Pixium Vision — US feasibility study now underway

Pixium Vision (PAR: PIX)

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Research: Healthcare

Pixium Vision — US feasibility study now underway

On 13 January Pixium Vision announced the first implantation of the Prima system in the US, as part of its US feasibility trial in five patients with advanced dry age-related macular degeneration with geographic atrophy. The procedure was the first to use Pixium’s new proprietary delivery system, designed to greatly improve the ease of implantation and result in a safer and less invasive procedure. The procedure was performed at the University of Pittsburgh Medical Center; more implantations are expected throughout the year at this site and at Bascom Palmer Eye Institute.

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Pixium Vision

US feasibility study now underway

Clinical update

Healthcare equipment & services

27 January 2020

Price

€1.00

Market cap

€25m

US$1.11/€

Net cash (€m) at 30 June 2019

3.4

Shares in issue

24.8m

Free float

40%

Code

PIX

Primary exchange

Euronext Growth

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

21.7

40.7

(43.2)

Rel (local)

21.7

33.0

(53.5)

52-week high/low

€1.83

€0.53

Business description

Pixium Vision develops bionic vision systems for patients with severe vision loss. Its lead product, Prima, is a wireless sub-retinal implant system designed for dry-AMD. The firm completed five implantations in an EU feasibility study and recently began implantations in a US feasibility study.

Next events

Preliminary data on second-generation system

March 2020

Pivotal study filing

H120

Analysts

Pooya Hemami, CFA

+1 646 653 7026

Maxim Jacobs, CFA

+1 646 653 7027

Pixium Vision is a research client of Edison Investment Research Limited

On 13 January Pixium Vision announced the first implantation of the Prima system in the US, as part of its US feasibility trial in five patients with advanced dry age-related macular degeneration with geographic atrophy. The procedure was the first to use Pixium’s new proprietary delivery system, designed to greatly improve the ease of implantation and result in a safer and less invasive procedure. The procedure was performed at the University of Pittsburgh Medical Center; more implantations are expected throughout the year at this site and at Bascom Palmer Eye Institute.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/17

2.5

(13.5)

(1.02)

0.0

N/A

N/A

12/18

1.6

(8.1)

(0.44)

0.0

N/A

N/A

12/19e

1.9

(10.5)

(0.46)

0.0

N/A

N/A

12/20e

1.6

(12.5)

(0.50)

0.0

N/A

N/A

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

Second-generation system now in use in both trials

After a one-month healing period, this first US patient (and all subsequent planned patients) will be trained to use the second-generation Prima system, which includes transparent augmented reality glasses that allow for the combination of both prosthetic vision and natural residual vision. The second-generation system also includes a pocket computer with improved algorithms, designed to incorporate more advanced image processing and artificial intelligence functionality to enhance the visual experience of patients implanted with the current 378-electrode Prima chip. The second-generation system has recently been introduced among the five patients treated in the EU feasibility study. Pixium states that preliminary results are encouraging and initial functional data are expected in Q120.

Pivotal study regulatory filing expected in H120

Pixium intends to start a pivotal study in European sites in mid-2020 and its preferred objective would be to harmonise study design requirements between the FDA and European regulators so it can combine facilities from Europe and the US into a single pivotal trial that would satisfy registration requirements in both territories. The best-case scenario would be a single registration-enabling trial (that we estimate would involve 50–70 implantations in total across both regions).

Valuation: Awaiting 2019 financials

In November 2019 Pixium announced a financing agreement with European Select Growth Opportunities Fund (ESGO) for the issue of up to €10m in bonds. We anticipate that a full €10m bond exercise should fund Pixium’s operations into 2021. We made slight adjustments to our forecasts to account for increased shares outstanding and lower than anticipated 2019 debt financing. Our base case assumes Pixium will need to raise €60m (including ESGO funding) to bring Prima to launch (in 2023). We maintain our €78m rNPV valuation and will revisit our estimates when the company reports its 2019 financial results in February.

