Ixico (LSE:IXI) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen. 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 will review your 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 if you could give that your kind attention, I'm sure the company would be most grateful. And I'd like to hand over to the management team from IXICO. Good afternoon to

0:32 you. Thank you very much, Mark. Thank you, everybody. I'd just like to thank you for attending today's call, in which Grant, our CFO, will cover the financial highlights for our first half of two thousand twenty three. I will update on the progress we're making in the rollout of our precision in neuroscience strategy introduced at the end of last year. And Robin, our chief scientific officer, will speak to how we're positioning IXICO to support error detection in post marketing surveillance in new AD therapies. From this surface slide, you see that our strapline is advanced analytics, intelligent insights. In addition today to hearing how our world class neuroimaging analytics capabilities power our ability to win in the marketplace against often much larger competitors, you'll also hear how we've been investing to scale up our operational capabilities to support our growth ambitions.

1:25 We're now able to deploy a robust end to end imaging data and analysis platform that enables us to deliver services across a much larger number of clinical trial projects across all phase of development. We believe that IXICO represents, therefore, a compelling investment case in which I'd like to illustrate now by describing our company purpose. Thank you. So the, purpose of the company is to advance medicine in human health by turning data into clinically meaningful information, providing valuable new insights in neuroscience to our clients in the pharmaceutical industry. Fundamentally, our measure of success is our ability to improve the return investment in drug development and reduce the risk and uncertainty in central nervous system clinical trials for our pharmaceutical clients.

2:13 We continue to build on our very strong franchise in rare neurological diseases, in particular in Huntington's disease, but as previously stated, also intend to further penetrate the larger therapeutic areas. To deliver on our purpose over the next three to five years, we plan to double down on the opportunities we've identified, in particular, in Alzheimer's disease. To do so, we plan to pursue organic and inorganic opportunities to better address the market opportunity in North America in particular, and also establish new partnerships to bridge the divide from clinical development into clinical practice. Now it's we all know it takes billions of dollars to develop new medicines over many years, and herein lies the opportunity for IXICO as a specialist neuroimaging CRO.

2:57 For example, global data forecast that Acy's Alzheimer's drug, Lakambi, anticipated to be approved later, in the summer, is projected to generate $12,900,000,000 in sales for AISIGHT by 2028. However, we also know that over 90% of clinical all clinical trials do not result in approved drugs, with early disseminations being part of the landscape that all CROs operate in. And with CNS strategic areas being recognized as a particularly difficult area. So this then reflects the short and long term risk rewards of investing in a company such as IXICO, whose purpose it is to support the pharmaceutical industry in the development of new medicines. So with that, I'd like to hand over to Grant to provide the financial highlights.

3:44 Thank you, Giulio, and good afternoon to everyone. Before I dive into the detail of our half year numbers, I'd like to give you a reminder of the revenue track record we've delivered over the last few years, as well as where we see our revenues heading for this full year and for 2024. I'd like to dig a little bit into the results so that you have an overview of what has and continues to drive our revenues. You'll recall, for those of you who've listened to us before, in the few years up to to 2020, we saw rapid revenue growth driven in particular by the services we provided to a large global phase three Huntington's disease clinical trial. That was the largest HD trial ever run, was a high revenue project and provided important visibility and validation of our operational and analytical capabilities to the market at large.

4:41 Our revenues peaked in 2020 at £9,500,000 before we received the news that from our client that that HD drug being trialed within that phase three trial was showing insufficient efficacy when compared to associated safety risks. This led to the trial being descoped in 2021 and closed altogether in 2022. The graph on this slide shows our revenues across the period split between those revenues generated from that Phase three HD trial and those generated by other trials. In total, across the period, you can see the decline in our revenues from £9,500,000 in 2020 to what will be a recent low point of £7,000,000 expected this year before we expect to see a return to revenue growth in 2024.

5:29 Within this, however, is a much more positive picture and underlines why we feel very confident about our medium and longer term prospects. In 2020, the HD trial constituted more than 50% of our revenues at £5,100,000 of the £9,500,000 we reported, with revenues coming from other projects at £4,400,000 Since then, we've been successful in winning more contracts, particularly in early phases, with more clients, meaning that our non HD phase three revenues have been growing strongly, and we expect to see a CAGR, a compound annual growth rate, for revenues from those trials of over 15% across the four years from 2020 to 2024. What this means is that whilst in total our revenues have declined in the last couple of years, the relative risk associated with the revenues we've been reporting has been decreasing alongside the increasing diversity of contracts and clients that we've been winning, which puts us in a stronger position to achieve sustainable revenue growth as we look forward.

6:34 Turning to my next slide. This shows our revenues, our gross margin and our EBITDA for the first six months of this financial year. That's shown in teal or the turquoisey color and is compared to the same metrics over the same periods in the last three financial years, which is shown in gray. Looking on the graph on the left, with revenues of $3,200,000 in the first half of this year, we are seeing the final comparator impact to our revenues of the cessation of that large Phase III HD trial. In other words, we expect to see the revenues reported in the second half of this year and across 2024 to show growth relative to this last six month period, meaning that essentially we see the first six months of this year as being the trough in our post-twenty twenty revenue performance, with revenues generated by more recently won contracts continuing to grow and with that negative trending overlay of the loss of the revenues from the phase three HD trial now removed from our performance metrics.

