The Hardman & Co Monthly: September 2022

Feature article: Macro issues dominate investor sentiment - Some basics for investors The big topics in the investment world at the moment seem to be macroeconomic. With that in mind, we thought it would be useful to revisit some of the basics of the terms being used in the current environment, and to remind investors of the things to look out for (indeed, many younger investors may not have come across some of these influences in their investing lifetime): • Recession does not affect

Diurnal Group - Proposed acquisition by Neurocrine Biosciences

Diurnal has announced that it has agreed to an acquisition by Neurocrine Biosciences (US-based biopharmaceutical player) for a cash consideration of £48.3m or 27.5p per share. The proposed acquisition consideration is a c 144% premium to the closing price of 11.25p on 26 August. Although the acquisition is subject to shareholder approval by both companies, the transaction is likely to close by late October or early November. Neurocrine is also focused on the endocrine space (in addition to neuro

The Hardman & Co Monthly: August 2022

Feature article: Utility regulation – Changes afoot - Patching up a tainted model While the gas supply crisis – and its price implications – have dominated the UK price regulated sectors in recent months, other issues have arisen that have seriously tainted the price regulation system itself. Indeed, it is fair to ask whether it is ‘’fit for purpose’’. Back in 1984, price regulation, via an unsophisticated RPI-x formula, was introduced to prevent the privatised British Telecom (BT) from abusin

Diurnal Group - Alkindi sales underpin top-line growth

Diurnal announced a trading update for the 12-month period ending June 2022, reporting top-line results broadly in line with consensus estimates. While total revenue grew by 7.1% y-o-y (to £4.7m), core product sales improved 104% y-o-y to £4.62m (£2.27m in FY21). Licensing revenue was a modest £0.06m versus £2.1m in FY21 (comprising upfront and milestone payments from Citrine Medicine for China). Product sales momentum was supported by a 60.8% growth in Alkindi during the period as well as the f

Hybridan Small Cap Feast 26/07/22

Dish of the day Joiners: No joiners today. Leavers: Vivo Energy Plc has left the main market of the London Stock Exchange. What’s cooking in the IPO kitchen?** Inteliqo Limited, intends to join the Aquis Growth Market. Inteliqo Limited provides sales, marketing and distribution services to technology product owners under long-term distribution agreements. The Company has agreed its first such agreement in respect of the Ipedia iQ product range. The iQ product is a smart translation earphone (ear

Hardman & Co Monthly: July 2022

Feature article: Punching above their weight? The contribution of small- and mid-cap quoted companies to markets, employment and tax revenues Back in May 2019, Hardman & Co and the Quoted Companies Alliance jointly published a paper looking at the importance of small and mid-size quoted companies (SMQCs) to the markets, and their contribution to tax revenues and employment in the UK. This is a poorly researched area, and that paper helped frame the debate; it has been quoted from by bodies such

Diurnal Group - First patient dosed in the US CONnECT study

Diurnal has dosed the first patient in its pivotal Phase III CONnECT clinical trial assessing DNL-0200/Efmody in adults with congenital adrenal hyperplasia (CAH) for the US and Japanese markets, marking a key step in the asset’s clinical progression. The year-long trial is the first blinded study in CAH, according to management. Headline data are expected in 2024 and are material to Efmody’s prospects in United States. We also believe positive results from this study could potentially create an

Hardman & Co Monthly: June 2021

In terms of environmental policy, the quest to cut carbon emissions dramatically and to achieve net zero remains high on the political agenda, although the war in Ukraine – and specifically the issue of gas supplies – may weaken these commitments. In any event, the environmental performance of China and the US – responsible, between them, for around one half of global emissions – will be key. In Asia, where ca.85% of energy consumption is currently being met by fossil fuels – there are ca.4.6b

Hybridan Small Cap Feast 01/06/22

Dish of the day Joiners: No Joiners Today. Leavers: Innovaderma has left the Main Market. What’s cooking in the IPO kitchen? AssetCo plc, intends to join re-join AIM. The Company's strategy is to develop an agile asset and wealth management company that meets the needs of investors in the 21st century by acquiring, managing and operating asset and wealth management activities and interests, together with other related services. The Company is in the process of acquiring the entire issued share c

The Hardman & Co Monthly: May 2022

Feature article: Latest ONS survey: steady as she goes…and ignore retail investors at your peril The ONS (Office for National Statistics) has been charting the beneficial ownership of UK-quoted companies periodically since the early 1960s. The latest paper was published in March 2022, and considers the data for December 2020. At December 2020, “Rest of the World” investors owned 56.3% of the market, a further growth since the last survey, while UK institutions’ ownership edged up to 31.6%.

Diurnal Group - Leveraging the known pathway

Diurnal has announced the extension of its existing marketing and distribution agreement with EffRx Pharmaceuticals, to include Efmody (in addition to Alkindi) in Switzerland. The agreement is in line with Diurnal’s strategy to leverage Alkindi’s supply chain and distribution network for Efmody and we expect more such agreements in the near future. After filing a market authorisation application (MAA) to Swissmedic in H222, EffRx expects the product to be launched in 2024. Further, on 20 April D

Diurnal Group - FY21 results reflect puts and takes

Diurnal’s H122 results were hindered by COVID-19 pandemic restrictions muting the benefits from the H2 CY21 Efmody launches in Germany, UK and Austria. Further, the recent Scottish Medicines Consortium (SMC) decision to not recommend Efmody for automatic reimbursement in NHS Scotland poses as a headwind and has caused management to lower revenue guidance. Despite management’s focus on expanding into incremental markets, it now expects that for Efmody to become a profitable franchise, the product

