Ixico sees clear path to become major pharma services provider

A 'wide and deep' portfolio of data around neurological diseases is very valuable

Ixico shares are at a five-year high

“We are not a start-up, we have been around ten years and we have big pharma clients that keep coming back.”

So says Giulio Cerroni, the chief executive of medical imaging specialist, Ixico PLC (LON:IXI).

Numbers recently reported by the AIM-listed business underline the point.

A trading update indicated revenues would rise 40% this year to £7.6mln, which was a healthy upgrade on the impressive 22% uptick seen at half-year.

Orders are worth £15.9mln, while there will be a first-ever annual underlying profit.

Cerroni believes Ixico has now made the transition from a business with good science but limited options into a scalable, commercial operation.

Everything was bespoke previously, he says, but the platform we have now is ‘proven, recognised in the industry and trusted’.

Clever algorithms that analyse the images produced by MRI and PET scans are at the core of what Ixico does.

They help big pharma companies interpret how new drugs are performing in trials for a range of neurological diseases.

Originally, the focus was Alzheimer’s but the indications have broadened recently to include Huntington’s; Parkinson’s; MS and cerebral palsy.

Cerroni adds that one of the strengths is its data pool.

A 'wide and deep' portfolio of data around neurological diseases is very valuable, he says.

A pharma company might have carried out a trial five years ago, but algorithms developed since can give a  completely different aspect.

"It’s not just having the data, it is how it is looked at."

That capability is unique to its algorithms, he believes.

“We can tell a pharma you might want to look at this trial again, using a new algorithm.”

Also working in the company's favour is an ageing population, which is a big macro driver to develop treatments for brain diseases in the elderly. 

Moving into the rare disease space also plays into the company’s strengths of ‘developing proprietary artificial intelligence and data analytics’. 

Margins have picked up as the proportion of data analytics work has increased, a trend that Cerroni sees continuing.

“Where we are succeeding is in big trials with pharma in neurosciences.”

Going forward, the plan is threefold.

Cerroni wants to boost its presence in North America as it is the world’s biggest clinical trials market.

At the operational level, more automation of the platform is planned with innovation the third leg.

“A highly differentiated portfolio of algorithms using more analytics on the same level of data.”

Investors, too, have started to buy into Cerroni's view that the company has the ‘benefits of big pharma but at a much lower risk’. 

At 65p, the shares stand at a five-year high, with the company valued at just shy of £30mln. 

Quick facts: IXICO PLC

Price: 90.1 GBX

Market: AIM
Market Cap: £42.47 m

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