Nicox — Q323 update confirms trajectory for NCX-470

Nicox (Euronext Growth: ALCOX)

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Research: Healthcare

Nicox — Q323 update confirms trajectory for NCX-470

At its Q323 update Nicox reiterated its guidance that it expects to report primary efficacy data for the Denali study in 2025. Denali is the company’s second Phase III study assessing lead candidate NCX-470, a nitric oxide (NO) donating bimatoprost, in the treatment of elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension (OHTN). The next clinical catalyst is the initiation of the Phase IIIb Whistler trial in Q423, which aims to assess NCX-470’s dual mechanisms of action (NO-release and uveoscleral outflow). The results (anticipated near YE24) could help differentiate NCX-470 from competing glaucoma therapeutics. At 30 September gross cash was at €14.6m, which we expect to provide a cash runway into June 2024, while the company continues to seek partnerships for NCX-470. After rolling forward our estimates, we obtain an equity valuation of €119.4m, or €2.38 per basic share.

Written by

Pooya Hemami

Analyst - Healthcare

Nicox_resized

Healthcare

Nicox

Q323 update confirms trajectory for NCX-470

Pipeline and financial update

Pharma and biotech

14 November 2023

Price

€0.56

Market cap

€28m

$1.07/€

Net debt (€m) at 30 September 2023

6.5

Shares in issue

50.2m

Free float

89%

Code

ALCOX

Primary exchange

Euronext Growth

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

15.9

(0.1)

(75.6)

Rel (local)

14.6

3.9

(77.0)

52-week high/low

€1.74

€0.31

Business description

France-based Nicox develops therapeutics for the treatment of ocular conditions. Its lead candidate NCX-470 is in Phase III studies for the treatment of glaucoma and it is advancing NCX-4251 for dry eye disease. Nicox also receives licence revenue for its FDA-approved drugs Vyzulta and Zerviate.

Next events

Start NCX-470 Phase IIIb Whistler clinical study aiming to show retinal cell or perfusion benefits

Q423

Analysts

Pooya Hemami,
OD MBA CFA

+1 646 653 7026

Soo Romanoff

+44 (0)20 3077 5700

Nicox is a research client of Edison Investment Research Limited

At its Q323 update Nicox reiterated its guidance that it expects to report primary efficacy data for the Denali study in 2025. Denali is the company’s second Phase III study assessing lead candidate NCX-470, a nitric oxide (NO) donating bimatoprost, in the treatment of elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension (OHTN). The next clinical catalyst is the initiation of the Phase IIIb Whistler trial in Q423, which aims to assess NCX-470’s dual mechanisms of action (NO-release and uveoscleral outflow). The results (anticipated near YE24) could help differentiate NCX-470 from competing glaucoma therapeutics. At 30 September gross cash was at €14.6m, which we expect to provide a cash runway into June 2024, while the company continues to seek partnerships for NCX-470. After rolling forward our estimates, we obtain an equity valuation of €119.4m, or €2.38 per basic share.

Year
end

Revenue
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/21

8.6

(15.5)

(0.32)

0.0

N/A

N/A

12/22

5.2

(18.3)

(0.34)

0.0

N/A

N/A

12/23e

6.1

(15.6)

(0.31)

0.0

N/A

N/A

12/24e

7.6

(20.3)

(0.40)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

NCX-470 key milestones on track

Nicox reiterated that the Denali trial is on track to report data in 2025, with enrolment and randomisation around 65% complete, which provides us with confidence that the company will complete the trial within the currently anticipated timeline. With the Mont Blanc study already successful in meeting its primary endpoint, we believe that Denali results are likely to be similarly positive and the conclusion of Denali should enable Nicox to file US regulatory approval, which we assume will occur in 2027. In order to better differentiate NCX-470 from competing glaucoma therapeutics, Nicox plans to initiate the Whistler Phase IIIb trial in Q423, as well as a separate Phase IIIb study to start in 2024, which will assess the drug’s possible retinal blood flow effects using optical coherence tomography angiography.

Funded into June 2024

Nicox reported €14.6m in gross cash at 30 September and expects the funds should maintain its operations into June 2024, based on development of NCX-470 alone. We anticipate Nicox will require €50m in additional funding (down from €58m previously as we have reduced our R&D spending forecasts) to bring NCX-470 to market and to reach recurring operating profitability. Nicox is seeking potential partnership arrangements for both NCX-470 and NCX-4251, which could provide non-dilutive funding and alleviate part of our expected funding requirements.

