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 – Expensive at GBX 195.00

• The Company did not have any control over operating expenses, which could further increase the loss and deteriorate the financial performance in future.
• As per valuation metrics, EV/EBITDA & Price/Cash Flow multiples of the Tiziana Life Sciences Plc are currently higher as compared to the corresponding multiples of the Biotechnology & Medical Research industry, reflecting overstretched valuations.
• The Company has a negative ROE of 1032.50% in the first half of the financial year 2020, and the current ratio of 1.86x is significantly lower than the industry median of 2.42x.
• From the technical standpoint, 14-day RSI is currently supporting downward movement (around 67 level), which means the stock price could decline in the short term.

Key Risks

• The Company faces significant pressure from regulatory changes with the threat of price controls increasing across all markets.
• Any failure to integrate acquisitions and shortage of supply during the Covid-19 crisis can disrupt operations and reduce returns.

Recent News

On 26 October 2020, Tiziana Life Sciences announced the allotment and issue of 329,225 shares of 3 pence credited as fully paid at 35 pence/share in respect of the exercise of options of 329,225 by option holders at an exercise price of 35 pence.

Financial Highlights – H1 FY2020 (30 June 2020) (released on 30 September 2020)

• In the first half of the financial year 2020, the Company did not generate any revenue and reported a loss of £3.91 million.
• The cash balance as on 30 June 2020 increased to £7.2 million. The Company during H1 FY2020 raised £12.9 million funds through a public offering.
• The Company has planned the research to extend the intellectual property on lyophilized foralumab antibody powder.
• The Company is developing new technology for the treatment of COVID-19 infections.

One Year Share Price Chart

(Source: Refinitiv, chart created by Kalkine Group)

Conclusion

The Company is in the development stage and do not generate any revenue for the period. The profitability margins have remained stagnant or declined. However, it relied on the cash balances and fundraised from the stock market for all the operational tasks. In August 2020, the Company raised an additional $57 million in funds during a US offering. The Company intends to initiate the clinical study for TZLS-501 (anti-Interleukin-6-Receptor), for covid-19 treatment, in the first quarter of FY2021. Presently, the company is trading near a 52-week high, raising doubts at its upside potential at current prices. The stock made a 52-week low and high of GBX 23.50 and GBX 300.00, respectively.

Based on the factors as highlighted above, we believe the stock of Tiziana Life Sciences Plc is “Expensive” at the current price of GBX 195.00 (as on 26 October 2020, before the market close at 12:55 PM GMT), with support from few catalysts needs to be evaluated at a later stage such as the development of new technology to treat COVID-19 infections.

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