Ip Group (LSE:IPO) — Half Year Results 2026

0:01 Good morning, ladies and gentlemen, and welcome to the IP GROUP PLC half year results investor presentation. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it's appropriate to do so. Before we begin, as usual, we would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you

0:32 over to CEO, Greg Smith. Greg, good morning, sir. Good morning, Jake. Thank you very much, and welcome everyone to IP GROUP's twenty twenty six half year results presentation. And thanks very much to all the investor me company team and Mark for hosting today's session. Much appreciated as always. For those who don't know me, I'm Greg Smith. I'm the chief executive of IP GROUP. With me today is David Baines, our chief financial and operating officer. We deliberately tried to keep today's presentation a bit shorter and more focused. It's the half year after all. So I will cover the half year highlights and progress across the portfolio and our strategic priorities. I'll get DB to take you through the financials before I return to summarize, and then, of course, there will be time for questions.

1:25 And I would say the headline for today's results is that we have carried the momentum that we had from 2025 into 2026 with further NAV per share growth, strong cash realizations, and as I hope we will demonstrate, broad based portfolio progress.

1:51 As usual, the disclaimer is here. Please note these sort of important disclaimers, particularly the bit about forward looking statements. This presentation will be up on the investor relations section of our website for review post the call. So in terms of what we'll cover today, short four short sections, the half year overview, portfolio progress, I think particularly the future value opportunity within that, then financial results, and then a brief summary. So please post questions through the platform as we go, as Jake said. We'll then group them by theme and answer as many as we can, and we'll do that clearly and directly.

2:37 So turning first to what we delivered for shareholders in the first half. And before we do that, I just wanted to note that this year marks IP GROUP's twenty fifth anniversary. And over that period, we've invested over £1,500,000,000. We've helped to form and support more than 600 companies, and those companies have created more than 15,000 jobs. That track record matters because science investing, in our view, rewards experience, specialist judgment, and also long term relationships. From a shareholder point of view, it also gives us a large and increasingly mature portfolio from which future value and cash realizations can emerge.

3:25 But today is principally about the delivery in the first half and the little period afterwards, so let's move straight into the first half results. So the group made disciplined and tangible progress in the first half. NAV per share increased by about 3% to a 114p, taking net asset value above 1,000,000,000. Since the period end, NAV per share has actually increased further to approximately a 117p a share as at September 11 last Friday. We generated 69,000,000 of cash proceeds in the six months, which was slightly more actually than the whole of full year '25. A further 17,000,000 since June takes our year to date proceeds to, the mid 80 millions.

4:17 Portfolio companies raised over 500,000,000 of third party capital, and we contributed about 5% of this. So this is strong external evidence that other investors are prepared to commit substantial capital to companies as they progress. Now the largest fair value driver in the period was the further derisking of Pfizer's obesity programs that increased the value of our royalty interest by, 27,000,000 to just over 150,000,000, and we ended the period with a healthy cash balance of 239,000,000 gross. So the message is not that one asset performed well. NAV growth, cash realizations, external funding, and operational milestones all generally moved forward together.

5:09 Now before going into, the detail behind that and the portfolio, I just want to briefly acknowledge the possible offer process during the summer. I would say as we put in our r and s release, the board sought to engage constructively with Rail Pen and its partners, and we remain very grateful for their effort and the constructive engagement of all of the shareholders who we spoke to during that period. As you would have seen, the process did not result in an acceptable proposal, and so our focus as a management team and a board is firmly on delivering the substantial value that we see in the group.

5:50 On that note, let's turn to Pfizer. So at the full year, I spent a bit of time explaining why that Pfizer obesity royalty interest had become such a significant asset for IP GROUP and our shareholders. The first half has added further evidence to that and also reduced development risk. During the period, Pfizer released positive clinical data for the lead program berubenotide showing competitive weight loss efficacy alongside favorable tolerability and supporting the potential for a monthly maintenance regimen. The barobenatide and amylin combination also advanced into phase two b, and that was the primary driver of the twenty seven million uplift that I mentioned.

6:41 Now this is an increasingly competitive market, so differentiation matters. I think the potential combination of, competitive efficacy, favorable tolerability, and this sort of monthly maintenance profile remains one of the main reasons that Pfizer believes this program can be highly differentiated in that increasingly competitive market. And, also, to reiterate, Pfizer has committed substantial resource to this. It is progressing 10 phase three studies this year and launch is targeted in 2028. So as we have said, in previous notes, there remains, clinical, regulatory, and commercial risk. And as a result, our valuation is based around a probability weighted, method and is discounted, but the progress in the half strengthens both the the quality and the breadth of our exposure to a market that is externally forecast at at around of a 100,000,000,000 to 150,000,000,000 or there or thereabouts annually by 2030.

7:51 To hopefully give you a little bit more color, this slide shows the route to market across the programs where we've got economic exposure. And the as I've mentioned, the most advanced of the assets at the top there is darabenatide. Two phase three studies are expected to reach primary completion in October 2027, and that supports a potential first approval in 2028. There's also a monthly dosing study and seven further phase three studies that are that that that could could provide potential to broaden the label and therefore the commercial opportunity. Worth noting that, just yesterday at a conference, Pfizer also indicated that recruitment across essentially all of the barobenatide phase three studies is now close to completion.

8:43 From our point of view, from your point of view as shareholders, that's very encouraging because patient recruitment is often the biggest factor in determining when studies read out and complete, and so it supports good confidence in the current program timetable. The as I mentioned, the the berivenatide enamelin combination is now in phase two b, so you can see that there, and that's got primary completion currently expected in, April 27. We also have exposure to, an amylin monotherapy and some earlier oral and next gen programs. And there's a couple, as Dave will come on to explain, couple of phase one assets that are not currently attributed value in our in our model. So I think the the important takeaway from this for shareholders is that this isn't exposure to a single binary program.

