IP Group PLC (LSE:IPO) CEO Greg Smith joined Proactive to discuss the company’s strategic outlook, recent exits, and high-potential investments.
Topics include future royalty streams from obesity drug programs, portfolio realisations, and IP Group’s backing of clean tech innovator OXCCU.
Here, we take a closer look at what was said.
Proactive: Greg, very good to speak with you this morning. With Pfizer acquiring Metsera for up to $7.3 billion, how meaningful could future royalty income from these obesity drug programs be for IP Group?
Greg Smith: This is quite an interesting development. So this is something that we spoke a little bit about at our half-year results. As a part of our business, we have some patents that we license and manage, and this is one of those examples. I think the announcement that Pfizer was acquiring Metsera has shone an additional light on this area of our business — something we feel has been a little bit overlooked by the market.
So we felt it deserved a bit of an update in the spirit of our commitment to transparency. Pfizer is paying almost $5 billion upfront to acquire Metsera and its anti-obesity drug programs. It’s interesting for IP Group because we are the licensor of the fundamental underlying technology behind their lead compounds and a number of others. If those compounds successfully progress through phase two, phase three, and reach the market, then we could benefit from some quite substantial royalties on drug sales. So it's a significant potential source of future value for IP Group and its shareholders.
Proactive: Metsera’s lead drug is heading into phase three next year. When might IP Group realistically start seeing milestone payments or royalties from this pipeline?
Greg Smith: Interestingly, Metsera recently said they’re accelerating the timetable due to strong progress. They’re targeting getting the phase three trial up and running by the end of this year, which is good news. Analyst forecasts suggest first sales might come in 2029 or 2030.
The majority of our value would come once sales begin, so 2029, 2030 and beyond. It’s worth pointing out these compounds were produced by Professor Stephen Bloom at Imperial College London. Back in 1996, his team discovered that GLP-1 suppresses appetite, laying the groundwork for these therapies. So it’s a high-quality source, which is why we're particularly excited about this opportunity.
This is a very big market, and the drugs have the potential to impact hundreds of thousands, if not millions, of patients. It’s another great example of how IP Group backs developments that target big markets with human impact and significant financial return potential.
Proactive: Does this potential royalty stream change how you think about IP Group's growth model — from being an early-stage investor to holding longer-term revenue interests in late-stage assets?
Greg Smith: It’s an interesting question. It could be of such magnitude over time that we need to think about how we articulate this in our strategy and monetisation plans for shareholders. Ongoing long-term revenue streams fit well with the long-term business model we have at IP Group. It’s one of the benefits of having a permanent capital vehicle that can invest over the long term and grow businesses to material value.
Proactive: It's been a busy period for IP Group. You announced three successful exits recently, including the sale of Monolith to Nasdaq-listed CoreWeave. Are we seeing a broader crystallisation phase for the IP Group portfolio?
Greg Smith: You probably remember that 2022 and 2023 were tough years for the venture market. Last year, we bucked the trend with good progress on realisations — around £160 million in 2024. That included major exits like Featurespace to Visa and Garrison Technology to Everfox.
There’s increasing confidence within IP Group that our portfolio is maturing and attractive for exits, especially in areas suitable for M&A. The CoreWeave exit is another example of the portfolio’s quality. It probably wasn’t a company many shareholders knew about, yet we delivered a strong financial result.
At our full-year results, we said we’re confident in achieving over £250 million in realisations from our private portfolio between 2025 and 2027. This is another positive sign in that direction.
Proactive: Greg, you're also investing £4 million into OXCCU as part of a broader fundraising. Encouraging to see your portfolio getting lots of third-party interest?
Greg Smith: Yes. Exits are the end of the line — that’s where we recycle capital into buybacks or reinvest in the next generation of value-creating companies.
OXCCU is one of those. They’ve just closed a $28 million funding round. What’s interesting is the breadth and depth of investors — including Safran Corporate Ventures and International Airlines Group (IAG), the parent of British Airways. Also involved were other clean tech investors like Clean Energy Ventures from the US.
It’s great to be in a financial position to support this business into its next growth stage. They're based in Oxford and have their proving plant on Oxford Airfield. Many airlines are now committing to including SAF (sustainable aviation fuel) in their fuel mix by 2030, 2040 and 2050.
IAG said they want 10% of their fuel mix to be SAF by 2030 — and that’s not far off. So this investment helps them meet that commitment. The regulatory and industry drivers suggest a bright future for OXCCU. It’s a great example of a British company tackling global problems and attracting strong specialist investment.
Proactive: Greg, sounds like a very busy and exciting period for IP Group. Thank you very much for taking the time to speak with us today.