Malin Corporation, the Dublin-based life sciences investment firm, saw its share soar 37 per cent in early trading on Tuesday after the company behind its most valuable investment agreed to be taken over by Swiss pharmaceuticals giant Roche.
Poseida, a Nasdaq-listed clinical stage biopharma company in which Malin holds a 12 per cent stake, revealed before European equity markets opened that it will be bought by Roche in a cash deal worth up to $1.5 billion (€1.4 billion).
Shareholders are set to receive $9 per share at the closing of the deal early next year, and much as $4 per share subject to Poseida, which has a number of treatments in clinical trials as it focuses on the fields of oncology, immunology, and neurology.
Malin said it expects to receive about $106.5 million from an upfront payment and up to a further $47.3 million in time. The deal is valued a multiple of the most recent value Malin put on its stake, of €33.7 million on November 8th.
Malin has moved to scrap a plan, unveiled only weeks ago, to buy back €45 million of shares at €6.65 each, as the Poseida deal has pushed the intrinsic value of the Dublin-listed company’s shares up to €10.17.
The sale will accelerate the ultimate winddown of Malin, which has returned more than €220 million of excess capital to shareholders over the past three years as it sold down other investments, including stakes Immunocore, which is focused on developing cancer treatments, and eczema-targeting Kymab.
The now-abandoned €45 million buyback was planned as a way of handing out proceeds from Malin’s sale of its stake in a company called CG Oncology.
Malin’s market value stood at €156 million in morning trading on Tuesday, following the share price spike.
“Malin’s portfolio now consists of its unlisted investments in Viamet, Xenex and Kymab, which had a combined value of €26.6m on August 22nd,” said Colin Grant, an analyst with Davy.
“We estimate that its pro forma cash balance is now €164.5m, including the proceeds from the sale of its stake in Poseida.”
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