9:33 It extends across the lead program, which is an injectable and some combination therapies and the potential for less frequent dosing and a number of these earlier stage programs. So that gives us several possible routes to value as Pfizer develops the franchise.

9:51 And I think this this point on the carrying value, I think the 150,000,000 we've got it in at, this definitely doesn't reflect Pfizer's commercial ambition, and it's based on these risk adjusted probabilities. And so DB will take you through those assumptions in a little bit more detail later today. In terms of our investment thesis, our default is to, hold the asset and receive the royalties, and they're anticipated to begin in 2028 if the development and launch proceed to the plan that is set out here. This is highly consistent with the venture model. A small number of exceptional outcomes can drive a very disproportionate share of returns, and this share this this asset, we believe, gives shareholders direct exposure to that potential.

10:38 That being said, a deep default path definitely doesn't mean that we stop exploring ways to accelerate value creation for shareholders. So as the program matures and derisks over this period, we would expect a range of strategic options available to us to broaden out, and we will continue to assess these carefully through the lens of long term shareholder value. And, of course, we remain open to exceptional opportunities should they arise.

11:14 On Oxford Nanopore, they made, I would say, encouraging progress in the half and and has performed strongly since the period end from share price point of view. As you can see from the slide, and many of you would have tracked this directly, revenue was at 117,000,000, which is about a 12% growth at constant currency. A big big thing for us was the fact that gross margin increased by, 400 basis points to 62%. But I think even more important, and I think this was the bit that came out particularly in the in the half year results more than the trading statement, was the adjusted EBITDA loss more than halving to just over 22,000,000. I think one of the key developments has been the strengthening of the leadership team.

12:00 Francis joined as CEO in March, the company has also added a a number of senior hires in in areas of key capabilities as it prepares for its next phase of commercial growth. And I think under that leadership team, it feels to us that there is a more focused customer led growth strategy. The company has spoken about narrowing down the 47 areas in which its technology could compete to the 18 that it considers most attractive. And, interestingly, management's own analysis indicates that around 40 to 45% of revenue generated over the last three years already comes from those priority markets. So the existing revenues therefore provide something of a strong foundation for that strategy

12:46 and give the company a credible base from which to expand And the opportunity available, which is clearly set out within their materials, gives very substantial room for expansion. So I think we see this as very much a refinement of focus rather than a wholesale change of direction, and that gives us confidence in the team's ability to execute. That point on profitability or the progress towards profitability, that has been absolutely central to our investment thesis, and I think the results were ahead of where the market appeared to be. The company remains on track for that EBIT breakeven in in full year '27 and positive free cash flow in 2028. And the other point of note is the cross licensing agreement with a global diagnostics company.

13:36 That brings $35,000,000 of committed revenue over, the next couple of years, but importantly, ongoing royalties, which we believe could be substantial. They are not, currently included in the medium term guidance. So any early adoption, which we might see as soon as as this year actually, could increase recognition of that strategic value to the platform. And there's been a a bit of an increase in the value of our holdings since the half year of about 26,000,000, but we remain very focused on that sort of operating thesis and the route to sustainable profitability. Delivery against that should also create more attractive monetization option options for us over time without prejudging the timing of those.

14:28 On the wider portfolio, don't worry. I'm not gonna go into all of these in detail, but I think that the the central message from this slide is breadth and the fact that the progress was not confined to Pfizer or Oxford Nanopore. Quantum Motion, Quantum Circuits, OPSA completed major funding rounds, and First Light Fusion and Mantel eight raised capital. ICESATA secured its first commercial electrolyzer order. Sentessa was acquired by Eli Lilly. So, there's been good good progress across the portfolio. I would just say, Okser is worth a a brief comment in there. So following its strategic rate reset last year and this sharper focus on what we term industrial mobile autonomy, it has formed a a new joint venture with the Dubai Future Foundation called Shift, and the venture is designed to put autonomous vehicles to work in ports and airports in an integrated product that combines Okta's self driving software, its fleet management platform, and its autonomy hardware.

15:33 And this is really targeting, you know, practical gains in things like productivity, efficiency, safety, and operational resilience within these environments, and the first scalable commercial deployment is planned before the end of twenty twenty seven. From Dubai's point of view, of course, it's trying to support the stated ambition to double its foreign trade by 2033. Of course, given the current regional uncertainty, the near term emphasis from the company is correctly on disciplined execution and securing those early deployments. Management definitely deserves the principal credit for delivering that partnership, but it's worth saying IP GROUP supported the company in bringing it about. And this is hopefully a useful example of how our network and our international network can help portfolio companies across these strategic international partners to accelerate into large markets.

16:34 Still delivery ahead, but pretty encouraging process from one of the companies that was affected by a significant valuation reduction last year. So overall, the the breadth of the financing, the the clinical progress, and the commercial partnerships provides evidence of greater maturity across the portfolio with a couple of negative movements as a reminder that execution risk always remains in the portfolio.

17:06 Cash generation was one of the clearest positives from our first half. We realized 69,000,000, which compared with about 30,000,000 in the first half of last year. And as I mentioned, it's actually now more than the whole of 2025. The principal contributors are set out on the slide, Monolith, Sentessa, and Hinge Health. And I think they they both provide sort of some some good illustrations of our model. Hinge Health, following their 2025 IPO, we've now generated a total of 46,000,000 of total proceeds. That was a a 50 times multiple of invested capital at almost a 50% IRR. Monolith is a bit different. That provides an example of where we've had a strategic acquisition of an important deep tech capability, and that was an acquisition by CoreWeave.

