Oncimmune Holdings (ONC) : Corp

Biodesix launches EarlyCDT Lung test in the US

Key data

  • Share price (p) 81.5
  • Target price (p) 150.0
  • Market cap (£m) 51.5
  • Enterprise value (£m) 51.6

Oncimmune’s exclusive commercial partner, Biodesix, has launched the EarlyCDT Lung test in the US. Biodesix will market the test as Nodify CDT, under its Nodify Lung brand. The US is one the largest addressable markets in the world, and Biodesix has a direct US national sales force who sell direct into pulmonologists and corporately into national hospital systems. Oncimmune is progressing with active discussions with NHS England partners. 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, this should build momentum in what is clearly an unmet market need. No changes to forecasts and we reiterate our target price of 150p.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

Proactis (PHD) : Corp

Restoring forecasts after conclusion of FSP

Key data

  • Share price (p) 47.0
  • Target price (p) 80.0
  • Market cap (£m) 44.9
  • Enterprise value (£m) 87.0

Proactis has announced the conclusion of the Formal Sale Process that was initiated in July 2019, with no proposal received that the Board were willing to recommend to shareholders. We take the opportunity to reinstate forecasts, noting the commitment to cost control alongside the 44% increase in TCV from new business won in the 1H to 31 January 2020 at £7.5m (2H19: £5.2m; 1H19: £6.1m), which has since risen to £9.4m for the seven months to end Feb. With the benefit of the trading update released in February, forecasts are supported by ARR of £43.4m at 1H20, distraction has been minimised. The focus on cost control, review of non-core elements of the business, the deployment of bePayd, and the reduction of net debt is accompanied by a commitment to more NEDs, and a review of KPIs – and the execution of the refined strategy. We re-establish forecasts and look forward to greater detail as management is able to re-engage with investors, and demonstrate the commercial opportunity evident in an enviable recurring revenue stream. Target 80p represents 10x July FY20 EBITDA.

Andrew Darley 020 7220 0547 adarley@finncap.com

Allergy Therapeutics (AGY) : Corp

Interims – progressing to plan, upgrades due to R&D

Key data

  • Share price (p) 10.8
  • Target price (p) 40.0
  • Market cap (£m) 68.4
  • Enterprise value (£m) 43.4

Allergy Therapeutics reported six-month results to 31 December that reflected the continued progress seen over the last few years, namely market share gains and margin (pre-R&D EBIT) enhancement. Whilst a more challenging market environment in some of its smaller territories curtailed share growth to c.50bps (rather than 100bps), revenues increased 9% (CER) to £50.5m with pre-R&D EBIT| up 10% to £17.3m and adjusted pre-tax profits (ex-£3.2m litigation payment) up 14% to £13m. With this stable growth base arguably underpinning a much higher valuation, we look forward to the start of its two-step Phase III trial for Grass MATA MPL in the US and Europe in the autumn of 2020. The market assumes little or no chance of success despite the real-world evidence for its use as well as one positive Phase III trial. We are upgrading forecasts for FY 2020 and 2021 by c.£2.1m due to lower R&D costs. Given the balance sheet (£39.75m cash), underlying growth and previous clinical trial successes, we believe the risk/reward profile is highly attractive and reiterate our target of 40p.

Mark Brewer 020 7220 0556 mbrewer@finncap.com

PCI Pal (PCIP) : Corp

Record H1 revenue growth with a caveat on timing

Key data

  • Share price (p) 41.5
  • Target price (p) 50.0
  • Market cap (£m) 17.7
  • Enterprise value (£m) 17.7

The recurring revenue model is clearly being proven, evidenced by record 74% YoY revenue growth in H1. The driver continues to be channel partnerships across the globe with customers now live in N. America, EMEA and ANZ. In particular this was an exceptional half for N. American operations where ACV signed in H1 alone is up 49% on the whole of FY 2019, assisted by PCIP’s second-largest contract to date. Although we are trimming revenue growth expectations on the back of contract timings and a slower speed of deployment, PCIP is nevertheless building an excellent platform to drive forward with its partners. We reiterate our 50p TP as the group builds a solid base of revenue.

Lorne Daniel 020 7220 0545 ldaniel@finncap.com

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