Akers Biosciences (AKR): Corp FY 2017 results | Europa Oil & Gas (EOG): Corp And Ireland comes for free… | Intercede (IGP): Corp Contract win and trading update
Companies: EOG IGP AKR
Akers Biosciences (AKR): Corp US distribution agreement | ANGLE (AGL): Corp Detailed results of US ovarian cancer study presented | Bioventix (BVXP): Corp What a nice surprise! | Cambridge Cognition (COG): Corp Contract win | Premaitha Health (NIPT): Corp “321” patent update | Taptica (TAP): Corp Taptica’s transformational time | Tristel (TSTL): Corp US partner secured for ultrasound
Companies: AGL BVXP COG YGEN TRMR TSTL AKR
See what's trending this week...
The AIM Healthcare index has shown positive returns in all but three out of the past 11 years (2007, 2008 and 2011), growing at a CAGR of 7.6% over the period. This compares with a CAGR of -0.3% for the broader FT AIM All Share, +0.6% for the AIM 100 and +3.5% for its more senior FT All Share Health index. Sector growth and relative performance to the AIM All Share index has accelerated over the past five years; the sector having risen 19.19% CAGR since 1 Jan 2012. This compares with 6.8% growth in the AIM All Share and 6.1% in the FT All Share.
This outperformance can be attributed to the increasing success amongst the Healthcare constituents which have progressed their business plans to a point where substantial value has been/is being created and where many companies have successfully scaled their businesses to sustain future growth.
We highlight four companies that have different business models but exemplify the opportunities that are increasingly becoming evident within the sector.
Companies: ABZA AGY APH AGL AVCT BVXP COG CTH IHC LID MTFB ODX OPTI YGEN PRM SDI STX SNG TSTL AKR
Keystone Law Group— full service law firm with over 250 self-employed lawyers . Due late Nov. Offer TBA
Beeks Financial Cloud -niche cloud computing and connectivity provider for automated (algorithmic) trading in Forex and Futures financial products . Raising £7m. Mkt Cap c.£24.5m. Due 27 Nov. FYJun17 rev £4m. Profitable at operating level.
City Pub Group - owner and operator of an estate of 34 premium pubs across Southern England. £30m raise. Consistent track record of strong revenue and EBITDA growth, with a three year CAGR from FY14 to FY16 of 34.9% and 44.8% respectively, and an EBITDA margin of 14.7% in FY16. Due late Nov. Offer TBA.
Boku - Independent direct carrier billing company. Revenues were up 21% to US$10.2 in HYJun17. Q32017, revenues grew to $6.5m, up by 44%. The Company also saw continued growth across all of its key metrics: user numbers, total payment and a positive adjusted EBITDA for the month of September 2017. Due 20 Nov. Offer raising £45m at 59p with mkt cap of £125.9m.
Ten Lifestyle Hldgs. Technology-enabled lifestyle and travel platform providing trusted concierge services to the world's wealthy. Net revenue increased from £20m in the year ended 31 August 2015 to £33m in the year ended 31 August 2017, a compound annual growth rate of 29%. Offer TBA, expected 27 Nov 2017.
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.
OG Graphite, brownfield development-stage graphite company focused on the reactivation of its wholly-owned Kearney natural flake graphite mine and mill located 280 km north of Toronto, Canada. Offer TBA, expected mid November.
Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.
Sabre Insurance Group—Private motor insurance underwriter, founded in 1982. Raising c.£213m. C.£206m to purchase outstanding preference shares. Generated gross written premiums in 2016. Due December.
Bakkavor—After being postponed on 3 November the provider of fresh prepared food has today set its offer price at 180p. Primary raise of £100m plus vendor sale in combination totalling 25% of enlarged capital. Mkt Cap c.£1bn. FY 16 Revenue: £1,763.6 million. FY 16 Adjusted EBITDA: £146.4 million . Due 16 Nov
Aviva Investors Secure Income REIT - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due Dec.
Cabot Credit Management -one of the largest credit management services providers in Europe and the market leader in the UK and Ireland with total 120-Month ERC of £2.2bn. Raising c.£195m. Offer TBA. Due November.
M7 Multi-Let REIT—Intends to raise up to £300m at 100p. Aims to acquire and hold a portfolio of UK regional light industrial and regional office assets diversified by geography, asset type and tenants that is expected to generate stable income returns and, where appropriate, offer the potential to leverage and enhance returns through active asset management initiatives. Due 30 Nov.
