Currency in EUR
Last close As at 02/06/2023
EUR0.07
— 0.00 (0.00%)
Market capitalisation
EUR10m
Research: Healthcare
Pixium has terminated its convertible note financing arrangement with the European Select Growth Opportunities Fund (ESGO) without any penalties. The termination is not surprising, given the arrangement required a minimum share price of €0.25 for Pixium to be permitted to issue any additional convertible notes beyond the initial 550 (representing €5.5m; each note had a nominal value of €10,000) that formed part of the first (and only) tranche issued. Pixium’s share price had remained below this minimum price threshold since August 2022 and the company acknowledged in October 2022 that it was not able to draw further tranches. Pixium reiterates that it is funded until the end of Q223 and is exploring various mechanisms to secure its cash flow necessary to pursue its strategic and development objectives.
Pixium Vision |
End of ESGO arrangement comes as no surprise |
15 February 2023 |
Share price performance Business description
Analysts
Pixium Vision is a research client of Edison Investment Research Limited |
Pixium has terminated its convertible note financing arrangement with the European Select Growth Opportunities Fund (ESGO) without any penalties. The termination is not surprising, given the arrangement required a minimum share price of €0.25 for Pixium to be permitted to issue any additional convertible notes beyond the initial 550 (representing €5.5m; each note had a nominal value of €10,000) that formed part of the first (and only) tranche issued. Pixium’s share price had remained below this minimum price threshold since August 2022 and the company acknowledged in October 2022 that it was not able to draw further tranches. Pixium reiterates that it is funded until the end of Q223 and is exploring various mechanisms to secure its cash flow necessary to pursue its strategic and development objectives.
Financing update |
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
2.1 |
(8.7) |
(0.26) |
0.0 |
N/A |
N/A |
12/21 |
2.7 |
(10.9) |
(0.23) |
0.0 |
N/A |
N/A |
12/22e |
1.8 |
(12.3) |
(0.21) |
0.0 |
N/A |
N/A |
12/23e |
0.8 |
(18.1) |
(0.24) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. FY23 EPS loss has been revised (from 0.26 previously) to reflect increase in shares outstanding. All other estimates are unchanged.
Pixium entered into the ESGO arrangement in Q322 and issued 550 notes (raising €5.5m in convertible debt) at the time. Since then, 238 notes have been converted to equity; 312 notes within the tranche remain outstanding and can be converted until 13 July 2023 or redeemed in cash at 109%. Converting notes at the current share price (c €0.065) would lead to the issue of c 48m new shares, diluting current equity holders by c 38%.
The company recently reported a year-end 2022 gross cash position of €7.7m, and a FY22 operating cash burn rate of €11.3m (+28% y-o-y). The increased cash outflow was largely due to increased costs for the PRIMAvera study, as well as the production of remote rehabilitation systems for patients in clinical trials. We note that all of the Prima implantations required for the PRIMAvera trial were completed before year-end 2022.
Pixium is planning a special meeting of shareholders on 15 February, where it is seeking resolutions to authorise a 50:1 share consolidation (reverse split) and increase the board’s flexibility for pursuing additional financing opportunities. It anticipates that the reverse split would ‘bring the company’s share price more in line with market standards and investor expectations and aim to reduce the volatility of the share price’.
Given the imminent funding need, we believe any successful fund-raising initiatives in the coming weeks would be welcomed by investors. If a sufficient financial runway is realised, market participants will then focus on the top-line PRIMAvera study data expected before year-end 2023. If positive, a CE Mark regulatory marketing submission can be filed in 2024 and could lead to commercialisation of the Prima system in an area of substantial unmet need, patients with severe vision loss due to geographic atrophy resulting from dry age-related macular degeneration.
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Research: Real Estate
For Q223, Target Healthcare REIT declared a second quarterly DPS of 1.69p, supported by inflation-linked rental growth and improving rent collection, which are in turn protected by fixed costs on 96% of borrowings. Yield widening across the broad property sector affected the portfolio’s property valuations, although the effect was significantly mitigated by the quality of Target’s portfolio and long-term, indexed leases.
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