Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
TXT e-solutions reported 15% year-on-year organic revenue growth for Q321, further boosted by contributions from recent acquisitions HSPI (+21%) and TeraTron (+11%). EBITDA increased 49% over the same period with a small increase in margin to 13.4%. While the pandemic has reduced demand for certain products and services, TXT has managed to expand into other areas organically and via acquisition to win new business (eg sustainable transport, defence, fintech). Diversification, combined with early signs of recovery from TXT’s civil aviation and financial services customers, positions the company well to grow this year and next.
TXT e-solutions |
Focused on accelerated growth |
Q321 results & acquisitions |
Software & comp services |
13 December 2021 |
Share price performance
Business description
Next events
Analyst
TXT e-solutions is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||
TXT e-solutions reported 15% year-on-year organic revenue growth for Q321, further boosted by contributions from recent acquisitions HSPI (+21%) and TeraTron (+11%). EBITDA increased 49% over the same period with a small increase in margin to 13.4%. While the pandemic has reduced demand for certain products and services, TXT has managed to expand into other areas organically and via acquisition to win new business (eg sustainable transport, defence, fintech). Diversification, combined with early signs of recovery from TXT’s civil aviation and financial services customers, positions the company well to grow this year and next.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
59.1 |
7.6 |
0.46 |
0.00 |
20.6 |
N/A |
12/20 |
68.8 |
7.1 |
0.47 |
0.04 |
20.0 |
0.4 |
12/21e |
91.6 |
10.2 |
0.62 |
0.06 |
15.1 |
0.6 |
12/22e |
107.5 |
13.2 |
0.80 |
0.08 |
11.7 |
0.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Organic revenue growth 15% in Q321
TXT reported revenue growth of 46.5% for Q321 and 39.5% for 9M21. Excluding contributions from TeraTron (acquired in August) and HSPI (acquired October 2020), the group grew 15% on an organic basis in Q321. EBITDA grew 49.0% y-o-y in Q321 and 43.1% in 9M21, with the margin expanding 0.2pp in Q321 to 13.4% and 0.3pp in 9M21 to 13.1%. The company closed Q321 with net cash of €3.5m, after paying €10m to acquire TeraTron.
Two more acquisitions; upgrading estimates
On 29 November the company acquired two Italian consulting businesses: Novigo Consulting and LBA Consulting for a total of €5.2m in cash and €1.1m in equity. Operating in the fintech space, both businesses generate EBITDA margins above 20%. We have revised our forecasts to reflect Q321 results and these acquisitions, factoring in higher gross margins which are only partially offset by higher operating expenses. This results in upgrades to our normalised diluted EPS forecasts of 6.7% in FY21 and 16.0% in FY22. After paying for the two recent acquisitions, we forecast a net debt position of €2.3m at the end of FY21, returning to a net cash position of €4.6m by the end of FY22.
Valuation: Discount to peers
TXT continues to trade at a discount to its peer group on all measures. This is despite the deployment of a large proportion of TXT’s cash balance into acquisitions, and revenue growth and profitability above the group average. Evidence of improving demand from civil aviation in the Aerospace & Aviation (A&A) division and the banking sector within the Fintech division, growing revenues from the earlier stage fintech businesses and the successful integration of TeraTron should help to reduce this discount.
