IP Group plc - AGM statement

IP Group plc (LSE: IPO) ("IP Group" or "the Company" or "the Group"), the developer of intellectual property-based businesses, issues the following statement ahead of its Annual General Meeting, which is a closed meeting taking place at 10am today and which will be followed by a virtual event for shareholders at 10.15am. 

All shareholders are invited to join the virtual event at 10.15am while we politely remind shareholders that the 2021 AGM is a closed meeting with the minimum attendance required to form a quorum (being two shareholders). No other shareholders will be permitted to physically attend the meeting in accordance with the UK Government's current COVID-19 guidelines and to safeguard shareholders, employees and the wider community.

No material new information will be released by the Company during the virtual event. This statement provides an update on the Group's progress for the period since 31 December 2020.

Business and operational update

During the year to date, IP Group has seen a continuation of the positive progress made by many of its portfolio companies during 2020. A summary of significant portfolio events is set out below.

The Group remains well financed and, as at 31 May 2021, had gross cash and deposits of £228.7 million (FY20: £270.3 million) and net cash (gross cash and deposits less EIB debt) of £169.1 million (FY20: £203.0 million)

Shareholder returns and inaugural dividend

As described in the 2020 full year results release, the Board considers that IP Group shareholder returns will continue to be driven primarily by long-term capital appreciation. The Board also considers that the business model has reached a sufficient stage of maturity that a modest but growing dividend should form a small part of the overall shareholder value proposition. Consistent with this approach, and assuming approval of the relevant resolutions at the Group's AGM later today, the Group will pay its inaugural dividend of one pence per ordinary share on 16^th June. £10.1 million of the dividend will be settled in cash and £0.5m via the issue of new ordinary shares under the Group's scrip programme.

The Board also anticipates receiving shareholder approval to renew the authority to purchase up to 10% of the ordinary shares in issue from the date of grant of the authority to the date of the Annual General Meeting in 2022. Such purchases will only be made at a discount to the prevailing Hard NAV per share. Any decision to repurchase shares would be undertaken in light of other potential capital investment opportunities for the benefit of stakeholders and remains subject to regular review.

Portfolio update

The Group's portfolio includes holdings in 40 'focus' companies across life sciences, deeptech and cleantech, representing over 84% of the portfolio value at 31 December 2020. In the year to date, the Group has invested over £50 million in 32 portfolio companies and made cash realisations of £16 million. The Directors anticipate that cash realisations in the first half of the year will exceed £80 million following the completion of certain portfolio transactions described below.

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.

Significant developments in the Group's portfolio since 31 December 2020 include:

·    NeoGenomics, Inc agreed to acquire Inivata Ltd, a leader in liquid biopsy, resulting in IP Group receiving approximately £65 million* ($91 million) in cash and an anticipated increase in the Group's net asset value of approximately £28 million.

·    Waveoptics Ltd was sold to Snap Inc, in one of Europe's largest deeptech exits, as announced on 17 May. Following completion, IP Group has recorded a fair value increase of approximately £20 million.

·    Oxford Nanopore Technologies Ltd raised £202 million in new capital including £125 million from new investors Temasek, Wellington Management, M&G Investments and Nikon with existing shareholders investing £77 million. Following completion of the round, IP Group has a 14.5% undiluted beneficial stake in Oxford Nanopore, valued at £359 million. Oxford Nanopore announced in March that it had started the process of preparing for a potential Initial Public Offering.

·    Kuur Therapeutics Ltd was acquired by Athenex, Inc. for a total potential consideration of $185 million with IP Group eligible to receive £30 million* ($42 million) in Athenex stock and up to a further £51 million* ($72 million) in milestone payments in cash or stock. The Directors anticipate that the transaction will result in an increase in the Group's net asset value of approximately £26 million*.

·    Centessa Pharmaceuticals plc announced that its Nasdaq IPO had closed on 2 June 2021 and its American Depositary Shares were now trading under the symbol 'CNTA'. IP Group had previously announced that portfolio company Apcintex Ltd had been acquired by Centessa. Based on the IPO price of $20 per share, the value of the Group's 2.8% holding in Centessa was £36 million* ($51 million), resulting in an increase in the Group's net asset value of £15 million. Centessa noted that gross proceeds from the offering totalled $379.5 million.

·    Diurnal Group plc announced on May 28 that the European Commission (EC) had approved the marketing authorisation for Efmody^® (hydrocortisone modified-release hard capsules, development name Chronocort^®) as treatment of adult and adolescent patients (12 years and older) with the rare condition congenital adrenal hyperplasia (CAH). This decision by the EC follows the positive opinion issued by the European Medicines Agency (EMA) in March 2021. First commercial launch is anticipated in Q3 2021.

·    Pulmocide Ltd completed a $92 million Series C financing. Following completion and the investment of the first tranche of £2.2 million, IP Group will have a 14.4% undiluted beneficial stake in Pulmocide, which will be valued at £8.0 million.

*GBP equivalents calculated using 1.41 USD/GBP.

This announcement may contain forward looking statements. These statements reflect the Board's current view, are subject to a number of material risks and uncertainties and could change in the future. Factors which could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors relating to the financial or commercial prospects or performance of individual companies within the Group's portfolio.

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Notes for editors

About IP Group

IP Group is a leading intellectual property commercialisation company which focuses on evolving great ideas, mainly from its partner universities, into world-changing businesses. The Group has pioneered a unique approach to developing these ideas and the resulting businesses by providing access to business building expertise, capital (through its 100%-owned FCA-authorised subsidiaries IP Capital and Parkwalk Advisors), networks, recruitment and business support. IP Group has a strong track record of success and its portfolio comprises holdings in early-stage to mature businesses across life sciences and technology. IP Group is listed on the Main Market of the London Stock Exchange under the code IPO.

Group holdings in portfolio companies reflect the undiluted beneficial equity interest excluding debt, unless otherwise explicitly stated.

For more information, please visit our website at www.ipgroupplc.com.

ENDS