IP Group Plc (IPO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the IP Group plc Half Year Results Investor Presentation. [Operator Instructions] 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 we'll publish 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 would now like to hand you over to CEO, Greg Smith. Greg, good morning, sir.

Good morning, Jake. Thank you very much, and welcome, everyone, to IP Group's 2026 Half Year Results Presentation. And thanks very much to all the Investor Meet Company team and Mark for hosting today's session. Much appreciated, as always. For those of you who don't know me, I'm Greg Smith, I'm the Chief Executive of IP Group. With me today is David Baynes, our Chief Financial and Operating Officer. We deliberately tried to keep today's presentation a bit shorter and more focused at 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. 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. As usual, the disclaimer is here. Please note the 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 -- 4 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. We'll do that clearly and directly. 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 25th anniversary. And over that period, we've invested over GBP 1.5 billion. 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, and also gives us a large and increasingly mature portfolio from which future value and cash realizations can emerge. 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 114p, taking net asset value of GBP 1 billion. Since the period end, NAV per share has actually increased further to approximately 117p a share as at 11th of September, last Friday. We generated GBP 69 million of cash proceeds in the 6 months, which was slightly more, actually, than the whole of full year '25. A further GBP 17 million since June takes our year-to-date proceeds to the mid-GBP 80 million. Portfolio companies raised over GBP 0.5 billion 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 GBP 27 million to just over GBP 150 million, and we ended the period with a healthy cash balance of GBP 239 million 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. 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 RNS release, the Board sought to engage constructively with Railpen 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 will have seen, the process did not result in an acceptable proposal. And so our focus as a management team and the Board is firmly on delivering the substantial value that we see in the Group. 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 have become such a significant asset for IP Group and our shareholders. The first half has added further evidence to that and also reduce development risk. During the period, Pfizer released positive clinical data for the lead program, berobenatide, showing competitive weight loss efficacy alongside favorable tolerability and supporting the potential for a monthly maintenance regimen. The berobenatide and amylin combination also advanced into Phase IIb, and that was the primary driver of the GBP 27 million uplift that I mentioned. 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 III studies this year and launch is targeted in 2028. Now 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 quality and the breadth of our exposure to a market that is externally forecast at around sort of GBP 100 billion to GBP 150 billion or thereabouts annually by 2030. 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 as I mentioned, the most advanced of the assets at the top there is berobenatide. Two Phase III 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 7 further Phase III studies that are -- that 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 berobenatide Phase III studies is now close to completion. From our point of view, from your point of view, 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 berobenatide and amylin combination is now in Phase IIb. 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, a couple of Phase I assets that are not currently attributed value in our model. So I think the important takeaway from this for shareholders is that this isn't exposure to a single binary program. 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. And I think this point on the carrying value, I think the GBP 150 million we've got it in at, it 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 proceeds 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 asset, we believe, gives shareholders direct exposure to that potential. That being said, having 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 the 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. On Oxford Nanopore, they have made, I would say, encouraging progress in the half and has performed strongly since the period end from a share price point of view. As you can see from the slide, and many of you would have tracked this directly, revenue was at GBP 117 million, which is about a 12% growth at constant currency. A big thing for us was the fact that gross margin increased by 400 basis points to 62%, but I think even more importantly, and I think this was a bit that came out particularly in the half year results more than the trading statement, was the adjusted EBITDA loss more than halving to just over GBP 22 million. I think one of the key developments has been the strengthening of the leadership team. Francis joined as CEO in March, and the company has also added a number of senior hires 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 3 years already comes from those priority markets. So the existing revenues, therefore, provide something of a strong foundation for that strategy 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 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. That brings $35 million 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 this year, actually, could increase recognition of that strategic value to the platform. And there's been a bit of an increase in the value of our holding since the half year of about GBP 26 million, 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 options for us over time without prejudging the timing of those. On the wider portfolio, don't worry, I'm not going to go into all of these in detail, but I think 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, Oxa completed major funding rounds, and First Light Fusion and Mantle8 raised capital. Hysata secured its first commercial electrolyzer order. Centessa was acquired by Eli Lilly. So there's been good progress across the portfolio. I would just say Oxa is worth a brief comment in there. So following its strategic reset last year and this sharper focus on what we term industrial mobile autonomy, it has formed 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 Oxa's self-driving software, its fleet management platform, and its autonomy hardware. And this is really targeting 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 2027. From Dubai's point of view, of course, it's trying to support the state's ambition to double its foreign trade by 2033. And 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. 