IXICO plc (IXI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the IXICO plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and will publish responses where it's appropriate to do so. Before we begin, I would like to submit the following poll; and I'm sure the company will be most grateful for your participation. And I'd now like to hand over to CEO Giulio Cerroni. Good afternoon.

Thank you very much, [ Mark ]. Welcome, everybody. Thank you for attending today's call, where we're presenting IXICO's interim results for the first half of 2024. I am Giulio Cerroni, IXICO's CEO. And I'm joined today by Grant Nash, our CFO; and Robin Wolz, our Chief Scientific Officer. You're going to hear today how IXICO is in the business of unlocking the power of medical images with artificial intelligence in neurological disease trials; and whilst we've experienced a shortfall in anticipated bookings for the first half of the year, why we're confident that we can make up ground in the second half of this year. This is evidenced by the fact that, subsequent to the first half year ending March 30th, we've signed new contracts and received notification of awards of competitive tenders that we anticipate contracting during the second half of this fiscal year. Grant will walk you through our financial results for the period, outlining the cost control actions we took at the beginning of the year, because we obviously came into the year anticipating continued market headwinds that we saw in the previous year, but also demonstrate how we were able to maintain our commitment to provide high-quality, flexible and responsive services to our clients who obviously have come to expect high levels from IXICO to support them in their clinical trials. And then, after Grant, Robin will be presenting on how the Leading with Science commercial strategy we implemented at the beginning of this year, after a grassroots review of our business processes -- and that's playing its way through to a strong pipeline of opportunities which we are very focused to deliver both to support our guidance for FY '24 but also to provide a sustained platform of growth for '25 and onwards. So that's the order. And then at the end, I'll close the presentation with a couple of summary slides. So without further ado, we'll skip beyond the disclaimer, on to the next slide which is Slide 3. Thank you, [ Mark ]. So this slide is headed "Trusted partner to Biopharma." For those of you that are new to IXICO, a few words of introduction, but basically we have a very strong, highly recognized position as a specialist in advanced analytics in neuroimaging. And I'll talk later about the attractiveness of the neuroimaging market, but basically I can't emphasize enough on the importance of the value of IXICO's track record as being a trusted partner to the global pharmaceutical industry, which in our opinion will be difficult for others to build or replicate. And so a major asset that we've built and a major platform that we've built in recent years in particular, but obviously the company has been around for -- actually it's our 20th year anniversary in December of this year. So this highlights, the slide highlights a couple of things. First one is that we directly contract with the biopharmaceutical industry. That's important. It means that we have those direct connections scientifically but also from a business procurement perspective. And we are on the approved master vendor lists with -- of supply agreements with many companies across the industry. We're very focused on differentiating ourselves by expanding our portfolio of AI-powered biomarker services. Robin will be highlighting some of the emerging imaging biomarkers that are underpinning our growth plans for the coming years but also how this is really helping to differentiate IXICO from much larger competitors. If I, if we just look at the last 5 years of our 20-year history. We've worked with 5 of the top 10 pharma. And you'll hear from Grant in terms of our order book. We also have a large range of biotech companies that are existing clients. And in terms of our existing order book, we're currently running 26 studies with 17 different sponsors. And again, Grant will give you an insight into the makeup of that order book, which clearly is very valuable and holds a lot of latent value for the business in terms of onward opportunities and in terms of pipeline development for our pharma sponsors. And then finally, in addition to building a stronger position with our biopharma sponsors, what we're also now looking at this year and going into next year is how we can raise our profile with the larger CROs who -- as we aspire to take on and expand with larger trials across a wider range of therapeutic areas, we believe it's important for us to develop those relationships. And so again, we have a good book of master service agreements with a number of those, but we'd like to expand that to support and increase an acceleration of our pipeline to provide us and feed us with more RFPs that, again, Robin will talk to in his presentation. So if we then move to the next slide. And I just want to highlight in this slide here just a similar message to the one I've highlighted previously but just with some different perspectives. And this is basically talking to the reason why we're so focused on this area and why many others are as well but obviously clearly driven by a large unmet medical need in neurological diseases across the globe. So just one perspective in terms of a disease area. Neuroscience (sic) [ neurological conditions ] is the biggest cause of ill health across the world; and the second largest cause of death, after cardiology (sic) [ cardiovascular disease ], so clearly, with an aging population, that's going to increase and so create an even greater burden on health care systems. And clearly, as a result, this area is a very large opportunity for those companies that can develop new treatments that can support patients and reduce the burden on health care systems. And that's why the biopharma industry is very focused in this area. And I should also highlight here that, just to put things into perspective, the neurological diseases -- obviously there aren't many treatments in clinical practice because they are so complex and it is so difficult to develop new treatments, but clearly, for those companies that are able to develop drugs and get them on to the market and provide patients with really a life-changing treatment that can make their lives better and give them a high quality of life for longer, clearly, there's a very large prize that these pharmaceutical companies are chasing. And as a result, they're spending billions of dollars. And just to put that into perspective. These trials are often significantly larger and cost more money and take longer than other trials in other therapeutic areas. So for example, in the case of Alzheimer's, it can take as long as twice as long but actually cost as much as 8x more for a clinical trial in Alzheimer's than it does in an oncology trial. So to -- giving a perspective there of the amount of dollars that are being spent in this field. And that in itself then is obviously driving the clinical trials CRO industry and in particular those modalities and technologies that are supporting precision medicine. And imaging in neurological diseases is increasingly being adopted as a means to provide objective, measurable biomarkers to support precision medicine. And that is obviously the space that IXICO is placed, and so for all those reasons, we see a long runway for growth supported by long-term macro growth trends -- and with a highly differentiated technology platform that's been validated by the pharmaceutical industry, places IXICO in a very strong position to capitalize on those R&D dollars that are being invested in the space. So moving to the next slide. Again this is same strategy, Precision in Neuroscience, that you've heard me talked to in recent presentations. Key points I just want to make here is that -- very much that this is a data-driven growth strategy to support precision medicine with next-generation AI-powered biomarker services. So as I said, Robin is going to talk to how we're directly linking our technical differentiation, which we've built on our ability to access highly curated data to support and -- the development of cutting-edge tools for the analysis of medical images; and how that's playing into our pipeline of opportunities; and how we, as a -- much smaller, compared to the many larger organizations, are actually able to get in front of the queue and become the partner of choice for the biopharma industry. So with that introduction, I'll hand over to Grant to present the financial highlights for the first half of '24.

