanytaxcredit receivable bytheGroup inthat year. anticipated tax receipt received in 2020 (£473,000), and an expected tax repayment relating to prioryears (£994,000). The adjustment of current tax in respect of the prior year of £1,467,000 (2019: £473,000) relates to a higher than income. Large Company Tax credit (RDEC) within research and development expenses in the statement of comprehensive income for theyearended31December2020comprisescorporation taxpayable ontheamountclaimedasa The amountof £1,140,000 includedaspartof the£327,000 taxation credit withinthestatement of comprehensive and developmenttaxcredits undertheGovernment’ssmallcompanyscheme. scheme for certainresearch anddevelopmentexpenditure. During2020theGroup ceasedbeingeligibletoclaimaresearch During 2019 and before the Group was entitled to claim tax credits in the United Kingdom under the Small company 8, Taxation for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Current tax United Kingdomcorporation taxresearch anddevelopmentcredit Adjustments inrespect of priorperiods: Corporation tax United Kingdomcorporation taxresearch anddevelopmentcredit Current tax (1,140) (1,140) £’000 1,467 2020 327 327 Group – – – £’000 4,823 4,545 5,018 5,018 2019 (473) 278 278 – by thestandard rate of corporation taxintheUKof 19%(2018:19%) Loss onordinary activitiesbefore taxmultiplied Loss onordinary activitiesbefore tax assets. Intangible assetscompriseintellectualproperty rights.TheGroup hasnot capitalisedanyinternallygenerated intangible Net bookamountat31 December At 31 December Amortisation charge for theyear A Accumulated amortisationandimpairment Total taxcredit/(charge)fortheyear Adjustments inrespect of priorperiods Tax lossescarriedforward tofuture periods Taxable gainsondisposalof shares Origination andreversal of timingdifferences ondeferred tax Deferred taxnotrecognised 11, Intangibleassets been includedinthesefinancialstatements. TheCompany’sloss for theyearwas £2,242,000 (2019:£2,016,000). As permittedbysection408of theCompaniesAct2006, theCompany’sstatement of comprehensive incomehasnot 10, Lossforthefinancialyear loss perordinary share andthedilutedlossperordinary share in theperiod. The Group madealossfor theperiodended31December2020. There istherefore nodifference betweenthebasic the weightedaverage numberof shares inissueduringtheyearended31December2020(79,944,911; 2019:72,709,944). The basiclosspershare of 7.81p (2019:earningsof 22.10p)hasbeencalculated bydividingthelossfor theperiodby share 9, Basicanddilutedlossperordinary Of theGroup taxlosses,£89.3 million(2019:£84.2 million)arose intheUnitedKingdom. At 31 December 2020, the Group had tax losses to be carried forward of approximately £89.3 million (2019: £84.2 million). Amounts notrecognised Recognition o Current taxrelief lessthanaccountingcharge onshare options Income nottaxable R&D relief mark-up onexpenses Expenses notdeductiblefor taxpurposes Effects of: explained below: The taxcredit for theyearislower(2019:lower)thanstandard rate of corporation taxintheUK.Thedifferences are Cost at 1 January and31December Cost at1January
t 1January f previously unrecognised taxlosses
(6,572) (1,046) 1,249 £’000 1,467 (753) 2020 (354) (277) 327 Group 26 15 – – – – (20,889) £’000 3 4,823 2,434 (464) (288) 2019 (473) (937) ,969 682 (20) (33) (47) – – (1,883) £’000 £’000 5, 5,563 5,541 2020 2020 (386) (354) (359) Company (18) 636 358 22 41 73 – – – – – – – (1,246) £’000 £’000 5,636 (160) 5,541 5,519 2019 2019 237 603 770 90 95 22 – – – – – – – –
Group financial statements 165 166 At 31December2019 At 31December2019 Disposals At 31December2020 Disposals Reclassification Change inestimate Reclassification At 31December2020 Charge for theyear Additions at cost Reclassification Reclassification Adoption of IFRS16(Leases) Adoption of IFRS16(Leases) Additions at cost Charge for theyear The Companyhadnoproperty, plantandequipmentat 31December2020or2019. one facilitytoanother. equipment ispurchased for ourlaboratory andbioprocessing processes, andare generallymovablefrom Leasehold improvements are capital improvements tobuildingswhichtheGroup leases.Bioprocessing andlaboratory Net bookamountat31 December2019 A Accumulated depreciation A Accumulated depreciation 12, Property, plantandequipment for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Net bookamountat31 December2020 A Cost A Cost t 1January2019 t 1January2019 t 1January2020 t 1January2020 Freehold Freehold property property 10,444 12,887 13 14721,908 21,427 23,331 21,283 14721,908 21,427 8,360 £’000 £’000 8,360 2,084 2,036 6,324 1,678 0720,229 ,067 226 144 – – – – – – – – improvements improvements Leasehold Leasehold Leasehold Leasehold 23 27,219 (1,263) 15,436 4,659 £’000 £’000 1,679 1,840 3,519 1,450 1,679 7,735 (188) 70 ,9 1,2 1,9 72,304 15,792 15,429 4,496 ,700 652 417 – – – – – – equipment and equipment and equipment and equipment and computers computers 916 466 802102,274 18,012 24,606 9,106 Office Office Office Office 1,484 £’000 £’000 3,054 4,610 5,088 ,4 3741,6 61,932 10,561 13,734 4,341 3,054 ,9 0141,0 82,304 11,400 20,174 7,395 2,681 1,556 2,416 7,395 (239) (374) 227 877 – – – – – – and Laboratory and Laboratory and Laboratory and Laboratory Bioprocessing Bioprocessing Bioprocessing Bioprocessing equipment equipment 20,174 (1,105) 12,337 6,440 5,537 £’000 £’000 6,440 4,462 9,177 1,784 2,737 7,513 (50) 239 (45) 374 – – – – Right of use Right of use Right of use Right of use 14082,304 11,400 ,2 29,970 2,220 £’000 £’000 ,8 29,556 3,782 6.361 1,381 7,618 asset asset 3 20,372 839 3 20,372 839 188 651 251 – – – – – – – –
46,443 14,652 19,719 £’000 £’000 9,598 6,355 5,765 Total Total (50) (45) 251 – – – – 13, Assetsatfairvaluethroughprofitand loss A Accumulated impairment Total investmentsinsharesandloanstogroupundertakings At 31December Loan advancedintheyear A Loans togroupundertakings 14, Investments andloansinsubsidiaries (current assets). Investments heldat fairvaluethrough profit andloss(non-current assets)toAssets at fairvaluethrough profit andloss an Assetat fairvaluethrough profit andlossunderIFRS 5. Assuch,theequityinvestmentwas reclassified from During thefirsthalf of 2019theGroupof determinedthat theequityheldinOrchard Therapeuticsmetthedefinition of anon-cashconsideration. Additions in2020relate toacontractassetmilestonewhichwasmetin2019withtheshares received in2020aspart Change infairvalueof available-for-sale asset Sale of shares Costs tosellassetat fairvaluethrough profit andloss Additions Reclassification of investmentasasset at fairvaluethrough profit andloss At 1January Assets atfairvaluethroughprofitandloss:Group At 31December A Capital contributioninrespectofemployeeshareschemes due for repayment within12months of theyearend. The loanfrom Oxford BiomedicaplctoOxford Biomedica (UK)Limitedisunsecured andinterest free. Theloanisnot parent company. company makes upalmostallof thevalue,considerablyexceeds thevalueof theloanandinvestmentmadeby to group undertakingsasthemarket value of theGroup, of whichOxford Biomedica(UK)Ltd. astheoperational The application of theexpectedcredit lossmodelhashadnosignificantimpactonthelevel of impairment of theloan Total investments At 31 December Additions intheyear(note26and27) Net bookamountat31 December A Shares ingroupundertakings t 1January t 1January t 1 January and31December t 1January t 1 January and31December t 1January 262,002 166,388 126,065 248,152 277,184 151,119 (2,523) 13,850 15,269 15,182 £’000 £’000 9,492 2,719 5,777 2020 2020 (831) 874 239 – – 263,334 126,065 248,152 ( 1,883 ) 194,736 137,269 1 ( 6,270) 10,966 46,761 53,416 15,182 £’000 £’000 9,492 1,559 7,933 2,719 2019 2019 (94 ) – –