Diurnal Group - The SMS decision, financial results and revised outlook

Although 2021 has been a period of significant regulatory and commercial progress for Diurnal, this performance has been overshadowed by the recent decision of the Scottish Medicines Consortium (SMC) not to recommend automatic reimbursement of Efmody in CAH. This is disappointing and has blunted Efmody's immediate UK wide potential despite its clear benefits. Efforts are underway to address the SMC's concerns, with two trials ongoing in both AI and CAH. Elsewhere, despite the impact of the pande

Diurnal Group - Driving the franchise

Diurnal Group's European commercial rollout of Alkindi and Efmody is now well underway. Near-term COVID related delays have been a focus, distracting from the more important longer-term outlook. Efmody’s ability to mimic the body’s natural release of cortisol, while improving hormonal balance and using a lower dose of steroid, makes it a compelling treatment option. We believe these attributes will ultimately allow Efmody a meaningful market share. Although Efmody did not achieve orphan drug st

EBITDA on track; strong order book

VLG has delivered a pleasing and reassuring H1 result against a challenging backdrop. The recent acquisitions are performing strongly and it has been able to mitigate a lot of the recent incremental cost/inflation headwinds. Trading so far in H2 is slightly ahead of plan and it has a very strong order book which will lead to increased H2 weighting. Confidence in EBITDA forecasts is therefore high. We have, however, reduced our PBT/EPS forecasts on the back of higher D&A (non-cash) than expected.

12m to May-22 results

Oncimmune has released results for the 12m period to May-22, ahead of its changed year and to August. These results reflect a period of investment into the commercial team for ImmunoINSIGHTS and increased penetration into the Top 15 global pharma customers, where a number of MSAs have been signed. These are expected to translate into faster contract wins and management reports a current weighted value pipeline of £11.0m across the business, providing increased revenue visibility. Cost savings in

SHORE CAPITAL - Warpaint London+ (W7L) - House Stock at 129p

Interim results update

Belluscura has made very significant progress in technology, manufacturing and sales in the year to date and remains strongly positioned to achieve considerable scale next year.

LIBERUM: Medica Group PLC* - Continued growth, but costs set to rise

Upgrade cycle continues as brand demand grows

Trading momentum has been sustained in early Q3, triggering a 3rd upgrade YTD. There is clear evidence the growth strategy is bearing fruit. Distribution gains are increasing brand reach both in the UK and overseas. This appears to be an ideal time for its on-trend value-for-money proposition to gain traction in its key channels, potentially with counter-cyclical characteristics as consumers start trading down. After a further pull-back (YTD now -29%), valuation is out of synch with its growth t

Cenkos: OptiBiotix Health Plc -- GoFigure Launch with Apollo

OptiBiotix has launched its GoFigure weight management range in India through its commercial partner Apollo Hospitals (Apollo). Apollo owns and operates the largest pharmacy network across India and will initially stock the GoFigure range in key stores in major Indian cities, as well as online. Apollo is one of three large partners which entered commercial agreements with OptiBiotix in late-2021. The launch demonstrates OptiBiotix' strategic shift towards selling a greater proportion of finished

Cenkos: OptiBiotix Health Plc -- Interim Results

OptiBiotix has issued its interim results for the six months ended 30 June 2022. In line with the company's August trading update, revenues have fallen to £0.12m as delays to customer restocking and new product launches impacted the top-line. Whilst the operating loss grew to £1.11m, as the company invested in key management personnel, OptiBiotix delivered over £10.2m in value to shareholders through a dividend in specie following the listing of ProBiotix Health (PBX) in March 2022. Post-period,

Hybridan Small Cap Feast 21/09/2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Independent Living REIT plc, intends to float on the Premium Segment of the Main Market. The Company's investment objective is to address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing a fair deal for society through savings for the UK taxpayer, and improved outcomes for residents. Raising £150

ReNeuron Group Update

Following ReNeuron’s strategic review and change of management, the company has refocused on the exploitation of its exosome platform. We have likewise focussed our research on the potential for, and value of, ReNeuron’s exosomes. In this note, we do not dwell on the past but explore the potential for ReNeuron’s exosomes and why they may be the answer to pressing drug delivery questions. One of its previous products – now under the control of a partner – remains as an upside to our valuation.

Cenkos: Venture Life Group Plc - Strong trading

Venture Life has published its interim results for the 6-months to June 22, which show profits slightly ahead of the previous trading update. Revenues grew 36% in the period to £18.9m, while both gross and adjusted EBITDA margins improved strongly, 5.0 and 3.6 percentage points, respectively. Growth was driven by recent acquisitions, with new distribution deals and product launches through the period. Performance has continued into H2/22, with further deals signed and trading in-line with expect

Morning Note – 21 September 2022

Hybridan Small Cap Feast 03/10/22

Joiners: No leavers today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Milton Capital Plc, a new type of special purpose acquisition company, intends to join the Standard Segment of the Main Market. The directors intend to search initially for acquisition opportunities in the technology sector. The focus for the prospective acquisition is megatrends. This includes sectors such as space, artificial intelligence, machine learning and blockchain technology. Ticker upon admission

Morning Note – 26 September 2022

Synairgen - Interim results: good cash runaway and going beyond COVID

Synairgen reported interim results to end-June 2022 that reflected a lower R&D spend on COVID-19-related trials and lower expenses overall. With net cash of £18m at the end of the period augmented by the receipt of a £9.1m R&D tax credit in August, our forecast of net cash of £10m at end-2022 is raised to just under £16m. The Group notes that it has a cash runway until at least end-September 2023, which we view as conservative, and with the introduction of 2023E forecasts, we now estimate end-20