Thank you, Giulio. Good afternoon, everyone. I'm going to start with the slide you can see now that shows IXICO's revenue since 2020, both in total; and split between those deriving from a large Phase III Huntington's disease trial, which is the part of the bar shown in pale blue, and those that arose from all the other projects that we were servicing at the time, which is the bit in gray. As you can see, the large Phase III Huntington's disease trial dominated our revenues in 2020, meaning of a total of GBP 9.5 million revenues, GBP 5.1 million of them related to that Phase III trial, with GBP 4.4 million of our revenues relating to all the other trials that we were servicing at that time. As we've communicated many times previously, the large Phase III HD trial was subsequently descoped in 2021 and then canceled altogether in 2022, which materially impacted our total revenues, reducing revenues from GBP 9.5 million in 2020 to GBP 6.7 million in 2023. However, with this declining revenue profile was a significant positive in terms of revenue growth from all the other trials that we were supporting, and this is a message we want to make very clear. Across the period 2020 to 2023, we won more than 30 new trials, primarily in Phase I and Phase II and primarily with biotechs. These underlying revenues grew approximately 20% CAGR between 2020 and the end of 2022 before holding level across 2023 as capital markets tightened significantly and biotechs in particular were impacted by the increasing challenges in raising capital to support their planned trials. This tight market has continued into 2024. And following 3 years of this underlying revenue growth, i.e., growth of all revenues excluding that large Phase III trial, we expected at the start of this year to see flat revenues over 2024. The first 6 months 2024 have, however, been even more challenging than we anticipated. Where we had targeted in the first 6 months of the year to sign 5 contracts of a significant value, actually whilst we did sign 1 of those contracts, we lost 1. And we saw the other 3 being deferred by the respective sponsors. Now whilst those delays didn't materially impact our expectations for the first half in terms of revenue, which were close to our internal budgets, as we know that new contracts take time to convert into revenues, they will have an impact on the second half. And consequently, we updated the market on the 13th of March this year, indicating that our revenues for the full year would be lower than expected. [ This, of course ], has been challenging, but it confirmed that we need to be -- remain very cognizant of costs. We had expected challenging market conditions and undertook a cost reduction exercise right at the start of this half year period. The company has consequently reduced total costs by a little over 1 million compared to 12 months ago, with an approximately 20% reduction in head count being partially offset by a small increase in non-staff costs resulting from a combination of one-off costs and the impact of the high inflationary environment. This has been completed whilst reorganizing our delivery model to reflect our Leading with Science approach, which Robin will speak to more later. As we look forward, however, prospects are materially brighter. We are seeing a pickup in our sales pipeline that Robin will talk to in more detail. And significantly, since the half year period end, we have signed new contracts and received notification of awards of further contracts that are material in value and will be announced on contract signature. This gives us confidence that the very challenging markets we've experienced over the last 18 months are starting to soften. And whilst we don't expect these contracts to change our revenue outlook for this year, these are important to underpin improved financial performance in 2025 and, of course, beyond; and ensure we are close -- we close the year with an order book that is stronger than where we started. And as important, we expect that order book to retain the level of project diversification that we've seen over the last few years, putting IXICO in a strong position to resume revenue growth. If you could turn to the next slide, please, [ Mark ]. Looking at our financial performance, specifically for the first 6 months of the year. As outlined, we've seen weaker revenues following an 18-month period of tight capital markets and lower booking levels. This has resulted in GBP 2.5 million of revenues for the first half of the year. The more positive bookings expectations that we have for the second half mean that, whilst we only see a marginal positive impact of these bookings in our H2 revenues, these bookings should set the foundations for growth as we look forward to financial '25 -- financial year '25 and beyond. We anticipate this more positive outturn will also be seen in the gross margin and EBITDA of the company, which due to the relatively high-fixed-cost base of the business will benefit from revenue growth, with a substantial portion of the revenue increases transferring directly