Accelerated business expected
With a strong product pipeline in Circulating Tumor Cells (CTC) based early cancer detection and treatment monitoring and the integration of AI into the existing platform, as well as secure funding from Atlas Capital Markets, we see Ikonisys to be well on track to expand its global reach and to meet our long-term financial targets. We are confirming our Buy rating for the shares of Ikonisys SA. Our target price of EUR 4.50 is based on our three-stage DCF entity model (base case scenario). In a Monte Carlo analysis we used alternative sales and earnings scenarios and calculated equity values in a range between EUR 45.1m (10% quantile) and EUR 67.6m (90% quantile), which translate into price targets between EUR 3.50 and EUR 5.30 per share (fully diluted).
Ikonisys published its annual report for the fiscal year 2022. Driven by first sales of the Ikoniscope20, mainly in the US, Ikonisys generated revenues of EUR 0.617m, significantly above previous year’s levels (2021: EUR 0.365m, +68.9% YoY), but well below our forecast of EUR 1.310m. With product sales of EUR 0.385m, the shortfall is mainly caused by a longer than anticipated sales cycle. With product sales below our forecast, maintenance sales (EUR 0.197m) and sales of reagents (EUR 0.018m) also did not meet our estimates.
The operating result (EBIT, reported) in 2022 was EUR -2.638m (2021: EUR -0.564m), in line with our expectations and significantly impacted by sales and marketing start-up costs in addition to R&D expenses related to the Ikoniscope20 and the newly launched Ikoniscope20max, which includes a high-volume slide loader that is particularly adapted for laboratories with high processing volumes.
Net financial position at the end of 2022 was EUR 0.094m. Additional financing needs can be served from the financing agreement with Atlas Capital Markets which totals EUR 5.1m and was concluded recently, yet only a small fraction has been drawn according to our view.
Around 80% of the market volume is generated by the sale of reagents and consumables and can thus be classified as recurring. Reagents dominate the in vitro diagnostics market. The growth in this submarket is driven by an increasing demand for rapid, accurate, and sensitive tests, as well as the demand for self-testing and point-of-care products. We expect this segment will grow significantly at Ikonisys.
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