Ip Share Discussion Threads

[oakville] 30/8/2022 08:48

30 August 2022

RECOMMED CASH ACQUISITION

of

Diurnal Group plc ("Diurnal")

by

Neurocrine Biosciences, Inc. ("Neurocrine")

to be implemented by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

-- The boards of Neurocrine and Diurnal are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition pursuant to which Neurocrine shall acquire the entire issued and to be issued ordinary share capital of Diurnal (the "Acquisition"). The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

-- The Acquisition values the entire issued and to be issued ordinary share capital of Diurnal at approximately GBP48.3 million.

-- Under the terms of the Acquisition, Diurnal Shareholders shall be entitled to receive 27.5 pence in cash for each Diurnal Share, representing a premium of approximately:

o 144 per cent. to the Closing Price per Diurnal Share of 11.25 pence on 26 August 2022 (being the last Business Day prior to this announcement, the "Latest Practicable Date"); and

o 151 per cent. to the volume weighted average Closing Price of 10.93 pence per Diurnal Share for the three months ended on the Latest Practicable Date .

-- If, on or after the date of this announcement and on or prior to the Effective Date, any dividend, distribution, or other return of value is declared, made, or paid or becomes payable by Diurnal, the Acquisition Price shall be reduced accordingly. In such circumstances, Diurnal Shareholders shall be entitled to retain any such dividend, distribution, or other return of value declared, made, or paid.

-- The Acquisition is conditional on, amongst other things, the approval of Diurnal Shareholders.

Information on Neurocrine

-- Neurocrine is a neuroscience-focused, biopharmaceutical company with a simple purpose: to relieve suffering for people with great needs, but few options. Neurocrine is dedicated to discovering and developing life-changing treatments for patients with under-addressed neurological, neuroendocrine and neuropsychiatric disorders. Neurocrine's portfolio includes FDA-approved treatments for tardive dyskinesia (TD), Parkinson's disease, endometriosis and uterine fibroids, and a diversified portfolio of investigational therapies with the potential to address unmet clinical needs of patients worldwide living with neurological, endocrine and psychiatric disorders. Neurocrine has a workforce of approximately 1,200 employees, and is headquartered in San Diego, California.

-- For the year ended 31 December 2021, Neurocrine reported net product sales of $1.09 billion (c. GBP0.9 billion) and net income of $89.6 million (c.GBP75.3 million). As at the Latest Practicable Date, Neurocrine had a market capitalisation of $10.0 billion (c.GBP8.4 billion).

Information on Diurnal

-- Diurnal is a European specialty pharmaceutical group targeting patient needs in chronic endocrine (hormonal) diseases. Diurnal aims to develop and commercialise products to solve patient needs in endocrine diseases, primarily those that result from a deficiency of cortisol and testosterone, typically where there is either no licensed medicine or where current treatment does not sufficiently address patients' needs. Diurnal's portfolio includes approved treatments for paediatric adrenal insufficiency (AI) and congenital adrenal hyperplasia (CAH). Diurnal has a workforce of 33 employees, and is headquartered in Cardiff, UK.

-- For the six months ended 31 December 2021, Diurnal reported unaudited net product sales (including royalties) of GBP2.13 million and a net loss of GBP7.95 million. As at the Latest Practicable Date, Diurnal had a market capitalisation of GBP19.1 million. Unaudited net product sales (including royalties) for the twelve months to 30 June 2022 were GBP4.62 million.

Diurnal recommendation

-- The Diurnal Directors, who have been so advised by Panmure Gordon as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Diurnal Directors, Panmure Gordon has taken into account the commercial assessments of the Diurnal Directors. Panmure Gordon is providing independent financial advice to the Diurnal Directors for the purposes of Rule 3 of the Code.