into gross margin and EBITDA. The EBITDA will be further supported by the cost reductions that we've made in the past 12 months, although this has been partly hidden by the reduction of costs being capitalized now that our next-generation data capture and analysis platform has been fully validated and is ready for use. And this change to ready-for-use status of what is a significant asset results in an accounting change which means that costs that we -- previously were being capitalized are now treated through operating expenses and therefore impact on our EBITDA. Moving to the next slide and looking at our financial position. We continue to have a strong balance sheet with net assets of GBP 10 million and working capital of GBP 3.5 million. Within our working capital, we hold GBP 2.5 million of cash and continue to be debt free. Cash has been impacted by the recent decline in our revenues despite the reduction in costs that we have made over the last 12 months. And this does reflect that IXICO has a largely fixed-cost base and is currently operating below the key revenue level for it to break even and generate cash, which is at approximately GBP 8 million revenues. The key indicator for the company in returning to growth after what has undoubtedly been a challenging 18 months will be the traction that we see over the coming months in winning new contracts. We expect that this will show an augmenting of our order book from the GBP 12.7 million current position. And we target an order book position above the prior year close of GBP 14.8 million, which in itself will provide good visibility for growth. Turning to my next slide, I'll provide a little bit more detail on our order book. So this slide shows that, despite the last 12 months being challenging for bookings with tight capital markets, meaning we've seen proposed trials being postponed or even canceled, we still across that period delivered contract wins higher than revenues. However, we have also seen several small trial descopes in the period as well as a small negative shift in foreign exchange, meaning that, across 12 months, our order book has contracted by GBP 700,000. It is this position, however, that we expect to see materially improve across the second half of the year as several bookings that we have line of sight of come in. And we target an order book well above the current position. Turning to the next slide, again on the order book, I just want to highlight the diversity that we have in our order book. As you can see, the order book is heavily weighted to earlier-phase projects, which while smaller and lower margin than the later phases, do provide an internal pipeline of opportunities for projects to progress to those later phases should the current phase be successful. We're also seeing, as you can see on the pie chart on the right, a diverse mix of therapeutic areas within our order book. Whilst Huntington's disease is still our primary area of project delivery, we have a good proportion of Alzheimer's disease projects as well as a range of rare indications. Now the reason to highlight -- moving to the next slide, please, [ Mark ]. The reason to highlight some of this in the order book is that it's really important that we convey clearly how far we've progressed in diversifying the constituent parts of our order book since 2020, so this chart shows the total value of our order book across the last few years and shows that now we have a much more balanced profile of order book than we did a few years ago. To illustrate: In 2020, our order book was dominated by a single project that constituted approximately 75% of our order book by value. This provided a very positive total order book figure but contained significant risk and had limited growth opportunities embedded within the order book, as the Phase I and Phase II trials totaled just GBP 3 million. Today, however, whilst the overall order book value is lower in total for all the reasons that I've explained previously, it actually contains much more opportunity to grow, with Phase I and Phase II trials totaling approximately GBP 9 million, with the single largest project totaling just 18% of the order book, so we have much more diversity and much more opportunity, based on the platform that we have today, even though the order book is lower than it was a few years ago based on that mix of contracts. So the point here is that, as we -- you can see, as we start to see a recovery in the market, which has been suffering significantly over the last 18 months, and we target the achievement of new contract bookings equivalent to the levels that we saw across 2020 to 2022, we aim to see order book develop rapidly whilst maintaining the level of diversity of projects that we currently have, which will increase the company's resilience to any single trial failure significantly, compared to previous years, but also provide a very strong pipeline for future growth where those trial phases that we complete succeed. I'm now going to pass over to Robin to talk more widely about how we are leading with our science.

