Small Cap Feast
Interswitch, a Nigeria-based payments firm, has hired advisers to resurrect plans for a stock-market listing in London and Lagos later this year, which may value the financial technology company at $1.3 billion to $1.5 billion. Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.
ERGO AGL C21 GAL PERE HMI DKL BLV ING SWG
22 Jul 19
Small Cap Feast
Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019
ERGO SAR MYSL SEE BLV LID IND DDDD AEO
16 May 19
Services businesses showing promise
Ergomed’s strategy is to become a global leader by 2020 in Pharmacovigilance and Services for orphan drug development. The reliance on the risk/reward profile of development deals is being dissipated by improvements seen in the Services businesses and better cost controls. Following this period of transition, a better, more forecastable, cash-generating story will support the valuation expectations for the company. Our valuation is upgraded to 242p / share for the Services businesses, with a further 120p for the Development portion of Ergomed.
31 Oct 18
Ergomed (ERGO LN) Oversold post interims: Buy | Findel (FDL LN) Positive H1 trading update. Well positioned for FY growth | First Derivatives (FDP LN) Material OEM contract win for Kx in Industrial Internet of Things | Oxford Metrics (OMG LN) FY in line: Vicon leading the way | Rathbone Brothers (RAT LN) FuM benefits from S&J acquisition, core IM stable at 2.6% annualised
ERGO STU FDP OMG RAT
17 Oct 18
accesso Technology (ACSO LN) Positive first half, full year expected to be in line | Cello Health (CLL LN) Health driving performance | Eckoh (ECK LN) A good start to the year | EKF Diagnostics (EKF LN) Interims slightly ahead, outlook positive | Elektron Technology (EKT LN) H1 19 in line with recently upgraded forecasts | Ergomed (ERGO LN) H1 results: in line with June trading update | Futura Medical (FUM LN) Business update highlights increased focus on MED2002 | ReNeuron Group (RENE LN) Exclusive hPRC discussions stopped: talks renewed with other parties | Yu Group (YU LN) Continuing strong, sustainable growth and cash generation
ERGO ACSO CLL ECK EKF CKT FUM RENE YU/
19 Sep 18
Building for growth
Ergomed’s strategy is to become a global leader in pharmacovigilance and orphan drug development services by 2020. This refocusing of the business, communicated earlier in the year, moves Ergomed away from its reliance on the risk/reward profile of development deals and will ultimately result in a much better, more visible, and cash-generating story.
16 Aug 18
Abzena (ABZA LN) Telix Pharma deals highlight an increasingly integrated offering | Best Ideas 2018 - H1 Review 9% outperformance for our picks YTD | Carclo (CAR LN) Non-binding proposal from consort | ECO Animal Health Group (EAH LN) Another good year: EBITDA and dividend ahead of estimates | Ergomed (ERGO LN) CFO appointed | First Derivatives (FDP LN) Acquisition of remaining minority stake in Kx Systems | Sigma Capital Group (SGM LN) Site delays could impact short term, 6% reduction to FY18e PBT | St Ives (SIV LN) Change complete – focus moves to growth | StatPro Group (SOG LN) Acquisition of regulatory risk services bureau | The PRS REIT (PRSR LN) Hits target yield, sees some construction delays
ERGO ABZA CAR EAH FDP SGM KCT SOG
02 Jul 18
Small Cap Breakfast
Kropz PLC-Intention to float by the emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa Immotion Group - aims to become the market leader in "out of home" Immersive Entertainment Experiences. Offer TBA. Due 12 July Yellow Cake will use its expertise to generate value through the ownership of physical U3O8 (Uranium) together with a range of activities and opportunities connected with owning physical U3O8. Acquiring supply contract for up to $170m. Due Early July. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.
ERGO ALSP BKY ABZA HUM PLUS KMK ZOO LION AVO
02 Jul 18
TU disappoints but medium-term outlook bright
This morning’s trading update highlights continued strong demand for Ergomed’s service offering, across its Clinical Research Services (CRS) and Drug Safety and Medical Information (DS&MI) divisions. However, revenue is now expected to fall 5% short of 2018 consensus (c. £57m) mainly due to start-up delays, with the impact on profit exacerbated by increased investment. Although we have downgraded forecasts to reflect this morning’s update, we continue to believe that Ergomed’s service offering is well positioned for strong medium-term growth. Our revised intrinsic value stands at 282p/share (from 360p).
