Allied Minds is an IP commercialisation company with a concentrated investment portfolio focused on early-stage companies within life sciences and technology. Its portfolio companies are spin-outs from US federal government laboratories and universities.
Allied Minds has announced that Jill Smith is stepping down as president and CEO, with Mike Turner (general counsel) and Joe Pignato (CFO) stepping up to become co-CEOs in addition to their existing roles. This further reduces costs in line with the company’s narrower strategic scope. Otherwise, previously announced cost-reduction measures are proceeding as planned and the only portfolio update was to confirm that Allied Minds is hopeful of successful funding rounds at HawkEye 360 and Federated Wireless in the near term. The shares trade at a 12% discount to our estimate of FY18 NAV and, with clear milestones for the core assets in 2019, the investment thesis remains focused on the prospects for HawkEye 360, Federated Wireless and Spin Memory.
Investor sentiment towards the IPC sector in general has remained negative with stocks typically trading at a meaningful discount to NAV. In 2019, investor frustration at a lack of material exits/value realisation across the sector are only likely to intensify leading to greater differentiation between stocks that offer the potential for meaningful exits in a realistic timeframe and those that do not.