Cereno Scientific — All eyes on Q3 readout after Q1 update

Cereno Scientific (OMX: CRNO-B)

Last close As at 19/06/2024

SEK4.35

−0.10 (−2.25%)

Market capitalisation

SEK1,222m

More on this equity

Research: Healthcare

Cereno Scientific — All eyes on Q3 readout after Q1 update

Cereno Scientific’s Q124 results provided a financial update and recapped the company’s clinical plans and progress. The Phase II trial for lead asset CS1 (pulmonary arterial hypertension, PAH) remains on track for a Q324 readout and we expect the Expanded Access Program approved by the FDA in January 2024 will help Cereno build a more robust data package for the subsequent Phase IIb/III trial. Additionally, the clinical trial application (CTA) submission for CS014 to the EMA in April 2024 brings a second asset to the clinic, bolstering the company’s clinical pipeline. We believe Cereno’s liquidity, post the SEK73.6m cash injection from the warrants exercise announced in March and assuming drawdown of the remaining SEK45m debt facility, provides operational headroom through Q225, ex-debt repayments. Our valuation slightly adjusts to SEK2.46bn from SEK2.32bn, previously, but declines to SEK8.8, from SEK9.9, on a per share basis with the higher share count post warrant conversion.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Cereno Scientific

All eyes on Q3 readout after Q1 update

Q124 results

Pharma and biotech

24 May 2024

Price

SEK4.08

Market cap

SEK1,146m

SEK10.70/US$

Pro-forma net cash (SEKm) at 31 March 2024 (including funds from warrant conversions announced in March 2024)

77.4

Shares in issue

281.0m

Free float

93%

Code

CRNO B

Primary exchange

First North Growth Market

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.3)

(4.8)

570.0

Rel (local)

(6.2)

(12.9)

464.9

52-week high/low

SEK5.4

SEK0.5

Business description

Cereno Scientific is a clinical-stage biotech based in Sweden, focused on the development of innovative, effective and safe treatments for cardiovascular diseases with unmet medical needs. Lead asset CS1 is an HDAC inhibitor that acts as an epigenetic modulator. It is currently being investigated in a Phase II clinical trial for the treatment of pulmonary arterial hypertension.

Next events

CS1: Phase II top-line data

Q324

CS014: Phase I trial launch

Q224

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Jyoti Prakash, CFA

+44 (0)20 3077 5700

Dr Arron Aatkar

+44 (0)20 3077 5700

Cereno Scientific is a research client of Edison Investment Research Limited

Cereno Scientific’s Q124 results provided a financial update and recapped the company’s clinical plans and progress. The Phase II trial for lead asset CS1 (pulmonary arterial hypertension, PAH) remains on track for a Q324 readout and we expect the Expanded Access Program approved by the FDA in January 2024 will help Cereno build a more robust data package for the subsequent Phase IIb/III trial. Additionally, the clinical trial application (CTA) submission for CS014 to the EMA in April 2024 brings a second asset to the clinic, bolstering the company’s clinical pipeline. We believe Cereno’s liquidity, post the SEK73.6m cash injection from the warrants exercise announced in March and assuming drawdown of the remaining SEK45m debt facility, provides operational headroom through Q225, ex-debt repayments. Our valuation slightly adjusts to SEK2.46bn from SEK2.32bn, previously, but declines to SEK8.8, from SEK9.9, on a per share basis with the higher share count post warrant conversion.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/22

0.0

(27.6)

(0.20)

0.0

N/A

N/A

12/23

0.0

(48.1)

(0.20)

0.0

N/A

N/A

12/24e

0.0

(49.4)

(0.18)

0.0

N/A

N/A

12/25e

0.0

(47.0)

(0.17)

0.0

N/A

N/A

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

CS1 on track; CS014 clinical entry to bolster pipeline

While anticipation builds as the Phase II trial results for CS1 draw closer (expected in Q324), we believe Cereno’s next milestone will be the launch of first-in-human Phase I studies for CS014, which is being developed for thrombosis prevention without increased risk of bleeding. In April 2024, Cereno submitted a CTA to the EMA for this trial, which will primarily assess the safety and tolerability of CS014 in healthy volunteers. Subject to EMA clearance, management believes that the Phase I trial is on track to commence within Q224. The period also saw several appointments of experienced subject matter experts in key leadership positions, which we expect will support the company’s development goals.

