IP Group (LON:IPO) reported higher net asset value, strong cash realizations and broad portfolio activity in the first half of 2026, while management said it remains focused on converting portfolio value into shareholder returns.
Net asset value per share increased 3.2% during the half year to 114p, taking total NAV above £1 billion. Chief Executive Greg Smith said NAV per share had subsequently risen to approximately 117p as of Sept. 11, principally reflecting a higher valuation of its listed Oxford Nanopore holding.
Pfizer Royalty Interest Drives NAV Gain
The largest contributor to the half-year valuation gain was IP Group’s royalty interest in Pfizer’s obesity treatment programs. The carrying value of the interest increased by £27 million to just over £150 million after Pfizer’s berobenatide and amylin combination advanced into a Phase IIb clinical trial.
Smith said Pfizer had reported positive data from its lead berobenatide program, including competitive weight-loss efficacy and favorable tolerability, while supporting the potential for monthly maintenance dosing. Pfizer is progressing 10 Phase III studies this year and is targeting a potential launch in 2028. Pfizer also indicated that patient recruitment for essentially all berobenatide Phase III studies was close to completion, Smith said.
David Baynes, IP Group’s chief financial and operating officer, said the company uses probability-weighted valuations for the royalty asset. The lead berobenatide monotherapy program remained at the same valuation because it continues in Phase III trials. However, the estimated probability for the combination therapy rose from 25% to 39% after it entered Phase IIb, producing most of the £27 million increase.
IP Group also has exposure to other Pfizer obesity programs, including an amylin monotherapy and earlier-stage oral, prodrug and GIPR programs. Baynes said two Phase I assets were not currently assigned value in the company’s model because they remained too early-stage.
Smith said the company’s default strategy is to retain the royalty interest and receive royalties if the programs proceed as expected, though it would consider opportunities to partially monetize the position if an attractive proposal emerged.
Portfolio Companies Raise Capital and Report Milestones
Portfolio companies raised more than £500 million from third-party investors during the half, with IP Group contributing approximately 5% of that capital. Smith said the fundraising activity represented external validation of portfolio companies as they advance, although he acknowledged that investors remain selective and capital is concentrated among a smaller number of businesses in some sectors.
Oxford Nanopore reported £117 million of revenue, representing 12% constant-currency growth, alongside a 400-basis-point improvement in gross margin to 62%. Its adjusted EBITDA loss more than halved to just over £22 million. Smith said the company remains on track for EBIT break-even in 2027 and positive free cash flow in 2028.
Oxford Nanopore also entered a cross-licensing agreement with a global diagnostics company that includes $35 million of committed revenue over the next several years and potential ongoing royalties. Smith said those royalties were not included in the company’s medium-term guidance.
Elsewhere, Quantum Motion, Quantum Circuits and Oxa completed financing rounds; First Light Fusion and Mantle8 raised capital; and Hysata secured its first binding megawatt-scale commercial electrolyzer order. Hysata expects to deliver the order in the first half of 2027.
Smith highlighted Oxa’s joint venture with Dubai Future Foundation, called Shift, which is intended to deploy autonomous vehicles in ports and airports. The first scalable commercial deployment is planned before the end of 2027, although Smith said management’s near-term priority was disciplined execution and securing early deployments.
Realizations and Capital Position
Key contributors to first-half proceeds included Monolith, Centessa and Hinge Health. IP Group has generated total proceeds of £46 million from Hinge Health following its 2025 initial public offering, representing a 50-times multiple of invested capital and almost a 50% internal rate of return, Smith said.
Monolith, acquired by CoreWeave, generated approximately £23 million of proceeds during 2026 and has delivered an overall IRR above 50%, according to the company. IP Group also completed its remaining sale of Centessa shares after Eli Lilly acquired Centessa for approximately $6 billion upfront, with up to a further $1.5 billion in potential milestones. Smith said IP Group’s investment generated a realized IRR of about 24%, with potential contingent-value-right payments of £3 million to £4 million.
The company ended June with £239 million to £240 million of gross cash and deposits. Baynes said IP Group invested approximately £30 million during the half, but proceeds from exits more than offset investments and costs. Gross cash increased over the period, while the total portfolio value remained broadly unchanged at about £907 million to £908 million.
Baynes said annual overheads were expected to rise modestly from just under £16 million in 2025 to about £17 million this year, largely due to inflation.
Third-Party Funds and Shareholder Returns
IP Group said it manages approximately £550 million of third-party capital through Parkwalk, Hostplus and other fund arrangements. During the period, the company continued to develop its relationship with Aberdeen, with the initial portfolio expected to be operating by year-end. It also launched the £50 million IP Group Climate Catalyst Fund with Australia’s Clean Energy Finance Corporation, which is expected to begin investing by the end of 2026.
Smith said the company is considering ways to accelerate realizations, sharpen capital allocation and increase per-share returns following shareholder engagement during the summer and the appointment of Michael Queen as chair. He said around £50 million of realization proceeds was available for future shareholder returns under the company’s board-approved capital allocation policy.
“Our priority is execution and converting that opportunity into outcomes that shareholders can see and measure,” Smith said.
About IP Group (LON:IPO)
IP Group accelerates the impact of science for a better future. As the most active UK based, early-stage science investor, we develop and support some of the world’s most exciting businesses in deeptech, life sciences and cleantech (led by Kiko Ventures). Through Parkwalk, the UK’s largest growth EIS fund manager, we also back world-changing innovation emerging in leading universities and research institutions. Our specialist investment team combines sector expertise with an international approach.
