Ixico (LSE:IXI) — Investor Presentation

0:00 Good afternoon, ladies and gentlemen, and welcome to the IXICO Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. And I'd now like to hand over to Giulio Cerrone, CEO. Good afternoon.

0:32 Good afternoon. Thank you, Mark. Thank you, everybody, for attending today's call with our presentation of the f FY 2023 results. As IXICO's CEO, I'm delighted to be joined today by Grant Nash, our CFO, and Robin Waltz, our CSO. For those of you that, are new to IXICO, a few words of introduction as to, what we do and, and who we are. So established in 2004 for more than a decade, IXICO has a highly regarded twenty year industry track record in neuroscience, which in addition to creating a valuable brand of equity in the global industry that we serve, also has validated our technology across an ever increasing range of therapeutic areas in central nervous systems or CNS diseases.

1:23 This track record is the core of our partnerships with large and mid sized pharma companies, as well as a growing portfolio of innovative mid and small cap biotech partners across the industry. Put simply, we're experts in end to end management and analysis of brain medical imaging scans that are increasingly being used in CNS clinical trials, with our aim being to become a mission critical partner to the global pharmaceutical industry in support of their efforts to accelerate drug development. You will hear today how we've been investing in our data driven technology platform to deliver these specialist tailored analytical services across the globe with a fully integrated regulatory compliant platform, which in our opinion would be difficult for others to build or replicate. So with that, if we move to the slide three, which sorry. Just moved one ahead, but go back one, Mark.

2:14 So slide three. There we go. So precision medicine, I want to articulate what what we want to highlight here is basically precision medicine refers to what our client partners are doing, and precision in neuroscience refers to what we are we are doing at IXICO to align our strategy with that of our partners. The overarching theme of today's call is the significance of the pharmaceutical industry's move to precision medicine, which is a move away from one size fits all drug development. This move requires data driven next generation CNS clinical trial designs. And in today's call, you will hear how we are positioning IXICO to meet this growing demand so that we can become this mission critical partner I refer to to the global pharmaceutical industry.

3:02 As as I mentioned earlier, we continue to invest in our very strong scientific heritage, and and Robin will talk more to that later, as we've built a unique AI assisted brain imaging biomarker platform that, as I mentioned, Robin will describe in in detail. The significance of this is that we own our own technology, and this allows us to provide biopharma companies with the technical expertise and cutting edge technology they need to improve clinical trial design, but also to increase the opportunity for trial success in their CNS studies. If we move to the next slide, slide four, in our purpose, you've seen before, the key thing and we want to highlight here is that with the increasing prevalence of neurological diseases in the global aging population, our purpose has far reaching societal benefits supported by long term macro drivers.

3:52 Our financial results, over the past twelve months have not been as strong as we would have liked at the beginning of the year, but we also acknowledge that 2023 was a more challenging macro environment than was anticipated with limited availability funding for biotechnology companies resulting in a flattening of sector r and d expenditure. Our view is that this recent slowdown is a pause in activity rather than a change in the historic trend of increasing r and d spend and also increasing levels of outsourcing to specialist niche operators such as IXICO. Our purpose supports our conviction that the long term fundamentals for IXICO's pharmaceutical services remain strong. And just to highlight this with a couple of numbers, one in three people globally is thought to suffer from a neurological disorder at some point.

4:41 And in 2017, one study estimated that the cost of care for patients suffering from the nine most common neurological diseases amounted to nearly eight hundred billion dollars in costs in The US alone. We've talked previously about Alzheimer's, and Robin will expand on the increasing opportunities for IXICO in the broader dementia space, which affects over six and with Alzheimer being the biggest and affecting over six million people in The US alone and expected to rise to thirty million by 2050. Multiple sclerosis is another devastating neurological condition affecting an estimated three million people globally. With a particular focus on phase one and phase two studies, we continue to build on our very strong franchise in rare neurological diseases such as Huntington's disease. But as previously stated, our intent of further penetrating these larger therapeutic areas such as Alzheimer's, MS, and also Parkinson's disease, which is the fastest growing neurological disease area.

5:44 However, we also recognize that CNS therapeutic areas are recognized as particularly challenging, and investors should be cognizant that early terminations are a fundamental part of the pharma services CRO landscape and can materially impact a company's financial performance, in particular, smaller companies such as IXICO. As Grant talks through our 2023 financial results, you'll see that when our client partners do decide to terminate or delay the start of a study, that this can create material headwinds that impact short term financial performance. Move to the next slide. So, again, you've you'll have seen this precision neuroscience strategy and the five pillars that we have. And Grant and and Robin will, in particular, be linking the points that they highlight in their slides that relate to our investment strategy directly to this five point growth strategy.

6:40 And the key points I want to highlight here is that the first three are very much about organic growth in our core CNS clinical trials market. The fourth point, Robin will expand a little bit further on an initiative that we have that starts to talk to how we see the technologies that have been validated in the clinical trial space in our twenty year track record starting to create potential opportunities for future future growth and future new markets for IXICO, which I'll I'll leave to to Robin to to expand on. And then the fifth pillar, which is one of partnership, I I actually want to highlight in that, clearly, this is experience and and the the ongoing macro environment that we we're operating in would suggest that we we need to accelerate our thoughts and partnerships to either complement our core capabilities and or extend our geographic reach for IXICO to become a partner of choice in global CNS clinical trials.

