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Arix Bioscience flies under the market's radar

Snapshot

  • Invests in potentially disruptive life sciences businesses
  • Provides more than just funds
  • Multiple inflexion points
test tubes

Quick facts: Arix Bioscience PLC

Price: 76.5 GBX

LSE:ARIX
Market: LSE
Market Cap: £103.74 m
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What Arix does

Arix Bioscience PLC (LON: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 is doing

In April, its portfolio company Autolus Therapeutics received the green light for AUTO1, its lead candidate for the treatment of lymphoblastic leukaemia, allowing the first study to begin.

Arix said the clinical study will suffer minimal impact from the coronavirus outbreak.

The company’s net asset value (NAV) was 149p a share at December 31, down from 200p a year earlier.

Part of the drag exerted on the NAV was the referred-to “volatility” of the Arix’s public holdings, exemplified by a 60% decline in the share price of Autolus on the Nasdaq.

However, there were a number of successes in the form of value uplifts from investee companies including Aura (Series D funding round), Harpoon (Nasdaq IPO), Quench Bio (Series A funding round). 

Arix companies also continued to make clinical good progress, with positive data readouts from Autolus, Amplyx, Aura and Imara and new trial initiations from VelosBio, Harpoon and Pharmaxis.

Post the financial year-end Autolus raised US$72.4mln in a public offering, while another investee business, Iterum, received US$52mln via a private placement.

 

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What the brokers say

Research house Hardman said in April: "ARIX shares are currently impacted by the global macroeconomics affected by COVID-19 and some negative sentiment towards biotech." 

"This has resulted in some volatility in the share prices of some of its listed portfolio companies, which is likely to remain the case until there is greater clarity regarding the easing of the global lockdown."

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.

 

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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