7:35 If you then look at the middle graph at gross margin, we report a first gross a first half gross margin of 46%, which is a drop in the margin compared to our recent history and is as we expected and have previously communicated in our updates, both verbal and VaRNS. As a reminder, this is driven by three factors. The primary factor is that our revenues are now coming from earlier phase trials, which have a relatively lower analysis component compared to other service streams and which are relatively higher cost for us to deliver as they tend to be more labor intensive. Later phase trials, such as the phase three HD trial, tend to have a higher analysis component, which are higher margin as our analysis pipelines are either fully or semi automated.

8:24 The second factor in in the margin picture is that I highlight the operational leverage element of our margins. We have a cost model that benefits rapidly from operational leverage as we grow and as we've seen over the last few years. But similarly, a decline in revenues, especially one that we anticipate to be short term as is the case with now, quickly becomes visible in our in our margins. The third point, of course, is that like many other companies at the moment, the impact of inflation is, of course, a challenge and one to which we are not we're not immune. So that combination of weaker revenues and gross margin, along with the important and continued focus on investing for our longer term opportunity, means that, as you can see in the graph on the right, we report a loss for the first half period since 2018.

9:15 This, again, was as expected. As we look forward and we start to see our revenues grow again, the benefits of the investments that we've made during the last few years will become clearer. The cash that we generated for our operations has been invested in our technology, and it's also being invested in our sales and marketing function, which has been impacted by a relatively high level of staff turnover recent years, but has nonetheless achieved a strong new contract wins record, and we believe there's much more that can come from that. What this all means is that as we look forward, we see the opportunity to grow our revenues both as a consequence of the biopharmaceutical industry's increasing level of investment in neurological disease research, but also our confidence that because of the investments that we've made and the strength and service offering that we have, we are well positioned to extend our market share within that growing market.

10:11 The decisions that we've taken as a management team and as a board reflect our confidence in the market opportunity, which has not gone away and indeed has has very much strengthened over recent years. As a result, in particular, significant progress being made in neurological disease drug development, most obviously exemplified currently by the recent announcements that have been well publicized in the Alzheimer's disease space. Our ability to execute on the decisions, however, as is shown in the next slide, if you can turn to that now, Thank you. Is to a large extent underpinned by the strength of our balance sheet. This slide shows our cash, our net assets and our order book position at the end of the first six months of this year, again, shown in teal or turquoise color, as compared to the end of the previous three financial years shown in gray.

11:03 As a a reminder, we raised cash in 2018 for the purpose of investing in our market offering and capabilities. And in investing those monies, alongside monies that we've generated via our profitability since 2019, has been an important focus of the company of the IXICO team. Specifically, we've strengthened our operational capabilities, extended our portfolio of neurological analysis tools, and invested both in our IT infrastructure and our next generation image capture analysis platform. Irrespective of those investments, we continue to hold 5,000,000 of cash at the end of the the end of March, end of the half year period. Also, within that period, we generated 200,000 of operating cash, and we remain debt free.

11:50 As those investments that we have been making are, to a large extent, to support our ability to scale across the medium and long term, a portion of those investments are reflected in our balance sheet with our net asset position at March 31 at 11,900,000, which itself includes working capital of 6,300,000. Across the period, you can see from the graph on the right a decline in our order book. I'll now go into detail on this over the coming couple of slides. But in summary, this reflects the significant impact of the HD Phase III trial descope and cessation, which along with a couple of smaller trial descopes have removed approximately £14,000,000 of contracts from our order book across 2021 and 2022. And it's a reflection of the number of new, albeit smaller contracts that we've won across the same period.

12:39 That means whilst we see an overall decline in order book value, it remains strong at close to 2x our expected revenues for this year.

12:49 Turning to the next slide. This slide shows the bridge of movement within our order book since March 2022, I. E, covering the twelve month period through to the half year close at thirty first of March of this year. What this reflects is that with the 03/31/2022 starting point of a 12,600,000 order book, our order book has benefited from 11,600,000 of new client trials win trial wins, partially offset by £7,900,000 of revenues that we've recognized and £3,000,000 of small trial descopes, the largest being a £600,000 descope, which we announced early in December last year. This has resulted in our order book closing the year at £13,300,000 at half year, 700,000 above the same time point in the prior year, but below where we were at September 2022 at our financial year end closed position, which was 16,000,000

13:47 And what I wanna highlight there is that this reflects the nonlinear rate of contract wins, where we had a particularly strong second half of the year last year and of contract descopes, where we have suffered the majority of these descopes in the first half of this year. So to really get a feel for how our bookings record has been, which was which will always be lumpy, it's worth looking at across a longer time period. And what we've seen is that we have seen consistently levels of new contract wins over the last three full financial years of at least 1.5 times, and in some cases more, compared to the value of the revenues that we recognized across that same time period. And if you now turn to the next slide, you can see the impact of these new trial wins on the makeup of our order book.

