Ixico (LSE:IXI) — Final Results for the year ended 30 September 2021

0:01 Good afternoon, ladies and gentlemen. Welcome to the IXICO PLC final results for the year ended 09/30/2021 investor presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated on the hand corner of your screen. Simply click q and a, scroll to the bottom, type your question, and press in. Company may not be in a position to answer every question received during the meeting itself. The company review all questions, and this is then published responses where it's appropriate to do so. These will be available via your investment company dashboard, and you'll be notified once they're ready for your review.

0:33 I'd also like to remind you this presentation is being recorded. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Grant Ness, CFO, and Judeo Ciarani, CEO of IXICO PLC. Good afternoon. Good afternoon, and welcome to everyone. Grant and I will be presenting today, and we'll we'll just switch off our videos as we present, and we'll come back once we've gone through the the slides. So if we move to the slide deck, go to the first slide. If you can just progress the slides forward. Okay. So the next slide talks to delivering on our purpose, and and the the key point here is I wanted to emphasize how invested IXICO as a company is in our meaningful purpose, and and that is to advance medicine in human health by turning medical imaging data, in our case, brain scans, into clinically meaningful information.

1:29 In doing so, we enable our pharmaceutical clients to gain valuable insights to accelerate the development of new medicines in neuroscience. And and you'll see here some, some numbers around the reason why there's such a a large unmet clinical need in dementia, of which largest is, of course, Alzheimer's. But, obviously, neurological diseases is field much broader than just the dementias. But just to give you some some data points as to why this is a market that for a company like IXICO is large, growing, and where the, intensity around identifying medicines becomes more intense, and more pressing, with, underlying growth, drivers such as an ancient population globally. The the other point on this slide is to highlight that IXICO in in been in this space for over a decade now has built a very strong portfolio of relationships and collaborations with a number of organizations, beyond just the clinical contracts that we have with our clients.

2:29 I'm just highlighting four here, but in particular, I want to make the point that these are organizations that obviously have the world to choose from in terms of their partners. The global Alzheimer plat platform, which I'll refer to in a couple of slides time, but also FIRA are two organizations where IXICO has been chosen as their supplier of choice in terms of imaging support for their work. But then also there are consortium collaborations such as Critical Path Institute, ADME, and the Dementias platform. And the CHIXICO is a member and a partner in terms of ensuring that we as a company are very much at the forefront of developing new protocol designs and investigating new biomarkers that are relevant in neurological diseases.

3:18 And this this really plays to our strength in terms of being a scientific leader. And as I said, the the value here is in addition to helping us develop our portfolio of solutions, to to ensure that we are seen as a specialist premium, partner to pharmaceutical companies. It also means that we were able to associate ourselves with many of the leading key opinion leaders in each of the therapeutic areas, which is clearly very valuable to us as we look to grow our commercial business. Go on to the progress into the next slide. Another key point I wanted to highlight in terms of 2021, the the there was a very significant industry event was the approval in June of Biogen's ADUHELM.

4:05 And this is a a drug. It's the the first drug that's been approved in just under two decades, and it's the first drug that's been approved for for symptomatic patients. And it's a drug that's been approved, but there's been quite a bit of controversy about the approval, in particular around the fact that the clinical benefits for the drug are uncertain. It's a drug with known side effects, and there is also a requirement for further studies and post marketing surveillance to ensure that patients prescribed the drug are, of course, safe. But it it talks to also the significance of having to have a drug available to patients around the world that is is able to support them if they are suffering from from Alzheimer's.

5:00 Now this this is also been main reason why we've also seen the FDA provide breakthrough therapy designations for three other companies efforts in the same space, IXI, Lilly, and Roche. And and really the the Biogen precedent for the approval would suggest that any small improvement over the drug would potentially see additional drug approvals. And so, you know, we can all be assured that, these three companies are pressing very hard to be able to bring their drug to market.

5:34 And the the implications to IXICO of these these four companies', progress with the FDA is that we we anticipate this to mean additional investment in Alzheimer's research, but also not just from from large pharma, but also from early stage companies that see an opportunity to develop drugs for Alzheimer's. And these these drugs are all in the amyloid target therapy approach. But in addition to that, there's a much broader range of targets that pharmaceutical industry is now looking at. And whilst the Alzheimer's has always been one of the larger areas of spend in r and d for the pharmaceutical industry, the these approvals and therapy designations, we think are quite significant stimulus that provides further and additional opportunities for IXICO as we look to increase our market penetration within Alzheimer's disease.

