IXICO PLC (LSE:IXI, OTC:PHYOF, FRA:PYPB), the neurology imaging and data analytics specialist, is raising £10 million to fund a strategic push beyond its established contract research business, with Cavendish arguing the move could unlock a market opportunity up to ten times larger than the company currently addresses.
The fundraise, structured as a conditional equity placing with a retail offer open to raise up to a further £0.5 million, will bankroll a shift towards what the company calls a "TechBio" model, in which its proprietary AI-driven IXI Platform is licensed or subscribed to by larger companies operating in the broader clinical trial management and clinical decision support markets.
IXICO's existing business operates as an imaging contract research organisation, or iCRO, providing brain scan analysis and imaging biomarker services to pharmaceutical companies running clinical trials focused on neurodegenerative conditions including Alzheimer's, Parkinson's and Huntington's diseases.
Imaging biomarkers are measurable characteristics visible in medical images, such as MRI scans, that can indicate the presence or progression of a disease, helping drug developers make go or no-go decisions on clinical assets.
Cavendish, the company's house broker, estimates the existing iCRO addressable market at around $100 million, against which IXICO has built revenues of approximately $10 million.
The TechBio strategy targets clinical trial services worth $300 to $450 million and clinical decision support worth $700 to $950 million, expanding the total opportunity to as much as $1 billion.
The broker argues that licensing revenues, being technology-driven rather than people-intensive, should attract valuation multiples of between 4x and 7x, well above the 1x to 3x typical of contract research organisations, creating meaningful valuation upside as the model matures.
A collaboration already announced with Medidata, a clinical trial solutions provider owned by Dassault Systèmes, represents the first live implementation of the strategy.
Cavendish retains a buy rating and 26p target price on IXICO, implying 230% upside from the current share price. IXICO is a corporate client of the broker.
The shares were flat at 7.88p.