Interim Management Statement

RNS Number : 7487F

IP Group PLC

03 May 2011

 



FOR RELEASE ON

3 MAY 2011

("IP Group" or "the Group" or "the Company")

IP Group: Interim Management Statement

IP Group plc (LSE: IPO), the developer of intellectual property based businesses, today issues its Interim Management Statement in accordance with FSA Disclosure and Transparency Rule 4.3.

This statement provides an update on the Group's progress since 31 December 2010 to date.

Alan Aubrey, Chief Executive of IP Group, said:

"During the first four months of the year our portfolio companies have announced a number of significant financings and commercial developments, continuing the progress seen during 2010. We are pleased to see an overall increase of the fair value of the portfolio of £3.2m. The Group continues to be financially strong with a portfolio valued at £115m, cash of £18m, no borrowings and a net asset value excluding intangibles of £137m or 53p per share."

Portfolio update

At 28 April 2011, the Group's portfolio of investments was valued at £115.3m compared to £110.0m at 31 December 2010, representing a net increase in fair value, excluding net investment, of £3.2m. This overall increase was largely driven by the £6.4m fair value gain as a result of Oxford Nanopore Technologies Limited's financing announced last week, which was offset to a degree by an overall reduction of £2.2m in the fair values of the 15 companies in the Group's portfolio that are quoted on either AIM or PLUS Markets.

During the period from 1 January 2010 to 28 April 2010, the Group invested £2.3m across 12 portfolio companies with a further £2.0m due to settle during the first week of May. During the equivalent period in 2010, the Group invested a total of £2.3m into 11 portfolio companies. In the first four months of the year, the Group made modest realisations of £0.2m, which compares to £0.6m for the equivalent period in 2010.

Significant developments in the Group's portfolio companies since 31 December 2010 have included:

• University of Oxford spin-out Oxford Nanopore Technologies Limited ("Oxford Nanopore"), developer of revolutionary technology for direct electrical detection and analysis of single molecules, completed a £25m further financing. Following completion of the round, the Group's 21.5% beneficial stake in Oxford Nanopore is valued at £33.4m. The round was funded by existing and new institutional and individual investors from the US and UK, including Lansdowne Partners, IP Group, Invesco Perpetual, Redmile Group, Illumina and other undisclosed investors. Oxford Nanopore has raised almost £75m since formation in 2005. The fundraising resulted in an unrealised fair value gain for the Group of £6.4m.

• Revolymer Limited ("Revolymer"), a spin-out company from the University of Bristol, announced today the completion of a £5.8m further financing in which the Group and IP Venture Fund participated along with other new and existing investors. The financing resulted in an unrealised fair value reduction of £0.8m for the Group. In addition, Revolymer announced that it has also just received a positive opinion from the European Food Safety Authority on the use of its Rev7 polymer in chewing gum and that its gum was already on sale in close to 500 stores in the US.

• Tissue Regenix Group plc ("Tissue Regenix"), the regenerative medical devices company spun out from the University of Leeds, announced in April that it had entered into a commercialisation and IP agreement with one of its long term clinical collaborators, the Pontifical Catholic University of Parana (PUCPR) and Cardioprotese Ltda (representing Professor da Costa), both based in Brazil, which will facilitate Tissue Regenix's entry into the $1.0bn global tissue heart valve market. Under the terms of the agreement Tissue Regenix obtains exclusive worldwide commercialisation rights (excluding Brazil) to all data generated from over 8 years clinical use of decellularised (using Tissue Regenix's dCELL methods) human donor heart valves as heart valve replacements. The deal involves royalties but no upfront or milestone payments.

• Oxford Catalysts Group plc ("Oxford Catalysts"), a spin-out from the University of Oxford that designs and develops technology for the smaller scale production of clean synthetic fuels from conventional fossil fuels and renewable sources such as biowaste, announced a placing raising £21m (before expenses) in February. The company also announced the successful fabrication of its first commercial scale Fischer-Tropsch reactor and catalyst and that its Gas-to-Liquids demonstration plant had arrived in Fortaleza, Brazil following the timely completion of its construction in Asia.

Fund Management

IP Venture Fund ("IPVF"), the £30.9m venture capital fund dedicated to follow-on investments in the Group's portfolio companies, invested a total of £0.4m across 4 companies during the period to 28 April 2011 (Q1 2010: £0.7m, 3 companies).  As at 28 April 2011, IPVF has invested a total of £15.5m across 26 IP Group portfolio companies since its launch in July 2006 and its portfolio was valued at £17.5m.

Since 1 January 2011, The North East Technology Fund, the £25m venture capital fund managed by the Group that invests in technology companies in the North East region of England, has completed a further four investments, bringing the fund's total investment to date to £1.8m.

Balance sheet update

At 28 April 2011, the Group had net cash of £18m, a diversified portfolio valued at £115m and net assets of £173m, representing 68p per share. Excluding intangible assets and the Oxford Equity Rights asset, the Group's net assets were £137m or 53p per share.

For more information, please contact:

IP Group plc Alan Aubrey, Chief Executive Officer   Greg Smith, Group Financial Controller Liz Vaughan-Adams, Communications	020 7444 0050 020 7444 0050 020 7444 0062 / 07979 853 802
Financial Dynamics Ben Atwell, John Dineen	020 7831 3113

This statement is intended to give an indication of material transactions and events that have taken place since 31 December 2010 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 with the Group's portfolio of investments.

Notes for editors

About IP Group

IP Group is an intellectual property ("IP") commercialisation company that specialises in commercialising university technology. Founded in 2001, IP Group listed on AIM in October 2003 and moved to the Official List in June 2006. It has made two acquisitions to date - Techtran, a company set up to commercialise university intellectual property under a long term contract with the University of Leeds, in 2005 and Top Technology Ventures, an investment adviser to early stage technology venture capital funds, in 2004.

IP Group has formed long-term partnerships with ten universities - the University of Oxford, King's College London, CNAP/University of York, the University of Leeds, the University of Bristol, the University of Surrey, the University of Southampton, Queen Mary (University of London), the University of Bath and the University of Glasgow.

The Company's portfolio is diverse with exposure to five main sectors - Energy & Renewables, Medical Equipment & Supplies, Pharma & Biotech, IT & Communications and Chemicals & Materials. To date, thirteen portfolio companies have listed on the AIM market of the London Stock Exchange, one on PLUS Markets and there have been five trade sales.

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

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