Pixium Vision — Update 27 July 2016

Pixium Vision (PAR: PIX)

Last close As at 27/03/2024

EUR0.15

−0.04 (−21.05%)

Market capitalisation

EUR1m

More on this equity

Research: Healthcare

Pixium Vision — Update 27 July 2016

Pixium Vision

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Pixium Vision

Iris II receives CE mark clearance

Update – CE mark

Healthcare equipment
& services

27 July 2016

Price

€8.07

Market cap

€103m

Net cash (€m) at 30 June 2016

16.1

Shares in issue

12.8m

Free float

26%

Code

PIX

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

11.5

3.3

28.9

Rel (local)

4.4

6.3

47.2

52-week high/low

€8.40

€4.48

Business description

Pixium Vision is a French medical device company developing retinal implants for patients with retinitis pigmentosa and macular degeneration. CE mark clearance was recently received on its initial product, Iris. A sub-retinal implant, Prima, is also being developed simultaneously.

Next events

First in-human dosing for Prima

H216

Discussions with FDA on Iris and Prima US clinical trial requirements

H216

Analysts

Pooya Hemami

+1 646 653 7026

Maxim Jacobs

+1 646 653 7027

Pixium Vision is a research client of Edison Investment Research Limited

Pixium announced on 25 July that its Iris II epi-retinal implant has received CE mark clearance from European regulatory authorities. This pivotal step helps validate the device’s safety and can enable the first stage of a commercial roll-out of this device in certain European markets. Our rNPV, inclusive of net cash, is €11.62 per share (vs €10.28 previously).

Year
end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/14

2.4

(11.6)

(1.18)

0.0

N/A

N/A

12/15

3.3

(15.6)

(1.23)

0.0

N/A

N/A

12/16e

2.9

(14.2)

(1.11)

0.0

N/A

N/A

12/17e

5.5

(24.1)

(1.89)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Clinical trial and reimbursement activities underway

We expect Pixium to implement the first phase of an EU commercial roll-out and seek reimbursement in Germany, France, the UK, Spain and Austria. Emphasis will be placed on selected ophthalmic surgery centres of excellence, particularly those sites that have participated in earlier trials of the earlier-generation Iris I implant. We believe that Second Sight’s Argus II implant is reimbursed at €96,000 in France (Pixium’s home market). We believe this can bode well for Pixium, as the Iris II has significantly more electrodes than the Argus II (150 vs 60), which may improve the level of visual resolution perceived by the user.

Iris II study underway, discussions with FDA in H216

A multi-centre 10-patient European study of Iris II in visually blind patients with retinal disease started in January 2016 and will assess the effectiveness of the device for at least 18 months. Interim data from the trial should further assist reimbursement applications in EU territories. Pixium plans to discuss the US clinical development strategy for both Iris II and its next-generation Prima sub-retinal implant with the FDA in H216. We continue to model US Iris II commercialisation in 2018 and Prima launches in 2019 for the EU and in 2021 for the US.

Valuation: Raising rNPV to $132m

Following CE mark clearance, we have raised our Iris II commercial probability of success estimate to 55% (from 40%, previously), with US regulatory risk and commercialisation risks (market acceptance, reimbursement) remaining as risk-adjustment factors. Our pipeline rNPV is €132.3m (vs €113.5m, previously). After including H116 net cash of €16.1m (€16.2m gross cash minus €0.2m in short-term advances), we obtain an equity valuation of €148.3m, or €11.62 per share (vs €10.28 previously). We model a 2016 operating cash burn rate of €15.1m, and continue to assume Pixium will raise €20m in financing in 2016 and €30m in both 2017 and 2018. For illustrative purposes only, we added these requirements to long-term debt, and our model does not include the potential dilutive impacts of future equity offerings.

