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Research: Healthcare
Having completed the required 38 implantations in late 2022, Pixium Vision’s key upcoming clinical milestone is the primary efficacy data, expected in or around year-end 2023, from the PRIMAvera European pivotal study assessing the safety and clinical benefits of the wireless Prima System in patients with geographic atrophy due to age-related macular degeneration (GA-AMD). The company’s FY22 results showed a milder operating loss than expected, coming in at €11.9m, below our €12.5m estimate. Pixium has since taken further steps to curb its cash burn rate, and it now expects its funds on hand (€4.7m gross cash as of 31 March) to last until approximately the end of July, versus its prior guidance of June 2023. It is working actively to raise additional funds and has hired two investment banks to reach potential investors worldwide. We have rolled forward our estimates and given that we expect the company’s focus in 2023 and 2024 will be on preparing the Prima System for EU market approval and launch (which we continue to model in H125), we have pushed back our US commercialisation forecast by one year, to H227. We now obtain a pipeline rNPV valuation of €140.1m (vs €146.3m previously).
Pixium Vision |
Focusing on reaching the PRIMAvera milestone |
FY22 update |
Healthcare equipment |
2 May 2023 |
Share price performance
Business description
Next events
Analyst
Pixium Vision is a research client of Edison Investment Research Limited |
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Having completed the required 38 implantations in late 2022, Pixium Vision’s key upcoming clinical milestone is the primary efficacy data, expected in or around year-end 2023, from the PRIMAvera European pivotal study assessing the safety and clinical benefits of the wireless Prima System in patients with geographic atrophy due to age-related macular degeneration (GA-AMD). The company’s FY22 results showed a milder operating loss than expected, coming in at €11.9m, below our €12.5m estimate. Pixium has since taken further steps to curb its cash burn rate, and it now expects its funds on hand (€4.7m gross cash as of 31 March) to last until approximately the end of July, versus its prior guidance of June 2023. It is working actively to raise additional funds and has hired two investment banks to reach potential investors worldwide. We have rolled forward our estimates and given that we expect the company’s focus in 2023 and 2024 will be on preparing the Prima System for EU market approval and launch (which we continue to model in H125), we have pushed back our US commercialisation forecast by one year, to H227. We now obtain a pipeline rNPV valuation of €140.1m (vs €146.3m previously).
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
2.7 |
(10.9) |
(0.23) |
0.0 |
N/A |
N/A |
12/22 |
2.0 |
(10.3) |
(0.21) |
0.0 |
N/A |
N/A |
12/23e |
0.8 |
(13.8) |
(0.10) |
0.0 |
N/A |
N/A |
12/24e |
0.8 |
(13.3) |
(0.09) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Managing costs as new financing is sought
We continue to view the Prima System as a potentially transformative treatment in GA-AMD given the visual function improvements already shown in the earlier European feasibility study and reinforced by the recent Breakthrough Device designation granted by the FDA. Given FY22 results and the company’s actions to conserve capital, we now estimate an FY23 net operating burn rate of €17.6m (vs €20.2m previously). We assume that any planned studies or activities targeting the US market will be postponed as the company focuses its resources towards obtaining CE Mark and bringing PRIMAvera to European commercialisation.
Valuation: Adjusted to reflect ESGO conversions
Pixium reported a gross debt position of €10.3m at end-FY22 and given a Q123 gross cash position of €4.7m and c €2.4m in ESGO debt converted to equity in the year to date, we estimate €3.2m pro forma (Q123) net debt. We obtain a pipeline rNPV valuation of €140.1m (vs €146.3m previously), resulting in an equity valuation of €136.9m after including net debt, or €0.92 per basic share (vs €2.09 previously), with the lower per share value due to increased shares outstanding following ESGO note conversions. We assume Pixium will require €37m in funding to reach profitability (in FY25) and if this need is met through equity issuances at the current market price (€0.073/share) and if outstanding ESGO debt (€1.25m) is also converted at this price, the resulting equity valuation would be €0.26 per share.