-- Accordingly, the Diurnal Directors intend to recommend unanimously that Diurnal Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer), as those Diurnal Directors who hold Diurnal Shares have irrevocably undertaken to do in respect of their own beneficial holdings of 3,030,867 Diurnal Shares representing, in aggregate, approximately 1.8 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

-- Neurocrine has also received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) from IP Group in respect of a total of 49,900,285 Diurnal Shares, representing, in aggregate, approximately 29.3 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

-- In addition, Neurocrine has also received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) from (i) Development Bank of Wales in respect of a total of 11,534,888 Diurnal Shares, representing, in aggregate, approximately 6.8 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date and (ii) Polar Capital Holdings plc in respect of a total of 20,000,000 Diurnal Shares, representing, in aggregate, approximately 11.8 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

-- Neurocrine has therefore received irrevocable undertakings in respect of a total of 84,466,040 Diurnal Shares representing, in aggregate, approximately 49.7 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

-- Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
-- In addition to the irrevocable undertakings, Neurocrine has received a letter of intent from Amati Global Investors in respect of 8,786,429 Diurnal Shares, representing, in aggregate, approximately 5.2 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

-- In total, Neurocrine has received irrevocable undertakings and a letter of intent in respect of a total of 93,252,469 Diurnal Shares representing, in aggregate, approximately 54.8 per cent. of the ordinary share capital of Diurnal in issue on the Latest Practicable Date.

Timetable and Conditions

-- The Acquisition shall be put to Scheme Shareholders at the Court Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. In addition, the implementation of the Scheme must also be approved at the General Meeting by Diurnal Shareholders representing at least 75 per cent. of votes cast at the General Meeting.

-- The Conditions to the Acquisition are set out in Appendix 1 to this announcement, along with certain other terms; the full terms and conditions will be provided in the Scheme Document.

-- The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting shall be published as soon as practicable and, in any event, within 28 days of this announcement (or such later time as the Panel agrees).

-- The Acquisition is currently expected to complete during late October or early November 2022, subject to satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, Anders Härfstrand, Non-Executive Chairman of Diurnal, said:

" The Board of Diurnal is delighted to announce this recommended offer for Diurnal. Diurnal and Neurocrine are highly complementary businesses, and we believe that Neurocrine's financial and operational resources will substantially accelerate the development of a leading franchise in diseases of cortisol deficiency, benefiting physicians and patients globally.

We believe that the Acquisition is compelling for Diurnal's shareholders given the risks associated with achieving Diurnal's vision of creating a profitable business, in particular the ongoing commercial roll out of Diurnal's products in Europe and the execution of key clinical studies, in addition to the substantial shareholder dilution that is likely to result from accessing the capital required to deliver this vision."

Commenting on the Acquisition, Kyle Gano, Chief Business Development and Strategy Officer of Neurocrine, said:

"We have followed Diurnal for several years and have a high regard for its people. We see a good strategic fit that offers benefits for both companies' stakeholders and the physician and patient communities we both serve."

This summary should be read in conjunction with the full text of this announcement (including the Appendices). The Acquisition shall be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix 2 to this announcement contains the sources of information and bases of calculations of certain information contained in this announcement, Appendix 3 to this announcement contains a summary of the irrevocable undertakings received in relation to this Acquisition and Appendix 4 to this announcement contains definitions of certain expressions used in this summary and in this announcement.

[bamboo2] 30/8/2022 08:10

IPGroup hold 29.5% of Diurnal.

Price responding to bid at 27.5p/sh

[bamboo2] 30/8/2022 07:44

I am embarrassed for them that this is not seen as newsworthy.

They should have known it might be on the cards, and should have been ready at 7am.

It's not difficult.

[bamboo2] 30/8/2022 07:42

Management here still on their hols, so I'll let you know...

30 August 2022

RECOMMED CASH ACQUISITION

of

Diurnal Group plc ("Diurnal")

by

Neurocrine Biosciences, Inc. ("Neurocrine")

27.5p a share.

[bamboo2] 28/8/2022 19:51

They missed out on Garrison, and Pulmocide. Pulmocide is already saving lives as an off label use where fungal infection is unresponsive to anything else, and patient is likely facing the worst outcome. There are quite a few others quietly getting on with it.

