Evgen Pharma (EVG) : Corp

Investigator-led study in CKD

Key data

  • Share price (p) 5.0
  • Target price (p) 25.0
  • Market cap (£m) 6.7
  • Enterprise value (£m) 1.6

Evgen announced that it has entered into a MoU with The University of Rochester School of Medicine and Dentistry to advance SFX-01 towards a clinical trial in chronic kidney disease (CKD). Evgen will supply SFX-01 for this trial whilst the clinical investigator will lead the process to secure grant funding and gain clinical trial approval for a potential randomised, double blind Phase II clinical trial. Evgen will retain all commercial rights. This is the third potential investigator-led study that Evgen has entered. We reiterate our target price of 25p (based on current breast cancer Phase II data), which excludes any value for SFX-01 in other indications, such as autism, NASH or CKD.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

LiDCO (LID) : Corp

Trading update

Key data

  • Share price (p) 4.8
  • Target price (p) 11.0
  • Market cap (£m) 11.6
  • Enterprise value (£m) 10.2

A positive trading statement for the year to 31 January indicates a positive adjusted EBITDA compared with our forecast £0.2m loss, with adjusted PBT in line with expectations. Whilst ROW distributor sales, which can be lumpy, helped to offset lower than expected US revenues, LiDCO is gaining traction with the HUP offering. Whilst growth in the US was strong YoY, it was however somewhat below our expectations, due to the rate of HUP licence wins being slower than originally anticipated, rate-limited in part by the number of sales reps. Net cash at year-end was £1.4m (FC est. £1.2m) and is considered sufficient to execute on LiDCO’s strategic objectives. Despite FY 2021 revenue downgrade to reflect the lower exit of HUP adoption, we maintain our 11p target price. Rolling forward the multiples, the stock would trade on 3.0x FY 2021 EV/Sales.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

Oncimmune Holdings (ONC) : Corp

Interims: sales ramp on track to meet forecasts

Key data

  • Share price (p) 31.5
  • Target price (p) 150.0
  • Market cap (£m) 19.9
  • Enterprise value (£m) 20.0

Oncimmune reported an adjusted net loss of £5.1m (vs. £3.8m) with revenues increasing 155% to £0.3m, demonstrating early traction in distributor-led markets for EarlyCDT Lung following positive top results of the ECLS screening study in 2019. Cash at 30 November was £7.5m, having also fully drawn down a €8.5m credit facility, ahead of an expected $9m milestone from Biodesix in FY 2021. Oncimmune continues to make progress towards a real-world lung cancer screening test with active discussions ongoing now with NHS England partners. The launch of the EarlyCDT Lung test in March in the US, together with the expected publication of supportive health economic data, regulatory clearance in Russia and filing in China by its partners in H1 CY 2020, should build momentum in what is clearly an unmet market need. We are leaving our forecasts unchanged, with 31 May 2020 cash of £4.6m, and reiterate our risk-adjusted DCF target price of 150p.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

Flowtech Fluidpower (FLO) : Corp

Restructuring actions taken

Key data

  • Share price (p) 97.0
  • Target price (p) 151.0
  • Market cap (£m) 59.1
  • Enterprise value (£m) 84.6

Consistent with its January update, it has seen difficult underlying markets, particularly in Q4. It has now announced details of previously signalled restructuring aimed at improving operating efficiency, which is expected to reap aggregated annualised cost savings of £1.6m. We have reduced our PBT forecast for 2020 by 10%, while cash generation continues to improve and debt leverage should be less than 1.0x this year.

David Buxton 020 7220 0542 dbuxton@finncap.com

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