IXICO: The brains behind brain scans
Know anyone who's suffering from Alzheimer's (AD), Parkinson's (PD) and/or Huntington’s (HD)? These neurological conditions tragically affect tens of millions of people worldwide.
Luckily there's help on the way.
You see, after several false starts, two Alzheimer's drugs (Biogen's Leqembi and Eli Lilly’s Kisunla) were approved last year by the FDA. Both treatments slow a patient's cognitive decline, but require regular brain scans to monitor possible side-effects.
These successes, however, have triggered an avalanche of new neurological research, reflecting the enormous unmet need. Here new clinical studies are being conducted on next-generation therapeutics (Roche and Bristol Myers), most of which also need detailed MRIs in order to assess a drug's safety, efficacy and longitudinal performance, as well as to assist in patient trial selection.
This is where (mrkcap £9m) fits in. It is one of the world's leaders in the highly specialised assessment of brain scans - helping Big Pharma and Contract Research Organisations (CROs) develop new drugs right from the test-tube through to commercial launch and post-marketing surveillance. The firm is currently running 26 trials for 18 customers.
Here its cutting-edge science, industry experts, and AI algorithms can detect and interpret >150 unique brain structures and digital biomarkers with microscopic precision. In fact, its highly contextualised database, incorporating a vast repository of 250k images, acts as a major competitive moat vs rivals and even possible deep-pocketed new entrants. All the information is securely stored and available for the client within IXICO's end-to-end TrialTracker software platform., thus improving efficiency, speed, regulatory submissions and quality of decision making.
Sure, the past 2-3 years have been tough across the whole sector, as many Biotechs have dialed back investment. Yet equally, this is changing, with the Board aiming to double turnover to £10m over the next 3-4 years vs an est £5.5m for Sept FY24. Breakeven sales is around £8m, whilst the orderbook stood at a healthy £15.1m on 31 Aug'24 vs £12.7m 5 months earlier.
This strong growth will be achieved by leveraging 's renowned HD expertise (£12m TAM) to penetrate further into the much larger research pools of AD (£30m) and PD (£15m), alongside expanding more into the US and incorporating new digital biomarkers into the imaging analysis platform - all funded after the recent oversubscribed £4.05m placing at 9.5p.
Lastly, in terms of the numbers, house broker Cavendish has a 24p/share price target, based on Sept FY'25 sales and EBITDA coming in at £6.0m and -£1.4m respectively, ending the period with net cash of £3m. As such at 9.5p, the stock trades on <1x EV/revenues, which looks far too cheap compared to sector peers and the 2023 takeovers of Instem (clinical trial software) and Medica (radiology services) on multiples of between 3.0x-3.5x EV/sales.
CEO Bram Goorden - who joined in the summer and has been pivotal in driving 's expansion strategy - commented: "The fundraising will be instrumental in accelerating the growth and global commercial reach of our AI driven technology platform, ensuring we can meet the increasing unmet clinical need in neurological diseases and further develop and scale our product offerings across rapidly increasing areas of drug development such as AD and PD."
Similarly, CSO Robin Wolz has been invited to present at several prominent industry events - an encouraging sign of the increasing importance of 's specialist imaging services across the Biotech world.
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