Despite challenges in the early part of the period, Yourgene has delivered a robust H1 performance and enters H2 with strong momentum on a number of fronts. Key strategic milestones were achieved in the period, including the launch of the flagship IONA Nx NIPT product on the Illumina platform in September and the acquisition of Coastal Genomics and associated fundraise in August. Both are supportive of FY estimates, as are the launch of Yourgene's Covid services and products such as DPYD, which are generating strong momentum. We make no change to our forecasts at this stage.
Companies: Yourgene Health Plc
Yourgene has announced the formation of a strategic partnership in Japan with a blue chip multinational. Yourgene will provide its Flex bioinformatics platform to initiate a reproductive health project locally. The agreement is for an initial five year term and is expected to deliver ~US$2.5m in revenues to Yourgene over the period. We make no change to our forecasts at this stage for this or the contract retention with St George’s NHS Trust announced yesterday. We view both as supportive to estimates, but clearly the Japanese deal is of strategic importance in that it opens up a new market for Yourgene and could lead to further collaborations across reproductive health and other fields.
Yourgene continues to progress across all areas of the business, with core trading on track. Demand has been increasing for Yourgene’s Covid-19 testing services, and is expected to reach 10k/month from early October onwards. This would equate to a £3.0m boost to revenues in the year to Mar-21 and we upgrade forecasts accordingly, with outer year estimates unchanged for now. We view this as a base level of demand, with scope for further upgrades if demand continues to increase and/or lasts beyond March. Our underlying estimates for the core are unchanged.
Yourgene has announced it has appointed IBL-America as a non-exclusive distributor for its range of PCR-based reproductive health and oncology products, including the DPYD assay which tests whether cancer patients are at risk from the administration of a common chemotherapy agent. These will be initially sold into the Research Use Only market in the US. As such, initial revenues are likely to be modest, but will act as an important test bed for establishing potential demand in the clinical setting. If the reception is positive, products will be submitted for FDA registration, potentially unlocking a £30m addressable market opportunity. We make no change to our forecasts, but view this another positive step to generating meaningful revenues in the world’s largest market, which remains a largely greenfield opportunity for Yourgene.
Yourgene has commercially launched its IONA Nx NIPT workflow to run on Illumina’s NextSeq platform. The new test offers improved performance over the previous version, including higher levels of accuracy, faster processing and enhanced fetal fraction enrichment, making it more cost effective for labs to adopt. We expect existing customers in the UK and France to transition imminently, with other territories in Europe and elsewhere (including Australia) to follow quickly given Yourgene’s increased commercial team. We make no changes to our forecasts at this stage, already factoring in strong growth in NIPT over the next few years. This is however a key milestone for Yourgene, which should enable it to fully exploit what remains a large and rapidly growing opportunity in NIPT.
Yourgene Health is an international molecular diagnostics group which develops & commercialises genetic products & services, mainly in the area of reproductive health. It works in partnership with global leaders in DNA technology to advance diagnostic science & positively impact human health.
Yourgene Health (YGEN.L): NIPT test approval for Australia
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.
Redx Pharma (REDX.L): $30m financing package and interim results | Cambridge Cognition (COG.L): Positive trading update for H120 | Yourgene Health (YGEN.L): Research use only COVID-19 PCR test launched
Companies: REDX COG YGEN
Synairgen (SNG.L): Preliminary 2019 results | Yourgene Health (YGEN.L): COVID-19 testing service launch and business update
Companies: Synairgen plc (SNG:LON)Yourgene Health Plc (YGEN:LON)
Companies: SYS DDDD CCS ANGS ODX RENX YGEN FUM BARK ENET
Yourgene Health (YGEN.L): CE Marking Technical File submission | ANGLE plc (AGL.L): Study published by University Medical Centre Hamburg-Eppendorf
Companies: Yourgene Health Plc (YGEN:LON)ANGLE plc (AGL:LON)
Inspecs, a UK designer, manufacturer and distributor of eyewear frames to global retail chains announces its intention to IPO onto AIM raising £94m with a market cap of £138m. Admission expected 27th February. FY Dec 2018 numbers show revenue of $57m and underlying EBITDA of $11m
Companies: FDP YGEN AVO FIPP FEN SLN SHRE ARCM AEG VLX
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Oxford University and AstraZeneca announced the first interim analysis from the Phase III study of its COVID-19 vaccine candidate, which was found to be 70% effective in preventing COVID-19. This follows similar announcements from Moderna, and Pfizer/BioNTech in the previous two weeks, and the caveats we mentioned at the time remain the same. While all of these results have been highly encouraging, we reiterate that they do not diminish the urgent need for COVID-19 treatments and testing, which will be required for years to come. We consider Synairgen, Avacta, genedrive, Omega Diagnostics and Open Orphan to offer good buying opportunities.
