AGM Statement

RNS Number : 8443M

IP Group PLC

12 May 2015

 



FOR RELEASE ON

12 May 2015

IP Group plc - AGM Statement

IP Group plc (LSE: IPO) ("IP Group" or "the Group"), the developer of intellectual property-based businesses, is issuing a statement ahead of its Annual General Meeting which will take place at 2pm today at the Group's offices. This statement provides an update on the Group's progress for the period since 31 December 2014 and replaces the former Q1 Interim Management Statement.

Alan Aubrey, Chief Executive of IP Group, said: "I am pleased to report a positive start to 2015, during which the Group has completed a £128m equity capital raise and recorded a net increase in the fair value of its portfolio of £26m. Overall, our portfolio companies have performed well during the period with several of the quoted companies experiencing an increase in their share prices while, amongst the unquoted companies, Diurnal became the first of the Group's portfolio companies to enter a product into a Phase 3 trial. We remain focused on supporting our portfolio companies and evolving further great ideas into world-changing businesses."

Portfolio update

As at 8 May 2015, the fair value of the Group's portfolio was £385.0m compared to £349.9m at 31 December 2014. This represents a net unrealised fair value increase of £26.1m during the period, excluding the investments described below. This net fair value increase was primarily driven by the positive share price performance of a number of the Group's quoted companies, including Xeros Technology Group plc (£9.5m), hVIVO plc (£8.3m) and Applied Graphene Materials plc (£3.3m). These were partially offset by total decreases of £4.9m in the fair value of the Group's holdings including Azuri Technologies Limited (£1.2m) and Ilika plc (£1.2m).

The Group's portfolio now consists of holdings in 93 intellectual property-based companies. From 1 January 2015 to 8 May 2015, the Group provided incubation, seed and further capital totalling £9.1m to 22 portfolio companies. There were no material realisations from the portfolio during the period.

Significant developments in the Group's portfolio companies since 31 December 2014 have included:

-      Diurnal Limited, a spin-out company from the University of Sheffield and in which IP Group holds a 51.7% undiluted beneficial interest, announced in March that it had been granted Orphan Drug designation by the US Food and Drug Administration for its lead product Chronocort^®, which it has developed to treat the rare disease Congenital Adrenal Hyperplasia. Pivotal Phase 3 trials of Chronocort are due to start later in the year as Diurnal seeks to progress the drug towards market authorisation. In the same month, Diurnal also announced that the first patient had been enrolled onto a Phase 3 trial of its paediatric product, Infacort®, which it has developed for the treatment of paediatric adrenal insufficiency. The trial is due to be completed by the third quarter of 2016 and represents the first Phase 3 study for Diurnal's portfolio of late-stage products targeted at rare disorders of the endocrine system.

-      Tissue Regenix Group plc ("Tissue Regenix"), a regenerative medical devices company, announced in January that it had raised £20m (before expenses) through a placing of new ordinary shares with both new and existing institutional shareholders. The proceeds will be primarily used for the development and launch of new products, including applications for meniscus repair, ligament repair and heart valve replacement, and to expand its direct salesforce in the US for DermaPure, which is used in the treatment of chronic and acute wounds. The Group committed approximately £2.5m to the placing. Tissue Regenix has also announced that it has secured approval from the Medicines and Healthcare Products Regulatory Agency for the first clinical trial of its decellularised tendon device, Orthopure^TM XT, for the surgical reconstruction of a torn Anterior Cruciate Ligament in the knee, a common sports injury that affects 900,000 people per year globally.

-      During the period, Xeros Technology Group plc ("Xeros"), the developer of a patented polymer bead cleaning system and in which the Group holds an 11.9% undiluted beneficial interest, announced that additional utility companies in the US had launched energy initiative programmes for customers who commit to reducing their energy consumption through the use of a Xeros Commercial Laundry System. To date, 13 utility companies in the US have launched such incentive programmes. In April, Xeros announced that 61 Forward Channel Partners had signed up to join its North American Commercialisation Programme and also a joint development programme between Xeros and LANXESS Deutschland GmbH to advance the application of Xeros' polymer bead cleaning technology in the leather processing industry.

-      Finally, Oxford Nanopore Technologies Limited ("Oxford Nanopore"), the Group's largest holding, opened its community-focused access programme - the "MinION Access Programme" - to fresh applications at the beginning of the year while programme participants continued to produce a number of publications in regards to novel applications for the MinION. On 14 and 15 May 2015, Oxford Nanopore will host its "London Calling" conference which is dedicated to nanopore sensing. During this conference, participants in the MinION Access Programme will share their experiences and attendees will learn more about the future of the technology and its applications.

In May, IP Group completed its second spin-out in the US and the first from Princeton University. The Group has agreed to provide initial capital of up to $1,500,000 for a significant minority stake in Uniformity Labs Inc., which develops optimised feedstock powders for 3D printing. The initial capital will be provided in tranches subject to successful attainment of commercial and technical milestones. 

Board changes

In March, the Group announced that Mike Humphrey was to become Non-executive Chairman with effect from the conclusion of the Group's Board meeting held on 24 March 2015. Mr Humphrey, who joined the IP Group Board in 2011 and was appointed Senior Independent Director in that same year and Chairman of the Remuneration Committee in 2014, replaced Dr Bruce Smith CBE, who stepped down after 12 years on the Board. With effect from that same date, Doug Liversidge CBE, who joined the Board in 2014, assumed the role of Senior Independent Director and Jonathan Brooks, a member of the Board since 2011, became Chairman of the Remuneration Committee. The Nomination Committee is actively searching for an additional Non-executive Director for the Board and will make an announcement once this process has been completed.

Balance sheet update

In March, the Group completed an equity capital raise of £128m (before expenses). This has left the Group well positioned to continue to increase its overall rate of capital deployment into its existing maturing portfolio as well as into new early stage opportunities, both in the UK and the US.

At 8 May 2015, the Group had cash of £212m, a diversified portfolio valued at £385m and net assets of £672m, representing 125p per share. Excluding intangible assets and the Oxford Equity Rights asset, the Group's "hard" net assets were £600m or 111p per share.

For more information, please contact:

IP Group plc	www.ipgroupplc.com
Alan Aubrey, Chief Executive Officer Greg Smith, Chief Financial Officer Vicki Bradley, Communications	[phone]
FTI Consulting
James Melville-Ross/Simon Conway/ Victoria Foster Mitchell	[phone]

This statement is intended to give an indication of material transactions and events that have taken place since 31 December 2014 and their impact on the financial position of the Group. These indications 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 portfolio companies within the Group's portfolio. Unless otherwise stated, the Group's holdings in portfolio companies reflect the undiluted beneficial equity interest excluding debt.

Notes for editors

About IP Group

IP Group is a leading UK intellectual property commercialisation company, developing technology innovations primarily from its research intensive partner universities. The Group offers more than traditional venture capital, providing its companies with access to business building expertise, networks, recruitment and business support.

IP Group's portfolio comprises holdings in around 90 early-stage to mature businesses across the Healthcare, Biotech, Cleantech and Technology sectors. These businesses include Oxford Nanopore Technologies, the DNA sequencing development company, Revolymer, best known for its removable chewing gum, and Xeros, which has received many accolades for its revolutionary clothes washing techniques with a much reduced requirement for water.

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

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