Shares in life sciences investment company Malin, which have rallied by over 250 per cent from their March lows, continue to trade well below their real value, according to its chief executive Darragh Lyons.
Speaking at the Dublin-based company’s annual general meeting, Mr Lyons said the planned US initial public offering (IPO) of its 19 per cent-owned Poseida, which is developing cancer and rare liver disease therapies, and expected “positive data” in the coming months from key firms that it is invested in “will further validate our estimate of the fair value”.
Malin’s stock is currently trading at about €5, some 35 per cent below what it estimates to be its “intrinsic equity value” as of the end of 2019, and half the level at which the company floated on the stock market in 2015.
A board and management overhaul at Malin in 2018 led to it refocusing its disparate portfolio investment around four priority assets. These include stakes in Poseida; Immunocore, whose key pipeline product is an eye cancer treatment; Kymab, which is working on a treatment of eczema; and Viamet, which focuses on antifungal products.
Shares in Malin have jumped 55 per cent in the past two weeks, fuelled by Poseida filing for a potential IPO on the Nasdaq exchange as well as news that it has raised $110 million of fresh equity in advance. Malin’s stake has been diluted slightly to 19 per cent from 23 per cent as it did not participate in the fundraising, according to Davy analysts.
In addition, Kymab won a UK supreme court case last week against US-based biotech group Regeneron following a long-running battle over patents regarding genetically modified mice.
Malin’s main investee companies are involved in a series of clinical trials for treatments that are at various stages of development. A number of key trial results are expected this year, which may support the group’s stock, according to Mr Lyons.
In addition, the chief executive signalled that Malin may sell some of its second-tier investments in the next 12 months. It follows on from the sale last year of its stake in healthcare apps developer 3D4Medical for €16.4 million, or 10 per cent above its estimated fair value.
“Ultimately, our commitment to return capital to shareholders as we monetise our assets will underpin the shareholder returns in the future,” Mr Lyons told the annual general meeting, which investors joined by conference call due to Covid-19 restrictions.