Great. Thanks, Grant. And good afternoon, everyone. So in my slides, I will talk a little bit about how we use our scientific engagement to drive commercial momentum, an approach that we are calling Leading with Science, which is a -- obviously a term that Grant and Giulio mentioned in their slides as well. So as we presented in previous updates -- sorry. Yes, [ if we go to the ] next slide. Thanks. As we presented in previous updates and as also summarized by Giulio earlier in the deck, we continued to execute on our Precision in Neuroscience strategy. And in this context, I will briefly touch on what we mean by Leading with Science and then focus the second part of the presentation on how we are starting to see some initial indicators on how this change in approach is starting to show an uptick in commercial momentum. So as part of the changes we implemented over the past last year probably, we have started putting more effort and resource on developing an increasing number of relationships and touch points with an increasing number of pharma sponsors, really designed to start developing a sales pipeline from the very beginning of the discussions and then go through this what is typically an 18 months sales cycle in our industry. The approach is well illustrated by what we do across scientific consortia, which is why I'll -- I've talked through some of those on the slides, and the other partnerships we're doing in our therapeutic indications, but it also includes other engagement strategies, including conference attendance, direct client engagement as well as scientific marketing. So the consortia really support our commercial strategy in 3 ways. First, access to data, which supports our R&D road map to develop and validate [ these specific ] biomarkers, as Giulio pointed out earlier on. It then is a highly useful and valuable opportunity to engage with the scientific community; and demonstrate our thought leadership, our expertise and capabilities. And then finally, as an extension of the first 2 points, this helps with direct engagement with biopharma partners on their upcoming development plans and the scientific topics more generally. So with this background, if we look at the [ top-hand ] panel on this slide, we see the consortia across therapeutic indications we currently partner in and -- or have worked in recently. I will recap on the next slide a couple of updates I gave 6 months ago, in our full year results 2023, in terms of AD, specifically to then get into how this funnels into our pipeline. Before going there, I would like to briefly summarize again how this approach has been and is a key pillar in our HD success story, again as we presented previously, traditionally or historically a core part of our order book and [indiscernible]. So most recently, this is illustrated through the HD-IH consortium, which is a consortium focused on the development of HD MRI biomarkers that we have cofounded together with the CHDI Foundation and several pharma sponsors. So this partnership enabled us to obtain access to key natural history studies in Huntington's, including TrackOn and Track-HD, which are listed here, which in turn helped us develop and validate our IXIQ.Ai analysis product that I have presented on previously and is now our flagship product in Huntington's and other indications as well and is setting new standards on how to do the analysis in those TAs. Separately, we have -- as previously mentioned, we've secured partnerships with various biopharma partners in this consortium that have an interest in developing Huntington's disease. We see listed here PTC Therapeutics, uniQure, AskBio, all of with -- whom are backing the consortium from a financial point of view but also who are obviously leveraging the results obtained in their trials, which helps developing and positioning our analytics solutions to those sponsors but also the HD community more widely. So the contribution we give to the scientific community helps us showcase capability and then, at the same time, enables us to engage with the member companies on their planned clinical trials, so pretty much addressing all of the 3 points we see on the left. So a really nice case study of that approach. So moving on. What we have started to present on in the past update here and then more generally is that we are starting to put building blocks in place in some of the larger indications, specifically in Alzheimer's disease as well. And so to that end, if you go to the next slide, please, I'd like to just show again a slide that I presented in December, to then build on it to look at the pipeline. So again, this is a slide I had in the full year's presentation in December. And what it's illustrating is really the progress we made in gaining traction in some of the initiatives outside HD, specifically in Alzheimer's disease. I went through all of those in December. Today, I just want to highlight and focus on the Bio-Hermes trial with -- and our partnership with the Global Alzheimer's Platform. So this is a leading natural history study in Alzheimer's disease that has concluded last year and where we're now working through analysis of the data and the application of our algorithms to the PET data collection. And we are starting to see some of the momentum this is creating similar to what we had in Huntington's disease. So we -- for example, as I have mentioned previously, we had a highly visible presentation on those findings at the CPAD conference, which is the main conference in Alzheimer's disease clinical trials, with all key pharma sponsors as well as scientific stakeholders attending. So a great forum to showcase our expertise and capabilities. So again what I think this is demonstrating is how we're starting to replicate some of the building blocks we put in place in Huntington's disease several years ago. There are other examples of that kind, some of which, as I said, I presented on before; some of which we hope to announce over the coming months. So with this context, I'd like to shift gears a little bit; and look at -- as I mentioned previously, look at some of the lead indicators we are starting to see in terms of commercial momentum as a consequence of these engagement strategies we put in place over the past 12 months or so. So if you go to the next slide, please. What the center 2 graphs on this slide show is the split in our sales pipeline per therapeutic area in September '23; and then again in May '24, so now. So this is an 18-month pipeline. So we're basically looking out for trials we are engaging with that will be outsourced over the next 18 months, which is roughly the sales cycle we're looking at or we're dealing with in our industry and therefore does define a good point of reference as we look at our mid-term outlook. So the size of each pie chart represents the number of opportunities. And then the split, so the pie itself, defines the [ splitting of opportunities ] across the core indications we track separately. So these are Huntington's disease, Parkinson's disease, Alzheimer's disease and multiple sclerosis; and then separately, studies in other category, which are typically rare neurodegenerative diseases we support, including ataxias or PSP, MSA, those kind of rare neurodegenerative indications. While -- we need to acknowledge that these graphs include opportunities across all stages of the sales pipeline, which means everything from an early qualification where we have created a new opportunity and are engaging with the client, all the way through to [indiscernible] award and then as opportunities go into contracting. So it's a range of maturity that sits in these pipelines. However, as we compare them like-for-like over time, which is what we're doing here, they do show an important direction of travel, so to speak, in terms of where our commercial opportunities are going. So if we look at the size of the pie, what we see really between September and May is largely a doubling in the number of opportunities we're targeting. And we also see an increase in diversification between therapeutic indication. Specifically, what we see now is an increasing share of Alzheimer's, Parkinson's and MS opportunities, which is by design, so we are starting to see a more balanced picture, where previously the pipeline was primarily dominated by Huntington's disease. As we acknowledged previously, HD is a comparably small market. And so that trend that we're observing towards increasing diversification is what we'd expect as we grow the overall pipeline of opportunities. What we then see on the top left of this slide is just the same pie chart Grant showed in his last slide, here with not absolute numbers of trials [ in our order book but again ] the percentage split, so -- as of March 2024. And if you compare that to the sales pipeline in September and then also May, again what we are seeing is an increasing diversification to larger therapeutic markets, a trend that we expect to be increasingly reflected in the order book as those opportunities mature and then contract. In fact, on this point, it is worth noting that is a trend that we are already seeing in the contracts that we've booked since March 31, so basically since we closed H1. Giulio and Grant mentioned recent awards and recently contracted studies. If we would overlay them onto the H1 actuals, we would already see that trend towards increased diversification realized. And with this, happy to hand back to Giulio. Thanks.