Improved headroom following warrants exercise

Cereno ended Q124 with a gross cash balance of SEK49.2m, supported by the SEK73.6m cash injection post-period from the conversion of TO3 warrants (first announced in March 2024). We note Cereno has the option to draw down the remaining SEK45m tranche from the SEK90m debt facility raised in November 2023. Based on our cash burn projections and pro forma adjustments including the SEK45m loan, we estimate the company’s gross liquidity of c SEK168m will fund it through Q225. This estimate exclude the SEK90m loan repayment due in May 2025.

Valuation: SEK2.46bn or SEK8.8 per share

Our estimates are unchanged, but our valuation has increased to SEK2.46bn (from SEK2.32bn) with the model roll forward and increased pro forma net cash. However, the valuation per share declines to SEK8.8, from SEK9.9, given the increased share count with the warrants conversion (281m shares outstanding from 233.8m).

Pipeline overview

Heading Cereno’s portfolio of candidates for both rare and common cardiovascular diseases is CS1, a delayed immediate release formulation of valproic acid with disease-modifying potential for PAH, underpinned by its epigenetic mechanism as a histone deacetylase inhibitor (HDACi). The candidate is currently being assessed in a Phase II clinical trial (n=30), and is leveraging Abbott’s CardioMEMS technology for detailed and continuous measurements of pulmonary pressure and haemodynamics. In recent months, Cereno successfully extended patent protection for CS1 in Mexico, Europe and Canada, strengthening its commercial potential. Another highlight from January 2024 was the FDA granting an Expanded Access Program (EAP; also referred to as ‘compassionate use’) to CS1 for PAH. The EAP allows patients who completed the Phase II trial to continue taking CS1, enabling Cereno to develop a more comprehensive data package as it prepares for regulatory discussions regarding a follow-on, potentially pivotal Phase IIb/III trial. The high reported interest from patients and investigators in the EAP also suggest a perceived patient benefit, in our view. Prior interim updates from the Phase II trial included an encouraging patient case study (reported in June 2023) and a Data Quality Control Review (reported in October 2023), both of which suggest that CS1 could provide a clinically meaningful benefit to PAH patients. While we are optimistic about the outcome of the Phase II trial, we acknowledge that detailed conclusions cannot be drawn until the final analysis is conducted once the study is complete. According to the Q1 update, these results are anticipated in Q324, consistent with prior guided timelines.

Cereno’s second asset, CS014, is also an HDACi with epigenetic effects. It is being advanced as a potential treatment for thrombosis prevention. An important feature of this candidate is the potential efficacy, without increased risk of bleeding, supported by various preclinical models. CS014 aims to offer a solution to a key challenge associated with current standard-of-care antithrombotic treatments. With the global antithrombotic market estimated to reach c $46bn by 2028 (according to BCC Research), we believe there is a sizable opportunity for Cereno in this space. In January 2024, Cereno announced that it obtained a UK patent for CS014, the first patent received for this candidate, strengthening its positioning. As discussed, management is gearing up to launch its first-in-human Phase I study for CS014. This trial has been designed to evaluate the safety and tolerability of CS014, and will be conducted in Sweden starting from Q224, provided the EMA accepts the CTA that was filed in April 2024.

CS585 is the company’s third asset, and is in the earlier stages of preclinical development. While the precise indication for the candidate is yet to be determined, it has shown promise as a potential treatment for thrombosis prevention without increased risk of bleeding. CS585 is a selective, potent, and oral prostacyclin receptor (IP) agonist, and the promise shown in preclinical research has been recognised with a publication in Blood. In April 2024, Cereno secured extended patent protection (Notice of Allowance) in Europe for the CS585 program, creating a strong foundation for further development efforts. While preclinical work is ongoing, we expect the selection of a clinical indication within the broader cardiovascular disease area for CS585 by end-2024, with the next program update expected at the European Hematology Association conference on 15 June 2024.

