Trinity Delta FY22: a year of two very distinct halves

FY22: a year of two very distinct halves

Lighthouse | 5 January 2023

Share this note

ANGLE’s business update outlines the progress made in 2022, including the FDA clearance of Parsortix to harvest cancer cells from patient blood for subsequent analysis in mBC (metastatic breast cancer) and the highly positive ovarian cancer data. Management’s strategy remains focused on making Parsortix broadly available to industry and patients. However, market conditions are notably challenging and have prolonged partnering discussions and delayed commercial uptake. Headwinds include broad pricing and cost pressures impacting all industry participants, and funding constraints, especially affecting smaller healthcare companies.
Despite these challenges, active discussions are ongoing with a number of potential partners and customers for Parsortix. This includes the Pharma Services business, the main near-term revenue driver, where multiple new customers and projects are in the pipeline, plus the expansion of existing customer contracts. In addition, collaboration discussions on the combination of Parsortix samples with external downstream analysis technologies are progressing.
Other key updates include: (1) closure of the Canadian facility has been completed in an orderly manner, which should lead to £2.6m of cost savings in 2023 and £4m per annum from 2024; (2) decision to focus on third party downstream analysis rather than the in-house HyCEAD Ziplex platform; (3) the ovarian cancer assay will be optimised on a third-party molecular analysis platform; (4) prostate cancer studies expected to complete in 2023; (5) ISO accreditation has been received for the US lab and is expected shortly for the UK lab, and US CLIA accreditation will be completed once the first laboratory developed test (LDT) is offered.
End-December 2022 cash is expected to be £32m, in-line with current consensus and providing funding to mid-2024. FY22 revenues are expected to be just above £1m, with c £0.5m of anticipated revenues delayed into 2023. FY22 operating loss is estimated to be around £22m, also in-line with consensus. Revenues in FY23 are expected to grow but be materially lower than current consensus of around £5m owing to the adverse market conditions described above.

Trinity Delta view: Despite significant progress during 2022, including the FDA clearance of Parsortix and the highly positive ovarian cancer data, broader market headwinds dictate a more cautious stance into 2023. These challenging conditions have led to increased focus on cost control at ANGLE’s potential partners and customers, causing delays in commercial uptake. Consequently, revenues are unlikely to accelerate as rapidly as previously anticipated. Regardless of these external factors, ANGLE remains confident in its commercial strategy to make Parsortix broadly available to industry and patients, which is focused on three key areas: pharma services, corporate partnerships, and a product-led business (either directly or via distributors). We suspend our valuation and forecasts for ANGLE pending a review of our financial model.

Lighthouse

5 January 2023


Price	48.0p
Market Cap	£130.0m
Primary exchange	AIM London
Sector	Healthcare
Company Code	AGL

Corporate client	Yes

Company description

ANGLE is a specialist diagnostics company. Its proprietary Parsortix technology can capture and harvest very rare cells, including CTCs (circulating tumour cells), from a blood sample. The FDA clearance for its clinical use to guide precision cancer care should open up multiple commercial opportunities.

Analysts

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043

Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041

Disclaimer

Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publicly available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at www.fisma.org. TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.