IP Group, a UK-based intellectual property commercialisation company, has secured a 35 times return on the sale of one of its companies.
IP Group received £15.4m from the sale of its portfolio company Proximagen Group, a UK-based maker of therapies for the central nervous system, at £3.20 per share, to USL Pharma International UK, a wholly-owned subsidiary of Upsher-Smith Laboratories, for up to £356.8m. It said this equated to a 35 times return on its original investment.
IP Group owns a 7.6% stake in Proximagen, and could receive up to £24.6m should the company meet certain performance criteria, which would lead to a further £1.92 per share pay out under a so-called Contingent Value Right. if the criteria for a payout is met its return would rise to 57 times. Denmark-listed drugs developer H Lundbeck invested £10.3m ($16m) in Proximagen Group last year as part of a strategic partnership to treat central nervous system (CNS) disorders. Lundbeck bought 5.7 million shares at £1.80 each.
Proximagen was founded in 2003 as a spin-out from King’s College London and was floated on AIM in March 2005.
Alan Aubrey, chief executive of IP Group, said: “We are delighted that Proximagen has agreed this proposed transaction which is a significant achievement not only for the company itself but also for staff and shareholders including the university. Having originally invested eight years ago, IP Group has been a long-term supporter of Proximagen and we are delighted to have achieved an initial 35 times return on our investment. This is an excellent example of the value that can be created from applying our model to a university spin-out and is also further evidence of the value within IP Group’s diversified and maturing portfolio which currently stands at over 60 companies.”