17:59 And since then, we've generated around 23,000,000 of proceeds this year with, again, greater than 50% overall IRR. So I think they show that we can create and realize value from different parts of the portfolio, whether that's a, you know, public market success or a strategic acquisition. And it's exactly the sort of profile that we would expect from a diversified science and technology portfolio. Including post period end receipts, we've now delivered a 154,000,000, just over 150,000,000 since the beginning of twenty twenty five, so we're well over halfway towards our 250,000,000 target by the end of twenty twenty seven.

18:45 Looking forward, we continue to see a healthy pipeline of maturing assets and and potential realization opportunities over the next twelve to eighteen months. Fair to say that timing is never entirely within our control, but the breadth of the portfolio gives us a number of different paths to achieving that target.

19:07 As a reminder of the way the components of IP GROUP work together, part walk provides differentiated access at sort of pre seed seed and into series a through our dedicated AIS funds and relationships with leading universities. The permanent balance sheet, which shareholders are exposed to, supports selected companies as they mature, while our private funds can add science and technology scale up capital alongside the balance sheet. That additional capital matters in three ways. It can accelerate our strongest businesses across a broader opportunity set. It can generate management fees to help reduce our net overheads over time, and strong investment performance in those funds can generate performance fees for shareholders.

19:53 So the model gives us proprietary sourcing, long term ownership, and the potential to increase the capital available to portfolio companies without relying solely on our balance sheet. On the subject of third party capital, we made progress in expand in expanding that, platform during the period, although I'd say the focus is now firmly on delivery of the two new mandates that we announced during the first half. Our strategic relationship with Aberdeen is moving quickly towards its first investment, and we expect the initial portfolio to be up and running by the end of the year. And this is definitely an early example of a, a dedicated

20:37 defined contribution mandate providing access to scaling science and technology businesses, and, you know, we we believe there is good potential for it to provide a route for further long term capital savings coming into this sector.

20:56 In Australia, just after our full year results, we also launched the, the 50,000,000 IP GROUP climate catalyst fund. That was with the Clean Energy Finance Corporation in Australia, which is the sort of equivalent of the the, the Australian Green Bank. And similarly for that fund, the next milestone is to begin investing that capital by the end of the year into Australian companies that are addressing hard to abate industries. So together with Parkwalk and Post Plus and those funds, we manage it manage around 550,000,000 of third party capital. And we have further opportunities in the pipeline where we aim to demonstrate material progress over the next six to twelve months. So this remains, at the moment, a a smaller part of today's shareholder value story, but over time, it should help us support more companies, reduce our overheads, and create this performance fee potential if we can deliver strong returns.

21:59 So I'll now turn to the first half outcomes in the portfolio, but also the future value opportunities that we see within them. So June 30, the total portfolio is valued at about, 900,000,000, and that's equivalent to about a 100p per share, a 103p per share. And the top five assets account for about 50 per 50p per share. You see them set out on the slide. And probably just worth recognizing each of these has different value drivers. So royalty

22:30 income and clinical derisking for our license, listed market performance and path to profitability at Nanopore, clinical milestones at ESTESO emission, and industrial scale up at Hysata. As I mentioned, Hysata secured its first binding megawatt scale order during the first half, and delivery is expected in the first half of twenty twenty seven. And I should also note that, Mission Therapeutics, their acute kidney injury program, was acquired by Dimerix for potential consideration of up to nearly $300,000,000, and that that upfront extends the obviously, not all that was upfront, but the upfront they received, will extend Mission's runway for its core Parkinson's program.

23:18 And I think the broader point here to make is the top five assets do provide distinct groups to value, but the other 53p per share gives us and shareholders exposure to a much wider group of businesses and the and a good level of optionality within those. And I'm just gonna highlight a few of those

23:40 over the course of the next few slides. Before I do that, it would be worth just pointing out our successful exit in Sentessa. This is another example of realized value, not paper value. This our involvement in this company began through a University of Cambridge spinout that we backed back in 2017. AppSynTEX became part of a roll up Sentessa, which then listed on Nasdaq in 2021. And then early this year, it was acquired by Eli Lilly for about $6,000,000,000 upfront with a further 1,500,000,000 in potential milestones. For us, we sold during the course of the development of that company during its Nasdaq life and the remaining balance we sold during at the point of completion of this year.

24:32 That has given us a realized IRR of, about 24%, and there's a bit of potential CVR payments, that that that could be up another sort of £34,000,000 potentially. I think, really, this is just to illustrate the validation of the model. So breakthrough university science supported through several stages, and has exited to a global pharmaceutical buyer. And we believe that there are a number of assets that look today like AppSyntics did back then at the early parts of its journey.

25:11 In terms of the rest of the therapeutics portfolio, I think there's just a few things to to highlight. Three milestones, particularly from the half stand out. Two of these were catalysts that we flagged at the full year that have now delivered. So Enterprise Therapeutics met its primary endpoint in a phase two cystic fibrosis trial, and that showed improved lung function over twenty eight days compared with placebo. And Microbartica delivered a second positive phase one b this time dataset, and that was in melanoma. And I think that's building evidence that its precision microbiome platform, its sort of gut microbiome platform, can increase or improve responses in these quite difficult to treat indications.

25:59 Esthesto began dosing the new phase two study of loramestat in June. As everyone will know, the the previous rheumatoid arthritis study didn't meet its primary endpoint, but it met it showed significant improvements in things like disability, fatigue, and reduction in markers of muscle loss. And so this trial therefore follows those signals into secondary sarcopenia caused by an RA, and we are testing muscle quality,

26:30 repair, and function in a randomized double blind placebo controlled study that we'll read out in the second half of twenty seven. This is worth noting that this sort of sarcopenia market is very significant. It it affects around a hundred and ten million people globally, and there are no treatments currently approved to treat it. So a safe oral treatment that improves function would be a very significant unmet need. ESTESTO remains a significant holding from the group from a valuation point of view, and we will, of course, review its valuation through the normal year end processes in light of the evolving, clinical evidence and the commercial opportunity. And I think for today, the important point is that the company has followed the biology into a more focused trial with a clear unmet need and a, a very differentiated oral regenerative approach. So the common thread across these is, large indications, high unmet need, and programs moving into study that provide clearer evidence, and if they're successful, support partnering and value realization.

