Ip Group (LSE:IPO) — Shareholder Event (9.30am) - Annual General Meeting (11am)

0:00 Right. Good morning, everyone. Welcome to another IP GROUP investor engagement event. This one is one that we've done to coincide with our AGM. The AGM, formal AGM, happens later at 11:00 this morning, but we thought we'd take the opportunity to engage with shareholders, both here in the room. So welcome, everybody. Great to see so many familiar faces, a few new faces, which is definitely something that we're really trying very hard as a management team to attract new buyers to, the IP GROUP stock, very helpful to have our friends from Berenberg, from Numis, from Bank of America here who are obviously helping us, on that journey. I had five minutes for a quick introduction, but we sort of started a couple of minutes late. So I currently have about a minute and ten seconds, for which I've got about four slides. So I'll go sort of as swiftly as I can. The job really I've got to do is to welcome everybody to this, but I wanted to just remind everyone, about our investor engagement. So this is a, a slightly updated slide from the one that we had. You'll remember if you dialed in or came to our full year results presentation back in March, we said, look, we've got a really active program of IR and Citi engagement and that we're going to take everybody through over the course of this year.

1:09 And we highlighted a whole number of them that have little asterisks by them, which we are doing for all shareholders, and we're doing those, both physically and online via the Investor Me Company platform, which is obviously what we're using today. Thanks very much to Mark and team as always for, hosting so professionally. You can see we've already done a few of those, and we had a very successful, in person event, our flagship, our first annual flagship science event, which was really about showcasing the amazing businesses and the amazing entrepreneurs, the amazing co investors that we've got in our portfolio and in our wider ecosystem. There was a fantastic event that we held at the science museum. Few members of the IP GROUP team, particularly, Joyce Z, pulled that together for us. It was part of our efforts at at IP GROUP.

1:56 We like to do things a little bit differently. So rather than having a whole bunch of companies present, we had a a panel discussion about what The UK can do to both nurture, but fundamentally and importantly, scale up companies that we've become very good at creating. There's many, many examples in the IP GROUP portfolio that can benefit from that trend. So there are a number more to come. We'll keep ticking these off. You can see there's some for the second half around clean tech and around ESG. I thought I'd just refresh everybody's memory. Again, this is a slide from the full year results presentation as to why do you hold a share in IP group? What's the point? What do we offer you? And there are four particular strengths or skill sets that we have within IP GROUP, which we highlight here.

2:45 We focus everything that we do around a deep expertise in our sectors that we operate in. We operate in three sectors, as you'll probably all know. Look for businesses that contribute to a healthier future, a regenerative future, and a tech enriched future. In sort of English, I guess that's clean tech, life sciences, deep tech. We really focus everything that we do on impact. We're looking for companies that address a big societal need, a big market opportunity, and that are overlaid with a deep technical solution to that, and we pride ourselves on being able to understand and price and take technology risk, and that's where we fit into the ecosystem. But we've done work with Berenberg over the years and with others to map our portfolio onto the SDGs and to help people who want to get impactful returns alongside financial returns to be able to understand and hold IP GROUP, and you'll notice if you look at our share register, the number of people who are impact focused is increasing, and so that's something that we think will be a trend to continue. And we're an international group. Some of the questions that came in on the AGM, which I'll cover later as part of the AGM around what's going on in Australia, what's going on in The US, I can talk to that. The reason we have an international group is really threefold.

3:54 One is for access to deal flow and innovation so we can compare the best stuff that's happening here in The UK, that's happening in The US, and happening in Australia. The second is around talent, so moving top teams and individuals around those those countries, particularly in the English speaking world. And the third, and I think where we've had probably most success on this front, is around accessing international capital, particularly in Australia where we have a partnership with Hostplus. We now manage about 300,000,000 Aussie dollars for them, and they're interested in investing in the portfolio internationally. And that's something that The UK is trying to have its position in the world as being the most international capital markets. IP GROUP sort of plays that role for our portfolio companies. Then the fourth is this permanent capital structure. This has its benefits, and it it definitely has its challenges, but we're trying to do things and have tried to do things differently, and we we think that offers significant benefits over, fixed life funds, particularly for the duration of investments that we are making.

