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Research: Healthcare
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.
Pixium Vision |
US feasibility study now underway |
Clinical update |
Healthcare equipment & services |
27 January 2020 |
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Pixium Vision is a research client of Edison Investment Research Limited |
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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* |
EPS* |
DPS |
P/E |
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
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Research: Investment Companies
European Assets Trust (EAT) aims to generate long-term capital growth through investing in quoted small- to medium-sized companies in Europe, excluding the UK. Over the past 10 years, EAT’s NAV total return (TR) has generated an annualised return of 12.9%. The board has a high payout policy and a 17.2% increase in the declared FY20 dividend results in a forward yield of 6.6%. Previously dual-listed in Amsterdam and London, EAT completed its legal migration to the UK in March 2019. The board believes a premium listing on the London Stock Exchange and becoming a constituent of the FTSE SmallCap and FTSE All-Share indices could broaden EAT’s appeal and help close the trust’s NAV discount over time.