7:47 And so partnering will, I anticipate, become a very important part of our next stage of the company's growth. So we then move to Slide six. As this is an investor presentation to both current and potential investors, I want to address head on what I think is a disconnect between the financial performance and share price when we compare this to our own management view of IXICO's inherent value. So, clearly, the the chart articulates and shows that when our revenues go up, our share price goes up. And if our revenues go down, our share price goes down, which is perfectly sensible and reasonable. However, the the point I'd like to make is that with the assets and and the scientific heritage and track record with the global pharmaceutical companies that we have, that the market valuation to me would seem to be a little bit harsh in that we're currently valued at around about one times revenues, which hopefully the slides that we share with you over the next thirty, forty minutes, gives you some comfort that we're actually building, a platform with significant value, that,

9:00 you know, gives you confidence in in IXICO as a as a company to to invest in. So if we go to my last two slides, I just wanna talk to some of those assets. This slide here talks to how we lead with science, and the the points at the top highlight some of those macro trends that are favorable to to our capabilities and the fact that we've built this AI automated brain imaging biomarker platform that we we own and we we plan to see significant ROI from over the next three to five years. The key point I want to make here is that what I mean by leading with science is that we deliberately are investing in scientific collaborations, both with academics, but also with our client partners.

9:52 And and this is really key to our success and ensures our our capabilities and technologies are utilized in commercial contracts where the discovery and deployment of new and better imaging biomarkers are being used in the generation of new clinical trial designs. And this is fundamental, I believe, in the success of precision medicine as a strategy, and, will will pay very strong dividends, over the next three to five years for us. Our our business planning then is predicated on success in those phase one and phase two studies, many of which are with emerging biotech companies as we believe this plays to our strength compared to our primary competitors who are significantly larger than IXICO. And then in the final slide, I want to talk to the trusted CNS partnership that we have with many companies that we built over this twenty year period.

10:49 I I I would just want to highlight that this is very valuable. A similar platform to the one that we built is very difficult to build, takes time, and the trust built comes with a requirement to continuously invest in innovation and flawlessly deliver services globally over a long period of time. And that's the track record that IXICO has and that is valued by our existing partners, and we see as being very important as a springboard for growth, as we look to acquire new clients, over the coming periods. And this is why of often when we're bidding for new contracts, IXICO is considered as one of the three primary potential partners for both MRI and PET services. And and Robin will talk to how, in recent years, we've expanded our traditional strong position in MRI to also now expand further and further into PET as that becomes increasingly important in some of the therapeutic areas that I've referred to earlier.

11:48 So final comment before I hand over to Grant is that in recent years, what this all means is that we've partnered with over 30 biopharmaceutical companies across the spectrum and size of company and value these as partnerships that have been highly beneficial to IXICO and have been hardened and provide us with an opportunity to further strengthen our growth by acting as a springboard for future and sustained growth. So with that, I'd like to hand over to Grant to talk to the financial highlights for 2023. Thank you, Giulio. Mark, if wouldn't mind going to slide 10. Great. Thank you. In this and over the next few slides, I'm I'm showing our key financial metrics across the last six years, either a period that's reflective of the tenure to date of Giulio as our our CEO.

12:44 On this slide, I'm showing the key income statement positions, those of revenues, gross margin, and EBITDA. Before I get into the detail, the key point that I want to make is that these financials reflect a point in time for us on longer road to the targets we expect to deliver by pursuing our five year precision in neuroscience strategy. To the point that Giulio made earlier, by IXICO being valued essentially on its revenues alone, it's attracting a valuation that even today is materially below the net asset value that the company has built up on its balance sheet. And then when the latent value of those assets is considered, our current market cap suggests that the value is not well understood by the market.

13:30 Now as Julia mentioned, this is not surprising as it can be quite challenging for an investor to know how to attribute value to technology or scientific capabilities. However, when we're in a situation where we are, where the investments in the capabilities is such a cornerstone to our long term strategy, It's really important and challenging if there's a disconnect in value between the the value in what we're investing in and and how the company itself is being valued. So what we are seeking to do today is to articulate more clearly the value of our science, technology, client relationships, and operational capabilities, as well as the drivers of growth within our marketplace.

14:19 So before getting into those elements and first focusing on our financials, starting with the revenues graph, is shown on the left of this slide, you can see that between 2018 and 2020, we grew rapidly. We reported circa 30% compound annual growth rates in revenue each year. This followed a very significant success in winning largest phase three HD Huntington's disease study ever run with a top three pharma company. We won that off the back of our scientific expertise in HD, something Robin will talk to more shortly. This client became approximately 80% of our order book in 2020 and contributed more than 50% of our revenues in that year.

15:07 And therefore, consequently, when, and unfortunately, that trial failed, it had a a negative impact on our revenues across the period 2021 through to this year. Across that same time period, we were successful in winning new trials with new clients and in new therapeutic indications, meaning that whilst our revenues declined in total, they declined at a much lower rate than would have been the case otherwise. The reason that that's important is that 2023 is the first year since 2018 when there are no material revenues from that large phase three HD trial in the revenues we're reporting. So the 6,700,000 revenues reported for this year reflects an order book of clinical trials that are predominantly phase one and phase two and individually all much smaller than that phase three HD trial.

15:58 In other words, over the last few years, whilst our revenues were declining overall, we had been building a steady level of momentum in signing new contracts that has seen increased revenues from all trials excluding that phase three HD trial. Now 2023 itself has undoubtedly been a challenging year. The macroeconomic situation has put pressure on the riskier ends of the market, and clinical trials in CNS have definitely felt the impact of that. Biotechs, in particular, have seen increased challenges in raising capital and consequently have slowed or delayed their trial plans. From an IXICO point of view, about 50% of our client base is biotech linked. And so we felt the impact of that slowdown.

16:47 Consequently, where we anticipated a more a swift return to growth twelve months ago, we've had to caveat and soften those expectations, now with 2024 expected to be approximately flat on 'twenty three before returning to growth in 2025. Now importantly, today, we have a stronger offering from a science, a technology, and an operational perspective than we did even three years ago when we were at the peak of running that that large HD trial. So we're actually better placed today than we were at that time to kick on and achieve material growth levels. As a consequence of having lower revenues and a greater proportion of early trials, which tend to be more complex and less analysis focused, we've seen some pressure on our gross margins, as you can see from the middle graph.

