IXICO posts 26% revenue growth and stronger margins in H1 2025, breakthroughs in neuroimaging analytics
Neurodegenerative disease is the final frontier of medical science. Indeed, there are over 50m people worldwide who suffer from either Alzheimer's, Parkinson's or Huntington's - equivalent to 2x-3x the population taking GPL-1 weight loss drugs (worth $50bn pa) from the likes of Novo Nordisk and Eli Lilly.
The good news is that the biopharma industry is now on the cusp of launching some new groundbreaking treatments following the approval of 1st generation medicines Leqembi (Biogen) and Kisunla (Eli Lilly) in 2024. In fact, later this year, two potentially blockbuster Alzheimer's drugs are moving into Phase 3 clinical trials, namely Bristol Myers Squibb's Cobenfy and Roche's Trontinemab.
One life sciences firm at the heart of these advances is AI-powered medical imaging analytics expert (mrkcap £8.5m) . It is already the world's #1 player in interpreting brain scans for Huntington's, and has expanded into Alzheimer's, Parkinson's and other CNS conditions - offering a much larger market opportunity.
Advanced digital imaging remains the gold standard (ie quickest, cheapest, safest and most effective way) for understanding, monitoring and treating brain disorders, and plays a crucial role in obtaining FDA/regulatory approval.
Here, novel treatments not only require detailed biomarker imaging analysis to help them progress through clinical trials, but also for later post-marketing surveillance (re safety, efficacy and longitudinal performance), as well as to validate the accuracy of neurological blood-based diagnostics.
Fine, but how is the business progressing?
Well, this morning released strong and in-line H1'25 results with LFL sales jumping 26% YoY to £3.2m, adding it was "in a strong position to deliver or exceed Sept FY'25 guidance", underpinned by c. 100% revenue cover for H2. Elsewhere, the balance sheet remains robust too, after completing an oversubscribed £3.7m fundraise in Oct'24 at 9.5p. In fact, net cash came in at £5.0m (or 5p/share) as at 31st Mar'25, equivalent to a modest H1 cash burn of £0.5m.
Sure, the orderbook fell sequentially to £13.1m from £15.3m in Sept'24, albeit this was still up 3% YoY, and is likely to further increase in H2 as several large contracts are set to be awarded for forthcoming clinical studies. Moreover, the company has recently secured a 3-year phase 1 clinical trial for Huntington's, worth £0.5m, adding to the backlog.
CEO Bram Goorden commenting: "It has been a good 6 months. The new strategy is bearing fruit, with 2025 trading showing a growing trajectory, [whilst equally] putting the Company in a strong position to deliver or exceed guidance. It is early in the execution of that strategy with the full impact expected to become more visible across the second half of 2025 and into 2026. The expansion of the IXICO biomarker Platform into more therapeutic areas and more verticals offers an exciting opportunity to realise a greater proportion of the significant potential of the technology".
In terms of the numbers, the Board is aiming to increase turnover to £10m over the next few years, with breakeven at around £8.5m. 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.
Finally, at 9p the stock trades on less than 1x EV/revs - which looks far too cheap for an IPR rich and rapidly expanding life sciences stock. Especially when compared to the 2023 takeovers of Instem (clinical trial software) and Medica (radiology services) on multiples of 3.0x-3.5x EV/sales.
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