En+, international vertically integrated aluminium and power producer with core assets located in Russia. Priced at $14 per GDR. $1.5bn offer of which $0.5bn primary to pay down debt. Dual listing in Moscow. Unconditional dealings 8 Nov.
Companies: IKA MYN TPG KRS ESCH FEN XTR AKR
Significant uptick in R&D output. After a very disappointing 2016, as measured by the number of new drugs approved by the FDA (23), we have seen 22 new product approvals year-to-date. We now expect the 2017 output to be above the 16-year median of 22 NDAs (New Drug Application) and 5 BLAs (Biologic Licence Application). As previously commented on, BLAs are expected to represent an increasing proportion of overall approvals. The most notable approval in the past quarter was AstraZeneca’s Imfinzi (durvalumab), not because of its use in metastatic bladder cancer but for its potential use as a first-line therapy in surgically unresectable Non-Small Cell Lung Cancer (NSCLC) following an interim analysis of a Phase III trial (PACIFIC), which showed a statistically significant increase in progression-free survival.
Companies: ABZA AGY APH AVCT BVXP BYOT COG CTH LID MTFB ODX OPTI YGEN PRM SDI TSTL AKR
Hardide* (HDD): Interim results, oil recovery and aerospace approvals bode well (CORP) | Premaitha Health* (NIPT): Trading update (CORP) | Akers Biosciences* (AKR): Q1 results (CORP) | Water Intelligence* (WATR): Growth strategy on track in a large, defensive market (CORP) | Frontier Developments* (FDEV): Elite Dangerous coming to PS4 (CORP) | K3 Business Technology* (KBT): Trading update (CORP)
Companies: YGEN WATR FDEV KBT AKR HDD
Companies: ABZA AGY AVCT BVXP BYOT COG DPH LID ODX OPTI YGEN PRM SDI SNG TSTL AKR
Akers Biosciences* (AKR): Trading update (CORP) | Cello (CLL): Accelerating the strategy (BUY)
Companies: Cello Health Akers Biosciences
Akers Biosciences* (AKR): GPO evaluation for PIFA Heparin test (CORP) | Hurricane Energy (HUR): Lincoln well result (BUY) | Gemfields (GEM): Ruby auction results (BUY)
Companies: HUR GEM AKR
The prospect of Hilary Clinton creating an oversight panel with the power to impose a set of harsh enforcement rules to control aggressive pricing of pharmaceuticals in the US fell away with the election of Trump, leading to a 16% bounce in the NASDAQ Biotech index and an 8% increase in the US Pharma & Biotech index, some of which has already been given back.
Companies: ABZA BVXP BYOT COG DPH EKF LID ODX YGEN PRM SDI SNG TSTL AKR VEC
Warpaint London—Schedule one update. Raising £2.5m at 97p. Expected mkt cap £62.6m vs revenues of £22.3m
Walls & Futures REIT — Has raised £1m at £1 to acquire, refurbish or develop residential properties in the UK . Due to arrive on ISDX on 29 November
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.
Companies: MTR RDT MKT GROW BLU TRAK KOD IVO TRX AKR
SCYSIS* (SSY): H2 upgrade builds on the excellent first half (CORP) | Akers Biosciences* (AKR): Preliminary prospectus filed (CORP) | Keywords Studios (KWS): Testing testing (BUY)
Companies: KWS SSY AKR
Orchard Funding Group* (ORCH): Initiation and results (CORP) | Akers Biosciences* (AKR): Q3 results with positive outlook (CORP) | Castleton Technology* (CTP): Interims on track, cash flow returns (CORP) | Ithaca Energy (IAE): Q3 results (BUY) | 21st Century Technology (C21): On the buses (CORP)
Companies: ORCH CTP IAE C21 AKR
In light of the Brexit vote, we reflect upon the implications for the NHS and the wider healthcare industry. We take a pragmatic approach to how the referendum result will affect staffing, recruitment, clinical trials, drug pricing and small company grant funding in the coming months and years.
Companies: AOR BVXP BYOT COG DPH EKF LID ODX YGEN PRM SDI SNG TSTL AKR VEC
Research Tree provides access to ongoing research coverage, media content and regulatory news on Akers Biosciences.
We currently have 28 research reports from 2
A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
Renalytix’s US IPO filing document went live overnight (having previously been filed confidentially). Whilst there are no details on size of offering, but the document is rich with details of the use of proceeds which we encourage UK investors to read. We are doing the same and will update our views in due course. Associated with the US filing document, another release this morning announces the publication of a circular, and outlines details for a new General Meeting on the 13 July 2020 to approve the issue of new shares, as well as board changes if the US IPO goes ahead. Namely, Julian Baines (Non-executive Chair) and Richard Evans (NED and Audit committee Chair) are stepping down from the board, Christopher Mills will assume the role of interim chair whilst a search for a successor is conducted.