14:37 What the pie charts on this slide show to the left is change in mix in our order book as at the 03/31/2023 compared to how the order book was constituted at the 09/30/2020. The change is stark and reflects a significant shift from an order book dominated by a single large phase three trial to a much more tilted towards earlier phase trials, I. E, phases one and two. This has led to a much reduced client and project concentration within our order book, which reduces our reliance and the accompanying risk associated with any particular trial. The bar graph on the right shows this with with our largest client now at little over 20% of our order book today compared to approximately 80% in 2020.

15:27 What's not shown on this slide, but is within that order book picture, is that we've also seen an approximate 70% increase in the number of studies that we're supporting today compared to 2020. The point here is that with a shift of our order book moving to earlier phase trials, we actually have a significant latent opportunity looking forward where those trials that are early phase, where they're successful, we are well positioned to follow those trials into phase two and to phase three. And that's what gives us a significant confidence based on what's in our order book today we have the opportunity to grow sustainably over the coming years. In terms of our therapeutic focus, that remains very much in in HD and other rare neurological diseases, but we've been making some some good strides in AD as well, with AD now making up approximately twenty percent of our order book with our focus, as you'll hear from Giulio and Robin, very much on expanding this further in the in the coming periods.

16:27 I'd just like now to move on to my final slide before I hand back to Giulio. And this slide focuses on Trial Tracker, where I want to provide a bit more additional color to this significant and critical piece of infrastructure and a significant investment that we've been making as a company over the last few years.

16:47 So for those of you who haven't heard us speak before, Trial Tracker is our end to end clinical trials image capture and analysis platform. What it does is it provides a web based upload for neurological images that enables imaging sites located across the world to upload brain scans from imaging scanners, PET, MRI, etcetera, as well as relevant clinical data into our centralized image management platform. The system alerts us automatically to scans of poor quality or that contain specific issues and also automatically pseudonymizes the scan for data protection purposes. The system then presents the image for manual visual QC quality control to check for any problems with the image not picked up by that automated quality control.

17:32 If the image is then passed, it then is transferred automatically to our radiological network who read the scan to check for patient eligibility to make sure the right patients for the trial and also patient safety to ensure that the the drug that they're on is not causing any any harm. The read results are then provided to the client, and we complete that process of scan upload from anywhere in the world to a completed radiological read within normally a five day turnaround and are able to offer expedited services of three days. Now following the image read, we then pass that image to our data analysis pipelines, which have been developed using highly contextualized data to identify and measure specific disease based biomarkers. The analysis can be volumetric, advanced or exploratory depending on what our client needs.

18:20 But each set of analysis then is submitted to our own internal expert science review where results are collated and transferred to the sponsor at defined times during the study. This process is quite rightly very highly regulated as it relates to patient data which are part of clinical trial results that may ultimately lead to a drug being approved for prescription to patients. Consequently, are subject to regular client audits. We must be able to show the detail and quality of our system validation evidence, the resilience and robustness of our systems, and the system security infrastructure. These are really significant requirements in terms of ongoing investment, especially considering the rate of change within technology and particularly in today's environment of high cyber risk. The point that that we're making here is that the differentiator of our platform and the very significant barrier to entry of prospective competitors is not just about what the system can do today.

19:14 It's also about how it is able to respond to the challenges that will arise tomorrow. Clinical trials take years to complete. The data is highly sensitive and must be stored in a highly organized way with high and increasing levels of security and with the resilience and robustness that delivers a minimum system downtime, mitigates the risk of data loss, and maintains the integrity of those data, which may constitute hundreds or thousands of trial participant images collect collected over several years from multiple global locations and multiple longitudinal time points. To ensure that we stay at the forefront of this, we've invested significantly in our next generation trial tracker, which we expect to launch later this year. This builds on over a decade of development of our existing trial tracker platform, but is but is a full redesign utilizing Microsoft Azure cloud technology portfolio.

20:03 We are hugely excited about the capabilities this platform will provide us with bringing on microservices technology available within the cloud. This platform is not only resilient, secure, and highly scalable, but it's also highly extensible, meaning we'll be able to add capabilities to it much more in a much more streamlined basis than we have been able to with our current system. The ROI on this investment won't be seen in the immediate short term, but is the keystone for the business to scale further and faster as we look to the future. It means that we're well positioned to do so. And with that, I'm I'm now gonna pass back to Giulio who will outline how the system dovetails into our precision in neuroscience strategy. Thank you, Grant. Thank you very much. So if we jump to, slide 12, which is the precision neuroscience strategy.

20:52 So I just wanna give some highlights on each of the pillars. So the the build pillar, we've made, as you heard, good progress in building our imaging CRO scale, providing capacity to run a broader range of client projects across all phases of development. We expect to further enhance this capability with the launch of the next generation platform that, Grant has just described. During the period, we're also delighted to be awarded a tier one, preferred vendor status by a top pharma, top five pharma company. This is for all early and late phase MRI imaging studies in Huntington's and Alzheimer's and also in a core PET imaging analysis, method across all neuroscience indications.