28 Jun 18
Adept4 (AD4 LN) Satisfactory progress against key objectives for 2018 | Ergomed (ERGO LN) TU disappoints but medium-term outlook bright | Redde (REDD LN) In line FY update, no change to forecasts | Small-cap quantitative research Momentum screen refresh + 7 highlighted stocks | Summit Therapeutics (SUMM LN) PhaseOut DMD misses endpoint: ezutromid development terminated
ERGO AD4 REDD SUMM
28 Jun 18
Small Cap Breakfast
Block Energy— UK based oil exploration and production company whose main country of operation is the Republic of Georgia. Raising £4m. Mkt cap £9.3m. Due early June. Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Cloud based automated management data system. Raising £6m at 15p. Mkt Cap £12m. Due 30 May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May
ERGO GROW ECHO EUSP HUW NAK HAYD HYDG MTPH
25 May 18
2018 - creating further value
Ergomed’s new strategy is to become a global leader in pharmacovigilance and orphan drug development services by 2020. This refocusing of the business moves Ergomed away from its reliance on the risk/reward profile of development deals, towards repeatable and sticky contracts across various geographies and therapy areas. This offers a much better, more visible, cashgenerating story. Our headline valuation has been revised to centre on the Services businesses only, giving a fair value of 266-292p. The Development and Haemostatix businesses add a further 120p to that range.
15 May 18
BCA Marketplace (BCA LN) Motoring ahead – H2 trading beats market expectations | Ergomed (ERGO LN) FY results show impressive pharmacovigilance growth | Liontrust Asset Management (LIO LN) HOLD tight: more to come as flows continue | Oxford Instruments (OXIG LN) Year end trading in line | Severfield (SFR LN) Positive conclusion to FY’18; Medium term targets reiterated
ERGO BCA LIO OXIG SFR
11 Apr 18
Structural growth in a complex landscape
Pharmaceutical Services is a vast and varied landscape, reflecting the complexities in the discovery, development, manufacturing and monitoring of drugs and devices, all within a stringent regulatory environment. The overall growth prospects are highly favourable: drug development activity globally is on the up, led by smaller companies, which is driving demand for outsourced services. In this report we provide a breakdown of the sector into its main activity segments, and identify biologics, increasing service specialisation and consolidation as important value drivers. Finally, we present 15 companies (9 of which are publicly listed) that, in our view, are well placed to benefit from the sector’s secular growth trends.
ERGO ABZA BQE CSRT INS UDG CLIN ABZA HZD OXB
07 Mar 18
ECO Animal Health Group (EAH LN) Marketing authorisations for Aivlosin® in Argentina | Ergomed (ERGO LN) FY trading update: revised EBITDA guidance | Microsaic Systems (MSYS LN) Challenges in traditional markets but new strategy progressing well | MySale Group (MYSL LN) Record interims, a sixth successive half of T/O and margin gains | St Ives (SIV LN) A great step forward
ERGO EAH MSYS MYSL KCT
05 Mar 18
Small Cap Breakfast
Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Offer raising £30m at 165p with mkt cap of £100m . Due 9 Feb.
ERGO PVG SPSY IDE JAY VLTY COM STR RHL ABAL
01 Feb 18
FY trading update: strong top-line growth & order book expansion
Today’s trading update highlights +35% YoY net services revenue growth in 2017, with a particularly strong performance by the Data Safety & Medical Information division, only partially offset (as previously reported) by lower reimbursement revenue. Although net H2 revenue was marginally below our forecasts as a result of clinical trial deferrals, the strong Services order book (£88m at period-end, up from just over £70m at the H1 stage) bodes well for continued strong growth in 2018 and beyond. We continue to favour Ergomed’s integrated business model and reiterate our positive stance.
