Arix Bioscience targets NAV of up to £500m by 2023
(LSE: ARIX ) has published its half-year results for the six months to 30 June showing a 24% increase in net asset value and entering the H2 with “strong momentum.”
The group reported net asset value of £251m (December 2019: £202.1 million) at 185p per share (December 2019: 149p); a 24% increase for the first six months of 2020. Meanwhile, the Company’s gross portfolio value stood at £203.4m from £149.2m as at December 2019.
In a half-year report, the venture capital firm said it had refocused and streamlined the business by significantly reducing net operating costs by over 35% to an annual run rate of around £5m by the end of 2021 down from £8m in 2019.
Pre-tax profit therefore turned positive to £48.96m compared to a half-year loss in 2019 of £44.81m.
Arix’s portfolio continues to make ‘strong progress’, with a number of companies reaching important clinical milestones and completing further financing rounds at higher valuations.
Autolus, which represents 17% of Arix’s net asset value, expects to present long term follow up Phase 1 data from its AUTO1 programme in adult acute lymphoblastic leukemia by the end of 2020, with pivotal data expected in H2 2021 and approval targeted for 2022.
Meanwhile, Imara which represents 17% of Arix’s net asset value14% of NAV, expects to announce updated results from its IMR-687 Phase 2a clinical study in sickle cell disease by the end of 2020 and report interim Phase 2b data in SCD and beta-thalassemia in 2021.
Shares in Arix Bioscience have traded solidly over the past month and opened 14.46% higher at 87.5p this morning following the publication of the group’s half-year results.
In the year to date Arix’s portfolio companies have raised $391.5m including Imara raising $86.5m in a Nasdaq IPO and Autolus raising $80m in a follow-on financing from investors.
This has continued post-period, Arix highlighted to investors, with biopharmaceutical firm VelosBio completing a $137.0m Series B financing, in which Arix invested $4.0m (£3.2m).
“We have been fortunate in seeing minimal delays to clinical trials across the portfolio, in part due to the acute setting that many of these companies operate in,” said Dr Naseem Amin, Executive Chairman of Arix Bioscience.
He added, “We syndicate all our deals with top tier biotech venture capital firms, and as such our portfolio companies are well financed and well positioned to navigate through any potential delays as a result of the pandemic.”
Looking ahead, Arix cited potential for M&A, strategic partnerships and other financing events which could significantly increase the value of its companies, and in turn its NAV.
“Whilst the development of important new medicines always carries risk, over the next three years we expect to see at least two additional IPOs across the portfolio and at least two exits.
Through strong execution of our strategy we expect to generate significant returns for our investors over the medium to long term, through capital growth and the potential for distributions where returns exceed the capital needed for reinvestment,” added Amin
Arix is targeting an annual IRR of 15% to 25%, generating a NAV of up to £500m by 2023.
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