4:51 Of course, it means we have to try and balance our capital allocation between shareholder returns in a cash form and shareholder returns on in a capital form, and we're trying to do that in a sustainable way. And that's led to us having a portfolio which is, sort of diverse but focused on those three themes. And as I set out at the full year, each of those three themes has very clear value creation milestones, over the coming, one to two years. And I know Odysseus has written about them and we've covered them. I go back over them again. So these are the three sectors. The point of today, and you'll remember in the slide that we showed, we did have a life sciences investor event earlier this year that was planned. We had to move that, for for personal reasons, and so we thought we'd take the opportunity to focus today on life sciences. I'm delighted that we've got Sam Williams, who is our managing partner of our life sciences team here in The UK, and I'm also delighted that we've got professor, sir Peter Donnelley, I think that's the right order of the titles, who heads up Genomics PLC, and, doctor Gordon Sangara, who will be having a q and a, who leads, Oxford Nanopore.

5:57 Just a reminder, these are some of the inflection points we highlighted at the full year, trying to just sort of focus down progress on a handful of companies in the three sectors in which we operate, and we may well come back to these in Q and A. But today, you're going to be hearing about both Oxford Nanopore, genomics, and Sam will definitely update, on progress at ESTESO. So with that, thanks everyone for joining, and I'll I'll hand over to to Sam to update on the life sciences portfolio. Thanks, Greg. So, yeah, so good morning. So, yeah, I'm Sam Williams, head of life sciences at IP GROUP. And, what how does this work?

6:35 There we go. Right. So I wanna talk about a simple principle that underpins our approach to investment in life sciences, and it's illustrated by this graph here, which plots the cost of treating disease as a function of the time at which we start to treat disease. And it might not surprise you to see that when we intervene in disease early on, start treating it early, the cost of that treatment is low. And the longer we leave disease to develop before we start treating it, the cost goes up. And that is obviously because the disease becomes more severe, develops complications, all of which also have to be treated. Patient might require hospitalization or even a visit to the ICU, which is all very expensive.

7:23 And, in the worst case, we may actually end up treating the patient towards an inevitable mortality event, which then, of course, the cost is not just about dollars, but also about lives. So you might think, well, obviously, the way to treat a a way to practice health care would be on the left hand side of this curve, but that's not the way the Western world, manages health care. At the moment, largely, our approach to health care is reactive. I we treat disease once it's diagnosed, once it's established, and once it's become chronic. And that's what the medics would call in more technical terms, episodic treatment of established chronic disease. And it's a very expensive undertaking. It requires huge hospitals, for example, because patients with developed disease and chronic disease, they need large inpatient and outpatient facilities. That's why we have these enormous regional hospitals up and down the country, and it's very expensive. It's an incredibly inefficient.

8:21 So I'll give you some examples. Currently, there are thousands of people every day, being treated in The UK for late stage or stage four cancer, and typically to give them another three or four months of life. Now those three or four months of life are priceless, and we should absolutely pay to give those people that that, those extra months. But it's an incredibly inefficient use of money. If you imagine how much more efficient it would be to use that money to treat those patients early on in the development of their cancer before their cancer has really even started developing. And then you could not just treat one patient for the cost of treating one patient at a later stage, could treat several patients very early on. Another example is in mental health. There are currently 20,000 NHS beds occupied peep occupied by people with mental health issues where arguably we could have diagnosed their mental health issue much earlier and provided the counseling and therapy needed to provide resolution before they had to be hospitalized and put in a bed. Probably the most striking example is in cardiovascular disease.

9:27 So every year in The United States, several hundred thousand people suffer from a heart attack, and a number of those have to be hospitalized. And the average cost of treating someone after heart attack for the first ninety days is $38,000. So if you do the math, it's no surprise that the annual cost to The US health care system of heart attack is a $120,000,000,000.

9:54 So you might ask, well, how is this happening? Why are we treating disease so late on, in its cycle, in its life cycle? And, and particularly in cardiovascular disease where we know there are drugs, for example, that can reduce the risk of a heart attack or a stroke. The statins, the newer class of p c, s k nine inhibitors, for example, both of which have been clinically proven to reduce risk, and yet they're clearly not being used as widely as they should be because people are still having heart attacks. And I just wanna give you an explanation or some parts of the explanation of that. So this is the standard protocol that is used in The United States for determining if someone is at risk of a heart attack or stroke, a major adverse cardiovascular event. And you can see it's quite a basic set of questions, nine questions.