25 Jan 18
Accesso Technology (ACSO LN) Full year EBITDA substantially ahead of expectations | Brady (BRY LN) Full year results below expectations, disposal of Recycling business | Brewin Dolphin Holdings (BRW LN) 5% core FuM growth in Q1, in line at this early stage | Ergomed (ERGO LN) FY trading update: strong top-line growth & order book expansion | Findel (FDL LN) Strong online trading and FS performance, positive outlook | Frontier Smart Technologies Group (FST LN) Strong 2017, preparing for more to come | Itaconix (ITX LN) Licence for use of non-core polymers in construction sealants | MySale Group (MYSL LN) Growth accelerating, with forecast risk clearly to the upside | NCC Group (NCC LN) Recovery largely priced in already | Renishaw (RSW LN) Strong growth, but a little lighter than we expected | Restaurant Group (RTN LN) In line FY17 outcome | StatPro Group (SOG LN) Full year results in line, Revolution ARR growth accelerating |
ERGO ACSO BRY BRW STU FST ITX MYSL NCC RSW RTN SOG
25 Jan 18
Small Cap Breakfast
Hydrominer GmbH, An Austrian cryptocurrency miner, is considering an initial public offering (IPO) on the London Stock Exchange AIM during 2018 according to an article on Bloomberg. Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
ERGO GTC BRY HAYD QXT INFA SMRT MYSL ACSO SRC
25 Jan 18
2018 – creating further value
Ergomed’s new co-development deal with Allergy Therapeutics adds 9p to the calculation of the top end of our valuation range, which now stands at 270p394p per share, suggesting potential for upside to the current price. At the same time, the announcement that Stephen Stamp is taking over as CEO from Dan Weng is good news for the business - Stephen understands the business well and should help drive it forward.
08 Jan 18
N+1 Singer - Ergomed - Stephen Stamp appointed CEO
Stephen Stamp has been appointed CEO, replacing Dr Dan Weng who was appointed in June 2017. Stephen joined Ergomed as CFO in January 2016 and has over 30 years of experience in corporate finance and general management in both public and private companies in the UK and US. Dr Jan Petracek has also been appointed COO and Board Director. Jan joined Erogmed at the time of the PharmInvent acquisition in November 2016 before being appointed CEO of PrimeVigilance in April 2017. Ergomed has grown considerably over the years and we retain our highly positive stance on the group.
15 Dec 17
N+1 Singer - Ergomed - Co-development agreement with Allergy Therapeutics
Ergomed has entered into a co-development agreement with Allergy Therapeutics for three of its OralVac products. The first Phase I trial (in house dust mites) will commence in 2018. Ergomed will contribute in-kind to the development of the products and will receive service fees as well as royalties on net sales. Ergomed has extensive experience in the allergy field and we view it as a good fit for the group’s co-development pipeline. We continue to favour Ergomed’s integrated business model and reiterate our highly positive stance.
12 Dec 17
Small Cap Breakfast
Fusion Antibodies—Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications. Offer TBA. Due Mid Dec. Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m. Due 19 Dec. Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine. Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with market cap of £17.4m. Also acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago with extensive drilling capabilities. Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity. Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec. Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices. Raising £7.5m to £10m. Offer TBA. Due early Dec Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native invideo advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 6 Dec. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.
ERGO ARIX PEN ATYM PXS APH VRS BMR CTP ROSE
04 Dec 17
Positive PeproStat data
Recently announced results from the phase II clinical trial of PeproStat were positive. As a result, the probability of PeproStat reaching the market increased from around a third to around two-thirds. This adds £12.7m to the valuation of this programme. As expected the shares saw strong performance on the back of the positive data. There remains significant upside to the bottom end of our 276p-401p valuation.
01 Nov 17
N+1 Singer - Ergomed - Positive top line PeproStat™ Phase II data
Ergomed has announced positive top line data from its Phase II trial of PeproStat™. The liquid haemostat met the primary efficacy endpoint of superiority over standard of care in time to haemostatis across all surgery types tested. PeproStat™ offers a differentiated approach to current products in the haemostat market in that it is manufactured from blood-free components and formulated in a ready-to-use solution. Ergomed now intends to undertake a Phase III trial evaluating PeproStat™ in an enlarged group of patients. We reiterate our highly positive stance and upgrade our intrinsic value to 376p per share (from 355p).
23 Oct 17
Well-positioned ahead of PeproStat data
Ahead of the PeproStat data expected later this month, Ergomed recently improved its competitive position for its Services businesses with its acquisition of PSR in the Orphan Drug/Rare Disease. At the same time, it signed its first deal for PeproStat (and ReadyFlow), suggesting attractive commercialisation opportunities awaiting the data at the end of the month. With significant upside to the bottom end of our 281-397p valuation, the shares could see strong performance on the back of positive clinical data.