17:44 Whilst these gross margins remain robust at approximately 50%, some of the operational leverage that we saw over recent years has reversed with a step back in revenue levels. Now this level this leverage will return as we return to revenue growth. And with the enhancements that we've made in our technology, we anticipate greater capacity to achieve higher margins with expanding revenues. The final graph on this slide reflects our EBITDA, which is the columns, and our FTE numbers, which is the line. The EBITDA reported is again reflective of the significant operational leverage we see in the business at revenue levels at or above 8,000,000 in revenues. As we consider the long term trends for CNS and the distinct scientific leadership we have as a specialized neuro neuroscience analysis company, we are very confident that we will see a return to growth in our revenues.

18:42 As a consequence of that, we have been comfortable with with a a return to losses for a period of time whilst we continue to invest in those areas we defined in our Precision for Neuroscience strategy as being priorities for the longer term success of IXICO and, ultimately, the long term benefit of our shareholders. That said, we are not ignoring our short term financial performance. We have a strong cash position, but, similarly, we want to maximize the utility of that cash position. So, consequently, we've reduced our headcount by approximately 12% over the last twelve months. And following a small restructuring exercise undertaken in October, we will see our headcount reduced by a further 8% by mid twenty twenty four. I we've made headcount reductions of about 20% across eighteen months.

19:29 Whilst this has not been a process we've taken lightly, it's allowed us to consider those key elements and key priorities of our strategy and ensure we continue to invest in those key areas whilst we see a more gradual return to growth than we anticipated twelve months ago. Turning to slide 11. This slide is focused on our balance sheet, and it reflects those investment decisions that we've been taking with long term targets of IXICO in mind as part of that Precision for Neuroscience strategy. As many of you recall, we raised 5,000,000 of cash in 2018, and we've utilized that alongside profits that we made over the last few years to invest in our technology platform, our operational capabilities, and our scientific analysis offering.

20:14 That is something that we've been very consistent about and with the reason we raised that that money back in 2018 with this with a clear focus of looking to deliver scale for IXICO over the medium and long term. What that has meant, as you can see in the graph on the left, is that across that period, we have utilized cash. And at the balance sheet date of the thirtieth of September of this year, we retained a strong cash position of 4,000,000 despite returning to losses and a continuation of those investments. Looking forward, we expect that to continue, albeit at a slowing rate, both as we see our revenues return to growth and also as the cost reductions we have been making flow through. The level of long term investments that we have made, specifically in technology, data, and science, is apparent in the middle graph, where in the year, we've capitalized just under 2,000,000, which, whilst lower than the previous two years, remains a substantial investment.

21:08 And the detail of the technology and science these investments relate to will be covered in more detail in in a late in later in this presentation. But what is important to highlight is that this substantial capital investment that we've been making in our next generation trial tracker platform in particular will reduce significantly in in 2024 and beyond now that this platform is validated and ready for client trial use. So the impact of these investments has been that IXICO has seen growth in its balance sheet value, I. The total value of its assets lie assets liabilities across the period as shown in the graph on the right. These assets provide IXICO with leading technology and scientific capabilities both for now and for the future. We have really only seen the very start of the potential ROI on these investments, and explain the potential for these assets is the focus of the next section of the presentation.

22:04 But just before we do that and turning to slide 12, I just wanted to provide an update on our order book. This, as a reminder, is the book of signed contracts where we have not yet delivered the revenues and therefore provides future visibility of of our revenues. The loss of the phase three HD study has impacted our order book since 2020, but also the challenging market conditions in 2023 resulted in a slower year of new contract bookings. And that has meant that whilst we signed 8,000,000 of new contracts in 2023, the recognition of revenues and a couple of client trial descopes meant that we saw order book contraction in the year. So for us, achieving booking levels that progress the order book back towards and then beyond the level we've seen previously is a priority and provides a lead indicator of our returning to revenue growth.

22:56 To provide with some additional detail on the order book, I've got two further slides on this. So just turning to to slide 13. This slide again shows the order book total for each of the last six year end split by trial phase. As you can see through to 2021, the largest element of our order book was made up of phase three trials, which was primarily the large phase three HD trial. Since 2020, however, we've built up contract wins in the earlier phases, meaning that we now have an order book that is principally constituted by these earlier phase trials, more than 75%. These trials tend to be smaller and means that we're now running more trials than we were in 2020 even though the total order book value has reduced.

23:45 This increase in the number of trials then provides increased opportunities for growth looking forward as we're well positioned to follow these trials into later phases if and when they're successful. In simple terms, we have more shots on goal today with the order book as it is now compared to how it was twenty twenty twenty, even though it was it was higher value. And to reiterate the point on slide 14, this again shows the same information. So the order book position at the end of each of the last six years, but this time shows the order book split by the number of clients. The difference in the makeup of client numbers in the last few years reflects the decline in importance of that phase three HD study in our order book and the increasing number of clients and projects where at the end of September of this year, we were supporting 20 trials with 15 clients across seven therapeutic indications within neurodegenerative disease.

24:41 This slide also shows the mix of type of clients where approximately 50% of our trials we are supporting biotech run. And that is why the macroeconomic impacts of the last twelve months, which have so impacted the biotech sector, have also impacted IXICO. And the balance of those trials is approximately evenly split between mid pharma, top pharma, and charities. From a a risk profile point of view, our largest client has reduced to 20% of our order book value from over 80% in 2020, and this reduces the risk of individual client trial failure and reflects the additional clients that we've won over the last few years. So then moving on to the next slide. I'm now gonna to to turn to the value that we've built in our next generation of trial tracker.