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 breadth of the financing, 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. Cash generation was one of the clearest positives from our first half. We realized GBP 69 million, which compared with about GBP 30 million 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, Centessa, and Hinge Health. And I think they both provide sort of some good illustrations of our model. Hinge Health, following their 2025 IPO, we've now generated a total of GBP 46 million of total proceeds. That was a 50x multiple of invested capital and 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. And since then, we've generated around GBP 23 million 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 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 GBP 154 million, just over GBP 150 million since the beginning of 2025. So we're well over halfway towards our GBP 250 million target by the end of 2027. Looking forward, we continue to see a healthy pipeline of maturing assets and potential realization opportunities over the next 12 to 18 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. As a reminder of the way the components of IP Group work together, Parkwalk provides differentiated access to sort of pre-seed, seed, and into Series A through our dedicated EIS funds and relationships with leading universities. The permanent balance sheet, which shareholders are exposed to support 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 3 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. 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 expanding that platform during the period, although I'd say the focus is now firmly on delivery of the 2 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 dedicated defined contribution mandate providing access to scaling science and technology businesses. And we believe there is good potential for it to provide a route for further long-term capital savings coming into this sector. In Australia, just after our full year results, we also launched the A$50 million IP Group Climate Catalyst Fund. That was with the Clean Energy Finance Corporation in Australia, which is the sort of equivalent of 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 Hostplus and those funds, we manage around GBP 550 million of third-party capital. And we have further opportunities in the pipeline where we aim to demonstrate material progress over the next 6 to 12 months. So this remains at the moment 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. 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 at 30th of June, the total portfolio is valued at about GBP 900 million, and that's equivalent to about 100p per share -- 103p per share. And the top 5 assets account for about 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 income and clinical derisking for our license, listed market performance and path to profitability at Nanopore, clinical milestones at Istesso and Mission, 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 2027. 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 million. And 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. And I think the broader point here to make is the top 5 assets do provide distinct routes 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 going to highlight a few of those over the course of the next few slides. Before I do that, it would be worth just pointing out our successful exit in Centessa. 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 in 2017. That ApcinteX became part of a roll-up, Centessa, which then listed on NASDAQ in 2021. And then earlier this year, it was acquired by Eli Lilly for about $6 billion upfront with a further $1.5 billion 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 this year. That has given us a realized IRR of about 24%, and there's a bit of potential CVR payments that could be another sort of GBP 3 million, GBP 4 million potentially. And 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 ApcinteX did back then at the early part of its journey. In terms of the rest of the therapeutics portfolio, I think there's just a few things to highlight 3 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 II cystic fibrosis trial, and that showed improved lung function over 28 days compared with placebo. And Microbiotica delivered a second positive Phase Ib, this time data set, 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. Istesso began dosing the new Phase II study of leramistat in June. As everyone will know, the previous rheumatoid arthritis study didn't meet its primary endpoint, but 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 RA, and we are testing muscle quality, repair, and function in a randomized, double-blind, placebo-controlled study that will read out in the second half of '27. This is worth noting that this sort of sarcopenia market is very significant. It affects around 110 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. Istesso 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 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. Two of our companies in the quantum space raised significant capital this period. And they -- the common thread 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. And these brands bring substantial third-party capital into that sector and validate the sort of strategic importance of that. And Quantum remains genuinely exciting. It's a longer-duration opportunity. But 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. I think one of the themes for us, and I'm sure you are all seeing it across your lives, 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 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. So we have 3 complementary physics-led approaches: light, memory, and probability. So on the first, Lumai, which is valued at about GBP 9 million, about a [ 1p ] per share, where we have a 26% holding, uses 3-dimensional optical computing for the matrix multiplication that goes on at the heart of AI inference. During the period, it announced that its first Iris system is now running billion-parameter language models in real time. So that hopefully means something to some of you; I guess, sort of in commercial terms, this is designed for high-throughput 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. Intrinsic on the memory side, again, valued at about 1p a share. We own about 28% of this. This is generating and developing what we call next-generation ReRAM, that's memory. And this is -- it's important because getting faster and non-volatile, i.e., remembers, and low-power memory can sit much closer to the processor and reduce the energy and a little bit of time moving data between memory and 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. And then finally, at about 0.2p or 0.3p of a share is our holding in Quantum Dice, and this is photonics and it is for probabilistic computing. 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, financial modeling, particularly relevant here. And so things that are used in robotics and machine vision. So 3 very complementary areas of the value chain. So although these 3 represent about GBP 20 million each of carrying value, we have 17% to 28%, as you can see, ownership. 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 and hopefully some commercial milestones from these businesses over the next 6 months or so. So with that summary of the main drivers and some of the future value drivers, I will hand over to DB to take you through the financial results. Thank you.