Pulmocide article here has some graphic photos that illustrate effectiveness.

[bamboo2] 28/8/2022 19:36

Kathleen Turner was just 38 when her feet began to swell up. Within weeks, she could not move her left arm, then her neck froze and shortly after that, it became almost impossible for the Hollywood actress to walk.

This was the early 1990s and, when Turner was diagnosed with the autoimmune disease rheumatoid arthritis, steroids were pretty much the only drug that could alleviate her chronic pain.

Other drugs have come on to the market since then, most of which work by turning the immune system off and on, creating lingering side-effects. UK start-up Istesso has developed a different approach, which encourages the immune system to work properly.

Spun out of Aberdeen University, the company has been backed from the start by IP Group, a FTSE 250 business that specialises in finding early-stage firms and helping them to become successful.

IP shares are 69p, having fallen 45 per cent over the past year. The decline is unwarranted and the stock should rally.

IP's biggest success to date has been Oxford Nanopore Technologies, a DNA sequencing specialist that is best known for identifying and tracking Covid-19 variants.

Nanopore floated on the stock market last year, valued at £3.5billion or £4.25 a share. The price is now £2.86, having tumbled in line with other tech firms, but there is widespread agreement that this company's technology is top-notch and the shares deserve to move higher.

This would be a welcome boost for IP, which helped to found Nanopore in 2005 and still owns 10 per cent of the business. But the group has many more strings to its bow.

Istesso is a case in point. Initial trials for its new drug have been encouraging, a second phase will kick off this year and final tests are expected in 2024. Of course, there is some way to go before the drug is approved but, if all goes well, the consequences will be far-reaching, with independent analysts suggesting Istesso could be valued at substantially more than £1billion.

Other investments in IP's portfolio have significant potential too. Cambridge-based Feature Space uses artificial intelligence to combat financial fraud, it is already making money and the technology is deployed by giants such as HSBC and Worldpay.

Oxbotica is developing self-driving software for larger vehicles, such as vans and buses, it has won multiple awards, is at the forefront of its sector and counts Ocado as a big investor, alongside IP.

Oxford-based First Light Fusion is working on technology that replicates the way the sun produces energy to create ultra-clean power. Pioneers have been trying to make this type of technology work for years.

First Light seems nearer than many to success and is looking for around £400million of cash from external investors to help bring its technology closer to fruition. Should this fundraising prove successful, First Light will see its valuation soar, making IP's 27 per cent stake considerably more valuable.

IP does not just keep buying new firms. It sells out of businesses too, including stock market-listed Ceres Power, valued at £1.2billion and electric motor specialist Yasa, sold to Mercedes-Benz last year.

The group floated on the stock market in 2003 when the shares were priced at around 60p and the value of its assets per share, known as the net asset value or NAV, was 22p.

At that time, therefore, the company was trading at a big premium to the value of its assets. Today, the NAV is £1.37. But the shares are just 69p, so the stock market is claiming that the firm is worth far less than the independently assessed value of its assets.

This does not seem right and chief executive Greg Smith is determined to change it. Promoted from finance director last year, he has since contacted IP's major shareholders and asked them what they would most like to see from IP.

Following their suggestions, Smith has simplified the company around healthcare, technology and green businesses. He has clarified where the firm is likely to see success over the next few years and started to pay dividends, proving to investors that he can invest in new technologies, support companies as they grow and reward investors along the way.

Midas verdict: The UK is one of the most inventive countries in the world, but it lags far behind the US in turning ideas into successful companies. IP is one of the few firms that can catalyse that process. At 69p, the shares are seriously undervalued. UK investors have a chance to put that right. Buy.

[manora] 28/8/2022 15:16

Recommended by Midas in Mail on Sunday today.

[palisz] 25/8/2022 10:59

Err. Rock Star they just changed CEO. He needs to stop following his predecessor's plan and get more imaginative.