Group financial statements 167 168 Oxford Biomedica(Ireland) Limited Oxford Biomedica(UK)Limited production orsoldonwards. TheCompanyholdsnoinventories. During the year, the Group wrote down £134,000 (2019: £171,000) of inventory which is not expected to be used in Inventoriesconstituterawmaterials heldfor commercial bioprocessing purposes. Total inventory Raw Materials Group 15, Inventories for thispurpose.Cumulative impairmentof £126.0 millionhasbeen recognised upto31December2020. that reference tothemarket capitalisation of the Group isanappropriate externalmeasure of thevalueof theGroup out inIAS36, andthecarryingvalueof theCompany’sinvestmentsinsubsidiariesisadjusted.TheDirectors consider resulting inadecrease inmarket capitalisation, theDirectors considerthisto beatriggerof animpairmentreview asset material andsustainedshortfallinthemarket capitalisation, orasignificantandsustainedchangeinthebusiness At eachyearendtheDirectors review the carryingvalueof theCompany’sinvestmentinsubsidiaries.Where there isa All of theabovesubsidiarieshave beenconsolidated inthesefinancialstatements. settle the2013deferred bonusshare awards madetoExecutive Directors andemployees(note25). In addition,theGroup setuptheOxford BiomedicaEmployeeBenefit toholdmarket-purchased sharesTrust (EBT) to Oxford, OX4 6LT. Theregistered office ofOxford Biomedica(Ireland) LtdisEarlsfort Terrace,Dublin2,DO2T380, Ireland. The registered office ofboth Oxford Biomedica(UK) LtdandOxxon TherapeuticsLimitedisWindrushCourt, Transport Way, Oxxon TherapeuticsLimited undertakings Interests insubsidiary for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements incorporation Great Britain Gr Country of Country of eat Britain Ir eland 1p ordinary shares 1p ordinary shares 1p ordinary shares Description of Description of shares held
Pr of issued shares held by the of issuedshares heldbythe oportion of nominal value oportion of nominalvalue Group andCompany 100% 100% 100% Gene therapy research Gene therapyresearch £’000 6,912 6,912 2020 Nature of business and development Product release Dormant £’000 2,579 2,579 2019
60+ days 30–60 days 0–30 days Ageing of pastduebutnotimpaired tradereceivables: which were pastdueat thereporting date andof which£9,460,000 hasbeenreceived after thereporting date. Included intheGroup’s tradereceivable balanceare debtorswithacarryingamountof £9,502,000 (2019:£7,472,000) Trade receivables does notholdanycollateral assecurity. The maximumexposure to credit risk at thereporting date is the fairvalueof eachclassof receivable above.TheGroup US Dollar Sterling The carryingamountsof theGroup’s tradeandotherreceivables are denominated inthefollowing currencies: impact onthelevelof impairmentof receivables. assessment underIFRS 9 andhas concluded that the application of theexpectedcredit loss model has had an immaterial The fairvalueof tradeandotherreceivables are thecurrent bookvalues.TheGroup hasperformed animpairment of depositsheldinescrow aspartof theWindrushInnovation Centre andOxbox leasearrangements. Non-current tradeandotherreceivables constituteotherreceivables of £3,605,000 (2019:£3,605,000) whichconsists 16, Trade andotherreceivables Total tradeandotherreceivables Prepayments Other taxreceivable Other receivables Contract assets Trade receivables Current
16,508 53,926 27,214 £’000 2,629 4,163 3,412 2020 Group 30,045 13,406 12,766 £’000 1,537 1,773 2019 563 57,531 57,517 9,502 9,523 £’000 £’000 £’000 2020 2020 2020 Company 21 14 – – – – – – – 33,650 25,939 £’000 £’000 £’000 6,330 1,142 7,472 2019 2019 2019 7,711 – – – – – – –
Group financial statements 169 170 Total tradeandotherpayables Accruals Other taxation andsocialsecurity Trade payables 18, Trade andotherpayables 17, Cashandcashequivalents to besatisfied. been nochangeinthetimeframefor arighttoconsideration tobecomeunconditionalandtheperformance obligation credit loss modelhashadanimmaterial impactonthelevelof impairmentoncontractassets.We have notedthere has The Group performed animpairmentassessmentunderIFRS9andhasconcludedthat theapplication of theexpected the periodwouldhave been£67,000 higherorlower. is £6,677,000. If the assessed percentage of completion was 1 percentage point higher or lower, revenue recognised in of completionfor that specificworkpackage. Thevalue of thecontractassetraisedwith regard totheseworkpackages percentage of completionbasisandassuchrequires estimation intermsof theassessmentof thecorrect percentage A portionof contractassetsrelates tofixed priceprocessa developmentworkpackages whichare recognised on higher levelof consideration for workcompletedbutnotyetbilled. increased levelsof bioprocessing andcommercial developmentactivitiesundertaken duringtheyearleadingtoa Contract assetshave increased from £13.4 millionat theendof 2019to£16.5 millionat theendof 2020duetothe of thebatch iscompleted. and bioprocessing batches accruedonapercentage of completionbasiswhichwillbeinvoicedasthemanufacturing work orders accruedonapercentage completebasiswhichwillbeinvoicedastherelated workpackage completes been accrued as the specific conditions stipulated in the licence agreement have been met, commercial development The balanceof £16.5 million(2019:£13.4 million)mainlyrelates tocommercial developmentmilestoneswhichhave the rightsbecomeunconditional.ThisusuallyoccurswhenGroup issuesaninvoicetothecustomer. for commercial developmentworkandbioprocessing batches. Thecontractassetsare transferred toreceivables when Contract assetsrelates totheGroup’s rightstoconsideration for workcompletedbutnotinvoicedat thereporting date Contract assets for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Cash at bank and in hand Cash at bankandinhand 46,743 10,354 19,716 £’000 £’000 1,585 2020 2020 7,777 Group Group 16,243 14,297 £’000 £’000 5,944 1,042 2019 2019 7,311 23,630 £’000 £’000 2020 2020 Company Company 134 134 – – £’000 £’000 2019 2019 109 109 – – 2 end of theleasesiftheyare notrenewed. per theBankof Englandnominalyieldcurve.Theequivalent rate wasusedin2019. Theprovisions willbeutilisedat the original conditionat theendof theleasetermsin2024, 2033, 2028and2030respectively, discountedusingtherate the leasehold Yarnton, Oxbox, Windrush Innovation Centre and Corporate Office properties in Oxford, UK