Sale of Araris Biotech
Schroders Capital Global Innovation Trust Plc
Sale of Araris Biotech
Schroders Capital Global Innovation Trust plc (the "Company") is pleased to announce that its portfolio company Araris Biotech AG ("Araris"), a Swiss biotechnology company developing next-generation antibody drug conjugates ("ADCs"), on 17 March 2025, has entered into an agreement to be acquired by Taiho Pharmaceutical Co. Ltd., at a purchase price of $400 million upfront, with the potential for additional milestone payments of up to $740 million. Following necessary procedures, the acquisition is expected to be completed in first half of 2025.
Schroders Capital was among the first investors in Araris as part of its CHF 2.5m seed round in 2019. In October 2022, the Company made a CHF 3.0m (£2.6m) investment into Araris, to support the further development and advancement of Araris' ADC candidates, created using its proprietary linker technology. The upfront will generate a distribution of approximately $24.3m (£18.7m) at closing (7.2x upfront gross multiple of invested capital ("MoIC")), and potential additional distributions of up to $43.6m (£33.7m) subject to near and long-term milestones (20.2x total gross MoIC).
Based on the valuation implied by the up-front purchase consideration, near-term milestone potential and accounting for specific closing adjustments according to the Company's valuation policy, the estimated value of its holding would approximately be £19.5m. This represents a positive valuation revision of £16.7m compared to its last published carrying value of £2.8m as of 30 September 2024. The overall impact on the Company's net asset value will be evaluated as part of the Company's 31 March 2025 net asset value publication.
The full upfront proceeds from the sale are expected to be added to the previously disclosed intended initial return of capital, increasing the total from approximately £10 million to £28.7 million, and hence the initial return of capital will take place shortly following the receipt of initial proceeds from this transaction.
Schroders Capital have made 19 new investments since being appointed Investment Manager in 2019. This is the fourth exit that builds on the exits of Carmot Therapeutics at 3.2x gross MoIC, Tessian at 1.1x gross MoIC and Anthos Therapeutics at 1.9x gross MoIC (with the potential to increase to 3.4x gross MoIC with milestones). This brings the realized track record of new investments made by Schroders Capital to 3.3x gross MoIC (with potential upside through further earnouts to 6.3x gross MoIC).
Tim Creed, Lead Portfolio Manager, and Harry Raikes, Co-Portfolio Manager commented: "We chose to invest in Araris Biotech based on its compelling platform, with potential best-in-class antibody drug conjugates ("ADC's") with superior design, high linker solubility and simple manufacturing that address the shortcomings of current generation ADCs. Overall, the company fulfilled our four key investment criteria: a strong management team, a significant market opportunity, high quality science and reputable co-investors. We are delighted by the news of this sale which reflects the unique nature of the Araris platform."
Enquiries
Schroder Investment Management Limited
Katherine Fyfe (Company Secretary) 0207 658 3136
Charlotte Banks (Press) 0207 658 9063
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