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

Shield Therapeutics (STX): Looking to accelerate positive signals in the US

Shield Therapeutics (Shield) is a commercial-stage pharma company delivering specialty products that address patients’ unmet medical needs, with an initial focus on iron deficiency (ID). Following launch of Accrufer® in the US in July 2021, the initial challenge was to greatly improve market awareness of its differentiating features as an oral ID drug. The US market offers enormous potential, but the uptake has been slower than the market had anticipated. While considerable progress has been mad

Shield Therapeutics - Focus on increasing US market access

Shield Therapeutics’ (STX) value stems from Accrufer’s US market opportunity as the company seeks to maximise returns through self-commercialisation. Recent progress on payer coverage and prescription uplift bodes well for future US expansion, although we expect a more modest growth trajectory than previously as STX focuses on expanding market outreach. The successful execution of its commercial plans relies on adequate fund-raising, which remains challenging in the current macro environment. Th

Investing in iron

Shield Therapeutics, a UK-listed company, directly sells a fully approved, patented, oral iron product, Accrufer, into the large and lucrative US market. This requires sales and marketing investments but captures all the profits enabling sustainable investment to gain higher returns. The two crucia

Shield Therapeutics - Operating results eclipsed by financing difficulties

Shield Therapeutics reported FY21 results in line with market expectations, recording revenue of £1.5m, including a maiden £0.1m contribution from the United States after the July 2021 US launch of Accrufer. Early indications from sales outreach efforts are encouraging, with Shield reporting improved payor coverage and 100% quarter-on-quarter growth in US prescription volumes in Q122. The out-licensing agreement signed with KYE Pharmaceuticals in Canada (in Q122) could expand this market opportu

SP Angel Healthcare Conditions- 30-06-2022

Shield Therapeutics - FY results: focus on funding and growing the US

Full-year results were in line with the preliminary guidance issued in early 2022. Feraccru revenues in Europe increased with a 60% increase in volumes and the US commercialisation of Accrufer continues, with broader insurance coverage (100m lives covered). As with many small cap companies, access to growth capital is currently difficult; however, the group has raised a $10m loan from a major shareholder providing a cash runway till end-2022. Our assumption is that further funding comes from deb

Morning Note – 30 June 2022

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%.

Hardman & Co Monthly: April 2022

An efficient reporting system has seen all the listed multinational pharmaceutical companies announcing results for 2021, which has given us the opportunity to update our industry statistics and drug database. This report provides the first snapshot of the global and US rankings of the top 20 drug companies for 2021. Comparisons are made with historical data to show how different company strategies have evolved. 2021 was characterised by a strong rebound in performance following the pandemic-aff

Morning Note – 21 March 2022

Shield Therapeutics (STX) - PBMs have bought in to Accrufer

Shield Therapeutics (Shield) is a commercial-stage pharma company delivering specialty products that address patients’ unmet medical needs, with an initial focus on iron deficiency (ID). Following the US launch of Accrufer® in July 2021, the initial challenge was to greatly improve market awareness of its differentiating features as an oral ID drug. The US market offers enormous potential, but it takes time to get new drugs on to formularies and sales traction. The market was disappointed by ini

Trading update confirms early commercial progress

Shield Therapeutics yesterday issued a trading statement indicating that it recorded modest initial revenues of £1.5mln, comprising £0.1mln of net product sales from US commercial activities, £0.9mln of royalties from sales by Norgine in the EU and milestones of £0.5mln. The market marked the share

Morning Note – 17 February 2022

Shield Therapeutics - FY 2021 trading update

A trading update for FY 2021 indicates unaudited revenues of £1.5m and year-end cash of £12.1m. Whilst revenues were markedly below our £9.2m forecast, set in Q1 2021, they are not wholly unexpected and in line with market commentators’ changes in Q4 2021. A 60% increase in Feraccru packs sold in Europe and further encouraging news of contracted commercial lives under coverage in the US rising to 60m from 40m in mid-December, suggests strong momentum going into 2022. The increased awareness (now

