Arix Bioscience Investors - ARIX

Arix Bioscience Investors - ARIX

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Stock Name Stock Symbol Market Stock Type
Arix Bioscience Plc ARIX London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-0.50 -0.43% 116.00 08:31:40
Open Price Low Price High Price Close Price Previous Close
116.50 116.00 116.50 116.50
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Industry Sector
PHARMACEUTICALS & BIOTECHNOLOGY

Top Investor Posts

DateSubject
11/8/2022
17:02
sev22: A Ben Graham recovery play. A venture capital company that invests in early-stage biotechnology businesses is being valued modestly above its cash pile even though it holds a valuable portfolio of unlisted and listed investments that could deliver strong returns. August 10, 2022 By Simon Thompson Arix Bioscience (ARIX:115p), a global venture capital company that holds a diversified portfolio of unlisted and listed investments in early-stage biotechnology businesses, is the laggard in my 2021 Bargain Shares portfolio after investor sentiment was hit by falls in the share prices of its Nasdaq-quoted holdings. In the latest interim accounts, the group reported £33.9mn of negative valuation movements in its listed holdings, offset in part by £8mn of foreign currency gains due to sterling weakness against the US dollar. However, with cash of £131mn backing up 88 per cent of Arix’s market capitalisation of £149mn, this means that a £37.5mn listed portfolio of 18 Nasdaq stocks, £56.2mn unquoted portfolio, and £1.9mn of other investments, are in the price for 80 per cent below their combined carrying valuations at 30 June 2022. Of course, investors may be concerned that Arix’s unlisted holdings are being overvalued. However, chief executive Robert Lyne points out that they are valued at cost or the most recent externally-priced funding round, and then referenced to current public valuations of comparable companies, where applicable, to ensure that valuations remain robust in the context of the decline in public biotech markets over the last 12 months. There is even hidden value. Exploit Arix’s valuation anomaly: *Net asset value falls from £255mn to £228mn (176p a share) in first half of 2022. *£25mn net downward portfolio movement due to decline in public biotech markets. *Cash of £131mn (101p a share) underpins 88 per cent of Arix’s market capitalisation. *Investee company Disc Medicine to merge with Gemini Therapeutics. A good example of the valuation process is Arix’s valuable 8.8 per cent stake worth £25.3m in Artios,, a private company that is developing precision medicines for the treatment of cancer. Artios has attracted the attention of big pharma, having entered a research collaboration with Novartis to discover next-generation DNA damage response targets to enhance its Radioligand Therapies (‘Five investment company bargains’ 8 April 2021). The closest listed comparable to Artios is $500mn market capitalisation Repare Therapeutics (RPTX:NSQ), a Nasdaq-quoted clinical-stage precision oncology company, which has a 44 per cent higher valuation even though Lyne believes Artios has more advanced programmes. Artios raised $153mn in an oversubscribed funding round last summer, so is well funded, and expects to announce data from its Phase 1b dose expansion study in the first half of 2023. Lyne also points out that Arix’s portfolio companies collectively raised over $776mn of funding last year, so are financed to progress to their respective clinical data points, potentially important catalysts for future valuation uplifts. Sensibly, the board are taking a prudent approach, having exited public positions where the directors no longer had confidence that the companies could deliver the superior returns targeted, and deliberately being cautious about making new private investments. Instead, they have turned their attention to the value in listed companies, focusing on those developing novel therapeutics that are of interest to large pharmaceutical companies, and which have scope to generate positive clinical data in the medium-term. As part of this strategy, Arix has created a small Public Opportunities Portfolio (POP) of 12 Nasdaq holdings, investing £14.5mn in the first half this year. These businesses are funded through to their milestones, thus reducing the risk of dilutive new fundraisings, and announced five positive data read-outs in the first half of 2022, which has underpinned their valuations. This small portfolio is showing a profit, reversing a small decline in the first half. Arix’s deep share price discount to book value also ignores the fact that there has been a strong recovery in the value of some of its larger listed holdings since the half-year end. For instance, investee company Aura Biosciences (AURA:NSQ) listed its shares at $14 on Nasdaq last autumn. The holding was valued at £20mn at the end of last year, and £17.6mn at 30 June 2022. However, Aura’s stock price has rallied 30 per cent to $18.36 in the past 10 weeks, valuing the holding at £22.9mn (17.6p a share), and adding 4p a share to Arix’s last reported NAV per share. Aura is a clinical-stage oncology company that is developing a novel technology platform based on virus-like drug conjugates to target and destroy cancer cells selectively, while activating the immune system to create long lasting anti-tumour immunity. It has made encouraging progress this year, presenting updated safety results that support the value of its technology in patients with early choroidal melanoma. The company is on track with its Phase 2 suprachoroidal study and a final decision on route of administration will be made later this year. Moreover, another holding, Disc Medicine, a clinical-stage company focused on developing novel therapies to treat serious and debilitating hematologic disorders, is merging with Gemini Therapeutics (NSQ:GMTX) in an all-stock transaction. The enlarged group will focus on advancing Disc’s pipeline of hematology programs. Disc has secured commitments from a syndicate of healthcare investors, including Arix, for a $53.5mn concurrent financing which means that the merged group will have cash of $175mn to advance Disc’s pipeline through multiple clinical studies. It also provides a cash runway into 2025. Last autumn, Arix invested £8.1mn in Disc Medicine and the stake was valued in its interim accounts at £9.1mn. Arix’s share price is little changed since I last updated my portfolio (‘2021 Bargain Portfolio Review’, 17 February 2022’), and I maintain the view that bottom fishers should be well rewarded buying at these levels. BUY.
