Currency in EUR
Last close As at 24/03/2023
EUR0.68
▲ 0.03 (4.62%)
Market capitalisation
EUR34m
Research: Healthcare
Nicox announced a €10m private placement equity financing transaction, resulting in €8.9m in net proceeds. With the company extending the interest-only payment period of its existing Kreos Capital debt by six months (to January 2024), it has extended its estimated cash runway (based on the development of NCX-470 alone) to mid-May 2024, from mid-November 2023, previously. Altogether, Nicox issued 6.849m shares at an offering price of €1.46 per share (a 14% discount to the 21 November closing price) to Armistice Capital Master Fund, a healthcare and consumer sector focused hedge fund registered in the Cayman Islands. Nicox also affirmed that it now expects to complete Denali, the second NCX-470 Phase III study, in 2025, consistent with our existing estimates, although additional capital will be required. Our rNPV of €190.4m is unchanged, but our equity value per basic share is now €4.10 (vs €4.52 previously) given the additional shares outstanding.
Nicox |
€10m financing boosts cash runway into Q224 |
Financing update |
Pharma and biotech |
23 November 2022 |
Share price performance
Business description
Next events
Analysts
Nicox is a research client of Edison Investment Research Limited |
Nicox announced a €10m private placement equity financing transaction, resulting in €8.9m in net proceeds. With the company extending the interest-only payment period of its existing Kreos Capital debt by six months (to January 2024), it has extended its estimated cash runway (based on the development of NCX-470 alone) to mid-May 2024, from mid-November 2023, previously. Altogether, Nicox issued 6.849m shares at an offering price of €1.46 per share (a 14% discount to the 21 November closing price) to Armistice Capital Master Fund, a healthcare and consumer sector focused hedge fund registered in the Cayman Islands. Nicox also affirmed that it now expects to complete Denali, the second NCX-470 Phase III study, in 2025, consistent with our existing estimates, although additional capital will be required. Our rNPV of €190.4m is unchanged, but our equity value per basic share is now €4.10 (vs €4.52 previously) given the additional shares outstanding.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
14.4 |
(10.2) |
(0.30) |
0.0 |
N/A |
N/A |
12/21 |
8.6 |
(15.5) |
(0.35) |
0.0 |
N/A |
N/A |
12/22e |
5.2 |
(17.3) |
(0.33) |
0.0 |
N/A |
N/A |
12/23e |
7.3 |
(17.4) |
(0.34) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Attached warrants could further extend runway
The investor (Armistice) was also granted 6.849m share purchase warrants, exercisable at €1.70 per warrant. Full exercise of these warrants could raise €11.6m in additional proceeds. Given the €8.9m in net proceeds from the current financing, but excluding the effect of the attached warrants, we now expect the company will require €76m in added funding (from €85m previously) before the anticipated launch of NCX-470 (which we forecast in 2027).
Affirming NCX-470 and refining NCX-1728 strategies
Nicox continues to plan to start two Phase IIIb studies in H123, as discussed in our prior note, with the aim of demonstrating that NCX-470 may protect the retinal ganglion cells susceptible to glaucomatous damage through IOP-independent mechanisms, as has been observed in preclinical models. The company also indicated that its studies on its nitric-oxide emitting preclinical stage drug candidate NCX-1728 have established potential utility for retinal conditions, and the company will no longer advance it for the reduction of intraocular pressure (IOP).
Valuation: Revision to reflect new shares outstanding
Nicox reported €25.6m in cash and equivalents at 30 September, and €20.6m in non-lease debt. Following the private placement, we calculate pro forma Q322 net cash of €15.0m, excluding lease liabilities. Adding this amount to our unchanged €190.4m rNPV results in an equity valuation of €205.4m, or €4.10 per basic share (€3.75 fully diluted), down from €4.52 previously (€4.36 fully diluted).