20 Oct 17
N+1 Singer - Ergomed - First commercial Haemostatix deal
Ergomed has signed its first regional licensing agreement for its Haemostatix products (PeproStat™ and ReadyFlow™) with Boryung Pharmaceutical in South Korea. Ergomed is eligible to an undisclosed upfront payment, development milestone payments and a double-digit share of product sales. PeproStat™ is on track to produce Phase IIb data in late October and, subject to positive data, could potentially reach the market in South Korea in 2021. We believe positive Phase IIb data will be a catalyst for Ergomed to establish a number of geographical deals for its Haemostatix products. We reiterate our highly positive stance on Ergomed.
27 Sep 17
N+1 Singer - Ergomed - Strong H1 growth; PeproStat™ Phase IIb data expected in October
Ergomed’s interim results highlight continued progression and impressive growth (net service revenue +53%, 36% organic) propelled by Drug Safety Monitoring and Medical Information, which nearly doubled YoY. New service contracts worth £23m were signed through to 31 July with an impressive backlog of contracted work of over £70m, providing the group with a high degree of revenue visibility. Following patient recruitment into the group’s Phase IIb trial evaluating PeproStat™ completing around six months ahead of schedule we now look forward to top-line data in late October. We reiterate our highly positive stance on Ergomed.
18 Sep 17
Outlook focused on PeproStat data soon
H1 performance was in line with expectations. Looking out, the early completion of recruitment into the PeproStat Haemostatix trial means the read out is expected in Q4 2017, substantially ahead of schedule. The valuation range remains unchanged at 232p - 397p and the business remains on track to match expectations of significant growth.
18 Sep 17
N+1 Singer - Morning Song 18-09-2017
Amino Technologies (AMO LN) German contract win | City of London Investment Group (CLIG LN) In line with Q4 update: earnings grow, small increase in dividend | Ergomed (ERGO LN) Strong H1 growth; PeproStat™ Phase IIb data expected in October | Itaconix (ITX LN) A period of meaningful commercial progress | Retail Recovering sector indicators for 2018 likely to trigger outperformance
ERGO CLIG STU HFD BWNG AMO ITX
18 Sep 17
N+1 Singer - Ergomed - Clinical hold on CEL-SCI’s Phase III removed
The FDA removing the clinical hold on co-development partner CEL-SCI’s Phase III trial in head and neck cancer is encouraging. Ergomed is working with CEL-SCI on the Phase III trial and is eligible to a proportional share of all product revenues until a multiple of investment has been returned. Ergomed currently has four co-development partners which offer potentially attractive returns. We reiterate our positive stance on Ergomed.
15 Aug 17
N+1 Singer - Morning Song 15-08-2017
Ergomed (ERGO LN) Clinical hold on CEL-SCI’s Phase III removed | H&T Group (HAT LN) Positive interim results, benefiting from gold price increase | Marshall Motor Holdings (MMH LN) Deep value as strong performance ongoing & net bank debt reduces | UDG Healthcare (UDG LN) Acquisition-led upgrade momentum building
ERGO HAT UDG MMH
15 Aug 17
N+1 Singer - Ergomed - PeproStat™ Phase IIb fully recruited; top line data Q4 2017
Ergomed has completed recruitment in its Phase IIb trial evaluating PeproStat™ six months ahead of schedule. The group announced in June that it had reached recruitment mid-point quicker than originally anticipated with top line data expected in Q4 2017, earlier than the original Q1 2018. This highlights Ergomed’s ability to recruit patients successfully and undertake trials efficiently. PeproStat™ offers a differentiated approach to current products in the haemostat market in that it is manufactured from blood-free components and is formulated in a ready-to-use solution. We reiterate our highly positive stance on Ergomed and look forward to the data later this year.
24 Jul 17
N+1 Singer - Ergomed - Investor meeting highlighted upside potential
Ergomed hosted a very interesting investor meeting yesterday, providing an overview of the business with a particular focus on PrimeVigilance. We continue to believe Ergomed’s specialised service offering provides it with a substantial opportunity to generate attractive returns for shareholders with significant upside from the development business. The group has grown considerably over the years (37% 3 year revenue CAGR to Dec 2016) and we estimate continued double-digit service growth in our forecast horizon. Ergomed’s strategy for accelerated growth includes acquisitions as well as organic growth and development upside. We look forward to the PeproStat™ Phase IIb data and co-development partner Asarina Pharma commencing a Phase IIb trial in premenstrual dysphoric disorder (PMDD) later this year. We reiterate our highly positive stance.