Companies: AVCT ODX SNG GDR ORPH
Venture Life has developed significant momentum through 2020, reflected in the strong share performance over the year. Building on this momentum, the company has announced it is conditionally raising £34m via an equity raise to help it secure additional M&A opportunities. At this time, Venture Life has identified three opportunities, which we estimate could deliver significant earnings accretion if all are completed. We have updated our forecasts to reflect the raise but at this time have left our underlying assumptions unchanged. We expect Venture Life to maintain the momentum it has developed, supported by the proposed raise and M&A opportunities; we re-iterate our Buy recommendation.
Companies: Venture Life Group Plc
ReNeuron, a UK-based stem-cell therapy developer, has announced today a fundraising of up to £17.5m (gross) through the means of a placing, subscription and open offer. The Company has also announced its FY’21E interim results as well as the latest data from its lead candidate hRPC in the ongoing Phase I/IIa clinical trial for Retinitis Pigmentosa (RP). The additional funding aims to provide liquidity for the next 18 months, and through key clinical development milestones for the hRPC programme and exosome collaborations. **** As joint broker to ReNeuron, we are restricted and can therefore provide factual comment only. Shareholder approval for the transaction will be sought at the General Meeting to be held on the 11th December 2020 ****
Companies: ReNeuron Group plc
ReNeuron Group (RENE.L): Interim results
President Trump likes to project himself as a highly successful businessman, but surprisingly little is known about his true financial position. Various articles, including a 2016 in-depth analysis by The Wall Street Journal, have speculated about his income and asset base. All sorts of claims and counter-claims have been made about his wealth – by Trump himself, pitching his fortune at some $9bn, and by journalist Timothy O'Brien, suggesting that it is as “low” as $150m-$250m. It is doubtful whether we shall ever know the truth, but we can use Trump’s UK corporate filings to gain an insight into his businesses in Scotland.
Companies: AVO ARBB ARIX CLIG DNL FLTA ICGT PCA PIN PHP RECI STX SCE TRX SHED VTA YEW
EKF has confirmed it expects a strong Q4 from both the core business and ongoing demand for the Primestore MTM sample collection device. As a result, FY20 performance is now expected to comfortably exceed market expectations, which have already been upgraded several times through the year. We upgrade our FY20 EBITDA forecasts by a further 6% to £24.4m and look forward to further updates in due course. EKF is a Best Idea for 2020 and we expect strong momentum to continue.
Companies: EKF Diagnostics Holdings plc
A positive AGM update from CVS this morning, illustrating a continuation of solid trading momentum since the Sept finals. LFL sales in the first four months were ahead by 5.1% vs a stiff 8% comp. This implies an acceleration to 6.3% over Sep-Oct - an excellent showing, reflecting resilience and ongoing self-help to optimise revenue generation. Significantly, this flows through to a healthy EBITDA margin back above 15%. Trading during the current lockdown has not been much impacted and this bodes well for any future restrictions. The balance sheet has further deleveraged. With guidance remaining suspended we hold off reinstating forecasts, but on our illustrative analysis the shares are trading on an FY21/FY22 EV/EBITDA rating of 14x/13x and a P/E of 22x/21x. Given the structural tailwind, underlying momentum and sector M&A at >15x EV/EBITDA, we see scope for rating expansion.