21:33 Now whilst this is not an award for any specific contract, it does mean that IXICO will be at the table for all the, to receive all of the RFPs from this company, going forwards in terms of these, given indications. On the flip side, though, during the first half of this year, we did experience some delays in contracting and project start up timelines, and we need to be mindful that that could continue to the remainder of the the FY twenty three and and potentially going into FY twenty four. But as we as we look forward and with the development of our order book as being a priority and focus of the business, building the business development team and making those investments in our commercial capabilities is key to ensuring we grow and capture the opportunities identified in our pipeline. In the innovate pillar, we continue to see very strong demand for our specialist AI neuroimaging analytics services, in particular, in support development of new biomarkers and CNS clinical trials.

22:30 And this has been exemplified by partnerships with the global Alzheimer's platform in North America and the CHDI Foundation, both evidencing the traction we're building in the important North American market. The partnership between CHDI, IXICO, and three biotech partners is to develop and validate MRI based biomarkers in HD analysis of over 6,000 patient level datasets using our proprietary IXICO, IXIQ dot ai algorithms. And since its launch in February 2022, that new, platform has been deployed, on over 10 clinical trials. So we're delighted with the, the the pickup and the adoption of that new capability.

23:14 Third pillar, the penetrate pillar, in his financial highlights, Grant has illustrated how the makeup of our order book, reflects the progress we're making in penetrating early phase trials so that we have more shots on goal for future later stage clinical trials. Having demonstrated now our ability to deliver both large and, large studies in HD and AD as well as winning early phase studies, we're well placed to follow the assets of those, current projects in our order book into the later stages of development. Final two stages, the bridge pillar and enhanced pillar. The bridge pillar, we're very excited about, and Robin will talk to that in a moment. You know, with the anticipated approval of two additional amyloid drugs during FY twenty three, we believe we're well placed to support and develop a post marketing surveillance area solution.

24:04 Robin will go into the details of how we envisage we can, achieve what we're describing a bridge from the clinical trial to the clinical practice, environment for these new therapies with which have known side effects. And so that's, that post marketing surveillance that we feel is a very exciting new opportunity for us.

24:25 And then finally, in terms of the enhanced pillar, we we continue to explore partnership opportunities and where, where they can accelerate our organic growth trajectory. And, obviously, we'll announce those, when appropriate to so. So if we move on to the next slide, couple I just want to highlight, the the two areas. One is the innovate, and the other one is the bridge pillars. On the innovate,

24:49 pillar, the the fundamentals of a precision in neuroscience strategy means that, you know, you need very rich disease specific cohort data. And IXICO is very well placed, because of our relationships and partnerships and and position in the marketplace. And within the clinical trials, marketplace, going back to the company purpose, it's widely recognized that recruitment of patients is slow, expensive, and is prone to a high degree of variance. So this is, an an area that we feel we can,

25:22 provide significant, value to our clients. The pharmaceutical industry is looking to partners like IXICO to support a more personalized approach to drug development, I. E, recognizing that, not all people are the same in terms of how they might respond to to new treatments. And very specifically, our access to to datasets from partnerships such as, Global Alzheimer's in Alzheimer's and the CHDI Foundation in Huntington's means that we have we have the access to these, datasets that enable us to provide validated best in class analytical solutions to support improved patient recruitment. As a reminder in relation to GAP, we were chosen by GAP to collect, and read PET images in their Biohomies studies, which was around about a thousand patients with the purpose of validating digital and blood based biomarkers for Alzheimer's against the gold standard PET imaging techniques of the day.

26:20 The quote from from John Dwyer, the president of GAP, in in this slide illustrates the potential impact of prescreening algorithms for superior clinical trial design. We also see opportunities to leverage our capabilities to address the recent, announced FDA requirements to improve recruitment of traditionally underserved populations into clinical trials and also to support the development of diagnostic biomarkers as these new therapies come to market.

26:48 And then finally, a just as a setting the scene, if you like, for for Robin's slides, I'd just like to talk a little bit about the opportunity we see for the IXICO in post marketing surveillance. Just just hours literally hours after Eli Lilly released positive phase three data for their anti amyloid Alzheimer's treatment at Dun and Bradstreet on the May 3, the commissioner of the FDA was already discussing the implications and the need for post marketing data collection. Now it's it's unusual for anybody for the FDA to publicly comment on drug approvals before they're they're approved. But,

27:28 here, the the the commission has obviously made a very strong statement, around the likelihood of this drug coming to market and, therefore, the requirement for an evidence ready system that could help accumulate much of the data that's going to be required to ensure that, clinical practitioners are confident in prescribing, the drugs as they come to market. So so with that, I'd like to to hand over to to Robin, and he can introduce our plans and how we plan to position IXICO to support the development of such, an evidence ready system for ARIA. Robin? Thanks, Julio. If you go to next slide, please. So that introduces my section. And on the following slides, I will provide some background on potential market opportunity to deploy our services in post market surveillance in AD trucks.

