RNS Number:6010G
Bionex Investments plc
27 January 2003
Bionex Investments plc - First Day Dealings on AIM
Bionex Investments plc
27 January 2003
Bionex Investments plc ("Bionex" or "the Company") announces admission of its
Ordinary Shares to trading on the Alternative Investment Market of the London
Stock Exchange.
Key Points
* The Company's shares began trading on AIM today
* A total of 157,925,634 Ordinary Shares were admitted to trading. On a
valuation of 3.25p per share (being the last price at which Bionex issued
shares), the market capitalisation of the Company is some #5.13 million
* Bionex was incorporated on 11 May 2000 as an investment company with
the objective of achieving long-term capital growth through investment in life
sciences companies
* To date, the Company has made nine equity investments in the life
sciences sector. One such investment was realised during the period from
October 2001 to January 2002 at a profit of #48,611
* The Company's nominated adviser and broker is W.H. Ireland Limited
Graham Wylie, chairman and chief executive of the Company, commented:
"Bionex provides investors with an opportunity to participate in the life
sciences sector through a structure allowing investment with a long term view
through a diverse portfolio. In particular, the Directors believe that the
Company will have many opportunities to invest in private companies which would
not be readily available to a private investor. We believe that the life
sciences sector is an exciting and growing market that offers a wide range of
investment opportunities."
ENQUIRIES:
Bionex Investments plc
Graham Wylie, chairman and chief executive Tel: 020 7368 6950
W.H. Ireland Limited
Peter Jackson Tel: 020 7397 3220
David Youngman Tel: 0161 832 2174
Introduction
Bionex was incorporated on 11 May 2000 as an investment company with the
objective of achieving long-term capital growth through investment in life
sciences companies.
The Company's principal fund raisings (which were all by the issue of equity
capital) were of approximately #2 million before expenses in January 2001,
#422,000 before expenses in April 2002 and #500,000 before expenses in December
2002. In addition, in December 2002, the Company issued 43,076,923 Ordinary
Shares at a price of 3.25p per share in consideration of the purchase from
Abingdon Capital Plc ("Abingdon")of 1 million shares in Ark Therapeutics Group
Limited, valued at #1,350,000 at that time, and 140,845 shares in Photo
Therapeutics Group Limited, valued at #50,000 at that time.
Prior to December 2002, Abingdon held 28,333,333 Ordinary Shares and the
agreement with Abingdon for the purchase of shares in Ark Therapeutics Group
Limited and Photo Therapeutics Group Limited provided that the 43,076,923
Ordinary Shares issued as consideration be issued to Abingdon or as it so
directed. As part of Abingdon's share capital reorganisation, all of its
existing holding of 28,333,333 Ordinary Shares and the 43,076,923 Ordinary
Shares issued as consideration for the purchase of shares in Ark Therapeutics
Group Limited and Photo Therapeutics Group Limited have been transferred and
issued respectively to a nominee of the shareholders of Abingdon. The use of a
nominee allows the shareholders in Abingdon to utilise a nil-cost dealing
facility for their Ordinary Shares which is to be provided by Abingdon. As a
result, Abingdon no longer holds any Ordinary Shares and the Company will have
up to 1,471 shareholders.
Newbourne Plc ("Newbourne"), an unquoted company, subscribed #500,000 for
16,666,667 Ordinary Shares in December 2002. Newbourne is currently in the
process of being wound up as a result of which these Ordinary Shares will be
transferred to the shareholders of Newbourne.
To date the Company has made nine investments in the life sciences sector, of
which one has been disposed of.
Life sciences
Life sciences may be regarded as the systematic study of living things, how they
work and their practical application to human healthcare, agriculture, food
production and the environment. Life sciences companies, broadly defined,
include companies in pharmaceuticals, biotechnology, medical devices,
diagnostics, bio-informatics, instrumentation and speciality chemicals.
The life sciences sector as a whole is capital intensive. The principal
activity of these generally young companies is research and development and
consequently they have an ongoing funding requirement throughout the product
development period.
Life sciences is a complex sector, where an in-depth understanding of the
markets and the technology, access to relevant information and the ability to
follow key events and developments are particularly important in identifying
successful investment opportunities.