10:43 What sex are you? What age? What race? Do you have diabetes? What's your blood pressure? What's your cholesterol? So and this has been in in in force for quite a long time. It hasn't changed that much. And what's really striking is despite everything we read every day about the advent of genetics and new discoveries of genes and disease and so on, there's not a single piece of genetic information here. And that's despite the fact that we know DNA underlies all of biological activity and probably most of disease. We've also had the human genome for more than twenty years now. There are people in this room who have spent their lives analyzing, identifying, and publishing in peer reviewed journals genetic risk factors that are associated with cardiovascular disease. There are also people in this room who've developed techniques for analyzing DNA with handheld devices that can be done anywhere. It can be done in a GP surgery, could be done in a hospital, It could be done in this room, on a laptop, or even probably soon your phone.

11:42 And yet none of that is included here. So this isn't to blame anyone. There's no nobody single person you could point the finger at. But what it just tells you is there's a huge amount of improvement could be made here, and thereby, in the case of cardiovascular disease, reducing the number of heart attacks, reducing mortality, and reducing cost. So, clearly, what we want to do is move to the left hand side of the curve and and be into what we would call proactive health care. And this isn't a new phenomenon. This isn't a new concept. This is the world is waking up to this. The The UK is particularly, forward thinking in this area. So this is the motivation behind, for example, the availability now of the GRAIL genetic test for cancer, which is available through the NHS and allows for the very early detection of cancer so that treatment can start in an appropriate fashion.

12:36 Also, it's the motivation behind our future health, which is a UK government NHS, backed initiative to, genotype over five million UK individuals over the next five years and to correlate their genotype with their health care progression. So how do we at IP GROUP, play a part here? So we are focused on, four pillars to our investment strategy. And if you want to develop products and devices and diagnostics and drugs that allow you to intervene very early in disease and potentially stop disease even from occurring in the first place, you need a fundamental understanding of the biology underlying disease. So we are investing, as the first part of our strategy, in companies that are understanding fundamental processes underlying disease. So genomics, for example, and Peter will talk shortly, but genomics is involved in identifying genetic risk factors behind a number of diseases, cardiovascular, autoimmunity, cancer, and and, diabetes.

13:40 Microbiota is identifying strains of bacteria in the human gut that are associated with predisposition to cancer and, inflammatory bowel disease, for example. And then AESO in the mental health space is identifying patterns of speech that can be

13:56 associated with the development of mental health issues. And when you have all of that sort of information, what you would try to do is develop drugs and products that can intervene in a disease at an early stage, but you need to do something that conventional drugs don't do. You need to have drugs that will change the way that cells and tissues behave, almost reprogram, their behavior so that you can intervene in a more sensitive manner and you can intervene at an earlier stage in a disease. And we are doing that through, for example, our investments, in Esteso. Esteso has a new technology which, reprograms the way the immune system behaves, has a phase 2b drug, a first in class, which we'll read out from a phase 2b study in the second in the first half of next year. We have Mission Therapeutics, which is applying a similar approach across a whole range of different disease areas.

14:51 We have companies like Akemos Bio in the gene therapy space and Crescendo Biologics in the monoclonal antibody space who are developing products that help recondition the way that tissues behave. And then finally, we like to think about redirecting people's behavior away from a disease state. So coming back to genomics and AESO, genomics is applying its genetic analysis to providing algorithms and tools that can be used so that people can avoid, developing disease in the first place. Similarly, ISO, algorithm tools that will allow people to avoid a more serious mental health state. And then when I think about Oxford Nanopore, Oxford Nanopore is providing the the the methods, the hardware, and the software, and the techniques that can be used in every setting to understand DNA. And, of course, DNA is fundamental to all of this.

15:44 So this may all sound quite a long way off, but in fact, it's actually gonna we're gonna have quite a few results from this approach over the next couple of years. So this is the therapeutics, part of our life science portfolio. 12 of our companies now have clinical stage products, Eight of those are going to read out over the next couple of years. Those will be data from phase one, phase two, and phase three studies, but each of those will be very important in terms of determining the fate of those companies. If positive, we believe will be very significant for those companies in terms of the ability to transact with the pharmaceutical industry, potentially, IPO if the markets are there, or raise money at a significantly increased valuation.