Excellent. Thank you very much, Robin. So -- and I hope that level of detail has given you all good insights. And I've just got a couple of slides, but what I would say is that, if I think back at the 7.5 years or so that I've been with the company, I would say that we achieved heady heights of share price, and -- but it -- actually there was quite a time lag between what we're delivering in the real world, if you like, and actually obviously -- a period of lag between that coming through in the financials and everything else. So I guess, with the current valuation of the company and where it's at versus where it's been, that's quite a sobering chart but, at the same time as well, I would suggest, an opportunity to -- for you to consider. And hopefully, the information we provided gives you some basis there to determine whether IXICO is a company to follow closely. Honestly, we believe it is. And so in the last couple of slides, I just want to highlight a couple of key things that we're going to be razor focused on; and give you insight as to how we judge ourselves, what KPIs we're looking at and also what you can expect from us over the next -- well, the second half of this year and beyond. So we'll go into the next slide, Slide 18. So first of all, I just want to articulate how I'm looking to measure success and how we verbalize success within IXICO. So the first one is are we creating valuable new IP. And is our technology being deployed across the global pharmaceutical landscape? Clearly, we've got good traction, but that's what we're investing our time and efforts in as one area. The second one is are we realizing the latency value in -- the follow-on value in our order book, making sure we stay close to our existing customers, keep on supply and servicing them well; responding to their requirements; being much more business friendly than larger competitors so that they really value the close interaction with IXICO so that we are then ready to capitalize on their latest studies. And again just as a lesson from history, if you look. The very transformative thing for IXICO was that Phase I, Phase II study becoming a phase -- or a larger study when it was taken on from a biotech company to a large pharma. And that's basically -- that's the opportunity we have. And you can see the impact one trial had in the company of our size, so you can imagine, going back to the order book that Grant described, if we have a number of those happening in the coming years, then that will be a very, very significant development for the company. So that's also why we've invested in our technology platform that Grant referred to, the TrialTracker [indiscernible]. Because in addition to creating a bigger pipeline, we also want to be operationally ready to be able to scale up and have the technology to scale up so that large pharma and large CROs have confidence in a company of our size that we can deliver large studies across many countries in the world. And then we've talked particularly about the opportunity to expand into the larger Alzheimer's and Parkinson markets and why we see that the capabilities that we've built in recent years are very transferable and have a high value in being applied in those markets and also with a particular focus on the North American market. And Robin talked to the strategic partnership we have with the Global Alzheimer's Platform, which is based in the U.S. And that has been very beneficial to us in terms of raising our profile. And so we're actively looking at, obviously, furthering that relationship but also creating new partnerships with other organizations to strengthen our profile and our position, in particular in the North American market; and then finally, in a nutshell, really be able to replicate the success we've achieved in Huntington's disease and not just in Alzheimer's and Parkinson's but also in building deeper relationships with large pharma whilst at the same time, obviously, continuing to nurture the many opportunities that we see ahead of us with biotech. And with the funding, hopefully, position being better for them, that should capture further growth opportunities. So those are the things that we look at to measure the success. And then just to give you an indicator of some of the forward-leaning performance indicators that I look at is, first of all, as we go forward, our ability to commercialize new novel MRI-based biomarkers in Alzheimer's and Parkinson's, that we can demonstrate year-over-year growth in our opportunities pipeline, that we can grow our order book. And again going back to one of the charts that Grant had, a number that I'm looking at is how quickly can we get to an order book of GBP 18 million and obviously get there as quickly as we can, please, which is what we're all very focused on. And then as a very, very simple KPI, which is widely adopted across the industry, is you're a very healthy business if you can demonstrate year-over-year book-to-bill ratios of 1.5. So basically book 50% more than the revenue that you recognize, to give you that ongoing, continuous trajectory of growth and profitability. And that's basically what we're looking at in terms of some of the key performance indicators in the medium to long term and -- but obviously expecting for us to be in a much better position at the end of this year than we are at the moment in relation to the key performance indicators: a, to make sure that we can underpin the guidance we provided back in March; but also to establish a really strong platform for '25 and onwards. So I think, in summary then, I just want to go into the next slide, which in the points I've made here is that we've invested significantly in this neuroimaging platform. We've invested in technology. And we're in a very attractive clinical trials market, being a specialist focused on neurological diseases. We've obviously established ourselves as a valued partner to a wide range of companies, but in particular, I want to highlight the 5 out of 10 big pharma because those are the guys that have the big dollars for the very large billion-dollar trials. And actually even just in recent weeks we've seen announcements from Takeda, for example, with a company called AC Immune, where they're highlighting that -- making milestone payments and upfront payments to that company. And if they achieve their milestones, then Takeda would take on that asset. So that's just an example of the sort of thing and why it's important for us to be talking to both biotechs but also the large pharma companies so that, when those things happen, IXICO is the obvious partner for them to work with. The ability to build strategic value in the company by being broader than just being seen as a specialist in HD. Clearly we see really good momentum in both the order book that we've achieved in the last 3 years -- we're very proud of that, but also actually I'm really excited by the progress that Robin has showed in terms of pipeline because that obviously not only gives us greater diversity but also actually creates -- it's going to be bigger pie as well. And within that, we would then expect to, in the second half of this year, be announcing more contracts which in turn will give us a larger set of projects to deliver, which in turn will give us a larger potential for latent revenue within that order book for future periods. And then finally, just on the pipeline, I just want to highlight that obviously we've seen a combination of an uptick and an improvement in the market. I mean it's definitely a case of haves and have nots in terms of companies that are getting funded and aren't getting funded, but in addition to that, that combined with the grassroots review that we undertook at the beginning of the year to really make sure that we are executing with our commercial strategies and also actually redirecting significant more scientific resource to business development activities is really playing -- paying dividends. And hopefully, that was very visible and then evident in the numbers and slides that Robin talked to. So with that, I'm going to pause. And we'll move on to questions, but also I want to thank everybody for [ listening in to us today ].