In particular, the valuation of life sciences companies is highly subjective and
involves an understanding of the science, the competitive positioning of the
product, the technological risks and whether a particular company has balanced
risk across its portfolio.
The Directors believe that the life sciences sector is an exciting and growing
market that offers a wide range of investment opportunities.
Key strengths
The Directors believe that the Company has the following key strengths:
* Experienced Board: the Board has wide experience of the life sciences
sector as well as extensive commercial experience, including in particular the
flotation of companies on public capital markets;
* Deal Flow: the Directors believe that the Company will have access to
a variety of potential investment opportunities. These opportunities will arise
both through the Board's considerable sector knowledge and the Directors' wide
range of contacts in the UK life sciences centres of Oxford and Cambridge, as
well as in the United States and Europe;
* Investment Opportunity: the Directors believe that Bionex provides
private investors with an opportunity to invest indirectly, as part of a diverse
portfolio, in a range of unquoted opportunities in which private investors can
normally only participate through companies such as Bionex; and
* Right Time: based on their current knowledge of the sector, the
Directors believe that this is a good time to be investing in life sciences as
valuations are currently at historically low levels.
Investment strategy
Bionex was formed in order to offer investors an opportunity to participate in
the life sciences sector through a structure allowing investment with a long
term view through a diverse portfolio. In particular, the Directors believe
that there are many opportunities to invest in private companies which will be
available to Bionex but which would not be readily available to a private
investor. Since December 2000 the Board has been expanded to include
individuals with substantial management and investment expertise in the life
sciences sector. The Directors believe that the Board offers a complementary
mix of commercial experience as well as specific expertise in the life sciences
sector.
The Directors believe that the Company has two key advantages in seeking to
achieve its investment strategy and identify suitable investments:
* the commercial experience of the Board both in the life sciences
sector and outside. Most of the Directors have been involved in the flotation
of a company as a director or adviser either in or outside the life sciences
sector. In addition the majority of the Directors has direct experience of
advising and investing in companies both pre and post IPO; and
* the Board has excellent contacts within the life sciences sector. In
particular, Graham Wylie has extensive contacts within the Cambridge area and
James Noble in the Oxford area, these being the two key locations in the UK for
life sciences. Geoffrey Vernon has extensive sector contacts throughout Europe
and the USA and in particular within the specialist financial community.
The Directors believe that this sector specific depth of knowledge will enable
them to access suitable investment opportunities.
Bionex will continue to seek to make investments in unquoted life sciences
companies, from start-up through to pre-IPO investments. However, whilst the
Company will focus on unquoted investments, it may also hold quoted investments,
both as the result of the flotation of companies in which Bionex has previously
invested and as a result of making investments in quoted companies. Whilst the
Company has to date invested in companies based in Europe and the USA, the
Directors do not rule out making investments in other geographical locations
should such investments be deemed to be appropriate for the Company's
shareholders.
Investment criteria
So as to best balance the risk of investing in unquoted, early stage, developing
companies, the Directors intend to invest only in companies which have the
backing of institutional investors and, in the Directors' opinion, fulfil all,
or the majority of, the following criteria:
* significant growth prospects with a strong, focused management team;
* based on sound scientific principles;
* appropriate intellectual property protection;
* a clearly defined and realistic commercial strategy; and
* reasonable prospects for an eventual IPO or other form of exit.
Investment structure
The Directors in general intend the Company to be a passive investor in
accordance with the following parameters:
* an aggregate investment of between #100,000 and #500,000, with a
target initial investment of #200,000;
* the founders and/or current directors of the Investee Company to
retain day to day control and, where possible, a significant shareholding;
* where possible, co-invest alongside institutional investors, or
otherwise in companies with prior institutional investment; and
* whilst the Company will always seek an equity participation in its
investments, it may invest through a variety of financial instruments including
convertible loan stock, warrants and convertible preference shares or a mixture
of equity instruments.
Investment process
Once an investment proposal has been identified, the Company carries out a
review of the potential Investee Company. As part of such a review, each
Investee Company will be assessed with reference to the criteria listed above.
In addition to these reviews, a potential Investee Company may also need to be
evaluated and approved by the Company's scientific adviser, who will be
instructed to analyse the investments purely from a scientific perspective and
to report back to the Board.
