IXICO plc (IXI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to IXICO plc final results for the year ended 30 of September 2021 investor presentation. Throughout this presentation, investors will be in listen-only mode. [Operator Instructions] Company may not be in a position to answer every question received to the meeting itself, and the company review all questions and this is Dan publish responses were also appropriate to do so. These will be available via our Investor Company dashboard, and you'll be notified once they're ready for your review. I'd also like to remind you this presentation is being recorded. Before we begin, I'll let move the following part. I'd now like to hand over to Grant Nash; and Giulio Cerroni, CEO of IXICO plc. Good afternoon.

Good afternoon, and welcome to everyone. Grant and I'll be presenting today, and we'll just switch off our videos as we present, and we'll come back once we go through the slides. So if we move to the slide deck, I'll go to the first slide. If you can just progress the slides forward? Okay. So the next slide talks to delivering on our purpose. And the key point here is I want to emphasize how invested IXICO as a company is in our meaningful purpose. And that is to advance medicine in human health by turning medical imaging data, in our case, brain scans, into clinically meaningful information. And in doing so, we enable our pharmaceutical clients to gain valuable insights to accelerate the development of new medicines in neuroscience. And you'll see here some numbers around the reason why there's such a large unmet clinical need in dementia, of which the largest is, of course, Alzheimer's. But obviously, neurological diseases is a field much broader than just the dementias. But just to give you some data points as to why this is a market that, for a company like IXICO, is large growing and where the intensity around identifying medicines becomes more intense and more pressing with underlying growth drivers such as an aging population globally. The other point on this slide is to highlight that IXICO, in -- been in this space for over a decade now, has built a very strong portfolio of relationships and collaborations with a number of organizations beyond just the clinical contracts that we have with our clients. I'm just highlighting 4 here, but in particular, want to make the point that these are organizations that obviously have the world to choose from in terms of their partners. The Global Alzheimer platform, which I'll refer to in a couple of slides time, it also fire our 2 organizations where IXICO has been chosen as their supplier of choice in terms of imaging support for their work. But then also, there are consortium and collaborations such as Critical Path Institute, Hermes and the dementia platform, in which IXICO is a member and a partner in terms of ensuring that we, as a company, are very much at the forefront of developing new protocol designs and investigating new biomarkers that are relevant in neurological diseases. And this really plays to our strength in terms of being a scientific leader. And as I said, the value here is in addition to helping us develop our portfolio of solutions to ensure that we are seen as a specialist premium partner to pharmaceutical companies. It also means that we we're able to associate ourselves with many of the leading key opinion leaders in each of the therapeutic areas, which is clearly very valuable to us as we look to grow our commercial business. If we go on to the progress onto the next slide. Another key point I wanted to highlight in terms of 2021. There was a very significant industry event was the approval in June of Biogen's aducanumab. And this is a drug. It's the first drug that's been approved in just under 2 decades, and it's the first drug that's been approved for symptomatic patients. And it's a drug that's been approved, but there's been quite a bit of controversy about the approval, in particular, around the fact that the clinical benefits of the drug are uncertain. It's a drug with known side effects, and there is also a requirement for further studies and post-marketing surveillance to ensure that patients prescribed the drug are of course safe. I think it talks to also the significance of having to have a drug available to patients around the world that is able to support them if they are suffering from Alzheimer's. Now this has also been the main reason why we've also seen the FDA provide breakthrough therapy designations for 3 other companies that fits in the same space, Eisai, Lilly and Roche. And really, the Biogen precedent for the approval would suggest that any small improvement over the aducanumab drug would potentially see additional drug approvals. And so we can all be assured that these 3 companies are pressing very hard to be able to bring their drug to market. And the implications to IXICO, of these 4 companies progress with the FDA is that we anticipate this to mean additional investment in Alzheimer's research, but also -- not just from large pharma, but also from early-stage companies that see an opportunity to develop drugs for Alzheimer's. These drugs are all in the amyloid target therapy approach. But in addition to that, there's a much broader range of targets that the pharmaceutical industry is now looking at. And whilst Alzheimer's has always been one of the larger areas of spend in R&D for the pharmaceutical industry, these approvals and therapy designations, we think, are quite significant stimulus that provides further additional opportunities for IXICO as we look to increase our market penetration within Alzheimer's disease. On to the next slide, please. I also want to talk a little bit about GAAP. I mentioned it earlier. And this is an organization that is -- has been North American-based, has a very large network of partners. And their arena is really to enable new trial designs and new approaches to enable clinical trials to be run more efficiently, more cost effectively. And at the root of what they do also is identifying the right patients. And this is very valuable to the pharmaceutical industry. One of the reasons cited for the significant spectacular phases in Alzheimer's in recent years was that, perhaps, the right patients weren't being chosen, i.e., patients that were clearly suffering from Alzheimer's were those that were predominantly put on to clinical trials. And the feeling now is that those patients need to be identified much sooner, i.e., before they're actually indicating symptoms. And so an organization like GAP, that is able to prescreen patients and provide a cohort of patients that are well identified and characterized, is clearly very valuable to pharmaceutical companies that are looking to running clinical trials in this space. And not only are these companies interested, there are a number of major pharmaceutical companies that you can see on this chart. Obviously, some of the ones I mentioned in the previous slides, but Roche Takeda, AbbVie, these are all companies that -- and also Biogen, these are all companies that are actually invested in hard dollars in supporting the Bio-Hermes trial, which is being run by GAP. And the Bio-Hermes trial is a 1,000-patient trial. They're roughly halfway through that now. And ExCo has been, again, chosen as a partner of choice by GAP to provide PET reads for the study. And the reason this is an important win for us and an important collaboration and partnership for us is that, first of all, it significantly raises IXICO's profile in North America. It obviously clearly adds and provides us with additional touch points with many of these large pharmaceutical companies that we wouldn't otherwise have had as a small organization. And also provides us a showcase for our ability to extend beyond our traditional MRI capabilities to now also be offering PET studies reads for Alzheimer's research. And PET is a gold standard approach that is used to identify appropriate patients for Alzheimer's. And clearly, our being associated with GAP and providing these services is a good case study for us as we talk to these and other companies in relation to choosing IXICO as a partner for them when they initiate their trials in the future. And at the bottom of this slide, there's -- in the bottom left hand corner, you can see there's a link there to a webcast that was done in last week with the CEO, John Dwyer, of GAP, and he articulates very well the purpose of their organization, but also how IXICO is helping them achieve their objectives. So I'd encourage you to go to that. It's a short 5-minute clip, I'm sure you'll find it very informative. Going to, I think, now the financial slides from Grant. Grant over to you.