Review of Q321 results
Exhibit 1: Q321 and 9M21 results highlights
€m |
Q321 |
Q320 |
y-o-y |
9M21 |
9M20 |
y-o-y |
Revenues |
23.0 |
15.7 |
46.5% |
66.7 |
47.8 |
39.5% |
Gross profit |
10.0 |
7.5 |
34.0% |
26.6 |
21.5 |
23.9% |
Gross margin (%) |
43.4% |
47.5% |
-4.1% |
39.9% |
44.9% |
-5.0% |
EBITDA |
3.1 |
2.1 |
49.0% |
8.8 |
6.1 |
43.1% |
EBITDA margin (%) |
13.4% |
13.2% |
0.2% |
13.1% |
12.8% |
0.3% |
Normalised EBIT |
2.5 |
1.6 |
54.9% |
7.1 |
4.7 |
50.5% |
Normalised EBIT margin (%) |
10.6% |
10.1% |
0.6% |
10.6% |
9.8% |
0.8% |
Reported EBIT |
1.9 |
1.3 |
52.0% |
5.4 |
3.4 |
58.7% |
Reported EBIT margin (%) |
8.4% |
8.1% |
0.3% |
8.0% |
7.1% |
1.0% |
Reported net income |
2.1 |
0.9 |
134.7% |
4.1 |
3.6 |
14.5% |
Net cash |
3.5 |
31.9 |
-89.0% |
3.5 |
31.9 |
-89.0% |
Source: TXT e-solutions
TXT reported 46.5% y-o-y revenue growth in Q321; excluding a €5.0m contribution from acquisitions (HSPI €3.3m, TeraTron €1.7m), organic growth was 15% y-o-y. Gross profit was 34% higher y-o-y and gross margin of 43.4% was 4.1pp lower than in Q320 due to a lower proportion of high-margin software sales in the quarter. EBITDA increased 49% y-o-y resulting in EBITDA margin expansion of 0.2pp to 13.4%. Normalised EBIT margin increased by 0.6pp over the same period to 10.6%. With net finance income of €0.3m and an adjustment to tax to reflect a 28% rate for the nine-month period to the end of September (9M21), reported net income increased 135% y-o-y. Net cash declined from €11.1m at the end of H121 to €3.5m at the end of Q321, reflecting the acquisition of TeraTron for €10.1m offset by operating cash inflow of €2.4m.
Exhibit 2: Divisional performance
€m |
Q321 |
Q320 |
y-o-y |
9M21 |
9M20 |
y-o-y |
Aerospace & Aviation total revenue |
13.8 |
9.8 |
40.1% |
37.1 |
30.7 |
20.9% |
Software licenses & maintenance |
1.6 |
1.9 |
-15.1% |
5.2 |
5.7 |
-8.3% |
Services |
12.2 |
7.9 |
53.4% |
31.9 |
25.0 |
27.5% |
EBITDA |
2.3 |
1.5 |
55.8% |
5.5 |
4.3 |
26.9% |
EBITDA margin |
16.7% |
15.0% |
1.7% |
14.8% |
14.1% |
0.7% |
Fintech total revenue |
9.2 |
5.9 |
57.3% |
29.6 |
17.1 |
73.0% |
Software licenses & maintenance |
0.5 |
0.2 |
128.2% |
1.2 |
0.9 |
36.1% |
Services |
8.7 |
5.6 |
54.4% |
28.5 |
16.3 |
75.0% |
EBITDA |
1.1 |
0.6 |
83.0% |
3.6 |
1.8 |
99.4% |
EBITDA margin |
12.1% |
10.4% |
1.7% |
12.1% |
10.5% |
1.6% |
Group software licenses & maintenance revenue |
2.2 |
2.1 |
0.6% |
6.4 |
6.5 |
-2.5% |
Group services revenue |
20.9 |
13.6 |
53.8% |
60.4 |
41.3 |
46.2% |
Source: TXT e-solutions
A&A division: ‘TXT flies again’
A&A saw year-on-year revenue growth of 40% for Q321 and 21% for 9M21. Excluding TeraTron revenue of €1.7m, organic revenue growth was 23% for Q321 and 15% for 9M21. Software revenue is lower this year than last, as demand from the civil aviation sector has been weaker due to the pandemic. Services revenue has grown strongly over the year, and excluding TeraTron, was 33% higher in Q321 and 21% higher for 9M21.
As we have previously written, TXT has seen strong demand from the defence sector which has helped offset weakness in the civil aviation market. The company has completed the integration of TeraTron and is now ready to drive the growth of that business. Management is seeing signs of activity in the civil aviation market and also sees opportunities arising from zero emissions programmes and urban mobility, prompting its statement ‘TXT flies again’.
So far in Q4:
■
TXT has been selected by the European Space Agency’s Space Solutions initiative to undertake a study aimed at the development of a new immersive virtual reality solution for first responder training, using the Pacelab WEAVR platform. The Immersive Search and Rescue project aims to develop remote virtual training for search and rescue professionals, taking advantage of satellite data to create realistic scenarios for dealing with natural disasters.
■
In November, TXT won an upfront license for its advanced modelling software from a Chinese institution active in the aviation market.
■
A North American airline with more than 200 aircraft and 100 destinations is trialling Pacelab FPO software. The company noted that c 90% of trials typically convert into commercial contracts.
