Alis Biosciences is focused on returning trapped capital to investors. We protect the interests of acquired company shareholders by providing a mechanism to return capital and resuscitate viable science, creating a novel and much-needed market safety net that may end up boosting investment in high tech healthcare.
Currently, there are significant market inefficiencies that leave capital locked in listed, development stage life sciences and biotech companies that have experienced setbacks – typically a failure in clinical trials or unsuccessful commercial launch of its lead programme.
Following an often immediate and sharp decline in the stock price, and consequent further loss of stock liquidity, these companies are left with cash on the balance sheet far in excess of the current market capitalisation (negative Enterprise Value), no commensurate growth or near-term development prospects, with no efficient and timely mechanism to return cash to investors.
The options are limited: the companies can either wind up, which can take at least a year and is expensive, or continue utilising remaining cash resources in the hope of achieving a positive outcome in its other scientific programmes; this second step is often less attractive to investors due to the change in the investment thesis and/or a poor track record of value creation.
In early 2025, there are nearly 300 companies worldwide with trapped capital estimated to be worth over USD$30 billion, with market caps ranging from USD$5 million to USD$100 million and cash reserves ranging from USD$10 million to USD$400 million.
Founded by seasoned industry and investment executives Nicholas Johnston and Chair, Annalisa Jenkins, the highly experienced and scientifically knowledgeable team work collaboratively with shareholders, management, and boards. Alis Biosciences’ flexible approach offers a range of innovative, and adaptable, structures to provide a mechanism to return capital to shareholders, while also allowing stakeholders the option to further develop residual science and IP if appropriate. The goal is to protect public shareholders’ funds while still supporting company management and boards.
The Fund is designed to include flexible, innovative and adaptable structures that provide public companies with a mechanism to return trapped capital to their shareholders, while also allowing stakeholders the option to develop IP further if it shows potential. Alis Biosciences will make acquisitions at or near to the current market value for equity in the acquiring entity. While each transaction is bespoke, Alis Biosciences’ approach is guided by three innovative, and adaptable, overarching structures which provide a mechanism to return capital to shareholders.
Alis Biosciences will approach the Board and management of each target company and mutually agree the optimum structure to deploy. Alis Biosciences will then seek to delist the company from the public market with the agreement of its shareholders in the normal way. Each delisted company’s cash and IP will be held in individual Special Purpose Vehicles (“SPV”) which are managed by Alis Biosciences. Applicable cash will then be returned to shareholders immediately, with the IP either developed or sold using one of the following structures.
Structure A returns most of the uncommitted cash to shareholders (e.g. 97%), with the company then sold back to certain shareholders or stakeholders who wish to further develop any residual science. Alis Biosciences will retain a small stake with any upside from its stake shared across these shareholders.
Structure B returns the vast majority of uncommitted cash to shareholders (e.g. 95%), leaving only enough to manage the structured wind-down of the company. Alis Biosciences keeps the IP associated with this company. This process will be far quicker than any bankruptcy process.
Structure C leaves enough cash in the acquiring vehicle (e.g. 40% of cash balance), to allow Alis Biosciences to fund further clinical programmes, with the remaining 60% of cash immediately returned to shareholders along with an equity interest in Alis Biosciences. The proceeds from any clinical success will then be retained by participating contingent value rights and by retaining shares in Alis Biosciences. In the near term, Alis Biosciences will seek a public market listing that will allow it to offer this Structure.
Multiomic analysis will be used to validate the residual IP within companies to determine whether a positive outcome is achievable. The feedback from this work, carried out over a relatively short period of time, will then be used to determine whether a different path forward is possible for any of the residual IP left within a particular company.