6:38 On to the next slide, please. I also want to talk a little bit about GAP. I mentioned it earlier. And this is an organization that is has been North American based, has a very large network of partners, and and their their remit is really to enable new trial designs and new approaches to enable clinical trials to be run more efficiently, more cost effectively. And at the root of what they do also is identifying the right patients. And this is very valuable to the pharmaceutical industry. One of the reasons cited for the significant and spectacular failures in Alzheimer's in in recent years was that perhaps the right patients weren't being chosen.

7:23 I patients that were clearly suffering from Alzheimer's were were those that were predominantly put on to clinical trials, and the the feeling now is that those patients need to be identified much sooner, I. E, before they're actually indicating symptoms. And so an organization like GAP that is able to prescreen patients and provide a cohort of patients that are well identified and and characterized is clearly very, very valuable to pharmaceutical companies that are looking to run clinical trials in this space. And and not only are these companies interested, there are a number of of major pharmaceutical companies that you can see on this chart. You know, obviously, some of the ones I mentioned in the previous slides, but Roche, Takeda, AbbVie, you know, these are all companies that and and and also Biogen.

8:17 These are all companies that are actually invested in in hard dollars in supporting the the Biohomies trial, which is being run by by Gap. And and the Biohomies trial is a thousand patient trial. They're they're roughly halfway through that now. And IXICO has been, again, chosen as a partner of choice by by Gap to to provide PET reads for the study. And and the reason this is an important win for for us and an important collaboration and partnership for us is that, first of all, it significantly raises IXICO's profile in North America. It obviously clearly adds and provides us with additional touch points with many of these large pharmaceutical companies that we wouldn't otherwise have had as a small organization, And also provides us a showcase for our ability to extend beyond our traditional MRI capabilities to now also be offering PET studies, reads for Alzheimer's research. And PET is a is a is a a gold standard approach that is used to identify appropriate patients for Alzheimer's and and clearly are being associated with GAP and providing these services is a is a good case study for us as we talk to these and other companies in relation to choosing IXICO as a partner for them when they initiate their trials in the future.

9:45 Now at the bottom of this slide, there's in the bottom left hand corner, you can see there's a link there to a a webcast that was done in the in the last in the last week with the CEO, John Dwyer, of Gap, and he articulates very well the the purpose of the their organization, but also how IXICO is helping them achieve their objectives. I'd encourage you to to go to that. It's a short five minute clip. I'm sure you'll find it very informative. We're going to, I think, now the the financial slides from from Grant. Grant, over to you. Thank you, Giulio. So, good afternoon, everyone. On on my my first slide, this slide slide eight, what I'm gonna do is talk about the financial performance of IXICO, which has once again been strengthened across the year.

10:38 As we communicated to the market in October, the year has been a challenging one, both in terms of the ongoing impact of COVID-nineteen, but more specifically due to the impact of having our largest client trials descoped in March of this year. So on the back of that, we've been very pleased to hold our revenues at GBP 9,200,000 for the year, just a 4% contraction on the prior year, and completing a 25% compound annual growth rate within revenues across the last five years. Now, we emphasized during the year and again in October that it is in the nature of our industry for clinical trials to fail. And therefore, the growth path for a company operating in our space will inevitably have bumps along the way.

11:23 So it's really worth emphasizing that the ability for us to have successfully navigated those bumps during this year reflects the resilience we've built up in the business, but also reflects the growing overall market opportunity that we can see ahead of us. Now, significantly, as you can see from the middle graph on this slide, the ability for us to continue to generate strong gross margins was largely unaffected in the year. Now, gross margin of 66%, sustaining the position achieved over the previous two years, is in part because we continue to benefit from the high margin analysis work associated with the Phase III studies that were descoped during the year, but it also reflects the level of revenues achieved by the company at this scale attracting a level of operational leverage, which in itself supports a strengthening of margins.

12:17 Now, as we look forward into 2022, and I'll touch on this in more detail shortly, we do expect these margins to come under some short term pressure, as our revenue mix moves more to earlier phase trials, which have a reduced relative proportion of associated analysis requirement. However, the market opportunity for scale gives us the full confidence that the gross margins that we've seen in the past year and the couple of years before that remain eminently sustainable across the medium and long term. On the right of this slide, you can see the impact of building resilience into the business, managing the business carefully following the descope of client trials and the impact of a couple of one time benefits that have accelerated our EBITDA once again to new highs.

13:07 With £1,700,000 of EBITDA, we've achieved a 34% increase in EBITDA despite having recorded flat revenues, which gives us an EBITDA margin of just shy of 20%, which in itself is an excellent achievement, but also worth highlighting was the degree of EBITDA accretion that we highlighted twelve months ago we felt was possible in the business. All of that, of course, then feeds through to the strength of our balance sheet and the company's ability to generate operating cash, invest wisely and deliver improved returns. Now again, we've communicated in October that we do expect to see a contraction in EBITDA in 2022. The reasons for that is that we plan to continue to invest, we will see the impact of that change in revenue mix and also the removal of a couple of one time benefits seen in 2021.