■
The company is negotiating with a North American cargo line which has successfully completed a trial.
The company had previously disclosed that PACE will supply licences for its preliminary aircraft and systems design suite and its route and aircraft economic analysis tool to the Aerospace Technology Institute’s (ATI) FlyZero Project. The project, led by ATI and backed by the UK government, is investigating the design challenges, manufacturing requirements and market opportunities of zero-carbon emission aircraft. Also in the sustainability area, the company is working with major European e-VTOL (electrical vertical take-off and landing) OEMs and recently joined the #1000 solutions challenge, an initiative by the Solar Impulse Foundation1.
Fintech division
The Fintech division saw year-on-year revenue growth of 57% for Q321 and 73% for 9M21. HSPI contributed revenue of €3.3m in Q321 and €10.5m in 9M21; excluding this, revenue was flat in Q321 and grew 12% in 9M21 (which benefited from a full nine-months contribution from MAC Solutions, acquired in July 2020). The software testing business, Assioma, has seen weaker demand through the pandemic but management believes it is starting to recover. The inclusion of higher margin HSPI for 9M21 helped drive the EBITDA margin up from 10.5% in 9M20 to 12.1% in 9M20.
So far this quarter, one of TXT’s start-up software businesses, Faraday, has signed multi-year contracts with the Italian branch of an international banking institution and a regional public IT company.
Fintech acquisitions
On 29 November, TXT announced that it acquired two Italian consulting businesses within the Fintech division.
■
Novigo Consulting: founded in 2013 as a spin-off from ING Lease, this Brescia-based business has 240 active customers and 25 specialised consultants, operating across six Italian regions and four European countries. The company develops software and applications for the digitalisation of credit brokerage and sales network management for agents in financial activities. It also implements and manages cloud IT infrastructure for financial markets. TXT is paying €3.5m for the company, split 70/30 cash/TXT treasury shares. There are retention and earnout clauses for the three selling shareholders and managers based on FY24 results, with a maximum earnout of €0.8m in equity. Management expects pro forma FY21 revenue to be c €3m with an EBITDA margin of 23%.
■
LBA Consulting: the company was founded in 2007 and has 20 consultants with advanced ERP and CRM skills and more than 30 active international customers. The company also develops and markets proprietary solutions for digital payments and e-commerce. TXT is paying €2.73m in cash for the company. There is a retention and clawback clause based on FY24 and FY26 results. Management expects pro forma FY21 revenue to be c €2.5m with an EBITDA margin of 30%.
Outlook and changes to forecasts
At Q3 results, management highlighted that for M&A it has access to €38m of short-term net financial resources (ie cash plus trading securities less short-term debt) plus 1.24m treasury shares worth c €13m.
We have revised our forecasts to reflect Q321 results, in particular factoring in slightly higher gross margins which are only partially offset by higher operating expenses. We have also added in the Novigo and LBA acquisitions from 1 December. This results in normalised diluted EPS upgrades of 6.7% in FY21 and 16.0% in FY22. We forecast that the company will move to a net debt position by the end of FY21 and cash generation in FY22 should return the company to a net cash position by the end of the year.