16:29 So it's a very exciting time to be exposed to our portfolio. So with that, I am going to hand over to, Peter. I just wanna say a few words about Peter. Peter, worked with him now in genomics PLC for for a few years. He's a great colleague, fantastic entrepreneur. He is, though, one of the world's preeminent geneticists. He's dedicated his life to the understanding of, genes and genetics in disease, and and and he's applying his life's work to, practicing that in the health care space, through genomics. So, Peter, over to you.

17:13 Thanks very much, Sam, and it's a great pleasure to be here and to have the chance to tell you a little bit about what we're doing in genomics, and it, nicely, follows on from a number of the key points that Sam made. Just to set the context in terms of genetics and health care, genetics plays into health care currently largely through serious rare conditions. So, people often very ill, usually after a long diagnostic odyssey, often young kids, where it's thought that the cause of their condition finally thought the cause of their condition might be genetic. And genetic technologies like, the one Gordon and his colleagues at Oxford Nanopore have developed now allowed us allow us to read their DNA, their entire genome, to find the one or maybe two positions that are causing that, set of symptoms.

18:02 So that's what we call genomic medicine. It feeds into clinical genetics within healthcare. It is, as I said, about late stage after a long diagnostic odyssey. When you find the mutations, it closes the diagnostic odyssey. You have a diagnosis for the condition sometimes, but not very often. It will also inform on treatment. The other area in which genetics plays into healthcare currently is in sequencing of tumors, again, in people who are already very ill with cancer, trying to find the mutation or mutations which are driving the growth of their particular tumor to choose therapies. So that's what I think of as the first wave of genetics in healthcare. What we're focused on is the second wave, and it's all about meeting the challenge that Sam set, which is how do we move healthcare upstream instead of looking after people late stage when they're very ill into prevention.

18:53 So it's different in many ways from the way genetics is currently being used. First of all, it's not rare diseases. It's all of the common diseases. It's heart disease, diabetes, the common cancers, breast cancer, bowel cancer, prostate cancer, the diseases which use 70% of health care budgets and which are responsible for most mortality and morbidity in our populations. So it's, it's common diseases, not rare diseases. It's about doing the genetics when people are healthy, not when they're ill, and it's about using the genetics to understand for each of us what our particular risks are in order that we and our health care systems can funnel us into the right pathways in the health care side and, lifestyle changes on our own part. And finally, you don't need, I mean, in time, we'll all be using technologies like, Nanopore or other sequence technologies, but in the short term, you can use a much cheaper technology to get the genetic information.

19:47 Why is this important? It's important because genetics is a major risk factor for all of those common diseases. We've known that for many, many years, as I'll explain in a minute, it's only recently we've been able to measure it. So genetics is a major risk factor, for some diseases it's the major risk factor, for some it's really all you need to measure. So the figure on the right here relates to breast cancer. Each row is a known risk factor for a woman for breast cancer, so her age, her BMI, whether she's had hormone replacement therapy, and so on. And the size of the bar and the number is a measure of how predictive that risk factor is in terms of the woman developing breast cancer. The third bar from the top is how powerful a predictor you can make if you use all known risk factors. The second bar from the top is how powerful you can get in terms of prediction if you only use genetics.

20:37 So genetics by itself is much more powerful at prediction than all of the other known risk factors we have. And the top bar says actually if you add in all the known risk factors to genetics, you improve prediction, but only by a tiny amount. So at a population scale if you want to understand risk for breast cancer for example, and this is true for many of the other cancers, genetics is effectively all you need to understand. I said until recently we didn't have a way of quantifying this. We do now via something called apologetic risk score. So the simple idea here is that we've learned from twenty years of genetic studies that for a disease like heart disease, any of the common diseases, there's not one gene that matters, there aren't two genes that matters. There are something like a million places in our DNA. Each one of those million places affects our risk of heart disease, but any one of them affects our risk in a tiny, to a tiny degree.

21:27 So we now have enough data for each of the diseases to be able to work out what are the million positions which matter for heart disease, what are the million which matter for breast cancer, they'll be different, and a different million for diabetes and so on. To measure them, and we can do that with one test, which is actually very inexpensive and it needs to be done once in a person's life, and then to use sophisticated algorithms using machine learning, which combine that information to get a single overall score of someone's risk for disease. That's what apologetic risk score is. So the figure on the right gives a sense of the impact of this. We've locked down the score using our data and our proprietary methods. We take that score into an independent set, not used for training the algorithm, an independent set of a 100,000 individuals in UK Biobank, in this case men, and we're focused on heart disease, and we just look at their health outcomes.