14:01 However, all of that withstanding, the medium and long term opportunity we anticipate will deliver continued EBITDA growth both in real terms and from a margin perspective, as the increased scale that we believe we are able to access increases the operational leverage that we have available to us in the business. So the summary here is: we have delivered very strong revenues over a period of time we've continued to have strong margins but we do expect to see a little bit of a softening in the next twelve months before those start to build up again

14:34 and that's something really reflecting the rebalancing of our order book which I'll talk about in more detail shortly but also the opportunity for us as an organization to have moved from very significant losses in 2016 to continue that journey of increasing profits is something that, whilst we will see an expected reduction in 2022, is a trend that we expect to see for the long term. Moving on to slide nine. We felt that, as we did back in May at our interims and also when we did our training update in October, that following the descopes we've had in the year, there was value in spending more time talking about our order book, an area that we have had a number of questions from investors over the the period.

15:22 So we spent a little bit more time putting together some detail to provide to you today. Firstly, what I want to give you is the summary where, if you look at the left hand chart on this slide, over the last five years our order book has grown strongly to an order book at the end of September of this year, which was almost double the order book at the same point in 2016, despite the fact that we've delivered a 25% revenue CAGR compound annual growth rate across that same period Now we have though, as you can see, seen a reduction in the order book across the last twelve months from the all time high of 21,700,000 at the end of twenty twenty to 18,800,000 at the end of twenty twenty one.

16:11 And the graph on the right outlines the key movements in the year to explain what has driven that change. So on that graph on the right, the first thing to look at is the light grey box which reflects the £9,200,000 of revenues that we've recognized in the year despite the challenges of Covid and came out of the order book that we had at the end of September last year. Then the yellow cream coloured box reflects the fact that we've also suffered client trial descopes of £7,400,000 in the year, 7,100,000 of that relating to our largest client's phase three Huntington's disease studies, which we announced back in March, and a further £300,000 in minor trial changes with other clients.

16:57 And then on top of that, we had £100,000 of FX valuation move against us with the strengthening of the US dollar against the pound. Then to look to the right of that, you see the light turquoise bar, which importantly shows that we signed 13,800,000 of new client trials during the year. That constituted 16 new projects with 14 clients, nine of whom are new to IXICO. So, essentially, in a year of short term challenges for us, this is really a very significant long term win for the organisation. These new trials, as I'll show in more detail in the following slides, are across different trial phases, clients and therapeutic indications, and significantly diversify our order book something that we highlighted twelve months ago was a key priority for us as a business.

17:50 In winning this many new trials, the company has also provided with significantly more shots on goal in the coming years and I'll explain what I mean by that in a moment. The net of all of those movements in the year means that at the end of the year, we had an order book of 18,800,000, which if you take it gross to the trial descopes, reflects a book to bill ratio of one and a half times across the year, equivalent to a very positive win rate. So the the net message here is that we had some short term, bumps in terms of the client trial descopes, but actually underlying that, the ability for the company to sign new contracts grew in the year and put us in a better position at the end of the year as a result. And really to emphasize that point, just turning to slide 10.

18:40 This slide looks in more detail at the diversification of the order book that we've achieved in the last twelve months. So the chart on the left shows the order book across the last few years split by the trial phase, and then the graph on the right shows the order book split again across the last few years split by client numbers and the value of each client to IXICO. So what you can see here is that at the end of September twenty one, IXICO had a much more diversified order book in terms of both trial phase, where approximately even splits by phase were held compared to the dominance of phase three trials over the last three years and phase two trials in the couple of years prior to that and also a significant uptick in client numbers, where we had 19 clients in our order book at the end of September of this year compared to 12 a year ago and also, as you can see from the dark turquoise element of the bar, a much reduced reliance on our largest client, which is something we highlighted, was an ambition for us twelve months ago Now what's not shown here, but is also the diversification that we've achieved across the therapeutic indications Now, this also reflects an increase in diversification, with IXICO, as at the end of September this year, having 11 different therapeutic indications in its order book compared to five a year ago So the key message there is that whilst

20:10 we've encountered short term challenges and inevitably any company that has its three largest trials either descoped or halted within a period of six months or for reasons outside of our control, there is inevitably going to be an impact, a short term impact, in the ability of the company to deliver the level of revenues that it otherwise would.