Companies: CVS Group plc
One of the original assumptions in our forecast for Destiny’s first product, XF-73 for the prevention of post-surgical staphylococcal infections, was that it would share the US market with GlaxoSmithKline’s Bactroban Nasal - despite Bactroban Nasal not being approved for this indication. We also referenced Bactroban Nasal’s US price in estimating the price for XF73 in all markets. Bactroban Nasal has now been discontinued in the US, so we adjust some of our modelling for its removal. This has resulted in our valuation increasing.
Companies: Destiny Pharma Plc
Venture Life aims to become a global leader in the self-care branded product market, where there are a number of structural growth drivers. It has a unique and scalable platform to develop, manufacture and distribute products, including its own brands and international customers’ brands. What is already a high margin business is poised to deliver a compelling mixture of top line growth with significant operating leverage. Performance in H1 (EBITDA +347%) highlights the potency of VLG’s model. Acquisitions can also leverage the platform to drive growth, and management has a very strong track record here. On top of this exciting growth play, there is also a chance that its Dentyl dual-action mouthwash could have applications to slow/reduce CV19 transmission, adding to the upside potential.
After Pfizer and Moderna, AstraZeneca-Oxford reported (preliminary) late-stage results for their COVID-19 vaccine candidate. Based on logistics and pricing, Astra’s vaccine has clear advantages.
However, with results for other (major) countries still awaited and considering past safety concerns, it is pre-mature to decide if Astra has won this race. Also, considering the firm’s ‘no-profit’ commitment as long as the pandemic is on, any major earnings uptick seems unlikely.
Companies: AstraZeneca PLC
4D pharma has announced a merger with the Longevity Acquisition Corporation (NASDAQ: LOAC), a Special Purpose Acquisition Company that provides a NASDAQ listing and $14.6m (gross) of cash for 4D pharma shareholders. The statement notes that this additional capital is expected to extend the current operational runway another 6 months into early Q3 2021 (vs. Q1 2021 previously) providing capital to support the ongoing clinical development of its pipeline. 4D pharma will maintain its AIM listing and will remain headquartered in the UK. The merger was agreed at an valuation of £1.10 per 4D pharma ordinary share, representing a 18% premium to last night’s close of £0.93. Post-completion, 4D pharma will issue approx. 19,783,827 new ordinary shares, and 4D pharma shareholders will own approx. 86.9% of the issued share capital of the enlarged group. The merger is expected to become effective in early 2021, subject to shareholder meetings for both companies, and approval of all necessary US / SEC documentation
Companies: 4d Pharma PLC
RUA have announced an earlier than expected update on the testing of its Elast-Eon-coated tri-leaflet artificial heart valve from its pilot pulsatile flow program. This testing is meant to simulate not just the flow of blood through the valve, but the viscous patterns that occur during the opening and closing of the valve, in the simulation of typical natural conditions. Not only have the minimum ISO Standard performance requirements been easily surpassed, but there were indications of reproducibility and ease of manufacture.
Companies: RUA Life Sciences Plc
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
Successful trials in Tesco have led to the W7 brand being distributed in a significant number of additional stores, including Tesco Extras. Performance in Wilko of its Technic and Body Collection brands has been ahead of expectations, leading to additional gift ranges being stocked there too. These distribution gains bode well for incremental sales/profit next year, and underline the appeal of the group’s value-for-money on-trend brands. Valuation is undemanding, particularly with the added attraction of a 6.4% dividend yield.
Companies: Warpaint London PLC
Beximco Pharma (BXP.L): Notification of AGM | Evgen Pharma (EVG.L): First patient enrolled in COVID-19 trial
Companies: Beximco Pharmaceuticals Limited Sponsored GDR RegS (BXP:LON)Evgen Pharma Plc (EVG:LON)