to their Provisions are exclusively inrespect of dilapidations. Thedilapidations provisions relate toanticipated costsof restoring Total provisions Non-current Current to bereleased astherelated performance obligations are satisfied overtheperiodasdescribedbelow: Contract liabilities consists primarily of deferred bioprocessing and process development revenues, which are expected during the2020financialyear. balance includedinthestatement of financialposition at theend of 2019, £11.6 millionhasbeen recognised as revenue 2020 due to funds received in advance for future bioprocessing and process development activities. Of the £14.9 million Contract liabilitiesanddeferred incomehave increased from £14.9 millionat theendof 2019to£28.3 millionat theendof of completionof theservicesbeingprovided. Contract liabilities and deferred income arise when the Group has received paymentfor services in excess of the stage 19, Contractliabilitiesand deferredincome At 31December Additional provision recognised Change inestimate New provision Unwinding of discount At 1January 20, Provisions The Companyhadnocontractliabilitiesordeferred incomein2020 or2019. assets are depreciated. of the Oxbox bioprocessing facilityexpansion.Theincomewillberecognised overtheperiodwhichpurchased Deferred incomerelates tograntfundingreceived from theUKGovernmentfor capitalequipmentpurchased aspart additional information). 2020 (2019:£1.8 million)relating totheestimate of outof specification batches (seenote2:’Estimations’ for Included withinbioprocessing contractliabilitiesisrevenue of £1.4 millionwhichhasnotbeenrecognised during Years Grant Lease incentives Deferred Income Licence fees andMilestones Process developmentincome Bioprocessing income Contract liabilities 27,258 24,327 ,0 2,515 1,006 2,914 £’000 ,0 2,515 1,006 0–1 17 –
£’000 1–3 0948 50 0948 50 – – –
£’000 3–5 – – – – –
£’000 £’000 5,086 5,839 5,839 5,839 £’000 2020 2020 5–10 464 251 38 – – – – – – – 5 5
28,261 24,327 2,914 1,020 £’000 £’000 3,521 3,521 5,086 5,086 5,086 T 1,287 3,741 2019 2019 otal 58 – – – –
Group financial statements 171 172 Trade andotherpayablesexcluding tax(note18) Assets at fairvaluethrough profit andloss(note13) Trade receivables andotherreceivables (note16) Cash andcashequivalents(note17) US Dollars Sterling and loss.Pleaserefer tonote13 for furtherinformation. The investmentassetrepresented byordinary shares inOrchard Therapeuticsisclassifiedas at fairvaluethrough profit Financial assetsclassifiedaslevel1inhierarchy US Dollar Euro Sterling The carryingamountsof theGroup’s cashandequivalentsare denominated inthefollowing currencies: book values. The Directors consider that the fair values of the Group’s financial instruments do not differ significantly from their Fair value are assuchassessedhaving alowriskof default. Other receivables are rent deposits held in separately administered bank accounts with covenants limiting their use and opening andclosingpositionwaslow(2019:low). reconciliation betweenthe2019and2020closingdebtorbalanceassessedbyriskof defaulthasbeenprovided. The reserves tosatisfy theirobligations. There hasbeennochangeinthedeterminedriskduring2020, therefore no groups inthetop10worldbymarket capitalisation, andbybiotechnologycompanieswithsufficientcash All tradereceivables are assessedashaving alowcredit riskrating asthedebtisowedbybluechippharmaceutical Cash andcashequivalentsare heldwithreputable banks withalowassessedriskof default. Assessment offinancialassetsbycreditriskrating: Floating rate instantaccessdepositsearnedinterest at prevailing bankrates. The Group hadthefollowing financialinstruments at 31Decembereachyear: Corporate GovernanceReportandinnote3relating toriskmanagement. assets at fairvaluethrough profit andloss,tradeotherpayables.Additionaldisclosures are setoutinthe The Group andCompany’sfinancialinstrumentscomprisecashequivalents,tradeother receivables, 21, Financialinstruments for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Financial assets at fair value Financial assetsat fairvalue through profit andloss £’000 2020 239 239 – – – £’000 2,719 2,719 2019 – – – 101,645 54,902 46, £’000 2020 receivables Cash and Cash and 743 – –
48,120 16,243 31,877 £’000 2019 – – Year average average rate Amortised costs, loans Amortised costs,loans Weighted Weighted and otherliabilities 37,299 46,743 18,131 18,131 0.00% 9,005 0.01% £’000 £’000 2020 2020 2020 439 – – – Year average average rate Weighted Weighted 10,789 16,243 13,255 13,255 0.55% £’000 £’000 1.62% 5,454 2019 2019 2019
– – – – Lease Liabilities Non derivativefinancialliabilities: Reconciliation ofexternalloanliability Exposure toLiquidityRisk arising fromfinancingactivities Reconciliation ofmovementsliabilities tocashflows At 31December Oaktree loanrepayment Redemption fee Cash interest paid Foreign exchange movement Interest payable At 1January Closing balanceat31December2020 Interest Total changesfromfinancingcashflows Transfer of share premium related towarrants Payment of lease liabilities Cost of share issues Issue of shares excluding options Share options–Proceeds from shares issued Changes fromfinancingcashflows 2020 Balance at1January Additions Other changes:
Carrying Carrying Amount 13 £’000 ,845 18,732 18,732 ,845
£’000 T otal
2 months 2 months or less £’000 –
Liabilities Contractual Cashflows liabilities months 13,845 (1,151) (1,151) ,8 8462268269,423 222,618 38,416 8,389 537 158 448 7,409 4,418 1,548 5,357 £’000 £’000 5 Lease Lease 2–12 874 ,733 – – – –
1–2 years 1112807313,023 258,017 41,161 capital £’000 £’000 ,4 53936,993 35,399 2,745 ,0 75040,000 37,500 2,500 Share Share 245 Equity – – – – –
2–5 years Premium 174 (1,724) (1,724) 128 (1,218) (1,218) £’000 £’000 £’000 Shar 2020 4 1,086 841 – – – – – – – – – – e e
Total >5 years (43,589) (2,486) 41,153 (1,151) £’000 £’000 £’000 5,733 4,819 (866) 2019 Total 874 969 –
Group financial statements 173 174 At 31December2019 At 31December2020 Origination andreversal of temporarydifferences Origination andreversal of temporarydifferences At 1January2019 At 1January2020 Deferred tax(assets)/liabilities–notrecognised Group –notrecognised At 31December2019 Origina At 1January2019 At 31December2020 Origina At 1January2020 Deferred tax(assets)/liabilities–notrecognised Company –recognised At 31December2019 Origination andreversal of temporarydifferences At 1January2019 At 31December2020 Origina At 1January2020 Deferred tax(assets)/liabilities–recognised Group –recognised corporation taxrate of 19%. corporation taxrate. Accordingly, thedeferred taxbalancesasat 31December2020have beenmeasured at the enacted on17March 2020. Asaresult, thecompany’sfuture current taxliabilityisexpectedtobesubjectthe19% 1 April2020andtherefore thecorporation taxrate wouldnolongerreduce to17%.Thischangewassubstantively The March 2020Budgetannouncedthat thecorporation taxrate of 19%wouldcontinuetoapplywitheffect from 6 September2016, andtheUKdeferred taxasset/(liability)asat 