20:33 But the expansion and diversity of the programmes that we have achieved in the year is really a very positive picture for the long term success of the company. In effect, what the company has done as it has rebuilt its order book in a very short timeframe and in doing so also reduced single client risk whilst providing a much broader scope for following early stage trials which, as you can see, the company has now a much greater number into later phases if the investigative drugs within those trials succeed in the clinic So what this means is that, from an IXICO investor point of view, there is a need for patience as the company rebuilds its revenues to the levels of growth delivered over the last five years and that will take more than a few months to achieve.

21:20 But actually, the company, having signed the number of contracts that it has in the last twelve months, is far better positioned to deliver this kick on in growth across the medium and longer term than it was twelve months ago. And I think this is an important point for investors and stakeholders to understand that, to a certain extent, the success that the company has had in diversifying its order book in the last twelve months risks being overshadowed by some short term impacts in terms of particular client trials failing, which is inevitable in the sector that we operate in.

21:52 But the point here is that the basis of trials that we have is now broader than it was twelve months ago. So whilst we will have a a short term retraction in terms of the growth rate that we've been seeing, that is something that is a short term issue rather than a long term issue where actually the opportunity for long term has only increased So moving to slide 11, I just want to spend a few moments highlighting the company's financial position The company has not only grown rapidly over the last five years from a financial performance point of view, but has also carefully protected and built its financial position to enable resilience and support long term growth, effectively acknowledging the risks of operating in the clinical trials space.

22:38 So, as a result, we can continue to hold a strong cash balance of £6,700,000 as you can see from the chart on the left, even after we've invested £2,200,000 in capital investment during the year, as you can see in the middle graph. We are essentially generating operating cash, we continue to be debt free and we have built the financial strength to continue to deliver our own investment plan despite the short term challenges faced in the last six months.

23:06 So, again, what this means is that not only is the market opportunity growing, as Julia outlined, but IXICO's technological offering has strengthened and our infrastructure investments are positioned as such that we are even better placed to leverage opportunities as they arise. So all of this has led, as shown on the graph on the right, to a further growth in our balance sheet with a net asset position increased by over £2,000,000 to £11,200,000 at the end of September.

23:35 Within that includes growth in working capital from CAD7.6 million to CAD8.1 million in the year, despite the fact that we've invested cash across the same period. We've also secured our London office lease for a further five years, based on much improved rental terms at a time when the opportunity was there to do so in what has obviously been a very uncertain rental market. So what does this mean for us as a management team is essentially we feel very positive and excited about the opportunity ahead of us. Despite the headwinds we've faced, and actually will continue to face in the short term as our rebuilt order book converts to revenues, and we continue to invest in the commercial traction that will accelerate the volume of new trials that we will bid for and hopefully win.

24:23 Just moving to Slide 12 and just before I hand back to Giulio, I just wanted to spend a few moments talking specifically about the significant investment we've made and continue to make in our Trial Tracker system So, we've been using Trial Tracker for over a decade and it's provided the organisation with a cutting edge platform to capture images from imaging sites all around the world, to quality control them to radiologically read them and analyse those images using our AI capabilities This not only facilitates the provision of wider services offering that we provide to our clients, but also provides a regulatorily compliant platform into which significant numbers of images are collected and organised in a coherent, secure, resilient environment.

25:11 The reason that's important is that in a world of appropriately increased focus on data protection, information security and where small margins in drug efficacy can be the difference between a trial failure or trial approval as has been shown by Biogen's aducanumabAduhelm drug earlier this year, as Giulio highlighted Clients having confidence that any risk of confounding effects in their trial are being minimized, by avoiding process error or quality error or data capture error is of the utmost importance Now, TrialTracker provides that confidence to our clients and and to ensure that we're well positioned to be able to continue to do so, whilst also putting ourselves in a position to continue the scaling of the business.

26:00 We feel and have seen that investing in the trial tracker platform is critical to achieving our goals for our growth So we've been partnering with Microsoft to develop our next generation trial tracker We're taking our technology forward to the cutting edge of cloud capabilities leveraging the Azure cloud infrastructure to develop a highly scalable, highly extensible platform that supports not only our current neuroscience analysis offerings but also provides opportunities for wider use beyond that We've invested almost £2,000,000 in the platform

26:34 over the last twelve months and anticipate this version of our trial tracker platform being ready for use on client projects during 2022. With that, we're fully committed to continuing to deliver on our technological offering to our clients. And really, this just underlines the confidence that we have in the market we see ahead of us, which continues to grow, driven by that aging population, by the fact there is that continued high unmet clinical need and the rapidly expanding cost to healthcare bodies globally, which is the result of these complex neurological conditions With that, I'd like to hand back to to Julio.