Thank you, Giulio. So good afternoon, everyone. On my first slide is Slide 8. What I'm going to do is talk about the financial performance of IXICO, which has once again been strengthened across the year. As we communicated to the market in October, the year has been a challenging one, both in terms of the ongoing impact of COVID-19, but more specifically due to the impact of having our largest client trials descoped in March of the year -- this year. So on the back of that, we've been very pleased to hold our revenues at GBP 9.2 million for the year, just a 4% contraction on the prior year, and completing a 25% compound annual growth rate within revenues across the last 5 years. Now we emphasized here in the year and again in October that it is in the nature of our industry for clinical trials to fail, and therefore, the growth path for a company operating in our space will inevitable have bumps along the way. So it's really worth emphasizing the ability for us to have successfully navigated those bumps during this year reflects the resilience we've built up in the business, but also reflects the growing overall market opportunity that we can see ahead of us. Now, significantly, as you can see from the middle graph on this slide, the ability for us to continue to generate strong gross margins was largely unaffected in the year. Now the gross margin of 66%, sustaining the position achieved over the previous 2 years, is in part because we continue to benefit from the high-margin analysis work associated with the Phase III studies that we descoped during the year. But it also reflects the level of revenues achieved by the company at this scale, attracting a level of operational leverage, which in itself supports our strengthening of margins. Now as we look forward into 2022, and I'll touch on this in more detail shortly, we do expect these margins to come under some short-term pressure as our revenue mix moves more to earlier phase trials, which have a reduced relative proportion of associated analysis requirements. However, the market opportunity for the scale gives us the full confidence that the gross margins that we've seen in the past year and a couple of years before that remain eminently sustainable across the medium and long term. On the right of this slide, you can see the impact of building resilience into the business. Managing the business carefully following the descope of client trials and the impact of a couple of onetime benefits that have accelerated our EBITDA once again to new highs. With GBP 1.7 million of EBITDA, we've achieved a 34% increase in EBITDA on -- despite having recorded flat revenues, which gives us an EBITDA margin of just shy of 20%, which in itself is an excellent achievement. But also worth highlighting was the degree of EBITDA accretion that we highlighted 12 months ago, we felt it was possible in the business. All of that, of course, then feeds through to the strength of our balance sheet and the company's ability to generate operating cash, invest wisely and deliver improved returns. Now again, we've communicated in October that we do expect to see a contraction in EBITDA in 2022. The reason for that is that we plan to continue to invest. We see -- we will see the impact of that change in revenue mix and also remove a couple of onetime benefits seen in 2021. However, all of that with standing, the medium and long-term opportunity we anticipate will deliver continued EBITDA growth both in real terms and from a margin perspective as the increased scale that we believe we're able to access increases the operational leverage that we have available to us in the business. So the summary here is, we have delivered very strong revenues over a period of time. We've continued to have strong margins, but we do expect to see a little bit of a softening in the next 12 months before those start to build up again. And that's something really reflecting the rebalancing of our order book, which I'll talk about in more detail shortly, but also the opportunity for us as an organization to have moved from very significant losses in 2016 to continue that journey of increasing profits is something that whilst you will see an expected reduction in 2022 is a trend that we expect to see for the long term. Moving on to Slide 9. We felt that as we did back in May in our interims, and also when we did our trading update in October that following the descopes we've had in the year, there was value in spending more time talking about our order book, an area that we have had a number of questions from investors over the period. So we spent a little bit more time putting together some detail to provide to you today. Firstly, I want to give you is the summary where, if you look at the left-hand chart on this slide, over the last 5 years, our order book has grown strongly to an order book at the end of September of this year, which was almost double the order book at the same point in 2016 despite the fact that we've delivered a 25% revenue CAGR compound annual growth rate across that same period. Now we have, though, as you can see, seen a reduction in the order book across the last 12 months from the all-time high of GBP 21.7 million at the end of 2020 to GBP 18.8 million at the end of '21. And the graph on the right outlines the key movements in the year to explain what has driven that change. So on that graph on the right, the first thing to look at is the light gray box, which reflects the GBP 9.2 million of revenues that we've recognized in the year despite the challenges of COVID and came out of the order book that we had at the end of September last year. Then the yellow cream-colored box reflects the fact that we've also suffered client trial descopes of GBP 7.4 million in the year, GBP 7.1 million relating to our largest clients Phase III Huntington's disease, which we announced back in March, and a further GBP 300,000 in minor trial changes with other clients. And then on top of that, we had GBP 100,000 of FX valuation move against us with the strengthening of the U.S. dollar against the pound. Then to look to the right of that, you see the light turquoise bar, which, importantly, shows that we signed GBP 13.8 million of new client trials during the year. That constituted 16 new projects with 14 clients, 9 of whom are new to IXICO. So essentially in a year of short-term challenges for us, this is really a very significant long-term win for the organization. These new trials, as I'll show in more detail in the following slides, are across different trial phases, clients and therapeutic indications and significantly diversify our order book, something that we highlighted 12 months ago was a key priority for us as a business. In winning this many new trials, the company has also provided with significantly more shots on goal in the coming years, and I'll explain what I mean by that in a moment. The net of all of those movements in the year it means that at the end of the year, we had an order book of GBP 18.8 million, which, if you take gross of the trial descopes, reflects a book-to-bill ratio of 1.5x across the year, equivalent to a very positive win rate. So the net message here is that we had some short-term bumps in terms of the client trial descopes, but actually underlying that, the ability for the company to sign new contracts grew in the year and put us in a better position at the end of the year as a result. And really to emphasize that point, just turning to Slide 10, this slide looks in more detail at the diversification of the order book that we've achieved in the last 12 months. So the chart on the left shows the order book across the last few years, split by the trial phase. And then the graph on the right shows the order book split again across the last few years, split by client numbers and