Acarix has gained strong support from clinical users, one comments that CADScor will ‘shorten waiting lists and add value for both patients and healthcare system’. The CADScor medical device helps doctors rule out coronary artery disease, avoiding complex and costly further testing in 50% of cases. Q119 sales were SEK299k with a gross profit of SEK209k, a 70% margin. Acarix sells to the German and Austrian private markets (about 10% of the population) and the Scandinavian public sector. The process for German public reimbursement is underway. A 2,000-patient outcomes trial starts in 2019. Our valuation remains at SEK369m.
Written by
Acarix |
Strong medical support |
Q119 results |
Healthcare equipment |
22 May 2019 |
Share price performance
Business description
Next events
Analyst
Acarix is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Acarix has gained strong support from clinical users, one comments that CADScor will ‘shorten waiting lists and add value for both patients and healthcare system’. The CADScor medical device helps doctors rule out coronary artery disease, avoiding complex and costly further testing in 50% of cases. Q119 sales were SEK299k with a gross profit of SEK209k, a 70% margin. Acarix sells to the German and Austrian private markets (about 10% of the population) and the Scandinavian public sector. The process for German public reimbursement is underway. A 2,000-patient outcomes trial starts in 2019. Our valuation remains at SEK369m.
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
0.64 |
(30.74) |
(1.29) |
0.0 |
N/A |
N/A |
12/18 |
1.02 |
(42.25) |
(1.83) |
0.0 |
N/A |
N/A |
12/19e |
2.62 |
(43.33) |
(1.88) |
0.0 |
N/A |
N/A |
12/20e |
4.11 |
(44.75) |
(1.94) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. The 2016 IPO increased shares in issue.
Q119 CADScor sales remain steady
Getting a solid base of CADScor units in place and routinely used is key to high-margin patch sales to offset cash burn and move to profit. The CADScor unit is normally sold in bundles with 120 disposable, single-use patches (these stick the microphone to the chest to enhance sound quality). In Q119, there were five CADScor system and 640 patch sales, implying perhaps 40 repeat patch orders. The incentive for private insurers to pay is greater, since much higher costs (from invasive hospital tests) can be avoided in 50% of chest pain patients who are identified by CADScor as not at risk of coronary artery disease (CAD, 96% negative predictive value). Acarix is building wider medical awareness across Europe.
New clinical outcomes trial planned
Acarix has stated that a new randomized clinical trial (FILTER-SCAD) will run in four centres to look at prospective outcomes. The 2,000-patient trial is planned by Acarix to start enrolling patients in 2019. The study will compare CADScor to standard evaluation over 12 months of follow-up. The trail is planned to end in 2021 or 2022. Although there is still little information available, this trial could be very important as it will provide long-term clinical data and show economic benefits. This will be very helpful in persuading public healthcare payors to buy CADScor.
Valuation: Remains at SEK16.00 per share
Acarix had operational cash use of SEK38m in FY18, with SEK65m cash remaining at 31 December 2018. Accordingly, further funding will be needed depending on investment in trials and marketing. Our valuation assumes 2020 German reimbursement, with strong sales from 2021. We also assume US sales from 2023. Sales could develop in other European countries. Our indicative value before any new funding remains at SEK369m (SEK16.00 per share).