Exhibit 3: Changes to estimates
FY21e old |
FY21e new |
change |
y-o-y |
FY22e old |
FY22e new |
change |
y-o-y |
|
Revenues (€m) |
90.9 |
91.6 |
0.7% |
33.2% |
101.7 |
107.5 |
5.7% |
17.4% |
Gross margin |
39.4% |
40.9% |
1.5% |
(1.7%) |
42.0% |
43.2% |
1.2% |
2.2% |
Gross profit |
35.8 |
37.5 |
4.6% |
28.0% |
42.7 |
46.4 |
8.7% |
23.8% |
EBITDA (€m) |
11.8 |
12.4 |
4.9% |
44.9% |
13.7 |
15.8 |
15.0% |
27.3% |
EBITDA margin |
13.0% |
13.5% |
0.5% |
1.1% |
13.5% |
14.7% |
1.2% |
1.1% |
Normalised EBIT (€m) |
9.6 |
10.1 |
4.9% |
53.9% |
11.3 |
13.2 |
16.7% |
31.3% |
Normalised EBIT margin |
10.6% |
11.0% |
0.4% |
1.5% |
11.1% |
12.3% |
1.2% |
1.3% |
Reported operating profit (€m) |
7.4 |
7.8 |
5.9% |
141.4% |
9.4 |
11.3 |
20.0% |
44.7% |
Normalised net income (€m) |
6.8 |
7.3 |
7.0% |
33.6% |
8.1 |
9.5 |
17.7% |
30.0% |
Reported net income (€m) |
5.2 |
5.7 |
8.7% |
25.2% |
6.7 |
8.1 |
21.3% |
42.8% |
Normalised diluted EPS (€) |
0.58 |
0.62 |
6.7% |
32.8% |
0.69 |
0.80 |
16.0% |
28.4% |
Reported basic EPS (€) |
0.45 |
0.49 |
8.4% |
24.4% |
0.57 |
0.69 |
19.6% |
41.1% |
Net cash/(debt) (€m) |
2.4 |
(2.3) |
(197%) |
(111%) |
9.0 |
4.6 |
(48.6%) |
(298%) |
Dividend (€) |
0.06 |
0.06 |
0.0% |
50.0% |
0.08 |
0.08 |
0.0% |
33.3% |
Source: Edison Investment Research
Valuation
The table below shows TXT’s valuation versus its peer group of European software and services providers. TXT continues to trade at a discount to its peer group on all measures, despite the deployment of a large proportion of the company’s cash balance into acquisitions, and revenue growth and profitability above the group average. We expect this discount to reduce as TXT provides evidence of:
■
A&A: the resumption/acceleration of orders from customers in COVID-19-hit sectors, particularly civil aviation; successful integration of the TeraTron acquisition.
■
Fintech: the early-stage businesses (TXT Risk Solutions, TXT Working Capital Solutions) starting to generate material revenues and reaching break-even; banks resuming normal activity for software testing; international revenues growing; successful integration of Novigo and LBA.
■
Overall, software revenues growing as a percentage of the total, as these generate much higher gross margins.
Exhibit 4: Peer financial and valuation metrics
Company |
Share price |
Market cap |
Rev growth |
EBIT margin |
EBITDA margin |
EV/Sales |
EV/EBIT |
P/E |
Div yield |
|||||||
€ |
€m |
CY |
NY |
CY |
NY |
CY |
NY |
CY |
NY |
CY |
NY |
CY |
NY |
CY |
NY |
|
TXT |
9.40 |
112 |
33.2% |
17.4% |
11.0% |
12.3% |
13.5% |
14.7% |
1.2 |
1.0 |
10.7 |
8.2 |
15.1 |
11.7 |
0.6% |
0.9% |
European IT services companies |
||||||||||||||||
AKKA Technologies |
47.96 |
1,494 |
3.3% |
5.6% |
1.1% |
5.8% |
8.7% |
9.6% |
1.3 |
1.2 |
118.6 |
20.5 |
N/A |
27.8 |
0.0% |
0.6% |
Alten |
152.90 |
5,248 |
23.0% |
11.3% |
9.6% |
10.1% |
12.2% |
12.4% |
1.8 |
1.7 |
19.2 |
16.4 |
26.0 |
22.8 |
0.7% |
0.7% |
AtoS |
36.07 |
3,987 |
-0.9% |
1.3% |
4.7% |
5.5% |
10.8% |
11.9% |
0.6 |
0.6 |
12.4 |
10.4 |
8.7 |
7.2 |
2.7% |
2.6% |
Cap Gemini |
206.00 |
34,712 |
13.9% |