the value of each client to IXICO. So what you can see here is that at the end of September '21, if it's going to have a much more diversified order book in terms of both trial phase, where approximately even splits by phase were held compared to the dominance of Phase III trials over the last 3 years and Phase II trials in a couple of years prior to that. And also a significant uptick in client numbers, where we had 19 clients in our order book at the end of September of this year compared to 12% a year ago. And also, as you can see from the dark turquoise element of the bar, and much reduced reliance on our largest client, which is something we highlighted was an ambition for us 12 months again. Now what's not shown here, but is also the diversification that we've achieved across the therapeutic indications. Now this also reflects an increase in diversification with IXICO. As at the end of September this year, having 11 different therapeutic indications in its order book compared to 5 a year ago. So the key message there is that, whilst we've encountered short-term challenges, and inevitably, any company that has its 3 largest trials either descoped or halted within a period of 6 months, all for reasons outside of our control, there is inevitably going to be an impact, a short-term impact in the ability for the company to deliver the level of revenues that it have otherwise would. But the expansion and diversity of the programs that we've achieved in the year is really a very positive picture for the long-term success of the company. In effect, what the company has done as it's rebuilt its order book in a very short time frame. And in doing so, also reduced single client risk whilst providing a much broader scope for following early-stage trials, which, as you can see, the company has now a much greater number, into later phases if the investigative drugs within those trials succeed in the clinic. So what this means is that from an IXICO investor point of view, there is a need for patients as the company rebuilds its revenues to the levels of growth delivered over the last 5 years, and that will take more than a few months to achieve. But actually, the company, having signed the number of contracts that it has in the last 12 months, is far better positioned to deliver this kick on in growth across the medium and longer term than it was 12 months ago. And I think it's an important point for investors and stakeholders to understand that, to a certain extent, the success that the company has had in diversifying this order book in the last 12 months, risks being overshadowed by some short-term impacts in terms of particular client trials pain, which is inevitable in the sector that we operate in. But the point here is that the basis of trials that we have is now broader than it was 12 months ago. So whilst we will have a short-term retraction in terms of the growth rate that we've been seeing, that is something that is a short-term issue rather than a long-term issue where actually the opportunity for the long term has only increased. So moving to Slide 11. I just want to spend a few moments highlighting the company's financial position. So the company has not only grown rapidly over the last 5 years from a financial performance point of view, but has also carefully protected and built its financial position to enable resilience and support long-term growth, effectively acknowledging the risks of operating the clinical trial space. So as a result, we can continue to hold a strong cash balance of GBP 6.7 million, as you can see from the chart on the left, even after we've invested GBP 2.2 million in capital investments during the year, as you can see in the middle graph. We're essentially generating operating cash, we continue to be debt free, and we've built the financial strength to continue to deliver our investment plan despite the short-term challenges faced in the last 6 months. So again, what this means is that, not only is the market opportunity growing, as Giulio outlined, but also echo technological offering has strengthened and our infrastructure investments have positioned as such that we're even better placed to leverage opportunities as they arise. So all of this has led a string on the graph on the right, to a further growth in our balance sheet with a net asset position increased by over GBP 2 million to GBP 11.2 million at the end of September. Within that includes growth in working capital from GBP 7.6 million to GBP 8.1 million in the year despite the fact that we've invested cash across the same period. We've also secured our London office lease for a rather 5 years based on much improved rental terms at a time when the opportunity was there to do so in what was has obviously been a very uncertain rent market. So what does this mean for us as a management team is essentially we feel very positive and excited about the opportunity ahead of us. Despite the headwinds we faced, and actually will continue to face in the short term, as our rebuilt order book converts to revenues, and we continue to invest in the commercial traction that will accelerate the volume of new trials that we will bid for and hopefully win. Just moving to Slide 12, and just before I hand back to Giulio, I just wanted to spend a few moments talking specifically about the significant investment we've made and continue to make in our TrialTracker system. So we've been using TrialTracker for over a decade, and it's provided the organization with a cutting-edge platform to capture images through imaging slides all around the world, to quality control them, to radiologically read them and analyze those images using our AI capabilities. This is not only facilitates the provision of wider services offering that we provide to our clients, but also provides a regulatory compliant platform into which significant numbers of images are collective and organized in a coherent secure resilient environment. The reason that's important is that in a world of appropriately increased focus on data protection, information security and where small margins and drug efficacy can be the difference between trial failure or trial approval as has been shown by Biogen's aducanumab drug earlier this year, as Giulio highlighted, clients having confidence for any risk of confirming effects in their trial are being minimized by avoiding process error or growth area or a data capture area, era is the utmost importance. Now TrialTracker provides that confidence to our clients and to ensure that we are well positioned to be able to continue to do so, whilst also putting ourselves in a position to continue the scaling of the business. we feel and have been investing in the TrialTracker platform is critical to achieving our goals for our growth. So we've been partnering with Microsoft to develop our next-generation TrialTracker. We're taking our technology forward to the cutting edge of cloud capabilities, leveraging the Azure cloud infrastructure to develop a highly scalable, highly extensible platform that supports not only our current neuroscience analysis offerings but also provides opportunities for wider use beyond that. We've invested almost GBP 2 million in the platform over the last 12 months and anticipate this version of our TrialTracker being ready for use for client projects during 2022. With that, we're fully committed to continue to deliver on our technological offering to our clients. And really this underlines the confidence that we have in the market we see ahead of us. which continues to grow, driven by that aging population by the fact there is that continued high unmet clinical need and the rapidly expanding cost to health care bodies globally, which is a result of these complex neurological conditions. With that, I'd like to hand back to Giulio.

