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Last close As at 09/06/2023
-775.00
▲ 1.00 (0.13%)
Market capitalisation
GBP296m
Research: Financials
Gresham House continues to develop its alternative asset management activities with a long-term view, but in the near term its exposure to real assets, long-term fund structures and a sustainability focus mean it is well-positioned to weather current challenging equity market conditions. This is evident in strong H122 results, while the longer-term growth potential remains in place and the group is on track to match or exceed its five-year plan targets.
Gresham House |
Resilience confirmed as growth continues |
H122 results |
Financial services |
16 September 2022 |
Share price performance
Business description
Next events
Analyst
Gresham House is a research client of Edison Investment Research Limited |
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Gresham House continues to develop its alternative asset management activities with a long-term view, but in the near term its exposure to real assets, long-term fund structures and a sustainability focus mean it is well-positioned to weather current challenging equity market conditions. This is evident in strong H122 results, while the longer-term growth potential remains in place and the group is on track to match or exceed its five-year plan targets.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
70.4 |
20.2 |
49.3 |
10.0 |
16.3 |
1.2 |
12/22e |
76.6 |
25.9 |
52.1 |
13.5 |
15.5 |
1.7 |
12/23e |
84.7 |
31.0 |
58.6 |
17.0 |
13.8 |
2.1 |
12/24e |
95.6 |
37.1 |
67.1 |
24.0 |
12.0 |
3.0 |
Note: *PBT and EPS (diluted) are adjusted, excluding performance fees, realised gains, amortisation and depreciation, exceptional items and share-based payments related to acquisitions.
H122: Strong organic growth
As reported in July, first-half fund-raising was resilient and in H122 overall assets under management (AUM) increased 11% to £7.3bn. This included organic growth of £0.5bn (+8%), within which there were net inflows (£0.4m) in all sections of the business, including public equity. While performance in Strategic Equity was affected by lower equity markets, this was more than offset by valuation gains in Real Assets. Compared with H121, net core income increased by 61% to £37.2m and adjusted operating profit was up 91% to £13.2m. Excluding the impact of acquisitions completed in H221 (Mobeus and Appian Asset Management), revenues grew by 26% and adjusted operating profit by 41%. After amortisation and depreciation, acquisition related share-based payments, exceptional items, net gains/losses on investments and other items, reported profit before tax was £3.2m versus £6.2m.
Full-year expectations maintained
While acknowledging the difficult macroeconomic background, Gresham House expects to achieve adjusted operating profit at least in line with market expectations for FY22. It is on track to make further progress on its five-year strategy, GH25, benefiting from exposure to investment strategies expected to see long-term growth, a strong current list of potential investors and the scope to make further balance-sheet investments to support growth. Our estimates are little changed.
Valuation
Year to date, the shares are down 11% but have shown greater resilience than many of the European and North American peers, reflecting the progress evident in H122. Our comparison table (see Exhibit 5) shows Gresham House trading below European and North American peer averages on P/E multiples and in terms of EV/EBITDA.
H122 results: AUM up 11%, operating profit up 91%
During H122, AUM increased by 11% to £7.3bn. As shown in Exhibit 1, there were net inflows in all areas totalling £367m. Strategic Equity performance was negative, reflecting lower equity market levels, but positive performance in Real Assets more than offset this, pointing to the potential these asset classes have to provide diversification. The acquisition of Burlington Real Estate, an Irish commercial property asset management and development company, added £243m to AUM. As noted earlier, organic growth (net flows and performance) was equivalent to 8% of opening AUM, demonstrating that, thus far, investor demand for Gresham House’s specialist asset management strategies has been resilient.
Exhibit 1: Analysis of assets under management
(£m) |
H121 AUM |
H221 AUM |
Net fund flows |
Performance |
Funds acquired/won |
H122 AUM |
% change v H121 |
% change v H221 |
Public equity |
965 |
1,037 |
43 |
(136) |
944 |
(2.2) |
(9.0) |
|
Private equity |
477 |
887 |
25 |
(88) |
825 |
72.9 |
(7.0) |
|
Strategic equity total |
1,442 |
1,924 |
68 |
(224) |
1,769 |
22.6 |
(8.1) |
|
Forestry |
1,985 |
2,954 |
78 |
260 |
3,291 |
65.8 |
11.4 |
|
New energy and sustainable infrastructure |
928 |
1,213 |
198 |
95 |
1,505 |
62.2 |
24.1 |
|
Real estate |
367 |
448 |
23 |
(2) |
243 |
712 |
94.0 |
59.0 |
Real assets total |
3,280 |
4,615 |
299 |
352 |
243 |
5,508 |
67.9 |
19.4 |
Total |
4,722 |
6,539 |
367 |
128 |
243 |
7,277 |
54.1 |
11.3 |
Source: Gresham House
Exhibit 2 provides an analysis of the H122 P&L compared with the prior two half-years. Gross core income increased by 63% compared with H121, slightly ahead of the increase in average AUM of 59%, reflecting a modestly richer fee margin mix with the overall average equivalent to 111bp compared with 106bp.
