Bionex Share Discussion Threads

[old boy returns] 21/10/2003 12:21

Done a bit more digging on the ARK Ordinary shares and interestingly they are not all the same. The following is a summary:

1. The Ord 'A' and Ord 'B' rank ahead of the Ords on a winding up or capital distribution.

2. Ord 'A' and Ord 'B' have to be offered to other shareholders before a transfer.

3. On a Listing the Ord 'A' and Ord 'B' convert to Ords. But curiously there is a conversion rate to be applied. I have not yet found out what this conversion rate currently is but it could mean that the Ord 'A' and Ord 'B' which Bionex hold carry more weight (or less) on a Listing than the Ords. Due to the fact that the Ord 'A' and Ord 'B' rank ahead of the Ords I suspect it could be more.

Other financial snippets:

Last NAV for ARK was about £20M - mostly cash.
Cash burn around £5M per year. Note this is mostly R&D (which is all expensed) before commercialisation of any products which has nopt yet been commenced.
ARK spent about £800K on fees etc. relating to their postponed listing. From the amount spent it would seem that it was very far advanced and hopefully the work already done will provide a good basis for plans to restart the process.

[rivaldo] 20/10/2003 17:38

Oooh RL, you are a one!

The Telegraph article from 2002 earlier in the thread mentioned a £140m valuation and a £40m fundraising, so you're probably in the right ballpark at a £100m valuation. Ark got pretty close to a float from memory at that valuation and pulled it because the markets suddenly lurched downwards (as did a number of others at the time).

The opening post covers the warrants in that as far as I can see they don't come into play until a 2.5p share price is achieved - so there's still leeway up to this point.

Let's say the Bionex stake in Ark is worth £2.6m at only a £75m valuation. Bionex therefore has/had:
- Ark stake worth £2.6m
- Cash of £1m
- Other stakes of £1.1m, including Biovex, Morphochem and Avidex which look particularly good.

So total NAV would be £4.7m, or 3p per share (which is before the usual discount on investment vehicles). Still plenty of mileage there short-term, though long-term is where the real gains are to be made. The price has come a long way quickly, and Ark news will be the trigger to where it ends up, but I don't see that a current market cap of around £2.75m against NAV of £4.7m is challenging - there's not much downside risk at the least, and the upside could be substantial and sharp.

And many thanks OBR for your detective work - looking forward to more gems.

[old boy returns] 20/10/2003 17:21

RL - ARK's mooted valuation was £140M when last pulled. I agree the £150M I suggested in my post is pie in the sky at this stage but I have heard it mooted. The point of my post was to share the hard facts of my research into Bionex's holding in ARK which I have seen with my own eyes in the shareholders register.

I agree about the past history of some of the characters connected with MCL, Abingdon etc. I have never managed to work out what happened to the value in a load of prime London properties they persuaded me to invest in via their Barrasford Holdings vehicle which they later transfered to Gander and then to Orb Estates (Serious Fraud Office take note) who I cannot even contact now to try to claim value for some paper they issued me. I must be the only person who invested in London residential property in 1997 and lost money on it. However I do think BNX has some more reputable characters on board so things SHOULD be different.

Also, the warrants you refer to are well underwater at present. From memory they are exercisable at 2.5p-3.5p.

[russianlinesman] 20/10/2003 16:56

Old boy returns et al

I am only doing this to wind you all up of course, BUT

Ark had a mooted 100mil valuation when its float was last pulled. Do you really think it is going to get away for more than that now? come on

Of course not clear whether we are talking pre or post money.

There are different classes of shares I think due to the merger of 2 companies. If you have been a holder since MCL days you'll remember that MCL bought into the UK company (name escapes me) which merged with the Finnish company to form Ark. (the 1mil was paid in as part of a 15mil funding round and that was before the merger hence explaining the smallness of the stake).

The 3.5% holding sounds about right for the current stake. Obviously the 3.5% is 3.5% of the pre-money valuation, which is unlikely IMO in any circs to be more than 100m, i.e. 3.5mil

Still this is 2p+ per Bionex share but given the money will disappear into a black hole with all the usual MCL/ACL/BIO visibility, am not convinced that the upside has just been had by rivaldo and co who bought at around 1p.