27:17 Thank you, Grant. So my my last three slides are are really around how IXICO creates value for for shareholders. And and, again, just taking a look at how our share price is one one metric, which obviously very relevant to to shareholders, is I kinda look at this and and obviously look at how the market responds to to news. And in in recent in recent months, we we've obviously taken quite a hit in our share price, and you can see that this time last year, our enterprise value was was valued at five times revenues, whereas until yesterday, it was more more like two times revenues. So and I and I look at this, and I obviously want to make the point that during this whole period, we've we've executed on our commercial strategy, our five point strategy, which I'll refer to in a moment.

28:14 And an actual fact, the you know, there there's a there's a time lag in terms of what we do and how that's reflected perhaps in the share price. But I really wanted to use this to to emphasize the fact that

28:28 as a management team, we're we're more focused on market traction and becoming more relevant to our clients and and be being confident that, the market will, judge us accordingly, once we can demonstrate, that we continue to have a track record of performance. And, clearly, five years of year over year performance is is a good place to start.

28:54 The other thing you can read from this slide, I think, is that you can see that there's very significant accretion to our p and l once those revenues start to flow through from from the trials that we win. And and so hence, the the reason now for us that the the biggest and best thing we can do to get back to that five times revenue valuation is to continue to do what we've been doing, which is basically connecting with our clients, connecting with our collaborators, and making sure that, you know, whenever there's an opportunity for someone to be appointed for imaging services in neuroscience that IXICO is the natural partner for them. So if we move, to the next slide, I just want to sort of highlight a couple of things.

29:43 The the first one being that, you know, clearly, we've strengthened our market position in the past five years. And and the other point to make is that that's been a 100% driven by organic growth. And I think that's a testament to the strategy, the management team, and, our organization and being able to build cutting edge solutions for our clients. And and, again, just to summarize, you know, the, the that's come through in in in our ability to deliver a 25% compounded CAGR over the past five years, five consecutive growth years in EBITDA, delivering a 19% EBITDA margin in '21, and also the significant, value in our balance sheet and the fact that we're cash generative and debt free free highlights also the the value creation from our business model, which is clearly benefiting from operational leverage now that we've gotten to the level that we have as a business and and hence why we're we're very excited about the opportunity ahead of us and and being able to take that to the next level.

30:52 All of this, of course, means that we we we have been in the last couple of years and we continue to to invest in in our future growth because of that market opportunity. Grant has highlighted the the investment in technology in particular, but I just want to highlight as well that we've also been investing in our innovation. We're very excited about the new AI platform that we will be rolling out in the new year with our new first new trials being

31:21 put onto that platform in in the first quarter of the the next calendar year. So we're very excited about that. But also our operational capabilities to deliver more projects and larger projects across a wider range of therapeutic areas is very exciting. And finally, with this virtual circle that we're very excited about the commercial opportunity we have. And so we've we've recently strengthened our commercial capabilities with the hire of with with the hire of a new leader for our commercial team, Chris Hamilton. And Chris will be looking at how we can extend our commercial reach both through our direct organization and through partnerships with key CROs that are focused in our particular area of focus, which is, of course, neuroscience.

32:08 And then finally, the next slide, really, I just want to highlight again, this build builds on the fact strategy that the first four points are very much about organic growth, and and that's worked for us consistently in the last four years and will continue to be a major focus and the focus of our growth strategy. But it's also in this, what I would call, second phase, e, the next five years of our growth. You know, we will be increasing our focus on point five, which is looking to enhance our organic growth through selective partnerships and m and a. And I just want to emphasize that the the strategy has always been a five point plan, but I I felt that we needed to get to a certain critical mass to to really be able to benefit from potential m and a's if they're available to us.

33:06 And I think now that we're the size we are compared to where we were four, five years ago, the next five years is is the right time for us to look at accelerating growth when we identify opportunities that do meet our criteria. The other thing that has been obvious in the last eighteen months, two years is that we're in a very exciting space, and there's a lot of activity in our space. And there have been some some acquisitions of of imaging assets, I've I've listed there on on the left hand side, which which are good good benchmarks for us in terms of the the value creation, in terms of building a specialist technology company, over the next five years that, can really add value to our our shareholders long term by by being a significant player in this market.

33:55 So so, you know, we we've talked a little bit about some of the scientific and collaborative partnerships that we have, but we're also looking at some commercial partnerships, which will allow us to extend our commercial reach or our geographic reach, to accelerate our footprint. And and in particular as well, I think m and a would be, a route to identify how we might, at some stage, look beyond neuroscience. So we still feel that there's lots of runway for growth, for organic growth for IXICO in neuroscience. I think it would also for the same reason there are barriers for other companies to come into the neuroscience space that aren't neuroscience experts, there are there are barriers for IXICO to to move out of neuroscience into those other areas.