27:43 Two of our companies in the quantum space raised significant capital capital this period, they the the common thread amongst the amongst these is the IP GROUP and Parkwalk were early investors, and our balance sheet exposure to quantum companies is probably worth about 2p per share at the half year. These rounds bring substantial third party capital into that sector and validate the sort of strategic importance of that. And and quantum remains genuinely exciting. It's a it's a longer duration opportunity, I think alongside it, we also have significant ownership in businesses tackling quite immediate constraints in AI computing, and I'll just turn to some of those now to round up this section.

28:32 I think one of the themes for us, and I'm sure you are all seeing it across your lies, is that AI is rapidly moving from experimentation into large scale industrial deployment. And as models become more embedded in products and services, the constraints are increasingly physical in nature. So things like electricity available to data centers, the heat being produced by conventional processes, and also the energy and time required to move data between, the the memory bit and the compute bit. GPUs remain absolutely central to the system, but they definitely can't solve every part of that equation on their own. And so we have three complementary physics led approaches, light, memory, and probability.

29:24 So on the first, Lumi, which is valued at about £9,000,000, about a one p a share, where we have a 26% holding, uses, three-dimensional optical computing for the matrix multiplication that goes on at the heart of AI inference. During the period, it announced that its first Irish system is now running billion parameter language models in real time. So that hopefully means something to to some of you. I guess sort of in in commercial terms, this is designed for high throughput works workloads in data centers, and the plan here is to develop that system and work it will work alongside conventional GPUs rather than trying to replace the whole computing stack. And if you look at their website, you can see, those sort of initial products.

30:17 Intrinsic on the memory side, again, valued at about a penny a share. We own about 28% of this. This is generating and and developing what would what we call next generation, rerun. That's memory. And this is it's important because getting faster and nonvolatile, I. Remembers and low power memory can sit much closer to the processor and reduce the energy and and a little bit of time moving data between memory and the processing. Relevant applications here can include things like, edge AI, autonomous vehicles, wearables, remote sensing, that sort of thing. And the company is well capitalized and is seeing strong commercial interest from important industry participants.

31:10 And then finally, at about point, point two or three p, of a share, is our holding in Quantum Dice, and this is, photonics, and it is for probabilistic computing. And the the aim here is to try and accelerate problems that required repeated sampling under uncertain conditions. So there's things like logistics and asset management and asset optimization and financial modeling, particularly relevant here, and so things that are used in robotics and and machine vision. So three very complementary areas of the value chain. So although these three represent about 20,000,000 ish of carrying value, we have 17 to 28%, as you can see, ownership.

31:59 And so a meaningful proportion of any future upside belongs to the group and our shareholders. And each has milestones ahead that could become the next value events. We expect and hope to be able to report further technical and funding, hopefully, some commercial milestones from these businesses over the next six months or so. So with that summary of the main drivers and some of the some of the future value drivers, I will hand over to to take you through the financial results. Thanks, DB. Thank you, Greg. Yes. I'll just take you through a quick canter through the financial results. It being only the half year. Most of us you've heard already, but, you know, it's always good to reiterate the message. So now now about £1.14 was £1.14 at the end of the period. It's actually slightly up. You'll see in the release as of the slide, I think, at £1.17 following improvement in Oxford Manipur's price.

32:56 At the end of June, that was a 3.2% increase in the period, which is following the 13% increase in period before. So we're we're a couple of good periods. Overheads similar, slightly up. I would expect I think total overheads last year were just under 16,000,000. I think for the full year that is. And I would expect to be some slightly higher than that this year just due to the nature of inflation. So probably, we'll have a sort of similar amount in the second half, maybe slightly more, maybe making it about 17,000,000. But Mowhead's still in control and only really growing by inflation. Growth cash, very strong. As you've already heard, growth cash actually up over the period, and I'll talk about that briefly in a minute. Balance sheet, very simple. Not much change, actually. The actual NAV, the portfolio value is pretty much exactly flat at about 907,908,000,000.

33:44 And and you can see the effect of that. That is we have invested 30,000,000 in the period, fully itemized in the in the report, but we've had quite a lot of exits as you heard. Very strong exits of 69,000,000 and more since period end and up 17,000,000. So exits are are being strong. With the fair value gain and take us back to where we started effectively. So that's what the movement has been. So the value of what we we've invested, what we've gained to count as much exactly the money that's been realized, which of course has moved into cash as we'll see in a minute. Pfizer royalty asset, Greg has explained this, but always good to actually see what it means in terms of the numbers. So we're actually up, from about a 127 to a 153,000,000. And and the main growth, this this is the chart I showed you at the time of folio, and it's got the main programs.

34:32 If you look at this, it's actually got six programs here. And the main one there on the left, the the lead one at the moment, can see, the monotherapy, which is one that's in these phase three clinical trials. No significant change in the value because, the probabilities haven't changed. It's still in that phase three trial. The next kind of key milestone for that will be if it gets successful completion of that trial, then those percentages will obviously go up, percentage probability, and therefore the value we've got at that time. There has been an increase in the second bar there. So that's a combination therapy with the the GLP and the admin. That moved into a phase two b trial. So that was twenty five percent probability when last reported, it's now thirty nine percent. If it's successful in that trial, it will ultimately move into fifty three percent when it moves into the next phase following the same logic. But that has resulted in most of the increase of about twenty seven million in the period is is actually in in that bar there. That's the one that's gone up.

