First patient implanted with Iris II retinal prosthesis

Pixium Vision 25 February 2016 Update

Pixium Vision

First patient implanted with Iris II retinal prosthesis

First Iris II implant

Medical technology

25 February 2016

Price

€4.76

Market cap

€60m

Net cash (€m) at 31 December 2015

24.4

Shares in issue

12.7m

Free float

26%

Code

PIX

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(5.2)

(8.8)

(35.2)

Rel (local)

(1.2)

4.8

(24.3)

52-week high/low

€7.40

€4.50

Business description

Pixium Vision is a French medical device company developing retinal implants for patients with retinitis pigmentosa and macular degeneration. A CE mark application was submitted on its lead product, Iris. A sub-retinal implant is being developed simultaneously.

Next events

Q116 results

27 April 2016

Iris II CE mark approval

Mid-2016

Prima human study

Q316

Analysts

George Magrath

+1 843 333 5241

Pooya Hemami

+1 646 653 7026

Christian Glennie

+44 (0)20 3077 5727

Pixium Vision is a research client of Edison Investment Research Limited

Pixium has announced it has successfully implanted the first patient with its second-generation epi-retinal implant, Iris II. This is the first patient enrolled in a study of up to 10 patients with retinitis pigmentosa or other retinal dystrophies. Pixium filed for CE mark approval in December 2015 for Iris II.

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

4.4

(16.5)

(1.29)

0.0

N/A

N/A

12/17e

6.6

(19.9)

(1.56)

0.0

N/A

N/A

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

First perception of light

The pivotal trial for Iris II recently enrolled and successfully implanted its first patient. Iris II is an epi-retinal implant that uses signals from a video camera to stimulate the nerves in the retina to simulate the image captured by the camera. The implant was made into a 58-year-old retinitis pigmentosa patient, who reported first perception of light after many years in the darkness; the patient will now receive training to learn how to interpret the light signals.

Upgraded technology

Iris II is expected to provide greater acuity and more realistic synthetic vision by providing more electrodes (150 vs 50) than the Iris I and incorporating a biomimetic camera, which captures continuous video of the changes in the surrounding environment. Prior cameras captured traditional video frames. Pixium plans to enrol up to 10 patients with retinitis pigmentosa or other retinal dystrophies in its current trial. Iris II was submitted for CE mark in December 2015, and the company expects approval in mid-2016.

Prima on track

Pixium is also advancing its sub-retinal implant (Prima) in preclinical studies. The recently completed chronic thermal safety study was conducted by Pixium’s partners at Stanford University, and revealed positive chronic thermal safety. The first-in-man implant is expected in Q316.

Valuation: Adjusted to €10.50 per share

Pixium is well capitalised with €24.4m in cash at FY15, which should be sufficient to progress the Iris programme to CE mark approval and conduct human studies with the Prima implant. We expect additional capital to be required for commercialisation in FY17. We have updated our risk-adjusted NPV model to reflect latest cash (€24m) and rolled it forward to 2016, resulting in a new valuation of €10.50/share (vs €10.27/share). Our model has been updated for FY15 results, with the key change to forecasts being a reduced R&D spend in FY16, to €18m (vs €22m previously), to reflect the current run-rate. R&D in FY17 is forecast at €20m.

Exhibit 1: Financial summary

€000s

2013

2014

2015

2016e

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,478

2,427

3,296

4,440

6,628

22,846

Cost of Sales

0

0

0

0

(765)

(2,636)

Gross Profit

1,478

2,427

3,296

4,440

5,863

20,210

R&D expenses

(6,590)

(10,963)

(15,169)

(17,761)

(20,426)

(21,958)

SG&A expenses

(1,035)

(3,111)

(3,824)

(4,015)

(6,023)

(9,034)

EBITDA

 

 

(6,147)

(10,834)

(14,553)

(16,203)

(19,392)

(9,485)

Operating Profit (before GW and except)

 

(6,147)

(11,647)

(15,697)

(16,470)

(19,775)

(10,037)

Intangible Amortisation

0

0

0

(866)

(810)

(744)

Exceptionals

0

0

0

0

0

0

Operating Profit

(6,147)

(11,647)

(15,697)

(17,336)

(20,585)

(10,782)

Other

0

0

0

0

0

0

Net Interest

1

36

52

0

(139)

(139)

Profit Before Tax (norm)

 

 

(6,146)

(11,611)

(15,645)

(16,470)

(19,914)

(10,177)

Profit Before Tax (FRS 3)

 

 

(6,146)

(11,611)

(15,645)

(17,336)

(20,725)

(10,921)

Tax

0

0

0

0

0

0

Profit After Tax (norm)

(6,146)

(11,611)

(15,645)

(16,470)

(19,914)

(10,177)

Profit After Tax (FRS 3)

(6,146)

(11,611)

(15,645)

(17,336)

(20,725)

(10,921)

Average Number of Shares Outstanding (m)

27.3

9.8

12.7

12.7

12.7

12.7

EPS - normalised (€)

 

 

(0.23)

(1.18)

(1.23)

(1.29)

(1.56)

(0.80)

EPS - FRS 3 (€)

 

 

(0.23)

(1.18)

(1.23)

(1.36)

(1.63)

(0.86)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

8,965

9,932

11,087

12,122

13,160

14,160

Intangible Assets

8,277

9,259

8,822

8,104

7,445

6,854

Tangible Assets

641

627

2,072

3,825

5,523

7,113

Other

47

46

193

193

193

193

Current Assets

 

 

11,327

44,867

27,682

9,388

12,704

15,863

Stocks

0

0

0

500

1,000

1,500

Debtors

0

0

0

0

0

0

Cash

9,420

42,132

24,354

5,560

8,376

11,035

Other

1,907

2,735

3,328

3,328

3,328

3,328

Current Liabilities

 

 

(2,038)

(4,050)

(3,498)

(3,498)

(3,498)

(3,498)

Creditors

(1,379)

(1,729)

(2,159)

(2,159)

(2,159)

(2,159)

Short term borrowings

0

0

0

0

0

0

Short term leases

0

0

0

0

0

0

Other

(659)

(2,321)

(1,339)

(1,339)

(1,339)

(1,339)

Long Term Liabilities

 

 

(30)

(245)

(315)

(315)

(25,315)

(40,315)

Long term borrowings

0

0

0

0

(25,000)

(40,000)

Long term leases

0

0

0

0

0

0

Other long term liabilities

(30)

(245)

(315)

(315)

(315)

(315)

Net Assets

 

 

18,224

50,504

34,956

17,696

(2,949)

(13,790)

CASH FLOW

Operating Cash Flow

 

 

(5,188)

(8,389)

(15,532)

(16,822)

(20,010)

(10,102)

Net Interest

0

0

0

0

0

0

Tax

0

0

0

0

0

0

Capex

(303)

(1,773)

(2,299)

(2,168)

(2,231)

(2,297)

Acquisitions/disposals

0

0

0

0

0

0

Financing

11,822

42,705

56

0

0

0

Dividends

0

0

0

0

0

0

Other

1

169

(3)

197

58

58

Net Cash Flow

6,332

32,712

(17,778)

(18,793)

(22,184)

(12,340)

Opening net debt/(cash)

 

 

(3,088)

(9,420)

(42,132)

(24,354)

(5,560)

16,624

HP finance leases initiated

0

0

0

0

0

0

Other

0

0

0

(1)

0

0

Closing net debt/(cash)

 

 

(9,420)

(42,132)

(24,354)

(5,560)

16,624

28,965

Source: Edison Investment Research, Pixium Vision accounts

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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

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