Exhibit 1: Financial summary
€(000) |
2018 |
2019 |
2020 |
2021 |
2022e |
2023e |
2024e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||||
Revenue |
|
|
4,717 |
8,260 |
14,423 |
8,583 |
5,193 |
7,298 |
9,704 |
Cost of Sales |
(690) |
(1,405) |
(1,516) |
(1,350) |
(1,592) |
(1,750) |
(2,161) |
||
Gross Profit |
4,027 |
6,855 |
12,907 |
7,233 |
3,601 |
5,548 |
7,543 |
||
General & Administrative |
(9,506) |
(7,666) |
(6,677) |
(7,000) |
(7,905) |
(8,269) |
(11,543) |
||
Net Research & Development |
(15,491) |
(16,883) |
(11,991) |
(17,194) |
(15,063) |
(13,336) |
(16,136) |
||
Amortisation of intangible assets |
0 |
(659) |
(1,252) |
(1,205) |
(423) |
(798) |
(778) |
||
Operating profit before exceptionals |
(20,970) |
(18,353) |
(7,013) |
(18,166) |
(19,790) |
(16,856) |
(20,914) |
||
EBITDA |
|
|
(20,718) |
(17,230) |
(5,270) |
(16,505) |
(18,979) |
(15,751) |
(19,868) |
Depreciation & other |
(252) |
(464) |
(491) |
(456) |
(388) |
(307) |
(268) |
||
Operating Profit (before amort. and except.) |
|
(20,970) |
(17,694) |
(5,761) |
(16,961) |
(19,367) |
(16,057) |
(20,136) |
|
Exceptionals including asset impairment |
302 |
(6,115) |
(6,621) |
(30,658) |
(11,631) |
0 |
0 |
||
Other |
0 |
0 |
0 |
(1,159) |
0 |
0 |
0 |
||
Operating Profit |
(20,668) |
(23,809) |
(12,382) |
(48,778) |
(30,998) |
(16,057) |
(20,136) |
||
Net Interest |
2,390 |
1,690 |
(4,436) |
1,419 |
2,057 |
(1,326) |
(2,806) |
||
Profit Before Tax (norm) |
|
|
(18,580) |
(16,004) |
(10,197) |
(15,542) |
(17,310) |
(17,383) |
(22,942) |
Profit Before Tax (FRS 3) |
|
|
(18,278) |
(22,778) |
(18,070) |
(48,564) |
(29,364) |
(18,182) |
(23,720) |
Tax |
(113) |
3,856 |
(28) |
3,644 |
1,679 |
0 |
0 |
||
Profit After Tax and minority interests (norm) |
(18,693) |
(12,148) |
(10,225) |
(13,057) |
(15,631) |
(17,383) |
(22,942) |
||
Profit After Tax and minority interests (FRS 3) |
(18,391) |
(18,922) |
(18,098) |
(44,920) |
(27,685) |
(18,182) |
(23,720) |
||
Average Basic Number of Shares Outstanding (m) |
29.6 |
30.3 |
33.7 |
37.5 |
46.7 |
50.5 |
51.1 |
||
EPS - normalised (€) |
|
|
(0.63) |
(0.40) |
(0.30) |
(0.35) |
(0.33) |
(0.34) |
(0.45) |
EPS - normalised and fully diluted (€) |
|
|
(0.63) |
(0.40) |
(0.30) |
(0.35) |
(0.33) |
(0.34) |
(0.45) |
EPS - (IFRS) (€) |
|
|
(0.62) |
(0.62) |
(0.54) |
(1.20) |
(0.59) |
(0.36) |
(0.46) |
Dividend per share (€) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
112,498 |
110,660 |
89,745 |
66,871 |
61,043 |
60,121 |
59,317 |
Intangible Assets |
71,397 |
72,120 |
64,848 |
39,974 |
32,127 |
31,329 |
30,550 |
||
Tangible Assets |
25,628 |
27,517 |
24,829 |
26,660 |
28,759 |
28,634 |
28,608 |
||
Investments in long-term financial assets |
15,473 |
11,023 |
68 |
237 |
158 |
158 |
158 |
||
Current Assets |
|
|
26,092 |
32,146 |
52,521 |
47,738 |
35,387 |
34,885 |
37,654 |
Short-term investments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Cash |
22,059 |
28,102 |
47,195 |
41,970 |
29,938 |
28,971 |
31,611 |
||
Other |
4,033 |
4,044 |
5,326 |
5,768 |
5,448 |
5,914 |
6,043 |
||
Current Liabilities |
|
|
(8,069) |
(9,828) |
(15,404) |
(8,000) |
(7,981) |
(6,677) |
(5,280) |
Creditors |
(8,069) |
(7,751) |
(10,115) |
(8,000) |
(7,981) |
(6,677) |
(5,280) |
||
Short term borrowings |
0 |
(2,077) |
(5,289) |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(16,868) |
(23,681) |
(26,027) |
(31,057) |
(28,846) |
(45,846) |
(71,846) |
Long term borrowings |
0 |
(9,045) |
(12,687) |
(20,520) |
(20,196) |
(37,196) |
(63,196) |
||
Other long term liabilities |
(16,868) |
(14,636) |
(13,340) |
(10,537) |
(8,650) |
(8,650) |
(8,650) |
||
Net Assets |
|
|
113,653 |
109,297 |
100,835 |
75,552 |
59,603 |
42,483 |
19,845 |
CASH FLOW |
|||||||||
Operating Cash Flow |
|
|
(21,533) |
(17,741) |
(956) |
(19,900) |
(22,986) |
(16,459) |
(20,311) |
Net interest and financing income (expense) |
2,390 |
1,690 |
(4,436) |
1,419 |
2,057 |
(1,326) |
(2,806) |
||
Tax |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Operating Cash Flow |
(19,143) |
(16,051) |
(5,392) |
(18,481) |
(20,929) |
(17,785) |
(23,117) |
||
Capex |
(268) |
(95) |
(20) |
(8) |
(82) |
(182) |
(243) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
37 |
0 |
0 |
||
Financing |
0 |
11,290 |
13,321 |
13,804 |
9,086 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(19,411) |
(4,856) |
7,909 |
(4,685) |
(11,888) |
(17,967) |
(23,360) |
||
Opening net debt/(cash) |
|
|
0 |
(37,532) |
(28,003) |
(29,287) |
(21,687) |
(9,900) |
8,067 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
56,943 |
(4,673) |
(6,625) |
(2,915) |
101 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(37,532) |
(28,003) |
(29,287) |
(21,687) |
(9,900) |
8,067 |
31,427 |
Lease debt |
na |
1,527 |
1,099 |
986 |
1,297 |
1,297 |
1,297 |
||
Closing net debt/(cash) inclusive of IFRS16 lease debt |
(37,532) |
(26,476) |
(28,188) |
(20,701) |
(8,603) |
9,364 |
32,724 |
Source: Company reports, Edison Investment Research
|
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