05 Jul 17
N+1 Singer - Ergomed - Top line PeproStat™ Phase IIb data now expected in Q4 2017
Top line data from the Phase IIb trial evaluating PeproStat™ is now expected in Q4 2017, earlier than the original Q1 2018 due to reaching recruitment mid-point ahead of schedule. This highlights Ergomed’s ability to recruit patients successfully and undertake trials efficiently. PeproStat™ offers a differentiated approach to current products in the haemostat market in that it is manufactured from blood-free components and is formulated in a ready-to-use solution. We reiterate our highly positive stance on Ergomed and look forward to the data later this year.
21 Jun 17
Ongoing strength in Ergomed’s approach
Aeterna Zentaris, a co-development partner of Ergomed, announced that its Pivotal Phase III Clinical Trial of Zoptrex in women with endometrial cancer failed to meet its primary endpoint. As a result, there is no longer any potential upside from the relationship. We have reduced the top end of our valuation range/share which includes the co-development deals, by 39.7p. The valuation range now stands at 232p - 397p.
08 May 17
N+1 Singer - Ergomed - Aeterna Zentaris Phase III trial with Zoptrex™ fails to meet endpoint
Co-development partner Aeterna Zentaris’ Phase III trial of Zoptrex™ failing to meet its primary endpoint is disappointing. Ergomed provided its services to Aeterna Zentaris for its Phase III trial and was eligible to a share of the revenue generated until a multiple of investment had been returned. A portion of upfront payments from several license agreements has already been received. Ergomed’s co-development business enables it to share the development risk and reward. The group still has four other co-development partners which continue to offer potentially attractive returns (Ferrer announced positive Phase II results in February). As highlighted in our recent note ‘Forecasts upgraded; analysis of upside potential’ on 21 April, we noted the downside to our target price of Ergomed if Zoptrex™ failed was 13p. As a result, we reduce our Target Price from 360p to 347p. We remain at Buy.
02 May 17
N+1 Singer - Ergomed - Forecasts upgraded; analysis of upside potential
Ergomed’s FY results highlighted continued robust growth with its services business (+30% YoY) and an impressive backlog of £70m contracted future work, providing a high level of revenue visibility. We upgrade our forecasts and Target Price (from 293p to 360p) to reflect the increasing momentum and visibility. We look forward to top line data from co-development partner Aeterna Zentaris’ Phase III trial of Zoptrex™ (endometrial cancer) in April. If positive, it will help validate Ergomed’s hybrid model and follows the recent positive top-line Phase II results of Lorediplon (insomnia) from Ferrer. We also provide an analysis of the upside potential from the development business in this note. We remain at Buy.
21 Apr 17
£70m contracted revenues still to come
2016 perfectly highlighted the strengths of the Ergomed business: the visibility of its Contracted Revenues and the potential upside from co-development deals. Contracted revenues now stand at an impressive £70m, up from £42m and the outlook remains auspicious. FY2016 came in ahead of revised forecasts and there are upgrades to FY2017 onwards. Meanwhile, Haemostatix is moving into the next phase of clinical trials, and the co-development programmes continue to progress. Our valuation range/share has increased to 232p - 437p.
11 Apr 17
N+1 Singer - Ergomed - FY results show strong Services growth; Phase III Zoptrex® data ahead
Today’s FY results highlight continued robust growth with services revenue +30% YoY (+27% excl. acquisitions), propelled as expected by Drug Safety and Medical Information (+63%), and adj. EBITDA ahead of our forecasts. The company’s backlog of contracted revenue has expanded further to £70m (from £59m last year), providing a high level of revenue visibility. Following the release in February 2017 of positive Phase II data on lorediplon (insomnia) by co-development partner Ferrer, we continue to expect top line Phase III data on Zoptrex® (endometrial cancer) from partner Aeterna Zentaris in April. In our view, positive Zoptrex® data would further validate Ergomed’s integrated business model, which offers a combination of strong growth and revenue visibility with a de-risked share of the potentially significant value creation across a number of clinical-stage development programmes. Our recommendation remains Buy.