25:30 The financials, as I said, is really a point in time in terms of the progression in year year two of a five year precision in neuro neuroscience strategy. Where we see the value coming looking forward is from these investments, one of the key investments being this next generation of trial tracker. We are very, very excited about the potential of this platform and see it as a key part of our future growth plans.

25:56 And turning to slide 16. Firstly, as an overview, when I talk about Trial Tracker, this is our end to end clinical trials image capture and analysis platform. It provides a web based upload for neurological images that enables imaging sites all across the world to upload brain scans from imaging scanners, PET, MRI, etcetera, as well as relevant clinical data into our platform. The system automatically processes these scans in a regulatory compliant manner. The system presents the image for quality control to check for any problems with the image. If the image is then passed, it transfers to our radiological network who read the scan to check patient eligibility and patient safety. Following the image read, the image is transferred to our data analysis pipelines, which have been developed using highly contextualized data to identify and measure specific disease based biomarkers.

26:53 Each set of analysis is then submitted to an internal expert science review where results are collated and transferred to the sponsor. The process is rightly highly regulated. We are subject to regular client audits where we must show the resilience and robustness of our systems and system security infrastructure. The point that I'm making here is that the differentiator of our platform and the significant barrier to entry for prospective competitors is not just about what the system is able to do today.

27:22 It's also about how it is able to respond to challenges that will inevitably arise tomorrow. Clinical trials take years to complete. The data is highly sensitive and must be stored in a highly organized manner with high and increasing levels of security and meant maintains the integrity of those data. To ensure we stay at the forefront of this, we've invested significantly in our next generation trial tracker, which is now ready for use on client trials. This builds on over 15 of development of our existing trial tracker platform, but it's a a full redesign using Microsoft Azure's cloud technology portfolio. We're very excited about the capabilities the platform provides us with, but the ROI on this investment won't be seen immediately. But, ultimately, it's a keystone for the business to scale further and faster as we look to the future.

28:13 And to to illustrate this a bit more, turning to slide 17.

28:18 This slide summarizes how the next generation of trial tracker fits into our Precision for Neuroscience strategy. Whilst I I'll dig a bit more into technology shortly, this slide is designed to communicate why the clinical trials market needs our technology and, hence, why this platform holds significant value for IXICO looking forwards.

28:41 For our clients, this technology supports faster deployment of new studies, reducing trial startup times and, therefore, cost. It uses the latest in Microsoft security capabilities that are continuously updated as the Azure cloud is updated by Microsoft. It also supports the scaling and the flexibility of the platform, means we can integrate more bespoke drug drug trials, more trial designs that are particularly important as trials become more complex, which is a definite market trend in CNS.

29:11 This has the potential to support trials with smaller patient numbers, reducing cost for clients, utilizing numerous analytical pipelines with a single trial. By incorporating new and different analysis pipelines, we can rapidly spin up offerings for adjacent therapeutic areas, both within CNS, but also outside of CNS, which, whilst not part of our current strategy, provides new market opportunities for the future. We can also scale up and scale down a deployment, ensuring the cost of delivery is appropriate to the scale and complexity of a trial. Then looking more to the future and towards the right hand side of the slide with our fourth bridge pillar, this version of Trial Tracker is suited to accessing opportunities to expand into clinical practice or post market assessments.

29:59 And Robin will talk to one opportunity in this space that we're currently pursuing.

30:03 This version of trial tracker also allows us to offer platform capabilities to analysis only companies, thereby allowing them to offer their analytics as part of our wider clinical trials offering in return for an access fee that potentially opens the door for a SaaS type offering.

30:21 And finally, on this slide, this version of TrialTracker provides a platform that integrates into our m and a strategy. Its flexibility means we can configure it to work with partners, integrate the technologies of others, and has the infrastructure to scale to a level well beyond the current size of IXICO.

30:39 And this, of course, ties absolutely into what we've driving towards with our strategy and our purpose. So then turning to slide 18, which is my final slide before passing over to Robin. This is a little bit more technical, but I wanted to explain, in brief, the architecture of this next generation trial tracker and to explain how it achieves such a high degree of scalability and flexibility. The box at the bottom of the page represents the back end of the system, I e Microsoft Azure cloud with a platform database, the platform architecture, security audit trail capabilities, key functionality features, etcetera.

31:18 The next box up is the front end. It includes the user interface, but also the highly powerful and flexible workflow engine that allows us to configure different workflows to suit different therapeutic indications within CNS currently, but also beyond CNS should we choose to do so, as well as individual study protocol. This is hugely powerful as it enables a system that can be adapted to run complex trials in a robust, compliant, and efficient manner.

31:47 And then the top half of the diagram is the analytics capabilities and what makes this platform both so scalable but also cost efficient and flexible. Using orchestration software known as Kubernetes within the Azure cloud environment, we can spin up and spin down processing capacity to an almost unlimited scale to support exactly the level of analysis capabilities we needed need at any time.

32:12 This allows for both scale, but also keeps cost to a minimum. At the same time, each of the analysis pipelines sits within a docker wrapper. This essentially enables us to run any of our analysis pipelines irrespective of the specific libraries or or technological design. And this design will allow us to bring in external analysis capabilities via partnerships or m and a as it can work with almost any technology using a simple development and validation structure such that we can rapidly expand our analysis capabilities to meet client requirements. This infrastructure is now in place,

32:47 and it contains more value than we can currently extract from it, as well as ensuring that we put ourselves in a position to develop the leading analysis portfolio within the clinical trials and potentially clinical imaging markets. With that, I will now pass over to Robin to talk a bit more about our science. Great. Thank you, Grant. So if you go to the next slide, please. I will be, talking a little bit about the, scientific engagement we've had in 2000, and '23 and progress we've made. As described earlier, we have significantly diversified our portfolio of contracts and the therapeutic areas we now serve into, and I will talk a little bit about the associate work we've done over the past years from a scientific point of view on and engaging in in scientific developments and the respective scientific communities.