Exhibit 1: Financial summary

€000

2016

2017

2018

2019e

2020e

2021e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

2,516

2,535

1,598

1,856

1,600

1,600

Cost of Sales

(141)

(1,124)

(41)

0

0

0

General & Administrative

(2,953)

(5,324)

(1,508)

(3,223)

(2,400)

(2,460)

Research & Development

(10,869)

(7,817)

(6,184)

(7,880)

(9,050)

(12,100)

EBITDA

 

 

(11,448)

(11,731)

(6,135)

(9,247)

(9,850)

(12,960)

Depreciation

(1,051)

(936)

(677)

(478)

(515)

(930)

Amortization

0

0

0

0

0

0

Operating Profit (before exceptionals)

 

(12,499)

(12,666)

(6,812)

(9,725)

(10,365)

(13,890)

Exceptionals

0

0

(5,483)

0

0

0

Other

0

0

0

0

0

0

Operating Profit

(12,499)

(12,666)

(12,294)

(9,725)

(10,365)

(13,890)

Net Interest

58

(876)

(1,277)

(749)

(2,146)

(5,391)

Profit Before Tax (norm)

 

 

(12,441)

(13,542)

(8,088)

(10,474)

(12,510)

(19,281)

Profit Before Tax (FRS 3)

 

 

(12,441)

(13,542)

(13,571)

(10,474)

(12,510)

(19,281)

Tax

0

0

0

0

0

0

Profit After Tax and minority interests (norm)

(12,441)

(13,542)

(8,088)

(10,474)

(12,510)

(19,281)

Profit After Tax and minority interests (FRS 3)

(12,441)

(13,542)

(13,571)

(10,474)

(12,510)

(19,281)

Average Number of Shares Outstanding (m)

12.7

13.3

18.5

22.9

24.8

24.9

EPS - normalised (€)

 

 

(0.98)

(1.02)

(0.44)

(0.46)

(0.50)

(0.78)

EPS - normalised and fully diluted (€)

 

(0.98)

(1.02)

(0.44)

(0.46)

(0.50)

(0.78)

EPS - (IFRS) (€)

 

 

(0.98)

(1.02)

(0.73)

(0.46)

(0.50)

(0.78)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

10,184

9,649

3,666

5,073

6,959

8,053

Intangible Assets

8,205

7,680

2,623

2,527

2,527

2,527

Tangible Assets

1,979

1,970

1,042

2,546

4,432

5,526

Current Assets

 

 

17,405

14,241

17,756

8,129

18,831

33,555

Short-term investments

0

0

0

0

0

0

Cash

14,244

10,532

15,629

5,165

15,757

30,481

Other

3,161

3,710

2,126

2,964

3,074

3,074

Current Liabilities

 

 

(2,836)

(2,752)

(2,044)

(1,810)

(1,810)

(1,810)

Creditors

(2,836)

(2,752)

(2,044)

(1,810)

(1,810)

(1,810)

Short term borrowings

0

0

0

0

0

0

Long Term Liabilities

 

 

(1,505)

(9,302)

(8,023)

(9,516)

(34,516)

(69,516)

Long term borrowings

(1,333)

(9,130)

(7,870)

(8,120)

(33,120)

(68,120)

Other long term liabilities

(172)

(172)

(153)

(1,396)

(1,396)

(1,396)

Net Assets

 

 

23,248

11,836

11,355

1,876

(10,537)

(29,719)

CASH FLOW

Operating Cash Flow

 

 

(11,188)

(10,605)

(6,174)

(10,227)

(9,862)

(12,861)

Net Interest

58

(876)

(1,277)

(749)

(2,146)

(5,391)

Tax

0

0

0

0

0

0

Capex

(148)

(191)

(31)

(415)

(2,400)

(2,024)

Acquisitions/disposals

0

0

0

0

0

0

Financing

(0)

519

14,068

923

0

0

Net Cash Flow

(11,279)

(11,153)

6,587

(10,468)

(14,408)

(20,276)

Opening net debt/(cash)

 

 

(24,190)

(12,911)

(1,401)

(7,760)

2,955

17,363

HP finance leases initiated

0

0

0

0

0

0

Other

(0)

(357)

(228)

(247)

0

0

Closing net debt/(cash)

 

 

(12,911)

(1,401)

(7,760)

2,955

17,363

37,639

Source: Pixium Vision accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Pixium Vision and prepared and issued by Edison, in consideration of a fee payable by Pixium Vision. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “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.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Pixium Vision and prepared and issued by Edison, in consideration of a fee payable by Pixium Vision. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “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.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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