Adjusted administration overheads, as shown below, were up 48% versus H121, with part of the increase arising from the Mobeus, Appian and Burlington acquisitions. The headcount has increased by 67 since end-H121, including 52 added through the acquisitions, taking the total to 205. Adjusted operating profit was up 91% or on like-for-like basis excluding last year’s acquisitions, 41% ahead. The operating profit margin was 35% versus 30% in H121 and the group continues to target an EBITDA margin of at least 40% by the end of its GH25 plan while still balancing investment to support growth and reaching financial targets.
Looking at the section of the table reconciling adjusted to reported operating profit before tax, the larger changes from H121 were: (1) amortisation and depreciation increased as a result of acquisitions and the related management contract amortisation; (2) exceptional items were also higher reflecting acquisition-related costs; and (3) the greatest difference was in gains and losses on balance-sheet investments where market-related valuation movements resulted in a £4.8m swing from a gain to a £1.5m unrealised loss. These non-cash or in some cases potentially temporary items left a reported pre-tax profit of £3.2m versus £6.2m.
Turning to the balance sheet, period-end cash stood at £28.1m and the group has an unused £20m revolving credit facility. Including investments in tangible and realisable assets, total cash and liquid assets stood at £69.7m so the group has significant capacity to invest to support growth in AUM.
Net cash generated from operations during the half year was £5.9m. Net investments of £10.8m were made in battery storage projects and a net £3m in funds. Deferred consideration paid and the Burlington acquisition together amounted to £7.5m while £11.8m was realised from the sale of the investment in Rockwood Realisation (formerly Gresham House Strategic). Payment of the FY21 dividend and the settlement of share-based payments absorbed £3.8m each. Spending on fixed and intangible assets and other smaller items accounted for a further £0.9m. This left a net cash outflow of £12.2m.
Exhibit 2: H122 P&L analysis
£’000s unless indicated |
H121 |
H221 |
H122 |
% change v H121 |
% change v H221 |
Gross core income |
23,648 |
39,697 |
38,526 |
62.9 |
-2.9 |
Rebates, distribution and fundraising costs |
(611) |
(1,125) |
(1,345) |
120.1 |
19.6 |
Net core income |
23,037 |
38,572 |
37,181 |
61.4 |
-3.6 |
Administration overheads (ex depreciation, amortisation, exceptionals & acquisition-related share-based payments) |
(16,041) |
(25,087) |
(23,751) |
48.1 |
-5.3 |
Finance costs |
(102) |
(209) |
(278) |
172.5 |
33.0 |
Adjusted operating profit/(loss) |
6,894 |
13,276 |
13,152 |
90.8 |
-0.9 |
Performance fees net of costs |
415 |
1,299 |
0 |
||
Realised gains net of costs |
88 |
1,685 |
(260) |
||
Adjusted operating profit incl. performance fees and realised gains |
7,397 |
16,260 |
12,892 |
74.3 |
-20.7 |
Reconciliation to reported pre-tax operating profit |
|||||
Amortisation and depreciation |
(4,191) |
(5,284) |
(6,092) |
45.4 |
15.3 |
Acquisition-related share-based payments |
(253) |
(814) |
(217) |
-14.2 |
-73.3 |
Exceptional items |
(102) |
(3,113) |
(495) |
385.3 |
-84.1 |
Net gains/(losses) on investments and other fair value movements |
3,305 |
2,919 |
(1,456) |
-144.1 |
-149.9 |
Other |
0 |
196 |
(201) |
||
Reported operating profit/(loss) before tax |
6,156 |
10,164 |
3,188 |
-48.2 |
-68.6 |
Taxation |
(908) |
(3,199) |
(1,257) |
||
Profit/(loss) from discontinued operations |
(5) |
(9) |
(3) |
-40.0 |
-66.7 |
Foreign exchange movement on translation of foreign subsidiary |
0 |
(158) |
237 |
||
Total comprehensive net income |
5,243 |
6,798 |
2,165 |
-58.7 |
-68.2 |
Non-controlling interest |
(23) |
(241) |
(12) |
-47.8 |
-95.0 |
Net income attributable to equity holders |
5,220 |
6,557 |
2,153 |
-58.8 |
-67.2 |
Basic EPS (p) |
16.2 |
18.6 |
5.7 |
-65.0 |
-69.5 |
EPS - diluted (p) |
15.3 |
17.5 |
5.3 |
-65.0 |
-69.4 |
Adjusted, diluted EPS (p) |
16.8 |
32.2 |
26.9 |
59.8 |
-16.5 |
Dividend per share (p) |
10.0 |
||||
Source: Gresham House, Edison Investment Research
Estimate changes and assumptions
Exhibit 3 makes clear that our estimates are little changed following the H122 results.