Thank you, Grant. So my last 3 slides are really around how IXICO creates value for shareholders. And again, just taking a look at how our share price is 1 metric, which is obviously very relevant to shareholders. As I kind of look at this, and obviously, look at how the market responds to news. And in recent months, we've obviously taken quite a hit in our share price. And you can see that this time last year, our enterprise value was valued at 5x revenues, whereas until yesterday, it was more like 2x revenues. So -- and I look at this and I obviously want to make the point that, during this whole period, we've executed on our commercial strategy, our 5-point strategy, which I'll refer to in a moment. And a natural fact, there's a time lag in terms of what we do and how that's reflected perhaps in the share price. But I really wanted to use this to emphasize the fact that, as a management team, we're more focused on market traction and becoming more relevant to our clients and being confident that the market will judge us accordingly once we can demonstrate that we continue to have a track record of performance. And clearly, 5 years of year-over-year performance is a good place to start. The other thing you can read from this slide, I think, is that you can see that there's very significant accretion to our P&L once those revenues start to flow through from the trials that we win. And so hence, the reason now for us, the biggest investing we can do to get back to that 5x revenue valuation is to continue to do what we've been doing, which is basically connecting with our clients, connecting with our collaborators and making sure that whenever there's an opportunity for someone to be appointed for imaging services in neuroscience that IXICO is the natural partner for them. So if we move to the next slide, I just want to sort of highlight a couple of things. The first 1 being that clearly, we've strengthened our market position in the past 5 years. And the other point to make is that, that's been 100% driven by organic growth. And I think that's a testament to the strategy, the management team and our organization in being able to build cutting-edge solutions for our clients. And again, just to summarize, that's come through in our ability to deliver a 25% compounded CAGR over the past 5 years; 5 consecutive growth years in EBITDA, delivering a 19% EBITDA margin in '21, and also the significant value in our balance sheet and the fact that we're cash generative and debt free highlights also the value creation from our business model, which is clearly benefiting from operational leverage now that we've gotten to the level that we have as a business and hence, why we very excited about the opportunity ahead of us and being able to take that to the next level. All of this, of course, means that we have been, in the last couple of years, and we continue to invest in our future growth because of that market opportunity. Grant has highlighted the investment in technology in particular. But I just want to highlight as well that we've also been investing in our innovation, and we're very excited about the new AI platform that we will be rolling out in the new year with our new -- first new trials being put on to that platform in the first quarter of the next calendar year. So we're very excited about that. but also our operational capabilities to deliver more projects and larger projects across a wider range of therapeutic areas is very exciting. And finally, with this virtuous circle that we're very excited about the commercial opportunity we have. And so we've recently strengthened our commercial capabilities with a hire with the hire of a new leader for our commercial team, Chris Helton, And Chris, we'll be looking at how we can extend our commercial reach both through our direct organization and through partnerships with key CROs that are focused in a particular area of focus, which is, of course, neuroscience. And then finally, the next slide, really, I just want to highlight, again, this still builds on the fact that this 5-point strategy. The first 4 points are very much about organic growth, and that's worked for us consistently in the last 4 years and will continue to be a major focus and defocus on our growth strategy. But it's also in this, what I would call second phase, i.e., the next 5 years of our growth. We will be increasing our focus on 0.5, which is looking to enhance that organic growth through selective partnerships and M&A. And I just want to emphasize that the strategy has always been a 5-point plan. But I felt that we needed to get to a certain critical mass to really be able to benefit from potential M&As if they're available to us. And I think now that we're at the size we are compared to where we were 4 or 5 years ago, the next 5 years is the right time for us to look at accelerating growth when we identify opportunities that do meet our criteria. The other thing that has been obviously in the last 18 months, 2 years is that we're in a very exciting space. And there's a lot of activity in our space. And there have been some acquisitions of imaging assets, which I've listed there on the left-hand side, which are good benchmarks for us in terms of the value creation, in terms of building a specialist technology company over the next 5 years that can really add value to our shareholders long term by being a significant player in this market. So we've talked a little bit about some of the scientific and collaborative partnerships that we have, but we're also looking at some commercial partnerships, which will allow us to extend our commercial reach or our geographic reach to accelerate our footprint. And, in particular as well, I think M&A would be a route to identify how we might, at some stage, look beyond neuroscience. So we still feel that there's lots of runway for growth -- for organic growth for IXICO in neuroscience. I think it would also, for the same reason, there are barriers for other companies to come into the neuroscience space that aren't neuroscience experts, there are there are barriers for IXICO to move out of neuroscience into those other areas. And clearly, one way that we would mitigate those barriers would be to acquire companies that have a credibility and a track record with pharma industry in some of those other therapeutic areas. So in addition to being a potential route for us to diversify beyond neuroscience, it's also clearly a route for us to accelerate our road map of technologies and portfolio of technologies that we have. So we'll also be looking with a keener eye on any differentiating IP technology. And the reason for that is that our model, and you've seen from the charts that Grant showed, we've been very focused on building accretion in our gross margin, and we've gone from mid-40s to mid 60% in the last 5 years. And so being a technology company, we want to sustain those premium margins and acquiring IP and technology that would sustain that and provide us with an ever differentiated offering is obviously something that we would value and we would be keen to do. So those 2 things basically acquiring capability to extend beyond neuroscience, but more importantly, acquisitions that would enable us to sustain and potentially further build on the premium technology margins we already deliver would be reasons for us to pursue M&A in addition to the organic growth. But again, just as I finish off, I just want to emphasize that the focus very much is investing in the organic business growth that we've been very successful in doing and expect to continue to drive growth for us for many years ahead.

