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ARIX Arix Bioscience Plc

142.00
0.00 (0.00%)
16 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Arix Bioscience Plc LSE:ARIX London Ordinary Share GB00BD045071 ORD 0.001P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 142.00 0.00 01:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
  -
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 142.00 GBX

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Date Time Title Posts
15/2/202410:05Arix Bioscience plc734
30/7/201811:14Arix Bioscience (ARIX) One to Watch -

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Posted at 21/12/2023 08:59 by frazboy
We're due an update from the company soon (see below). Given the value of RTW's stock it's very compelling to vote in favour (as we currently stand). I note that no approval is required from RTW's shareholder, only Arix investors need to vote it through.'It is currently envisaged that the Circular and notice of the first general meeting setting out the details of the Scheme and seeking shareholder approval for the Scheme and liquidation will be sent to Arix's Shareholders in the fourth quarter of 2023, at the same time as the publication of a prospectus by RTW Bio in respect of the New RTW Bio Shares. The first Arix general meeting is expected to be held in early 2024.A full timetable and further details of the Scheme will be set out in the Circular to be published by Arix in due course.'
Posted at 06/12/2023 14:01 by ohisay
It is currently envisaged that the Circular and notice of the first general meeting setting out the details of the Scheme and seeking shareholder approval for the Scheme and liquidation will be sent to Arix's Shareholders in the fourth quarter of 2023, at the same time as the publication of a prospectus by RTW Bio in respect of the New RTW Bio Shares. The first Arix general meeting is expected to be held in early 2024.

A full timetable and further details of the Scheme will be set out in the Circular to be published by Arix in due course.

Well the relative share prices RTW/Arix tell you there is zero possibility of the offer going ahead so they need a Plan B dont they ?
Posted at 28/11/2023 10:14 by stagvalley
Just a reminder from The Times of 1st November."But there must be a better solution than this: a deal that shafts three quarters of Arix’s share register for the benefit of Acacia and RTW. Shareholders should kick out Moncreiffe if he can’t find one".

Arix could relatively easily have returned cash and sold listed holdings which covers most of the NAV. Difficult to have confidence in this management who messed up on corporate governance last year, wasted shareholder funds on a Carribbean jolly when their share price is at about half of what it listed at in 2017, and is willing to favour one shareholder group over another. I shall vote my shares against. I hope the FCA rejects the purchase by RTW of Acacia's shares in a special deal to favour one shareholder with either expectation of being reimbursed by Arix. Bad behaviour by both RTW and Acacia. But if the FCA don't prevent it, we can make clear we won't accept Arix reimbursing RTW at our expense, by voting no. That still leaves us in a decent position given the extent of cash and listed shares and the big discount to NAV. The current RTW share price might make the deal look reasonable but the RTW share price is likely to fall as Arix shareholders seek to sell given the shares are not very liquid.

What's the point of takeover rules if they can be avoided by deeming the takeover to be a sale of all the assets to avoid the takeover rules. Cone on, FCA, you know this is unacceptable and a very bad precedent. Peel Hunt is to be applauded for speaking out and resigning as a second broker to Arix. Always did like Peal Hunt - very helpful in their VCT shares service.

I may be wrong on this, but being long in Arix and short in RTW (though I have never shorted a share in my life) seems a reasonable strategy whether the deal goes through or not. Arix has been driven down and RTW has gone up. If the deal goes ahead, Arix shareholders currently get a notional uplift but RTW may be depressed by Arix shareholders seeking an exit. If the deal doesn't go ahead, Arix can be forced to return cash and sell listed equities once the Chairman is exited and other shareholders get their act together, and RTW share price may decline as it saw the deal as lucrative and immediately accretive. Hard to believe that this bet could work both ways so I'm interested in the comments of others. It's a fairly unusual situation. But morally, I will oppose the RTW move as no class of ordinary shareholder should be favoured over another, ever!
Posted at 12/11/2023 12:28 by +eysenck
Here's the reply I received - this seems to sum it up "Although our largest shareholder is a minority, their substantial shareholding would have made it difficult to pass any shareholder resolutions necessary to affect a way forward other than the rapid wind down which they favoured."

Thank you for your email.

We are conscious of the differing treatment offered to Acacia; however, this was not a choice of the Arix board but was a factor in a transaction presented to Arix by RTW and was not something which the Arix board could negotiate or alter. The Board was obliged to consider the executable transactions presented to it, alongside wind-up scenarios and to weigh these up against the likely future value which could be delivered by supporting the portfolio and following the investments Arix has made to their logical conclusion.



Following the announcement of the Strategic Review, the Arix Board received a strong request from Arix’s largest shareholder to see a rapid return of capital. However, secondary sales of private positions and large listed holdings (many of which are illiquid) could only be achieved at a discount to our holding value. This discount would likely be very significant indeed for the private assets, with only a fraction of the book value realised. Unfortunately, it is not possible to liquidate a portfolio such as Arix’s in short order and deliver the full NAV per share to shareholders. Indeed, given the current weakness in biotech markets, the Arix board did not consider now to be a responsible time to be liquidating positions.