Exhibit 3: Estimate changes
|
Revenue (£m) |
Adjusted pre-tax operating profit (£m) |
Adjusted EPS (p) |
DPS (p) |
||||||||
|
Old |
New |
% chg. |
Old |
New |
% chg. |
Old |
New |
% chg. |
Old |
New |
% chg. |
03/22e |
74.2 |
76.6 |
3% |
25.9 |
25.9 |
0% |
52.1 |
52.1 |
0% |
13.50 |
13.50 |
0% |
03/23e |
84.4 |
84.7 |
0% |
30.8 |
31.0 |
1% |
58.6 |
58.6 |
0% |
17.00 |
17.00 |
0% |
12/24e |
95.3 |
95.6 |
0% |
36.8 |
37.1 |
1% |
67.1 |
67.1 |
0% |
24.00 |
24.00 |
0% |
Source: Edison Investment Research
We set out our key estimate assumptions in Exhibit 4. We assume AUM increases to c £9.8bn by 2024 with an asset management fee rate maintained at around 100bp in that year. The group reports a good pipeline of potential clients and the current difficult equity market conditions appear to have had a smaller impact on the sort of specialist asset management categories that Gresham House operates in. Morningstar has reported that first-half flows into sustainable funds, for example, have been more resilient than funds as a whole. This is borne out in the flows seen at Gresham House in the first half, while the group continues to see good growth prospects and capacity across its strategies.
In line with the GH25 target, our operating margin is assumed to reach 40% in 2024. Details of the strategic and financial targets of the GH25 five-year plan (ending in 2025) are set out in our May 2022 initiation note.
We have not assumed any performance fees or realised gains in our estimates and these could create added value over the long term. Likewise, in estimating reported profit (see the lower section of table) we do not include any exceptional items or net gains or losses on investments.
Further details of our estimates are shown in the financial summary (Exhibit 7) including our assumed dividend payments for the next three years, with cover in 2024 matching the group’s 3x objective (using adjusted earnings).
Exhibit 4: Key P&L assumptions and reconciling adjusted to reported profit
£’000s unless indicated |
FY21 |
FY22e |
FY23e |
FY24e |
|||
Performance (£m) |
777 |
183 |
291 |
332 |
|||
Net flow (£m) |
1,791 |
770 |
750 |
890 |
|||
Total AUM change (£m) |
2,568 |
953 |
1,041 |
1,222 |
|||
End year AUM (£m) |
6,539 |
7,492 |
8,533 |
9,756 |
|||
Asset management income |
62,162 |
74,311 |
82,783 |
93,712 |
|||
Other income |
1,183 |
1,182 |
1,882 |
1,882 |
|||
Gross core income |
63,345 |
75,493 |
84,665 |
95,594 |
|||
Rebates, distribution and fundraising costs |
(1,736) |
(2,351) |
(2,312) |
(2,617) |
|||
Net core income |
61,609 |
73,142 |
82,353 |
92,977 |
|||
Administration overheads (ex depcn, amort, excpnls & acqn-related SBP) |
(41,128) |
(46,733) |
(50,931) |
(55,428) |
|||
Finance costs |
(311) |
(478) |
(400) |
(400) |
|||
Adjusted operating profit |
20,170 |