28:21 I'd like to start by giving a brief recap on the recent progress that we've seen around the validation and approval of anti amyloid monoclonal antibodies and then go on to discuss how this offers a potential opportunity to translate our services from a clinical trial application into

28:43 post market application. So as we know, there are four relevant drugs that have completed phase three trials over the past couple of years. Starting on the left, we've seen AISI announce positive phase three results on the lecanumab drug in November, and the company has since received accelerated approval on based on the phase two results of the study of the drug that was given by the FDA in January. A full approval has been filed based on the phase three results with an outcome expected in July 2023. We have since seen an announcement by the US Veterans Association to provide reimbursement for that truck, which is a key step, of course, towards more widespread adoption.

29:40 More recently, in May, we've seen Lilly announce positive phase three results on their monoclonal antibody, clonanemab, where previously accelerated approval by Lilly was rejected in January based on the limited data available at the time. However, it is widely expected for Lilly to file for full approval by the end of this year based on the positive phase three results. A couple of years ago, we've seen Biogen file for the first approval of disease modifying therapy in AD and received, again, accelerated approval on the aducanumab drug.

30:28 It was the first approved approval of an AD drug in more than twenty years and the first disease modifying treatment while we had symptomatic treatment approved previously.

30:41 It was, however, a highly controversial process as the phase three data or the phase three study that Biogen ran wasn't conclusive and the accelerated approval was partially supported by positive phase three results and the inconclusive phase three data. However, reimbursement was was then rejected by the Center for Medicare and Medicaid, CMS in The US, and Biogen has later announced to halt commercialization of the drug. Separately, Roche have completed a phase three study on the ganteneramirumab drug, but those results read out negatively in November last year and development has been stopped. However, there's an alternative formulation that is still under development at Roche.

31:33 So clearly, it was a long journey to develop successful monoclonal antibodies to to target amyloid in Alzheimer's disease, but it is very clear that the recent positive phase three results we've seen on two separate drugs from AISI and Lilly does or has already moved us into a new era in terms of AD treatment, and it is now widely expected those drugs to become available at scale and being reversed being reimbursed over the next five years. So with that background, I would like to move on to the next slide to talk a little bit about a key side effect in those anti amyloid therapies that requires monitoring by MRI.

32:24 So amyloid related imaging abnormalities, again, it is the key side effect of those drugs that and it does require regular safety monitoring on from MRI. There are two types of ARIA, hemorrhages and edema referred to as ARIA H and ARIA E, and the we see we observe around fifteen to thirty percent of cases treated with those therapies in the phase three trials showing either RAE or RAH with significantly lower percentage developing symptoms from those side effects. It is a well known side effect for years in as anti amyloid therapy was developed and is therefore well understood in clinical trials and regular safety monitoring is performed as part of developing those drugs.

33:24 IXICO has a track record delivering ARIA safety reads in 80 clinical trials for more than ten years. As those drugs now enter clinical practice, we do see a requirement for regular safety monitoring in clinical practice via Atuhelm and the CAMBI labels by the FDA based on the accelerated approval require around three safety monitorings within safety MRIs within the first six months and one safety MRI within one year of treatment initiation. Clearly, this poses a significant challenge for widespread adoption and prescription as the health care system simply isn't ready to provide those safety needs at scale as to date the assessment has been limited to clinical trials with experts expert reads provided through central services and central platforms like the one we are offering in the clinical trials.

34:33 You go to the next slide, please. Here, we're looking at potential phases of rollout of this novel treatment into clinical practice and what the requirement for an Arita solution may look like. We are now in stage one where we have drugs that have received accelerated approval from the FDA and have gone through successful phase three trials where there are sponsor initiated and sponsor controlled phase four studies that are being planned to support approval if that's not received and specifically to develop evidence to support reimbursement.

35:19 We see this as the first stage in those drugs moving away from clinical trials into clinical practice, and we are currently discussing with different potential partners to engage in those studies with pharma sponsors, providing a service not too dissimilar from the one that we provide into clinical trials. The next stage that that we see is local prescription by centers of excellence potentially or likely combined with reimbursement by small insurers and private payment.

36:05 We've seen first we've seen the decision by the VA already on on reimbursing the can be. This then moves provision of an ARIA service slightly further away from the the control of a clinical trial, and we expect second opinion safety reads to to support those kind of applications where a central read service similar to what we see in clinical trial can be provided to support prescription at those centers as excellence. More further away, we see more widespread reimbursement and prescription where we see adoption at at a larger scale.

36:56 And at this point, area safety monitoring will likely require support by by automation as can be handled by by a visual assessment by radiologists. IXICO is well positioned to support services for ARIA read across all three stages. As I said, we do have a track record to deliver ARIA reads in clinical trials. We're doing this for more than ten years, and this will not be dramatically different as we see phase four trials. For stage two, again, we have experience providing a second opinion safety monitoring into post market surveillance, and on the next slide, I will show our assessor product that was developed to provide that service in in MS and can be transitioned into an application in in Alzheimer's and ARIA.

