ANGLE PLC (LON: AGL)

ANGLE PLC (LON: AGL) is an FTSE AIM All-Share listed specialist medical diagnostic company, which offers products for cancer diagnostics and fetal health. Moreover, AGL is engaged in the commercialization of its Parsortix cell separation system, with deployment in non-invasive cancer diagnostics.

(Source: Company Presentation)

Growth Prospects

• Successful Fundraising Activity: AGL had raised £20.0 million from new and existing institutional investors in both the UK and the United States to support the expansion of commercial and management infrastructure and initiation of new studies in prostate cancer.
• Establishment of Clinical Laboratories: AGL had signed a contract post H1 FY21 to establish a laboratory with a capacity of 50,000 samples p.a. at a USD 1,000 baseline price. Moreover, the Company had also planned ovarian cancer LDT.
• Significant Progress of Parsortix^®System: The comprehensive review by the United States Food and Drug Administration (FDA) for Parsortix had made accelerated progress with regulatory response to be expected during the second half of 2021.
• Ovarian Cancer Clinical Verification Study: AGL remain in process for the ovarian cancer clinical verification study with patient enrolment completed during the period. Furthermore, the headline results would be expected by the fourth quarter of 2021.

 Key Risks

• Liquidity Risk: The Company has the liquidity to finance its R&D for the medium term; however, if there are any delays in clinical trials and R&D and the Company fails to procure finance, it could have a material impact on the R&D and liquidity of the Company.
• Failure to Develop Products: The Company might fail to develop and get the approval of marketable products.
• Regulatory Risk: The Company cannot assure regulatory approvals for its product pipeline. Also, the healthcare medical equipment industry is highly regulated; any non-compliance could lead to fines and penalties.
  

Now we will analyze some key fundamental and shareholders statistics of ANGLE PLC.

Conifer Management LLC is the most significant shareholder as it holds nearly 20.73 million shares as of 30 September 2021. 

Financial and Operational Highlights (for six months ended 30 June 2021 as of 30 September 2021)

(Source: LSE Website)

• Decent Revenue Growth: The Company had a decent revenue growth of around 25% to £0.296 million during H1 FY21 when compared with H1 FY20. Moreover, the revenues came from the research-use sales of the Parsortix system. 
• Increased Operating Cost: AGL had shown a significant increase in the operating cost from £4.6 million during H1 FY20 to £8.9 million for H1 FY21 as the Company incurred an increased investment in studies to develop and validate the clinical application and commercial use of the Parsortix system.
• Decent Cash Position: The cash & cash equivalents stood at £21.0 million as of 30 June 2021.
  

Share Price Performance Analysis

 (Source: Refinitiv, Research done by Kalkine Group)

On 14 October 2021, at 08:03 AM GMT+1, AGL’s shares traded at GBX 121.13, down by around 1.52% against the previous day closing price. AGL’s 52-week High and Low were GBX 144.00 and GBX 37.15, respectively.

On a daily chart, the stock price is sustaining between the middle Bollinger band and the lower Bollinger band. Hence, there could be an uptick in the stock price in the near term.

AGL’s stock has delivered an outstanding positive return of ~140.25% in the last one year. Also, it has outperformed the FTSE All-share Medical Equipment & Services Index with a return of negative 0.89% and FTSE AIM All-Share with a return of around 23.52%.

Valuation Methodology: EV/Sales (NTM) (Illustrative)

Business Outlook

ANGLE had made accelerated progress on the FDA submission for the Parsortix® System and made a comprehensive response to the expected AIR. On an optimistic note, AGL aimed to penetrate market opportunities worth USD 3.9 billion per annum from the commercialization of the Parsortix system with MBC patients in the United States. Meanwhile, the Company had recently signed three contracts regarding the launch of a commercial laboratory, which would raise the revenue during H2 FY21. Furthermore, the Company had initiated the commercialisation of its unique liquid biopsy platform to support personalised cancer care. In a nutshell, AGL remained confident to deliver long-term returns for the shareholders with a significant clinical pipeline and several revenue streams.

Considering the strong clinical pipeline, decent revenue growth during H1 FY21, strong leverage position, and support from the valuation using the above method, we have given a “Speculative Buy” recommendation on ANGLE PLC at the current price of GBX 121.13 (as on 14 October 2021, at 08:03 AM GMT+1), with a lower-double digit upside potential based on 57.13x EV to NTM sales (approx.) on FY22E sales (approx.). 

*The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and Peer information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Disclaimer

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