34:45 And clearly, way that we would mitigate those barriers would be to acquire companies that have a credibility and a track record with with pharma industry in some of those other therapeutic areas. So in addition to being a potential route for us to diversify beyond neuroscience, it's also clearly a route for us to accelerate our roadmap of technologies and and portfolio of technologies that we have. So so we'll also be looking with a

35:16 keener eye on any differentiating IP and technology. And and the reason for that is that our model, and you'll see from the charts that Grant showed, has been very focused on building accretion in our gross margin, and we've gone from mid forties to to mid 60 percents in the last five years. And so being a technology company, you know, we want to sustain those those premium margins and acquiring IP and technology that would sustain that and provide us with an ever differentiated offering is obviously something that we would we would value and we would be keen to do. So those two things basically acquiring capability to extend beyond neuroscience, but more importantly, acquisitions that would enable us to sustain and and potentially further build on the premium tech technology margins we we already deliver would be reasons for us to to pursue m and a in addition to the organic growth. But, again, just if I finish off, I just want to emphasize that the focus very much is investing in the organic business growth that we've been very successful in doing and expect to continue to drive growth for us for many years ahead.

36:37 That's fantastic. Thank you. Julio Grant, thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab situated in the right hand corner of your screen. I just want the team to take a few moments to review those investor questions submitted already. I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard on the Investor Meet company platform. I'd also like to remind you that your feedback is important to the company, and immediately after the presentation has ended, you'll be redirected to the opportunity to provide your feedback in order the company can better understand your views and expectations. Judy or Grant, before we go into some of the live q and a, we did have a couple of presubmitted questions. If I may, I'll just start with those. The first one reads, what are the plans to reduce the reliance of earnings on trial outcomes, or are there any plans to diversify earnings and also increase the customer base?

37:27 Thank you. So I'll I'll take this in. So our business model has been very much about growing our market position in clinical trials. So so that's the market that we we are in. And, obviously, we need to recognize that trial outcomes often do do not result in a drug being approved. So there's always a potential for early terminations. Therefore, the the best mitigant that we have is that over the next five years, we grow scale, and we increase our ability to to win clients so that we can sustain that profitable growth that we've seen in the previous five years. So those are the two key things really for me. It's it's building scale and client diversification to the order book. In addition to that, as I mentioned, with the the new platform, we can see that our technology platform will allow us to scale within neuroscience.

38:21 But I think also there's potential for that platform to enable us to reach into other therapeutic areas outside of of neuro. So so that would be another way that we would anticipate accelerating our plans for diversification of of clients. So I think those are the the the, I guess, my immediate response to to the question. That's fantastic. Thank you, Julia. Second one we have here is could more not be done to exploit the value of IXICO's platforms such as assessor? I'll I'll take this one again. Yes. In short. Basically, with with the FDA's approval of in in AD and also the breakthrough therapy designations for aci, lily, and Roche, we're we're expecting a lot more interest in not just the initiation of clinical trials, but also the monitoring of potential side effects of these drugs and and in particular, where there are drugs such as those that are targeting amyloids.

39:26 ARIA is a is a known potential side side ish side effect safety issue that needs to be monitored. So one of the things that we're looking at is we have a the assessor platform which was developed in conjunction with Biogen as a pilot. It was developed for a drug called Tysabri, which was prescribed for MS, and there was a a small prevalence of side effects, p and l as the side effect safety issue that needed monitoring. So in the end, Biogen decided not to roll that platform out into production as it were, but that's because the prevalence of PML was was very small. With with ARIA, the the levels of prevalence are much higher.

40:11 And so, you know, we are we are talking with partners around the potential use of assessor as a as a means of providing post market surveillance for those Alzheimer drugs that will be coming to the market. Fantastic. That concludes the pre submitted questions. If I may just ask you to click on the q and a tab. Just where appropriate to do so, just read out the question and give you a response. If I could just hand back to you, Giulio, that'd be great. Yep. So let me I'll I'll I'll read out and give Grant the opportunity to to answer some. So, Grant, I wanna hear from Seaga s. Question is, what is your biggest challenge? Well, it's it's a it's a it's a big question. But I think I think as we've we've stated through this presentation, I think as we've stated in our in our the RNS that was released this this morning as well.

41:12 You know, when you're when you're operating in the clinical trial space, it is inevitable from time to time that a trial will come to an early end. And so the key for us as we grow our business is managing to build the resilience into the organization to handle those negatives when they happen. And the good news for us is that, know, if you like, having had those particular instances crystallize in the last six months or so, the business has shown that we have to achieve that to build to the scale that we've been able to handle those significant impacts, where two or three years ago, it have been it would be much more problematic for us. So really, answer to that question, I think, is largely to the extent the question that was asked previously and answered by Giulio is really how we make sure that we can continue to grow our the the diversity of our order book and win new trials to minimize the impact of that, and that just comes with scale. So that's something that we've we've been successful in doing over the last twelve months and expect to continue to be successful.