Valuation: Pipeline rNPV revised upward to €125.9m

After rolling forward our estimates, we now obtain an rNPV pipeline valuation for Nicox of €125.9m (versus €108.0m previously). After including Q323 net debt of €6.5m, we obtain an equity value of €119.4m, or €2.38 per basic share (up from €2.13 previously).

NCX-470 key clinical milestones on track

NCX-470 is the second compound developed using Nicox’s proprietary NO-donating platform, where it combines an NO-donating molecule with an established prostaglandin F2α analogue (PGA) drug. NCX-470 is being tested in patients with open-angle glaucoma (OAG) and OHTN in two pivotal Phase III trials: Mont Blanc and Denali. The Mont Blanc trial met the primary efficacy endpoint of non-inferiority to latanoprost 0.005% for the reduction in IOP in patients with OAG or OHTN in Q422. The Denali trial is ongoing, with enrolment and randomisation reported as c 65% complete during October 2023 (up from c 55% in July), which provides us with confidence that the company will complete the trial within its currently projected timeline of 2025. The Phase III data from the Mont Blanc and Denali trials will form the basis for a regulatory New Drug Application (NDA) in the US, and we continue to forecast that NCX-470 could reach commercial launch in 2027. Given the Mont Blanc study met its primary endpoint and NCX-470 offers a favourable safety profile, we believe Denali study has a strong likelihood of showing sufficient efficacy to support a subsequent FDA approval application.

Phase IIIb studies could add differentiation

To strengthen NCX-470’s competitive profile versus other PGAs and topical glaucoma drug treatments, Nicox is seeking to demonstrate through two Phase IIIb trials that the drug, likely because of its NO-release properties, may have unique and beneficial properties for the treatment of glaucoma compared to existing drug therapies. As a reminder, current approved glaucoma treatments are designed to reduce IOP, which may not fully prevent retinal ganglion cell degeneration and thus progression of the condition in many patients, particularly those with normal tension glaucoma (NTG). Certain IOP-independent risk factors, including ischemia (inadequate blood supply) or inadequate retinal perfusion, may contribute to optic nerve or retinal cell damage (particularly in NTG), and NO is known to be a potent vasodilator. Further, due to many factors, many (up to 3040%) of patients (even those taking PGAs) will require additional medication and/or a change in therapy within one to five years of starting first-line therapy (to maintain the desired target IOP level), which opens the need for differentiated treatment approaches that may offer more than one approach to lowering IOP.

Nicox previously reported preclinical data indicating that NCX-470 may improve ocular perfusion and retinal function in damaged eyes compared to vehicle (in an endothelin-1 induced ischemia/reperfusion rabbit model used to mimic glaucoma pathophysiology) and may therefore have protective properties not related to its effect on IOP. To build on this, one of the two Phase IIIb studies planned by the company is designed to assess retinal blood vessel density using OCT angiography (a validated imaging technique) to provide further insights on NCX-470’s effects on retinal blood flow. The company expects to start the study in 2024 and anticipates it should be relatively short, as the relevant endpoints and clinical features will likely be measurable within 30 days of initial patient dosing, and only c 15–50 patients will likely be needed.

The other planned Phase IIIb trial, Whistler, is designed to evaluate NCX-470’s effects on aqueous humour (AH) dynamics, including its ability to lower episcleral venous pressure as well as enhance outflow through the trabecular meshwork (TM). TM-mediated AH outflow, if demonstrated, would represent an IOP-lowering pathway that conventional PGA drugs typically do not exploit since, as stated above, PGA drugs generally increase outflow through the uveoscleral pathway. Patients in Whistler will be dosed NCX-470 once-daily for eight days, and the company plans to start the study in Q423 and provide results approximately one year afterwards.

We do not expect the read-outs from these studies to affect the approval (or relevant approval-related timelines) of NCX-470. However, we expect the data will be released well before product launch, and if data supporting non-IOP related benefits can be established, this may strengthen NCX-470’s competitive position compared to PGA drugs such as Vyzulta and Lumigan, as well as newer drugs such as Omlonti and Rocklatan.