Thank you, Giulio and Grant. Thank you very much indeed for your presentation. [Operator Instructions] I'd like to remind a recording of the presentation are on the copy of the slides and the published Q&A can be accessed via our investor dashboard on the Investor [indiscernible] company. I'd also like to remind you feedback is important to the company. And immediate after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order the company can better understand your views and expectations. Giulio and Grant, before we go into some of the live Q&A, we did have a couple of pre-submitted questions, if I may, I'll just start with those. The first 1 reads, what are the plans to reduce the reliance of earnings on trial outcomes? Or are there any plans to diversify earnings and also increase the customer base?

Thank you. So I'll take this. So our business model has been very much about growing our market position in clinical trials. So that's the market that we are in. And obviously, we need to recognize that trial outcomes often do not result in a drug being approved. So there's always a potential for early turbinations. Therefore, the best mitigant that we have is that over the next 5 years, we grow scale, and we increase our ability to win clients so that we can sustain that profitable growth that we've seen in the previous 5 years. So those are the 2 key things really for me. It's building scale and client diversification to the order book. In addition to that, as I mentioned, with the new platform, we can see that our technology platform will allow us to scale within neuroscience. But I think also there's potential for that platform to enable us to reach into other therapeutic areas. -- outside of neuro. So that would be another way that we would anticipate accelerating our plans for diversification of our clients. So I think those are, I guess, my immediate response to the question.