35:28 The third bar, if we're following in the OR bar, we haven't changed the value on. Actually, no nothing ready to report. Greg's already explained. Fiverr did talk about the fact that they've actually terminated one of their OR assets, but that wasn't our one. They have one asset they sourced from somewhere else. So at the moment, we haven't really got anything to report on that all. So at the moment, we're carrying it still at a very low probability of success. And talking about low probability successes, we do, of course, still have free whole programs and not really valuing at all. Again, Greg mentioned them, but there's a, what's called a GIPR. So that's an alternative to the Amlin. That program is now in a phase one clinical trial as is the prodrug. And that prodrug, you can see in the far right there, is actually a quarterly dose of trial monthly in a phase one trial. Thing is at moment, it's still we still consider it too early to actually put values on those. Not least of all. It's very difficult to, identify market size to do the But if they progress certainly, if they progress in the phase two two trial, we will then have to start recognizing those values, and that will have a relatively significant impact on that value at that time, I guess.

36:33 So that's why we still got about a 152,000,000. Going quickly on the funding profile, very slightly different, but pretty much similar as we think. We tend to I tend to talk about a third funded, a third in a year, a third in two years. It's changed very slightly. Actually, we've only got about 6% to fund for the rest of this year and 19¢ for the six months after that. So, actually, twelve months now is only about 25%. And quite a lot of funding get actually moved out into the year after that. So after next half year to the half year after. So if anything, actually, the funding profile has slightly improved over other periods. But but the truth is the message always is the the rate at which our company needs to fund is relatively constant, and it gives you chance to do fundings as they come along. You don't get a kind of wall of funding requirements.

37:19 And as always, I say, you know, follow the cash on these things. The cash is really repeating what we've seen before, but the cash has actually improved, and that's with investments in about 30,000,000 of in that way. Considering about the exits and and relatively small amount of costs is to reduce that. And really what's happened is, effectively, the profit we've seen, that's a 31,000,000 profit has effectively gone into cash. That's where it is. And as we've mentioned already, we haven't been doing the buyback. There's quite a lot of questions about that. I haven't been doing buyback in the period, so that money is is sitting in cash at the moment. That explains that increase. And I'll hand back to Greg. Thank you very much, Dave. You're welcome. So let's just quickly finish with a recap of the key messages and a little look forward. So as I mentioned at the start, the first half of twenty twenty six has been a period of disciplined execution and hopefully growing momentum that you're seeing.

38:15 NAV per share increased to a 114p and has increased further to approximately 117p since the period end. We delivered 69,000,000 of proceeds in the half and actually mid eighties, 86,000,000, I think, from for the year to date, and that takes total proceeds since the start of 2025 to 154,000,000. We remain on track for the 250,000,000 by the end of twenty twenty seven. And from a portfolio point of view, the Pfizer programs continue to derisk. Oxford Nanopore made good financial and commercial progress, and the broader portfolio attracted over 500,000,000 of third party capital while delivering milestones that ranged across, therapeutics, quantum, autonomy, climate tech, and AI enabling compute.

39:08 As Dave said, we ended June with 240,000,000 of gross cash and deposits. So I think, importantly, from our point of view, the progress is becoming increasingly visible in outcomes. So per share value growth, cash realizations, external validation through funding rounds, and, hopefully, you're seeing clearer routes to potential future value. This is the same set of priorities that I outlined we will be targeting this year at the full year. I haven't changed the slide. I guess the the first point to make is the sort of, accountability. So this is what, what I said we would do and reporting back on the progress that we have made to date. So we've made continued positive NAV per share performance.

39:58 We have generated about 154,000,000 of exits, as I mentioned, including those post period receipts since the beginning of twenty twenty five. We've moved the Aberdeen relationship towards its first investment. We announced that further fund, the Climate Catalyst Fund, and we've maintained a disciplined approach to deployment. For the remainder of the year, those objectives sort of largely still stand, you know, the continued positive NAV per share performance, making the first investments in those, both of those private capital arrangements, and keeping executing towards that 250,000,000 exits target. So that's the sort of accountability piece. I would say that the second point, though, is more around pace and ambition.

40:47 You'll have seen that Michael Queen joined us as chair during the half, and he brings a substantial level of experience from, his role at three I where he was chief executive and many private markets, companies, most recently, Collard Capital, where he was chair. And we also heard a range of views from, our shareholders during the summer, and we will continue that engagement now as part of this half year results roadshow. I would say Michael, the board, and management are using all those inputs to determine and implement the most effective ways for us to be able to accelerate realizations, sharpen our capital allocation, and convert more of the portfolio's underlying value into per share returns while also retaining the valuation discipline that protects you as shareholders.

41:49 Third party interest and that shareholder engagement we saw during the summer underlying for us the attractiveness of the underlying assets and also the strategy that we're following. And, of course, the task for us as a management team now is to convert more of that value into outcomes that you as investors can see in in cash and per share returns. As Dave mentioned, we have approximately 50,000,000 of proceeds, from realizations that is now available for future shareholder returns under the capital allocation policy that was approved by the board. Now, of course, following the AGM vote, as you would expect as a public company, we are engaging constructively with shareholders on the appropriate form and timing and how we can consider we can deliver against our capital allocation policy.

42:45 From our perspective, the principle is is clear. We should allocate capital where it creates the best risk adjusted per share outcomes. So I I wanna be clear that this is not simply business as usual. We've got a strong portfolio. We've got a clear strategy for growth, and we've got substantial opportunity ahead. Our priority is execution and converting that opportunity into outcomes that shareholders can see and measure. I thank you all very much for your continued support. DB and I will be very happy now to take the questions. I'm gonna try and try and group them. Gonna at them as they're coming through. Some of them, I I think we've now answered in the presentation on areas like capital allocation, and we mentioned the bid process during the summer. I probably can't say an awful lot more I agree.