A partial return of capital and orderly management of the portfolio to generate returns to shareholder would have had attractions as an outcome to the strategic review. However, the desire of our largest shareholder to see a rapid return of capital made it difficult to execute on a wind down process which the board would have considered responsible. Although our largest shareholder is a minority, their substantial shareholding would have made it difficult to pass any shareholder resolutions necessary to affect a way forward other than the rapid wind down which they favoured. In this context, the transaction presented to Arix by RTW was judged to be superior to the other executable ways forward.



We appreciate your feedback and engagement and hope that future communications on this matter will help demonstrate the potential value this transaction can create.



I will of course be sharing yours, and other shareholder feedback, with the Arix board and RTW.



Kind regards,

Laura
Posted at 11/11/2023 02:06 by ohisay
One of Arix Bioscience’s joint-brokers quit on the morning it announced a contentious takeover deal in protest at its inequitable treatment of shareholders.

Peel Hunt demanded that its name and that of its two healthcare bankers be taken off the release for the sale of the company’s assets to the rival life sciences investment company RTW Biotech.

It resigned with immediate effect hours later.

The investment bank, which had been brought into the deal late in the process, is understood to have told Arix that it could not sanction a deal that discriminated against three quarters of its shareholders to provide a cash exit on better terms to its 25.5 per cent activist investor Acacia Research.
Moncreiffe hailed the deal as “the best outcome for Arix shareholders”. However, several shareholders are known to be livid with the board over the unequal terms and what they feel is a low-ball price when Arix is sitting on £106 million of cash. Arix needs the support of 75 per cent of voting shareholders for the deal to succeed.

A day after quitting, the Peel Hunt analyst Miles Dixon published an excoriating note, saying the deal was “opportunist and undervalues Arix’s portfolio”. He said the terms were so skewed that Acacia had managed to secure “1.7 times its share of Arix’s cash”, while RTW was effectively gaining control of Arix’s portfolio of unlisted investments “for just 30 cents on the dollar”.

Getting to be embarassing now.Board should just fess up and insist RTW improve the offer.
Posted at 10/11/2023 01:02 by ohisay
Well done Sky ...!
Somebody else isnt impressed either...



RTW is buying out Acacia for cash at 143p per share. But, as for Arix’s other shareholders, they’re merely being offered the same illiquid RTW paper that’s halved in value since 2021: 1.4633 new RTW shares for each Arix one. Using dubious 30-day averages, the Arix board claims this also equates to 143p a share. But it doesn’t, not least with RTW shares down from $1.18 to $1.11. For most Arix shareholders, this deal’s now worth only 132p.

It gets worse. RTW is funding the purchase of Acacia’s stake. But, if the deal goes through, it’s reimbursed. Arix is sitting on £106 million cash. After RTW’s bought out Acacia and paid deal costs, it’ll still have about £49 million of Arix cash, plus its £51.7 million of listed assets and unlisted ones valued at £67.8 million. Even Arix’s house broker Peel Hunt says the deal’s “opportunist and undervalues Arix’s portfolio”.

Moncreiffe needs 75 per cent of shareholder votes for the deal to go through. But even if they vote it down, he’s thrown in another egregious twist. He’s agreed to appoint RTW’s investment manager — RTW Investments — to manage Arix’s assets. RTW will have to use its own money to buy out Acacia if the deal fails. But it will still end up with 25.5 per cent of Arix and its own manager to vote its stake.

RTW says none of that matters because interests “would be aligned”. And, in Arix’s view, the alternative to the deal is an asset fire sale — not helped by its chief executive Robert Lyne jumping ship for a new job. But there must be a better solution than this: a deal that shafts three quarters of Arix’s share register for the benefit of Acacia and RTW. Shareholders should kick out Moncreiffe if he can’t find one.
Posted at 03/11/2023 06:16 by ohisay
Peel Hunt has downgraded Arix Bioscience (ARIX) from ‘buy’ to ‘hold’ in response to RTW Biotech Opportunities’ (RTW ) proposal to acquire its assets, which analyst Miles Dixon believes is ‘opportunist’ and undervalues the shares.
Arix’s largest shareholder, Starboard Value-backed Acacia Research, has been offered much better terms by RTW, who will buy their whole 25.5% stake for about £47.2m, securing 1.7 times its share of Arix’s cash per the most recent NAV, Dixon said.

‘Somehow Acacia Research has co-opted RTW to help it “crack the Arix safe”’, he added.

The stuff of Animal Farm ? .
All shareholders are equal but some are more equal than others.!
Posted at 02/11/2023 09:58 by frazboy
So we're all pretty much agreed on the merits of the deal. But let's assume it goes ahead. Current price of RTW is $1.10. We get 1.46 shares per Arix share. Adjust for the exchange rate and you get £1.31 per share roughly, a significant premium to the current price.So, what are the risks? I guess the obvious one is a derating of RTWs equity (greater NAV discount) once the deal is approved, leaving Arix's shareholders back in a very similar position (albeit in a more diversified portfolio) to where they start except with less cash support (as a percentage of NAV). Is that the risk? I'm not sure what the current Arix share price is actually telling us.
Posted at 25/4/2023 18:54 by sev22
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.
Posted at 11/8/2022 17:02 by 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.
Arix Bioscience share price data is direct from the London Stock Exchange

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