[palisz] 25/8/2022 10:55

I dunno where the dirt is... but I'd suggest were 6 feet under already. They've arranged an 'investor meeting' but wait for it.... not until 5th October! Will we have the power to even watch it!

[rock star] 25/8/2022 10:54

Followed this for years. Clearly run by Oxford Geeks rather than streetwise investors. Time for change I think.

Directors should be embarrassed over their decision making.

[p1nkfish] 25/8/2022 10:46

CEO waiting untl its really in the dirt and then proclaims new incentive scheme related to share price performance & how aligned he is. Doh!

[palisz] 25/8/2022 10:39

Dunno, But if I was CEO and confident in my companies investments, I would think if they were trading at a 77% discount to end June 2022 valuation (ex ONT and cash) I'd not be looking for new investments I'd be buying my own shares! (NOT THAT COMPLICATED!)
Very frustrating... still out performing ARKK...but not a lot else.
Summer 2020 when stock was a similar level was when I kept asking about a share buyback...that eventually came a year later and 50% higher. Really hope this is not a repeat of that.

[bamboo2] 12/8/2022 11:23

IPGroup hold 29.5% of Diurnal.

Price responding to the last nights excellent results from Eton Pharma, which has exclusive rights to US distribution of DNL products.





"Sales of our recently launched ALKINDI SPRINKLE® remain strong, with 293% year-over-year revenue growth, and feedback from the patient and physician communities continues to be overwhelmingly positive."

[bamboo2] 11/8/2022 14:27

p1nk, re Nexeon, email sent to IR
Will report back, if any info forthcoming!

[p1nkfish] 11/8/2022 11:51

The fact they hold such a reasonable % of Nexeon that has just raised $200M with no comment from IPO is certainly strange. The holdings history is another mystery.

A point is approaching where management need to tighten up operations. The discount to NAV is not by accident nor totally down to PE/VC being out of favour, or growth or tech. Investors are voting with their money.

[bamboo2] 11/8/2022 11:39

A TR-1 holdings notice. These are as hard to come by as hens teeth!

It is frustratingly cryptic as usual.
My guess is that Liontrust have lent out additional stock for a shorter.

If anyone knows any better please speak.

[p1nkfish] 09/8/2022 10:40

Battery materials & IP is a hard business.
The current valuation is impressive.
They must have something special.

[bamboo2] 09/8/2022 09:44

p1nk, maybe it'll be like Hinge, a unicorn by stealth!

[p1nkfish] 09/8/2022 09:18

So Nexeon was valued about £250M prior to recent new funding and had received about £8.5M uplift in IP portfolio since FY21.

$200M is major validation. They haven't deemed it worthy of a release of info to the market?

Perhaps it's a poor cousin for current management having been an Imperial investment.

Guess key personnel on holiday might get an excuse but a very poor one.
Looks more like sloppiness to me.

[bamboo2] 09/8/2022 08:48

p1nk, I have updated the header, some old info left in for comparison.

The link to recent accounts shows NEXEON at 7.8%, valued at £19.8m

I guess this includes the prior 2022 fundraising, but not the recent one [$220m]

[details below]

[p1nkfish] 08/8/2022 22:14

End of Dec 2021, NEXEON haad a carry value of £11.3M for 10.7% of the company. Suggests £105M approx valuation.
IPO do not look like having taken part in the latest $200M round last week.
Very strange there's still no news.

[bamboo2] 08/8/2022 12:02

palisz, thanks for the reply.

There are a few income streams in the second half, these are performance related payments from past transactions [noted from a presentation last year].

Hinge Health was earmarked for flotation in 2022, and given the recent good figures from them, would anticipate this occurring in the late Autumn.

Ceres should complete their purchase of RFC later in the year, [Nov] but this is subject to compatibility testing, and the payment will be made in shares rather than cash.

I see the tech market bottoming at present. I think it will be tech that leads the market higher over the next few years, with Companies such as ONT at the forefront of a revolution in healthcare.