"UK LiGHT Trial data supports use of SLT as first-line
Ellex reported the results from a large independent study called LiGHT, which looked
at a direct comparison of Laser 1st vs. Eye Drops 1st for treating both glaucoma and Ocular Hypertension (OHT). Data from this robust RCT (randomised controlled trial)
conducted at 6 UK hospitals including the well-known Moorefields Eye Hospital, provides evidence of efficacy and cost effectiveness of SLT in direct comparison with
eye drops to support its use as 1st line alternative to drops. Results from the study found that 1st
line treatment with SLT was safe and cost-effective, with no significant
difference in health-related quality of life (HRQoL) and clinical outcomes at a lower
cost compared with use of eye drops as 1st line over 3 years, hence supporting its use
as an alternative 1st line treatment to eye drops for newly diagnosed patients with OAG
(open angle glaucoma) and OHT. It supports a change in current clinical practice,
given current guidelines on glaucoma from the UK NICE recommend only eye drops
as 1st line treatment, with SLT as 2nd line. We believe data from this study could lead to
revision of NICE guidelines to include SLT as an alternative 1st line treatment. It would
also allow companies such as Ellex with an SLT to be able to market it as such. 74%
patients in SLT 1st group had drop free control of IOP for 3 years, SLT group also
exhibited better control of IOP over the course of 3 years with more visits at target IOP,
less intense drop treatment, less cataract surgeries and no glaucoma surgeries vs. 11
required in the eye drops group and at a lower cost. These benefits from the LiGHT
trial coupled with no compliance issue, fewer hospital visits, fewer side effects and
potential inclusion in NICE guidelines should go a long way in increasing the uptake of
SLT in UK and potentially other markets where SLT penetration is still quite low.
However, we note that widespread 1st line use of SLT vs. 1st line use of eye drops
which is also driven by patient preference and their association of laser with surgery
like risks, will likely take several more years to achieve. Recently approved drugs such
as Vyzulta and Rocklatan which offer better IOP lowering (>30-35%) and are once
daily use with fewer side effects than older drugs, will also have an impact.
Retain Buy and PT of $1.41
No changes to our estimates. We retain Buy and PT of $1.41. The PT is generated
using a blend of three valuation methodologies: DCF, EV/EBITDA and EV/Sales."
and from 26th Feb
"Revenue in-line, EBITDA miss with step up in opex
Revenue of $41.6m was in-line with our forecast and up 9.3% on pcp, with Fx favourably impacting the result. Underlying EBITDA loss of $1.6m, increased over pcp and was higher than our forecast of $0.5m, with higher opex offsetting the marked improvement seen in gross margin for both the CLU business and the iTrack business. For iTrack, both US and China sales were up, while ROW sales declined due to temporary disruption at ELX’s German distributor and increased competition. New account for iTrack in the US grew during the period, which should improve reorder sales in future. Inventory levels increased in 1HFY19, affecting cash flow and we expect it will reduce by end of FY19. ELX had a net cash position of $4.4m. We expect 2HFY19 result to be stronger than 1HFY19, with increased overall group sales driven by growth across all segments, with an improved EBITDA result (driven by strong EBITDA growth in CLU business, reduced EBITDA loss in the iTrack business and modest increase in EBITDA loss in 2RT). The EBITDA result would be driven by improved gross margin and better cost management. Modest Earning Revisions
Following revisions to our model, the net result is a $0.6m increase in our underlying EBITDA loss forecast for FY19, and increase in our EBITDA profit forecasts for FY20 and FY21 by 8% and 5% respectively, on the back of better forecast gross margins, partially offset by higher forecast opex. Changes to our overall group revenue forecasts were not material. Lower forecast amortisation expense has led to a decrease in our Net loss forecast for FY20 and increase in our NPAT forecast for FY21. Changes to our FY19 Net loss forecast was not material. We still, forecast ELX to achieve positive NPAT in FY21. We also still forecast positive EBITDA in 2HFY19.
PT reduced to $1.41, Retain Buy
The short term NPAT adjustments and recent market movements which have affected our relative valuations, has led to a modest reduction in our valuation for ELX. Our PT reduced to $1.41 (was $1.47). We retain Buy. The PT is generated using a blend of three valuation methodologies: DCF, EV/EBITDA and EV/Sales."
I'm out for now, but will be back, good luck peops
ELX Price at posting:
62.0¢ Sentiment: None Disclosure: Not Held
(20min delay)