Pixium Vision — Second Sight $28m financing adds clouds to deal

Pixium Vision (PAR: PIX)

Last close As at 12/10/2024

EUR0.15

−0.04 (−21.05%)

Market capitalisation

EUR1m

More on this equity

Research: Healthcare

Pixium Vision — Second Sight $28m financing adds clouds to deal

On 24 March, Second Sight announced a $27.9m private placement (4.65m shares at $6.00/share), expected to close on 26 March. Such a capital raise was prohibited under the terms of the January 2021 memorandum of understanding (MOU) entered into by Pixium and Second Sight relating to the proposed business combination of both entities. Second Sight had requested Pixium’s prior consent in recent days but Pixium’s board declined, as it felt that due to regulatory constraints, the proposed private placement would jeopardise the likeliness of the closing of the $25m capital increase contemplated as one of the conditions required under the MOU for the business combination. Pixium is now seeking further information from Second Sight on the conditions of the private placement and will also study alternative financing solutions as appropriate, and intends to announce its next steps in the coming days.

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Pixium Vision

Second Sight $28m financing adds clouds to deal

Transaction update

Healthcare equipment
& services

26 March 2021

Price

€1.69

Market cap

€79m

US$1.18/€

Net cash (€m) at 31 December 2020
(excluding lease liabilities)

3.3

Shares in issue

47.0m

Free float

60%

Code

ALPIX

Primary exchange

Euronext Growth Paris

Secondary exchange

N/A

Share price performance

Business description

Pixium Vision develops bionic vision systems for patients with severe vision loss. Its lead product, Prima, is a wireless sub-retinal implant system designed for dry-AMD. The company recently started a European pivotal study.

Analysts

Pooya Hemami, CFA

+1 646 653 7026

Maxim Jacobs, CFA

+1 646 653 7027

Pixium Vision is a research client of Edison Investment Research Limited

On 24 March, Second Sight announced a $27.9m private placement (4.65m shares at $6.00/share), expected to close on 26 March. Such a capital raise was prohibited under the terms of the January 2021 memorandum of understanding (MOU) entered into by Pixium and Second Sight relating to the proposed business combination of both entities. Second Sight had requested Pixium’s prior consent in recent days but Pixium’s board declined, as it felt that due to regulatory constraints, the proposed private placement would jeopardise the likeliness of the closing of the $25m capital increase contemplated as one of the conditions required under the MOU for the business combination. Pixium is now seeking further information from Second Sight on the conditions of the private placement and will also study alternative financing solutions as appropriate, and intends to announce its next steps in the coming days.

Year end

Revenue (€m)

PBT*

(€m)

EPS*
(€)

DPS
(€)

DPS
(%)

Yield
(%)

12/19

1.8

(9.8)

(0.44)

0.0

N/A

N/A

12/20

2.1

(8.7)

(0.26)

0.0

N/A

N/A

12/21e

1.6

(11.0)

(0.25)

0.0

N/A

N/A

12/22e

1.6

(15.5)

(0.34)

0.0

N/A

N/A

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

If completed, Second Sight’s $27.9m private placement would also dilute Pixium’s proposed ownership of Second Sight under the MOU, which called for Pixium to transfer its assets and liabilities pertaining to its Prima-related retinal neuromodulation technology in exchange for c 34.88m Second Sight shares. This would have left Pixium with a 60% stake in Second Sight (pre-financing), but with 4.65m additional Second Sight shares now issued (vs 23.25m previously), Pixium’s pre-financing stake would be diluted to c 55.6%.

Second Sight stated that Pixium could potentially seek to terminate the MOU and receive a termination fee of up to $1m. Altogether, we believe Second Sight’s motivation for the private placement was to benefit from the sharp rise in its share price since the FDA approval on 5 March of a redesigned set of external hardware (glasses and video processing unit) initially designed for use in combination with previously implanted Argus II systems (which had been de-prioritised by Second Sight in favour of its Orion Visual Cortical Prosthesis System).

Altogether, we believe Pixium and Second Sight will aim for an amicable reconciliation to allow a business combination to occur, but if this is not the case, we reiterate our view that the Prima assets are more clinically advanced (as they are in pivotal EU studies) and have a more clear development and commercial path than the Orion system, and should the combination fall through, we expect that Pixium will be well-positioned to bring this asset through the regulatory process, assuming that future financing needs are met.

.

General disclaimer and copyright

This report has been commissioned by Pixium Vision and prepared and issued by Edison, in consideration of a fee payable by Pixium Vision. Edison Investment Research standard fees are £49,500 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 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on Pixium Vision

View All

Latest from the Healthcare sector

View All Healthcare content

Research: Investment Companies

Murray International Trust — Manager took advantage of 2020 market volatility

Murray International Trust (MYI) is managed by the Global Equity team at Aberdeen Standard Investments (ASI), led by Bruce Stout and supported by Martin Connaghan and Samantha Fitzpatrick. Stout says ‘it was a humbling experience to manage an income fund in 2020 as so many companies had to cut, cancel or suspend their dividends’. Last year, global stock market leadership was narrow as ‘when growth is scarce investors are prepared to pay any price for growth businesses’. Once vaccine programmes gain momentum and lockdowns are eased, the manager expects pent-up demand to contribute to a meaningful improvement in economic growth and broader market leadership, ‘which would be helpful for the relative performance of a diversified portfolio’ and has been evident over the last few months. MYI continues to have a significant exposure to emerging markets as these are regions where Stout sees the most attractive growth prospects.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free