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EKF has secured its first order in the UK for the Primestore MTM sample collection device, worth £3m over the next 7 weeks. The purchaser is a partner from the private sector, with the device being used in a Covid-19 testing programme for UK staff. With these increasing orders, EKF has expanded its production line in Cardiff and now has capacity for 25,000 sample collection tubes per day. In addition, the production line in Germany is now up and running. We increase our FY20 revenue estimates by a further £3m and EBITDA by £2m. Given the nature of the device, which is agnostic over which molecular test is used, we expect demand to continue at elevated levels for the duration of the pandemic and continue to see further upside potential to our already materially upgraded estimates. EKF remains one of our best Ideas for 2020.
Companies: EKF Diagnostics Holdings Plc
Hemogenyx Pharmaceuticals (HEMO.L): CAR-T Agreement with University of Pennsylvania
Companies: HemoGenyx Pharmaceuticals Plc
Scancell is proposing to raise up to £15m through a combination of shares and convertible loan notes. The raise is underpinned by an investment of £10m (£5m shares and £5m convertible) by Redmile Group LLC, a US based specialist healthcare and life sciences investment fund. Vulpes, the existing major investor, will subscribe £2m (£1m equity and £1m convertible).
Companies: Scancell Holdings Plc
Yourgene has raised £15m (net) via an equity placing to enhance its growth trajectory through the acquisition of Coastal Genomics and investment in commercial infrastructure. Our 3yr revenue CAGR increases to 31% and we expect both the acquisition and investment to be significantly earnings enhancing in FY23. We see fair value for the shares at 24p and view Yourgene as a strategic asset in a rapidly growing market segment.
Companies: Yourgene Health Plc
For this Monthly, we are delighted that Rooney Nimmo and 24Haymarket have allowed us to reproduce a recent report they jointly published, entitled An analysis of UK exits (2015-2019), which provides a granular analysis by sector of the activity in our dynamic private companies world. We hope you find the insights of interest.
Companies: AVO AGY ARBB ARIX CLIG ICGT NSF PCA PIN PXC PHP RECI SCE TRX SHED VTA
Redx Pharma (REDX.L): Out licensing agreement with AstraZeneca | Genedrive (GDR.L): Collaboration with Beckman Coulter to automate SARS-CoV-2 PCR testing
Companies: Redx Pharma Plc Genedrive Plc
GSK’s Q2 top-line growth came under pressure due to COVID-19-related disruptions, particularly in Vaccine, and destocking in the Pharmaceuticals and Consumer Healthcare segments. Rising investments in oncology and COVID-19-related treatments further impacted the bottom-line. Although recovery could be slow, as people avoid visits to physicians, the newer class of drugs in the Pharmaceutical segment could fuel growth in the near to mid-term. Pre-booking of COVID-19 vaccines has been encouraging.
Companies: GlaxoSmithKline Plc
Tiziana (TILS), also listed on NASDAQ (Symbol TLSA), is driving forwards the clinical development plan for its fully-human mAb TZLS-501 for treating COVID-19 respiratory symptoms and has set out the detail of its clinical plan being executed by a group of specialist contract research organisations
Companies: Tiziana Life Sciences Plc
Re-analysis of the AEGIS H2H study showed that Ferracru/Accrufer is a credible alternative to IV therapy for iron deficiency anaemia and that it corrects anaemia and maintains haemoglobin (Hb) levels over the long term. Although Feraccru did not technically achieve non-inferiority versus IV iron at 12 weeks, the long-term benefits and health economic arguments for using Feraccru remain as strong as ever. The regulatory status of Feraccru is unaffected by this result and is unlikely, in our view, to affect the outcome of the anticipated US licensing deal. If anything, it should re-enforce Shield’s position. We reiterate our 350p target price, and look forward to the prospect of the company completing a US licence deal.
Companies: Shield Therapeutics Plc
The FY 2019 results, as a guide to the future performance of the business, are largely irrelevant given the transfer of COPD therapeutic assets to AstraZeneca in May 2020 and exceptional impairment costs incurred. However, the remaining NIOX business (FeNO diagnostic test for asthma) provides an attractive investment opportunity post the COVID pandemic. With monthly cash burn of c.£1m during the key lockdown months of April/May and an expected, albeit declining, burn in the short term, early signs of recovery offer encouragement beyond this period of disruption, after which we expect a return to strong revenue growth in the medium to long term. Assuming that NIOX can return to pre-pandemic levels, this business can arguably support a valuation in the 25-60p range, based on comparable multiples. Our forecasts and target price remain under review.
Companies: Circassia Group Plc
Venture Life Group has provided a trading update for the six months to June 2020. In the period, the company grew revenues by 80% to £16.9m, including 65% organic growth, while PharmaSource revenues (acquired Dec-19) increased 43% versus H1/19A. Supported by the new hand-sanitising brand, DISINPLUS, and organic growth, Venture Life Brands contributed 53% of revenues in the period, versus ~30% in H1/19A. During the half, Venture Life signed several new agreements, including an exclusive 15-year agreement with its Chinese partner and additional business with Alliance Pharma, providing a solid foundation for longer term revenue growth. Amid a global pandemic, these results clearly demonstrate the strength and agility of Venture Life Group, we maintain our Buy recommendation.
Companies: Venture Life Group Plc
Shield Therapeutics (STX) has announced a technical update to findings from the AEGIS-H2H post-marketing study. The re-analysis demonstrates that Feraccru/Accrufer is a credible alternative to IV iron therapy for iron deficiency anaemia (IDA) in the long term. We note the product did not meet the primary endpoint of non-inferiority at 12 weeks vs IV iron, but did correct anaemia and maintain Hb levels over the long term phase (as defined by the 40-week extension phase of the trial). While we note AEGIS H2H was not required as a registration study (thus the regulatory status of the product is unaffected by the study), the headline results of long-term Hb correction is comparable to IV iron for chronic conditions of anaemia. We believe this will have positive implications for health economic outcomes, pricing strategies and partnering opportunities. The next key inflection point is a US partnering deal; we expect Accrufer launch later this year once a partner has been found. Our valuation of STX is unchanged at £381.7m or 326p/share.
Shield Therapeutics (LON:STX) has provided further conclusions from its analysis of data from the AEGIS-H2H study comparing the company’s oral iron replacement treatment Feraccru to intravenous (IV) iron. The outcomes of the analysis are strongly supportive of ongoing discussions for the global com
Hikma’s H1 20 top-line acceleration was driven by COVID-19-related demand in Injectables and Generics and the economic recovery in Algeria propelled growth in the Branded segment. Combined with a favourable product-mix, the operating margin was up 1.5ppt. In the near term, new launches across segments should provide some respite against the ongoing pricing pressure. Given the company’s thin R&D pipeline and a robust balance sheet, M&A (probably in the biosimilars space) seems on the cards.
Companies: Hikma Pharmaceuticals Plc
Circassia announced on 9 April that it is terminating its agreement with AstraZeneca (AZN) selling COPD therapies in the US. Circassia will transfer these assets to AZN in return for setting off the c.$150m outstanding loan it has with AZN. Consequently, Circassia will become a debt-free diagnostics company whose principal focus will be the commercialisation of NIOX, which reported c.26% growth in revenues to c.£35m in 2019. Despite the inevitable disruption across its key markets caused by the COVID-19 pandemic, there is encouraging evidence from China, which went into lock down first. Given the right-sizing of its cost base, this business should be both profitable and cash generative, given the c.75% gross margins. Whilst we are withdrawing forecasts and target price, given this uncertainty, we have provided an assessment of the potential value of the business, based on comparable multiples that supports a 25-60p valuation range.