25,930 |
31,022 |
37,149 |
|||
Adjusted operating profit margin (%) |
33 |
35 |
38 |
40 |
|||
Performance fees net of costs |
1,714 |
0 |
0 |
0 |
|||
Realised gains net of costs |
1,773 |
(260) |
0 |
0 |
|||
Adjusted operating profit including performance fees and realised gains |
23,657 |
25,670 |
31,022 |
37,149 |
|||
Reconciliation to reported pre-tax profit: |
|||||||
Net non-core activity |
38 |
0 |
0 |
0 |
|||
Amortisation and depreciation |
(9,475) |
(13,242) |
(14,123) |
(13,965) |
|||
Acquisition-related share-based payments |
(1,067) |
(434) |
(1,000) |
(1,000) |
|||
Exceptional items |
(3,215) |
(495) |
0 |
0 |
|||
Net gains/(losses) on investments and other items |
6,224 |
(1,456) |
0 |
0 |
|||
Add back FX movement on translation of foreign subsidiary |
158 |
0 |
0 |
0 |
|||
Reported pre-tax profit |
16,320 |
10,043 |
15,899 |
22,184 |
|||
Source: Gresham House, Edison Investment Research
Valuation
While the Gresham House shares are down 11% year to date, they have shown much greater resilience than the European and North American peers on average (down 29% and 26% respectively), reflecting the progress evident in H122. Gresham House shares nevertheless trade below the European and North American peer-average P/Es and EV/EBITDA multiples (but reflecting its different exposures and growth profile, well above the more traditional UK asset manager average).
Exhibit 5: Asset management comparators
Price |
Market cap (£m) |
P/E 2022e |
P/E 2023e |
Dividend yield (%) |
EV/EBITDA 2022e (x) |
|
Gresham House |
806 |
308 |
15.5 |
13.8 |
1.3 |
10.0 |
Antin Infrastructure Partners |
27 |
4,086 |
49.4 |
26.6 |
0.3 |
30.9 |
Bridgepoint |
249 |
2,042 |
19.4 |
14.7 |
N/A |
17.7 |
EQT |
24 |
20,604 |
31.2 |
19.9 |
1.1 |
27.8 |
Foresight |
412 |
477 |
15.2 |
11.8 |
N/A |
11.1 |
Impax Asset Management |
586 |
774 |
14.8 |
14.3 |
3.5 |
10.9 |
Intermediate Capital |
1,218 |
3,525 |
10.1 |
9.6 |
6.2 |
15.9 |
Partners |
84,206 |
22,504 |
24.2 |
19.3 |
3.5 |
21.1 |
Petershill Partners |
218 |
2,493 |
9.9 |
8.0 |
N/A |
N/A |
Tikehau Capital |
2,175 |
3,808 |
13.2 |
13.0 |
2.4 |
11.0 |
Average |
20.8 |
15.3 |
2.8 |
18.3 |
||
North American peer average* |
17.0 |
14.9 |
1.9 |
20.7 |
||
UK asset managers average** |
10.0 |
10.1 |
8.8 |
5.1 |
Source: Refinitiv, Edison Investment Research. Note: Priced at 15 September 2022. *Ares, Brookfield, Carlyle, Hamilton Lane, KKR, StepStone. **Ashmore, City of London, Jupiter, Liontrust, Man Group, Polar Capital, Schroders.
Exhibit 6 shows the range of values implied when we put Gresham House shares on peer group multiples for 2022e, those implied by transactions involving comparator companies and finally the range indicated by our discounted cash flow (DCF) model, assuming a 3% long-term growth rate and discount rates between 8% and 17%.