42:18 Great. Thank you, Grant. So next question from the same chap. What is the difference between you and Cambridge Cognition Holding PLC, and is this your closest competitor? So there's a lot of difference. First of all, they so the similarity is that they operate within the neuroscience space, but that's about where the similarity ends. That they are focused on cognition, and they're not an imaging specialist, whereas obviously that's our focus is is imaging. And so then we don't see them as a competitor. Their cognition is often a technology that's used by our clients in the trials that we operate in, but it's not something that we offer offering.

43:06 Likewise, Cambridge cognition don't offer imaging capabilities. So, you know, our our biggest competitor to answer answer the question of the ways has been Bioclinica. Bioclinica are the the big player in the industry, and Bioclinica were recently acquired by ERT, as I mentioned in one of the slides, to form a new organization called Clario. So maybe next slide next question, Grant, is the recent decline in the share price presented an opportunity for directors to buy ship buy the shares. Why why were directors not interested in buying? Thank you for that one, Julio. So I I mean, I I think it's it's an interesting question, this one, because it comes up from time to time. But, actually, I think this this comes back down to the fact that whether the directors of the company invested in the company.

43:59 Of course, we're very much invested in the success of the company. Firstly, I mean, Julia obviously owns shares in the company. I don't. But that's not to say that I'm not heavily invested. I obviously have options that I'm keen to see succeed, and they come they're all linked to share price accretion. So the alignment is between us and our wider investors in seeing that opportunity. Similarly, it then comes down to having additional spare cash to invest. And if someone gives me some spare cash to invest, I will certainly invest in IXICO because it'd be the right thing to do. So hopefully, that helps give you some view that it's this at the at the current market price, it looks it's a very good opportunity. So so I I would add to that as well.

44:44 So I think the the question, obviously, refers to the recent decline in the share price. The other point I would add to that is, obviously, we we would have been in a in a closed period in in recent months where we we wouldn't be able to buy shares. I obviously don't plan to indicate my my future intentions, but what I can say is that as as Grant pointed out, I've I've acquired shares at a much higher price than they currently are sitting. So I would concur with the view that, for a company, like IXICO, we do look as if we're, it it would be an opportunity for for people to to take a serious look at. Next question is from Peter a. How unique is your offering compared to other companies?

45:31 So I'll I'll take that. So I think it's the last slide in in the deck. There's an appendix. I don't know actually if you can show that whilst we're talking, but but it highlights yeah. Next next slide. There we go. So that slide there, the the the six sort of RAM bubbles highlights the end to end nature of of our service. So the key point I want to make is that the the data analysis, the the bottom right hand corner is obviously where we apply our proprietary AI analytics is where all the the clever analytics goes that not just analytics, it's also our ability to access specific cohorts of patients that are specific to the therapeutic area of of interest in a pharmaceutical company.

46:21 And the next bubble, the data management piece refers to the data platform management system that Grant talked to. But we also have all of this enveloped into a regulatory compliant business model that also includes project management and site setup and protocol designs as a complete offering. So there are companies that just do AI analytics, but don't have the other five bucket buckets. There are companies that have data management platforms, but don't have the other five buckets. And there are, of course, people like Bioclinica who would have all of the buckets. So the you know, I'd say IXICO is one of the few companies that has a complete end to end solution for clients, and that's really a key thing that, we wanted to emphasize in addition to the fact that we have proprietary in house developed data management platforms and AI analytics that have been developed from many years of working with, collaborators to develop the best algorithms to, to be applied for the different therapeutic areas.

47:31 And and that, at the end of the day, all gets reflected in the gross margin, which is obviously a reflection of the price that we're able to charge for our service, which would reinforce the belief that we have highly differentiated products that are valued by our clients. Mark c asked a question. Have this is for you, Grant. Have you enough cash to meet all your ambitions? Can your AI also interpret radio wave scans for breast cancer? So so I'll take the second half of that question first. So no. AI can't interpret wave scans for radio wave scans for breast cancer. It's not an area that we're we're focused on. But in terms of the first part of of your question, in terms of our organic growth plans, yes, with a cash balance of 6,700,000, we have the cash that we believe we need to deliver on the scale up program that we're following.