Exhibit 1: Clinical development overview of lead asset NCX-470

Source: Nicox corporate presentation

NCX-470 sales potential estimates

As discussed in a prior note, Nicox provided details in July of a US market survey evaluating the commercial potential of NCX-470 for the treatment of elevated IOP in patients with glaucoma or OHTN. The independent market research agency commissioned by Nicox confirmed that NCX-470’s therapeutic profile, as shown in prior studies including the Phase III Mont Blanc trial, was positively received by stakeholders including ophthalmology key opinion leaders, glaucoma prescribers (US optometrists and ophthalmologists) and payors.

Together with insights from Ocumension Therapeutics, the company’s NCX-470 partner in China and South-East Asia, which provided its own forecasts for NCX-470 sales for regions covered by their agreement, Nicox estimates that annual global net sales of NCX-470 (excluding Europe) could exceed $300m within eight years of the product’s launch in the US and China, with US net sales estimated at $115–165m by year eight.

We maintain that the US estimates may be conservative, given that US branded bimatoprost (Lumigan, AbbVie) sales exceeded $270m in 2021 and that NCX-470 is differentiated through its additional NO-mediated mechanism of action (in addition to its PGA-mediated IOP lowering effects). We continue to believe that NCX-470 has the potential to generate $245m in net US sales in 2032, although we recognise that this is above the range communicated by the company.

Nicox continues to seek NCX-470 partnerships or arrangements

The company continues to seek commercial partnerships for NCX-470 in major markets, including the US and Japan. Our base-case scenario assumes that the company will have commercial partner(s) or licensee(s) to market NCX-470 for the treatment of OAG or OHTN, provided the drug obtains regulatory approval. We project the company will partner with well-resourced biopharmaceutical companies with existing commercial infrastructure, resources and experience in commercialising ophthalmic drugs in the key developed markets (US, Europe and Japan).

We continue to assume that a potential US and/or European partnership would occur after the reporting of top-line efficacy results for Denali. While Mont Blanc met its primary endpoint and with a favourable safety profile (and we believe Denali has a strong likelihood of showing similar efficacy), we assume a hypothetical US and/or European market partner would prefer the additional de-risking that would occur after the reporting of Denali study results. As a separate clinical trial conducted in Japan will likely be required for approval in that country, regardless of the Denali outcome, we believe the timing for a Japanese partnership arrangement would not be as dependent on Denali’s conclusion and we anticipate that such a licensing arrangement could occur before year-end 2024. Our model continues to assume Nicox would be entitled to a net royalty of 20% on net sales in both the US and Europe (and that the associated partnership transaction(s) would be realised in H225), and that Nicox’s arrangement with a Japan-based licensee would provide Nicox with a 15% net royalty on net sales from sales in this region.

Our commercial forecasts for NCX-470 are reiterated below. We assume Nicox will receive net royalties on NCX-470 sales in all major markets. Our assumptions do not include any milestone or upfront payments and hence the attainment of such arrangements adds potential upside to our new estimates.

Exhibit 2: Commercial sales and licence revenue forecasts for NCX-470

2027e

2028e

2029e

2030e

2031e

2032e

US market

Estimated number of glaucoma drop bottles dispensed per year (000)

75,271

78,282

81,413

84,670

88,057

91,579

Market share for NCX-470 (%)

0.43

0.61

0.88

1.27

1.83

2.00

Estimated price per bottle ($), net of discounts/rebates

110.00

114.40

118.98

123.74

128.68

133.83

Net sales ($000)

35,303

54,985

85,639

133,383

207,745

245,124

Net royalties to Nicox ($000)

7,061

10,997

17,128

26,677

41,549

49,025

Ex-US markets

110.00

114.40

118.98

123.74

128.68

133.83

Net royalties for Europe, Japan and other ex-US regions not covered by Ocumension agreement (€000)

0

2,893

7,712

13,924

21,114

30,856

Net licence and royalty revenue from Ocumension for China (€000)

442

824

1,549

3,451

8,138

10,762

Assumed $/€ rate

1.07

1.07

1.07

1.07

1.07

1.07

Worldwide total NCX-470 related royalty revenue to Nicox (€000)