28 Mar 17
N+1 Singer - Morning Song 28-03-2017
A G Barr (BAG LN) Share buybacks the main news around FY17 finals | Churchill China (CHH LN) An excellent set of 2016 results and more upgrades | Ergomed (ERGO LN) FY results show strong Services growth; Phase III Zoptrex® data ahead | Instem (INS LN) Investment to accelerate growth trajectory | Severfield (SFR LN) Strong H2 drives upgrades; CEO temporarily steps down due to ill health | Summit Therapeutics (SUMM LN) Strengthening the data package: planned extension of PhaseOut DMD | T. Clarke (CTO LN) Strong conclusion to FY16, record order book
ERGO SUMM BAG CHH INS CTO SFR
28 Mar 17
Small Cap Breakfast
Ergomed ( ERGO. L ) | PipeHawk (PIP.L) | CAP-XX (CPX.L) | Focusrite (TUNE.L) | Maintel Holdings (MAI.L) | Learning Technologies Group (LTG.L) | SalvaRx Group (SALV.L) | Tiso Blackstar Group (TBGR.L) | Photonstar LED Group (PSL.L) | Michelmersh Brick Holdings (MBH.L)
ERGO PIP CPX TUNE MAI LTG SALV BOU MBH TBGR
20 Mar 17
2016 revenues ahead of forecasts
The recent period end update for Ergomed confirmed the good performance for that was expected for FY2016, with revenues of £38m up 26% year on year, against £35.5m forecast. The company retains its momentum, and with an attractive forward order book currently worth £42m, this could be expected to continue. Our sum-of-the-parts valuation analysis suggests that the Services businesses are valued at c.202p. With the Products businesses added to this, the valuation increases to 301p.
25 Jan 17
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
ERGO IQE SDY SUN NETD G4M GFIN ULS FUTR
12 Jan 17
Adding earnings. Adding future upside
Following a roller-coaster few months politically, it is good to return to an attractively priced, well-managed investment which has progressed its business model over the last quarter. Ergomed’s recent acquisition adds a further high growth revenue stream to its portfolio and, along with the Asarina co-development, adds 34p to our valuation per share which remains well above current levels with a range of 163-301p.
13 Dec 16
N+1 Singer - Ergomed - PharmInvent acquisition complements PrimeVigilance
The announcement of an acquisition to complement Ergomed’s pharmacovigilance division, PrimeVigilance, comes as no surprise given Ergomed stated that it was evaluating potential service business acquisitions at the time of its interim results. PharmInvent, a European pharmacovigilance and regulatory services business, will be integrated with PrimeVigilance, which continues to generate impressive growth (+53% in H1 2016). The acquisition will be immediately accretive to earnings. Ergomed’s strategy is to continue to expand its pharmacovigilance offering, particularly in the US. We view the deal as a good fit and continue to favour Ergomed’s integrated business model. We remain at Buy.
29 Nov 16
Small Cap Breakfast
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.
ERGO MSMN CRAW IGR JDG VRS CRX CERP
29 Nov 16
N+1 Singer - Ergomed - Asarina agreement provides upside potential
Ergomed entered into a co-development agreement with Asarina Pharma AB for the Phase IIb clinical development of Sepranolone as a targeted treatment for patients with premenstrual dysphoric disorder (PMDD) on 1 Nov 2016. Ergomed is co-investing in the trial in return for an equity stake in Asarina. The group now has 5 active co-development agreements with clinical data from 3 due in the next 12 months, providing upside to our revised 275p Target Price (from 265p). We remain at Buy.
07 Nov 16
AMBRIAN PLC (AMBR LN) | BEOWULF MINING (BEM LN) | ELEGANT HOTELS GROUP PLC (EHG LN) | ERGOMED PLC (ERGO LN) | EU SUPPLY PLC (EUSP LN) | GRAFENIA PLC (GRA LN) | INLAND HOMES PLC (INL LN) | WEATHERLY INTERNATIONAL (WTI LN) | Milestone Group (MSG LN) | Inland Homes (INL LN)
ERGO EUSP BEM GRA WTI AMBR INL EHG LWRF CTEA
14 Oct 16
Excellent H1 progress, confident for H2
Ergomed’s recent performance highlights a key attraction of the business: long- term visibility on revenues from its Services. The H1 results show that Ergomed has already contracted enough business to hit FY2016 expectations, and has good visibility into FY2017 too. Ergomed has significant upside potential from its co-development relationships and from its ownership of Haemostatix, too.
11 Oct 16
N+1 Singer - Ergomed - Solid interim results
Ergomed’s interim results highlight continued progression and robust growth (+21%) in its services business. Data from one of the group’s co-development partnerships (Ferrer) is on track to deliver clinical data before the end of the year with two (Aeterna Zentaris and Dilaforette) in H1 2017. The acquisition of Haemostatix in May added a development segment to the business with a Phase II trial expected to commence next year. The Board continues to evaluate additional potential service business acquisitions and a number of co-development leads are under discussion. We continue to favour Ergomed’s integrated business model of services provision, co-development and development. We remain at Buy.
