Arix Bioscience Share Discussion Threads

[orchestralis] 13/7/2023 07:22

The need to start paying a dividend

[lennonsalive] 13/7/2023 07:20

One for investors to buy as a discount and wait to see what happens, although so far I don't have much confidence in the management

[ohisay] 13/7/2023 07:17

I suspect Acacia are behind this too so something should happen.

[nakedmolerat] 13/7/2023 06:48

strange to announce, just get on and do it!

[arthur_lame_stocks] 13/7/2023 06:28

True, but then it sounds like Acacia pushed for the strategic review.

[value hound] 13/7/2023 06:26

Agreed - the clue is in the RNS: "There is no certainty that any changes will result from the Strategic Review". Nothing will happen unless Acacia want it to.

[skyship] 13/7/2023 06:22

Strategic Reviews are a total waste of time. Competent management should be reviewing the status quo on a regular basis - just routine.

What they should do is make a tender offer at a small discount to NAV so as to return the bulk of the cash to shareholders.

A 33.33% tender at 1.75p should be about right. Cost £79m v. current £101m cash.

[arthur_lame_stocks] 13/7/2023 06:16

Interesting development today. I'm in two minds about it. If they do decide to wind the company down and they can get anywhere near NAV for the unlisted investments then I'll do ok out of these. But on the other hand it looks a bit like throwing the towel in when things will hopefully improve in time.

[makinbuks] 06/6/2023 10:05

Biotech possibly coming back in favour with increased M & A. We may get lucky

[ohisay] 06/6/2023 10:04

Phase 1 safety and tolerability data for ART4215 in advanced solid tumors is expected in 1H 2023;

Still waiting ...

Artios is the biggest unlisted @£24m..

[skyship] 04/5/2023 12:23

Debra Barker (NED) buys 26k @ 106p

[nakedmolerat] 28/4/2023 09:06

It will be in IC today, then rise and then fall later. Needs more than private investors to buy to move the price up

[spectoacc] 26/4/2023 07:06

Doesn't give up does he. Guess there's a continuous stream of new acolytes.

[sev22] 25/4/2023 17:54

Hot off the press:

A biotech stock at an unwarranted discount.

This cash-rich venture capital company is priced 41 per cent below book value.

April 25, 2023
By Simon Thompson

*Net asset value (NAV) falls from £255mn to £226mn (175p) in 2022
*Year-end net cash of £122.8mn and portfolio valuation of £99.6mn
*Post-period-end investments made in portfolio companies
*Shares priced 41 per cent below NAV

Arix Bioscience (ARIX:102p), a global venture capital company that holds a diversified portfolio of unlisted and listed investments in early-stage biotechnology businesses, has delivered annual results in line with the investment case I outlined when I selected the shares for my 2023 Bargain Shares Portfolio.

Last year’s decline in NAV reflects the losses on Arix’s investment portfolio of mainly Nasdaq-quoted small and micro-cap biotech stocks. It was caused by a confluence of macroeconomic and political events that drove up the cost of capital and created a challenging environment for the biotech sector. An equal-weighted index of US biotechnology stocks declined 26 per cent in 2022, the reversal coinciding with the steep rise in 10-year US Treasury yields, the preferred discount rate used for valuations.

Investors took flight to safety as capital dried up, financing costs soared and equity markets declined. The sell-off was broad-based, with many new and non-specialist investors reducing their exposure to the biotech sector. Inevitably, smaller biotech companies felt the effects more acutely. Even those companies with positive clinical trial data often failed to impress investors. The number of biotech companies trading below their balance sheet cash remains far above the pre-Covid norm, an indication of how the industry has reset valuations and is positioned for a recovery.

An opportunity for bargain hunting.

The sell-off has created an opportunity for bargain hunters, hence why I included the shares as one of my bargain selections for 2023.

It was partly predicated on the belief that the US Federal Reserve has acted swiftly enough in raising its short-term federal fund rate to see off the inflation threat. Market expectations embedded in the yield curve are adjusting, hence why the US 10-year Treasury yield has fallen from a peak of 4.25 per cent to 3.43 per cent in the past six months. Further easing would undoubtedly be good news for biotech company valuations.

Chairman Peregrine Moncreiffe notes that while Arix’s investment team sees value in the public markets, they are beginning to see attractive valuations for high-quality companies in the private market and expect to add selectively to this part of the portfolio. He highlights the post-period-end acquisition of portfolio company Twelve Bio by Ensoma, a Boston-based genomic medicines company developing one-time in-vivo treatments that precisely engineer any cell of the hematopoietic system. The acquisition was accompanied by $85mn concurrent financing in which Arix participated.

Moncreiffe also highlights that while Arix has sought to take a lead or co-lead position on private company financings in the past, it now prefers to take smaller positions to give more “shots on goal” and introduce more liquidity into the group’s core portfolio. It’s a sensible strategy to adopt as it’s holding around five to 10 per cent of NAV in a public opportunities portfolio to exploit short-term investment opportunities.

Unwarranted share price discount to NAV.

The share price has drifted from my 110p recommended buy-in price. However, the company has cash of £108.7mn (84p) and a listed portfolio of £42.9mn (33p) as of 31 March 2023. These valuations are already worth 15 per cent more than Arix’s current market capitalisation of £132mn (102p). And on top, there's an unlisted portfolio of £66.6mn (51.5p) and legacy investments of £3.1mn, which you're basically getting a free ride on.

The margin of safety on offer strongly suggests re-rating potential when investor risk appetite improves. BUY.

[nakedmolerat] 17/4/2023 13:12

nav down a tad to 1.71, but still well under.
Nice little tick up so far today and perhaps another run to 120p.

[ohisay] 11/4/2023 12:22

Very readable thread ..

[reabank] 06/4/2023 20:59

I think the problem is that having cancelled the share buy back the company is investing its cash at a very slow rate. Expenses for the first half were just over £2m but assets (other than cash) under management were < £100m. So 4% / 4.5% expense to asset ratio & at that level a hefty discount to NAV is (perhaps) inevitable. I guess management's explanation is they won't invest if they don't see value. Maybe a merger / sale is the answer?

[spittingbarrel] 06/4/2023 08:22

Just paid 102.45 for 10k, showing as a sell.

[nakedmolerat] 05/4/2023 12:56

The share buy back scheme was such a waste of time. All them monies thrown away. By growing or having investments in bio companies that will have break throughs would have been better. NAV at 1.76, so undervalued. However what next for Arix?

[ohisay] 05/4/2023 04:12

Fairly typical headlines recently ..

[skyship] 04/4/2023 12:34

Back in for a few at 103p.