10/8/2022
19:43
hpcg: I guess improved sentiment in the US is helping here by proxy, given where the assets are. The downside underpinning of the cash pile was helpful for refreshing the investor base I imagine.
10/8/2022
14:55
ohisay: Interesting Investor Meet presentation . In discussing Artios they think the best US comparator company suggests a carrying value double that they assume in the NAV. I'm not surprised the market seems to like the presentation .
08/8/2022
13:36
hugepants: spec, This stock has nothing to do with cats but maybe this modest rise is due to results and investor presentation on wednesday.
17/7/2022
05:13
ohisay: Fair point..Still cash here is around 100p per share . And interesting presentation partly relating to that point from end June. https://arixbioscience.com/insights/investor-meet-company-presentation
06/5/2022
07:21
snappler: The best Case for the investors is, if they make a Tender offer similar to Malin Corp and repurchase a large amount of outstanding shares at NAV.
03/2/2022
02:50
ohisay: I haven't changed my view that it would be useful for them ..and potential investors if they released an updated NAV at the end of every month .
16/12/2021
15:13
skyship: From P. No. 363 above. Simon Thompson re-tipped these on 8th Nov'21 when they were 140p: ........................... Aura IPO highlights hidden value in Arix’s unquoted portfolio Arix’s holding in Aura Biosciences soars on Nasdaq IPO. The Nasdaq IPO of Aura Biosciences (US:AURA) raised $75.6m at $14 a share and has been well received. The stock is now trading at $18.69 to value the company at $531m. This is important for UK venture capital group Arix Bioscience (ARIX:140p), the laggard in my market-beating 2021 Bargain Shares Portfolio, which holds 1.52m shares in Aura. The stake is now worth $28.4m (£21m), a 75 per cent premium to the valuation in Arix's half-year accounts, and accounts for 30 per cent of the group's listed portfolio of mainly Nasdaq biotech stocks. This means that Arix’s £181m market capitalisation is 15 per cent less than the combined value of its £139m (108p) cash pile and the £73m (56.5p) listed portfolio. You are also getting a free ride on the group’s £53m (41p) unlisted portfolio even though it includes a conservatively valued £25.3m stake in Artios, a developer of precision medicines for the treatment of cancer that raised $153m from investors in a Series C financing round in July 2021. Artios could receive discovery, development, regulatory and sales-based milestones of up to $1.3bn under a collaboration agreement (April 2021) with Novartis, and $860m of milestones per target from last Decemberâ€T82;s agreement with Merck. It’s more likely, though, that one of the pharma giants will bid for the company if its development programmes are successful. Arix shares are being harshly rated, trading almost a third below spot NAV. Buy.
01/12/2021
15:05
pinemartin9: I think it is a general sentiment around the overall management. They messed up the share buy back in my opinion, they had a pile of cash and didn't know what to do with it. They could have looked at a special dividend but went down the share buy back and in hindsight paid over the odds for that. I like the exposure here but it just seems to suffer from a poor perception amongst investors? Nothing too inciteful from me sorry!
08/11/2021
21:25
boystown: Re-tipped by Simon Thompson FWIW... Aura IPO highlights hidden value in Arix’s unquoted portfolio Arix’s holding in Aura Biosciences soars on Nasdaq IPO. The Nasdaq IPO of Aura Biosciences (US:AURA) raised $75.6m at $14 a share and has been well received. The stock is now trading at $18.69 to value the company at $531m. This is important for UK venture capital group Arix Bioscience (ARIX:140p), the laggard in my market-beating 2021 Bargain Shares Portfolio, which holds 1.52m shares in Aura. The stake is now worth $28.4m (£21m), a 75 per cent premium to the valuation in Arix's half-year accounts, and accounts for 30 per cent of the group's listed portfolio of mainly Nasdaq biotech stocks. This means that Arix’s £181m market capitalisation is 15 per cent less than the combined value of its £139m (108p) cash pile and the £73m (56.5p) listed portfolio. You are also getting a free ride on the group’s £53m (41p) unlisted portfolio even though it includes a conservatively valued £25.3m stake in Artios, a developer of precision medicines for the treatment of cancer that raised $153m from investors in a Series C financing round in July 2021. Artios could receive discovery, development, regulatory and sales-based milestones of up to $1.3bn under a collaboration agreement (April 2021) with Novartis, and $860m of milestones per target from last December’s agreement with Merck. It’s more likely, though, that one of the pharma giants will bid for the company if its development programmes are successful. Arix shares are being harshly rated, trading almost a third below spot NAV. Buy.
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