26 Sep 16
Two bolt-on acquisitions in Germany
Ergomed has enhanced its existing capabilities through two bolt-on acquisitions in Germany, in line with the group’s strategy. The acquisitions offer the potential for cross-selling as well as improving the efficiency of the business. We continue to favour Ergomed’s integrated business model of services provision, co-development and development. We remain at Buy.
13 Jun 16
Deal adds risk; potential upside remains
Ergomed recently announced the acquisition of Haemostatix and accompanying c.£9m placing. The announcement of an acquisition came as no surprise given that strategic acquisitions are part of the group’s strategy in order to expand globally. However, we expected a complementary acquisition to PrimeVigilance rather than one that added a development segment to the business, increasing its overall risk profile. Although we do note that a portion of the c.£9m placing has been earmarked for acquisitions in the services business. We continue to favour Ergomed’s integrated business model of services provision, co-development and now development. We remain at Buy with a revised Target Price of 263p (from 286p).
26 May 16
Ergomed (ERGO LN) Deal adds risk; potential upside remains | Ground Rents Income Fund (GRIO LN) NAV uplift of 4% to 118.9p, revenue increase of 15% | Imagination Technologies Group (IMG LN) Messy trading update but cash ahead and restructuring on track | Marshall Motor Holdings (MMH LN) Ridgeway acquisition transform scale and forecasts | Oxford BioMedica (OXB LN) Forecasts updated, remain at Sell
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26 May 16
Proposed Haemostatix acquisition and conditional placing
The announcement of an acquisition comes as no surprise given that potential strategic acquisitions are part of the group’s strategy in order to expand globally. We continue to favour Ergomed’s integrated business model of services provision and co-development, as it provides low-risk exposure to ongoing drug development programmes. However, the proposed acquisition adds a development segment to the business, increasing its overall risk profile. Ideally we would have preferred the acquisition to be complementary to PrimeVigilance, although note that a portion of the conditional placing has been earmarked for acquisitions in the services business. Ergomed intends to remain profitable at the EBITDA level and we will update our forecasts and valuation post the general meeting.
05 May 16
Forecasts updated, remain at Buy
We have updated our forecasts on Ergomed this morning following full year results on 12th April 2016. The results highlighted continued progression and robust growth in the group’s services business. We are expecting three of the group’s co-development partnerships to deliver clinical data in 2016 with positive data providing value inflection points. The group continues to be in discussions for potential new co-development deals and we look forward to them being announced during 2016. We continue to favour Ergomed’s integrated business model of services provision and co-development, which provides low-risk exposure to ongoing drug development programmes. We upgrade our target price to 286p (284p) and remain at Buy.
19 Apr 16
Full year results: clinical data expected in 2016
Ergomed’s full year results highlight continued progression and robust growth in its services business. We are expecting three of the group’s co-development partnerships are on track to deliver clinical data in 2016 with positive data providing value inflection points. The group continues to be in discussions for potential new co-development deals and we look forward to them being announced during 2016. We continue to favour Ergomed’s integrated business model of services provision and co-development, with provides low-risk exposure to ongoing drug development programmes. We remain at Buy.
12 Apr 16
EBIT upgrades following strong business update
Ergomed’s full year business update earlier in the month highlighted strong top line growth ahead of our expectations and c.£28m of new contracts. Three of Ergomed’s co-development partnerships are on track to deliver clinical data in 2016 with positive data providing value inflection points. The group is in discussions for potential new co-development deals and we look forward to them being announced during 2016. We continue to favour Ergomed’s integrated business model of services provision and co-development, which provides low-risk exposure to ongoing drug development programmes. We upgrade EBIT forecasts this morning by 3%, 2% and 2% in 2015, 2016 and 2017 respectively. We remain at Buy and increase our Target Price slightly from 281p to 284p.
18 Feb 16
Co-development update: clinical data expected in 2016
Three of Ergomed’s co-development partnerships are on track to deliver clinical data in 2016 with the fourth in 2018. We have removed Synta from our valuation following the termination of its Phase III trial in October 2015, reducing our target price from 290p to 281p. We continue to favour Ergomed’s hybrid business model of services provision and codevelopment, which provides low-risk exposure to ongoing drug development programmes. We believe additional co-development partnerships will be established, providing upside to our valuation. We remain at Buy.
