Shares in State-backed Malin hit an all-time low yesterday to leave taxpayers nursing a loss of 30pc on the initial investment.
Malin’s shares lost 3.45pc in trading yesterday to close at €7, and at one stage plunged below €7 for the first time to hit €6.60.
The State’s Ireland Strategic Investment Fund (ISIF) invested €50m in Malin at the time of its IPO in 2015, at an IPO price of €10 per share.
The company has raised money in a number of subsequent share placings since then, and ISIF has declined to follow its money in at least one, which took place in May 2017.
Last month, Malin CEO Adrian Howd sold almost €300,000 of shares in the company, which was established to invest in innovative life sciences companies.
One its major problems has been the performance of Novan, a flagship initial investment whose share price collapsed after poor results in clinical trials of its lead product, designed for the treatment of severe acne.
With just €14m in cash left on its balance sheet at the end of last year, raising the prospect that the company may not have as much funding as it would like for follow-on investments, Malin raised almost €30m from investors at €8.88 a share in January.
Writing to investors in March, Dr Howd said he was hopeful the company’s balance sheet would be “further augmented by inflows in the year ahead”.
The company also said at that time that it was talking to the European Investment Bank, a long-term lender owned by the EU member states, about “a possible amendment of the terms of our debt facility to better align its structure with our business needs”.
Dr Howd told shareholders the company’s share-price performance in the second half of 2017 was “particularly poor”.
“A key focus of mine is to work with the management team to close the gap between intrinsic value and share price,” he said.
Dr Howd was Malin boss at the time of its €330m IPO in 2015. He later moved to the role of chief investment officer and was replaced by former Elan chief executive Kelly Martin, a founder of the business. Dr Howd reassumed the role of CEO last October after Mr Martin exited, with a severance package of €3.2m in cash.
Another of the key investors in Malin, alongside ISIF, is Woodford Investment Management, run by high-profile London hedge fund manager Neil Woodford. It did not comment yesterday on whether it was a seller. ISIF does not comment on its investments.
Since becoming CEO, Dr Howd has closed the company’s office in the US and said he expects operating spend to be roughly a third lower in 2018, at €12m.
“I have re-positioned the business and its resources on the assets with the greatest source of actionable upside and value for our shareholders,” Dr Howd said earlier this year.
“I also implemented a restructuring of our business to align the infrastructure with the resources required for the current phase of the journey,” he said in the company’s annual report.
ISIF has said its decision to invest in Malin achieved significant commitments from the company to invest in Ireland.
“These commitments would not have been achieved by private-sector investors and are an example of ISIF’s ability to act as a catalyst for attracting investment into Ireland.”
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