7,041

13,995

25,268

42,306

68,083

87,436

Source: Edison Investment Research

Zerviate launch in China expected in 2024

Nicox’s Chinese partner, Ocumension Therapeutics, continues to expect to launch Zerviate (cetirizine ophthalmic solution, 0.24%) in China in 2024. As a reminder, Zerviate is being advanced for ocular itching associated with allergic conjunctivitis and the Chinese regulatory approval application received priority review status in Q223. Ocumension estimates that Zerviate could potentially deliver $100m in annual sales in China within seven years, and Nicox itself would be entitled to royalties between 5% and 9% of net Zerviate sales by Ocumension, as well as sales milestones up to $17.2m. Market research compiled by CIC suggested the prescription market for allergic conjunctivitis products in China will exceed $460m in 2030. We assume that, at peak, Zerviate will account for 15% of ophthalmic drugs used to treat allergy in China, reflecting c $67m in China-derived annual sales by 2030, delivering $4.7m in royalty revenue to Nicox in that year.

We believe Zerviate has a high likelihood of approval given it is also approved in the US (and commercialised by Nicox’s US partner, Santen), and given the positive results from a Phase III study in China on Zerviate, funded and operated by Ocumension and reported in Q122. We model a 90% probability that the drug will obtain regulatory approval in China.

Nicox earns royalties from Santen for Zerviate sales in the US market, although specific figures are not disclosed in the company’s financial reports. Zerviate sales in the US have been relatively limited, because the US ocular allergy market is highly competitive, with the standard of care for mild-to-moderate ocular allergy involving drugs that combine antihistamine properties with mast cell stabilisation, including over-the-counter medications like Pataday. However, we believe there might be a more significant opportunity for Zerviate in the Chinese market due to a scarcity of approved ocular drugs addressing both mechanisms.

Exhibit 3: Out-licensed Nicox products and product candidates

Source: Nicox corporate presentation

Nicox continues to seek partnership(s) for NCX-4251

Regarding NCX-4251, an ophthalmic suspension of fluticasone propionate nanocrystals developed for DED, we estimate that Nicox will secure a drug development partner to advance NCX-4251 for DED in the US, Europe and other markets outside China in the coming months (previously we assumed a transaction at the end of 2023). We continue to anticipate the initiation of the next Phase II study for DED in 2024, with funding from the partner, followed by a Phase III program in 2025, leading to commercial approval and launch in 2028. Our market assumptions for DED are unchanged. Over 30 million people are affected by DED in the US, of whom more than 75% experience short-term exacerbations, which we model at an average of four events per year. While we consider a sizeable portion of DED patients will not seek medical care for every acute DED episode, we continue to estimate the addressable market to be c 24m potential acute DED episodes per year in the US. Assuming a gross price at launch of $320 per bottle or treatment course (unchanged), we model peak US sales of c $480m in the US market in 2033, resulting in c $72m in net NCX-4251 US royalties to Nicox in that year (assuming a 15% net royalty rate).

H123 results show continued double-digit Vyzulta growth

Nicox currently receives product sales-related licensing revenue from the sales of Vyzulta and Zerviate. Gross H123 product sales-related licensing revenue (primarily gross royalties from Bausch + Lomb (B+L) from the sale of Vyzulta in the US and other approved markets and, to a lesser extent, Zerviate US royalties from Santen) were €2.8m, up 19% y-o-y. This is largely explained by increased US Vyzulta prescriptions, reported as increasing 26% y-o-y in Q223 and 23% y-o-y in Q123. Nicox is entitled to tiered net royalties of 612% on Vyzulta sales from B+L.2 Cost of sales, which reflects royalties on Vyzulta sales that Nicox must pay to Pfizer, were €1.0m. Hence, H123 net royalties were €1.7m, up from €1.4m in H122. While the US market is the predominant driver for Vyzulta sales, the drug has been launched in 15 countries worldwide, and we expect net Vyzulta royalties to continue to grow based on continued growth in prescriptions. Nicox also reported that Vyzulta prescriptions continued to grow at a brisk pace in Q323, up 22% yo-y, leading to Q323 net royalties of €1.1m (up from €0.8m in Q322).