Exhibit 1: Financial summary
€(000) |
2018 |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||||
Revenue |
|
|
1,598 |
1,782 |
2,092 |
2,655 |
1,955 |
800 |
800 |
Cost of Sales |
(41) |
0 |
0 |
0 |
0 |
0 |
0 |
||
General & Administrative |
(2,019) |
(3,572) |
(4,008) |
(5,084) |
(4,650) |
(5,398) |
(6,628) |
||
Research & Development |
(5,297) |
(6,563) |
(5,704) |
(7,282) |
(8,793) |
(7,800) |
(4,500) |
||
EBITDA |
|
|
(5,758) |
(8,352) |
(7,620) |
(9,712) |
(11,488) |
(12,398) |
(10,328) |
Depreciation |
(677) |
(448) |
(366) |
(549) |
(456) |
(276) |
(223) |
||
Amortization |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit (before exceptionals) |
|
(6,435) |
(8,801) |
(7,986) |
(10,261) |
(11,944) |
(12,673) |
(10,551) |
|
Exceptionals |
(5,859) |
(69) |
(448) |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
(12,294) |
(8,870) |
(8,434) |
(10,261) |
(11,944) |
(12,673) |
(10,551) |
||
Net Interest |
(1,277) |
(1,006) |
(699) |
(669) |
1,632 |
(1,156) |
(2,717) |
||
Profit Before Tax (norm) |
|
|
(7,712) |
(9,806) |
(8,685) |
(10,930) |
(10,312) |
(13,830) |
(13,268) |
Profit Before Tax (FRS 3) |
|
|
(13,571) |
(9,876) |
(9,133) |
(10,930) |
(10,312) |
(13,830) |
(13,268) |
Tax |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax and minority interests (norm) |
(7,712) |
(9,806) |
(8,685) |
(10,930) |
(10,312) |
(13,830) |
(13,268) |
||
Profit After Tax and minority interests (FRS 3) |
(13,571) |
(9,876) |
(9,133) |
(10,930) |
(10,312) |
(13,830) |
(13,268) |
||
Average Number of Shares Outstanding (m) |
18.5 |
22.3 |
34.0 |
47.4 |
48.9 |
139.1 |
149.0 |
||
EPS - normalised (€) |
|
|
(0.42) |
(0.44) |
(0.26) |
(0.23) |
(0.21) |
(0.10) |
(0.09) |
EPS - normalised and fully diluted (€) |
|
|
(0.42) |
(0.44) |
(0.26) |
(0.23) |
(0.21) |
(0.10) |
(0.09) |
EPS - (IFRS) (€) |
|
|
(0.73) |
(0.44) |
(0.27) |
(0.23) |
(0.21) |
(0.10) |
(0.09) |
Dividend per share (€) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
3,666 |
4,507 |
3,410 |
2,684 |
2,030 |
1,774 |
1,571 |
Intangible Assets |
2,623 |
2,361 |
1,727 |
1,341 |
983 |
983 |
983 |
||
Tangible Assets |
1,042 |
2,145 |
1,683 |
1,343 |
1,047 |
791 |
588 |
||
Current Assets |
|
|
17,756 |
9,107 |
12,721 |
16,945 |
10,344 |
5,722 |
16,657 |
Short-term investments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Cash |
15,629 |
6,792 |
10,566 |
14,505 |
7,687 |
3,065 |
13,913 |
||
Other |
2,126 |
2,316 |
2,155 |
2,440 |
2,657 |
2,657 |
2,745 |
||
Current Liabilities |
|
|
(2,044) |
(2,880) |
(3,885) |
(6,483) |
(8,698) |
(4,651) |
(4,651) |
Creditors |
(2,044) |
(2,880) |
(3,349) |
(4,895) |
(4,374) |
(327) |
(327) |
||
Short term borrowings |
0 |
0 |
(536) |
(1,588) |
(4,324) |
(4,324) |
(4,324) |
||
Long Term Liabilities |
|
|
(8,023) |
(7,033) |
(7,682) |
(7,332) |
(6,525) |
(19,525) |
(43,525) |
Long term borrowings |
(7,870) |
(5,787) |
(6,604) |
(6,500) |
(5,990) |
(18,990) |
(42,990) |
||
Other long term liabilities |
(153) |
(1,246) |
(1,078) |
(832) |
(535) |
(535) |
(535) |
||
Net Assets |
|
|
11,355 |
3,700 |
4,564 |
5,814 |
(2,849) |
(16,680) |
(29,948) |
CASH FLOW |
|||||||||
Operating Cash Flow |
|
|
(6,174) |
(7,282) |
(6,207) |
(8,160) |
(12,960) |
(16,445) |
(10,415) |
Net Interest |
(1,277) |
(1,006) |
(699) |
(669) |
1,632 |
(1,156) |
(2,717) |
||
Tax |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Operating Cash Flow |
(7,450) |
(8,288) |
(6,906) |
(8,829) |
(11,328) |
(17,601) |
(13,132) |
||
Capex |
(31) |
(34) |
(82) |
(48) |
(92) |
(20) |
(20) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Financing |
14,068 |
2,034 |
9,055 |
13,170 |
(927) |
0 |
0 |
||
Net Cash Flow |
6,587 |
(6,288) |
2,067 |
4,293 |
(12,347) |
(17,621) |
(13,152) |
||
Opening net debt/(cash) |
|
|
(1,401) |
(7,760) |
(1,004) |
(3,426) |
(6,417) |
2,627 |
20,249 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
(228) |
(468) |
354 |
(1,302) |
3,303 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(7,760) |
(1,004) |
(3,426) |
(6,417) |
2,627 |
20,248 |
33,401 |
Lease debt |
N/A |
1,346 |
1,258 |
1,045 |
765 |
765 |
765 |
||
Closing net debt/(cash) inclusive of IFRS 16 lease debt |
(7,760) |
342 |
(2,168) |
(5,372) |
3,392 |
21,013 |
34,166 |
||
Source: Edison Investment Research, company accounts
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Research: Healthcare
AFT Pharmaceuticals has announced that the US FDA has allocated a Prescription Drug User Fee Act (PDUFA) date for Maxigesic IV, an intravenous form of its flagship pain relief medicine. The PDUFA date is expected to be the last step in the FDA review process and has been set for 17 October 2023. It follows submission of additional requested data in April 2023 in response to the complete response letter (CRL) received from the FDA in July 2022 (related to queries about certain extractable and leachable compounds present in Maxigesic IV’s packaging) following the 2021 New Drug Application. The IV formulation is registered in 43 countries and has been launched in more than 19 (including the key markets of Germany, France and Italy), but the US is expected to be a key high-margin market. We note that Maxigesic IV was out-licensed to Hikma Pharmaceuticals in the US in 2021 for up to NZ$18.8m in proceeds.