Thank you, Greg. Yes, I'll just take you through a quick canter through the financial results, being only the half year. Most of this you've heard already, but it's always good to reiterate the message. So NAV about [ GBP 1.14 was -- GBP 1.14 ] (sic) [ 114p ] at the end of the period. It's actually slightly up. You'll see in the release, the slide, at GBP 1.17 following improvement in Oxford Nanopore price. 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 a couple of good periods. Overheads, similar, slightly up. I would expect -- I think total overheads last year were just under GBP 16 million. I think for the full year, that is. But I would expect it to be something 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 GBP 17 million. But overhead is still in control and only really growing by inflation. Gross cash very strong, as you've already heard. Gross 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 math of the portfolio is pretty much exactly flat at about GBP 907 million, GBP 908 million. And you can see the effect of that, that is -- we have invested GBP 30 million in the period, fully itemized in the report. But we've had quite a lot of exits, as you heard, very strong exits of GBP 69 million and more since the period end, GBP 17 million. So exits have been strong. With the fair value gain then taking us back to where we started, effectively, that's what the movement has been. So the value of what we've invested, what we've gained count as perhaps 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 numbers. So we're actually up from about GBP 127 million to GBP 153 million. And the main -- this is a chart I showed you at the time of full year. And it's got the main programs. If you look at this, there's actually 6 programs here. And the main one there on the left, the lead one at the moment is the berobenatide, the monotherapy, which is one that's in these Phase III clinical trials. No significant change in the value because the probabilities haven't changed. It's still in that Phase III trial. The next 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 will go up at that time. There has been an increase in the second part there. So that's a combination therapy with the GLP and the amylin. That moved into a Phase IIb trial. So about a 25% probability when last reported. It's now 39%. If it's successful in that trial, it will ultimately move into 53% when it moves into the next phase, following the same logic. But that has resulted in most of the increase of about GBP 27 million in the period is actually in that bar there. That's gone up. The third bar if we're following the [ oral ] bar, we haven't changed the value on. Actually, no -- nothing really to report. Greg has already explained. Pfizer did talk about the fact that they've actually terminated one of their [ oral ] assets, but that wasn't our one they had one asset they sourced from somewhere else. So at the moment, we haven't really got anything to report on that. So at the moment, we're carrying it still at a very low probability success. And talking about low probability successes, we do, of course, have 3 programs we're not revaluing at all. Again, Greg mentioned them, that there's what's called GIPR, an alternative to the amylin, that program is now in a Phase I clinical trial as is the pro drug, and that pro drug you can see in the far right there is actually a quarterly dosage rather than monthly in a Phase I trial. Thing at the 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 calculation. But if they progress -- certainly if they progress in the Phase II 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 would guess. So that's why we still got about GBP 152 million. Going quickly on the funding profile, very slightly different, but pretty much similar as we see. We tend to talk about third funded, third in a year, third in 2 years, changed very slightly. Actually, we've only got about 6% to fund for the rest of this year and 19% for the 6 months after that. So actually, 12 months now is only about 25%. And quite a lot of funding actually moved out into the year after that. So after next half year, the half year after. So if anything, actually, the funding profile has slightly improved over other periods. But the truth is the message always is the rate at which our company funds is relatively constant and it gives you a chance to do funding as they come along. You don't get a kind of walls of funding requirements. And as always, I say follow the cash on these things, the cash is really repeating what we've seen before, but the cash has actually improved and that with investments in about GBP 30 million have been outweighed by the exits and relatively small amount of costs to reduce that. And really what's happened is effectively the profit we've seen, that GBP 31 million profit has effectively gone into cash. That's where it is. And as we've mentioned already, we haven't been doing buybacks. There's quite a lot of questions about that, doing buybacks in the period. So that money is sitting in cash at the moment and that explains that increase. And I'll hand back to Greg.