Exit strategy
The Directors intend to realise the Company's investments in a manner which will
create the maximum value for the Company's shareholders, for example via a
flotation or a trade sale. The Company will, where appropriate, provide
assistance to the Investee Companies in this regard.
Where Investee Companies are floated, the Directors may not realise the
Company's investment immediately where regulatory reasons or the restrictions
relating to a particular investment prevent an immediate realisation or where
the Directors believe that an investment might be realised more profitably at a
future date.
Co-investment policy
To avoid potential situations of conflict between the Executive Directors, any
employees and the Company, a co-investment policy has been adopted by the Board
in relation to co-investment by the Executive Directors, employees and Bionex.
The details of this policy are set out below:
* no Executive Director or employee of Bionex can co-invest in an
Investee Company on more favourable terms than Bionex itself;
* no Executive Director or employee of Bionex can co-invest unless
Bionex has had the opportunity to take an investment within its normal
investment size criteria (as defined by the Board from time to time); and
* no Executive Director or employee of Bionex may dispose of investments
held by them where Bionex is also an investor unless the Executive Director or
employee has obtained the prior written permission of the Board.
In adopting this co-investment policy the Board is aware that no co-investment
policy can cover all situations and the Board may therefore vary, amend or
suspend the policy following consultation with W.H Ireland Limited or the
Company's nominated adviser from time to time.
Details of investments
Set out below are details of the investments currently held by the Company.
Since December 2000, the Company has made nine equity investments in the life
sciences sector. One such investment, an equity stake in Cytomyx Holdings plc
purchased for #200,000, was realised during the period from October 2001 to
January 2002 at a profit of #48,611.
In accordance with applicable accounting standards, the Directors have adopted a
policy whereby investments are valued at cost less any permanent diminution in
value. Any profit will only be recognised on the eventual realisation of an
investment. Where the Directors are of the opinion that there has been a
permanent diminution in the value of an investment the book value is written
down to the new lower value and the loss taken to the profit and loss account
for the relevant period.
The Company currently holds shares in the following companies:
* Advanced Medical Solutions Group plc
* Ark Therapeutics Group Limited
* Avidex Limited
* BioVex Limited
* Drug Abuse Sciences Incorporated
* EcoSmart Technologies Inc.
* Morphochem AG
* Photo Therapeutics Group Limited
Directors and scientific adviser
Details of the Directors and the Company's scientific adviser are set out below.
Directors
Graham Wylie, 53, Chairman and Chief Executive
Graham Wylie is a qualified accountant who has spent the last 20 years
specialising in the development of start-up technology companies in the computer
and computer peripherals sector. In 1980 he co-founded Immediate Business
Systems plc ("IBS") before bringing it to the Unlisted Securities Market in
1982. IBS developed and marketed the first UK portable computing device
enabling utilities to capture data and print bills onsite. IBS was sold to an
American company in 1995 for #5.4 million. In 1991 Graham joined Xaar plc as
finance director and became chief executive in 1993, in which capacity he
steered the company through successive rounds of venture capital funding, a
private placing in 1996 and flotation on the Official List in 1997. Xaar, based
in Cambridge, specialises in ink jet printing technology with its technology
being licensed to many of the world's leading office equipment companies. Xaar
now manufactures a specialised range of ink jet printheads from plants in
Cambridge and Sweden. In 2002 Graham became chairman of ART VPS Limited, a 3D
computer generated graphics company based in Cambridge. Graham is also a
non-executive director of U4EA Limited, an unquoted technology company in the
telecommunications sector, and a member of the business mentor programme for the
University of Cambridge Entrepreneurship Centre.
Thomas Powell, 31, Finance Director and Company Secretary
Tom Powell qualified as a Chartered Accountant with Coopers & Lybrand in their
London office. During his four and a half years at Coopers & Lybrand he audited
a wide range of clients in the middle market sector. In 1998 he left to join a
client, Card Clear Plc, the AIM-quoted specialist in payment card fraud
prevention, as their corporate finance manager. Tom is now group financial
controller of Abingdon.
