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IXICO swings into profit as brain data analysis sales soar

Snapshot

  • Provides data analytics services to interpret brain scans
  • AI-based algorithms aid neurological disease trials
  • Order book has risen to £21.2mln
  • First profit just booked
Medical scanner

Quick facts: IXICO PLC

Price: 70.5 GBX

AIM:IXI
Market: AIM
Market Cap: £33.07 m
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What IXICO does:

IXICO PLC’s (LON:IXI) data analytics services are used by the global biopharmaceutical industry to interpret data from brain scans and digital biosensors to enable better trial design, site qualification, patient selection and clinical outcomes.

The company’s digital platform and Artificial Intelligence (AI) software manages and helps interpret images from MRI (magnetic resonance imaging) and PET (positron emission tomography) scanners as well as collating and making sense of real-world data from wearable biosensors.

 

How is it doing

Ixico will post its first annual underlying profit since it listed after revenues in its latest year surged 40%.

The company said the performance was better than expected as sales growth had accelerated since the half-year, even though one large trial had finished early.

In the year to September, revenue increased year-on-year by 40% to £7.6mln, up from £5.4mln in 2018, while orders at the year-end were £15.9 million, which takes account of the client early trial cessation reported on 9 August.

Net cash at the year-end was £7.3mln (2018: £7.9mln). 

 

What the boss says: Giulio Cerroni, CEO

Cerroni believes Ixico has now made the transition from a business with good science but limited options into a scalable, commercial operation.

Everything was bespoke previously, he says, but the platform we have now is ‘proven, recognised in the industry and trusted’.

Cerroni adds that one of the strengths is its data pool.

A 'wide and deep' portfolio of data around neurological diseases is very valuable, he says.

A pharma company might have carried out a trial five years ago, but algorithms developed since can give a  completely different aspect.

"It’s not just having the data, it is how it is looked at."

That capability is unique to its algorithms, he believes.

“We can tell a pharma you might want to look at this trial again, using a new algorithm.”

Also working in the company's favour is an ageing population, which is a big macro driver to develop treatments for brain diseases in the elderly. 

Moving into the rare disease space also plays into the company’s strengths of ‘developing proprietary artificial intelligence and data analytics’. 

Margins have picked up as the proportion of data analytics work has increased, a trend that Cerroni sees continuing.

“Where we are succeeding is in big trials with pharma in neurosciences.”

Going forward, the plan is threefold.

Cerroni wants to boost its presence in North America as it is the world’s biggest clinical trials market.

At the operational level, more automation of the platform is planned with innovation the third leg.

“A highly differentiated portfolio of algorithms using more analytics on the same level of data.”

Investors, too, have started to buy into Cerroni's view that the company has the ‘benefits of big pharma but at a much lower risk’. 

 

Watch video interview

 

Inflexion points

  • In October, the company secured three new contracts, one from an existing client and two from new, as well as appointing a new chief business officer to drive growth in its North American and Asian markets
  • Ixico has reported revenue growth of more than 20% for five periods running
  • Margins are increasing as more companies use its AI-based algorithms
  • Balance sheet contains £7.3mln of cash
  • Company is expanding commercial team to attract larger contracts
  • Working also with smaller biotechs as well as large pharmas

Blue Sky

Recent revenue growth has been delivered from a strong performance across all of the business divisions, namely clinical trials services, Assessa PML, wearables projects and licensing revenue.

IXICO’s business is also moving away from a historical and predominant focus on Alzheimer’s disease to include several other neurological conditions, including Huntington’s disease and progressive supranuclear palsy, and the use of innovative technology for novel applications - wearable biosensors in psychiatric and neurological disorders.

With the shares trading at around 72.5p as of 28 October 2019, IXICO carries a market cap of £32.6mln.

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