22:14 The red curve are the men in the top of the polygenic risk distribution, so those with the highest genetic risk. The blue curve are those at the bottom of the distribution, the lowest genetic risk, and the green curve are those with median risk. So what you can see is that for the high risk men, shown by the red curve, their lifetime risk of heart disease is over forty percent. For the low risk men based on genetics, their lifetime risk is two or three percent. Massive differences in risk. And the horizontal line shows you that if you're a high risk man, your risk in your in your mid forties is about the same as the typical man's risk in his mid sixties. So that risk accrues much earlier in life. This is a slide, that illustrates predictive power across many diseases. So each row here is a disease.

23:03 Distance to the right is a measure of how powerful the risk score is as a predictor, and each dot is a polygenic risk score. The gray dots are the ones developed by the specialist academic groups, the colored dots which aren't green are the ones developed by other companies, and the green dots are all the ones we've developed. So two things for you to notice. The first one is that there are differences across disease in our ability to predict, and the second one, a commercial point from our perspective, is we've got the best technology. For every single disease, our prediction is more powerful than all of the alternatives. How does that, impact on health outcomes? So I said a minute ago for heart disease, and this is the 20x in the middle of the top row, people who are high risk, men who are high risk are about 20 times more likely to develop heart disease by age 70 than men who are low risk.

23:53 For prostate cancer, that differential is 40 fold. Men with high polygenic risk for prostate cancer are forty times more likely to develop it than men who are low risk. For diabetes and atrial fibrillation, it's about 30 fold. For breast and bowel cancer, it's 10 or 15 fold. Really big differences in risk when you use

24:10 the right powerful predictors. So that's a snapshot of the technology. I want to talk a little bit now about opportunities, how we commercialize it, and how we can get this to have an impact. And we see three different customer segments, each of which builds on the same underlying technology, and I'll say just a little bit about each of them. The first is what we think of as enterprise, so there we're selling into large corporations. Our first application there is in life insurance. It's not what you'd first think, it's not about using genetics to decide whether a life insurer should insure someone, or how much they should charge. It's once someone has a life insurance policy. So if you have a life insurance policy and I'm your life insurer, I want you to live as long as possible. Of course, I care about you, but the longer you live, the more premiums you'll pay and the longer for which I'll have been investing your early premiums before I pay out.

25:03 So there's real actuarial value for me as an insurer, a life insurer, if I can do something to improve your health outcomes and improve your lifespan.

25:11 So that leads to the idea of the insurer paying for you to have a test from genomics, and that test will tell you individually what your personalized risk. So across a set of diseases, we're not likely to be in the top few percent for heart disease. Some of us will be, but most won't be. But across eight or 10 diseases, we're very likely to be at high risk for one of them. So you can think of this as for each of us giving a personalized risk plan and understanding where those risks are. And for all of the diseases we look at, health systems already have pathways, screening programs for the cancers, prevention programs for diseases like diabetes, treatments, as Sam mentioned, for heart disease through statins and PCSK9 inhibitors. So there's value to the insurer, and they calculated this value, in us giving health information to the policyholder.

26:02 It's obvious value to the policyholder, and it's great for us, in fact, that the price we charge, we get a 70 percent margin and the insurer has a 40% ROI. They get more value than it costs them to pay for the test. So that's one, opportunity in enterprise. In life insurance, you could do similar things with employer programs.

26:23 In life sciences, so that's about using these technologies to improve the way pharma and biotech companies do clinical trials, and also range expansions of drugs. Downstream, we also work upstream in using genetics to find new drug targets. But the downstream piece, I think, is really interesting, and I think this can transform the way we do clinical trials. It wasn't obvious, but it's now clear that individuals who are on the statins who have a high apologetic risk score have a larger therapeutic response. So the statins reduce their risk by more than a typical person. The same is true of the next generation of lipid lowering therapies, the PCSK9 inhibitors. Individuals with hypologetic risk scores have a larger response to therapy. And there are reasons why that's probably more general.