31December2019wascalculated basedon thisrate. A reduction intheUKcorporation taxrate from 19%to17%(effective 1April2020)wassubstantivelyenactedon 31 December2019comprisedexpectedfuture taxablegainsonthesaleof theOrchard investmentasset. tax liabilityasat 31December2020comprisedfixed assettemporarydifferences.at Thedeferred taxliabilityas therefore adeferred taxassethasbeenrecognised onlytotheextentthat there isadeferred taxliability. Thedeferred 2019. Inlightof theGroup’s historyof losses,recovery of thewholedeferred taxassetisnotsufficientlycertain,and The CompanyandtheGroup have recognised deferred taxassetsandliabilitiesat 31December2020and 22, Deferredtaxation for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements tion andreversal of temporarydifferences tion andreversal of temporarydifferences tion andreversal of temporarydifferences depreciation £’000 76 112 (138) (1,132) (786) 6)(,1)(441) (1,218) (62) 6)(,1)(441) (1,218) (62) 724 Tax Tax 2(9 235 (49) 62 – relationships 127 26 1,4)(,3)(22,155) (3,239) (17,443) (206) (1,267) £’000 Loan Loan 8)(303) (86) Provisions £’000 Tax losses Tax losses Tax losses (15,874) (15 (15 (1,569) 119 1, (1,129) £’000 £’000 £’000 (448) 39 359 (359) 1,129 (359) 39 359 (359) ,936) (770) ,874) 359 359 (359) 359 7 109 (279) (1,049) 770 – – Revaluation of Revaluation of Revaluation of Revaluation of Share options investments investments 164 (19,259) (1,664) (1,664) (1,575) 172 (19,164) (1,712) £’000 £’000 £’000 0 279 408 8(95) 48 – – – – – – – (19,259) (2,896) £’000 £’000 £’000 1,129 (359) (770) Total Total Total 359 359 – – – – –
Costs associated withtheissueof shares £1,218,000 from share premium toretained earnings. been overstated following the issue of warrants in the comparative period – to correct this they have transferred During theperiodDirectors reviewed theirpresentation of share premium andfound that theshare premium has Premium onexercise of share options Transfer of share premium related towarrants Premium onexercise of warrants Premium onshares issuedfor cashinplacingandsubscription At 1January Group andCompany 24, Share premiumaccount £6.90 on29May2019. Gross proceeds from thefundraisingwere £53.5 million;netproceeds were £52.8 million. £6.90. NovoHoldingsalsoexercised infullitsoptiontosubscribeafurther1,181,976 newordinary shares at apriceof On 28May2019, theGroup announcedthat NovoHoldingshadsubscribedto6,568,024 newordinary shares at apriceof Proceeds from theshares issuedwere £1.3million. In April2019, Oaktree exercised itswarrants whichwere thenconvertedinto2,689,686 ordinary shares of 50peach. per share. Gross proceeds from thefundraisingwere £40.0 million;netproceeds were £38.3 million. On 19June2020, theGroup announcedan equityfundraisingof 5,000,000 newordinary shares at apriceof £8.00 Allotted onexercise of share options–461,454 (2019:315,917) 23, Ordinary shares 23, Ordinary Allotted onexercise of warrants–nil(2019:2,689,686) shares Allotted for cashinplacingandsubscription–5,000,000 (2019:7,750,936) shares At 1January–76,859,131 (2019:66,103,528 postconsolidation) shares sharesof50peach Ordinary Issued andfullypaid Group andCompany At 31December At 31December–82,320,585 (2019:76,859,131) shares 222,618 258,017 38,416 (1,724) (1,218) 37,500 41,161 £’000 £’000 2,500 2020 2020 245 841 – – 222,618 172,074 49,600 33,034 38,416 £’000 £’000 3,875 1,345 1,218 (769) 2019 2019 495 162 –
Group financial statements 175 176 the date of grant. which theoptionsexpire andthecashsaved isreturned. Optionscannotbeexercised before thethird anniversaryof grant. Theyare notsubjecttomarket conditionperformance criteriaandthelivesof theoptionsare four years, after Options grantedunderthe2015Sharesave Schemehave fixed exercise pricesbased onthemarket price at thedate of third anniversaryof thedate of grant. years, after whichtheoptionsexpire. Optionsgrantedunderthe2015Schemecannotnormallybeexercised before the at the date of grant.Theyare notsubjecttomarket conditionperformance criteriaandthelivesof theoptionsare ten Options grantedunderthe2015Executive Share OptionSchemehave fixed exercise pricesbasedonthemarket price of 25% from the firstto fourth anniversaries of thegrantdates. the date of grant.Optionsgrantedunderthe2007Schemeduring2012to2014, withoneexception, vestintranches which theoptionsexpire. Optionsgrantedpriorto2012cannotnormallybeexercised before thethird anniversaryof of grant. Theyare notsubjecttomarket condition performance criteriaandthelivesof theoptionsare tenyears, after Options grantedunderthe2007Share OptionSchemehave fixed exercise pricesbasedonthemarket price at thedate Directors, optionsgrantedin2019and2020alsohave a2yearholdingperiodpostvesting. at either paroranilcostonthethird anniversaryof thedate of grant,andlapse10yearsafter beinggranted.For The performance criteriaare describedintheDirectors’ Remuneration Report.LTIP awards madetodate are exercisable granted optionslapsing. criteria have beenmet.Failure tomeettheminimumperformance criteriabythethird anniversaryresults inallthe and market condition performance criteria and will vest only if, at the third anniversary of the grant, the performance Options grantedunderthe2007and2015LTIPs toDirectors andotherseniormanagersare subjecttobothrevenue scheme. Alloptiongrantsare at thediscretion of theRemuneration Committee. Incentive Plans(LTIP), Deferred BonusPlans,andtootheremployeesundertheShare OptionSchemesandSharesave Share options are grantedtoExecutive Directors andselectedseniormanagersundertheCompany’sLongTerm — — — — — — — The Companyhasoutstandingshare optionsthat were issuedunderthefollowing schemes: 25, OptionsoversharesofOxfordBiomedicaplc for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements
The 2015Shar The 2015Def The 2013Def The 2015LongT The 2007LongT The 2015Ex The 2007Shar ecutive Share OptionScheme(approved May2015) erred Bonus Plan(approved May2015) erred Bonus Plan(approved February2014) esave scheme(approved May2015) e OptionScheme(approved February2007) erm IncentivePlan(LTIP) (approved May2015) erm IncentivePlan(LTIP) (approved February2007) Note 2–Optionsgrantedunderthe2015LTIP. Note 1–TheseLTIP awards willvestprovided that performance conditions specifiedintheDirectors’ Remuneration Report are met. Options grantedundertheOxfordBiomedica2007and2015LongTerm IncentivePlans Options grantedtoemployeesundertheOxfordBiomedica2015Sharesave scheme Note 1–Optionsgrantedunderthe2015Executive share optionscheme. Options grantedtoemployeesundertheOxfordBiomedica2007and2015ShareOptionSchemes Share options outstandingat 31December2019have thefollowing expirydate and exercise prices: 2020 Numberofshares 2020 Numberofshares 2020 Numberofshares 1,608,361 286,869 3,479,870 298,323 1,361,829 441,336 191,195 225,073 176,562 573,318 509,680 258,882 143,294 165,724 49,561 78,362 139,000 108,395 10,888 67,849 25,870 21,562 17,225 66,679 34,539 93,535 5,829 – 1,2 1,2 1,2 1 1 1 1 1 1 2 09Nme fsae xriepieprsaeDate