33:44 I'll specifically focus on Alzheimer's disease as this is where we have seen significant development over the past two years and where we do indeed see a significant opportunity in the coming years. So I can see we have the next slide already, and I just put this in. Obviously, I just said I'll talk about Alzheimer's disease, but I want to start with Huntington's disease just to illustrate how how we successfully penetrated that market. As Giulio has described earlier, this is an area where we have successfully developed a leading position throughout ability to translate difficult scientific requirements into clinical trial applications and where the foundation of commercial success really was laid several years ago through the development and validation of novel biomarkers and the deployment in natural history studies and then onto pharma treatment trials.

34:40 We continue to innovate in the area, and we have previously presented about the HCIH consortium that leverages our latest xeq. AI analysis platform to validate imaging based biomarkers with a number of pharma partners. Over the past months, we've we've, seen further progress in the project as we have onboarded additional, pharma partners supporting the consortium as we continue, to deliver our analysis plan. As those member companies and other pharma partners are planning HTU trials, we will then naturally work with them as an extension of the scientific calculation. So obviously, that's Huntington's disease. Alzheimer's disease is different. It's a different market. It's much bigger. There are different competitive dynamics and so on. However, we do believe that through the work that I will present on following slides and the track record we've also demonstrated over the past years in terms of diversification, we can demonstrate how we are increasingly engaging in those markets in a way that has supported commercial momentum previously in Huntington's Disease.

35:51 If you go to the next slide, please, I will start by giving a brief update on our imaging portfolio. So as a company, we have a strong heritage in MR imaging both from an acquisition and analysis point of view, and we have at our disposal a comprehensive set of techniques that will support brain imaging across neurodegenerative diseases to provide services for safety eligibility and efficacy across phase one to three trials. This includes well established MRI sequences like structural MRI, but also a range of novel and advanced sequences that more directly measure underlying biological processes and therefore more directly linked to various novel treatment mechanisms or hypotheses that I will go into in the coming slides.

36:47 If you go to the next slide for now, I will briefly touch on molecular imaging as well and PET specifically where over the past two to three years, we have significantly invested in capabilities there to now have a full service offering also in molecular imaging across the tracers established in neurodegenerative diseases, specifically Parkinson's disease and and Alzheimer's disease, and you do one click, please, we see overlayed now which of those services have been first launched into clinical trials over the past thirty six months. And in fact, a lot of those we first deployed over the past twelve to twenty four months, we we see the momentum really that we've created in the past years in penetrating those therapeutic areas, and we now have the products available that enable us to provide additional services for eligibility and efficacy primarily in those bigger indications, primarily Alzheimer's and Parkinson's disease.

37:57 If you go to the next slide, please, I'd like to briefly come back to a slide that Julia has shown earlier around our scientific network and the way this enables us to engage in the scientific community but also the pharma partners associated with those consortia. And I will highlight four different projects where over the past years, we've made significant project progress. So if we start with the global Alzheimer's platform on the top right, this was a thousand patient natural history study where we have provided the amyloid PET imaging for and that has finished recruitment earlier in this year. We have started preliminary analysis and at this year's CTED conference, which is the most prestigious or most important conference in AD truck development, this enabled us to get a high profile speaker slot on the analysis we've done on the data which is really demonstrating the mission critical nature of those biomarkers in an evolving landscape of AD drug development.

39:08 If you go to the next one, please, I will briefly talk about the AMIPED and EPED natural history studies which have been completed over the past two years and are now creating a lot of insights as we, together with our partners, are going through the data. There were various manuscripts presented this year and also conference presentations over the past years that really illustrate how IXICO is engaging in biomarker development both in MRI and PET in in Alzheimer's disease and helps us position us as a vendor in that space. If you go one more click, please, I will briefly talk about more technical developments. So we're part of the AI Center for Value Based Healthcare, which is which which is run by King's College here in London.

40:02 And what we have done this year there is and presented at conferences is a validation of our XEQ dot AI analysis platform for the segmentation of hippocampal subfields, which is a potentially more sensitive AD biomarkers compared to looking at the full volume and which can be derived from a standard MRI alone. What we're seeing with this is really how we're we're we're starting to generate some of the differentiators in Alzheimer's disease that we have established in Huntington's disease over the years. And if you go one more click, I'll briefly finally talk about some work we've started engaging in as part of the critical path for Alzheimer's disease CPAD initiative, which brings together pharma partners precompetitively and and regulators. And and there, we are now closely working in two work streams around the standardization of tau PET analysis as well as its use in as a potential surrogate biomarker in clinical trials. So what I'm trying to show with all of these examples is how we are systematically engaging more and more in biomarker development in Alzheimer's disease, and we are expecting this to lead to additional opportunities to to further penetrate that therapeutic indication and then hopefully continue to support those drugs as they

41:33 go to later stages. So we are expecting a difference in the pattern again in the mix of trials to what Grant presented earlier in that as we start supporting those assays from early on and they progress later in the development stage, we will get more into our late stage trials as well. So if you go to the next slide, please, I will briefly just train it back to the AD drug development landscape, so I guess the question is are we developing all of these biomarkers, why is this relevant, we think it is relevant for two key trends that we're seeing. One is a significant diversification in the targets in the mechanism of action that we see in AD drug development. So if we look at this pie chart here, we see the targets currently in phase two development and we obviously see amyloid and tau with thirteen to nine percent respectively, but then we see big chunk in neuroinflammation, 20%, and then we see other targets neurotransmitter receptors, for example.

