Biotech investor Arix Biosciences PLC (LON:ARX) has been moving at a rate of knots since it was formed two and half years ago.
From a portfolio of five investments in 2016, there are thirteen currently, with a target of around twenty likely to be reached in the not-too-distant future.
Financial numbers, too, are impressing.
Net asset value rose by 76% to £270mln or 191p per share in the half year to June, a more than five-fold rise since the end of 2016.
“We’ve barely started,” quips Joe Anderson, Arix’s chief executive, adding that its rapid pace only reflects the trends in healthcare.
The time is right and it’s a receptive market as life science generally is developing at an incredible speed, he says.
“It’s where tech was ten years ago. We are beginning to understand disease.”
Getting investors on board
Arix’s aim is to enable average investors to get in on the ground floor of these developments.
Some 4,000 retail investors took part when it floated in 2017, something that is at the ‘core of what we are about', he says.
“The way we operate is not dissimilar to VCs [venture capitalists] but we are publicly traded.”
Arix also has much greater flexibility than a traditional VC company.
It can buy in or sell out at any time, taking stakes in companies at the pre-clinical, early trial or even the phase III stage.
Being a listed vehicle, investors are not locked in either and those less experienced in biotech can let Arix’s team do the leg work.
And the company does a lot of sifting.
Though the portfolio stands at thirteen companies, more than one thousand possible investment opportunities have been looked at.
The vindication of that filtering policy showed through this year when two of its portfolio of companies floated on Nasdaq.
One company in particular, Autolus, illustrates what you can achieve if you invest in the technology early, says Anderson.
A spin-out from University College London in 2014, Autolus was Arix’s first investment and operates in one of the hottest areas of cancer research at present – T-cell engineering.
T-cells are the body’s enforcers eradicating dangerous intruders.
But they struggle with cancer cells as they are reluctant to attack what are in essence a person’s own cells.
T-cell engineering involves them being removed from the body, genetically engineered and re-injected back in to the body to tackle cancerous cells with ‘new found aggression’.
Early stage studies in leukaemia by other companies have delivered stunning results.
Autolus has a technology that can make the engineered T-cells more effective, safer and applicable to a broader range of cancers.
Interest was enormous when it joined Nasdaq in June.
From a listing price of US$17, it is over US$24 currently, taking the value of Arix’s 7.9% stake to more than US$70mln.
That compares with US$20mln it invested through three funding rounds.
Anderson sits on the board of Autolus and taking an active part in the running of the companies it backs is another feature of Arix.
He adds that while Autolus may be generating the headlines currently, all of the portfolio has the potential to deliver major value increases.
That will become evident over the next 18 months as strong newsflow will be a feature for Arix.
Ten clinical trials are underway currently among the portfolio companies, with a further thirteen set to get started.
Verona, Aim-listed, has seen positive Phase II COPD data while there was strong interim data in a phase 1b/II trial from Aura in ocular melanoma and in pre-clinical studies at Harpoon, another T-cell focused group.
Atox Bio, meanwhile, has commenced a Phase 2 clinical trial in Acute Kidney Injury, with data expected to read out alongside Phase 3 NSTI data in 2019.
Anderson also points to DNA repair specialist Artios, which was set up by the same team that developed the drug that AstraZeneca now markets as Lynparza, as another of the portfolio that is attracting a lot of attention.
Many shots on target
That’s a lot of shots on goal in one portfolio and the performance of Autolus, which on its own has five trials ongoing in six cancer indications, has already given a taste of what might lie ahead.
House Jefferies recently upgraded its price target to 275p or a 55% premium to the current market price of 178p, itself a 7% discount to the latest NAV.
The US broker said: “Trading below its NAV and funded through multiple value triggers (clinical & funding/commercial) over 12 months, Arix appears anomalously cheap.”