Paxman

In this fundamental analysis report, analysts Dennis Drevell Smith and Anna-Brita Hunter Nilsson
examine Paxman AB, a UK-based MedTech company operating a de facto monopoly in mechanical
scalp cooling. From January 1, 2026, permanent CPT I billing codes are expected to significantly
improve reimbursement in the United States, removing a key adoption barrier and driving a sharp
increase in machine utilization. Patients per installation are estimated to increase from 7 in 2025 to 18
by 2028, supporting a sales CAGR of 33% in Paxman’s U.S. segment, which is characterized by high
margin consumable cold cap sales carrying gross margins of approximately 80-90%. This utilization
driven growth is expected to result in an EBIT margin expansion of 26pp. While near term earnings
have been temporarily pressured by one-off costs related to regulatory implementation, FX headwinds,
and the Dignitana acquisition, these effects are assessed as non-recurring and unrelated to underlying
fundamentals. An equally weighted DCF and relative valuation, where an EV/EBIT multiple of 12.9x is
applied to a forecasted EBIT of 180 SEKm, implies a potential upside of 58%, making Paxman a
compelling buy opportunity.

Investment Thesis
• Regulatory tailwinds drive utilization growth and margin expansion
• New revenue source unlocks product synergies
• Acquisition of Dignitana creates a monopoly