Monday, November 13, 2000
Rothschild Asset Management no longer holds the strings to
International Biotech Trust (LSE:IBT). Last week, the biotech investment company
appointed Schroder Ventures, the private equity group, as investment advisers
and overseers to the trust's administration.
The move comes after a summer in which IBT succumbed to calls
from Millennium Offshore Partners to return cash to the shareholders. Kate Bingham,
general partner of Schroder Ventures Life Sciences (SVLS), told Ebb & Flow
that "the trust plans to return 50 percent of its net value." The cash will
come from the 100 million ($145 million) in IBT accounts earned from recent
divestments including MorphoSys (NMarkt:MOR), Medarex (MEDX), and Cubist (CBST).
Further cash will be gleaned from sales of minor positions in non-core investments,
such as Amgen (AMGN) and Biogen (BGEN). Millennium Partners held an 11.2 percent
interest in the trust at Nov. 3, when the trust's diluted net asset value stood
at 401.66p per share.
Bingham plans to make the Trust more pragmatic by enabling it to exit investments earlier than it has in the past. In these terms IBT is looking at options that could include stopping the fund's practice of taking board seats in many of its companies, or stepping down from current board seats, or even introducing a policy of not taking board seats. "Many of the past problems for IBT centered around not being able to exit from companies due to IBT's board position," said Bingham. "Previously, in some stocks that have been fully valued IBT should have been able to exit, but the Trust's board position made this difficult."
The majority of IBT's investments are in publicly quoted biotech companies in the U.S. and there are no plans to change this strategy in the short term. However, Bingham plans to make IBT more international by possibly putting up to 40 percent of holdings in Europe. She also expects to put some weight into unquoted companies.
Indeed, IBT's move to SVLS forms the basis for a biotech investment continuum. SVLS invests in young companies and exits at IPO. IBT, with its publicly quoted emphasis, will be able to take a cornerstone position in any SVLS-backed IPO.
Schroder Ventures now advises 25 buyout and venture capital funds, with combined commitments of $7.5 billion.
Meanwhile, Rothschild Asset Management (RSM) said it is considering plans to launch a new investment vehicle in order to utilize the bioscience investment expertise within the Rothschild Bioscience Unit.
New to market
(NMercato:NOV) was off E1.95
at the close of its first week trading following an IPO that was four times
oversubscribed (see B17). The cancer company, a spinout emanating from
the Hoffmann-La Roche acquisition of Boehringer Mannheim, has two cytotoxic
compounds in Phase II testing. The deal raised E164
million ($142.2 million) through the sale of 2.05 million shares at E80
($69.37). Bankers to the deal were SG Cowen and Bank IMI with Close Brothers
as placing agent. NOV closed with a market cap of E512
million ($444 million).