27:09 And if it is, it means that in advance, we could choose individuals to participate in clinical trials who would increase the chance of the trial being successful or, reduce the sample size you would need, or reduce the time for which you need to run the trial. So all of those, I mean, as you'll be well aware, potentially very valuable. That's something where we've just signed a contract with one of the major global global pharma companies to use our technology in their clinical trials to assess that potential. As a related opportunity, imagine a situation where a company has an approved drug for a small subset of individuals, for example, with a genetic condition. We could use our polygenic risk score to identify a group in the general population who might actually have a similar phenotype just because they're in the tail of the normal distribution.

28:00 So that means that our technology could be a companion diagnostic to expand the patient population for a drug that's already approved and safe to a much, much larger group. So there are two interesting segments where we have commercial traction now. The big opportunity here, and it comes back to Sam's theme, is in health care. So let me tell you about the work we're doing there. Actually, this picks up exactly on Sam's example around heart disease, cardiovascular disease. We ran a trial with the NHS in a number of GP practices last year, and the trial was all about adding the genetic component of risk via apologetic risk score into what, GPs already do in The UK in estimating, risk for cardiovascular disease. So Sam showed a screenshot of the tool used in The US.

28:47 The tool used in The UK is called QRISK. It combines an individual's age, sex, blood pressure, BMI, cholesterol level, family history, smoking history, and so on, and it gives an estimate of their 10 risk of cardiovascular disease. That's over ten percent, the GP will talk to the individual about statins and lifestyle changes. Genetics is a big risk factor for men between 45 and 55, for example, the genetic component of risk, the polygenic risk score captures as much risk by itself as all of those clinical risk factors together in the current score that's used. And it's independent of them, so it's an additional source of risk. So what we did with the trial was to add in the polygenic risk score. The scatter plot here shows for each trial participant on the x axis what their score was just based on the clinical risk factors, and on the y axis what the score was when you added in genetics.

29:38 Genetics made no difference, all of those points would be on the diagonal. Fact, you can see there's quite a lot of variation. Genetics can change the risk quite a lot. A bunch of individuals who are at high risk, so over ten percent who were invisible previously to the NHS, they can now be identified and put on statins. There are other individuals who are known to be high risk, but they're really high risk. So the GP thought they and the GP thought their risk was thirteen percent or something, and it might be thirty. Also really impactful. We wanted to check to see how this fitted in with standard GP workflows, and the trial showed that it does really well. How does it land on the patients? They were extremely positive about it. Ninety eight and a half percent said they found it really helpful. And in thirteen percent of cases, it changed clinical management. That actually makes a difference, in practice.

30:25 It had huge impact, both amongst thought leaders and and quite a lot of attention in The UK press. So it's an important first step, in showing that that the hope Sam expressed about using genetics to make a difference can be realized. The next thing, in The UK, Sam has already mentioned the Our Future Health Program. It plans to recruit 5,000,000 individuals in part to build the next generation research resource, a resource in which drugs companies can do clinical trials where they recruit on the basis of health information or genetics. So there's a research platform component. But the other part of Our Future Health is that it plans to give risk information back to individuals.

31:07 Genomics, our company, is partnering with Our Future Health, we're providing those risk scores both for the platform and back to individuals. So this will be the first population scale program in the world where risk information that includes the genetic component will be given to individuals and to their doctors. It's incredibly exciting development. It's another example where The UK's forward thinking in genomics and health care, will I think be globally leading. And just let me finish, come back to Sam's point to give you a sense of impact. So if you use these, technologies, the natural thing to do is to do that genetic test once, maybe for individuals when they get to about age 40, to then work out their risk across multiple diseases using genetics and where available and relevant other clinical risk factors, and then we can do a much better job of identifying who are the high risk individuals for each disease.

32:02 So in terms of cardiovascular disease, there would be a whole lot of people, in fact about three quarters of a million of them in England, who meet the clinical threshold, the ten percent guideline for statins, who are currently invisible to, the NHS. If they're identified and put on statins, it would save, and avoid almost twenty thousand acute events, strokes and heart attacks over the next ten years.

32:25 For breast cancer, where I said genetics was almost all the story for risk by apologetic risk, NICE have a number of threshold, a number of tiers of risk for women. Their guidelines are that for women in the top two tiers of risk, instead of waiting till The UK's program, national program, which offers screening to all women at age 50 kicks in, NICE guidelines are that those women should have mammograms from age 40. Twenty percent of women fall in that risk category. One in five women, they are completely invisible to the NHS current. So what happens currently is they potter through their 40s, some of them sadly will develop cancer, which could have been prevented if we'd started screening them earlier, and others will just wait till they get to the national program. So it's much better for the women involved, obviously, to catch cancer earlier in terms of outcomes and for a health system point of view costs.