37:57 Finally, as we enter mass adoption and widespread prescription of those drugs requiring safety monitoring at scale, we are well positioned to develop and deliver AI based solutions to support automated decision making based on our track record and history of delivering automated MRI solutions into clinical trials for more than fifteen years now. If you go to the next slide, please, as I said, here I'm just showing very briefly and recapping what we have presented in public in the past a pilot study that we run with Biogen on post market safety assessment where IXICO has developed and launched the platform to provide a second opinion safety read from imaging in in a post market study in MS.

39:00 This was for Biogen's MS drug, Tizepri, and was designed to monitor a rare side effect called PML and provide a second opinion expert read to local centers in case of or in for suspicious cases. The platform was rolled out in multiple territories Euros and Europe and was successfully deployed in in more than 30 centers. It didn't go beyond pilot stage at the time, but this was linked to the commercial plans of Biogen on on the drug and also the fact that PML is a much rarer side effect than what we see in ARIA with incidents being in the low single digit numbers compared to the fifteen to thirteen percent that we've seen for ARIA.

40:00 The the platform has been developed with a potential application in ARIA monitoring in mind, again, with our partners at Biogen at the time, and therefore, is ready for potential deployment in that application. And we are currently exploring several partnership opportunities to deploy that platform in post market studies as a starting point to then develop and support ARIA safety monitoring across the three stages I have laid out on the previous slide. In parallel and for for future, we are starting different initiatives with both academic and pharma partners to develop AI based decision support for our return monitoring and see this as a potential complement for the the radiology based assessment that we see we see in the short term to address the problem.

41:01 And with this, I'll hand back to Giulio. Excellent. Thank you very much. So I'm gonna summarize, the highlights of, of what we've talked about today. So, as you can see from the presentations, we've, you we've seen what we feel what we know now is the final period of comparative revenue impact of the large phase three Huntington's trial cessation. We we now have the benefit of an increased diversity of revenue base, derisking future trial descopes. We've, we've got 11,600,000 of contract wins in the past twelve months. We have an order book that's now tilted to earlier stage trials, means significant latent value from future uncontracted trials. We also have, the broader, progress, and the anticipated drug approvals in Alzheimer's, led by, major pharmaceutical companies, providing a strong opportunity for IXICO for post marketing surveillance.

42:04 A very strong cash balance sheet of £5,000,000, and we have a path to driving gross margins back to historical levels. So with that, that's, conclusion of the presentation. And I'd now like to open to, Q and A. Julia, Grant, Robin, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab just on the right hand corner of the screen, which is why the company take just a few moments to review your questions submitted already. I'd just like to remind you that the recording along with a copy of the slides and the published Q and A will be accessed via your Investor Meeting company dashboard. Giulio, Grant, Robin, as you can see, you've had a considerable number of questions from investors. So thank you firstly to everybody for your engagement this afternoon. If I may hand back to you, Giulio, to manage that Q and A, and then I'll pick up from you at the end. Absolutely, Mark. Thank you.

42:53 So that's the first question from Mark a is, are you seeing any material impact from the cuts to r and d budgets? And and what, if anything, can you do to mitigate this? So I think it's fair to say we as I mentioned, we we have seen, longer periods of contracting, and project start up. And so so, yes, we have seen evidence of that. But but, again, I'd say, remember, we we've got a, you know, small market share in a relatively large market, which is growing. So the way we're mitigating it is is doubling down to make sure that we tell more people, what great products we have and and try to be their partner of choice.

43:40 In actual fact, I think it provides us with an opportunity because, you know, the the pharmaceutical industry is very conservative. It's difficult to to get in front of clients. So so we see it as an opportunity for a company of our size. But, of course, it means that we have to build that commercial team to go out and do the outreach. We're not, you know, to to go out and win people's favor. But it is, I would say, and and Grant talked to right, I think it is, a tighter market. And the way that we plan to mitigate is to, as you as you've seen, continue to invest in our differentiation, which is predominantly from the advanced analytics, but also at the same time continue to be ready to deliver projects.

44:26 And so building that operational capability is also an important part of our strategy to to win in the marketplace. So the next question I'll direct to to Grant from, from is when is the actually when is the actually cash received on contracts compared to when the revenue is recognized? Grant? Yeah. So so essentially, we have a a a service based revenue recognition model. So, as we deliver our services, whether that's project management, site management and analysis, radiological read, we invoice and we recognise that revenue in the month that's delivered. So, in terms of what that means, in practice, we recognise the revenue, for example, in May.

45:16 We would invoice for that work in May and there'd probably be a sixty day payment term attached, so the cash would come in a couple of months later. We do have clauses in our contracts that allow for some advanced payments for some particular aspects. So we do carry a little bit of deferred revenue, but by and large, our cash and revenue recognition are are matched. Thank you, Grant. Whilst you're on the roll, I'll give you another question. Actually, I'll I'll I'll answer. I think you'll you'll add it you'll add further details. So Tom m asked what further investment is needed in terms of the IT infrastructure? So so my preliminary answer to that is that we we have we've made considerable investment in our IT infrastructure in the last two and a half to three years, and that there's always going to be some.

