PRIMA_subretinal_3D

ANSM approval to start PRIMAvera pivotal study

Pixium Vision 25 November 2020 Update
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Pixium Vision

ANSM approval to start PRIMAvera pivotal study

Clinical update

Healthcare equipment
& services

25 November 2020

Price

€0.66

Market cap

€29m

$1.18/€

Net debt (€m) at 30 June 2020 (excluding lease liabilities)

0.9

Shares in issue

43.8m

Free float

60%

Code

PIX

Primary exchange

Euronext Growth Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

4.7

25.0

16.2

Rel (local)

(7.3)

12.7

22.5

52-week high/low

€1.11

€0.47

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 company completed five implantations in an EU feasibility study and recently started a US feasibility study.

Next events

Start PRIMAvera pivotal study

Q420

36-month data from EU feasibility study

Q121

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

Pixium Vision announced on 20 November that it has received approval from the French regulatory health authority, ANSM, to start its PRIMAvera European pivotal study of its Prima Bionic Vision System (BVS) in patients with dry age-related macular degeneration with geographic atrophy (GA-AMD), a largely unmet market indication. This is an important milestone for Pixium as we believe the PRIMAvera European registration study may provide top-line 12-month data in H222, supporting our estimate of potential CE mark and European launch in H223.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/18

1.6

(7.7)

(0.42)

0.0

N/A

N/A

12/19

1.8

(9.8)

(0.44)

0.0

N/A

N/A

12/20e

1.7

(8.6)

(0.28)

0.0

N/A

N/A

12/21e

1.6

(11.0)

(0.25)

0.0

N/A

N/A

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

PRIMAvera pivotal study to start before year-end

Pixium expects to start the PRIMAvera study by the end 2020. It will be an open-label, non-randomized, multi-centre, prospective, single-arm study that will implant and assess the Prima BVS in 38 patients. Top-line 12-month data could be sufficient for approval purposes, although patients will be followed for three years. Pixium remains in discussions with US regulatory authorities to explore the possibility of conducting this study in parallel in Europe and the US, which, if accepted by the FDA, could lead to a US launch earlier than our baseline estimate of H225.

Primary endpoint likely achievable given data to date

The primary efficacy endpoint is the proportion of subjects with an improvement of visual acuity of logMAR 0.2 or more from baseline to 12 months (after implantation), which refers to two lines on the logMAR visual acuity (VA) scale. 18-month data from the ongoing European feasibility study (n=5) showed that on average, the Prima BVS provided a logMAR of 0.5 (representing five lines of improvement vs baseline). If this data is reproduced in the PRIMAvera study, we expect the primary endpoint would be readily met. We believe this level of amelioration should provide functional benefits (such as recognizing shapes and symbols) and potentially improve patient independence.

Valuation: Raising rNPV to €134.0m

We have updated our valuation by increasing our probability of success estimate for the European market to 25% (from 20% previously), while keeping our US estimate unchanged at 20%. We now obtain a pipeline rNPV (enterprise value excluding net cash) of €134.0m versus €115.4m previously. After including €5.6m in estimated Q320 pro forma net cash (excluding lease liabilities), we obtain an equity valuation of €139.7m, or €3.19 per share (versus €2.82 previously). We continue to assume that Pixium will need to raise €37.5m in funds between Q420 and year-end 2023, modelled as illustrative debt, to bring Prima to commercial launch.

Prima heading for European pivotal study

With approval from the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM) in France, Pixium intends to start the 38-patient multicentre European pivotal study (PRIMAvera) before the end of 2020. Filings with other European regulators are underway, which are expected to allow other European countries to participate in the trial.

The primary efficacy endpoint is the proportion of subjects with a VA improvement of logMAR 0.2 or greater from baseline to 12 months post-implantation, and the primary safety endpoint is the number and severity of device and procedure related serious adverse events at 12 months follow-up. The study will include three years of follow-up, but we believe that CE mark approval and market launch can occur if the 12-month primary safety and efficacy endpoints are met. We expect that 12-month top-line primary endpoint data could be available in H222, which could lead to European approval and launch in H223, which is consistent with our existing estimates.