16 Dec 15
BLUR GROUP PLC (BLUR LN) CFO joins Board | Brewin Dolphin Holdings (BRW LN) Moving to HOLD following performance post-Finals | Domino's Pizza UK & IRL (DOM LN) Germany – short-term fix but mid-long term growth expectations lowered | Ergomed (ERGO LN) Co-development update: clinical data expected in 2016 | Futura Medical (FUM LN) Extended shelf life for CSD500 achieved: regulatory filing imminent | IDOX (IDOX LN) Stable outlook in all markets; £100m sales target | IQE (IQE LN) Full year in line, as expected | Marston's (MARS LN) Solid double-digit TSR proposition | N Brown Group (BWNG LN) Risk from unseasonably warm weather reflected in downgrade | Skyepharma (SKP LN) Positive development with EXPAREL®
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16 Dec 15
Co-development partner Synta terminates Phase III trial in NSCLC
Synta Pharmaceuticals terminating its Phase III trial in second-line treatment of non-small cell lung cancer (NSCLC) is disappointing. Ergomed could still potentially benefit from a share of product revenues from ganetespib (Synta’s candidate cancer drug) in additional indications. Ergomed also has four other do-development deals which continue to offer potentially very attractive returns with clinical data from three of them due in 2016. We continue to favour Ergomed’s hybrid business model of services provision and co-development, which provides low-risk exposure to ongoing drug development programmes. We remain at Buy.
21 Oct 15
Co-development partner initiates Phase II
The commencement of Dilaforette’s Phase II trial with sevaparin in patients with sickle-cell disease is encouraging and marks the first milestone in Ergomed’s Orphan drug co-development deal. Data is expected in H2 2016. The five current co-development deals offer potentially very attractive returns with clinical data from 4 due between now and the end of 2016, providing upside potential to our 290p TP. We remain at Buy and look forward to data from the group’s co-development deals.
13 Oct 15
Near-term newsflow from co-development deals
We continue to favour Ergomed’s hybrid business model of services provision and co-development, which provides low-risk exposure to a number of ongoing drug development programmes. We expect important newsflow on two co-development deals in Q4 in the form of interim Phase III data, which if positive would provide further validation for Ergomed’s co-development strategy and de-risk its expected returns.
01 Oct 15
Interim results in line with expectations
Ergomed’s interim results highlight continued progression and robust growth in its services business. The five current co- development deals offer potentially very attractive returns with clinical data from 4 due between now and the end of 2016, providing upside potential to our 290p TP. We continue to see organic growth opportunities in the group’s service offering and co-development business as well as potential acquisitive growth to accelerate service expansion and enhance geographical presence. We remain at Buy.
29 Sep 15
Service offering gaining traction
The selection of Ergomed by Aeterna Zentaris to manage its confirmatory Phase III clinical trial of MacrilenTM in adult growth hormone deficiency (AGHD) is positive and highlights the attractiveness of Ergomed’s service offering. Ergomed also has a co-development agreement with Aeterna Zentaris on its Phase III trial of Zoptarelin Doxorubicin in endometrial cancer and as a result, we view the additional contract work in a different trial as confirmation of Ergomed’s reliable and specialised capabilities. We maintain our Buy recommendation and 290p Target Price.
26 Jun 15
Hybrid model drives significant upside potential
Ergomed is a profitable CRO that enhanced its service offering in July 2014 through the acquisition of PrimeVigilance to include post-marketing support for marketed drugs. We believe the co-development business could drive significant potential upside as Ergomed co-invests a proportion of revenue in return for equity or royalty payments. Ergomed currently has 5 active co-development deals with clinical data from 4 due in 2016, providing upside potential to our 290p TP. We initiate with a Buy.
18 Jun 15
AGA Rangemaster (AGA LN) Offer from US consolidator seems likely, suggesting upside from here | Ergomed (ERGO LN) Hybrid model drives significant upside potential | Findel (FDL LN) Renewed focus on Education & shareholder value | Liontrust Asset Management (LIO LN) Earnings beat and dividend pushing ahead | Scapa Group (SCPA LN) First Water site visit - Opportunities abound
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18 Jun 15
Hybridan - Small Cap Wrap
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.
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21 Jan 15