Exhibit 4: Nicox H123 financial results versus Edison estimates

€000s (unless stated)

H123

H123e

Difference (%)

H122

Difference yoy (%)

Licence milestones and other revenue

-

300

(100.0)

-

N/A

Licence royalty payments

2,772

2,938

(5.6)

2,322

19.4

Total Revenue

2,772

3,238

(14.4)

2,322

19.4

Cost of sales

(1,039)

(818)

27.0

(892)

16.5

Gross profit

1,733

2,419

(28.4)

1,430

21.2

General & Administrative

(3,511)

(3,798)

(7.6)

(3,724)

(5.7)

Gross Research & Development costs

(6,690)

(7,211)

(7.2)

(7,778)

(14.0)

Financial and other expenses

1,908

(819)

(333.1)

3,018

(36.8)

Exceptional items including asset impairment

(26)

0

N/A

(11,631)

(99.8)

PBT (reported)

(6,586)

(9,409)

(30.0)

(18,685)

(64.8)

PBT (normalised)

(6,560)

(9,028)

(27.3)

(7,054)

(7.0)

Tax expense

(20)

0

N/A

1,679

(101.2)

Net income (reported)

(6,606)

(9,409)

(29.8)

(17,006)

(61.2)

Net income (normalised)

(6,580)

(9,028)

(27.1)

(5,375)

22.4

Reported EPS (€)

(0.13)

(0.19)

(29.5)

(0.39)

(66.5)

Normalised EPS (€)

(0.13)

(0.18)

(26.8)

(0.12)

5.6

Period-end cash position

19,011

19,542

(2.7)

31,644

(39.9)

Free cash flow

(8,363)

(8,108)

3.1

(10,406)

(19.6)

Source: Nicox documents, Edison Investment Research

Gross R&D costs, which are predominantly based on NCX-470 development (including the ongoing Denali trial), were €6.7m, down 14% y-o-y, with the decrease largely due to a reduced clinical trial expense run-rate following the completion of Mont Blanc in H222. G&A costs also came in under our expectations, down 6% y-o-y. The normalised PBT loss of €6.6m was below our €9.0m estimate, although a large driver for the difference was a non-cash €2.9m financial income component due to the revaluation of the fair value of put options.

The free cash outflow was €8.4m in H123, slightly above our €8.1m estimate. The company reported an H123 gross cash position of €19.0m, and a 30 September gross cash position of €14.6m. Nicox also disclosed gross financial debt of €21.6m at H123 and €21.1m at 30 September, with the largest contributors to the debt (in both periods) being the €18.8m bond financing agreement with Kreos Capital. We calculate Q323 net debt of €6.5m and a Q323 net cash burn rate of c €3.9m, comparable with the H123 free cash flow run-rate described above.

Financials and valuation

As discussed above we calculate Nicox’s net debt position at €6.5m as of 30 September. The company maintains its guidance that its gross cash on hand (€14.6m) should be sufficient for it to maintain its operations, based on the development of NCX-470 alone, into June 2024, which is consistent with our forecasts.

Following the H123 results and Q323 corporate update, we have reduced our net R&D expense estimate for FY23 (to €13.7m, vs €15.3m previously) to reflect the expense run-rate shown in H123 and as Denali costs have been lower than anticipated in H123. We have reduced our FY24 net R&D expense forecasts by a lower amount (to €16.6m, vs €17.1m previously) as we continue to expect the two Phase IIIb NCX-470 studies to lead to incremental year-on-year increases in total R&D expenditure. Altogether, our net FY23 and FY24 operating cash burn assumptions are now €17.1m (vs €18.0m previously) and €23.1m (from €24.7m previously), respectively.

Our Nicox valuation continues to apply a risk-adjusted net present value (nNPV) model with a 12.5% cost of capital. While we maintain our existing launch timing estimates, underlying commercial assumptions and peak sales forecasts, as described below, we have rolled forward our estimates, which had a positive effect on the discounted valuations of the included development programmes. We now obtain an rNPV pipeline valuation for Nicox of €125.9m (versus €108.0m previously). After including Q323 net debt of €6.5m, we obtain an equity value of €119.4m, or €2.38 per basic share (up from €2.13 previously).

