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Arix Bioscience - venture capital firm flies under the market's radar


Here we take a closer look at Arix Bioscience PLC (LON:ARIX), a listed venture capital company that doesn’t appear to be receiving the recognition it deserves

test tubes

Quick facts: Arix Bioscience PLC

Price: 118.5 GBX

Market: LSE
Market Cap: £160.63 m
  • Invests in potentially disruptive life sciences businesses
  • Provides more than just funds
  • Multiple inflexion points

What Arix does

Arix is a venture capital company that invests in disruptive growth companies with the potential to significantly increase in worth as they progress through clinical trials and conduct financing rounds at higher valuations.

It aims to provide more than just capital when it invests. Arix will take a board seat and play an active role to support portfolio companies. It also brings to the party scientific and commercial experience to help navigate clinical and operational hurdles.

The firm’s PLC balance sheet enables it to take a longer-term view than non-listed peers that might have a set investment horizon. It can therefore provide investee businesses with the flexible, patient capital they require to grow.

Arix describes itself as being “unconstrained by institution, geography or stage of company development”. It therefore has the ability to source the best life science innovation without restriction.

Major investments

As at the end of last year, the gross portfolio was worth £175mln, up from £54mln. The net asset value, which is closely monitored by the market, was £270mln, or 200p a share, a rise of 48p from a year ago. Arix also revealed in its last results a net £70mln upward revaluation of the portfolio, primarily driven by investments core portfolio firms Autolus Therapeutics, LogicBio, and Harpoon Therapeutics.

Since the prelims were published at the end of March, the company has made further investments.

It increased its stake in investee company Aura Biosciences after backing the latter’s £31mln (US$40mln) Series D financing round. It did so by committing £3.4mln, taking its holding in the ocular oncology specialist to 7.7%.

It also agreed to invest another £3.8mln in Autolus Therapeutics PLC (NASDAQ:AUTL) as part of the latter’s IPO. The share purchase will keep Arix’s stake in Autolus at 7.5%, which is valued at £62.6mln.

Inflexion points

Looking ahead, investee companies have 26 clinical trials underway, with 19 expected to provide a clinical read-out. In other words, there are 19 potential value inflection points for Arix.

What the brokers say

“We continue to see Arix at current levels to be a good buying opportunity, with largely transparent valuations, trimmed cash opex and multiple catalysts ahead,” said Jefferies on April 29. Its current price target is 229p.

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Arix Bioscience 'building a very exciting, diversified healthcare company'

Dr Joe Anderson, chief executive of Arix Bioscience Plc (LON:ARIX) runs Proactive Investors through the company's strategy and outlook. ''We're focused on the innovation end of healthcare, which is exactly where we believe the value is in healthcare today'', Anderson says.

on 19/5/17

2 min read