FY23 results ahead of expectations

ECO Animal Health Group reported revenue for the year to 31 March 2023 of £85.3m (+4%YoY) and adjusted EBITDA of £7.2m (+34%YoY), ahead of market expectations. Revenue growth was led by S&SE Asia (+42%YoY) and LatAm (+15%YoY). Gross profitability improved from a 42.7% margin in FY22 to 45.0%, whilst the (adj.) EBITDA margin was also up from 6.6% in FY22 to 8.5%. The year closed with net cash of £21.7m, with cash from operations of £15.9m (FY22: £(0.5)m), in addition to which the Group retained £

FY23 ahead of expectations

Strong demand in key territories in H2 brought FY23 results in slightly ahead of expectations, with a notable beat on cash as tied up working capital unwound. The outlook remains positive and management are cautiously optimistic for the year ahead. We make no material changes to our forecasts. With new product launches on the horizon coming ever closer, ECO is approaching a potentially transformational inflection point later this year. We stay at Buy with an increased TP of 268p.

Positive surprises in year-end trading update

Eco’s pre-close trading update confirms revenue and EBITDA are ahead of current market expectations for FY23 that had previously anticipated modest growth relative to FY22. The better-than-expected results are being driven by an unexpectedly strong final quarter for Aivlosin in China combined with continued growth in South/Southeast Asia and Latin America. We now expect FY23 sales of £84.7m and an adjusted EBITDA of £7.0m based on our interpretation of the statement. With an EV of £66m, Eco cu

Hybridan Small Cap Feast 23/11/2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022. AT85 Global Mid-Market Infrastr

In line interims should reassure

Interims are in line with expectations and should reassure, particularly given the strong mid-teens growth ex-China. Improved pork prices should be supportive of a recovery in China in H2 and management remains cautiously optimistic over the full year outlook. New product development activities continue to plan, and should start to contribute from FY25 onwards. Our forecasts, Buy recommendation and 246p Target Price (2.0x EV/Sales) are unchanged. After recent weakness, the shares now stand at a

ROW growth offset by volatility in China

However, the company reports strong underlying growth in other regions, led by mid-teens growth in the Americas and South East Asia. £23m of funding headroom gives the company plenty of scope to continue its strong R&D program, diversifying away from dependence on Aivlosin sales in China. Revenue and margin estimates for FY23/24E have been revised as a result of ongoing weakness in the Chinese market and the impact of the sales tax issue revealed earlier this month. However, we continue to see s

Trading update triggers share price fall

The statement also flagged up two financial issues which had recently emerged: that it will have to make a provision for a possible but unanticipated sales tax sales liability and treat certain previously capitalised development costs as an expense. The impact of these two items will be largely offset by exchange rate gains and ECO expects to report sales in excess of £82.5m and EBITDA of £6.5m, both broadly in line with consensus. Current trading has been weak in the key Chinese market and

Update ahead of results

Ahead of its upcoming results, ECO has issued an update flagging an issue around a sales tax liability and the treatment of certain items of capitalised development, offset by a foreign exchange gain will result in it reporting FY22 Adj EBITDA of ~£6.5m vs SCMe £7.1m. It has also indicated trading in China has been difficult in Q1 FY23, particularly with the large producers, but margins have improved on mix. Trading in the Rest of the World has been strong YTD. Given the proximity to the results

ECO Animal Health - Collaboration to develop poultry red mite vaccine

ECO Animal Health has established a research collaboration with Moredun Research Institute aimed at developing a potential first-in-class vaccine against poultry red mite, a blood-feeding parasite with welfare and production implications for egg-laying hens. The move represents ECO’s second new academic R&D collaboration this year and follows an agreement signed with Imperial College last month to develop vaccines against porcine infectious diseases. Moredun is an independent, although largely

Encouraging expansion of vaccine R&D pipeline

ECO Animal Health has undertaken what represents a potentially important expansion of its R&D pipeline via a collaboration to develop veterinary vaccines against three porcine infectious disease targets using a novel self-amplifying RNA (saRNA) technology developed by Professor Robin Shattock of Imperial College London. The collaboration will assess saRNA-based veterinary vaccines against two viral and one bacterial infection in ECO’s validated swine disease models with a view to selecting candi