from whichexercisable Exercise pricepershare 2019 Numberof shares 09Nme fsae xriepieprsaeDate from whichexercisable Exercise pricepershare 2019 Numberof shares Date from whichexercisable Exercise pricepershare 2019 Numberof shares 3,010,660 1,240,962 298,323 1,284,765 218,181 191,195 484,933 305,360 459,586 268,781 130,794 237,104 142,000 122,344 66,864 75,845 73,443 69,768 113,158 89,082 34,302 66,679 13,608 24,525 9,718 – – 1,2 1,2 1,2 – 1 1 1 1 1 0pt 0p1/221 o0/822 15/02/2028to07082028 15/02/2018to07/08/2021 502p to904p 100p to200p 270p to290p 618p to 705p 04/01/2022 to 12/9/2022 04/01/2022 to12/09/2029 04/01/2022 to12/9/2022 04/01/2022 618p to705p 6pt 1p2/622 o0/022 26/06/2030to05/10/2030 26/06/2023to05/10/2023 760p to817p 115p to155p 80p to140p 490p 495p 330p 422p 672p 275p 725p 145p 50p 50p 50p 0p 0p 0p 0p 0p 0p 80/02t 20/0218/04/2029to 12/09/2029 18/04/2022 to12/09/2022 50/01t 70/0115/02/2021to7/8/2021 15/02/2021 to07/08/2021 26/06/2023 09/10/22 13/07/20 12/10/20 31/10/23 10/10/21 13/10/19 Vested Vested Vested Vested Vested Vested Vested Vested Vested Vested Vested Vested 13/03/25 to10/06/25 03/06/24 to17/10/24 08/05/22 to21/12/22 16/05/26 to13/10/26 17/07/27 to25/09/27 15/03/21 to04/10/21 22/05/23 to19/11/23 20/6/24 to17/10/24 26/06/2030 Expiry date Expiry date Expiry date 09/04/23 30/06/22 12/04/20 10/04/22 16/05/26 31/04/24 12/06/23 10/01/25 12/04/21 13/07/27
Group financial statements 177 178 (Model used:BlackScholes) Share options (Model used:BlackScholes) Sharesave Schemeawards 26, Sharebasedpayments options that were abovewater, basedontheyear-end share priceof 1,030p (2019:645p)pershare. £1,043,000 (2019: £529,000) isincludedinaccrualsfor thepotentialNIliabilityaccruedto31Decemberonexercisable Certain optionsgrantedtoUKemployeescouldgiveriseanational insurance(NI)liabilityonexercise. Aliabilityof National insuranceliability Shar Options grantedtoemployeesundertheOxfordBiomedica2013and2015DeferredBonusPlan The optionsgrantedunderthe2015Deferred BonusPlanwillbesatisfied bynewissueshares at thetime of exercise. (2019: nil)from theEBTwere exercised. EBT isconsolidated at yearendwiththeshares heldintrustuntiltheexercise of theoption.Duringyearno shares Oxford BiomedicaEmployeeBenefit As at 31December2019,Trust (EBT). allshares heldbytheEBThadvested.The The optionsgrantedunderthe2013Deferred BonusPlanwillbesatisfied bymarket-purchased shares heldbythe of thegrantdependentonoptionconditions.Optionswithavalueof £667,000 vestedduring2020(2019:£688,000). options. Theseoptionsare exercisable at nilponeitherthefirstthree anniversaries of thegrant orthethird anniversary The Executive Directors andcertainotherseniormanagershave beenawarded deferred bonusesintheform of share Deferred ShareAwards for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Fair valueperoption Risk free rate (weightedaverage) Expected life (years) Expected volatility (weightedaverage) Total numberof shares underoption Vesting period(years) Exercise price Shar Exercise price Vesting period(years) Total numberof shares underoption Expected volatility (weightedaverage) Expected life (years) Risk free rate (weightedaverage) Fair valueperoption 2020 Numberofshares e priceat grantdate e priceat grantdate
394,861 48,082 83,909 28,924 32,544 39,642 68,035 93,725 09Nme fsae xriepieprsaeDate from whichexercisable Exercise pricepershare 2019 Numberof shares
427,866 86,320 53,900 66,592 48,422 78,907 93,725 – 0p 0p 0p 0p 0p 0p 0p 20/06/21 to20/06/23 18/04/20 to18/04/22 07/08/19 to07/08/21 Exercisable Exercisable Exercisable Exercisable Options awar 26 Jun2020 268.00p 577,953 (0.07)% 53.22% 760p 748p ded 3 3
15/06/24 and14/10/24 Options awar Options awar 05 Oct2020 13 Oct2020 Expiry date 20/06/30 07/08/28 04/05/25 18/04/29 14/05/26 (0.07%)% 11/07/27 845.00p 810.00p 285.10p 672.16p 817.20p 165,724 310.11p (0.09)% 47.42% 47.45% 5,568 ded ded ded 3 3 3 3
Exercisable at 31 December LTIP awards (optionsexercisable atparvalue 1pornilcost) exercise priceat 31 December Exercisable at 31 December which related toequity-settledshare basedpaymenttransactions. total charge for theyearrelating toemployeeshare-based paymentplanswas£3,752,000 (2019:£1,559,000), allof 482,073 optionswere exercised in2020(2019:315,917), including51,057 of deferred bonusoptions(2019:14,664). The price for optionsgrantedduringtheyearwas740.7p (2019:597.8p). Excluding theLTIP andDeferred Bonusawards whichare exercisable at par/nilvalue,theweightedaverage exercise together withtherelated weightedaverage exercise prices. The tablesbelowshowthemovementsinShare OptionScheme,Sharesave schemeandtheLTIP duringtheyear, Shar (Model used:MonteCarlo) LTIP awards Share optionsexcluding LTIP Outstanding at 31 December Fair valueperoption Risk free rate (weightedaverage) Expected life (years) Expected volatility (weightedaverage) Total numberof shares underoption Vesting period(years) Exercise price Outstanding at 31 December Outstanding a Outstanding a Exercisable andwhere market priceexceeds Granted Granted Expired Forfeited Exercised Exercised Cancelled e priceat grantdate
t 1January t 1January
1,769,698 2,118 (323,794) (18,176) (58,429) Number 749,245 385,859 385,859 ,041 Weighted average exercise price 1,240,962 1,361,829 (107,222) (58,780) 286,869 Number 585,442 602.8p 243.0p 654.9p 384.5p 384.5p 548.7p 419.2p 673.8p 2020 2020
1,769,698 (253,718) (125,373) 1,421,117 Number 770,299 349 349 (42,627) ,579 ,579 W eighted average eighted average L exercise price TIPs awarded TIPs awarded 26 Jun2020 1,2 1,028,263 Number 285,869 558.50p (54,856) (45,874) 421,186 313,429 (0.07)% 53.22% 602.8p 40,962 654.9p 243.0p 548.7p 673.8p 419.2p 263.1p 263.1p 748p 2019 2019 0p 3 3
Group financial statements 179 180 Share basedpayments 650+p 350p to650p Loss for theyear 250p to350p Transfer of share premium related towarrants 150p to250p At 31December At 1January 50p to150p Options: Deferred taxonshare options At 31December2019 Exercise of warrants A Exercisable at parorat nilcost Deferred bonus: Exercise of nilcostoption for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements 27, Accumulatedlosses At 1January2019 Group At 1January2020 Group 28, Otherreserves 31 December2019. Neither theCompanynoritssubsidiaryundertakingshadreserves available for distribution at 31December2020or Note 2 – – 1 Note Range ofexercise prices Exercisable at parorat nilcost L TIP: t 31December2020 The cr (2019: £688,000) related tothevestingof deferred share awards madetoexecutive directors andseniormanagers. During theperiodDir comparative period–tocorrect thistheyhave transferred £1,218,000 from share premium toretained earnings. edit toaccumulated lossesismadeupoutof thecharge for theyearrelating toemployeeshare-based paymentplansof £2,363,000 (2019:£1,559,000) (note25),£1,389,000 ectors reviewed theirpresentation of share premium andfound that theshare premium hasbeenoverstated following theissueof warrantsinthe exercise price Weighted Weighted average average 8p101,416 284p 5p495,566 459p 5p1,462,739 754p 0p35,459 103p 8p22,861 181p .p1,361,829 8.8p p394,861 0p 3,874,731 of shares Number Number life (years) life (years) remaining remaining Weighted Weighted (188,723) (187,695) average average (6,245) 1,218 3,752 £’000 2020 2020 (26) 273 8.8 2.9 6.5 6.7 5.3 2.7 7.5 Group 2 1
