£10.5m contract win, update on trading & COVID-19

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR)

14^th April 2020

IXICO plc

("IXICO" or the "Company")

£10.5m contract win, update on trading for the period ended 31 March 2020, and commentary on potential impact of COVID-19 pandemic

New contract win

IXICO plc (AIM: IXI), the data analytics company delivering insights in neuroscience, is pleased to announce today the signing of a substantial new contract for a late-phase open label study in Huntington's disease (HD).  The four-year contract runs to 2024 with a total value of £10.5 million with the expectation that the majority of the revenue will be generated in 2022 and 2023.  This brings the total value of the new contracts signed to-date in the current financial year to £15 million.

Late-phase open label studies enable pharmaceutical companies to investigate, and potentially demonstrate the clinical benefits of, the continued access to novel treatments for patients who have completed the preceding randomised controlled trials.  Additionally, such studies allow patients to continue treatment while those treatments are being considered for regulatory approval. Consequently, as these are patients from existing or previous trials, enrolment onto this new late-phase open label study is currently expected to be less impacted by COVID-19 than other trials, with an estimated 1000 subjects in Europe, N. America & Asia currently anticipated to begin enrolment during the summer of 2020. 

Trading for the period ended 31 March 2020

IXICO expects to report revenue growth for the six months ended 31 March 2020 of at least 25% compared to the corresponding period in the previous financial year.  The Company finished the half year with £6.7m of cash and no debt. Confirmation of the Company's revenues for the first six months of the year as well as its order book position at 31 March 2020 will be announced later in April. The full financial results for the six months ended 31 March 2020 will be announced during May 2020.

COVID-19

The COVID-19 outbreak has affected all businesses in multiple ways. By leveraging its TrialTracker^TM Technology platform, IXICO has rapidly adapted its remote-access, single operational site business model and implemented new working practices to enable all staff to work remotely from home. This has enabled the Company to prioritise the safety of its staff while also minimizing disruption to the current active clinical trial projects for which the Company is contracted to supply medical imaging data analytics.

Clinical trial operations have been affected by the ongoing travel restrictions and social distancing policies put in place by governments across the world and several pharmaceutical companies have already announced suspensions or the slowing down of clinical trials.  COVID-19 could also lead to clinical sites being quarantined or closed down, as well as further restrictions on travel and interruptions to the supply of investigational product to patients.

However, due to its strong order book and operational improvements implemented prior to the COVID-19 outbreak in areas such as site qualification and site start-up, the Company has a significant backlog of image analysis and other revenue generating project requirements for short-term completion and delivery. Given the IXICO business model is based on remote interactions with imaging sites, there is no requirement for travel to site visits by the Company's personnel to complete this backlog.

Outlook

The Company expects a slowdown in revenues in the second half of the financial year ending 30 September 2020 as ongoing work on clinical trial projects is necessarily deferred and new projects delayed into the next financial year by its pharmaceutical sponsors.  Given the nature of these trials, however, the Company expects that any deferred project activity would be reactivated in future periods, enabling IXICO to recoup   the related deferred revenue in due course.

By continuing to carefully manage its expenditure and with the benefit of a strong, debt-free balance sheet and robust order book, IXICO is well-placed to face the anticipated impacts of the COVID-19 pandemic.  This gives the Board increased confidence for revenue growth in the medium to long-term; however, due to the uncertainty around the level and duration of disruption to clinical trial operations due to COVID-19, the Board is not currently able to provide clarity regarding the outlook for 2020.  Further updates will be provided once there is greater visibility on the trading environment.

Giulio Cerroni, Chief Executive Officer of IXICO, commented:

"IXICO is working hard to meet the needs of our clients and to minimize disruption to clinical trials during this time of uncertainty. As well as sustaining service levels, we are coordinating with our pharmaceutical clients, as per FDA guidance, to ensure patients safety in trials as the pandemic continues. The new HD contract highlights how the pharmaceutical industry is continuing to support studies where patients face life-limiting conditions, particularly where discontinuing treatment would risk the patient's long-term well-being.   

"Whilst implementing the necessary response to mitigate an anticipated near-term slowdown in revenues and a constraint on market development opportunities, we will continue to make our technology-enabled services as efficient and agile as possible. We plan to be 'start-up ready' when clients re-initiate studies that have been suspended or slowed down and, despite these extraordinary times, we face the future with cautious confidence."

Charles Spicer, Chairman of IXICO, added:

"I would like to thank Giulio, Grant and all the team at IXICO for their highly responsive and effective teamwork in meeting the initial disruption of COVID-19. Maintaining growth and winning a major new contract against global headwinds is evidence of a well-run business.  The Board thanks our colleagues, our clients, and our suppliers for all their support and, of course wish them and their families the best of health."

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About IXICO

IXICO's purpose is to advance medicine and human health by turning data into clinically meaningful information, providing valuable new insights in neuroscience.

Our goal is to be a leading proponent in the use of AI in clinical development, to improve biopharma R&D productivity through the adoption of breakthrough data analytics in precision healthcare. Through the deployment of novel AI algorithms, we analyse and interpret brain scans and digital biosensor data to enable better trial design, patient selection and ultimately clinical outcomes across all phases of clinical evaluation. Our data analytics services are deployed on some of the most important clinical trials in neuroscience, providing valuable insights to disease progression and patient safety, enabling our clients to make better informed decisions earlier in the clinical development pathway.

 More information is available on www.IXICO.com