Exhibit 1: Financial summary
SEK000s |
2017 |
2018 |
2019e |
2020e |
||
Year end 31 Dec |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
638 |
1,024 |
2,623 |
4,105 |
Cost of Sales |
(208) |
(316) |
(577) |
(874) |
||
Gross Profit |
430 |
708 |
2,046 |
3,232 |
||
EBITDA |
|
|
(29,499) |
(41,028) |
(41,959) |
(43,273) |
Operating Profit (before amort. and except.) |
|
|
(30,743) |
(42,523) |
(43,454) |
(44,768) |
Intangible Amortisation |
(1,261) |
(1,430) |
(1,430) |
(1,430) |
||
Exceptionals |
- |
- |
- |
- |
||
Operating Profit |
(32,004) |
(43,953) |
(44,884) |
(46,198) |
||
Other |
- |
- |
- |
- |
||
Net Interest |
7 |
273 |
120 |
20 |
||
Profit Before Tax (norm) |
|
|
(30,736) |
(42,250) |
(43,334) |
(44,748) |
Profit Before Tax (FRS 3) |
|
|
(30,736) |
(42,250) |
(43,334) |
(44,748) |
Tax |
960 |
- |
- |
- |
||
Profit After Tax (norm) |
(29,776) |
(42,250) |
(43,334) |
(44,748) |
||
Profit After Tax (FRS 3) |
(29,776) |
(42,250) |
(43,334) |
(44,748) |
||
Average Number of Shares Outstanding (m) |
23.0 |
23.0 |
23.0 |
23.0 |
||
EPS - normalised (ore) |
|
|
(129.31) |
(183.48) |
(188.18) |
(194.33) |
EPS - FRS 3 (ore) |
|
|
(129.31) |
(183.48) |
(188.18) |
(194.33) |
Dividend per share (ore) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
67.4 |
69.1 |
78.0 |
78.7 |
||
EBITDA Margin (%) |
(4,624) |
(4,007) |
(1,600) |
(1,054) |
||
Operating Margin (before GW and except.) (%) |
(4,819) |
(4,153) |
(1,657) |
(1,091) |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
25,191 |
23,696 |
22,201 |
20,706 |
Intangible Assets |
20,351 |
18,921 |
17,491 |
16,061 |
||
Tangible Assets |
0 |
0 |
0 |
0 |
||
Acquired rights |
4,840 |
4,775 |
4,710 |
4,645 |
||
Current Assets |
|
|
108,865 |
71,501 |
29,662 |
(13,591) |
Stocks |
1,945 |
2,625 |
2,625 |
2,625 |
||
Debtors |
2,468 |
3,857 |
3,857 |
3,857 |
||
Cash |
103,457 |
65,019 |
23,180 |
(20,073) |
||
Other |
995 |
0 |
0 |
0 |
||
Current Liabilities |
|
|
(5,118) |
(7,320) |
(7,320) |
(7,320) |
Creditors |
(1,464) |
(2,504) |
(2,504) |
(2,504) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Short term leases |
0 |
0 |
0 |
0 |
||
Other |
(3,653) |
(4,816) |
(4,816) |
(4,816) |
||
Long Term Liabilities |
|
|
0 |
0 |
0 |
0 |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Long term leases |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
128,939 |
87,877 |
44,543 |
(205) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(41,506) |
(39,863) |
(41,959) |
(43,273) |
Net Interest |
7 |
277 |
120 |
20 |
||
Tax |
960 |
977 |
0 |
0 |
||
Capex |
(2,984) |
0 |
0 |
0 |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
1,203 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(42,320) |
(38,609) |
(41,839) |
(43,253) |
||
Opening net debt/(cash) |
|
|
(145,895) |
(103,457) |
(65,019) |
(23,181) |
HP finance leases initiated |
- |
- |
- |
- |
||
Other |
(118) |
171 |
- |
- |
||
Closing net debt/(cash) |
|
|
(103,457) |
(65,019) |
(23,181) |
20,073 |
Source: Acarix accounts, Edison Investment Research forecasts
|
||||||||
|
||||||||
Cranswick had a year of consolidation in FY19, showing resilience against an uncertain and intensely competitive market backdrop. Management has continued to invest in the business to strengthen its asset base. Revenues were broadly flat on an underlying, like-for-like basis, and adjusted PBT was slightly ahead on the same basis, despite the tough trading environment. Capital investment behind the business continues apace: the Continental meats facility was completed in FY19 and the construction of the new state-of-the-art poultry processing facility is well underway.