33:16 Actually, if you think from the NHS's point of view, the NHS is paying for those mammograms. If you give the mammograms to people who actually need them who are at higher risk, the chance of a mammogram detecting a cancer, so as it were the bang for your buck per mammogram goes up and it almost doubles in this case. Similarly for bowel cancer in The UK, capacity is a bottleneck. And if we use genetics in the right in the right way, we would increase the effectiveness of colonoscopy by about twenty percent. And there's a last example osteoporosis, so bone fragility that affects older individuals, particularly older women. Again, if you use genetics in clever ways, you'd need fewer scans, DEXA scans, but you'd identify more than twice as many individuals who are at high risk for which there are cheap therapies bisphosphonates, which are off patent.

34:06 So I hope that gives you a sense, and I hope you'll get an idea of how we can meet the challenge that Sam put. This is about moving healthcare upstream. We have the capability now of being much more sophisticated about understanding disease risk for individuals across all the major diseases, all of the killers and sources of mortality. When we do that, we can get the right people into existing screening programs, treatment programs and prevention programs, better for the individuals, more effective use of those screening programs, better for the health system, both in terms of efficiency now, but in terms of long term outcomes. We're really excited about the possibilities. We think it could make a massive difference to health and healthcare globally. Thanks very much. Come back here so those on mic can hear. So we're just gonna, switch switch, sort of pace a little bit now, and we're gonna and we're gonna ask Gordon who's the chief exec of Oxford Nanopore to come up, and we're gonna do a q and a here. I've got a, a number of questions. There there are probably a few online. We'll try and spend about sort of, twenty minutes, half an hour, talking through.

35:15 There'll be a chance for questions, from the floor. And then at the end, I'll also ask Sam and Peter to come up, and we can just have five, ten minutes on general questions on the life sciences space. If you've got questions for, the broader business or some of the AGM matters, if you could keep those for the AGM section at eleven, and we'll cover the q and a and the many, questions we've had through the, the IMC platform as well for for then. So I'll hi, sir. Morning. Morning. So we'll use handheld mics because apparently this works better for those on online. So for many people, Gordon Sangara will need no introduction. I'll do a very brief one, though, for those who don't know Gordon. Gordon is one of those people that we're looking to back through IP GROUP. He is a true pioneering entrepreneur, somebody who has set out on a mission to create a genuinely world changing business based on fundamental underlying science and to do that based here in The UK. And there's a number of things Gordon's done sort of differently, that we can we can probably all learn from in terms of of role modeling. And this this is it's a really important thing, to have confidence in our ability to do this more broadly and to create value and to create impact. Gordon, I hope you got what was saying, was recognized for his efforts with the CBE. I thought it was really interesting that one of the role models Gordon thought of was his grandfather and his grandfather's journey, and it was a very touching story.

36:45 For those in the room though, and if you've worked with Gordon, one of his other role models is Cluffy, which maybe gives you an idea if you follow football of some elements of Gordon's management style. So

36:58 I thought I'd I'd start just quickly. Like, many people will be familiar with the Oxford Nanopore story. For the for those who aren't, can you just sort of summarize who you are, what you do, for a couple of minutes, please? Yeah. Morning, everyone. I thought I'd go back a bit because, it's important, you know, IP GROUP have been backers from the outset. First, Dave Norwood and then Alan. We fought many wars and many funding rounds together. But if you go back one step further in the mid eighties, I did a postdoc at Oxford with Professor Alan Hill, passed away last year, and he pioneered a bioelectronic device blood glucose measurement. So that company was combining biology to electronics, which is what I did for my PhD.

37:46 And I was obsessed with joining the company he'd set up, I did a postdoc with him for two years. But that company went on, and this was before tech transfer groups even existed, raised a lot of money from the East Coast, USA. It went it floated on Nasdaq in '94. It was sold to Abbott for 900,000,000 and and really a British technology that could have dominated and become a $10,000,000,000 company. It's part of Abbott Diabetes Care these days. And the vision that Allan Hill had, which is finally achieved by Abbott about five years ago, was a continuous glucose monitor measuring real time glucose all the time.