Exhibit 5: Nicox rNPV assumptions

Product contribution

Indication

Stage

NPV
(€m)

Probability of success

rNPV
(€m)

rNPV/basic share (€)

Launch year

Peak sales (€m) **

NCX-470 licence fees (net of R&D costs) in US Market

Glaucoma

Phase III ongoing

77.2

75%

41.8

0.83

2027

248

NCX-470 licence fees for Japan market

Glaucoma

Phase III ongoing

34.3

60%

19.7

0.39

2028

106

NCX-470 licence fees (net of R&D costs) in Europe

Glaucoma

Phase III ongoing

30.9

60%

17.2

0.34

2028

124

NCX-470 licence fees from Ocumension (China and other)

Glaucoma

Phase III ongoing

25.1

75%

17.9

0.36

2027

12.1*

NCX-4251 licence fees

Dry eye disease

Phase IIb

113.0

25%

27.9

0.56

2028

68*

Vyzulta royalties from Bausch + Lomb

Glaucoma

Commercial

33.4

100%

33.4

0.67

2017

7.6*

Zerviate royalties from Eyevance

Allergic conjunctivitis

Commercial

10.3

100%

10.3

0.21

2020

2.4*

Zerviate royalties from Ocumension

Allergic conjunctivitis

NDA stage

16.5

90%

14.8

0.30

2024

5.5*

Corporate costs

(57.2)

100%

(57.2)

(1.14)

Total

283.4

125.9

2.51

Net cash/(debt) at Q323 excluding lease liabilities

(6.5)

(6.5)

(0.13)

Total equity value

276.9

119.4

2.38

Basic shares outstanding (000)

50,157

Outstanding options and warrants (000)

12,991

FD shares outstanding (000)

63,148

Source: Edison Investment Research. Note: *Reflects net licence and royalties received by Nicox and not commercial sales by licensee. **Peak projected sales shown for year 2033 except for Vyzulta where peak anticipated royalties are shown for year 2030.

As stated above, Nicox continues to expect that funds on hand will be sufficient to maintain operations into June 2024 based on the development of NCX-470 alone and our forecasts are similar. Given that we have reduced our R&D spending expectations, we now expect that the company will only require €50m in additional funding to fulfil its requirements for bringing NCX-470 to commercialisation (which we forecast in 2027) and to reach recurring operating profitability (on a self-sustaining basis), down from our prior estimate of €58m.

Nicox has commented that it has initiated strategic discussions, including those involving potential M&A activities, and it has also started discussions with its creditors to restructure its debt. Until there is further clarity on the above initiatives (and/or the signing of definitive engagements), our model continues to assume all additional financings will be raised through illustrative debt, as per our usual methodology. If our projected funding need of €50m is raised through equity issuances at the prevailing market price of c €0.45, our effective value per share would decrease to €0.97.

The amount of fund-raising that we estimate is necessary for Nicox to bring NCX-470 to commercialisation (in collaboration with anticipated partners or licensees) is larger than its current market capitalisation, although we note that funding intervals may be staggered over the next several years, which may alleviate the potential challenges associated with raising sums in excess of a company’s market capitalisation. Furthermore, as stated above, Nicox is actively seeking potential partnership arrangements, which could provide non-dilutive funding and alleviate part of our expected funding requirements.

Exhibit 6: Financial summary

€(000)

2018

2019

2020

2021

2022

2023e

2024e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

4,717

8,260

14,423

8,583

5,242

6,099

7,607

Cost of Sales

(690)

(1,405)

(1,516)

(1,350)

(1,971)

(1,865)

(1,805)

Gross Profit

4,027

6,855

12,907

7,233

3,271

4,234

5,802

General & Administrative

(9,506)

(7,666)

(6,677)

(7,000)

(7,479)

(7,081)

(7,328)

Net Research & Development

(15,491)

(16,883)

(11,991)

(17,194)

(17,276)

(13,744)

(16,625)

Amortisation of intangible assets

0

(659)

(1,252)

(1,205)

0

(405)

(763)

Operating profit before exceptionals

(20,970)

(18,353)

(7,013)

(18,166)

(21,484)

(16,996)

(18,915)

EBITDA

 

 

(20,718)

(17,230)

(5,270)

(16,505)

(21,096)

(16,403)

(17,984)

Depreciation & other

(252)

(464)

(491)

(456)

(388)

(188)

(168)

Operating Profit (before amort. and except.)