43:40 On that. But, yeah, that's I agree entirely. Fact, fact, I was gonna say. Well, how do go? So please don't be offended this year if I don't include your question. I've traditionally treated every question. I'll do some grouping, and and as Greg correctly said, I think we've really we've certainly covered off the capital allocation. I feel we've we've, given a fairly good description around also the bits. So I probably won't do any more on those. So, Kane, analyst and Deutsche, lovely to have you with us, Kane, as always. Lots of long questions like or a long question with lots of complexity in it. Would you consider partially monetizing the Pfizer royalty interest an attractive opportunity of earnings, or is the intention to remain fully exposed given the potential upside of the program's progress? I hope I answered that one in full.

44:25 No. That's fine. We we have a default position that we would hold it, but as the as the asset derisks over the course of the next sort of twelve to eighteen months, then we think there'll be there there could be opportunities that could be attractive. And, absolutely, you know, I always say as to all investment team, you know, everything is for sale in the portfolio at the right price. So if there was an attractive offer, of course, we would look at it. Sorry. I'm sometimes reading the questions. Yeah. Yeah. No. No. No. Comment. I'm sorry. With respect to the portfolio, it still came. Raises of which has been a lot. Do you think this reflects a genuine improvement in the funding environment, or investors simply becoming more selective and concentrated capital into a smaller number of higher quality assets? But both and? I mean, we're certainly seeing that in if you look at the the broad statistics across the industry, there are some mega rounds that are attracting huge amounts of capital.

45:23 I mean, maybe a good example is fusion. You know, if if you look at the analysis of the fusion funding environment, quite a lot of capital has gone into that space. Haven't got the stats to hand, but it's in the in the billions. And there are three, four, five companies that have identified or have received a substantial amount of that capital with, you know, much of a thinner tail. Interestingly, the stat that we were looking at the other day in our analysis of this sector, of course, we we have our exposure through First Light Fusion, and this is an area of particular interest to them. It's something when they analyze the companies in the fusion space about the level of capital that they believe they still needed to access in order to to deliver the commercial milestones, it was something like four or five x the amount of capital that's been raised even in this increased period. So I I would say it is it is selective.

46:26 The environment for certain of the sectors is is strong. We see it as a good validation of, the portfolio, and it's a it's a metric that we track and report on for that reason. And the last, based on k, and I can probably deal with this. This is related to the 43% of price funding rounds that you were down. People noticed in the report, we tracked for how many funding rounds are up from the last one, how many flat, how many down. There's slightly more in this period. And the question was, should we think of this as a lagging effect from impairments? Would you recognize in prior periods? Or do you see pockets of valuation pressure across the portfolio? I funny enough, I I I don't wanna read too much into it. By number by number, it's slightly up into well, the number that are down slightly increased, I should say. But actually, by value, they haven't.

47:12 And also, it's important to note, I think, that this is true with every year I've ever done this. These adjustments are from the last funding round. Actually, we had already recognized all those in the last set of accounts. So we're telling we're telling to run ahead of that. So where we think something might be down, we've already factored it into our numbers. These aren't things that normally catch us out. Moving on a little bit. There's we've we've covered pretty well on the MET zero stuff, but the particular question just to clarify. Question was, what's the 27,000,000 uplift milestone? I guess I they maybe all of it actually is evaluation adjustment. There was a small milestone during the period. It was only a pound of 3,000,000. The next one, back to you, Greg, I think from Paul Bay. Bulk of transaction activity both in exits and investments looks to be concentrated in health tech and AI. Can you comment on strength or weakness of activity outside of these areas? And in which sectors do you see the bulk of activity in the near term?

48:11 Yeah. That's an interesting one. I would say I've I've hopefully tried to set out. There was quite a a a breadth both in terms of the larger portfolio companies and the the other milestones and progress underneath that across each of the three main areas in in which we invest. I didn't dwell too much on Hystata, for example, which is very much in the cleantech space delivering, hopefully, its first commercial order for a megawatt scale plant, in South America in, early twenty twenty seven, in the first half of twenty twenty seven. So we do see opportunity across all of them. I mean, interestingly, your your question actually is a great observation on what we're seeing in our opportunity set is actually quite a convergence of deep tech, cleantech, and health tech.

49:11 So many of our opportunities touch those areas in different ways. So, Oxford would be a good example. That is a company that has a, both a software model and a hardware model. It is clearly deploying machine learning and AI and software into physical environments. In some cases, that is being used to increase efficiency. In some cases, it's being used for security and defense for improving resilience. And so it's it's touch that that's one that probably doesn't touch health tech, for example. But if you look that that's a trend that we think is interesting and and something that our multidisciplinary science based approach hopefully gives us a competitive advantage in.

50:02 Thank you. Again, just to clarify from John B, is the Amlan does the Amlan belong to the group? Yes. It does. I explained in the in the, IPO owns a lot of the Pfizer's weight loss franchise. Quite a few parts, not just the not just the lead programs, but the combination therapies and the and the prodrug and the GIBR. So it's quite a wide state of about six different patent areas, which we we originate with IP group. Going back, the next one I would say from Lucas, I I think one of our most loyal shareholders definitely deserves to have your question read out in full, Lucas. Congratulations on the strong results. Given the very positive presentation and very strong underlying performance, we still find it difficult to understand what a stock continues to trade at 40% discount level.

50:47 And this is a question we've talked about many time. What do you believe are the key reasons for this discount? Well, yeah, we've we've discussed this a lot, haven't we? And we that's part of the reason that we have the capital allocation program that we do. I mean, I I guess there are there are broad ways we can reduce the discount over time. The first is simply delivery. You know? Ultimately, discounts narrow when investors gain confidence that our our NAV growth, our portfolio progress, our cash realizations are repeatable rather than one off. So that's why we've been so focused on the NAV per share growth, the exits, the portfolio execution.