Strong growth in core underpins FY expectations

EKF has reported a strong H1, with revenues of £37.5m and double-digit growth in underlying non-Covid related business. Management reports it is trading in line with expectations for the full year and we make no change to our profit forecasts at this stage. New growth initiatives are proceeding to plan and should lead to accelerated core growth from FY23 onwards. We continue to see substantial upside on successful execution with the shares trading on an FY23 P/E of 13.1x and an EV/EBITDA of just

Kromek - Fundraise – £1.7m convertible loan note

Kromek announced a £1.7m fundraise by way of the issue of convertible loan notes (8% coupon, 18-month conversion period at 15p per share), which will allow the company to minimise any potential supply-chain disruption to the delivery of contracts during the year. We make only minor changes to forecasts to reflect the additional interest (c.£0.1m) accrued, with adjusted pre-tax loss increasing to £5.0m. We leave our target valuation of £118m (27p) unchanged, with near-term catalysts (e.g. a secon

Morning Note – 3 August 2022

Update ahead of results

Ahead of its upcoming results, ECO has issued an update flagging an issue around a sales tax liability and the treatment of certain items of capitalised development, offset by a foreign exchange gain will result in it reporting FY22 Adj EBITDA of ~£6.5m vs SCMe £7.1m. It has also indicated trading in China has been difficult in Q1 FY23, particularly with the large producers, but margins have improved on mix. Trading in the Rest of the World has been strong YTD. Given the proximity to the results

Hybridan Small Cap Feast 21-07-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen? Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group export

Hybridan Small Cap Feast 09/08/22

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group exports

LIBERUM: PureTech Health - Karuna hits Phase III ground running

Hybridan Small Cap Feast 05/08/22

Dish of the day Joiners: Inteliqo Limited has joined the Access Segment of AQSE Growth Market. Inteliqo Limited provides sales, marketing and distribution services to technology product owners. Leavers: Menzies (John) plc and Sanne Group have left the Premium Segment of the Main Market. What’s cooking in the IPO kitchen?** Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a sup

Morning Note – 5 August 2022

Supply agreement with VGM Group

Belluscura has announced that it has entered into a Group Purchasing Organisation Product Supply Agreement with VGM Group which further expands its distribution network across the US.

FY22 results and a highly visible outlook

For the year to 30 April 2022 Kromek reported results in line with the Trading Update of 16 May: revenue of £12.1m, +16.5%YoY, and an EBITDA (adj.) loss of £1.2m. We estimate revenue in the Advanced Imaging division grew 28% YoY to £4.6m, whilst the CBRN segment grew 1.5x to £5.4m. Kromek reports that it expects growth to accelerate in both its core segments – security-related CBRN and advanced imaging – with the prospect of “a substantial year-on-year increase in revenue”. The CBRN segment in

In-line H1; but sustained downturn in generics spooks investors

Hikma ended the H1 on a weak note, with decent growth in Injectables and Branded segments being largely offset by a decline in the Generics franchise. Also, the weaker H1 led to a second downward revision to the full-year 2022 outlook for Generics in the last three months. Nevertheless, these are only transient concerns and the firm’s attractiveness remains intact on the back of the robust long-term virtues of the generics market, and the group’s leading position in the target markets.

LIBERUM: ReNeuron* - Signed, sealed, delivered (I'm yours)

Cenkos: Creo Medical Group Plc -- Core tech driven positive update

Creo Medical has provided a positive trading update for H1/22E, expecting revenues to increase over 10% vs H2/21A (£12.3m), indicating revenues of c£13.5m for the period. Creo notes this growth is driven by its core technology and Kamaptive licensing programme. The company expects gross margins to improve, which, coupled with a reduction in operating costs, should deliver over a 20% reduction in underlying EBITDA loss versus H2/21A. H1/22E cash burn has also been reduced. During the half there h

Growth on an accelerating path

Smith & Nephew’s growth acceleration and margin expansion in Q2 should continue in H215, more reflecting internal changes than improvements in market fundamentals. Its c 13% premium on 2015 P/E to its global ortho peers is supported by its brisker growth and strategic value.