Exhibit 1: Cereno’s clinical development pipeline

Source: Cereno Scientific Q124 report

New leadership aligned with strategic goals

The first quarter of 2024 also saw several new appointments to the company’s R&D and business development teams, which we believe is aimed at supporting the company’s longer-term strategic goals as its clinical pipeline progresses. Notably, Dr Rahul Agrawal was appointed as the chief medical officer (CMO) and head of R&D in February 2024. Dr Agrawal has significant experience in designing and leading clinical trials across therapeutic areas (such as cardiovascular, renal and respiratory) and has been involved in launching seven new drugs on the market. We expect Cereno to leverage this expertise to support its clinical programs, particularly CS1 as it approaches topline readouts and potential progression to pivotal stage studies. Other key appointments during the quarter include Tatiane Abreu Dall’Agnol as medical director, Julia Fransson as director of business development and Megha Ranjan as project director.

Financials and valuation

In Q124, Cereno reported an operating loss of SEK13.8m, up 213.8% y-o-y from the Q123 figure of SEK4.4m, albeit 25.1% lower than the Q423 figure of SEK18.5m. Since the company capitalises its R&D, the operating profitability is driven by personnel costs and other external expenses, which increased year-on-year. Personnel costs more than doubled to SEK6.3m from SEK3.1m in Q123, which we believe can be partially attributed to the several new appointments made by the company since the beginning of FY24. The net loss for the period was SEK15.4m, versus SEK4.4m in Q123, and was also affected by a higher interest expense (SEK1.6m in Q124, none in Q123) related to the SEK90m bridge loan (SEK45m drawn down to date) raised from Formue Nord Fokus in November 2023. The Q124 free cash outflow was SEK38.0m, up 69.4% y-o-y from the comparative figure of SEK22.4m due to a combination of greater operating losses and R&D expenses. Capitalised R&D, as reflected in the cash flow statement as intangible acquisitions, was SEK21.6m in Q124, versus SEK15.4m in Q123, and was majorly attributed to the ongoing Phase II clinical trial for lead asset CS1 in PAH. The Q124 performance was in line with our expectations, and we therefore keep our FY24 and FY25 operating expense estimates mostly unchanged. We continue to project operating losses of SEK42.7m and SEK44.8m in FY24 and FY25, respectively. We project cash burn of SEK127.1m in FY24 (SEK128.9m previously) and SEK133.3m in FY25 (SEK135.0m previously).

We continue to value Cereno using a risk-adjusted NPV model (with a discount rate of 12.5%), reflecting contributions from its Phase II clinical candidate CS1 and the Phase-I ready CS014, expected to enter the clinic in Q224. Our underlying assumptions were detailed in our recently published initiation report and have been kept unchanged following the Q124 results. Note that there is potential upside to be had with the expected Phase II readout from CS1 in Q324, Phase I trial initiation for CS014 and inclusion of the other preclinical asset CS585 in our valuation, as it advances to the clinic.

Our implied enterprise value benefits from rolling forward our model and a higher pro forma net cash position has a positive impact on the overall equity value. Overall, we now ascribe a valuation of SEK2.46bn, versus SEK2.32bn previously. However, the per share valuation drops to SEK8.8 from SEK9.9 previously, given the higher share count following the warrants exercise (281m shares outstanding vs 233.8m previously). A breakdown of our valuation in presented in Exhibit 2.

Exhibit 2: Cereno valuation

Asset

Indication

Development phase

Launch

Peak sales ($m)

Peak sales year

NPV (SEKm)

Probability

rNPV
(SEKm)

rNPV/share (SEK)

CS1

PAH

Phase II

2029

2,113

2038

8,778.9

25%

2,194.7

7.8

CS014

Thrombosis

Phase I-ready

2031

1,863

2042

3,854.5

5%

192.7

0.7

Total

12,633.4

2,387.5

8.5

Pro forma net cash at 31 March 2024*

77.4

0.3

Valuation

2,464.8

8.8

Source: Edison Investment Research. Note: *Includes SEK73.6m in net proceeds from the post-period TO3 warrants exercise. Per share valuation is based on shares outstanding of 281m (post warrants exercise).