42:39 And so what this shows is the diversification away from amyloid and tau into new hypotheses and and that's where biomarkers obviously get critical to to understand both target engagement but also efficacy. The other trend we're seeing, again, Giulio has touched on this, is a more general move to towards precision medicine. So we are seeing, like, a major update to the NIAAA diagnostic criteria for AD diagnosis via ATN framework towards an increasing use of biomarkers. And we then see at least indirectly related requirement around the increasing recruitment of traditionally underrepresented racial and ethnic populations into clinical trials where we see some questions around efficacy in some of those populations as they are traditionally underrepresented in the treatment trials and the FDA really pushing to for more inclusive trial designs which is closely linked, for example, to the GAP data and study I've mentioned earlier.

43:48 And all of this requires more careful biomarker assessment, for example, because there are potentially confounding effects between different populations in terms of underlying risk factors for vascular disease and other elements which are which we think will lead towards a more detailed workup in terms of biomarkers. And if you go to the next slide, I will briefly talk about how basically we bring it back to imaging and why we think we're well positioned to to serve that increasing need for biomarker assessments. So obviously amyloid and tau is measured by PET as a gold standard and we see that widely used in clinical trials.

44:36 We see that increasingly complemented by blood based biomarkers, but we we see a continued need for the gold standard assessment. There are some advanced MRI techniques like resting state of MRI that can complement tau PET and have been linked to tau spreading in in terms of the the the biomarker assessment. Neurodegeneration MRI is the the is is is the most likely used technique there as you can look at local brain atrophy and that actually is a key part of the inclusion criteria in most AD trials. But then we are also seeing imaging biomarkers for those supporting those increasingly widely targeted hypotheses including neuroinflammation where TSPO PET is a quite direct measure of underlying some microclear activation and therefore neuroinflammatory processes, but then we see less invasive techniques like free water diffusion MRI which has been linked to those those processes and and can serve as a potentially quite valuable and interesting marker for for exploratory efficacy analysis.

46:02 Vasculature, I touched on the importance in the context of different racial groups which is highly important in terms of standardization of biomarkers to make sure we're disentangling underlying co pathology and potential biomarker performance between different subpopulations and more generally is a critical measure to support differential diagnosis and stratification, and it is really can only be assessed from an MRI. There's no blood based measurement to look at strokes or some some other vascular pathology. So we see that continuing to be a key requirement and probably increasing the advanced measures like ASL that can further complement and support the analysis.

46:56 With that, I will probably move on to the next slide, which is my last slide. And here, I'd just briefly like to mention a new R and D project we just initiate we are just initiating, and that really starts linking our core clinical trial technology to potential applications in health care as described by Giulio as part of our strategy in in pillar four when we talk about the bridging into into health care applications. So this is a twelve month partnership project we are starting as we speak, which is around developing AI technology for an application in trial stratification and then potentially in future clinical applications to support dementia diagnosis where we're looking at, like, a screening funnel where we combine different biomarkers including plasma assays but with imaging both MRI and PET to support differential diagnosis and a confidence in in AV diagnosis.

48:03 The project builds on the technology shown earlier and is, in fact, designed to tackle some of the biomarker challenges we see in AD drug development and that we've looked at earlier. It it it benefits from the GAP Biohervis data. Again, I've touched on this earlier. We have a a full R and D license on the dataset. And, again, that feeding into this new project is really illustrating the value we get from innovative datasets like this one. There will be a public and formal announcement of this project over the coming weeks, but I wanted to take the opportunity today to provide a high level introduction to the concept, and we will be discussing this project in more detail in future.

48:52 And with that, I will hand back to Julio. Great. Let's get my camera back on. Super. So summary, if we move to slide 28. So with this slide, just to emphasize the point that with the increasing prevalence of neurological diseases in the global age of population, our purpose here at IXICO has far reaching social benefits supported by long term macro drivers that we've referred to. Number of people with dementia the world is expected to triple by 2015, increasing the cost and burden to the global health care systems. From the pharmaceutical partners perspective, the CNS therapeutic market size is very large, estimated to be in excess of $800,000,000,000 with a very strong CAGR.

49:50 But all of this comes with a health warning that drug development takes a long time with low likelihood of approval and costs a lot, in particular, in central nervous system diseases. However, herein lies the opportunity for niche technology companies such as IXICO to become a mission critical partner to the global biopharmaceutical industry to improve clinical trial designs and increase the opportunity of trial success by the means that we've highlighted in Grant and Robin's presentations. If we then go to the final slide, just want to sort of top and tail the presentation with, again, the precision in neuroscience strategy slide and really just illustrating how, hopefully, we've been able to articulate the five point neuroscience strategy that we have, summarizing how we plan to achieve our objective of becoming a mission critical partner to the global pharmaceutical industry.

50:45 So with that, thank you very much for listening. And I think now would be an appropriate time for us to take time to answer some of your questions. That's great, Grant, Julian, Robin. Julia and Robin, thank you very much indeed for updating you. As ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the guys take a few moments to review your questions submitted already, I'd just like to remind you the recording of this presentation, with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. Julio, you received a number of questions throughout today's presentation. So thank you firstly to everybody for your engagement, this afternoon. If I may just hand back to you to open up the Q and A tab and treat out the questions and give response where it's appropriate to do so. Great. And I'd like to again thank you everybody as well for submitting your questions. So I'll what I'll do is I'll go down them and, read them out and maybe hand them over to, I'll either deal with myself or hand them over to my colleagues, on on the call. So the first one, is how can you compete with bigger competitors?

51:44 So I as I hope we've been able to articulate, we're we're a CNS specialist, and we've been partnering with pharma for a very long time to help discover, develop, and deploy the latest imaging techniques to imaging biomarkers and incorporating those in new clinical trial designs. And we're doing this versus quite often generalist imaging vendors that are much more transactional in their approach and generic in the services they provide. So that's one aspect. The other thing, you hopefully seen in this presentation is that we're aiming to compete on, leveraging technology to achieve our differentiated position. So, our our investment in technology is is aimed at developing highly differentiated tailored services that we can deliver globally without significant investments in physical presence in the different geographies.

