Ixico Share Discussion Threads

[aishah] 20/8/2019 13:03

Shore Capital said: "We continue to see IXICO as a compelling opportunity to gain exposure to a high-growth business with accelerating momentum and a management team with renewed focus on commercial delivery.

"Prior to any updates following today's announcement, we see fair value at 62p, which is derived using a blended approach, with a fundamental discounted cashflow (DCF) indicative of the longer-term opportunity and a sales-multiple to capture the existing business."

[mirabeau] 20/8/2019 13:00

With a market capitalisation of £22m, Aim-traded IXICO (IXI:47p) may be under the radar of most investors, but the London-based company is at the forefront of a technological revolution. That’s because the world’s largest biopharmaceutical companies are investing huge sums of money in the field of neurology to target therapies for diseases affecting the central nervous system including Huntington’s, Alzeihmer’s and Parkinson’s disease.



This has created a surge in demand for the services of companies that use proprietary artificial intelligence (AI) software algorithms to analyse images from brain scans - magnetic resonance imaging (MRI) and positron emission tomography (PET) – in order to provide measurements of small changes in brain structure, assess the efficacy of new drugs being trialled, monitor patient safety, and provide valuable insights on different aspects of trial performance.

In a nut shell, IXICO’s cutting edge proprietary LEAP algorithm harnesses the power of large datasets and computer-based learning to segment specific regions of the brain and then accurately measure their volume, thus providing a reliable method of measuring brain atrophy which can indicate progression of neurological disease. To date the algorithm has been applied to over 150 brain regions, analysed over 100,000 brain scans and has been cited in over 750 scientific publications.

The company has also developed AI technology to assess brain pathology like white matter lesions and, more recently, uses data from wearable biosensors to accurately measure sleep patterns in Parkinson’s disease and dementia patients. These approaches enhance the understanding of disease symptoms more directly compared to manual assessment or complex in-clinic technology. Importantly, by applying IXICO’s data science expertise, these measurements have the potential to increase success rates of clients’ clinical trials by improving patient selection, lowering the cost of running them, and reducing the burden on trial participants and their carers by reducing the need for clinic visits.

High operational leverage

The technology is proving incredibly popular. In fact, no fewer than eight of the 14 top 20 biopharmaceutical companies that have active neurological drug development programmes are clients of IXICO. They clearly hold the company in high esteem as IXICO has booked over £20m worth of new orders since the start of last year, a revenue stream that supports a sustained move to operating profitability.

Once that inflexion point is passed, the high gross margin (62 per cent) earned from its cutting edge data analytics activities means that operating profits are set to move sharply higher in the years ahead given the significant amount of automation in the workflow and remote management of the clinical trial imaging sites. This means that IXICO is able to take on additional revenue generating activities without an equivalent increase in staffing costs, the effect of which is that any outperformance against revenue forecasts delivers a high conversion rate of incremental gross margin earned to operating profit. This operational leverage effect is also illustrated by the fact that over the past few years IXICO’s staffing levels have remained between 60 to 70 employees even though revenues earned have more than doubled since 2016.

The possibility of profit upgrades was certainly not priced into the company’s valuation when I suggested buying IXICO’s shares, at 33p, in last month’s 8,000 word small-cap report for our Alpha subscribers ('Alpha: Simon Thompson spies opportunity in cutting edge technology', 23 July 2019). It still isn’t for that matter even after the 42 per cent rise in the company’s share price following yesterday’s trading update when management revealed that growth has been accelerated by new and existing contracts coming on line, deployment of newly developed algorithms and faster turnaround times in trial situations.

Increased target price

To put the current valuation into perspective, analyst Chris Donnellan at house broker Cenkos Securities has torn up his previous estimates and now expects IXICO to post 32 per cent revenue growth in the 2018/19 financial year, and 20 per cent top-line growth in both the 2019/20 and 2020/21 financial years, too. On this basis, IXICO’s annual pre-tax loss is forecast to be slashed from £0.8m to £0.1m on revenue up from £5.4m to £7.1m in the 12 months to 30 September 2019.

Furthermore, Mr Donnellan now forecasts that IXICO will generate both an operating and pre-tax profit of £239,000 on revenue of £8.5m in the 2019/20 financial year to produce a net profit of £339,000, rising to an operating and pre-tax profit of £0.88m, and net profit of £0.79m on revenue of £10.25m in the 2020/21 financial year. He had previously forecast a £0.44m operating profit on revenues of £9.55m in the 2020/21 financial year, so the additional £0.7m of revenue that is now expected to be booked that year will produce £0.43m of incremental gross margin, all of which is effectively being converted into operating profit.

Cenkos estimate IXICO will have net funds of £5.5m at the end of next month which means that its enterprise valuation of £16.5m equates to 20 times forecast net profits in the 2020/21 financial year, hardly a punchy rating for a highly operationally geared business that is winning new orders and looks to be at the start of an earnings upgrade cycle. Indeed, around two-thirds of the 2020 revenue target is already covered by the contracted order book, so if contract momentum continues to build then it’s not unrealistic to expect IXICO to over deliver even against analysts’ upgraded expectations.

In the circumstances, I am raising my 55p target price to 62p, implying a fair value enterprise valuation of £23.5m, in anticipation of the contract momentum in the business continuing to build and the release of another positive pre-close trading update in mid-October. Trading on a bid-offer spread of 45p to 47p, I continue to rate IXICO’s shares a buy.