 

(20,970)

(17,694)

(5,761)

(16,961)

(21,484)

(16,591)

(18,151)

Exceptionals including asset impairment

302

(6,115)

(6,621)

(30,658)

(12,029)

(26)

0

Other

0

0

0

0

0

0

0

Operating Profit

(20,668)

(23,809)

(12,382)

(47,619)

(33,513)

(16,617)

(18,151)

Net Interest

2,390

1,690

(4,436)

1,419

3,226

966

(2,178)

Profit Before Tax (norm)

 

 

(18,580)

(16,004)

(10,197)

(15,542)

(18,258)

(15,625)

(20,330)

Profit Before Tax (FRS 3)

 

 

(18,278)

(22,778)

(18,070)

(47,405)

(30,287)

(16,056)

(21,093)

Tax

(113)

3,856

(28)

3,644

2,528

(20)

0

Profit After Tax and minority interests (norm)

(18,693)

(12,148)

(10,225)

(11,898)

(15,730)

(15,645)

(20,330)

Profit After Tax and minority interests (FRS 3)

(18,391)

(18,922)

(18,098)

(43,761)

(27,759)

(16,076)

(21,093)

Average Basic Number of Shares Outstanding (m)

29.6

30.3

33.7

37.5

46.7

50.2

50.2

EPS - normalised (€)

 

 

(0.63)

(0.40)

(0.30)

(0.32)

(0.34)

(0.31)

(0.40)

EPS - normalised and fully diluted (€)

 

 

(0.63)

(0.40)

(0.30)

(0.32)

(0.34)

(0.31)

(0.40)

EPS - (IFRS) (€)

 

 

(0.62)

(0.62)

(0.54)

(1.17)

(0.59)

(0.32)

(0.42)

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

59,480

58,092

57,351

Intangible Assets

71,397

72,120

64,848

39,974

31,692

30,731

29,968

Tangible Assets

25,628

27,517

24,829

26,660

27,463

27,136

27,159

Investments in long-term financial assets

15,473

11,023

68

237

325

224

224

Current Assets

 

 

26,092

32,146

52,521

47,738

33,684

14,391

15,985

Short-term investments

0

0

0

0

0

0

0

Cash

22,059

28,102

47,195

41,970

27,650

10,150

11,841

Other

4,033

4,044

5,326

5,768

6,034

4,241

4,144

Current Liabilities

 

 

(8,069)

(9,828)

(15,404)

(8,000)

(8,206)

(8,917)

(5,806)

Creditors

(8,069)

(7,751)

(10,115)

(8,000)

(8,206)

(8,917)

(5,806)

Short term borrowings

0

(2,077)

(5,289)

0

0

0

0

Long Term Liabilities

 

 

(16,868)

(23,681)

(26,027)

(31,057)

(32,525)

(27,506)

(52,506)

Long term borrowings

0

(9,045)

(12,687)

(20,520)

(24,606)

(19,614)

(44,614)

Other long term liabilities

(16,868)

(14,636)

(13,340)

(10,537)

(7,919)

(7,892)

(7,892)

Net Assets

 

 

113,653

109,297

100,835

75,552

52,433

36,060

15,023

CASH FLOW

Operating Cash Flow

 

 

(21,533)

(17,741)

(956)

(19,900)

(26,442)

(18,068)

(20,941)

Net interest and financing income (expense)

2,390

1,690

(4,436)

1,419

3,226

966

(2,178)

Tax

0

0

0

0

0

0

0

Net Operating Cash Flow

(19,143)

(16,051)

(5,392)

(18,481)

(23,216)

(17,102)

(23,119)

Capex

(268)

(95)

(20)

(8)

(83)

(122)

(190)

Acquisitions/disposals

0

0

0

0

37

0

0

Financing

0

11,290

13,321

13,804

9,086

173

0

Dividends

0

0

0

0

0

0

0

Net Cash Flow

(19,411)

(4,856)

7,909

(4,685)

(14,176)

(17,051)

(23,309)

Opening net debt/(cash)

 

 

0

(37,532)

(28,003)

(29,287)

(21,687)

(3,369)

9,240

HP finance leases initiated

0

0

0

0

0

0

0

Other

56,943

(4,673)

(6,625)

(2,915)

(4,142)

4,442

0

Closing net debt/(cash)

 

 

(37,532)

(28,003)

(29,287)

(21,687)

(3,369)

9,240

32,549

Lease debt

N/A

1,527

1,099

986

828

2,773

2,773

Closing net debt/(cash) inclusive of IFRS 16 lease debt

(37,532)

(26,476)

(28,188)

(20,701)

(2,541)

12,013

35,322

Source: Company accounts, Edison Investment Research


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

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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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

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

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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