|
Exhibit 6: Valuation ranges based on peers, transactions and DCF |
|
|
Source: Edison Investment Research, Refinitiv. Note: Peer multiples for 2022e. The markers show average values and, for the DCF valuation, the value at a discount rate of 10%. |
Exhibit 7: Financial summary
December (£'000s unless indicated) |
2018 |
2019 |
2020 |
2021 |
2022e |
2023e |
2024e |
PROFIT & LOSS |
|||||||
Asset management income |
13,717 |
31,427 |
40,304 |
62,162 |
74,311 |
82,783 |
93,712 |
Dividend, interest and other income |
781 |
357 |
1,632 |
2,038 |
2,282 |
1,882 |
1,882 |
Performance fees |
0 |
1,944 |
0 |
6,163 |
0 |
0 |
0 |
Total income |
14,498 |
33,728 |
41,936 |
70,363 |
76,593 |
84,665 |
95,594 |
Administrative overheads |
(14,608) |
(34,331) |
(42,052) |
(60,116) |
(65,328) |
(68,366) |
(73,010) |
Net operating profit/(loss) before exceptional items |
(110) |
(603) |
(116) |
10,247 |
11,265 |
16,299 |
22,584 |
Finance costs |
(42) |
(390) |
(25) |
(311) |
(478) |
(400) |
(400) |
Exceptional items |
(2,001) |
(1,063) |
(1,775) |
(3,215) |
(495) |
0 |
0 |
Share of associates’ profits/(losses) |
1,718 |
246 |
158 |
4,955 |
(203) |
0 |
0 |
Gains and losses on investments held at fair value |
(271) |
3,048 |
4,599 |
5,842 |
(945) |
0 |
0 |
Movement in fair value of contingent consideration |
(209) |
(2,065) |
(1,163) |
(1,659) |
(840) |
0 |
0 |
Other |
40 |
0 |
224 |
461 |
295 |
0 |
0 |
Operating profit/(loss) before taxation |
(875) |
(827) |
1,902 |
16,320 |
8,599 |
15,899 |
22,184 |
Taxation |
218 |
(23) |
(1,084) |
(4,107) |
(2,339) |
(3,751) |
(5,546) |
Discontinued operations and FX movements |
11 |
55 |
(12) |
(172) |
(3) |
0 |
0 |
Total comprehensive income |
(646) |
(795) |
806 |
12,041 |
6,257 |
12,148 |
16,638 |
Non-controlling interest |
(53) |
(55) |
(229) |
(264) |
(24) |
(24) |
(24) |
Net income attributable to equity holders |
(699) |
(850) |
577 |
11,777 |
6,233 |
12,124 |
16,614 |
Adjusted core operating profit |
|||||||
Net core income |
14,709 |
31,724 |
40,774 |
61,609 |
73,142 |
82,353 |
92,977 |
Operating expenses (excl. dep'n and amortisation) |
(11,705) |
(21,047) |
(28,690) |
(41,128) |
(46,733) |
(50,931) |
(55,428) |
EBITDA (adjusted) |
3,004 |
10,677 |
12,084 |
20,481 |
26,408 |
31,422 |
37,549 |
Finance costs |
(42) |
(390) |
(25) |
(311) |
(478) |
(400) |
(400) |
Adjusted operating profit/(loss) |
2,962 |
10,287 |
12,059 |
20,170 |
25,930 |
31,022 |
37,149 |
EPS - diluted (p) |
(3.9) |
(3.2) |
1.8 |
32.6 |
15.4 |
29.9 |
40.0 |
Adjusted, diluted EPS |
14.7 |
31.2 |
32.9 |
49.3 |
52.1 |
58.6 |
67.1 |
Dividend per share (p) |
3.0 |
4.5 |
6.0 |
10.0 |
13.5 |
17.0 |
24.0 |
BALANCE SHEET |
|||||||
Non-current assets |
83,353 |
78,165 |
80,339 |
126,143 |
107,901 |
95,280 |
82,841 |
Intangible assets |
65,911 |
58,545 |
59,970 |
95,012 |
86,803 |
74,627 |
62,451 |
Tangible fixed assets |
332 |
813 |
1,090 |
2,927 |
2,256 |
1,811 |
1,548 |
Investments |
17,032 |
18,807 |
18,228 |
25,515 |
16,152 |
16,152 |
16,152 |
Other |
78 |
0 |
1,051 |
2,689 |
2,690 |
2,690 |
2,690 |
Current Assets |
21,703 |
46,187 |
46,767 |
94,174 |
107,656 |
125,768 |
147,250 |
Trade receivables |
2,628 |
5,334 |
3,184 |
11,135 |
11,560 |
11,560 |
11,560 |
Cash and cash equivalents |
13,958 |
19,432 |
21,886 |
40,252 |
40,600 |
58,712 |
80,194 |
Assets held for sale (property then battery storage projects) |
0 |
12,188 |
7,363 |
17,545 |
29,831 |
29,831 |
29,831 |
Other |
5,117 |
9,233 |
14,334 |
25,242 |
25,665 |
25,665 |
25,665 |
Current liabilities |
6,085 |
24,928 |
20,852 |
50,220 |
43,472 |
