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Arix Bioscience flies under the market's radar

Snapshot

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: 58.5 GBX

LSE:ARIX
Market: LSE
Market Cap: £79.3 m
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  • 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 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.

 

How it's doing

In its latest results, interims to end August, the published Net Asset Value (NAV) was £232m or 171p.

That comprised 17 portfolio companies into which Arix has invested £135m since its launch in 2016.

Net cash was estimated to be around £48mln at the end of 2019.

 

What the brokers say

In October, Arix was initiated as a ‘buy’ by analysts at stockbroker Shore Capital, in a note highlighting that the growing biotech investor has “multiple shots on goal”.

The venture-capital style firm, which invests in potentially disruptive life sciences businesses, plays an active role in the companies it backs and a number of those are now advancing high potential opportunities.

“The biotech portfolio is invested across 12 core companies, focused on cancer, immunology & inflammation, rare diseases/gene therapy and anti-infectives and a ‘Discovery’ portfolio of earlier stage assets,” Shore Cap analyst Dr Tara Raveendran said in the note to clients.

Research house Hardman said in February: "Arix is relatively young, and its performance cannot yet be assessed through its exit returns.

"However, other value-accretive events validate the strategy, including the IPOs of four PCs.

"Since its float in 2017, Arix’s reported NAV/share has increased from 150p to 170p (at 1H’19)."

 

Inflexion points

  • Investee companies have many clinical trials underway
  • Multiple results from these trials expected over the next 18 months
  • Analysts rate the value of the portfolio way above market price

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on 19/3/19

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