48:26 Clearly, if we were to look at some non organic growth, I. E, M and A, then that might be something that we would need additional cash for. And then that would come down to us making sure that we are happy with the valuation and that we felt it was the right time to to look at raising that cash to do so. Thank you. I then have a question from, Shayar S again. Can you give an update on the m and a? So, again, as I said, m and a has always been one of the the points of the five point strategy. We you know, I said we've we've always kept a a watchful eye on on the potentials. And, clearly, the fact that we haven't done any suggests that we felt our time and effort and money was better invested in our organic strategy.

49:19 Really, all I'm pointing out is that, you know, when I joined the company five years ago, we had roughly £3,000,000 of revenues. We've we've now traveled that in five years. As I look to the next level, which I'd say is how quickly can we double the company? I'm just highlighting that I think it's more likely that, m and a will play a part of that rather than assuming we're going to do it, all organically. And I think that's all I can can really say. But, obviously, what I'd also say as well that, during that five year journey, we've been, very pleased with the the share shareholder investment from the institutional investors. And for a company of our size, I think we've got really good supportive institutional shareholders.

50:08 And, obviously, as a management team, we've we've now got a five year track record, which I would hope serves us well if we do identify a suitable opportunity. Steve b, this is one for you, Grant. You mentioned exceptional revenue EBITDA contributions in 2021. How large was it? Yes. It's just to be clear on that. So the the the we what we said is that we had a number of one off onetime benefits in terms of the EBITDA figure that we achieved in 2021 rather than any exceptional items impacting revenue. So it was really down to changes in cost base on a one off basis.

50:53 That equates to about £400,000 So we have an EBITDA of £1,700,000 reported. Without those onetime benefits, it would have been about 1,300,000 So essentially, we'd have achieved an EBITDA margin of 14%, 15%, which would have been in line or slightly ahead with the EBITDA that we achieved twelve months ago. Thank you. So then Peter a last two questions. Peter a, also, read analytics and perhaps Cambridge cognition. So I'm I'm not sure how to interpret the question, but I think if the question relates to are they competitors, so, again, they're they're not competitors. Read Analytics, I'm aware, is an AI model, and they're utilizing AI.

51:42 I guess the point I would make is, and this is an important point, AI is an is a very important part of our differentiation, but it's actually, one element of our proposition. So, clearly, we want to have the best algorithms, but to have the best algorithms, we know we need to know how to apply them in the therapeutic areas that we're in, and we also have to be able to deliver the imaging expertise that we have to deliver. So so those three things combined really, you know, the the the combination of those three legs of that stool, make IXICO's model work in terms of our clients. And, and that's why, you know, we we, we're successful, in the marketplace.

52:30 And then Sam m, is the current share price a significant impediment to acquisitions? I I can take this. Clearly, if we were, you know, at the the market cap that we were a year ago, we would have a bigger, pond to be able to fish in. I wouldn't say it's a significant impediment, but I but I think it is obviously something that means we we have to as I said, perhaps we we might not be able to pursue some that we would otherwise pursue if we were, you know, capitalized at twice twice what we are today. So yeah. Of of course, it does in terms of the the opportunities. What it what it also means is that, you know, in this space, clearly, companies that have a a book of clients is are are very valuable as well as a book of techno technology capabilities.

53:26 It's it's more likely that at the smaller end, we might look at companies that are technology based rather than revenue rate revenue accretive. So so the benefit of of a a larger market cap would be that we would probably be able to partner with companies that actually would also give us, additional client diversification early on, and that might be lesser with companies that are have a smaller, valuation. And that's the end of the the questions. I think yeah. No. No. You've been super super kind as usual and answered every single question. So thank you so much indeed. And, of course, if any further questions do come through the team, we'll be able to review those, and we publish responses where appropriate to do so on the investor me company platform.

54:12 Julia, perhaps before we, redirect the attendees to give you some feedback, I could just ask you just for a sort of closing snapshot, please. Yes. Thank you for that. I really appreciate, everybody's time. And I guess so in in summary, it's been another strong financial performance. In fact, the fifth year of successive EBITDA growth, and, you know, clearly delighted to have increased our, EBITDA by 34% versus prior year. Achieving high gross margins has always been an important focus in the business, and I'm delighted that the commercial led growth strategy implemented, has delivered the 25% CAGR in revenues that you've seen over the past five years. The market opportunity for IXICO remains very strong, and in fact, I believe enhanced by the increased investments we're seeing in key therapeutic areas such as AD and a number of rare diseases, which support our growth ambition for the next five years.

55:04 And all of this allows us for to continue to invest in f y twenty two for the medium term growth to deliver that long term shareholder value to our investors that I referred to. That's fantastic. Julio Grant, thanks again for updating investors today. Could I please ask investors not to close this session? It should be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete. It's greatly appreciated and valued by the company. On behalf of the management team of IXICO PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon.