Oxford Biomedica CFO on finding coronavirus vaccine

It’s no great stretch to say that Stuart Paynter is playing a key role in tackling one of the great challenges of our time. Oxford Biomedica, the gene therapy specialist that he is CFO of, is tasked with finding a coronavirus vaccine alongside Oxford University’s Jenner Institute and drug giant AstraZeneca.

Although there are many other efforts underway to defeat the pandemic that has so far afflicted 10 million people worldwide and killed another half a million, the Oxford-based consortium is widely regarded as the most likely to be first to discover a vaccine. Results from human trials the consortium has been conducting could be available as soon as August or September.

Paynter says everyone at Oxford Biomedica, which was spun out of the university in 1995, is excited and proud to be involved in what could be a huge achievement. “There’s a real feeling that we’re involved in what could potentially be a breakthrough,” he says.

Oxford Biomedica’s finance function, which Paynter has led for the last three years, has played a key role in ensuring that the firm is now in a position to contribute to the fight to find a vaccine for coronavirus.

The firm has grown solidly in recent years, having struck partnership deals with several of the world’s leading pharma groups including Novartis and  Sanofi. But the steady development has been based on effective decision-making on how to deploy the firm’s resources – chiefly its scientists – to develop the technology that involves the introduction of genetic material in cells.

Paynter says that as well as running core finance areas effectively, he is chiefly responsible for making sure Oxford Biomedica has funds available to exploit all the opportunities that come its way. “At the fast growth stage we are in, with four or five approved gene therapy products, and many more coming, that is my chief mandate,” he says.

Having proved the effectiveness of its technology, Oxford Biomedica is on course to make the processes “more repeatable, more robust and cheaper,” moving from “high science to routine,” he says. As part of the evolution, the firm has invested in a new facility , which is now up and running, for which it raised around $50m of debt that has been paid off in full.

But the onset of coronavirus earlier this year changed everything. The firm has massively increased its capabilities to play its part in developing the vaccine, bringing the wider capacity of the new building into play earlier than anticipated. An extra £40m was raised in June, following a series of fundraisings in recent years worth around £100m.

Paynter says the ratcheting up of Oxford Biomedica’s efforts, has been done in a way that hasn’t put its future at risk, as the firm will receive funding for its work through the consortium, although lower than its normal commercial rate. “There is enough uncertainty in the process itself that we want to make sure we are covering our costs, because it’s a highly uncertain thing we’re doing, given we haven’t operated in this type of partnership before.

“Lentiviral vectors is the area we have expertise in, whereas this is an adeno virus. Whilst it has a many similarities, it has a few differences as well. Adeno is possibly a slightly easier vector to make, but it does leave us with a certain amount of unknowns, which from a CFO’s perspective need to be factored in,” he says.

Healthcare minded

Paynter has spent much of his career in finance related to healthcare businesses of one form or another. After graduating in physics from Imperial College, London, he moved to mid-tier accountancy firm Haines Watts, where he felt its exposure to all kinds of clients developed in him strong problem-solving skills.

He started in industry at software firm Unigraphics, a UK firm owned by Texas-based tech giant EDS as a financial analyst, before moving to Steris Corporation, a US sterilisation and surgical products group, where he would become European finance director. Promotion every couple of years allowed him to “consolidate the learning, build foundations, and start building the house, career-wise,” he says.

But it was a move to UK healthcare giant Shire which, although increasingly US-focused until it was eventually acquired by an American entity, was growing rapidly. “I learned that growth is a great place to be, because it gives you a whole bunch of options, and problems of how you maximise opportunities,” says Paynter.

When a review of financial strategy of the then Basingstoke-headquartered group was launched, Paynter was given an internal value management role, shaping recommendations to the board for the next few years. He learned the need to “take some risks to exploit growth, and not restrict growth by trying to be perfect in every sense”. He says: “When growth slows down, you take a step back and look at what you’ve created, and what needs to be pared back,” he says.

On the recommendation of group CFO Graham Hetherington, Paynter was chosen to run internal audit, which meant a huge breadth of work given Shire was also listed in the US, as well as exposure to the group’s board.

When it became clear that he would need to be based in the US, Paynter decided to stay in the UK. He set his sights on becoming CFO of a FTSE-250 size entity and moved to note maker De La Rue, as head of finance business partnering, a role he saw as a stepping stone to where his ambitions lay.

But he soon realised that his heart was still in the healthcare space. “As soon as I got there, I was wanting to get back into something that was making a tangible difference to people’s lives.”

Raising the bar

At Oxford Biomedica, the opportunity to lead the finance function of a substantial plc in the healthcare space, became available. From the retiring CFO Tim Watts, he learned how finance supports Oxford Biomedica’s business model, in which the firm charges a royalty for use of its technology – such as the work with Novartis on the first US-approved gene therapy, Kymriah.

The group has continued to grow and entered into agreements with more big healthcare groups, such as Boehringer Ingelheim and Bristol Myers Squibb (BMS). Last year Denmark’s Novo Holdings, part of the Novo family of organisations including Novo Nordisk, acquired just over 10 percent of the firm to support its gene therapy products and allowed Oxford Biomedica to clear its debt in full.

So it was clear the CFO role was as much about investor relations and corporate development. “What that does is make us think that finance has another role to play, in terms of transparency and reporting, and letting the business run itself, with analytics becoming more important,” he says.

“We’ve been building out the finance team in order to provide business partnering services, making sure we keep up with what the business needs in a £600m company,” says Paynter, who adds the firm joined the FTSE-250 in the last shuffle of the index.

In its last annual results to December 31 2019 Oxford Biomedica incurred an operating EBITDA loss of £5.2m compared to a £13.4m profit the year before on revenue that decreased by four percent to £64.1 million over the period.

He says that as well as developing a better ERP system, he has been raising the bar in the quality of information, finance is providing across the group. “The information we pass to the business isn’t just financial information, there are data sets around utilisation of time and workforce planning,” he says.

Artificial intelligence (AI) is set to play a bigger role across the group, although not yet in finance, through a collaboration with Microsoft. “We see AI as the key enabler in order to achieve our goal of industrialising the process we feel we have a current lead in.  It’s going to get more robust, quicker and cheaper,” adds Paynter.

“In the medium term, systems will allow people to concentrate less on analysis and more deep understanding of the numbers, supporting decisions further up the value chain, taking the strain of what traditionally would have been done by finance.

“You want AI to interpret what the numbers actually mean, to pressure test your hypothesis on what that means, so you know you’ve got the best chance of giving the right guidance and advice to your business partners. That is where automaton is most useful, where it is adding value,” he says.

In the meantime, Oxford Biomedica is totally committed to the consortium’s efforts to find a coronavirus vaccine, which Paynter says is galvanising the firm’s workforce. “It has allowed everyone to have a common goal during this time,” he says.

That’s despite the inherent difficulties of working to government coronavirus guidelines. “If staff are in an office or laboratory they need access to clean rooms, and to be spread out. We’ve invested in personal protection equipment (PPE) and in testing over and above the government guidelines,” he adds.

“We are privileged in non-Covid times to be helping save the lives of children with cancer. But now we also have the ability to actively help the Jenner Institute and AstraZeneca produce a vaccine and bring normality back to the world. We couldn’t be more proud of our role in the consortium,” he says.

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