James Noble, 43, Non-executive Director
James Noble is the chief executive officer of Avidex Limited, an unquoted
biotechnology company specialising in T Cell Receptor technology. He has over
10 years experience in the biotechnology industry, the first seven as finance
director of British Biotech plc and latterly as non-executive director of a
range of biotechnology companies including three listed companies: Oxford
Glycosciences plc, PowderJect Pharmaceuticals plc and Advanced Medical Solutions
Group plc. James has also served on a number of unquoted company boards,
including Adprotech Limited, Oxagen Limited, BioVex Limited and Prolifix
Limited. Currently he is a director of Oxfordshire Biotechnet Limited.
Prior to his involvement in the biotechnology sector, James spent seven years at
Kleinwort Benson, becoming a director in 1990. He previously qualified as a
Chartered Accountant with Price Waterhouse in 1983 after graduating from Oxford
University in 1980.
Christopher Roberts, 39, Non-executive Director
Chris Roberts is group managing director of Abingdon. Before joining Abingdon
in 1996 he spent seven years at MacIntyre Hudson where he qualified as a
Chartered Accountant. Chris has served on the board of a number of quoted and
unquoted companies and was chief executive of The Evolution Group plc (formerly
The eVestment Company Plc) until it acquired Christows Group Limited in November
2000, remaining as group managing director of its private equity division until
March 2001.
Dr Geoffrey Vernon, 50, Non-executive Director
Dr Geoffrey Vernon, who was an executive director of Rothschild Asset Management
Limited and a partner in the venture capital group Advent Limited, has over 20
years experience in life sciences. He is chairman and/or non-executive director
of several public and private companies in the United States, the United
Kingdom, Germany, the Republic of Ireland and Israel. These include Morphosys
AG, Arrow Therapeutics Limited, Ark Therapeutics Group Limited, XTL
Biopharmaceuticals Limited, Peptor Limited, Advanced Medical Solutions Group
Plc, Drug Abuse Sciences Incorporated and Ziggus Holdings Limited. Geoffrey is
a fellow of the Institute of Directors and one of the first directors in the
United Kingdom to be admitted as a Chartered Director. Geoffrey holds a
Bachelor of Pharmacy degree as well as a PhD and an MBA.
Scientific adviser
Dr John Gordon, 58, Scientific Adviser
Dr John Gordon is Chairman of Quercus Management Limited and Nurin Limited and
has served as a director or adviser with many companies in the life sciences
sector including Adprotech Limited, Avidex Limited, BioVex Limited, British
Biotech plc, Oxagen Limited, Oxford Glycosciences (UK) Limited, PowderJect
Pharmaceuticals plc, Finsbury Life Sciences Investment Trust plc and Sitka
Health Fund VCT Plc. Earlier in his career he held senior academic positions at
various university laboratories and institutions. He holds PhD and Sc.D.
degrees from Cambridge University in experimental pathology.
Financial information
The table below summarises the trading results of the Company from incorporation
for the 17-month period ended 30 September 2001 and the year ended 30 September
2002. The information has been extracted from the accountants' report set out
in Part III - Financial Information of the Company's admission document dated 17
January 2003.
17 month period to Year to 30 September
30 September 2001 2002
# #
Management expenses (81,564) (58,222)
Loss on ordinary activities before interest (81,564) (415,811)
Loss for period (58,111) (390,407)
As at 30 September 2002 the Company had net assets of #1,975,838 (2001:
#1,970,705).
Current trading and prospects
Since December 2000 the Company has made nine investments, one of which has now
been sold, and the Board will continue (including during the 12 months following
Admission) to review further investment opportunities. The Directors believe
that the future prospects of the Company will be dependent on the successful
implementation of the Company's investment strategy set out above.
Capital structure
Number of Ordinary Shares in issue on Admission 157,925,634
2006 Warrants 20,187,500*
2010 Warrants 20,187,500*
2006 Further Subscription Rights 13,000,000*
2010 Further Subscription Rights 13,000,000*
W.H. Ireland Warrant 4,737,769*
* - no application has been made for the Warrants, the Further Subscription
Rights or the W.H. Ireland Warrant to be dealt on any Recognised Investment
Exchange. Full details of the rights of the holders of Warrants and Further
Subscription Rights are provided in paragraphs 3 and 4 of Part IV - Additional
Information of the Company's admission document dated 17 January 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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