exercise price W (187,695) (173,876) (16,066) Warrant Warrant Warrant average average eighted eighted reserve reserve (1,218) £’000 £’000 £’000 2,247 2p1,416,444 628p ,1 ,9 3 2,291 1,218 9p213,955 293p 8p27,881 180p 2019 2p111,418 129p 2 1,240,962 12p p427,866 0p – – – – – – – (125,093) (126,143) 3,438,526 of shares Number Number (2,242) reserve reserve Merger Merger Merger 1,218 £’000 £’000 £’000 ,9 2,291 2,291 2,291 2,291 2020 ,9 2,291 2,291 Company (26) – – – – 2 remaining remaining life (years) Weighted Weighted (125,093) (123,077) average average (2,016) (1,218) £’000 £’000 £’000 2019 2019 Total Total ,509 6.8 6.6 6.6 5.6 8.7 3.7 – – – – –
At 31December2019 Credit inrelation toemployeeshare schemes Credit inrelation toemployeeshare schemes At 1January2019 At 1January2020 At 31December2020 was released toshare premium. consideration of £1,344,843. Theexercise priceof thewarrantswas50pperwarrant.Uponexercise thewarrantreserve On 18April2019, Oaktree exercised its warrantsrepresenting 2,689,686 ordinary shares of 50peachfor total Oaktree since thenduetoequityfundraisingsbytheCompany. net of related expensesandthisamountwascredited tothewarrantreserve. Afurther2,661 warrantswere issuedto price of 1pandcouldbeexercised at anytimeoverthefollowing tenyears.Thewarrantswere fairvaluedat £1.2million Oaktree, equivalentto4.4% of theenlarged Group’s share capital.Thewarrantswere exercisable at thenominalshare Under theOaktree loanagreement theCompanyissued134,351,226 (2,687,024 postconsolidation) warrantsto costs inthestatement of comprehensive income,andthesecurityoverassetsof theGroup wasremoved. repaid at a cost of £43.6 million plus a redemption fee of £0.9 million which forms part of interest payable within finance (“Oaktree”) financedthrough £53.5 million of equityissuedtoNovoHoldingsinMay2019. Theloanfacilitywasfully On 28June2019theGroup repaid its$55million(£43.6 million)loanfacilitywithOaktree CapitalManagement Warrant reserve merger relief tothepurchase of Oxxon TherapeuticsLimitedin2007. Oxford Biomedica(UK)Ltd usingthemerger methodof accountingin1996, and£1,580,000 from theapplication of The Group merger reserve at 31December2020and2019comprised£711,000 arisingfrom theconsolidation of Merger reserve on distributablereserves of theCompany. Thedisclosure relating tosuchshare basedpaymentawards isdetailedinNote25. The prioryearbalancesheethasnotbeenadjustedonthegrounds that theDirectors donotbelievethisitemisqualitatively material tousersof thefinancialstatements, ithasnoimpact a to equitysettledshare basedpaymentsgrantedtoemployeesandserviceproviders insubsidiaries.Ofthe£3.4 million,£2.7million relates toamountswhichshouldhave beenrecognised Note 1–In2020, theCompanyrecognized a£3.4 millionincrease initsinvestmentoperating subsidiaryOxford Biomedica(UK)Ltd (refer note14 of thefinancialstatements) due corresponding credit toreserves. the subsidiaries,resulting inanincrease inthecostof investmentof £5,777,000 (2019:£1,559,000) (seenote14) anda statements (seenote26).Inaccordance withIFRS2theCompanyhastreated theawards asacapitalcontributionto with IFRS2’Share-based Payment’theexpenseinrespect of theseawards isrecognised inthesubsidiaries’ financial Options over the Company’s shares have been awarded to employeesof Oxford Biomedica (UK) Ltd. In accordance Company t 31December2019. Inaddition£700,000 of deferred bonusthat wasincludedinthe2019consolidated balancesheethasbeenrecognised withingroup equityinthecurrent period. Warrant reserve (1,218) £’000 ,1 ,8 ,3 10,731 7,933 1,580 1,218 – – – – reserve Merger ,8 ,9 11,072 9,492 1,580 ,8 52916,849 15,269 1,580 £’000 ,8 ,9 11,072 9,492 1,580 – – Scheme Reserve £’000 5,777 Share 1,559 1 £’000 5,777 Total 341
Group financial statements 181 182 Net cashusedinoperations Adjustment for: Operating loss Continuing operations Group Group Right-of-use assets: presented below: The Group leaseslandandbuildingsITequipment.Information aboutleasesfor whichtheGroup isalessee 31, Leases payable totheschemeat theyear-end. amounts payablebytheGroup tothescheme.Contributionsof £308,000 (2019:£253,000), includedinaccruals,were are heldinindependentlyadministered funds.Thepensioncostcharge of £2,244,000 (2019:£1,769,000) represents The Group operates adefinedcontributionpensionscheme for itsdirectors andemployees.The assets of thescheme 30, Pensioncommitments Reconciliation of lossbefore taxtonetcashusedinoperations: 29, Cashflowsfromoperating activities for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements Changes inworkingcapital: Balance a Additions Change inestimate Depreciation charge for theperiod Balance at31December2020 Non-cash loss/(gains) (Increase)/decrease ininventory Charge inrelation toemployeeshare schemes Increase inprovisions Increase/(decrease) incontractliabilities Loss ondisposalof property plantandequipment (Decrease)/increase indeferred income Amortisation of intangibleassets Increase intradeandotherpayables Depreciation Incr ease intradeandotherreceivables t 1January2020 Property 12,261 (1,079) 10,419 £’000 2,670 251
Equipment 3,442 £’000 3,691 (249) (25,893) (5,694) (3,889) 13,410 (4,333) – – £’000 3,289 5,419 9,817 2020 (795)
831 Group 38 22 – IT equipment (14,467) (4,586) (6,636) (3,634) £’000 2,868 2,247 1,883 5,765 1,533 1,672 2019 58 22 3 £’000 (53) 142 89 – –
(1,858) (1,883) £’000 2020 Company 25 – – – – – – – – – – 15,792 (1,301) (1,381) (1,246) 10,561 £’000 £’000 6,361 2019 T (55) otal 251 – – – – – – – – –
Lease liabilities: Inter 2020 –LeasesunderIFRS16 Amounts recognisedintheprofitorloss Curr Lease liabilitiesincludedintheStatementofFinancialPosition Less thanoneyear Maturity analysis–contractualundiscountedcashflows T Amounts recognisedinthestatementofcashflows Total undiscountedcashflowsat31December2020 More thanfiveyears One tofiveyears Expense relating toshorttermleases Interest onleaseliabilities 2019 –LeasesunderIFRS16 Expense relating toshorttermleases Total leaseliabilitiesat31December2020 Non-current otal cashoutflowforleases ent est onleaseliabilities 31 December2020 31 December2020 31 December2020 31 December2020 13,845 18,732 1,151 4,475 5 £’000 £’000 £’000 £’000 5,966 9,370 7,409 874 ,357 654 247 137