51:39 The second is conversion. So we've we've talked today about the quality of the portfolio, but investors quite reasonably want to see more of that value translated into cash and then hopefully into shareholder returns and realize outcomes, and that's why we set that 250,000,000 cash exit target. I mean, we felt that was a you know, that was an ambitious target. That was, I think, the time, more than half our entire market cap that we said we were going to deliver in in cash excess, and it's obviously why capital allocation remains such an important area of focus. And then I I suppose the third, we're increasingly focused on the on the sort of the structure around the portfolio itself. So that obviously includes shareholder returns, which we need to engage on further during the rest of this year, the development of our third party capital platform, how we can maximize the value. You know, we we definitely heard a range of views on that front during the summer, and and we are, of course, now actively considering how best to reflect those views while remaining disciplined and focused on long term value creation. So I think there isn't a single action that closes a discount of this size.

52:57 I think that sustained delivery, the thoughtful shareholder focus, capital allocation, continued realizations, that seems to me the most credible route to narrowing it over time. Yes. And then I won't be in this number of questions about reducing the discount. A question from John L. Is Saba a shareholder? Factual answer, yes. They are. They own about 12%. Next question from Bill H. Has IP GROUP's new chairman bought any shares in the group? Are there any signs yet of Harry's contribution to the group's effect will be different from the predecessor? You have talked a little bit about this, but just perhaps on the shares. Yeah. On the on the shares, yeah, Mike was very keen to buy shares and and bought them, I think, within a week of the the the end of the offer period.

53:49 I bought a few more shares too, and I think that, well, hopefully signifies to shareholders that we, you know, we believe in the value of the group, believe that there is upside in the share price, and, you know, vote voting with our with our capital. I'm I'm very exposed to the IP GROUP share price, as you would expect as as shareholders. So it's, it's my number one KPI, obviously. One from Milosvic, also an analyst. Nice to have you with us today. How much m and a appetite do you see for precommercial stage biotech companies from big pharma? I would say there is I mean, there's always active discussion ongoing, and the route to value creation for that bit of our portfolio, we will hopefully demonstrate over the course of the next twelve, eighteen months, I would say. There's a number of the the bigger readouts coming, and there, you know, there remains significant appetite for sure.

55:00 Yep. Four or five more on the buyback. I won't repeat those again. This is from Sam E, who is also another analyst. Nice to have you with us, Sam. Thank you. How much visibility do you have on realizations at 27 that gives you confidence to deliver on the two fifty realization target. Perhaps I'll answer that one. The the forecasting, realizations is quite tricky because it's not like the majority of our stocks are public companies. If you just make a decision, you're gonna sell something. A lot of them require, obviously, transaction out of the to make float or somebody to buy it. However, we found we can get relatively accurate on this by looking really into the probability basis. And based on that, you can see, you know, up to fifteen, twenty different means that have varying probabilities. And overall, I think we're relatively or very confident that we will achieve that target in the next year, and certainly based upon our accuracy of forecasting.

55:50 So it comes from a deep knowledge of a large number of companies and understanding relatively realistically what the probabilities of all of them are. And once you once you wait for that, I'll allow waiting if you see what I mean. You can get relatively accurate forecasts. So our visibility is actually good without being precise is what I would say. Looking on down. Okay. Sam again, you're back. Outside of direct AI exposure, what extent do you see AI as a value creator across a portfolio versus something that creates a risk of disruption? Other topical question. Well, it's it's being used significantly. I mean, we've said that a lot of our the value drivers for our businesses are heavily aligned with with AI and the use of AI, and this ranges from things like, Oxford Nanopore's base calling software and an ability to be able to improve the efficiency of that. We're seeing it being used in therapeutic areas to help around the clinical trial design and analysis.

57:04 We're seeing it in I mean, we've done a new we're just we're just looking at a a new AI supported materials, discovery and development company, for example, that will have to combine a direction of travel that we see, which is sort of combining the the the digital electrons with the physical atoms and materials in a, you know, a sort of an iterative loop. So I think that's a that's a trend that will be important actually for the next two, three years. You know, where are the places where there is a sustainable competitive advantage brought about by a technological advantage that can be paired or accelerate paired with or accelerated by the the potential for AI.

57:53 And, of course, we're using it significantly within IP GROUP and and using it to improve all aspects of our business very significantly. I think it's, you know, it's having a profound effect here just as much as it is in in the portfolio, and we'll definitely report back more on that over over coming months. There there are a couple of rounds of governmental support here, which are gonna combine. Generally, what's your engagement, if any, with the New Bern government and its focus on backing British business? Can the government help you? As a follow on, are there any concrete developments from UK government perspectives by encouraging pension funds to invest in UK tech? Yeah. The I would say the the the trend that began of course, it is I don't not to not to ramble here because it's trying trying to keep focus, but, you know, sort of look back to where a lot of the current things like Mansion has all started. They were back in sort of 2016 or so, and it's been a number of years for that to to come to fruition.

59:06 I mean, definitely, one thing we've learned over the years is that government support is not something that we build any investment cases around, but it is becoming an increasingly important tailwind for us. I mean, over the last twelve to eighteen months, we've seen a lot more policy emphasis on innovation, science and technology as drivers of UK growth, support for scaling companies, and that point definitely around greater engagement with institutional capital and this sort of recognition that particularly hit in The UK, more UK businesses need access to growth funding if they're gonna remain and grow here. I think to sort of specifically answer the question, I mean, I guess the and there was a recent announcement by a big consortium of pension funds headed up by the or endorsed by the UK government and The UK scale up funds. That's part of wider efforts to bring pension capital into innovation and trying to get address that that sort of funding gap.

