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Northland Capital Partners View on the City - Motif Bio; Savannah Resources; Venture Life Group

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MOTIF BIO
(LON:MTFB)

SECTOR – HEALTHCARE

RATING – BUY*

MARKET CAP – £99m

CURRENT PRICE – 33p#

ANALYST: LIAM GASCOIGNE-COHEN

 

Year-end Dec

2016A

2017A

2018E

2019E

 

Revenue (£m)

-

-

 

 

EBITDA (£m)

(39.71)

(38.02)

 

 

Adj. pre-tax Profit (£m)

(40.32)

(44.79)

 

 

Adj. EPS (p)

(34.60)

(19.35)

Under

review

DPS (p)

-

-

 

 

Net Cash/(Debt) (£m)

15.53

(4.53)

 

 

P/E (x)

-

-

 

 

Dividend yield (%)

-

-

 

 

EV/EBITDA (x)

-

-

 

 

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Joint Broker to Motif Bio and therefore this information should be viewed as a Marketing Communication.

 

Motif Bio to Present Iclaprim Data at Upcoming Scientific Conferences

 

NORTHLAND VIEW

Motif Bio plans to present data on iclaprim, the Company’s lead antibiotic drug candidate, at the two following US scientific conferences.

§  IDWeek 2018 (San Francisco; October 5th 2018). Iclaprim data is to be presented as a poster, entitled: A Pooled Analysis of Patients with Wound Infections in the Phase 3 REVIVE Trials: Randomized, Double-blind Studies to Evaluate the Safety and Efficacy of Iclaprim versus Vancomycin for treatment of Acute Bacterial Skin and Skin Structure Infections.

§  World Anti-Microbial Resistance Congress, (Washington, DC; October 25th 2018). David Huang, Chief Medical Officer at Motif, is to deliver a keynote address entitled: Updates to Iclaprim clinical development program.

§  The FDA has accepted iclaprim’s New Drug Application for the treatment of acute bacterial skin and skin structure infections (ABSSSI) and has set a target approval date of 13th February 2019.

As Motif prepares for the drug’s potential commercial launch, participation in these events, which are attended by scientific experts and industry players, allows Motif to raise the profile of iclaprim as a potential therapy for ABSSSI patients.

 

COMPANY DESCRIPTION

Clinical stage biopharmaceutical company specialising in the development of novel antibiotics.

 

 

SAVANNAH RESOURCES (LON:SAV)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £65.9m

CURRENT PRICE – 7.55p#

 

Year-end Dec

2016A

2017A

 

 

 

Revenue (£m)

-

-

No forecasts provided

EBITDA (£m)

(1.8)

(2.8)

Adj. pre-tax Profit (£m)

(1.8)

(2.8)

Adj. EPS (p)

(0.46)

(0.53)

DPS (p)

-

-

Net Cash/(Debt) (£m)

0.7

1.2

P/E (x)

-

-

Dividend yield (%)

-

-

EV/EBITDA (x)

-

-

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at prior trading day close. *Northland Capital Partners Limited acts as Nomad and provides commissioned research coverage to Savannah Resources and therefore this information should be viewed as a Marketing Communication.

 

12 hole drill programme underway in Oman

                                                                                                                                    

NORTHLAND VIEW

  • SAV began a 12 hole, 1,065m drill programme at two prospective deposits, Bayda (Block 4) and Hara Kilab (Block 5), in the Sultanate of Oman, targeting extensions to existing mineralisation and to build upon current resources. Drilling is expected to be complete in Q4 2018.
  • Bayda is a 2 hole drill programme totaling 560m, testing the area below the historical intersection of 12.5m at 2.9% Cu from 185m (previously mined 1982-1993 producing 1Mt @3%Cu), in an interpreted mineralised envelope with a potential 50m width.
  • Hara Kilab is a 10 hole, 515m drill programme with the intent to convert the current mineralisation into  Mineral Resource Estimate and target potential extensions along strike and down dip of the existing mineralisation (previously explored by Prospection in the 1970’s, then JICA & Gentor). This includes a historical drill hole intersecting 9.15m @ 2.78% Cu and 0.39% Zn.
  • SAV earns a 65% shareholding in the Omani company, Al Thuraya LLC, the owner of the Bayda (Block 4) project, and is a 65% shareholder in Al Fairuz Mining, the holder of the Hara Kilab (Block 5) licence.