Group financial statements 183 184 (2019: none).Key personremuneration canbeseeninnote5of thefinancialstatements. outstanding balancesinrespect of transactionswithDirectors andconnected personsat 31December2020 There isanoutstandingbalanceof £nil(2019:£5,417) owedtoDr. Lorenzo Tallarigo at yearend.There were noother Company: transactionswithrelatedparties There were notransactions(2019:none)withOxxon TherapeuticsLimited. resulting inacumulative increase inthecostof investmentof £11,855,000 (2019:£9,492,000). companies. Inaccordance withIFRS2,theCompanyhastreated theawards as acapitalcontributiontothesubsidiaries, In additiontothetransactionsabove,optionsoverCompany’sshares have beenawarded toemployeesof subsidiary The investmentinthesubsidiary, of whichtheloanforms part,hasbeenimpaired by£126million(note14) inprevious years. Loan tosubsidiary Company: year-endbalanceofloan due for repayment within12monthsof theyearend.Theyear-end balanceontheloanwas: The loanfrom Oxford BiomedicaplctoOxford Biomedica(UK)Limitedisunsecured andinterest free. The loanisnot Cash loanedbypar Cash management: Parent companyexpensespaidbysubsidiary Purchases: Company: transactionswithsubsidiaries payments, includingtheexpensesof theparent company. Oxford Biomedica(UK)Limitedasaloan,andOxford Biomedica(UK)LimitedmanagesGroup fundsandmakes intellectual property. Theproceeds from theissueof shares bytheparent are passedfrom Oxford Biomedicaplcto the Group strategy, employsalltheUKstaff includingtheExecutive Directors, andownsmanagesall of theGroup’s The parent companyisresponsible for financingandsettingGroup strategy. Oxford Biomedica(UK)Limitedcarriesout The registered office ofOxford Biomedica(Ireland) LtdisEarlsfort Terrace,Dublin2,DO2T380, Ireland. registered address for theCompanyandallof itsUKsubsidiariesisWindrushCourt,Transport Way, Oxford OX4 6LT. Biomedica (Ireland) Ltd whichwasincorporated in2019asawhollyownedsubsidiaryof the parent company. The and becamedormantin2007whenitsassetstradewere transferred toOxford Biomedica(UK)Limited,andOxford Limited), theprincipaltradingcompany, andtwodormantsubsidiaries,Oxxon TherapeuticsLimitedwhichwasacquired The Group consistsof aparent, Oxford Biomedicaplc,onewholly-ownedtradingsubsidiary(Oxford Biomedica(UK) Identity ofrelatedparties 33, Related partytransactions not provided for inthefinancialstatements at 31December2020(2019:£1,946,000). The Group hadcommitmentsof £176,000 for capitalexpenditure for leaseholdimprovements, plantand equipment 32, Contingentliabilitiesandcapitalcommitments for theyearended31December2020 Notes totheconsolidatedfinancialstatements Group financial statements ent tosubsidiary 262,002 15,000 (1,150) £’000 £’000 2020 2020 248,152 54,829 (1,413) £’000 £’000 2019 2019
Oxford Biomedica’sLentiVector multiple therapeuticgenes. than mostothervectorsystemsandcanaccommodate Oxford Biomedica plc uses the Group’s LentiVector photoreceptors intheretina andvisionloss.SAR422459 of the ABCRgenewhichleadstothedegeneration of of Stargardt disease.Thediseaseiscausedbyamutation SAR 422459 isagene-based therapyfor thetreatment SAR 422459:Stargardtdisease cells inthebrain.OXB-102 usestheCompany’sLentiVector caused bythedegeneration of dopamineproducing nerve for Parkinson’sdisease,aprogressive movementdisorder Axo-Lenti-PD (formerly OXB-102) isagene-basedtreatment AXO-Lenti-PD (formerlyOXB-102: Parkinson’sdisease) LentiVector Oxford Biomedicaspecificterminology Glossary Other matters provide longtermorpotentiallypermanentcorrection. administration of theproduct directly totheretina could deliver acorrected versionof theABCRgene.Asingle LentiVector that geneexpression couldbemaintainedindefinitely. The retinal cells in the eye. In such cell types, studies suggest non-dividing cellsincludingneurons inthebrainand with upto100%efficiencyandcanintegrate genesinto systems. Thetechnologycanstablydelivergenesintocells problems associated withearliergenerations of vector which isdesignedtoovercome thesafety anddelivery an advanced lentiviral vector based genedeliverysystem source of the neurotransmitter. factory withinthebrain,thusreplacing thepatient’s ownlost striatum, convertingcellsintoareplacement dopamine is administered locallytotheregion of thebraincalled that are required for thesynthesisof dopamine.Theproduct platform technologytodeliverthegenesfor three enzymes ® platform technology also has a larger capacity platform technologyalsohasa larger capacity ® platform
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Annual r eport and accounts 2020 ® platform technology to platform technology to ® platform technology is platform technologyis ®
most solid tumours and some haematological malignancies. target the5T4tumourantigenexpressed onthesurfaceof provide long termorpotentiallypermanentcorrection. MYO7A gene.Asingleadministration of theproduct could 5T4 tumourantigen.ItusestheGroup’s LentiVector OXB-302 aimstodestroy cancerous cellsexpressing the OXB-302 (CAR-T 5T4):cancer due toretinitis pigmentosabyusingtheGroup’s LentiVector hearing defect. SAR 421869 intends to address vision loss progressive retinitis pigmentosa combinedwithacongenital o of Usher syndrome 1B. The disease is caused by a mutation SAR 421869isagene-basedtherapyfor thetreatment platform platform SAR 421869:Ushersyndrometype1B f the gene encoding myosin VIIA (MY07A), which leads to f thegeneencodingmyosinVIIA(MY07A), whichleadsto ™ ™ to deliver a Chimeric Antigen Receptor (CAR) to todeliveraChimericAntigenReceptor(CAR) technologytodeliveracorrected versionof the ® ®
Group financial statements 185 186 CMC, chemistry, manufacturingandcontrols. consistent between batches. These activities are known as order toensure that theproduct issafe, effective and characteristics, andproduct testingmustbedefinedin product, specificmanufacturingprocesses, product To appropriately manufacture apharmaceutical or biologic Manufacturing andControls) CMC (Chemistry, — — — phases itmaybeapproved bytheregulatory authorities: many years.Ifthedrugsuccessfullypassesthrough all process willnormallyproceed through thephasesover is treated asa separate clinicaltrial.Thedrug-development into three phases.Eachphaseof thedrugapproval process Clinical trialsinvolvingnewdrugsare commonlyclassified Clinical trials(testinginhumans) an cells inapatient for thetreatment of adiseaseoften in Cell therapyisdefinedastheadministration of livewhole Cell therapy to drugmanufacturing. comprehensive services from drugdevelopmentthrough pharmaceutical industryonacontractbasistoprovide A CDMOisacompanythat servesothercompaniesinthe (Contract DevelopmentandManufacturingOrganisation) CDMO tumour associated antigen. modified Tcellscanbeengineered totarget virtuallyany Receptors (CAR)isananti-cancertherapeuticasCAR Adoptive transfer of Tcellsexpressing ChimericAntigen CAR-T therapy sustainability of buildings. established methodof assessing,rating, andcertifyingthe Research Establishment(BRE)in1990, isthe world'slongest Assessment Method),firstpublishedbytheBuilding BREEAM (BuildingResearch EstablishmentEnvironmental BREEAM for introduction, abiologicalproduct intotheUSmarket. The BLA is a request for permission to introduce or deliver Biologics LicenseApplication(BLA) Terminology notspecifictoOxfordBiomedica Glossary Other matters Oxford Biomedica plc
Phase III against aplacebo Phase II Phase I ex vivosetting.