1:00:11 I think and would hope that the relationship that we've started with Aberdeen also is a way that we can sort of significantly address that gap. There's a lot of defined contributions. So you've got sort of the defined benefit, like government pension schemes, pool of capital, and then you've got the the direct contribution DC savers pool of capital. And both both present opportunities. The Aberdeen one is is more on this side of the opportunity, and I think there is there's good strategic alignment between us and Aberdeen and the underlying investors about the opportunity here and and getting canceled into the space. So I think, you know, sort of the overall policy is aligned, maybe more aligned around what we're trying to achieve, and that's, you know, building and scaling leading science and technology companies in in The UK.

1:01:07 I'm conscious it's 11:00, and, obviously, for those who wanna go, please do. But I'm I'm going to I I we didn't say anything. We won't be half an hour more. There's still sort of seven or eight questions. I'll try and try and, answer those or combine where I can, but quite understand if people have to drop off now. It's what I've mentioned that. There's a very specific question. I'll just quickly deal with anyway because it's it was a clever observation by Andrew M. Can I clarify that the high start evaluation at June did not affect the third party evaluation of the commission? Well, I've told you, I guess you spotted it hadn't changed much. We actually did choose not to change it. The valuation actually was slightly higher, but we thought from balance it made sense to put leave it until the next something around. We don't always use evaluations as as religion that they don't have to adopt them, but they're a useful guide that we are materially in the right area. And we and we are. The difference is fairly immaterial.

1:02:02 Evaluation is within the range. Yeah. It was right at the bottom of the range in the end, so we didn't wanna change it. Yeah. And there's a slight technical question about the valuation limit zero. Do the probability ratings go to a 100% once an asset's approved, Or are there commercial risks including that or the peak sales estimates? In short, yes. Once it launched, your your your your probability is now probably is a 100%, but at any time, the forecast will change. So there is the the doubt both about where you'll get there and when you get there, how big it will be. So that basically sums it up. So at any time, you know, you could find the forecast increasing a lot into a big increase or or vice versa. So those are really the two things to bear in mind. But certainly, once these things launch, you've eliminated your risk of of of the trial component.

1:02:49 You're now into, I guess, risk of market size. Briefly, perhaps question about the most exciting new investments, Greg, maybe something you might wanna touch on briefly. You could go on for a long time about that. But Yeah. Well, I I think the the ones that I've tried to to set out, I'm gonna give you a whole list of some of them. We've got a, you know, very interesting health tech series a business that we just invested into. Again, sort of slightly later stage as some opportunities to come into things slightly later stage now looking at analyzing the health of tissues during surgery. Again, it's it's AI powered enhanced, but it's, enables the, both sort of human, surgeons and robot surgeons to be able to analyze the integrity and health of tissue, which is very important sort of during the during an operation. So that's a sort of an interesting one.

1:03:45 There's the materials AI driven materials opportunity. Yeah. There's there's a there's a a good breadth. All of those sit at the very early stage in that 53 of NAV per share. I've tried to highlight the ones that are probably provide the nearest opportunity for, you know, sort of shorter term catalyst the next six to twelve months in the presentation. I definitely would say we've had an increase in pace of new investments this year. I think we've done six or so year to date on the balance sheet. We've continued to do plenty in our park walk funds, but I think that six to date is, I think, double what we did last year, if I remember correctly, on the balance sheet.

1:04:32 I think we did about three last year. So, yeah. No. We're definitely seeing, opportunities for investment. And I think, you know, with the confidence around realizations, we need to make sure that shareholders' capital is at work. And a couple more. I'm fine. There's a very specific one about the increase from the one pound thirteen to one pound seventeen and asking, you know, what is that attributable in the portfolio? Is it related to valuations? Probably worth making the point that it's just generated by the movement in Oxford and Nanopore or Sheldon Nanopore, which has performed strongly since it reported to get results. We've not done a full revaluation of portfolio at that date. So it's just been adjusted by the movement in the public shares, which is mainly in Helipore.

1:05:17 I may well be there. I've covered Saba. No. I I would say that would cover them all. I think I think I'm back to repeats now. So we we didn't overrun by too much. There's a there's a couple of small ones on the portfolio. We could I mean, again, whether people are are interested in these, did ops or IP GROUP have a look out or seek to work with Orego? I'd have to double check. And could loramestat be granted orphan drug status by the FDM? It has previously been granted orphan drug status in an indication called idiopathic pulmonary fibrosis and IPF. So, of course, that's something that we our portfolio companies and and we work together on in order to build up this sustainable competitive advantage and hopefully contribute to increased commercial value at the, you know, at the time that we get to sort of partnering and exit. So it's certainly something that we'd that we'd be looking at. Let me see if there's anything else.

1:06:27 There there's there are lots, look, to, you know, to be very transparent. There are there are a number of questions on differing views amongst our shareholder base and and things like that, but I think we've we've commented, I think, to the extent is is appropriate. If we've missed any, apologies. Yeah. And if you, you know, you want to reach out, please do. But yeah. Perfect. Greg, David, at this point, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors this morning. And of course, if there are any further questions, we'll give them back to you immediately after the presentation for you to review. But Greg, perhaps before really now, just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great.

1:07:14 Thanks, Jake. Well, in in summary, there's probably three things to highlight. First, we've continued to deliver against the priorities that I set out at the start of the year, further NAV per share growth, strong cash realizations, and that broad progress across the portfolio. Second, to give comfort to shareholders, we're seeing that increasing external validation of the quality of those portfolio companies, whether that's fundraising, strategic partnerships, or continued progress in in the therapeutic areas. And third, we are very focused on turning that progress into tangible shareholder outcomes, and we will we will work on that capital allocation piece. But the things like active portfolio management and continued cash generation are very high up our priority list.

1:08:03 That's great. Greg, David, thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback? On behalf of management team of IP GROUP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.