Partnership adds novel saRNA technology to pipeline

ECO has entered into a research partnership with Imperial College London to assess veterinary applications for its novel saRNA platform technology. This is the next generation of RNA-delivered medicines with a broad range of potential applications in vaccines and other therapeutics, crucially at a lower cost than existing mRNA technologies. It adds to ECO’s pipeline and strategy to diversify the business alongside lead product Aivlosin, which we continue to believe will be transformative for the

Short term pain for long term gain

ECO’s FY22 trading update is encouraging in so far as trading in China appears to be normalising. As a result, revenues and margins are tracking in line with revised expectations. As outlined at its recent CMD, ECO has an exciting pipeline of new products in development. Investment is therefore continuing at an accelerated level, which will result in lower EBITDA than previously expected. We update our forecasts accordingly, but continue to see scope for a transformed business as these new produ

LIBERUM: Aptamer* - Prelims supports growth projections

LIBERUM: Aptamer* - Initiation - Build better binders

LIBERUM: Futura Medical: The Futura's coming

Update on Life Sciences expansion

Despite continued strong revenue growth from the existing Point-of-Care and Life Sciences activities, it is now apparent the new capacity expansion programme for enzymes fermentation will not contribute to revenues this year. As a result, management is now guiding to FY23 group revenues of ~£53m and Adj EBITDA of ~£10m, both around £4m lower than previous expectations. We update our forecasts accordingly and expect more information around the shape of the revenue ramp up in FY24 at the upcoming

Destiny Pharma plc+ (DEST, House Stock at 57p) - Primed to go

LIBERUM: hVIVO plc: H1 weighting translates into upgrades

Patent opposition withdrawn

POLB announced today announces that the opposition to one of its European patents (Immunomodulator I) that was filed by a third party is to be withdrawn. In the pharmaceutical industry it is not unusual for patents to be challenged. POLB had previously disclosed in September 2021 that the Immunomodulator I European patent had been opposed but this has now been resolved. We maintain our BUY recommendation and 21p PT.

Hybridan Small Cap Feast - 04 Sep 23

4th September 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obj

Hybridan Small Cap Feast - 14 September 23

14th September 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment ob

Interim results

Belluscura has reported interims in line with our expectations and notes strong momentum across its product range, particularly the DISCOV-R, and ‘transformational' progress in its global roll-out after signing Agreements with InnoMax and McKessen.

Warpaint London+ (W7L, House Stock, 303p) - Stand-out FY23A interim results – forecasts unchanged

Destiny Pharma - Late-stage assets continue to be in focus

Destiny Pharma’s H1 2023 interim results provided an overview of what has been a busy period of positive activity for the company. The group strengthened its balance sheet through the completion of an equity fundraise, generating £7.3m in gross proceeds, ending the period with a net cash position of £9.8m. Management has guided that the current cash reserves provide an operating cash runway into Q1 2025. In our view, given the currently turbulent biotech financing environment, the successful rai

Morning Note – 20 September 2023

Artificial intelligence in UK biopharma and healthcare 11/09/2023

Artificial intelligence (AI) continues to accelerate at full speed, first by imitating the workings of a human brain and now it is drawing concepts of evolution, sometimes with synthetic data, artificially manufactured for training purposes or for privacy protection, and sometimes not even with human intervention. In this note, we examine how AI is being developed and applied by the NHS and UK mid/small cap companies for the benefit of human health and wellbeing. AI in drug discovery and devel

Creo Medical Group - Paradigm shifting

Creo Medical has reported its results for the 6 months to June 2023. As pre the recent trading update, revenues in the period were £15.7m, supported by growth from the Core Creo products and Endotherapy consumables. Gross profit increased, though gross margin declined marginally due to revenue mix. Creo’s cost base continues to fall supporting reduced operating losses. Cash at period end was £26.5m with £4.5m of R&D tax credits received post-period. The company expects to maintain its growth tra