 

In line with the company’s strategy to feed a hub and spoke mine development, SAV began its Omani drill programme. This programme is aiming to further define Mineral Resources by targeting extensions to existing mineralisation centred around the copper deposits at Blocks 4 and 5, two of the more promising deposits that have, so far, received limited contemporary drill testing. SAV continues to await the much anticipated grant of Mining Leases over the Mahab 4, and Maqail South copper deposits.

COMPANY DESCRIPTION

Savannah Resources is an energy metals group with copper-gold projects located in Oman, lithium projects in Portugal, and a operates a mineral sands project in Mozambique that is a JV with Rio Tinto

 

 

Venture Life Group (LON:VLG)

SECTOR – HEALTHCARE

RATING – BUY*

MARKET CAP – £39.8m

CURRENT PRICE – 47.5p#

TARGET PRICE – 100p

ANALYST –BARRY GIBB

 

Year-end Dec

2017A

2018E

2019E

2020E

 

Revenue (£m)

16.1

18.4

22.0

24.4

EBITDA (£m)

1.9

2.2

3.4

4.7

Adj. pre-tax Profit (£m)

0.1

0.5

2.3

3.3

Adj. EPS (p)

(1.0)

0.4

2.1

3.3

DPS (p)

0.0

0.0

0.0

0.0

Net Cash/(Debt) (£m)

(6.3)

6.8

7.2

8.9

P/E (x)

-

118.8

22.6

14.4

Dividend yield (%)

-

-

-

-

EV/EBITDA (x)

24.3

15.0

9.6

6.6

 

SOURCE: Northland Capital Partners Limited estimates. #Priced at market close, *Northland Capital Partners Limited acts as Nomad and Joint Broker to Venture Life Group and therefore this information should be viewed as a Marketing Communication. 

 

Interim Results Anticipate a Strong Second Half Performance

 

NORTHLAND VIEW

§  Venture Life announces its unaudited interim results for the six months ended 30th June 2018. As had already been detailed in its trading update of 16th August, the unaudited H118 interim results include revenues up by 6% (to £8.3m) driven entirely by organic growth. In line with expectations, EBITDA for the period also increased to £0.7m (H117: £0.5m), adjusted loss per share reduced to 0.4p (H117: adjusted loss of 0.9p), while cash at period end was £1.5m (31 December 2017: £1.4m).

§  Commercial highlights included a 37% increase in UK listings of UltraDEX supported by new launches, along with six new international partnering deals signed on products that included UltraDEX, Mycoclear and Procto-eze. The extension of the Group’s partnership with Alliance Pharma also added €1.6m of annualised revenues, with the agreement term now stretching to 2025.

§  The second half has already seen the successful placing of new shares at 40p, raising gross proceeds of £18.75m (£17.5m net of expenses). This was used to fund the £4.2m cash acquisition of the Dentyl mouthwash brand, along with debt repayment of £3.7m while leaving a significant cash resource to both fund further organic growth and for the continued building of its Brands business through strategic M&A. Significantly, Venture Life’s partner agreement with La Brosse et Dupont has also been extended into Spain, Portugal and Belgium, meaning UltraDEX is now partnered in 15 countries.

August’s placing and acquisition was a transformational event for the Group. Having entered its second half with a significantly stronger order book, VLG’s international distribution and development platform will continue to drive organic growth while, in tandem, it has funded what Northland believes will become a step-change in its high margin Brands business.  This, in turn, is expected to considerably improve Venture Life’s underlying quality of earnings, operational visibility and financial leverage ratios. Having achieved this at the expense of just a modestly higher post-transaction 2019E EV/EBITDA multiple underlines the opportunity the Company is now seizing. Northland considers this has yet to be reflected in the share price.

 

 

COMPANY DESCRIPTION

Venture Life Group plc is a consumer healthcare company. The Group develops, manufactures, and commercialises self-care products which target the ageing population.

 

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