8.2% |
11.6% |
12.1% |
15.7% |
15.9% |
2.2 |
2.1 |
19.3 |
17.1 |
24.2 |
21.6 |
1.0% |
1.2% |
Devoteam |
168.50 |
1,402 |
10.1% |
7.0% |
11.0% |
11.1% |
12.8% |
12.8% |
1.6 |
1.5 |
14.9 |
13.7 |
27.5 |
25.0 |
0.7% |
0.8% |
ESI Group |
73.80 |
439 |
4.0% |
6.2% |
6.4% |
9.6% |
10.6% |
13.6% |
3.4 |
3.2 |
52.2 |
32.8 |
87.6 |
55.0 |
0.0% |
0.0% |
Reply |
179.20 |
6,693 |
18.2% |
13.4% |
14.1% |
14.1% |
17.4% |
17.1% |
4.4 |
3.9 |
31.5 |
27.7 |
44.6 |
39.6 |
0.4% |
0.4% |
Sopra Steria |
158.60 |
3,252 |
9.4% |
5.3% |
7.3% |
7.9% |
11.3% |
11.8% |
0.9 |
0.8 |
11.9 |
10.4 |
14.7 |
12.4 |
1.5% |
1.7% |
Average |
10.1% |
7.3% |
8.2% |
9.5% |
12.4% |
13.1% |
2.0 |
1.9 |
35.0 |
18.6 |
33.3 |
26.4 |
0.9% |
1.0% |
||
(Discount)/premium to peers |
(42%) |
(46%) |
(69%) |
(56%) |
(55%) |
(56%) |
(28%) |
(15%) |
||||||||
Source: Edison Investment Research, Refinitiv (13 December)
Exhibit 5: Financial summary
€'000s |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||||
Revenue |
|
|
33,060 |
35,852 |
39,957 |
59,091 |
68,753 |
91,558 |
107,514 |
Cost of sales |
(18,954) |
(20,224) |
(22,289) |
(31,825) |
(39,469) |
(54,087) |
(61,116) |
||
Gross profit |
14,106 |
15,628 |
17,668 |
27,266 |
29,284 |
37,471 |
46,398 |
||
EBITDA |
|
|
4,260 |
3,536 |
4,098 |
7,004 |
8,560 |
12,402 |
15,788 |
Operating Profit (before amort and except) |
|
|
3,954 |
3,180 |
2,755 |
5,408 |
6,542 |
10,066 |
13,212 |
Amortisation of acquired intangibles |
(264) |
(439) |
(610) |
(1,142) |
(1,340) |
(1,900) |
(1,900) |
||
Exceptionals and other income |
(557) |
0 |
(300) |
(713) |
(1,963) |
(347) |
0 |
||
Other income |
0 |
(69) |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
3,133 |
2,672 |
1,845 |
3,553 |
3,239 |
7,819 |
11,312 |
||
Net Interest |
48 |
(208) |
(1,284) |
2,194 |
562 |
100 |
0 |
||
Profit Before Tax (norm) |
|
|
4,002 |
2,972 |
1,471 |
7,602 |
7,104 |
10,166 |
13,212 |
Profit Before Tax (FRS 3) |
|
|
3,181 |
2,464 |
561 |
2,315 |
5,958 |
7,919 |
11,312 |
Tax |
(661) |
(710) |
4 |
(1,867) |
(1,162) |
(2,217) |
(3,167) |
||
Profit After Tax (norm) |
3,170 |
2,170 |
1,204 |
5,473 |
5,718 |
7,320 |
9,513 |
||
Profit After Tax (FRS 3) |
2,520 |
1,754 |
565 |
448 |
4,796 |
5,702 |
8,145 |
||
Ave. Number of Shares Outstanding (m) |
11.7 |
11.7 |
11.7 |
11.7 |
11.7 |
11.7 |
11.9 |
||
EPS - normalised (€) |
|
|
0.271 |
0.186 |
0.102 |
0.456 |
0.470 |
0.624 |
0.801 |
EPS - normalised fully diluted (€) |
|
|
0.271 |
0.186 |
0.102 |
0.456 |
0.470 |
0.624 |
0.801 |
EPS - (IFRS) (€) |
|
|
0.475 |
5.874 |
0.048 |
0.027 |
0.391 |
0.486 |
0.686 |
Dividend per share (€) |
0.30 |
1.00 |
0.50 |
0.00 |
0.04 |
0.06 |
0.08 |
||
Gross margin (%) |
42.7 |
43.6 |
44.2 |
46.1 |
42.6 |
40.9 |
43.2 |
||
EBITDA Margin (%) |
12.9 |
9.9 |
10.3 |
11.9 |
12.5 |
13.5 |
14.7 |
||
Operating Margin (before GW and except) (%) |
12.0 |
8.9 |
6.9 |
9.2 |
9.5 |
11.0 |
12.3 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
25,428 |
8,860 |
22,942 |
34,635 |
47,411 |
76,815 |
73,239 |
Intangible Assets |
21,296 |
7,332 |
17,751 |
24,380 |
37,652 |
54,126 |
52,110 |
||
Tangible Assets |