Incidentally, holders (who therefore have more of an interest than me) might want to have a closer look at the demerger docs of Mountcashel/Abingdon which led to Bionex being set up as I seem to recall either Abingdon or the management (ahem) have quite a lot of warrants which can be exercised for not very much in a few years. This is just a vague recollection, and as I am only here to stir a bit I haven't bothered looking it up.

rgds to all

[old boy returns] 20/10/2003 16:26

Rivaldo

I have checked ARK Therapeutics Group Ltd shareholders register and Bionex hold the following:

135,135 Ordinary 'B' Shares
1,000,000 Ordinary 'A' Shares (the ones a acquired from Abingdon / Mountcashel)

The total issued share capital of ARK is 38,808,101 shares made up as follows:

13,968,498 Ordinary Shares
15,033,846 Ordinary 'A' Shares
9,756,757 Ordinary 'B' Shares
50,000 Redeemable Preference Shares

I do not know what different rights are conveyed on the holders of the Ords, Ord A's and Ord B's but from my memory of company law they must all represent the same proportion when it comes to ownership. It therefore seems that Bionex hold about 3.5% of ARK. This would be valued at £5.2M based on the £150M IPO valuation I have seen mentioned. Looks promising. I am awaiting info on some other areas I am researching and will report when I receive it.

[geniusjohn55a] 18/10/2003 18:28

Hi all,

Well I now own 446552 shares !
Bought in friday morning and paid 0.0188 average price for them.....I was a bit gutted when my trades didn't show up on nothing-ventured as buys though although you might have seen 08.22am 250000 and 08.24am 196552 which were bought by me :)
I only just signed up here as I had been using nothing-ventured for early (7am) news prior to buying at 8am before dashing off to work. But NV have gone now so I needed a new news feed and here I am !
These were bought without much research as I just couldn't find any and the price was rushing up as if some inside knowledge had been leaked !
But on reflection I'm glad I did it ;~)
Roll on weekend press and trading next week !
I do like the look of the BNX investments, but then I am a geek !

[rivaldo] 18/10/2003 11:17

Welcome james111.

Having trawled through the various company web sites again, there's more good news from Biovex following on fron its £17m fundraising which I hadn't noticed before (on the front page of the site):


BIOVEX RECEIVES NOTICE OF ALLOWANCE FROM THE US PTO FOR CORE PATENT COVERING ITS IMMUNOVEX VACCINE PLATFORMS
Oxford 8th October 2003 - BioVex Limited announced today that it had received a Notice of Allowance from the US Patent and Trademark Office in relation to one of its core patents.

I particularly like this extract - per the AIM prospectus Biovex was valued at just £7m when Bionex made its investment:

"The Company's lead product from this platform, ImmunoVEX tri-melan is for the therapy of malignant melanoma. The product, which delivers three complete melanoma associated antigens to dendritic cells, is expected to enter a Phase I/II trial in the first quarter of 2004. The Company believes it is the only triple whole antigen vaccine being developed for the treatment of melanoma. In addition, the Company is developing a number of prophylactic ImmunoVEX vaccines for various infectious diseases including those caused by HSV2, HIV and HPV."

[james111] 17/10/2003 17:44

Hi guys another nice day today to follow yesterday s, I had almost forgot I had these 550K not a fortune but a welcome gain, will be watching much closer from now.
Regards James

[rivaldo] 17/10/2003 15:50

Randj, it's on the very front page of the site (for some reason they haven't put it on the press release page - just to fool us I suppose!).

[regandjess] 17/10/2003 15:42

rivaldo.....the last press release I can see is on the 6th Oct. Unless I have misread it or can't find the bb nbr 30 reads as if it was released today. If not accept my appologies............regandjess

[rivaldo] 17/10/2003 14:18

R, have a look at Biovex's web site front page - sorry, forgot to paste the link again (gawd, I wish Biovex and Bionex had different names!)

[regandjess] 17/10/2003 13:14

rivaldo post 30 of 32 where did you see an RNS regarding this??

[rivaldo] 17/10/2003 13:05

Yes, I am he! Great stuff, there can't have been many who got them so cheap that morning. You can buy me a beer some time! With good news coming from both Morphochem and Biovex over the last couple of days, it doesn't look like BNX is dependent on Ark anyway for more progress.

Please share what you find about the Ark holding (number of shares, % holding etc) - it'll be extremely useful if/when Ark float or valuations are being bandied around. Good luck.

[old boy returns] 17/10/2003 12:40

rivaldo - are you also hansel who posted the same post as the header in Paulypilots Pub (and got many recs). If so thankyou very much. I saw the post the evening it was posted. Did a bit of research and then left a stack of overnight limit orders with by broker to buy shares up to 1.2p in the morning (I was expecting a mark-up but thought it was worth a try). Anyway I ended up with 500K shares at an average just under 1.2p and I don't even posses a pair of sunglasses. Thanks again for the tip. Off to do a bit more research into their Arc holding. The information on Bionex's holding is actually publically available via Arc's shareholder register so it shouldn't be too difficult to dig up.