For the primary efficacy endpoint to be met, we believe that 72% of the evaluable patients will need to demonstrate a logMAR 0.2 or above improvement. Given the robust 18-month data shown in the five-patient European feasibility study (PRIMA-FS), where on average the five evaluable patients had logMAR 0.5 change (representing five lines of vision improvement) and the range of improvement was between three and seven lines, we believe there is a high likelihood that the primary efficacy endpoint can be met if the trends shown in PRIMA-FS are replicated in PRIMAvera.

We believe the level of VA amelioration already shown in PRIMA-FS, if reproduced in the pivotal study, should provide functional benefits (such as recognizing shapes, letters and symbols) and potentially improve patient independence, supporting potential market adoption.

US market pathway may still require a separate US pivotal study

Pixium remains in discussions with US regulators to explore the possibility of including or adding US sites to the PRIMAvera study such that the trial could potentially serve as a registration-enabling study for the US market. Our baseline forecast continues to assume that the FDA will require a separate pivotal study to support US Premarket Approval (PMA) registration for the Prima BVS, but at minimum, we expect that PRIMAvera study data could be used to supplement or support the eventual US PMA application. Our baseline estimate continues to assume a potential US launch of H225, but there continues to be a possibility that this could be pushed earlier if the FDA agrees to an approach that would allow the PRIMAvera trial to serve as a registration-enabling study in this market.

Financials and valuation

Our financial forecasts have not changed since our 29 October note , aside from a minor update in the company’s net cash position as an additional c €0.1m of the ESGO convertible debt has since been converted to equity in early November. We hence now estimate Q320 pro-forma net cash of c €5.6m (vs €5.5m previously). We believe Pixium’s funds on hand should be sufficient to support its ongoing operations into Q421, thus including at least several months of initial ramp-up of the PRIMAvera pivotal study.

We continue to assume that Pixium will need to raise €37.5m in funds between Q420 and year-end 2023, modelled as illustrative long-term debt, to complete the PRIMAvera pivotal study, all EU-related regulatory and preparatory commercial activities, and bring Prima to commercial launch. We expect that part of this requirement will be fulfilled using the remaining (or unused) €6.25m in tranches from the ESGO funding facility. All together, we model that Pixium will raise a further €2.5m in the remaining months of 2020, €12.5m in both 2021 and 2022, and €10m in 2023 (all these amounts are shown as long-term debt for illustrative purposes).

Given the planned start of the PRIMAvera study and the acceptance by ANSM of the study protocol, we have increased our European market probability of success estimate to 25% (from 20% previously) and have kept our US market probability at 20%. We may further adjust our European market probability estimate following the pace and progress of PRIMAvera trial recruitment and based on interim safety updates.

We now obtain a pipeline rNPV (enterprise value excluding net cash) of €134.0m versus €115.4m previously, with the increase attributable to the raised probability estimate for the European market. After including €5.6m in estimated Q320 net cash (excluding €1.2m in estimated lease liabilities), we obtain an equity valuation of €139.7m, or €3.19 per share (versus €2.82 previously). Given that we now assume a higher probability of success for Europe than for the US in our model, we are showing a separate breakdown of the valuation contributions of the two market regions.

Exhibit 1: Pixium Vision rNPV assumptions

Product contribution

Indication

Status

NPV
(€m)

Probability of success

rNPV (€m)

rNPV/ share (€)

Launch year

Peak sales (€m)

Prima (net of R&D and SG&A costs) in EU Market

Age-related Macular degeneration with Geographic Atrophy

Entering pivotal study

637.9

25.00%

154.7

3.53

H223

515

Prima (net of R&D and SG&A costs) in US Market

Age-related Macular degeneration with Geographic Atrophy

Human feasibility trials

400.2

20.00%

79.3

1.81

H225

531

Net capex, NWC & taxes (Global)

(398.2)

(100.0)

(2.28)

Total

639.9

134.0

3.06

Net cash (Q320e) pro-forma

5.6

5.6

0.13

Total equity value

645.5

139.7

3.19

FD shares outstanding (000) (5 November 2020)

43,829

Source: Edison Investment Research

Exhibit 2: Financial summary

€(000)

2017

2018

2019

2020e

2021e

2022e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

2,535

1,598

1,782

1,700

1,600

1,600

Cost of Sales

(1,124)

(41)

0

0

0

0

General & Administrative

(5,324)

(2,019)

(3,815)

(2,889)

(2,961)

(3,835)