1,598 |
793 |
3,680 |
7,929 |
7,460 |
6,090 |
4,530 |
||
Other |
2,534 |
735 |
1,511 |
2,326 |
2,299 |
16,599 |
16,599 |
||
Current Assets |
|
|
37,085 |
109,426 |
134,674 |
127,052 |
126,036 |
102,411 |
109,915 |
Stocks |
3,146 |
2,528 |
3,141 |
4,156 |
4,749 |
5,049 |
5,349 |
||
Debtors |
26,369 |
17,215 |
16,992 |
24,150 |
41,193 |
50,169 |
58,912 |
||
Cash |
7,570 |
89,683 |
114,541 |
98,746 |
80,094 |
47,193 |
45,654 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Current Liabilities |
|
|
(21,051) |
(13,612) |
(29,366) |
(43,129) |
(55,446) |
(62,587) |
(67,583) |
Creditors |
(20,243) |
(12,937) |
(12,062) |
(17,823) |
(24,811) |
(31,952) |
(36,948) |
||
Short term borrowings |
(808) |
(675) |
(17,304) |
(25,306) |
(30,635) |
(30,635) |
(30,635) |
||
Long Term Liabilities |
|
|
(7,180) |
(4,781) |
(41,903) |
(36,538) |
(32,138) |
(23,638) |
(15,138) |
Long term borrowings |
(1,391) |
(1,688) |
(36,882) |
(32,029) |
(27,398) |
(18,898) |
(10,398) |
||
Other long term liabilities |
(5,789) |
(3,093) |
(5,021) |
(4,509) |
(4,740) |
(4,740) |
(4,740) |
||
Net Assets |
|
|
34,282 |
99,893 |
86,347 |
82,020 |
85,863 |
93,001 |
100,433 |
CASH FLOW |
|||||||||
Operating Cash Flow |
|
|
10,676 |
119 |
2,039 |
(354) |
1,244 |
9,920 |
11,741 |
Net Interest |
105 |
(208) |
(69) |
3,102 |
(988) |
100 |
0 |
||
Tax |
(2,022) |
379 |
(624) |
(229) |
(1,332) |
(2,217) |
(3,167) |
||
Capex |
(738) |
(661) |
(548) |
(916) |
(1,156) |
(850) |
(900) |
||
Acquisitions/disposals |
(5,403) |
82,250 |
1,314 |
(2,178) |
(11,701) |
(30,755) |
0 |
||
Financing |
(828) |
(6) |
(7,208) |
(4,287) |
(2,648) |
(130) |
0 |
||
Dividends |
(2,931) |
(3,496) |
(11,710) |
(5,781) |
0 |
(468) |
(713) |
||
Net Cash Flow |
(1,141) |
78,377 |
(16,806) |
(10,643) |
(16,581) |
(24,401) |
6,961 |
||
Opening net debt/(cash) |
|
|
(8,259) |
(5,371) |
(87,320) |
(60,355) |
(41,412) |
(22,061) |
2,340 |
HP finance leases initiated |
0 |
0 |
(2,788) |
(2,500) |
0 |
0 |
0 |
||
Other |
(1,747) |
3,572 |
(7,371) |
(5,800) |
(2,770) |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(5,371) |
(87,320) |
(60,355) |
(41,412) |
(22,061) |
2,340 |
(4,621) |
Source: TXT e-solutions, Edison Investment Research
|
|
Research: Healthcare
Ultimovacs has made the decision to expand its R&D pipeline with a new indication, non-small cell lung cancer (NSCLC), for its lead asset the therapeutic cancer vaccine, UV1. The sponsorship arrangement will be similar to most of the other Phase II trials: Ultimovacs will work closely with the lead investigator and will provide financial support. The company will be able to continue the development if the Phase II data are positive. Despite significant progress being made with the advent of immunotherapies, NSCLC is still a challenging cancer to manage. Ultimovacs aims to position UV1 as a combination therapy with Keytruda in a first-line setting, which means it is targeting the biggest share of the large NSCLC market. We adjust our model to include the new opportunity and increase our valuation to NOK6.13bn or NOK179/sh (from NOK128/sh).