Pixium Vision — End of ESGO arrangement comes as no surprise

Pixium Vision (PAR: PIX)

Last close As at 20/05/2024

EUR0.15

−0.04 (−21.05%)

Market capitalisation

EUR1m

More on this equity

Research: Healthcare

Pixium Vision — End of ESGO arrangement comes as no surprise

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.

Written by

Pooya Hemami

Analyst - Healthcare

Pixium-Vision_resized

Healthcare

Pixium Vision

End of ESGO arrangement comes as no surprise

15 February 2023

Price

€0.065

Market cap

€5m

Gross cash (€m) at 31 December 2022

7.7

Shares in issue

78.2m

Free float

76%

Code

ALPIX

Primary exchange

Euronext Growth Paris

Secondary exchange

N/A

Share price performance

Business description

Pixium Vision develops bionic vision systems for patients with severe vision loss. Its lead product, Prima, is a wireless subretinal implant system designed for dry age-related macular degeneration. The company completed implantations for the European PRIMAvera pivotal study in Q422.

Analysts

Pooya Hemami, OD, MBA, CFA

+44 (0)20 3077 5700

Soo Romanoff

+44 (0)20 3077 5700

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
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

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.

General disclaimer and copyright

This report has been commissioned by Pixium Vision and prepared and issued by Edison, in consideration of a fee payable by Pixium Vision. 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.

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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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

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NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Pixium Vision and prepared and issued by Edison, in consideration of a fee payable by Pixium Vision. 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 2023 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.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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