Malin eyes more investments and returning cash in 2022

Malin Corporation, the Dublin-listed life sciences investment company, said on Tuesday that it sees more of its stakes paying off this year, after receiving more than $181 million (€164.8 million) from the sale of two assets in 2021.

The company called 2021 a year of "strong progress" as it reported annual results, with the sale of its 10 per cent stake in Kymab, a firm developing a potentially lucrative eczema treatment, and 65 per cent holding in Irish injectable drugs company Altan, marking the first returns on its stable of investments since its initial public offering in 2015.

It used most of the proceeds to return more than €95 million to shareholders and repay €45 million of loans to the European Investment Bank. At the end of year it was left with €33 million of cash.

“[We] believe that the continued clinical, operational and financial progress we are seeing in our investee companies can catalyse additional investment realisation opportunities for Malin in the year ahead,” said chief executive Darragh Lyons.

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‘Strategic’ opportunities

“In addition, we continue to evaluate strategic business opportunities and will judiciously deploy capital where we see the opportunity for the enhancement of overall shareholder returns.”

Malin’s estimated intrinsic equity value stood at €295.7 million, or €8.70 per share, at the end of December. However, it had fallen to €7.50 per share by the end of last week, due to declines in the value of Immunocore and Poseida, two key companies in which it is invested, on the US stock market. The company described the fall in the values of the companies as “consistent with the overall biotech market weakness”.

Immunicore, in which Malin has retained 6 per cent stake, saw the US Food and Drug Administration approve a commercial launch of its key eye cancer therapy in early January. Malin said it expects further approvals in the coming months in Europe, the UK, Australia and Canada.

Malin's 16 per cent-held Poseida Therapeutics, which is also developing cancer treatments, has had encouraging developments across its pipeline in in the past year.

Malin also revealed in its annual report that it incurred €400,000 of litigation-related costs last year. This follows on from former Elan chief executive Kelly Martin and two other founder shareholders suing the company last October to allow them to convert their founder shares into direct stock.

The development came as the company went about returning cash to shareholders for the first time last year. At Malin’s current share price, the founder shares would convert into a stake worth about €13.6 million.

The other two founder shareholders involved are solicitor John Given, Elan's one-time general counsel, and Séan Murphy, a one-time executive with Abbott Laboratories. The three men claim that the sale of the Altan stake amounted to a so-called change of control event, triggering a conversion of the founder shares.

Malin has rejected the claims and did not recognise a provision for them in its 2021 financial statements.