Second one we have here is, can more not be done to exploit the value of IXICO's platforms such as [indiscernible]?

I'll take this in again. Yes, in short. Basically, with the FDA's approval of aducanumab in AD and also the breakthrough therapy designations for Eisai, Lilly and Roche, we're expecting a lot more interest in not just the initiation of clinical trials, but also the monitoring of potential side effects of these drugs. And in particular, where there are drugs such as those that are targeting amyloids. ARIA is a known potential side effect safety issue that needs to be monitored. So one of the things that we're looking at is we have a assessor platform, which was developed in conjunction with Biogen as a pilot. It was developed for a drug called TYSABRI, which was prescribed for MS. And there was a small prevalence of side effects -- PML as the side effect safety issue that needed monitoring. So in the end Biogen decided not to roll that platform out into production as it were, but that's because the prevalence of PMR was very small. With ARIA, the levels of prevalence are much higher -- And so we are talking with partners around the potential use of Acessa as a means of providing post-market surveillance for those Alzheimer's drugs that will be coming to the market.

Fantastic. That concludes the pre-submitted questions. If I may, just ask you to just click on the Q&A and just where appropriate to do so, just read out the question and give you a response, if I could just hand back to you, Giulio, that would be great.

Yes. So let me -- I'll read out and give Grant the opportunity to answer some to grant want to hear from [indiscernible]. Question is, what is your biggest challenge?

It's a big question. But I think, as we've stated through this presentation, I think as we've stated in our -- the RNS that was released this morning as well, when you're operating in the clinical trial space, it is inevitable from time to time a trial will come to an early end. And so the key for us as we grow our business is managing to build the resilience into the organization to handle those negatives when they happen. And the good news for us is that, if you like, having had those particular instances crystallized in the last 6 months or so. The business has shown that we have to achieve that to build the scale that we will be able to handle those significant impacts, where 2 or 3 years ago, it would be much more problematic for us. So really, the answer to that question, I think, is largely to the extent the question that was asked previously and answered by Giulio is really how we make sure that we continue to grow our -- the diversity of our order book and win new trials to minimize the impact of that, and that just comes with scale. So that's something that we've been successful in doing over the last 12 months and expect to continue to be successful.

