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Richard Williamson

bet-at-home - German regulation looks positive (at last)

After years of uncertainty, all 16 German states have agreed in principle that the July 2021 Gambling Treaty will include a unified approach to allowing e-gaming (casino and poker). This follows recent news that e-gaming was to be banned altogether. This new development is clearly a very positive step forward for the industry. The announcement is particularly important for bet-at-home (BAH), which derives c 20% of net gaming revenues (NGR) from German e-gaming. We will update our estimates at FY19 results in March, when we expect further clarity.

Richard Williamson

EMIS Group - On track

EMIS’s FY19 trading update was reassuringly straightforward. H219 revenue and profit growth was similar to the rate in H119, which is within the company’s target for mid- to high single-digit growth. Both divisions made steady progress, with EMIS-X development ongoing and restructuring complete. We maintain our forecasts; FY19 results are due on 18 March.

Fiona Orford-Williams

The Mission Marketing Group - Last minute surge

MISSION’s full year trading update confirms that the group performed in line with market expectations, with the last weeks of the year particularly busy. Working capital is therefore likely to have increased net debt to more than the £2.1m previously anticipated by the market, but still within the 0.5x net debt/EBITDA target. Management continues to expect the group to be net cash positive by end FY20e, despite higher investment in both technology and geographic expansion. Unchanged market forecasts for FY20 and FY21 show good progress at revenue and margin levels. The valuation remains at a s...

InMed Pharmaceuticals - Developing cannabinol (CBN)

InMed has announced that the cannabinoid that is the basis for both its epidermolysis bullosa (EB) and glaucoma programs is cannabinol (CBN). This puts InMed in an attractive position (especially from an intellectual property perspective) as other medical cannabis programs are focused on either tetrahydrocannabinol (THC) and/or cannabidiol (CBD) for a variety of indications. Importantly, from a regulatory perspective, CBN is believed to have either slight or no psychoactivity, but it does have a number of beneficial effects including reducing inflammation and intraocular pressure (IOP).

Targovax - Positive signals from Phase I/II mesothelioma trial

Today, Targovax reported randomised data from the Phase I/II study (n=31) in unresectable malignant pleural mesothelioma. The results confirmed a good ONCOS-102 safety profile. The key clinical response endpoint mPFS was 8.4 months (active arm) vs 6.8 months (control) and above the historical control of 5.7–7.3 months. mPFS results are still early, with many patients not included in the analysis (additional data will serve as a potential catalyst later in 2020). Overall, as we described in our last note, mesothelioma is one of the most difficult cancers to treat, with classic chemotherapy stil...

Record - Positive AUME flows and performance fees

Record’s Q320 update was positive, with a 4% inflow of assets under management equivalent (AUME) and the crystallisation of a performance fee in the period. AUME flows have now been positive since Q120, totalling $4.5bn (+8%) over nine months. The performance fees in this quarter follow on from a material contribution during FY19, reflecting value added for clients. Record continues to innovate and invest to counter competitive pressure, which has contributed to broadly stable management fee rates.

Herantis Pharma - 2019 progress made; next up, CDNF data

Herantis Pharma progressed on multiple levels in 2019. With the main study of the Phase I/II cerebral dopamine neurotrophic factor (CDNF) study now complete in Parkinson’s disease (PD) (top-line safety and efficacy data are expected in Q120), positive trial data could validate the research efforts and enable future partnering opportunities. Advances have been made on the development of a non-invasive next-generation CDNF (xCDNF); three lead candidates have progressed into lead optimisation stage. The Phase II Adenovirus gene therapy for the treatment of LymphEdema (AdeLE) study evaluating Lymf...

Richard Williamson

Carclo - Stabilising the business

Carclo’s H120 results show that the remaining businesses following the exit from Wipac in December provide a basis for a sustainable group going forward. The continuing businesses generated £56.1m revenues and £3.3m underlying EBIT. However, there remain significant challenges in reaching agreement on long-term funding with the lending bank and pension trustee. Our estimates will remain under review until these are resolved.

RhoVac - Phase IIb BRaVac study enrolling patients

RhoVac’s Phase IIb BRaVac study with RV001 (a cancer immunotherapy against RhoC) is up and running with patients being recruited in six European centres since November 2019. In total, over 175 prostate cancer patients, who experienced biochemical failure after a curative therapy (surgery or radiation therapy), are expected to be enrolled by the end of Q320. The primary endpoint is time to PSA doubling or clinical progression and key interim results are expected in H221 (the treatment part of the study), with follow up data due in H222. Besides the BRaVac study progress updates, RhoVac released...

Acacia Pharma - Cosmo provides cash injection

Acacia Pharma has announced a deal with Cosmo Pharmaceuticals to acquire the US rights to sedative ByFavo (remimazolam). This is a multi-faceted deal – the addition of ByFavo broadens Acacia’s US commercial pipeline beyond key asset BARHEMSYS (post-operative nausea and vomiting (PONV)). Both assets are under FDA review, with imminent PDUFA dates (BARHEMSYS 26 February, ByFavo 5 April) and potential US launch during H220. Critically, Cosmo’s equity investment of €10m plus access to loan facilities (up to $35m) for Acacia bridges its short-term funding gap, enabling it to expand its much-needed ...

Henderson International Income Trust - Overseas income fund with attractive total returns

Henderson International Income Trust (HINT) was launched in 2011 with the aim of enabling UK-based investors to diversify their sources of income by investing overseas. As shown in the chart below, the UK market suffers a high degree of dividend concentration, with the top 10 dividend payers accounting for 55% of total UK dividends in 2018 compared with 9% for the top 10 payers globally. Since launch, HINT’s investors have enjoyed total returns of c 10% a year, supported by well-covered dividends that have grown at a compound annual rate of 5.2%. While manager Ben Lofthouse’s value-oriented in...

Egdon Resources - Wressle and Resolution updates

On 17 January 2020, Egdon announced the Planning Inspectorate has upheld the company’s appeal and granted planning consent for the development o