46:08 You know, obviously, it's a technology platform and technology develops, But but I I would consider that, you know, it's been a particular area of focus, and rightly so for the reasons that that Grant made, but I would, expect that level to, to to not be repeated in in the coming, near term. But I'll hand over to Grant to add a little bit more detail to that. Yeah. No. Thanks, Giulio. And of course, that's right. You know, we have had a very much a focus on our IT infrastructure, not only in terms of the on premise infrastructure that we have in place for all of our existing client trials, but also the investment that we've been making in our next generation trial tracker platform, which is obviously a cloud infrastructure.

46:55 Now I think any organization in the sector that we're in who is not expecting to continue to invest in the right infrastructure is likely to encounter issues fairly quickly with the technology and the risks associated with technology changing so quickly. There is always gonna need to be that level of ongoing investment around data security risks, resilience, etcetera. But we have invested significantly over the last few years to put ourselves right at the front of where we'd like to be in that respect. And actually, of the advantage of being investing in the cloud is that where things change and technology changes, the cloud is being regularly and continuously updated by Microsoft. In our case, They're investing huge amounts and will continue to invest huge amounts. And the platform that we operate on top of that cloud benefits from those investments that Microsoft is making. Whereas for a company that is purely reliant on on premise solutions, they're constantly gonna have to continue and probably rapidly increase the volume of on premise infrastructure investments. So, you're never gonna stop investing in the right infrastructure or you shouldn't be.

48:02 But but we have invested significantly, we we will see that level coming down over the next few years. Great. Thank you. So let's have a look. There's a lot there are a lot of questions here. Let's have a look. Line or h, I'm trying to be balanced across a number of people rather than sort of, one particular person. But, if the worst for the company is truly behind us and the revenue growth is set to increase again, then with £5,000,000 cash in the bank, the company's obvious takeover target, please comment. So I'll I'll take that one. Obviously, I I I can't comment with a specific there other than to say, you know, we we obviously, as a management, we we feel that we're our market capitalization doesn't reflect the the true value of the business.

48:53 Our view is that we are clearly bigger and better than we were two years ago, and that doesn't seem to be reflected in our our share price. So the bet best thing we can do is continue to do what we believe is the right thing to do. And, of course, with the £5,000,000 that we have, we feel we'll, we have a strong balance sheet and and and debt free as well. So so we feel, well positioned to be able to execute on, some of the plans, that we've laid out. There there's another question, from which which is kind of linked, I guess, and says that could we see capital raise as a 5,000,000 cash levels decline in the next twelve months? And to that, I would say, that's a very healthy position to be in for a company of our size given the investments we've already made in the last, twelve or eighteen months. So we don't have a technology deficit in our infrastructure or our our data platform.

49:49 So it's really a question of, you know, how boldly we want to go after those market opportunities. And that's obviously something that we monitor continuously, and we'll do so in, what we feel is the best way for the business for the long term. So, let's go to another question. Sam m, given your strategy is to gain phase one and phase two contracts seemingly based on the theorem that you will not get appointed a phase three trial without being previously on the phase two, why do you think you might gain an area market surveillance contract? Is it not in is not an in market surveillance contract an effective mega phase three trial? I think, Robin, that's one that you'll be well versed in being able to answer, I think.

50:45 Sure. There's obviously some truth in that and so far that if the the pharma company might want to work with whoever developed the phase three trial in terms of the imaging requirement. First of all, I guess, without breaking confidentiality, we need to work on some of the phase three trials that were mentioned. So we have contacts into into pharma companies running the relevant clinical trials. The other comment is, I think, on the it maybe the last bit isn't it mega phase three trial. It's a slightly diff it's a quite different trial in so far that quite different requirements so far that some of the services delivered into clinical trials, like the very rigorous qualification of sites and so on, will relax as we go into post market surveillance, and therefore, it is a slightly different contract.

51:47 And I think that links potentially to a separate question I've seen around size of those kind of contracts. And the last point I would like to make is that one strategy of the following is to develop those kind of solutions through partnerships. Julio has referred to couple of examples on where we successfully developed and launched new capabilities through partnerships with consortia or other entities. And this is one other avenue that we are following in terms of the post market surveillance service model. Thank you, Robin. I've got two questions for for Grant, from Sugar s.

52:40 How will chat GPT AI affect your business? Was there a small question? Yeah. So that's a that's a it's an interesting question. I mean, I think I I guess it depends on there there are two elements to that question. What we can use it for and and, guess, how it might be a a threat, guess, is the other element to that question. So like many companies, there are opportunities for us to make use of ChatGPT or other similar AI based tools. We do a lot of development ourselves. We have tools and processes internally already to do that efficiently. But there are opportunities to use things like ChatGPT to support the way that we develop, do some of the coding development that we do. And of course, efficiencies that chat BGP, GPTA and other systems can can apply across across the business.

53:35 I think the other element perhaps to this question is is really often something that and then Robin often talks to, so he may have a comment as well. But about the the distinction between AI per se and applying AI in the context of the business that we do. It's having AI is is fine, but if you don't have the the contextualized data to run it off and you don't have the operational capability of getting the relevant data into that AI, then you don't have the capability that that we have within IXICO. So so it's not just about the AI. It's about having the very the algorithms that that are driven off the the relevant data, but also the fact that we are able to collect data from imaging centers all around the world to bring that into a centralized system, to do that in a pseudonymized way that protects the the identity of that data, that organises that data in such a way that it doesn't get corrupted or errors don't creep in, that allows us then to run that AI on and then deliver that work back to the client.

