Arix Bioscience (ARIX:106p), a biotech venture capital company, has launched a strategic review that could lead to a return of capital to shareholders or even a tax-efficient wind down of the company.
It’s a classic Ben Graham value play, hence why I included the shares, at 110p, in my 2023 Bargain Share Portfolio. Arix’s cash pile backs up 73 per cent of its £137mn market capitalisation, leaving a £140.8mn portfolio of biotech investments in the price for £36mn, or 75 per cent below their carrying values, even though the portfolio is growing. in the first half of 2023, NAV increased from £226mn to £240.8mn (186p a share).
Arix’s assets include a £71.2mn (55p) listed portfolio of mainly Nasdaq-quoted biotech companies, £65.8mn (51p) unlisted portfolio, £2.8mn (2p) of legacy assets, and a £101mn (78p) cash pile. The listed portfolio and cash are worth 25 per cent more than Arix’s market value, de-risking the investment case.