Companies: Renalytix AI
The announcement announced today highlights the potential breadth of the KidneyIntelX platform, opening up new routes to expand data inputs and test utility, and create opportunities alongside pharmacological therapy as a companion diagnostic. The first agreement with the University of Michigan adds an additional 800 chronic kidney disease (CKD) patients (adding to Mount Sinai’s 1,500 patients and the University of Groningen’s 3,500 patients) to analysis the performance of KidneyIntelX in different settings. This will ultimately carry additional sway with healthcare centres, regulators, and payers. The option to exclusively license a new urinary biomarker, urinary Epithelial Growth Factor (uEGF), shows the potential to add additional biomarkers and body fluids into the platform to further enhance the prognostic performance of KidneyIntelX. We understand there is a relatively immaterial upfront payment to access this new biobank, and a similar immaterial cash payment to gain the biomarker license option with additional milestones and standard tiered royalties payable if exercised. The second data sharing agreement with a major undisclosed pharma partner highlights KidneyIntelX’s potential use as a companion diagnostic (e.g. for SGLT2 inhibitors) and the potential to use the test multiple times to monitor drug response. This builds on work being conducted in Groningen with data expected H2 CY’20. Ultimately, pharmaceutical collaborations could drive additional long-term value creation and may open opportunities for lucrative licensing and M&A deals. At this juncture we make no changes to our forecasts and eagerly await further updates. We reiterate our positive stance on Renalytix.
Today Ergomed held its annual general meeting (AGM). As expected, no new financial details were provided, although the executive chairman released a statement with a general business update. Q120 trading was good with ‘solid overall growth in revenue’ and cash generation ‘remained strong’. In Q220, Ergomed continued to grow the order book across the business and maintained its ‘revenue growth trend’. Its staff successfully adapted to remote working conditions and no employees were made redundant or furloughed. The H120 trading update will be released in July 2020 as usual, but Ergomed stated within its AGM update (June 10) that it is confident the results will be ‘in line with current market expectations’.
Futura Medical confirms the timelines for the regulatory filings for MED3000, its novel erectile dysfunction (ED) treatment, are on track. Dialogues with both the US FDA and European Notified Body have been constructive. The EU Notified Body has begun its review of the supporting documentation and the FDA filing is still expected by end-Q320. There have been no COVID-19 related delays but, in our view, these remain a consideration. We assume the review processes will take a minimum of 12 months in both cases, so have approvals pencilled in for Q421. Commercialisation discussions are expected to start in earnest once the status of the regulatory approvals is known. Our DCF-based model, using conservative assumptions, values Futura Medical at £153.8m, equivalent to 60.9p a share.
Companies: Futura Medical
Inspiration Healthcare has announced its intention to acquire SLE Limited (SLE), a leading neonatal ventilator designer and manufacturer for consideration of £18.0m. Inspiration Healthcare has conditionally raised £16.5m (gross, ahead of an open offer) via an oversubscribed equity placing to support the acquisition. We believe the acquisition represents a transformation deal, virtually doubling the size of the business and providing significant new revenue growth opportunities. We expect the acquisition, on a 12-month proforma basis to be accretive to adjusted earnings in the near-term and increasingly so in the medium-term. We reiterate our Buy recommendation.
Companies: Inspiration Healthcare Group
We are encouraged by today’s Phase IIa data from the hRPC programme in Retinitis Pigmentosa (RP) and continued clinical meaningful improvement in the treated eye vs. the untreated eye of 8.9 and 8.8 letters at 6 and 12 months, respectively. All patients have now reached 6 months of treatment, although one patient now has reached 18 months and continues to show a highly encouraging 16.0 letter improvement vs. the untreated eye. We believe analysing the 8 patients who had a successful surgical operation, and excluding the two patients who had surgical complications, is the most appropriate dataset. The recovery in eyesight of one of the two patients who had surgical complications is good news, but we exclude from our analysis. Whilst it is possible, we think this recovery is unlikely to be the result of the hRPC therapy. As previously announced, nine additional patients are expected to be recruited into the Phase IIa trial and sufficient data is expected to be available from the trial to seek approval in H2 2021 to commence a single pivotal clinical study in RP. We view today’s results to be supportive of ReNeuron’s investment thesis and the new primary focus on RP. We make no changes to our forecasts or valuation analysis, and look forward to further updates from the hRPC programme.