Cereno closed Q124 with a net cash balance of SEK3.8m (gross cash of SEK49.2m and loans of SEK45.4m, including the SEK45m bridge loan). The cash balance was bolstered with a post-period capital injection of SEK73.6m (net proceeds) from the conversion of the TO3 warrants. In total 99.6% of the warrants were exercised, with the company issuing 47.9m new shares at SEK1.6/share for total gross proceeds of SEK76.7m. Given the exercise price was at a significant discount to the company’s prevailing trading price near expiry (over SEK3/share), we were expecting the warrants to be exercised and had already reflected this in our model.

Looking ahead, if the remaining SEK45m tranche from the SEK90m debt facility is also drawn down (which we expect to happen in H224, unless the company explores other fund-raising avenues), we now expect the pro forma gross liquidity (SEK167.8m) to be sufficient to fund operations through Q225 (excluding debt repayments). We continue to estimate the need for the company to raise SEK150m by Q225 to fund further operations as well as service the SEK90m debt repayment due in May 2025, which we reflect as illustrative debt in our model. As highlighted in our initiation report, we assume a licensing deal in 2026, with the partner taking over development activity. However, if such a deal does not materialise and the company takes on self-development of its clinical programmes, we estimate it would need to raise SEK200m per year starting in FY26, until the commercial launch of CS1 in 2029 (a total of SEK750m between FY25 and FY28). If the company uses equity issues for this funding, we estimate that it would need to issue c 184m shares (assuming the current share price of SEK4.08), which would result in our per share valuation diluting to SEK6.9 per share, from SEK8.8 per share currently.

Exhibit 3: Financial summary

Accounts: K3, Yr end: December 31, SEK:000s

 

2021

2022

2023

2024e

2025e

PROFIT & LOSS

 

 

 

 

 

 

Net sales

 

0

0

0

0

0

Capitalised work for own account

 

44,805

57,538

49,277

79,615

87,007

Total revenues

 

44,805

57,538

49,277

79,615

87,007

Cost of sales

 

0

0

0

0

0

Gross profit

 

44,805

57,538

49,277

79,615

87,007

Total operating expenses

 

(59,811)

(85,037)

(93,927)

(122,276)

(131,777)

R&D and other expenses

 

(57,797)

(76,620)

(71,152)

(102,576)

(111,107)

Of which - R&D expenses

 

(44,805)

(57,538)

(49,277)

(79,615)

(87,007)

Of which - other expenses

 

(12,815)

(18,899)

(21,658)

(22,741)

(23,878)

Personnel costs

 

(1,789)

(7,514)

(18,763)

(19,700)

(20,670)

Other operating items

 

(226)

(903)

(4,012)

0

0

Operating income (reported)

 

(15,006)

(27,499)

(44,650)

(42,661)

(44,770)

EBITDA (normalized)

 

(14,992)

(27,485)

(44,636)

(42,646)

(44,770)

Finance income/(expense)

 

(1,245)

(149)

(3,456)

(6,761)

(2,206)

Exceptionals and adjustments

 

0

0

0

0

0

Profit before tax (reported)

 

(16,251)

(27,649)

(48,106)

(49,422)

(46,976)

Profit before tax (normalised)

 

(16,251)

(27,649)

(46,436)

(49,422)

(46,976)

Income tax expense (includes exceptionals)

 

(4)

(6)

0

0

0

Net income (reported)

 

(16,255)

(27,654)

(48,106)

(49,422)

(46,976)

Net income (normalised)

 

(16,255)

(27,654)

(46,436)

(49,422)

(46,976)

End of period number of shares, '000

 

105,262

137,515

233,775

281,702

281,702

Basic EPS (SEK)

 

(0.15)

(0.20)

(0.21)

(0.18)

(0.17)

Adjusted EPS (SEK)

 

(0.15)

(0.20)

(0.20)

(0.18)

(0.17)

BALANCE SHEET

 

 

 

 

 

 

Intangible Assets

 

89,449

146,987

196,264

275,879

362,886

Fixtures, tools and installation

 