: screening for safety : establishing the efficacy of the drug, usually : establishingtheefficacy ofthedrug,usually : finalconfirmation of safety andefficacy
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Annual r eport and accounts 2020
Gene therapy devices. drugs, vaccinesandotherbiologicalproducts, andmedical effectiveness, quality, andsecurity of humanand veterinary for protecting the public health by assuring the safety, US FoodandDrugAdministration (FDA) isresponsible FDA place outsidethebodiesof livingorganisms. Latin termusedtodescribebiologicaleventsthat take Ex Vivo of medicinal products. European Unionincharge of theevaluation andsupervision European Medicines Agency (EMA) is an agency of the EMA genetic information. Deoxyribonucleic acid(DNA)isamoleculethat carries DNA among adults. It isthemostcommontypeof non-Hodgkin lymphoma a typeof whitebloodcellresponsible for producing antibodies. Diffuse large B-cell lymphoma(DLBCL)isacancer of Bcells, DLBCL B celllymphoma. chr B cell non-Hodgkin lymphoma (NHL), adult disease leukemialymphoblastic acute cancers suchas (ALL), CTL019 isaCAR-T celltherapyfor patients withBcell outside of alivingorganism. performing agivenprocedure inacontrolled environment Latin term(for withintheglass) refers tothetechniqueof In Vitro for manufacturing,clinical andlaboratory activities. conform toguidelineslaid downbyrelevant agencies GMP, GCPandGLPare thepracticesrequired to GxP isageneraltermfor Good(Anything)Practice. GxP, GMP, GCP, GLP to provide treatment. or usingDNAthat encodesatherapeuticprotein drug gene. Otherf a functional,therapeuticgenetoreplace amutated f can beinanexvivoorsetting.Themostcommon delivering therapeuticDNAintoapatient’s cellswhich Gene therapyistheuseof DNAtotreat diseaseby CTL019 orm of gene therapy involves using DNA that encodes orm of genetherapyinvolvesusingDNAthat encodes onic lymphocytic leukemia (CLL) and diffuse large onic lymphocyticleukemia (CLL)anddiffuselarge orms involve directly correcting a mutation, orms involvedirectly correcting amutation,
Oxford Biomedica plc testing anddrugsafety data iscollected. can beginduringwhichimportantfeasibility, iterative is thestageof research that takes placebefore clinicaltrials Pre-clinical studies(alsoknownasnon-clinicalstudies) Pre-clinical studies India, Australia,CanadaandtheUK. including intheEU, anumberof Latin Americancountries, and bymore than50countries,spanningfour continents emergency usebytheWorld HealthOrganisation (WHO) been grantedaconditionalmarketing authorisation or The Oxford AstraZeneca COVID-19 vaccinehasalready later infects thebody. the immunesystemtoattack theSARS-CoV-2 virusifit vaccination, thesurfacespike protein isproduced, priming material of theSARS-CoV-2 virusspike protein. After infections in chimpanzees and contains the genetic version of acommoncoldvirus(adenovirus)that causes deficient chimpanzee viralvectorbasedonaweakened AstraZeneca COVID-19 vaccineuses areplication- Oxford anditsspin-outcompany, Vaccitech. TheOxford known asAZD1222,wasco-inventedbytheUniversityof The Oxford AstraZeneca COVID-19 vaccine,formerly Oxford AstraZenecaCOVID-19 vaccine devices workandare acceptablysafe. is responsible for ensuringthat medicinesandmedical Health andSocialCare intheUnitedKingdomwhich (MHRA) is an executive agency of theDepartmentof Medicines andHealthcare products Regulatory Agency MHRA Manufacturing ScienceandTechnology. MSAT Gene deliveryvectorbasedonlentiviruses. Lentiviral vectors trademarks, designrightsandpatents. property rights fallprincipallyintofour mainareas; copyright, be treated asanassetorphysicalproperty. Intellectual Intellectual Property (IP)refers tocreative workwhichcan IP place insidethebodiesof livingorganisms. Latin termusedtodescribebiologicaleventsthat take In Vivo
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Annual r eport and accounts 2020
Adjusted Operatingexpenses operating income. Gross incomeistheaggregate of RevenueandOther Gross income included. defined as Operating EBITDA with the R&D tax credit Operating EBIDA is an internal measure usedby the Group, Operating EBIDA for operational Cashflow. is anon-GAAP measure andisoften usedasasurrogate revaluation of investmentsandshare basepayments) (Earnings before Interest, Tax, Depreciation, Amortisation, Operating EBITDA Definitions ofnon-GAAPmeasures biologists todelivergeneticmaterial intocells. Are tools commonlybasedonvirusesusedbymolecular Viral vectors remuneration, accountability and relations with shareholders. practice inrelationship toboard leadershipandeffectiveness, Financial ReportingCouncilandsetsoutstandards of good The UK Corporate Governance Code is published by the UK UK CorporateGovernanceCode to treatment. B lymphocytes(atypeof whitebloodcell)that are resistant children and youngadultsmake toomanyimmature (ALL) isatypeof cancerinwhichthebonemarrow in Relapsed orrefractory (r/r)acutelymphoblasticleukaemia r/r paediatricALL interest paidpluscapitalexpenditure. Cash burnisnetcashgenerated from operations plusnet Cash burn and Share basedpaymentsandtherevaluation of investments. Being Operating expensesbefore Depreciation, Amortisation
Group financial statements 187 188 United Kingdom Oxford OX4 6LT Transport Way Windrush Court Natalie Walter and registeredoffice Company secretary United Kingdom Leeds LS14DL 29 Wellington Street Central Square 10th Floor Link Group Registrars United Kingdom London WC2R 1BH 265 Strand Covington &BurlingLLP Solicitors United Kingdom RG1 3AD Reading 33 ForburyRoad 2 ForburyPlace KPMG LLP Registered independentauditors United Kingdom London EC2R 7HG 41 Lothbury Consilium Strategic Communications communications Financial andcorporate United Kingdom London EC2V 7NQ 85 Gresham Street WG Partners Financial adviserandjointbroker United Kingdom London EC2M 2AT 100 LiverpoolStreet 7th Floor Peel Hunt Financial adviserandbroker Advisers Advisers andcontactdetails Other matters Oxford Biomedica plc
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Annual r
eport and accounts 2020
www.oxb.com [email protected] United Kingdom Oxford OX4 2HN Cowley Garsington Road Oxford BusinessPark Building 9400 Corporate Office United Kingdom Oxford OX4 2JZ Oxford BusinessParkNorth Alec IssigonisWay Unit A,Plot7000 Oxbox United Kingdom Oxford OX5 1QU Yarnton Oxford IndustrialPark Unit 5 United Kingdom Oxford OX4 6LX Cowley Transport Way County Trading Estate Harrow House Other locations: Tel: +44(0)1865783000 United Kingdom Oxford OX4 6LT Transport Way Windrush Court Headquarters: Oxford Biomedicaplc Contact details
This report and its messaging has been designed and produced by scientific branding specialists thinkerdoer. www.thinkerdoer.com
Location and laboratory photography by Philip Gatward / thinkerdoer except pages 1 and 6 (© David Levene / The Guardian), the COVID-19 vaccine image on page 31 (Catherine Isted) and page 32 (© Andre Camara / The Times). Lifestyle photography by Getty Images.
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The papers used for the production of this 2020 report are certified by the Forest Stewardship Council. www.fsc-uk.org Oxford Biomedica plc Windrush Court, Transport Way Oxford OX4 6LT, United Kingdom Tel: +44 (0) 1865 783 000 [email protected] www.oxb.com