[rivaldo] 17/10/2003 12:35

Now I know how Biovex managed to arrange a £17m financing round earlier this month - they've announced this today:

BIOVEX ANNOUNCES AGREEMENT WITH JOHNSON & JOHNSON PHARMACEUTICAL RESEARCH & DEVELOPMENT

"17 October 2003 - BioVex Limited announced today that it has signed an agreement allowing Johnson & Johnson Pharmaceutical Research & Development, a division of Janssen Pharmaceutica N.V. (J&JPRD) located in Beerse, Belgium, to evaluate its proprietary NeuroVEX vectors that allow highly efficient and non-toxic gene delivery to the cells and tissues of the nervous system. NeuroVEX can be used to establish long-term foreign gene expression in nerve cells and may be useful in the identification of new gene targets for small molecule drugs to treat diseases and disorders of the central and peripheral nervous systems.

For further details about NeuroVEX contact Dr. Tony Mills, Director of Business Development or Dr Robert Coffin, Chief Scientific Officer Tel: [phone]."

[quidzinn] 17/10/2003 10:22

Congratulations to Double6 for paying the highest price of the day so far - Is this a change of tactics ?

I thought you liked sniffing out bombed-out bargains before the herd got to them....

Q

[rivaldo] 17/10/2003 10:21

LOL RL! You should have pestered your broker - he might have got you some at 1.05p, which fortunately mine did.

I think you're seeing the glass half empty rather than half full. Why would anyone ever invest in any investment vehicle if they took that philosophy? From memory, aren't you invested in PDT - surely the same applies there, with a cash balance, a spread of relatively late stage investments and assumed lock-ins post-IPO?

It may be that an exit for Ark is achieved via corporate activity (takeover) rather than float. Or maybe, as an early investor, on IPO Bionex would be allowed to dispose of a % of their shares, or even place the entire stake. Either way, payback could be early - it's not as straightforward as you say.

And on valuation, yes there should be a discount to NAV - but with Ark's prospects looking good there's every reason to hope for a multibagger return. Even without any uplift from Ark, the current NAV is 2.3p per share, so there's still a large discount to be had, especially given that all the investments were reviewed for provision as recently as June.

You're right to be cautious, it's just that IMO the downside here is minimal and the upside great.

[russianlinesman] 17/10/2003 09:37

i seem to recall at the time of the last failed attempt to float Ark, it was said that Bionex owned about 3-4%, i.e. about 4mil quid worth (3p per Bionex share approx).

Perhaps I should rename myself bionex bear, but even if ark floats, they are either (a) locked in and subject to the vagaries of biotech valuations, i.e. typically close to cash, (b) or have cash which they invest again.

And then you have the whole valuation problem, which the market hates, so zou can make trading profits here, but then the price will drift, as MCL and Abingdon have done for several years.

of course am really just annoyed because i was watching for months waiting for the spread to narrow from its usual 30%, so I could buy for 1.0p instead of 1.2p

hey ho

[rivaldo] 17/10/2003 09:05

Sorry Kamlani, forgot to paste the link - it's in the Market Report:

[kamlani] 17/10/2003 08:57

Rivaldo could you tell me what page the arcticle was on please?cheers

[rivaldo] 17/10/2003 08:49

OldBoyReturns, you reminded me that Bionex has one further investment which I omitted to list - in Photo Therapeutics. Around £250,000 was invested per the prospectus. This was written down by 75% at the time of float, but looking at their web site it appears they've revived somewhat:



I'm amending the header to include it.

Nice to see some interest here - and I second Philmiboots' comment.

[double6] 17/10/2003 08:24

Bought 25k (odd) @ 1.92p - looks intriguing...

[thecleaner] 17/10/2003 08:22

I wear dark glasses in October.

[philmiboots] 17/10/2003 08:13

Splendid!
:o)

[rivaldo] 17/10/2003 07:29

Thanks OBR.

From the Independent this morning - tell us something we don't know. And who exactly are these men wearing sunglasses in October?

"The men in dark glasses were heard to be piling into Bionex Investments, up 0.2p to 1.3p, amid talk that the biotech investment group has one prospect on its books which alone could be worth 4p a share to the company. More than 12 million shares changed hands."