[someuwin] 20/8/2019 10:20

IXICO's data analytics services are used by the global biopharmaceutical industry to interpret data from brain scans and digital biosensors to enable better trial design, site qualification, patient selection and clinical outcomes. We provide technology-enabled services across all phases of clinical evaluation. Our integrated digital platform provides a scalable and secure infrastructure for the capture and analysis of regulatory compliant clinical data to enable clients to make rapid, better informed decisions. IXICO is also collaborating with partners to develop new analytical techniques and companion digital health products targeted at improving patient outcomes.

IXI's customers are working on some of the most pressing degenerative diseases afflicting the world's growing and aging population including...

Alzheimer's Disease

Parkinson's Disease

Huntingdon Disease

Multiple Sclerosis

Progressive Supranuclear Palsy

Other Rare Neurological Diseases

[someuwin] 20/8/2019 08:19

...Still a good price to get back inti IXI - imo.

[coachsailor] 19/8/2019 23:33

As you say someuwin. Some u win and some u lose. This I lost. Originally bought Phytopharm (now Ixico) in 2004 at 47.50p and finished up with 6800 shares costing around £2500. Following ccnsolidation in Sep 2013 and 2018 finished up with just 100 and today back at 43p with a total value of £43. Fortunately bought Biocompatables around the same time which evolved in to BTG - so some u win.

[zlotini] 19/8/2019 12:21

Someuwin, thanks for the Cenkos comments.

[someuwin] 19/8/2019 11:19

Cenkos comments today...

"IXICO Plc Performance driven upgrade Following the recent commercial update, IXICO has released a trading update highlighting its strong revenue growth and anticipating the results for FY19 will be ‘materially ahead of current market expectations’. In light of this performance and ahead of the release of the full year results to Sep-19, we are upgrading our forecasts as discussed below. We believe IXICO’s proprietary AI algorithms, focus on the growing CNS market and established client relationships support our Buy recommendation."

...

"Investment thesis – We believe the combination of strong revenue growth with a high degree of visibility, expanding gross margins and operational leverage set to move the company into profitability makes IXICO a highly attractive investment opportunity. We believe IXICO’s proprietary AI algorithms, focus on the growing CNS market and established client relationships support our forecasts. We maintain our Buy recommendation"

[saucepan] 19/8/2019 11:00

It was a different company then, Toffeeman. Reverse takeover 2013.

[toffeeman] 19/8/2019 09:57

£2.50 in 2005!!!

[mirabeau] 19/8/2019 09:19

5 year high

Was around 45p Aug 2014

[someuwin] 19/8/2019 08:48

Plenty of cash. GBP7.5M at 31 March 2019

[someuwin] 19/8/2019 08:11

19th August 2019
IXICO plc
("IXICO" or the "Company")
Trading update
Revenue and EBITDA for full year 2019 expected to be ahead of market expectations
IXICO plc (AIM: IXI), the data analytics company delivering insights in neuroscience, is pleased to announce that the Company has continued to see strong growth in revenue in the second half of the year. Growth has been accelerated by new and expanded contracts coming on line, deployment of newly developed algorithms and faster turnaround times in trial initiation. The Company is further able to confirm that it anticipates this improved revenue performance will drive additional operating leverage and the Board expects to build on the breakeven position reported at the half year.

Given the performance in the period to date, the Board anticipates that the results for the full year ending 30 September 2019 will be materially ahead of current market expectations.

Giulio Cerroni, Chief Executive Officer of IXICO, commented: "We are delighted to see continued momentum in our revenue growth, establishing 2019 as an inflexion point in the Company's progress. This is a fantastic achievement which reflects the Company's ability to support and grow with the increasing demand for our high quality neurological imaging and data analytics services."

[mirabeau] 23/7/2019 13:00

He has tipped it

[mirabeau] 23/7/2019 12:56

Has this been tipped by Simon Thompson in the IC?

You know, I think ST has tipped this as he's made reference to it before

Get onto Google and search for

'Simon Thompson. IXICO'

[babbler] 23/7/2019 12:27

order conversion imo

[curlly] 23/7/2019 11:23

11.22k delayed buy just come in
Hence the rise, and what do they know?

[babbler] 23/7/2019 11:07

perhaps one of their £23m orders converted.

[babbler] 23/7/2019 11:06

other than its undervalued?

[curlly] 23/7/2019 10:28

Cant find anything for the rise

[turbocharge] 23/7/2019 09:54

Something's sparking interest today, all buys so far, price ticking up...

[5oletrader] 11/7/2019 08:01

Like I say... a shake of the tree on 09/07/19 to generate some liquidity. A Buying Opportunity taken by you smart cookies.

NOTED approximations:
23/05/2018 - Director Purchase - 60,606 @ 33p - £20k
30/05/2018 - Director Purchase - 31,550 @ 31.5p - £10k
13/05/2019 - Director Purchase - 53,300 @ 28p - £15k
18/05/2019 - Director Purchase - 70,715 @ 28.5p - £20k
11/07/2019 - Director Purchase - 140,421 @ 28.485p - £40k

TOTAL - £105k approx.

Plus 31/05/2019 - Various Holdings RNS - Increased Positions

Positive action in conjunction with the last report. ATH's soon!

[turbocharge] 10/7/2019 13:33

Lot of interest today, wonder why....

[5oletrader] 10/7/2019 12:41

Yesterday - 09/07/19.... Theft of Stock?!?!?