43

29

14

0

0

Other long-term receivables

 

8

10

9

9

9

Total non-current assets

 

89,500

147,025

196,287

275,888

362,895

Other receivables

 

1,363

1,248

1,124

1,305

1,336

Prepaid expenses and accrued income

 

240

335

407

407

407

Cash and bank balance

 

89,635

67,046

87,169

78,657

5,343

Total current assets

 

91,238

68,629

88,699

80,368

7,086

Accounts Payable

 

2,884

9,411

6,930

9,022

9,723

Other Current Liabilities

 

2,589

4,331

16,231

16,231

16,231

Short-term Debt

 

4,800

0

0

0

0

Total current liabilities

 

10,273

13,742

23,162

25,254

25,955

Long-term Debt

 

0

0

45,000

90,000

150,000

Other debt

 

400

400

400

400

400

Total non-current liabilities

 

400

400

45,400

90,400

150,400

Equity attributable to company

 

170,065

201,511

216,424

240,602

193,627

CASH FLOW STATEMENT

 

 

 

 

 

 

Net profit

 

(16,255)

(27,654)

(48,106)

(49,422)

(46,976)

Depreciation

 

14

14

14

14

0

Translation difference

 

(321)

(90)

34

0

0

Accrued costs

 

1,230

450

777

0

0

Share based payments

 

0

0

1,671

0

0

Taxes paid

 

(1)

(4)

0

0

0

Movements in working capital

 

2,196

8,669

8,695

1,911

670

Cash from operations (CFO)

 

(13,137)

(18,615)

(36,915)

(47,497)

(46,306)

Purchase of intangible assets

 

(44,805)

(57,538)

(49,277)

(79,615)

(87,007)

Purchase of PPE

 

0

0

0

0

0

Other investing activities

 

0

0

0

0

0

Cash used in investing activities (CFIA)

 

(44,805)

(57,538)

(49,277)

(79,615)

(87,007)

Loans received

 

0

0

45,000

45,000

150,000

Loan repayments

 

(5,000)

(5,000)

0

0

(90,000)

Equity issued

 

91,398

58,791

61,315

73,600

0

Other Financing Cash Flows

 

(4,825)

(226)

0

0

0

Cash from financing activities (CFF)

 

81,573

53,564

106,315

118,600

60,000

Cash and equivalents at beginning of period

 

66,004

89,635

67,046

87,169

78,657

Increase/(decrease) in cash and equivalents

 

23,630

(22,589)

20,123

(8,512)

(73,313)

Effect of FX on cash and equivalents

 

0

0

0

0

0

Cash and equivalents at end of period

 

89,635

67,046

87,169

78,657

5,343

Net (debt)/cash

 

84,435

66,646

41,769

(11,743)

(145,057)

Source: Company reports, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Cereno Scientific and prepared and issued by Edison, in consideration of a fee payable by Cereno Scientific. Edison Investment Research standard fees are £60,000 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 2024 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Cereno Scientific and prepared and issued by Edison, in consideration of a fee payable by Cereno Scientific. Edison Investment Research standard fees are £60,000 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 2024 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Cereno Scientific

View All

Latest from the Healthcare sector

View All Healthcare content

Research: Investment Companies

The Bankers Investment Trust — Greater investment flexibility may boost returns

The Bankers Investment Trust (BNKR) focuses on cash-generating companies and FY23 (ended 31 October 2023) was its 57th consecutive year of dividend growth. Dividends rose by 10%, maintaining the trust’s track record of above inflation dividend growth over the long term. The board expects dividends to rise by at least 5% in FY24. While this is commendable, BNKR’s recent relative total return performance has been adversely affected by its lack of exposure to most of the so-called Magnificent Seven US tech stocks, which the manager, Alex Crooke, has avoided as they do not pay dividends. However, BNKR’s board has recently indicated that it will adopt a more flexible approach to using revenue reserves. This will enable the manager to invest in a broader pool of investments. This greater flexibility has the potential to deliver better capital returns, while ensuring the trust keeps delivering progressive dividend growth.

Continue Reading

Subscribe to Edison

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

Sign up for free