So next question from the same chap. What is the difference between new and Cambridge Cognition holding PLC? And is this your closest competitor? So there's a lot of difference. First of all, the -- so the similarity is that they operate within the neuroscience space. But that's about where the similarity ends. They are focused on cognition. They're not an imaging specialist, whereas, obviously, that -- our focus is imaging. And so then we don't see them as a competitor. Their cognition is often a technology that's used by our clients in the trials that we operate in. But it's not something that we offer in likewise Cambridge Cognition don't offer imaging capabilities. So -- our biggest competitor, to answer the question, the way has been Bioclinica. Bioclinica or are the big player in the industry. And Bioclinica were recently acquired by ERT as I mentioned in 1 of the slides to form a new organization called Clario. So maybe next slide -- next question, Grant, is, the recent decline in the share price presented an opportunity for directors to buy the shares. Why were directors not interested in buying?

Thank you for that one, Giulio. So I mean I think it's an interesting question, this one because it comes up from time to time. But actually, I think this comes back down to the fact that whether the Director of the company invested in the company. And of course, we're very much invested in the success of the company. Firstly, I mean, Giulio, obviously, owns the shares of the company. I don't that's not to state that I'm not heavily invested. I only have options that keen to see succeed, and they come -- they're all linked to share price accretion. So the alignment is between us and our wider investors and seeing that opportunity. So many comes down to having additional spare cash to invest. And if someone gives me some spare cash to invest, I will certainly invest in IXICO because it would be the right thing to do. So hopefully, that helps give you some view that it's -- at the current market price, it looks -- it's a very good opportunity.

So I would add to that as well. So I think the question obviously refers to the recent decline in the share price. The other point I would add to that is, obviously, we would have been in a close period in recent months where we wouldn't be able to buy shares. I obviously don't plan to indicate my future intentions. But what I can say is that, as Grant pointed out, I've acquired shares at a much higher price than they currently are sitting. So I would concur with the view that for a company like IXICO, we do look as if we're -- it would be an opportunity for people to take a serious look at. Next question is from [ Peter A ]. How unique is your offering compared to other companies? So I'll take that. So I think it's the last slide in the deck that's in an appendix. I don't know actually if you can show that whilst we're talking, but it highlights -- next slide, here we go. So that slide there, the 6 sort of bubbles highlights the end-to-end nature of our service. So the key point I want to make is that the data analysis, the bottom right-hand corner is obviously where we apply our proprietary AI analytics. It's where the clever analytics goes that it's not just analytics, it's also our ability to access specific cohorts of patients that are specific to the therapeutic area of interest in the pharmaceutical company. And the next bubble, the data management piece, refers to the data platform management system that Grant talked to. But we also have all of this enveloped into a regulatory compliant business model that also includes project management and site setup and protocol designs as a complete offering. So there are companies that just do AI analytics, but don't have the other 5 buckets. There are companies that have data management platforms, but don't have the other 5 buckets. And there are, of course, people like BioClinica, who would have all of the buckets. So I'd say IXICO is one of the few companies that has a complete end-to-end solution for clients. And that's really a key thing that we wanted to emphasize in addition to the fact that we have proprietary in-house developed data management platforms and AI analytics that have been developed from many years of working with collaborators to develop the best algorithms to be applied to the different therapeutic carriers. And that, at the end of the day, all gets reflected in the gross margin, which is obviously a reflection of the price that we're able to charge for our service, which would reinforce the belief that we have highly differentiated products that are valued by our clients. Mark asked the question for you, Grant. Have you enough cash to meet all your ambitions? Can your AI also interpret radio wave scans for breast cancer?

So I'll take the second half of that question first. So no [indiscernible] can't interpret [indiscernible] for any way to come to breast cancer. There's not an area that we're focused on. But in terms of the first part of your question, in terms of our organic growth plans, yes, with a cash balance of GBP 6.7 million, we have the cash that we believe we need to deliver on the scale up program that we're following. Clearly, if we were to look at some nonorganic growth, i.e., M&A, then that might be something that we would need additional cash for. And then that will come down to us making sure that we are happy with the valuation, and that we felt it was the right time to look at raising that cash to so.