Research & Development

(7,817)

(5,297)

(6,320)

(6,260)

(8,000)

(10,400)

EBITDA

 

 

(11,731)

(5,758)

(8,352)

(7,449)

(9,361)

(12,635)

Depreciation

(936)

(677)

(448)

(426)

(480)

(580)

Amortization

0

0

0

0

0

0

Operating Profit (before exceptionals)

 

(12,666)

(6,435)

(8,801)

(7,875)

(9,841)

(13,215)

Exceptionals

0

(5,859)

(69)

0

0

0

Other

0

0

0

0

0

0

Operating Profit

(12,666)

(12,294)

(8,870)

(7,875)

(9,841)

(13,215)

Net Interest

(876)

(1,277)

(1,006)

(740)

(1,146)

(2,209)

Profit Before Tax (norm)

 

 

(13,542)

(7,712)

(9,806)

(8,616)

(10,987)

(15,424)

Profit Before Tax (FRS 3)

 

 

(13,542)

(13,571)

(9,876)

(8,616)

(10,987)

(15,424)

Tax

0

0

0

0

0

0

Profit After Tax and minority interests (norm)

(13,542)

(7,712)

(9,806)

(8,616)

(10,987)

(15,424)

Profit After Tax and minority interests (FRS 3)

(13,542)

(13,571)

(9,876)

(8,616)

(10,987)

(15,424)

Average Number of Shares Outstanding (m)

13.3

18.5

22.3

31.3

44.2

45.0

EPS - normalised (€)

 

 

(1.02)

(0.42)

(0.44)

(0.28)

(0.25)

(0.34)

EPS - normalised and fully diluted (€)

 

(1.02)

(0.42)

(0.44)

(0.28)

(0.25)

(0.34)

EPS - (IFRS) (€)

 

 

(1.02)

(0.73)

(0.44)

(0.28)

(0.25)

(0.34)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

9,649

3,666

4,507

4,021

3,765

3,228

Intangible Assets

7,680

2,623

2,361

2,268

2,268

2,268

Tangible Assets

1,970

1,042

2,145

1,753

1,497

961

Current Assets

 

 

14,241

17,756

9,107

15,315

16,793

14,968

Short-term investments

0

0

0

0

0

0

Cash

10,532

15,629

6,792

13,376

14,815

12,990

Other

3,710

2,126

2,316

1,939

1,978

1,978

Current Liabilities

 

 

(2,752)

(2,044)

(2,880)

(2,203)

(1,360)

(1,360)

Creditors

(2,752)

(2,044)

(2,880)

(2,203)

(1,360)

(1,360)

Short term borrowings

0

0

0

0

0

0

Long Term Liabilities

 

 

(9,302)

(8,023)

(7,033)

(11,396)

(23,896)

(36,396)

Long term borrowings

(9,130)

(7,870)

(5,787)

(10,282)

(22,782)

(35,282)

Other long term liabilities

(172)

(153)

(1,246)

(1,114)

(1,114)

(1,114)

Net Assets

 

 

11,836

11,355

3,700

5,736

(4,699)

(19,560)

CASH FLOW

Operating Cash Flow

 

 

(10,605)

(6,174)

(7,282)

(6,218)

(9,691)

(12,073)

Net Interest

(876)

(1,277)

(1,006)

(740)

(1,146)

(2,209)

Tax

0

0

0

0

0

0

Capex

(191)

(31)

(34)

(222)

(224)

(44)

Acquisitions/disposals

0

0

0

0

0

0

Financing

519

14,068

2,034

10,667

0

0

Net Cash Flow

(11,153)

6,587

(6,288)

3,487

(11,061)

(14,325)

Opening net debt/(cash)

 

 

(12,911)

(1,401)

(7,760)

(1,004)

(3,094)

7,967

HP finance leases initiated

0

0

0

0

0

0

Other

(357)

(228)

(468)

(1,397)

0

(0)

Closing net debt/(cash)

 

 

(1,401)

(7,760)

(1,004)

(3,094)

7,967

22,292

Lease debt

N/A

N/A

1,346

1,215

1,215

1,215

Closing net debt/(cash) inclusive of IFRS16 lease debt

(1,401)

(7,760)

342

(1,879)

9,182

23,507

Source: Company 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.

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).

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

1185 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).

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

1185 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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