Companies: Reneuron Group
AVO’s goal is to deliver an affordable and novel proton therapy (PT) system, called LIGHT, based on state-of-the-art technology developed originally at the worldrenowned CERN. Over the past two years, the project has been significantly derisked through important technical milestones. AVO is working on the verification and validation phase, prior to LIGHT being used on the first patients to support CE certification. A recent equity issue, new loan facilities and some commercial announcements earlier in 2020 highlight the increasing confidence that is building in AVO’s ability to achieve its goal to deliver LIGHT in the near future.
Companies: Advanced Oncotherapy
Hemogenyx (HEMO.L): Agreement with GlobalCo (from Friday) | ReNeuron Group (RENE.L): Positive data from ongoing Phase 2 retinal cell therapy trial
Companies: Hemogenyx Pharmaceuticals Reneuron Group
Cambridge Cognition ("COG") has provided a trading update for the 6 months to 30 June and presented its growth strategy at an excellent Capital Markets Day. The Group continues to build on an impressive H1 2020, announcing additional contract wins that take the order intake to £4.9m (+88% vs H1 2019). COG is currently 'seeing unprecedented demand' for its solutions which enable pharmaceutical companies to continue clinical trials even while participants are unable to physically visit clinical trial sites.
Companies: Cambridge Cognition
We are initiating coverage on specialist pharmaceutical services provider Ergomed. We believe it should prove relatively resilient during the COVID-19 crisis and has the fundamentals in place to execute its growth strategy. Ergomed announced impressive audited numbers for FY19, with revenue up 26% to £68.3m and EBITDA up 5.5x to £12.5m. The FY19 announcement is effectively Ergomed’s fourth profit upgrade for FY19 and a small beat on recently reset FY19 expectations. Ergomed trades at a discounted EV/EBITDA of 10.1x vs the contract research outsourcing (CRO) sector average of 11.5x (FY20). We value Ergomed at £186m or 399p/share. Ergomed’s strong organic growth is benefiting from a clear strategic focus on high growth pharma sectors, margin control and order book growth (up 15% to £125m in FY19, giving 90% visibility to 2020).
SDI announced that it expects to meet market expectations for FY 2020, which are for adjusted pre-tax profit of £4.2m. Despite taking decisive action to reduce costs following the lockdown on 23 March, and confirmation that it has traded profitably in March and April, the lack of long-term visibility prompts a withdrawal of FY 2021 guidance. That said, we believe the company to have sufficient liquidity to weather the COVID-19 crisis with end markets still viable, and the improved 2020 margins are positive.
Companies: Scientific Digital Imaging
Avacta is leveraging the antibody-like properties of Affimers for Therapeutic and Diagnostic applications across multi-billion dollar markets, including testing and treatment for COVID-19, building a differentiated pipeline and global partnerships. The near-term key is the roll out of its SARS COV-2 antigen tests, including potentially one of the first Point-of-Care tests to-market, offering game-changing commercial scope, sufficient to significantly accelerate the clinical development of its Therapeutic pipeline.
Companies: Avacta Group
The potential of cell therapies is starting to become clear, and MaxCyte’s technology lies at the heart of many of these next-generation treatments. The pivotal role its platform plays is shown by ten major partnership agreements formed with leading cell therapy players over the past 18 months. These can earn pre-commercialisation milestones in excess of $800m, transforming MaxCyte’s medium- and longer-term revenues as the underlying programmes advance through clinical development. CARMA, MaxCyte’s proprietary cell therapy platform, is nearing a key inflection point, with Phase I data from its lead asset due in 2020. Management is targeting CARMA to be self-financing by 2021. We raise our valuation to £260m (340p/share), from £195m and 341p, with the core business alone valued at £158m (206p/share).
A continued strong recovery in the important China and US markets means group revenues are expected to be significantly ahead of expectations. The strong revenue performance and improving gross margins has also delivered EBITDA significantly ahead of consensus expectations. The outlook remains robust, supported by ongoing recovery in China in particular and a strong order book gives good visibility over H1’21 revenues. We prudently leave outer year forecasts unchanged for now, but view the sensitivity as being to the upside, with potentially material medium-longer term upside from the vaccines currently in development (but not in forecasts). On an FY21 multiple of 11.2x EBITDA, the valuation is undemanding.
Companies: Eco Animal Health Group