54:37 That is something that really sets us apart from many AI companies out there. And I and I think that, if you like, the AI threat is is more to to those companies than it will be to us in in that respect. Great. Thank you, Grant. And just another question. Could you give more detail in what you mean by careful cost management and what cost savings are available? Yes. So I'm I'm quite glad that question was asked because essentially what we what we regard as careful cost management is not just saving cost. I mean, to a certain extent, anyone can save cost. You just take cost out of a business, but that doesn't necessarily make it sensible or appropriate. So in terms of what we regard as careful cost management, essentially, it's a it's an exercise that protects as far as possible the financial resources of the company whilst at the same time not undermining the the medium or long term opportunity for that company to succeed.

55:31 So that's that's how I define careful cost management. In terms of what that means and what are the the specific opportunities to save costs, what what we are able to do is we have where we have known that we're going through a period where we would have been declining revenues before we we expect them to increase again. We have been careful with things like recruitment. So we've had a small reduction in our headcount, which has been natural. Where people have left, we have chosen not to replace. We've been very sensible and prudent in terms of the way that we look at external supply based costs. So obviously negotiation of those costs is part of it where we can bring things in house. Recruitment, for example, we've been very successful at doing all our recruitment ourselves where we have recruited. And that is a significant cost saving for us as a business.

56:19 But also going back to the technology question, where we utilize and have migrating to the cloud, how we use that cloud, how we how we set things up. That's been an exercise that's been done in house and has made sure that we're utilizing that cloud efficiently and that we identify savings accordingly. And then more broadly, an ongoing approach for us as a business is how we do things with more efficiency. And so making sure that we are doing things as efficient as we can, we're increasing our productivity levels. That all ultimately relates to careful cost management. Thank you, Grant. So then I've got three questions from which I'll combine into one answer, I think. One is, how will you increase the order book? There haven't been many contracts won this year.

57:07 And what's your biggest challenge? So I I group all of us in. As I said, you know, going forwards, our focus is very much on the development of the, the order book and continue to to do that, in an accelerated pace. I mean, earlier, we talked about how, you know, we we have seen contracting taking longer, startups taking longer. So so those are obviously the the dynamics. But as I said earlier, we're, we're very successful when we get in front of customers. We're very, able in being able to articulate the added value that we can provide with our our platform and our analytics capabilities. So so our biggest challenge really is to build that commercial capability so that we're in front of people and we're able to tell them, and we don't want to remain the best kept secret in the neuroimaging world. So so, hopefully, that gives a a a rounded answer to all of those three.

58:04 So that that's our biggest challenge is, basically, as a small relatively small company competing with much larger organizations, many of which are in North America. That that's our biggest challenge is to is is to, you know, be seen and be heard, in that environment, which, is is, you know, probably a little bit more competitive now than it would have been a couple of years ago, but holds many opportunities for a company of IXICO's size and especially with the, with the backdrop of the developments in Alzheimer's, which is why in particular, we're doubling down on the opportunity in Alzheimer's. And I think that's all the questions there. There's one more from Sam, and maybe we can finish off on that one just to which talks to asking the size of what a contract for area market surveillance might look like. And and I think Robin went some ways to to answering that. But but just to I mean, without putting a number on that, just to put some some numbers for people to extrapolate their own.

59:05 Know, in The US, there's around about six million people suffering with with Alzheimer's. You know, proportion of those, it really comes down to what's the proportion of those that might be prescribed the drug and and work your work your way backwards from that. But but clearly, significant contracts, that are getting significant work needs to be done, in the in the next year to two years by these pharmaceutical companies. The, FDA commissioners already signaled that there's going to have to be continued data, to be supporting the reimbursement of these drugs. So so we anticipate pharmaceutical companies will be spending their dollars to support the, adoption of these drugs in the market that they spent billions of dollars developing.

59:56 Thank you. That's great. Grant, Giulio, Robin, thank you very much indeed. And I think you've addressed all the questions from investors, and thank you once again for your engagement this afternoon. Giulio, I know investor feedback will be particularly important to you and to the rest of the management team, and I'll shortly redirect those on the call to give you their feedback. But before doing so, I wonder if I may, Giulio, just ask you for a few closing comments, and then I'll redirect investors. Yeah. So, again, closing comments is, I hope we've, provided you with the information you need to make your own assessments in terms of the, the the the value of the the platform that we built and our ability to address the market opportunity. And I wanna thank you all for your, attendance today, and, wish you well for the rest of your day. That's great. Julia, Grant, Robin, thank you once again for updating investors this afternoon. Could 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?

1:00:54 This may take a few moments to complete, but I'm sure it'll be greatly welcomed by the company. On behalf of the management team of IXICO PLC, we'd like to thank you for attending today's presentation, and good afternoon to you.