That's great, Giulio. Thank you very much indeed. Robin and Grant, let me just bring back up your cameras for the Q&A. [Operator Instructions] [ I'm just going to let the ] guys take a few moments to review the questions you've submitted already. I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Investor Meet Company dashboard. Giulio, as you can see, you've had a number of questions throughout today's presentation. Firstly, thank you, to everybody, for your kind engagement this afternoon. If I may just hand back to you, Giulio, to read out the questions. And I'll pick up from you at the end.

Great. I'm going to ask maybe -- Robin, if you can go back to your slide -- or actually, [ Mark ], if you can go back to Robin's slide on the pipeline and show the chart. So the first question is from [ Sam M ]. It says, "Do -- the increase in RFPs only in IXICO's traditional markets, Huntington's? Or are they also being seen in Alzheimer's?" It was a pie chart, [ Mark ]. Sorry. I don't...

This one. Thanks, [ Mark ]. Thanks, Giulio. I think I'll probably answer that and, hopefully, answer that to the extent as we see on the slide here. So the short answer would be yes insofar that as -- I mean, obviously, as we see in the order book, we have a significant number of AD trials already, but we see there's diversification in the pipeline which is also reflected in the RFP inflow insofar that it is diversifying away from focused on HD to including those other indications as well. Thanks.

Yes. And then I should say the question came in before you put the slide up, so hopefully, that marries up. I then got a question from [ Sam M ], one for Grant, is how long do you see the current cash runway.

Yes. Thanks, [ Sam ]. So obviously, in terms of the exact length of that runway, it depends on a good number of things in terms of our bookings performance and the ongoing work that we do with costs to manage that. We obviously have cash flow costs that take us out well into 2025 without bookings included beyond the end of this year, so essentially we've got a forecast that looks like we've got cash that takes us into 2025. And then we'd expect to augment that with additional bookings.

