Woodford backs Malin to move ex-Elan execs toward €325M IPO goal

Neil Woodford's fund has committed to buy shares in Malin, the life science investment company set up by Kelly Martin and other former Elan executives. And with Woodford, the Ireland Strategic Investment Fund and other cornerstone investors gobbling up two-thirds of the shares, observers think Malin could hit the top end of its IPO range.

The Financial Times quoted anonymous sources close to the IPO as saying demand for the remaining shares is strong, suggesting Malin can blast past the bottom end of its range. Such an outcome would leave Malin with close to €325 million ($345 million) to invest in life science companies. Even if Malin receives no further commitments to buy shares, it will still find itself sitting on around €200 million. Whatever the final tally is, Malin sees itself offering more than just money to companies.

Neil Woodford

"Many of these companies have the science but do not have the commercial expertise," Malin CEO Adrian Howd told the Financial Times. "We are focused on adding operational value." If investment targets are keen to work with Malin to tap into the knowledge of its Elan-heavy team, the fund could find itself with an extra chip in negotiations. The flip side is that not everyone was impressed by the operational value Martin and his colleagues added during their stints at Elan.

Such issues may await Malin down the line, but for now the Dublin, Ireland, IPO is the focus. Once shares are trading in Dublin, Malin will begin to consider filing for a dual listing in London, giving it access to investors in a city that hosts some of Europe's more vibrant stock exchanges for biotech investors. After a 2014 in which Circassia (LON:CIR) led the way with its £200 million IPO, London is awaiting the listing of the Woodford Patient Capital Trust.

The trust--which Woodford is setting up to get deeper into young companies--is looking to raise upward of £200 million. With the launch of the trust coinciding with the Malin IPO and a possible fund from big-name investor Jim Mellon, a lot of cash could soon be in the bank accounts of Europe-based, biotech-focused investors. Not all of the money will flow into European companies, though. Malin is taking a global approach to its investment decisions.

Many of Malin's 7 initial investments are based outside Europe. And it is expected to retain such geographic flexibility as it looks for up to 5 companies on which to spend the €100 million it hopes to have left after making the first batch of investments.

- read the FT article

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