Malin Corporation chief executive Darragh Lyons said he plans to return to shareholders most of the $112 million (€94.2 million) upfront payment the State-backed life sciences investment company is set to receive from the sale of Kymab, a firm developing a potentially lucrative eczema treatment.
French drugs giant Sanofi agreed to buy Kymab, in which Malin owns a 10 per cent stake, in January in a deal worth as much as $1.45 billion. It will deliver up to $33 million in follow-on payments to the Dublin-listed company, subject to certain milestones being met.
“We’d be looking to distribute the majority of the initial inflow from Kymab,” Mr Lyons told analysts on a call as the company reported full-year results.
Malin has €23 million of cash on its balance sheet and plans to repay €45 million of European Investment Bank borrowings before making the first shareholder distribution since its 2015 initial public offering (IPO), he said.
Dublin-listed Malin has not “made any firm decisions” on whether it will go down the route of a share buyback programme or special dividend, he said. The Ireland Strategic Investment Fund (ISIF) owns 10.9 per cent of the company.
Malin said that the valuation of all its assets stood at €449 million at the end of last week, marking a 23 per cent uplift from the end of 2019 and a turnaround in the fortunes of a business that was forced amid a declining share price to overhaul its board, management and strategy in 2018.
The recent valuation increase was driven by the Kymab deal being set at a much higher level than where the asset was valued on Malin’s books, as well as an increase in the value of another key company in which it is invested, Immunocore, as its stock market floated on the Nasdaq in February.
Still, Malin’s shares continue to trade at an almost 40 per cent discount to the company’s estimated “intrinsic” value of its portfolio.
Mr Lyons said it may be into next year before Malin sells down its 15 per cent stake in Poseida, whose main pipeline product is a treatment for bone marrow cancer, as the company awaits results from important clinical trials. He described Poseida’s share price fall since its IPO last summer as “disappointing”.
The CEO signalled that the Malin is open to selling two key revenue-generating assets: its 65 per cent-owned Irish injectable drugs company Altan, and Texas-based disinfection services business Xenex, in which it has an 11 per cent interest.
Xenex’s sales surged last year as its germ-zapping robots were used across healthcare facilities across the US, Europe and Asia during the Covid-19 pandemic. During 2020, the company also deployed the technology in various non-healthcare settings such as airports, convention centres, hotels, and sports arenas.
“We’re clearly looking at some point to monetise those assets, but we haven’t set a timeline,” Mr Lyons said.
Mr Lyons said that Malin will also be assessing over the next year how it can cash in on its 15 per cent stake in Viamet, which focuses on antifungal products and is expected to see a pipeline vaginal infection treatment being approved for commercial use this year.
“Selling before commercial traction has been established would be leaving money on the table, which we certainly wouldn’t be doing,” he said.