Thank you. Another one I'll pass on to Grant is -- well, I'll answer it. And then I'll pass it on to Grant for more details, but, "Could you give an update on the CEO search and the time line when to take over role?" So what I'll say here is, as everybody knows, I announced my planned retirement at the end of calendar year last year, so I'm working, obviously, with the Board on that. And I can't say. I'm actually the most confident for the business outlook than I'd been for the last 12 to 18 months. And I don't know if that's linked to my retirement -- or actually because of the traction that I'm seeing in the pipeline and the market. So I think I'm very confident it's the latter. And I'm really excited for the prospects of the business, but with that, I'll hand over to Grant in terms of any more color you can provide in terms of time lines and that sort of thing.

Yes. So I think, as we've spoken about previously, we've initiated the succession plans that are in place. We've got a shortlist of strong candidates that are currently being interviewed by the Board. Obviously, until we have our candidate, we don't have our candidate, but we're expecting that -- but it's moving along nicely. And we expect to have a candidate in place well before Giulio's full retirement date.

Thank you very much. Okay, Grant, I'm sorry. You're in a bit of a run here, just -- but again, you've been overseeing the investment in our next-generation TrialTracker platform. And obviously we're all very delighted that that's coming to fruition, so question is validations of the next-generation platform is significant. "How do you plan to leverage this to gain a competitive edge and drive future revenue growth?" And I'll maybe add some words to yours once you've outlined our plans.

Yes. So this is really important for us. So we -- obviously we have a platform. And that platform is working well and has been in place for a long time, but this platform is -- gives us a significant level of additional extensibility and scalability, which as we look forward and we look to the aspirations of the business, provide us with a platform for many, many years to come. It's built on Microsoft Azure cloud infrastructure, which means that it -- as the technology develops. So we'll benefit from that because the underlying technology we've built this on will be updated and developed as well. It comes with all of the required security, data resilience requirements that are necessary in highly regulated environments such as the clinical trials industry; and puts us right at the front edge, we believe, in terms of competitive offering as an imaging CRO to that biopharmaceutical industry. Beyond that as well, it actually is an asset that, realistically where we are today, it has more value than we can access from it ourselves right now. That will come both from the growth that we believe we will drive ourselves but also provides an opportunity for us to partner with other industry players who have interesting analysis capabilities, for example, but don't have a platform and therefore can't serve clinical trials market. This will allow us to partner with them to support that, expanding our offering to clients whilst also getting a -- potentially a [ SaaS-type ] revenue stream. It also offers the opportunity from bigger players in the market to look at us in terms of the capabilities of our platform and how they might be leveraged more broadly possibly into other therapeutic areas. So there's a lot of opportunity that comes from this platform. And obviously it will take time for that to come through. The bookings that we have -- see are positive, and they will go on to the platform, but it's -- it will take a bit of time, but there's a huge latent value sitting there now with that platform.

So what I would add to that as well is that this platform allows us actually to discuss [ and plan a ] number of strategic partnerships with other technology companies that we wouldn't have been able to do with our previous platform. So it allows us to exchange data more easily and scale more quickly and also make us more resilient, but I think, as I said, this platform allows us to have conversations with companies around strategic partnerships that very exciting. And as soon as we have something to be specific about, we'd -- be rest assured we will be announcing those partnerships and how TrialTracker helps us to do that. Okay, [ Alex C ]. With the signs of recovery in the market and the uptick in client request for proposals, what is the expected time line and strategies to convert them? So I'll answer that, and then Robin can add to that. So cut to the chase: When do you expect to convert them? We expect to convert a number of them this year, i.e., in the next 6 months, as we emphasized during the presentation. And then Robin highlighted that we -- again it's not a linear thing, but we kind of use an 18-month sales cycle as a guide; and that changes. It ebbs and flows. Sometimes, things come forward. Sometimes, things get pushed out, but the answer is always more -- faster is better. And that's what we are looking to do. And as I said, from a relatively short space of time, through the comparison that Robin showed from September of last year to this year, you can see the momentum that we've been building. So as I said, the question that we're looking to -- ourselves is how quickly can we build an order book of GBP 18 million. So I'll leave it at that. And maybe, Robin, you can add something else if you feel I missed something.

Yes, no. Thanks, Giulio. And thanks for the question. I think we're kind of like seeing 2 things going on in parallel. One is an uptick in the market, as [ Alex C ] points out in the question. The other one is a change in our approach that we -- I think we talked about previously and then we started implementing around much more systematic engagement in opportunities. And I think, the first impact of that latter, we're seeing now with some of those opportunities that we have targeted in a much more systematic way maturing and actually going to awarding contract. And what we expect to see on top of that from, hopefully, softening of the market is to basically widen that funnel further and then pushing things through the pipeline, but we are talking about the 18 months pipeline. The good thing is that we have started filling the funnel, so to speak, a while ago, so these things are starting to mature. The things that go in now will contract in the next 12 months, roughly, 6 to 12 months.

