IP Group plc (LON:IPO), the developer of intellectual property-based businesses, has issued the following statement ahead of its Annual General Meeting which will take place at 11am today. This statement provides an update on the Group’s progress for the period since 31 December 2019.
Business and operational update
IP Group’s day-to-day operations have been largely unaffected in the year to date. The majority of the team is operating effectively remotely, in line with the latest public health guidance, to ensure the continued health and wellbeing of our team in each of the geographies in which we operate.
The Group remains well financed and, as at 31 May 2020, had gross cash of £256.6 million following record realisations in the year to date of £113.8 million compared with £79.5 million for the whole of 2019. The management team remains focused on generating a positive return on net assets. As described in our 2019 Annual Results statement, achieving portfolio self-sustainability through realisations from our maturing companies and increasingly concentrating resources on our ‘focus’ companies, as well as prudent cost management, remain key objectives in 2020.
Portfolio update
The Group’s portfolio includes holdings in 57 ‘focus’ companies across life sciences, technology and cleantech, representing over 87% of the portfolio value at 31 December 2019. In the year to date, the Group has invested £27.7 million in 30 portfolio companies and made cash realisations of £113.8 million. Management is currently undertaking its regular fair value assessment exercise as part of its half-yearly results processes and looks forward to updating shareholders in August.
The Group continues to assess and respond to the impacts of COVID-19 on its portfolio, which includes world-changing businesses that we believe will deliver impact and significant benefits to society at large. While the year to date has undoubtedly been a period of significant change and we have experienced volatility, particularly in the capital markets, we remain positive on our portfolio’s prospects. Our team continues to work with our individual portfolio companies as they assess and mitigate potential impacts on their businesses, respond to opportunities, and manage their capital and resource requirements. We are proud of the many IP Group companies, past and present, that are contributing to the response to Covid-19, including Oxford Nanopore Technologies, Ieso Digital Health, Oxehealth, Navenio and MobilION Systems.
Significant developments in the Group’s portfolio since 31 December 2019 include:
· Ceres Power Holdings plc: IP Group announced it had sold approximately 19.25 million ordinary shares in Ceres Power across two transactions, raising net proceeds of approximately £73 million.
· Featurespace Ltd: Completed a £30 million fundraising led by Merian Chrysalis Investment Company Ltd and also included further funding from existing investors including IP Group, Highland Europe, MissionOG, TTV Capital and Invoke Capital Partners. IP Group has an undiluted holding of 19.7% in Featurespace. The directors expect that this transaction will result in an unrealised fair value gain to the Group of approximately £10 million compared with Featurespace’s last financing round and that the Group’s holding will be valued at approximately £40 million.
· Inivata Ltd: Formed a strategic collaboration with NeoGenomics, Inc for the commercialisation of its InVisionFirst®-Lung liquid biopsy test in the United States. As part of the collaboration, NeoGenomics will make a $25 million equity investment in Inivata to take a minority shareholding with an option to buy the company outright. Following completion of the initial equity investment, IP Group has an undiluted holding of 25.7% in Inivata. The directors expect that this transaction will result in an unrealised fair value gain to the Group of approximately £7.0 million and that the Group’s holding will be valued at approximately £31.0 million.
· Oxford Nanopore Technologies Ltd: Completed a fund raising of an additional £48.4 million of new capital from both new and existing shareholders in EMEA, US and Asia in May, in addition to the £29.3 million of capital raised in January. Following these transactions and a £22.0 million partial sale of its holding in January, IP Group has an undiluted holding of 15.9% in the company. Oxford Nanopore announced recently that it is in advanced development of a new generation of end-to-end test (assay) for the detection of SARS-CoV-2, the virus that causes COVID-19. The LamPORE assay is designed to be rapid, low cost, and scalable to cater to on-demand analysis of smaller sample numbers, to very large numbers of samples.