52:45 So those are the two key aspects I would would say is how we compete with bigger competitors. So the second question, I'll direct to Grant, which is when will you raise cash? So raising cash, obviously, is an option that we have, and we'll continue to always consider. As a reminder, you know, as I said, we raised 5,000,000 of cash in 2018, and we used that to drive rapid growth and swift move to profitability. The purpose being to invest in the areas of the business that we see long term value. That's what we did. That's what we do. And we've held the course on that despite some fairly substantial headwinds over the last couple of years.

53:32 In terms of the question, clearly, our share price level it is currently, a substantial raise would materially dilute our existing shareholders. And so thinking of raising cash would need to bear that in mind. However, in such a scenario, our hope, of course, would be that our existing shareholders are fully aligned with the substantial latent value of our assets and would see that long term trends in the market and would wish to hold their corner in any such raise. But these are obviously theoretical points at this time because we haven't currently made the decision to to go ahead and and raise cash. It's something, as I said, we would continue to keep under review. And as at such time as we do thought that was the right thing to do, we would and we would be obliged to make the appropriate announcements so that the market is informed.

54:22 Thank you, Grant. Next question, I will take it's, what do you expect the market to look like in FY 2024? So as we refer to 2023 that, we've we've definitely seen, a slowdown, in in r and d expenditure. And I guess this is also cost linked to the, trying to anticipate the the the economic macro, environment that we're in and trying to anticipate what happens in relation to interest rates and and wars across the world. You know, those obviously create a lot of uncertainty, and we're definitely seeing the pharma industry being more selective and, if you like, more choosy in terms of how they're prioritizing their their pipelines. And and, indeed, we're we're also seeing, you know, not just biotechs, but also some large pharma companies, you know, shedding shedding jobs. So my my anticipation at this stage is that we we anticipate f y twenty four to continue to be a challenging environment.

55:35 I'm hopeful that in the second half of the year, we start to see evidence that, some of those things have been, addressed, and, we start to see a clear path to the reinvigorating of some of the, the the financial constraints that, some of the biotechs are under, but also that pharma, obviously retain a a long term view in their investments. But as I said, the the important thing is that we're ready and able to deliver on their requirements when when they come to to initiate new trials. So I guess I'm saying, I suspect more of the same in terms of general market environment. But again, that just means that we have to compete more tenaciously and more and make sure that we get our voice heard in terms of the great science and technology that we've referred to today.

56:30 So next slide, I think might be one for Grant. Would you be better off listing on the Nasdaq? It's an interesting question. So I think I think Nasdaq is is obviously an attractive market from the point of view that I I think traditionally US investors are are particularly keen on on technology solutions, and and capital raise levels can often be pretty significant and often higher, I suspect, than than they have been on on AIM. And I think it's therefore a market that is attractive to to biotech companies in particular. However, the the downside is that being listed on Nasdaq is pretty expensive. I think I read somewhere that being listed on AIM typically comes with an advisory insurance type overhead cost of a small number of hundreds of thousands per annum.

57:23 I think being listed on Nasdaq can be an order of magnitude greater than that. Now, I think if you're a biotech company that looks needs to raise a lot of money to pursue a drug candidate for years before achieving revenues, that relative cost compared to the opportunity to raise those extra levels of capital make it worthwhile. However, for a med tech company that has been profitable and expect to be profitable again in in the not too distant future, that kind of cost, I think, will be difficult to justify. So consequently, assuming, of course, the AIM market functions in the way that it should, which hasn't necessarily been the case over the last year, certainly, then my my expectations we're probably better off an AIM than NASDAQ at this point. Okay. This one, probably a combination, of Grant and and Robin.

58:13 What's the planned r and d spend, and what areas in this investment, I'm sorry. What areas is this investment going into? So maybe, Grant, if you sort of talk to the size of the envelope and and then maybe Robin can obviously expand on on what you say. Yeah. So we invested in r and d as total in from a cost point of view, a P and L point of view was about £900,000 invested in the last twelve months. But we also invested significantly in capitalized development costs, where the bulk of our capitalized cost of 1.3 1,900,000 in the year was related to development spend primarily in the on the next generation trial tracker, but also in in analysis pipelines.

58:59 Looking forward, we expect that level of spend now to come down significantly, primarily because the that platform is now client ready. So whilst there will always be ongoing developments we want to make, the quantum of that initial that big spend that we've had over the last three years is reducing significantly. So in terms of what those quantums will be, we'll probably see the R and D in the P and L go up slightly, but the capitalized level come down significantly. And, Robin, do you wanna just sort of expand a little bit in terms of some of the that you can talk to, some of the areas that you're you're looking at? Sure. The so from a scientific point of view, it's it's really focused on further developing, validating, and I would also say positioning our capabilities across MRI and PET in neurodegenerative diseases. So as I've described, we have had a significant focus on PET.

59:58 I think we we now have a competitive offering from an analyst point of view. There are some platform elements we we are still focusing on and and and some of the the the the service components that we're we're investing into. There are then we didn't talk about MS a lot today, for example, but that's another area of potential where we see potential growth for the future. It's a significant area in terms of the number of trials going on and so on. So we've had some investments in our MRA capabilities in that area, and that will continue. And then it is the besides the pure technique, know, technology development or analysis capabilities development is to support engagement in, those scientific consortia and partnerships that we have outlined.