Thank you. I then have a question from [indiscernible] again. Can you give an update on the M&A? So again, as I said, M&A has always been one of the points of the 5-point strategy. We -- as I said, we've always kept a watchful eye on the potentials. And clearly, the fact that we haven't done any suggest that we felt our time and effort and money was better invested in our organic strategy. Really, all I'm pointing out is that when I joined the company 5 years ago, roughly GBP 3 million of revenue. We've now tripped that in 5 years. As I look to the next level, which I'd say is how quickly can we double the company? I'm just highlighting that I think it's more likely that M&A will play a part of that rather than assuming we're going to do it all organically. And I think that's all I can really say. But obviously, what I'd also say is, well, that during that 5-year journey, we've been very pleased with the shareholder investment from the institutional investors. And for a company of our size, I think we've got really good supportive institutional shareholders. And obviously, as a management team, we've now got a 5-year track record, which I would hope serves us well if we do identify suitable opportunity. Steve B, this is for you Grant. You mentioned exceptional revenue EBITDA contributions in 2021. How large was it?

Yes, just to be clear on that. The -- what we said is that we had a number of one-off onetime benefits in terms of the EBITDA figure that we achieved in 2021 rather than any exceptional items impacting revenue. So it was really down to changes in cost base on a one-off basis. That equates to a GBP 400,000. So we have an EBITDA of GBP 1.7 million reported. Without those onetime benefits, it would have been about GBP 1.3 million. So essentially, we have achieved an EBITDA margin of 14%, 15%, which would have been in line or slightly ahead with the EBITDA that we achieved 12 months ago.

Thank you. So then Peter A -- last 2 questions, Peter A. Also Renalytics and perhaps Cambridge cognition. So I'm not sure I had you to the question, but I think if the question relates to are the competitors. So again, they're not competitors. [indiscernible] where is an AI model and they're utilizing AI. I guess the point I would make is -- and this is an important point. AI is a very important part of our differentiation, but it's actually one element of our proposition. So clearly, we want to have the best algorithms, but to have the best algorithms, we know -- we need to know how to apply them in the therapeutic areas that we're in. And we also have to be able to deliver the imaging expertise that we have to deliver. So those 3 things combined, really -- the combination of those 3 legs of that stool make IXICO's model work in terms of our clients. And that's why we we're successful in the marketplace. And then Sam M., is the current share price a significant impediment to acquisitions? I can take this. Clearly, if we were at the market cap that we were a year ago, we would have a bigger pond to be able to fish in. I wouldn't say it's a significant impediment, but I think it is, obviously, something that means we have to -- as I said, perhaps we might not be able to pursue some that we would otherwise assume if we were capitalized at twice what we are today. So, yes. Of course, it does in terms of the opportunities. What it also means is that, in this space, clearly, companies that have a book of clients are very valuable as well as a book of technology capabilities. It's more likely that, at the smaller end, we might look at companies that're technology base rather than revenue accretive. So the benefit of a larger market cap would be that we would probably be able to partner with companies that actually would also give us additional client diversification early on, and that might be less so with companies that have a smaller valuation. And that's the end of the questions.

I think you've been skin as us answer every single question. So thank you so much, indeed. Of course, if any further questions to come through the team, we'll be able to review those and we publish responses where appropriate to do in the investor Giulio, perhaps before we redirect the attendees to give you some feedback, I think just to ask you just for a sort of a closing snapshot.

Thank you for that. I really appreciate everybody's time. And I guess -- so in summary, it's been another strong financial performance, in fact, the fifth year of successive EBITDA growth, and clearly delighted to have increased our EBITDA by 34% versus prior year. Achieving high gross margins has always been an important focus in the business, and I'm delighted that the commercial growth strategy implemented has delivered the 25% CAGR in revenues that you've seen over the past 5 years. The market opportunity for IXICO remains very strong. And in fact, I believe, enhanced by the increased investments we're seeing in key therapeutic areas such as AD and a number of rare diseases, which support our growth ambition for the next 5 years. And all of this allows us to continue to invest in FY '22 for the medium term growth to deliver that long-term shareholder value to our investors that I referred to.

That's fantastic. Giulio, Grant, thanks again for updating investors today. Could I please ask investors not to close this session should be automatically redirected for the opportunity provide your feedback in order the management team can better understand your views and expectations. It should only take a few moments to complete. Its great appreciate [indiscernible]. On behalf of the management team of IXICO PLC, we'll have to thank you for attending today's presentation. That concludes today's session. Good afternoon.