Great. I've got about 5 questions, so I'm going to -- I've got -- conscious we've got 7 minutes left, so I'm going to rattle through them quickly. So just bear that in mind, Grant and Robin, but then the next one is [ Chagra S ]. He's got 3, 4 of the 5 questions left. So quick one is, Grant, what criteria [ was not met ] to capitalize the platform?

Yes. This is a simple accountancy requirement, where while our platform is being built and being developed, it's being -- it's treated as development cost. Development costs under accounting rules gets capitalized on the balance sheet. Once that platform is ready for use, it's then converted to what's called an asset in use and the associated costs then go to the P&L. So it's simple. It's not that you didn't hit a criteria. It's simple treatment of the change from an asset being developed to an asset being in use.

Yes. Actually I think, one of the questions from [ Chagra ], we've already answered. It's, "What indicators are you looking at to suggest the turn in the market?" So obviously, our own, but again there's this -- it was widely published. I think there was an article in the U.S. press and The Wall Street Journal. I think it's entitled haves and have nots, where it was talking about job cuts from a number of companies but, at the same time as well, very high levels of VC funding in the first quarter of the calendar year. So all of those data points, but in particular, I would say, our very significant increase in early-stage pipeline opportunities that we've built in the last 4, 5 months that we've seen, that's obviously reflected in the numbers that Robin has talked to. Grant again, from [ Chagra ], when do you see positive operating cash flow?

Yes. So I think the answer to that is essentially we expect to see positive operating cash flows will obviously vary on a number of things: timing of payments. We get advanced payments in some client contracts. Obviously, sometimes there's costs that we pay off on longer time frames et cetera, so there's all of that variability, but in terms of the overarching position, we would expect to see positive operating cash flows when essentially we have income at around about the GBP 8 million mark. And when I say income, that's not just revenues. That's revenues plus the grants income that we get, plus the R&D tax credit income that we get. So with an EBITDA, I mean, forecast this year of around about GBP 2 million negative, that's essentially our revenues plus our grants income and R&D tax credit, which brings us up to about GBP 6 million of income, the gap being -- yes. And EBITDA [ obviously is an approximator ] for operating cash flow. So that's where we sit.

Yes, yes. I think [ that's a nice ], simple number to remember that we can be consistent on. So then a question from -- the 2, kind of similar. 1 from [ Sam M ]: Has the company looked at the benefit/costs of delisting? Has this been ruled out, or is it under review? So what I would answer to that is we've been listed since 2014. Obviously, yes, there is a cost to being listed, but also we've been able to access the markets when we needed to. I mean, when I first started in 2018, we did a capital raise. We've not needed to do so since, but [ that point is ] something that's available to us if needed. But it's not. I guess the focus of the business is fundamentally to get back to growth. I mean, whether you're listed or not, you need to have a performing business. And so our focus is not -- I mean obviously we've managed our costs. And we stay very focused on managing costs, but my belief and the Board's belief is that, that shouldn't be your raison d'être. And so we are very focused on what are the best strategies and what are the best business environments to support growth. And that's what the Board are doing. And of course, if we do decide that it's not being listed, then that's obviously something that we would look at and consider very carefully, but as I said, the focus is very much on delivering on the promise of the business and the potential based on the market opportunity I described earlier. Grant...

[ Can I maybe just add to that ]? Because I think it's also worth saying that, whilst we have very supportive shareholders -- I mean that we have -- the institutional shareholders that have invested in IXICO are very supportive of what we're doing. And whilst that's the case, then remaining listed and having them remaining as our shareholders is obviously a key priority for us, so that's obviously something we bear in mind as well.

Yes. And on that as well, obviously, we've got a [ cap table ] in the appendix. And you can see we're very fortunate to have a very strong blue chip set of institutional investors, which, yes, it's very important for a company of our size to have that quality of [ investment cap ] market.

That's great. Giulio, Robin and Grant, thank you very much indeed. You've taken all the questions from investors. Thank you once again, to everybody, for your engagement this afternoon. Giulio, as usual, I'll shortly redirect those on the call to provide you with their feedback, but before doing so, I wonder if I may just ask you for a couple of closing comments.

Well, as I said, closing comments are expect more in the second half from us. We're going to deliver it. And we're feeling positive about the second half and really looking to build a strong platform for not just the second half but beyond and into '25 and onwards. I just want to thank you all for taking the time out of your busy schedules to listen to Robin, Grant and I; and wish you a great evening.

That's great. Giulio, Robin, Grant, thank you once again for updating investors. Can 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 Board can better understand your views and expectations? This will only take a couple of moments to complete, but I'm sure it will be greatly valued by the company. On half of the management team of IXICO plc, I would like to thank you for attending today's presentation. And good evening to you all.