1:00:58 Great. Okay. So next one, how will the change of chair impact the strategic direction of the company? I guess, it'd be nice if I had the chair here to be able to answer that question. But I I I think the I think the short answer is, I I don't think that change in itself, merits a strategic change, in the direction of the company. I think, what I would say is that in addition to that change, we've also quite recently enhanced our board, where we've, added two additional execs with, pharma background. So I I think the the best way I could answer that question is that, you know, I would anticipate that the, increased expertise on the board and experience in relation to, how pharma values, innovation and the challenges and the the pain points that they have so that, I and my senior leadership team get good good support for our strategic direction of how we're running the business is a very positive thing for the company.

1:02:08 So I I think that's the most appropriate way for for us to think about changes at the board level. But, again, the changes of of the chair, we also have the benefit. Obviously, the fact that the the incoming chair, Mark Warren, is, very experienced with with IXICO, knows the company very well. So, I think that's a a very strong point for for continuity, in terms of strategic direction of the company. Next question. Maybe Robin or Grant, I'll let you fight over who's best qualified. Is AI integrated in IXICO services or future plans? So maybe Robin, do you wanna take that? Yep. Sure.

1:02:54 Yes. So we we have running at the company deep learning program in terms of our R and D development for probably six or seven years now. So we've started transitioning to what a lot of people think of me when they talk about AI several years ago. I was talking about xecute.ai, our latest analysis platform, which is fully based on deep learning concepts as well. So it is a firm part of our current product offering, and we see that continue to be integrated in our product development. Great. Grant, please, can you give more details on how the low share price negatively affects the company's operations?

1:03:43 It's a bit of, yeah, presumptive question there, but So so, well, I think there's a number of factors that play in that. So obviously, to day, the business continues and the share price doesn't impact day to day the operations. We're able to continue doing what we would do and we would do that to the best of our ability. And the fact that the share price is up or down doesn't necessarily always correspond to how well the business is going in itself. One of the key I think the key areas the key areas that does have an impact are the more macro strategic elements. So, for example, there are some opportunities out there that where we are a private company, we're able to value ourselves. We might make a justification that we would be able to acquire companies that perhaps are would be currently valued more than we are with our share price as it is. That makes it harder to do m and a when it might be a good thing for us to to do as a as a business.

1:04:44 Similarly, were we to think that, you know, we want to invest more and grow quicker, then raising capital with a higher share price would be easier to do because it has less dilutional effects. So there's there's elements like that as well. And the third consequence, obviously, is when we know that we have the value in the business that we do and our share price is where it is, there is a risk of us being seen as cheap and therefore a potential target. And these are all, I think, potential risks or you could say opportunities in in with with our share price where it is. But from an operational day to day point of view, the the impact is not significant. Thank you, Grant. I'm I'm conscious we run over a little bit, but there's just one final question, which I think myself and Robin should answer. So it's do you still have any feasible opportunity to win a market surveillance contract for AD for ARIA?

1:05:42 Why do you think this opportunity did not materialize? So I'll I'll start. So, yes, we do believe that there are feasible opportunities out there for for basically implications of amyloid based new drugs coming on to market as as surveillance as actually, surveillance trials, but also post marketing and also potentially in the clinic. Now, there are I mean, the next drug that we anticipate coming to market will further enhance the requirement for monitoring of ARIA. And as you may not know, to monitor ARIA, you need to have a deep capability and expertise in MRI, which obviously is our core capability.

1:06:34 And so, you know, we are looking to partner with third parties to help us access the right sort of opportunities and right sort of data so that we can develop the right sort of solutions to to meet that that demand over the coming coming years. And and just the the second part, why do you think this opportunity did not materialize? You know, I I think there's much to be determined in terms of what the opportunity is and the scale of the opportunity. So I definitely would not suggest that that opportunity there's a there's only one, and it's it should have been it should have materialized by now. So the the pharmaceutical companies themselves are still trying to assess how they get their drugs approved, and I and I can assure you that area monitoring of area and, the deployment, of sorry. The, the adoption of their drugs in in the real world, will very much be considering, monitoring patient safety and ensuring patients are safe and supporting clinicians to diagnose ARIA as and when it might appear in the real world.

1:07:51 So Robin, I'll hand over to you to maybe give a more informed answer than the one I just gave, but that's my view. Well, that's probably only, small piece that I can add. I think you spoke through the, the partnership of, discussions that are going on in the background that that we can probably talk in more detail when the time is right. The only thing to add maybe then is that we have an active r and d program in that area as well where we are developing technology. There's there's an r and d partnership that we're firming up as well that hopefully we can announce at some point. And then last but not least, it does link to the the new r and d project we are just initiating that I've mentioned in my in my last slide in that these are both concepts that, from a platform technology point of view, are quite similar in that it's clinician facing or health care facing technology leveraging biomarkers we've developed in in in for clinical trials. So going through that project that that that I've mentioned will also further support offering a solution in ARIA safety monitoring. So appreciate that this is all relatively weak, but I hope it it still helps to reassure the

1:09:21 the the audience that this is still an area of active interest where we have various initiatives ongoing and where we see a significant opportunity for the future. Great. Thank you. Well, that's Mark, I'll hand over back to you. That that's for all the questions answered. You have you answered all the questions, so thank you once again to everybody for your engagement. Julia, I'll certainly shortly redirect those on the call to provide you with their feedback, which I know is particularly important to you and the team. But before doing so, if I could just ask you just for a couple of closing comments. And then as I said, I'll redirect investors to give you their feedback. Yeah. So, I'd like to, first of all, thank Grant and, Robin for for joining, me on this call today. And, but more importantly, thank all of the, people that have joined the call. Thank you for your interest in IXICO, and, I hope, sincerely that you got a lot from the material that we shared.

1:10:14 And again, thank you for your time today in attending today's call. That's great. Giulio, Robin, Grant, thank you very much indeed for updating investors this afternoon. I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations? This might take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of IXICO PLC, we'd like to thank you for attending today's presentation, and wish you all a very good afternoon.