Trinity Delta Recent deals provide evidence of assay traction

Recent deals provide evidence of assay traction

Lighthouse | 21 April 2023

Share this note

ANGLE’s FY22 results are as expected following the January business update. FY22 revenues were £1.0m (FY21: £1.0m). End-Dec 2022 cash was £31.9m, which should provide funding into H224. Revenues in Q123 are showing positive momentum, already strongly ahead year-on-year.
Pharma services is likely to be the key revenue growth driver in the near-term from the current small base. The new contract with Crescendo Biologics will utilise ANGLE’s recently launched Portrait Flex assay in the expansion cohort of an ongoing Phase I prostate cancer trial. This deal builds on the positive traction within this business, which was only established during 2021 to provide clinical trial services in oncology for patient targeting and monitoring. With multiple new customers and projects in the pipeline, including with major pharma, we expect additional contracts to be executed this year.
ANGLE has also signed an assay development partnership with BioView, focused on a Parsortix-based HER2 test, which could be used for longitudinal monitoring of HER2 status in breast cancer patients from a simple blood sample. With new therapies to treat low HER2 as well as HER2 positive patients, optimising their use to target the most appropriate patients is becoming increasingly important. Development work is anticipated to take around a year and is expected to generate c.£1.2m of revenues for ANGLE. There would be major future revenue upside if this assay is successfully adopted into routine clinical use, which will likely attract larger commercial partners, in our view.
Additional deals will be key to demonstrating continued commercial traction with Parsortix, and active discussions remain ongoing with a number of potential partners and customers. Furthermore, development work on the first LDTs (laboratory developed tests) for prostate and ovarian cancer is ongoing, with these potentially becoming commercially available in 2024. This includes the prostate cancer clinical trial, which is expected to complete this year with topline data potentially available around year-end; and selection and verification of a third-party downstream molecular analysis platform for the ovarian cancer LDT.

Trinity Delta view: Recent commercial related activities, with a new pharma services contract, plus an assay development partnership, are encouraging steps towards securing potentially significant future Parsortix revenues. Both provide important external validation of Parsortix, and as this continues to build, future deal execution should be facilitated, in our view. The opportunities being explored are sizeable and will also help to expand near-term revenues. Positive revenue momentum is already evident in Q123, according to management. In the near-term, we expect ANGLE to remain focused on growing the Pharma services business, attracting industry partners for downstream analysis, and completing the remaining LDT development work ahead of potential launches from 2024. Our DCF-based ANGLE valuation is £253m, equivalent to 97p per share.

Lighthouse

21 April 2023


Price	20.5p
Market Cap	£55.8m
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.