Exhibit 1: Financial summary

€000s

2014

2015

2016e

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

2,427

3,296

2,866

5,525

25,875

Cost of Sales

0

0

0

(1,894)

(12,154)

General & Administrative

(2,299)

(2,680)

(3,893)

(6,495)

(9,600)

Research & Development

(10,963)

(15,169)

(12,301)

(20,000)

(22,000)

EBITDA

 

 

(10,835)

(14,552)

(13,328)

(22,864)

(17,878)

Depreciation

(813)

(1,144)

(1,086)

(1,265)

(1,430)

Amortization

0

0

0

0

0

Operating Profit (before exceptionals)

 

(11,648)

(15,697)

(14,414)

(24,129)

(19,308)

Exceptionals

0

0

0

0

0

Other

0

0

0

0

0

Operating Profit

(11,648)

(15,697)

(14,414)

(24,129)

(19,308)

Net Interest

37

52

240

16

(401)

Profit Before Tax (norm)

 

 

(11,611)

(15,644)

(14,174)

(24,113)

(19,710)

Profit Before Tax (FRS 3)

 

 

(11,611)

(15,644)

(14,174)

(24,113)

(19,710)

Tax

0

0

0

0

0

Profit After Tax and minority interests (norm)

(11,611)

(15,644)

(14,174)

(24,113)

(19,710)

Profit After Tax and minority interests (FRS 3)

(11,611)

(15,644)

(14,174)

(24,113)

(19,710)

Average Number of Shares Outstanding (m)

9.8

12.7

12.8

12.8

12.8

EPS - normalised (€)

 

 

(1.18)

(1.23)

(1.11)

(1.89)

(1.54)

EPS - normalised and fully diluted (€)

 

 

(1.18)

(1.23)

(1.11)

(1.89)

(1.54)

EPS - (IFRS) (€)

 

 

(1.18)

(1.23)

(1.11)

(1.89)

(1.54)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

9,932

11,087

11,106

12,341

14,911

Intangible Assets

9,259

8,822

8,494

8,494

8,494

Tangible Assets

673

2,265

2,613

3,848

6,417

Current Assets

 

 

44,866

27,682

33,279

37,735

47,298

Short-term investments

0

0

0

0

0

Cash

42,132

24,354

28,501

30,780

34,044

Other

2,735

3,328

4,778

6,955

13,254

Current Liabilities

 

 

(4,051)

(3,498)

(2,325)

(1,231)

(2,156)

Creditors

(4,051)

(3,498)

(2,325)

(1,231)

(2,156)

Short term borrowings

0

0

0

0

0

Long Term Liabilities

 

 

(245)

(315)

(20,337)

(50,337)

(80,337)

Long term borrowings

(167)

(164)

(20,165)

(50,165)

(80,165)

Other long term liabilities

(78)

(151)

(172)

(172)

(172)

Net Assets

 

 

50,503

34,956

21,723

(1,491)

(20,284)

CASH FLOW

Operating Cash Flow

 

 

(8,426)

(15,584)

(15,060)

(25,236)

(22,335)

Net Interest

37

52

240

16

(401)

Tax

0

0

0

0

0

Capex

(1,772)

(2,106)

(1,097)

(2,500)

(4,000)

Acquisitions/disposals

0

0

0

0

0

Financing

42,705

56

63

0

0

Net Cash Flow

32,543

(17,582)

(15,854)

(27,720)

(26,737)

Opening net debt/(cash)

 

 

(9,420)

(41,965)

(24,190)

(8,335)

19,385

HP finance leases initiated

0

0

0

0

0

Other

1

(193)

0

0

(0)

Closing net debt/(cash)

 

 

(41,965)

(24,190)

(8,335)

19,385

46,122

Source: Edison Investment Research, Pixium Vision accounts. Note: 2014 and 2015 revenues include tax credits and subsidies, which are forecast at approximately $3m per year through 2018.

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Pixium Vision and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2016. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

More on Pixium Vision

View All

Latest from the Healthcare sector

View All Healthcare content

Research: TMT

Acal — Update 27 July 2016

Acal

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free