43,472 |
43,472 |
Trade and other payables |
4,085 |
15,210 |
18,780 |
42,721 |
32,606 |
32,606 |
32,606 |
Liabilities of disposal group held for sale |
2,000 |
9,718 |
2,072 |
7,499 |
10,866 |
10,866 |
10,866 |
Non-current liabilities |
19,231 |
8,605 |
8,976 |
22,560 |
21,552 |
16,252 |
11,352 |
Long-term borrowings |
7,840 |
5,973 |
5,749 |
0 |
0 |
0 |
0 |
Other creditors |
11,391 |
2,632 |
3,227 |
22,560 |
21,552 |
16,252 |
11,352 |
Net Assets |
79,740 |
90,819 |
97,278 |
147,537 |
150,533 |
161,323 |
175,267 |
Minority interests |
527 |
582 |
811 |
1,075 |
1,099 |
1,123 |
1,147 |
Net assets attributable to ordinary shareholders |
79,213 |
90,237 |
96,467 |
146,462 |
149,434 |
160,200 |
174,120 |
Diluted NAV per share (p) |
289.3 |
288.2 |
287.4 |
366.6 |
370.1 |
396.7 |
431.2 |
ROCE (%) |
20.6 |
14.6 |
16.0 |
34.1 |
17.0 |
20.6 |
23.0 |
CASH FLOW |
|||||||
Net operating cash flow |
905 |
9,203 |
15,711 |
19,975 |
18,309 |
30,071 |
34,403 |
Acquisitions and deferred consideration |
(11,855) |
0 |
(17,887) |
(1,736) |
(7,501) |
(5,300) |
(4,900) |
Purchase of management contracts |
(23,000) |
0 |
0 |
0 |
0 |
0 |
0 |
Net sale/(purchase) of investments |
(3,906) |
(797) |
2,025 |
(1,122) |
(3,018) |
0 |
0 |
Net proceeds of sale of investment properties |
4,685 |
0 |
0 |
0 |
0 |
0 |
0 |
Net investment in DevCo projects |
0 |
(1,510) |
4,406 |
(8,247) |
(10,835) |
0 |
0 |
Net purchase of fixed and intangible assets |
(242) |
(531) |
(736) |
(1,045) |
(1,478) |
(1,501) |
(1,526) |
Other |
(1,768) |
53 |
186 |
2,514 |
11,754 |
0 |
0 |
Cash flow from investing activities |
(36,086) |
(2,785) |
(12,006) |
(9,636) |
(11,078) |
(6,801) |
(6,426) |
Dividends |
0 |
(795) |
(1,351) |
(1,881) |
(3,815) |
(5,158) |
(6,495) |
Share issuance (net) |
25,679 |
6,487 |
7,663 |
20,487 |
0 |
0 |
0 |
Share warrants issued/exercised |
3,841 |
4,859 |
182 |
0 |
0 |
0 |
0 |
Share-based payments settled |
0 |
(833) |
(7,125) |
(9,734) |
(3,818) |
0 |
0 |
Other financing activities |
1,994 |
(8,795) |
(396) |
4,904 |
(135) |
0 |
0 |
Cash flow from financing activities |
31,514 |
923 |
(1,027) |
13,776 |
(7,768) |
(5,158) |
(6,495) |
Increase/(decrease) in net cash |
(3,667) |
7,341 |
2,678 |
24,115 |
(536) |
18,112 |
21,482 |
Closing net cash/(debt) |
6,118 |
13,459 |
16,137 |
40,252 |
39,716 |
57,828 |
79,310 |
Source: Source: company reports, Edison Investment Research. Note: *Return on capital employed (ROCE) = adjusted operating profit + net performance fees + net development gains divided by opening net assets adjusted for share issuance during the year.
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Immix Biopharma is a clinical-stage biopharmaceutical company focused on the development of its SMARxT tissue-specific platform producing Tissue-Specific Therapeutics (TSTx). Its lead clinical asset, IMX-110, is being investigated for the treatment of soft tissue sarcoma (STS), where interim results from its Phase Ib trial have, so far, demonstrated positive safety and efficacy profiles, albeit in a small patient population. Management now intends to initiate Phase IIa of the study in first-line STS in Q422. We also expect a Phase Ib study of IMX-110 in combination with tislelizumab (an anti-PD-1 antibody) to begin in Q422. To support this trial, Immix has entered a supply agreement with BeiGene. Immix had a net cash position of US$18.4m at end-June 2022, which we estimate will fund operations to Q424. We value Immix Biopharma at US$56.7m or US$4.1 per share.
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