Thank you very much, Dave. 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 2026 has been a period of disciplined execution and hopefully growing momentum that you're seeing. NAV per share increased to 114p and has increased further to approximately 117p since the period end. We delivered GBP 69 million of proceeds in the half and actually mid-80s, GBP 86 million, I think, from -- for the year-to-date, and that takes total proceeds since the start of 2025 to GBP 154 million, and we remain on track for the GBP 250 million by the end of 2027. 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 GBP 0.5 billion of third-party capital while delivering milestones that ranged across therapeutics, quantum, autonomy, climate tech, and AI-enabling compute. As I said, we ended June with GBP 240 million 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 changed the slide. I guess the first point to make is the sort of accountability. So this is 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. We have generated about GBP 154 million of exits, as I mentioned, including those post-period receipts since the beginning of 2025. 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: the continued positive NAV per share performance, making the first investments in those -- both of those private capital arrangements, and keeping executing towards that GBP 250 million exit target. So that's the sort of accountability piece. I would say that the second point, though, is more around pace and ambition. 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 3i, where he was Chief Executive, and many private markets companies, most recently Coller 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. Third-party interest and that shareholder engagement we saw during the summer underline 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 cash and per share returns. As Dave mentioned, we have approximately GBP 50 million 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. From our perspective, the principle is clear. We should allocate capital where it creates the best risk-adjusted per share outcomes. So I want to 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 your questions.

I'm going to try and group them. I'm looking at them as they're coming through. Some of them, 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 on that. But yes, that's...

I agree, exactly what I was going to say we'll have a go. So please don't be offended this year if I don't include your question. I've traditionally included every question. I'll do some grouping. And as Greg correctly said, I think we really -- we certainly covered off the capital allocation. I feel we've given a fairly good description around also the bid. So I probably won't do any more on those. So Kane [ Anderson ] Deutsche, love to have you with us, Kane, as always, lots of long questions -- or a long question with lots of complexity in it. Would you consider partially monetizing the Pfizer royalty interest at an attractive opportunity arose or is the intention to remain fully exposed given the potential upside of the programs' progress?

I hope I answered that one in full. We have a default position that we would hold it. But as the asset derisks over the course of the next sort of 12 to 18 months, and we think there could be opportunities that could be attractive. And absolutely, I always say to all the investment team, 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 question [indiscernible] I'm sorry. With respect to the portfolio companies still came, raises of which there's has been a lot. Do you think this reflects a genuine improvement in the funding environment or investors simply becoming more selective and concentrated into a smaller number of higher-quality assets?

Both [indiscernible] . I mean we're certainly seeing that in -- if you look at the broad statistics across the industry, there are some mega rounds that are attracting huge amounts of capital. I mean maybe a good example is Fusion. If you look at the analysis of the Fusion funding environment, quite a lot of capital has gone into that space. I haven't got the stats to hand, but it's in the billions. And there are 3, 4, 5 companies that have identified or have received a substantial amount of that capital with much of a thinner tail. Interestingly, a stat that we were looking at the other day in our analysis of this sector. And of course, 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 deliver the commercial milestones, it was something like 4x or 5x the amount of capital that's been raised even in this increased period. So I would say it is selective. The environment for certain of the sectors is strong. We see it as a good validation of the portfolio, and it's a metric that we track and report on for that reason.

