Arix Biosciences PLC’s (LON:ARIX) recent share price weakness was explained Friday by the announcement of the sale of a sizeable chunk of shares, according to brokers.
Chris Chipperton, one of the first investors in the company, sold 3mln shares or around 30% of his stake at 155p.
HC Wainwright said the share overhang from the Chipperton sale would explain why the price has dropped in a way “diametrically opposed to what the company and its group businesses have been delivering”.
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Chipperton still holds a 5.3% interest but has agreed to a 12-month lock-in for these shares.
US broker Wainwright said it was told by Arix that the Chipperton sale was due to personal reasons and not related to the underlying business, but with low trading volumes, the 'volatility to the downside has been magnified'.
“A significant disconnect continues, and we now know why,” added the broker, which has a target price of 314p.
Arix now has 14 current investments in its portfolio following the recent investment in Aussie firm Pharmaxis, with data from 10 clinical trials scheduled over the next 18 months.
Stifel, the broker that put together the Chipperton deal, recently increased its price target based on the potential newsflow and portfolio developments.
Just on book value and cash, the portfolio’s value is 194p per share, it said or a 22% premium to the current market price of 158.5p.
But allowing for the 26% rise in portfolio company, Artios's book value following its recent £65mln funding; the £8mln investment into Pharmaxis; and Harpoon Therapeutics entering clinical trials with its first immuno-oncology candidate, Stifel has upped its target to 253p from 246p.