Tiziana Life Sciences PLC

Tiziana Life Sciences PLC (LON: TILS) is a Pharmaceuticals & Biotechnology company, which specialises in the development of transformative therapies to fight against cancer and other diseases related to the liver.

Investment Highlights – Tiziana Life Sciences PLC – Avoid at GBX 81.00

• The Company had not generated revenue yet, raising concern regarding the earning potential.
• The Return on Equity and Return on Assets remained in a negative territory during H1 FY20.
• With regards to the profitability, the annual net profit fell in the negative zone from the last four years (FY15 to FY19).
• From a technical standpoint, TILS is trading lower than its 20-day simple moving average price (GBX 88.78), indicating further correction in the stock price.

Key Risks

• TILS may face significant pressure from regulatory changes with the threat of price controls increasing across all markets.
• The Company is also exposed to failure to integrate acquisitions and shortage of supply during the Covid-19 crisis, which can impact the top-line business and bottom-line business.
• Covid-19 uncertainties may cause a significant delay in various development projects.

Recent Developments

On 05 May 2021, TILS had announced a strategic initiative with Takanawa Japan K.K., Pharma Team, to identify a strategic partner in Japan for further development of Milciclib.

On 13 April 2021, the Company announced that the former subsidiary, Accustem Sciences Limited, would file a listing application with the Nasdaq Stock Market.

On 30 March 2021, TILS announced that FDA (“Food and Drug Administration”) had approved the treatment for a Secondary Progressive Multiple Sclerosis (SPMS) patient for the Nasal Administration of Foralumab (Fully Human Anti-CD3 Monoclonal Antibody).

One Year Share Price Chart

(Source: Refinitiv, Thomson Reuters)

Conclusion

The Company is in the development phase and do not generate any revenue yet. Moreover, the net loss had further widened during H1 FY20. Currently, the development pipeline consists of three potential candidates such as Milciclib (TZLS-201), Foralumab (TZLS-401), and Anti-IL6r (TZLS-501). Meanwhile, TILS had completed various fundraising activities to accelerate the progress of developing clinical trials of Milciclib and Foralumab. The stock made a 52-week low and high of GBX 53.85 and GBX 264.83, respectively.

Based on the weak financial performance, and the various factors discussed above, we have given an "Avoid" stance on Tiziana Life Sciences PLC at the current market price of GBX 81.00 (as of 10 May 2021 at 08:45 AM GMT), while we will revisit our stance after the release of FY20 results.

Genedrive PLC

Genedrive PLC (LON: GDR) is an FTSE AIM All Share-listed Pharmaceutical Company, which is engaged in the development and sales of molecular diagnostics platform for the treatment of infectious diseases.

Investment Highlights - Genedrive PLC – Hold at GBX 73.00

• GDR had delivered an excellent performance for HCV test in low and middle-income countries.
• The Company had received formal approval from the Indian Council of Medical Research ("ICMR") regarding the Covid-19 PCR tests in India.
• GDR had converted all loan notes into ordinary shares making the Company debt-free.
• From a technical standpoint, the stock is trading higher than its 20-day simple moving average (GBX 72.71), indicating a further upside potential.

Key Risks

• The Company operates in a strict regulatory environment; any change in regulations or government policies could affect its overall business.
• The widening demand-supply gap of skilled professionals can have an adverse impact in 2021 and beyond.
• GDR is also exposed to the risk of the introduction of new technology by competitors, which can hamper the top-line business of the Company.

Recent Developments

On 30 April 2021, GDR updated that it had received approval regarding the 96 SARS-CoV-2 kit for Covid-19 testing from the ICMR.

On 23 April 2021, GDR announced excellent results regarding the Genedrive® HCV -ID Kit in low- and middle-income countries.

H1 FY21 financial highlights for the period ending 31 December 2020 (as of 25 March 2021)

(Source: Company result)

• GDR had reported a net asset of £5.3 million as of 31 December 2020.
• The Regulatory approvals for the 96 SARS-CoV-2 kit are still pending from WHO and FDA.
• The Company had a cash balance of £3.8 million as of 31 December 2020, while it was £8.2 million as of 30 June 2020.

One Year Share Price Chart

(Source: Refinitiv, Thomson Reuters)

Valuation Methodology: Price/Earnings Approach (NTM) (Illustrative)

 Conclusion

GDR has a strong balance sheet and good liquidity position with increasing market opportunities in coronavirus testing. Moreover, the Company had made significant progress regarding the development of the Covid-19 test portfolio, POC test platform development and the expansion of manufacturing capability. Meanwhile, GDR had received formal approval from ICMR for Covid-19 PCR testing in India. Furthermore, GDR remained optimistic regarding the contract with Beckman Coulter and the ongoing opportunity with the European Ministry of Health. The stock made a 52-week high and low of GBX 215.56 and GBX 38.00, respectively.

Based on the increased Covid-19 testing opportunities and the valuation method discussed above, we have given a "Hold" stance on Genedrive PLC at the current market price of GBX 73.00 (as of 10 May 2021 at 08:20 AM GMT), while we will suggest fresh buying after its Covid-19 PCR test gets approval from the top regulatory authorities like WHO and FDA.

*All forecasted figures and Peer information have been taken from Refinitiv, Thomson Reuters.

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