And last piece, I can probably deal with this. This is related to the 43% of priced funding rounds which were down. People noticed in the report, we track how many funding rounds are up from the last one, how many flat, how many down, slightly more in this period. And the question was, should we think of this as a lagging effect from impairments or you recognize in prior periods or do you see pockets of valuation pressure across the portfolio? Funny enough, I don't want to read too much into it. By number -- by number it's slightly up into well the number that is down slightly increased, I should say. But actually, by value, it happens. And also it's important to note, I think, that this true, almost every year we'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 tending to run ahead of that. So where we think something might be down, we've already factored into our numbers. These aren't things that normally catch us out. Moving on a little bit. We've covered pretty well on the Metsera stuff, but the particular question just to clarify, question was the GBP 27 million uplift milestone. I guess they nearly all of it acted as a valuatin adjustment. There was a small milestone during the period. It was only about GBP 3 million. The next one back to you, Greg, I think, from Paul B. 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?

Yes, that's an interesting one. I would say I've hopefully tried to set out there was quite a breadth, both in terms of the larger portfolio companies and the other milestones and progress underneath that across each of the 3 main areas in which we invest. I didn't dwell too much on Hysata, for example, which is very much in the clean tech space, delivering, hopefully, its first commercial order for a megawatt-scale plant in South America in early 2027, first half of 2027. So we do see opportunity across all of them. I mean interestingly, your question actually is a great observation on what we're seeing in our opportunity set is actually quite a convergence of deep tech, clean tech, and health tech. So many of our opportunities touch those areas in different ways. So Oxa would be a good example. That is a company that has 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. So it's to -- that's one that probably doesn't touch health tech, for example. But if you look, that's a trend that we think is interesting and something that our multidisciplinary site-based approach hopefully gives us a competitive advantage in.

Thank you. Again, just to clarify from [ John B ]. Is the amylin -- does the amylin belong to the group? Yes, it does. I explained in the Metsera and that sort of IP Group owns a lot of the Pfizer weight loss franchise, quite a few parts, not just -- not just the lead programs, but the combination therapy and the prodrug and the GIPR. So it's quite a wide estate of about 6 different patent areas which we originate to at IP Group. Going back to -- the next one I would say from Lucas, 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 why the stock continues to trade at 40% discount level. And this is a question we talked about many times. What do you believe are the key reasons for this discount?

Well, yes, we've discussed this a lot -- that's part of the reason that we have the capital allocation program that we do. I mean, I guess there are broad ways we can reduce the discount over time. The first is simply delivery. Ultimately, discounts narrow when investors gain confidence that our NAV growth, our portfolio progress, our cash realizations are repeatable rather than one-offs. So that's why we've been so focused on the NAV per share growth, the exits, and the portfolio execution. The second is conversion. So 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 realized outcomes. And that's why we set that GBP 250 million cash exit target. I mean we felt that was an ambitious target. That was, I think, at the time, more than half our entire market cap that we said we were going to deliver in cash exits. And it's obviously why capital allocation remains such an important area of focus. And then I suppose the third, we're increasingly focused on the sort of the structure of 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, and how we can maximize the value. We definitely heard a range of views on that front during the summer, 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. I think that sustained delivery, the thoughtful shareholder-focused capital allocation, continued realizations, that seems to be the most credible route to narrowing it over time.

Yes. And [indiscernible] a 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 how his 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.

Yes. On the shares, yes, Michael was very keen to buy shares and bought them, I think, within a week of the end of the offer period. I bought a few more shares too. And I think that hopefully signifies to shareholders that we believe in the value of the group, believe that there is upside in the share price and voting with our capital. I'm very exposed to the IP Group share price as you would expect as shareholders. So it's my #1 KPI, obviously.

One from also an analyst, nice to have you with us today. How much M&A upside do you see for pre-commercial stage biotech companies from big pharma.