38:32 And that is important and critical for type one diabetics who have to control their glucose all the time, but is now becoming used in routine healthcare, in lifestyle, in preventing type two diabetes, which Peter talked about. I'm not going talk about genetics. It's always intimidating to talk about it after Peter's been on stage. But that was disappointing because Abbott acquired the company and yet again another British technology escaped. And so at early forties, midlife crisis, I really was not enjoying being part of that, but I did seven years in The States and I'm just not really very good with authority, except investors who I'm fabulous with, just so as you know. Most investors.

39:25 Fast forward in 2005, I was still kept in touch with Isis Innovations. Came across a single molecule nanopole sensing, stochastic single molecule sensing. I had to go and look that up in the dictionary but it was label free easy and you can make electronic devices and so I thought actually all the things we learned at Medisense and all the mistakes we made in those fourteen years could be corrected. That was a fourteen year MBA in entrepreneurship that I then plastered onto the eighteen years we've been doing Oxon Anable. And Peter has eloquently talked about the power of genomics and DNA RNA sequencing.

40:13 What we are doing is looking to bring about the same revolution that we saw in mainframe computing. So everything Peter's done has to be done in supercomputers and he's got a fabulous facility and it's millions of dollars to buy the capital, multimillion dollar infrastructures, brilliant people like Peter and his teams to really unpick this hard stuff. What we're doing is bringing simple, cheap, affordable, accessible DNA RNA information into everybody's biology life every day. And, that was beautifully embodied during the pandemic when over 2,000,000 COVID genomes were sequenced on nanopole sequencing in 85 countries and predominantly lower middle income countries who do not have sequencing capacity.

41:03 You have to be a superpower to do that and that's all changing now and I always bring a sequencer with me. I'll pass it over to you. Greg will explain how it all works because he can. But suffice to say, the the the revolution and the parallel is with computing. When we went from mainframe batch based to desktop handheld real time streaming and we can get into use cases and applications later but that is the difference. These instruments are really low cost to make. That machine there can perform the same as a $250,000 alumina machine, which is the market leader, owns 90% of the market today. So this is really a step change and a disruptive innovation.

41:50 And that comes with challenges, which I'm sure we'll talk about. I'll get Adam to pass the scenes around for those who haven't they're very ubiquitous, but not everyone will have seen one yet. Okay. So I thought let's start off on sort of technology and commercial progress. You keep the market pretty well updated, those of us, certainly IP GROUP, me, Sam, we we follow things like London Calling where you do lots of the technical updates. You also did a a tech update for the investor community following that event. But since the IPO, commercially and technically, you've made great progress. You've grown revenues faster than your peers. You've rerated those revenues and continue to grow strongly. And there's been a number of these technology updates. Could you just summarise that twelve-eighteen month progress on the tech and commercial side?

42:40 Yeah. Well, it's London Tech Week. You can't get away without saying something about ChatGBT and augmented machine learning and AI. We started doing that ten years ago. There's a signal that comes out of that device and all the genomic information and much richer content than the single point mutations that Peter and people like him have brilliantly garnered medical insights to are in the software. The problem is the software just wasn't good enough ten years ago. And in the last two to three years since IPO, that exponential growth in machine learning, the quality of voice recognition, that same, word learning we've applied to nanopore sequencing. We've now reached a point where we can now do everything you can do with existing traditional systems. And to just give you a context there, they are photocopied, and you take beautiful high definition color biology and make black and white versions.

43:42 So it is a tour de force of brilliance for people like Peter to be able to garner all the insights they do. What we do is keep that clean copy because this is a single molecule and that's all you need to know about that. And we provide rich content and high definition which will ultimately accelerate the kind of research that PETA does, gives you much more insight and content. And we launched the chemistry nine months ago, and that is now out there with customers. And we are equivalent to the existing systems plus much, much more content and really empowering that change. And that technology reaching that point is important in terms of driving revenue growth in the research markets.

44:33 Very good. On that point on revenue growth, one of the things that I think has been quite noticeable is the number of collaborations and partnerships, be it with governments, with corporations, BioMeria and others, particularly in the last sort of six, twelve months. Any any of those you'd particularly, call out for for both impacts and commercial, relevance? Yeah. Think strategically. We all get we always get asked, okay. So this is better. It's really cheap. Why don't people just switch and buy it straight away? The incumbent has been there since 2005. A lot of clinical workflows have been set up and validated and it's the switching cost is very challenging and they are a monopolizing market leader with billions in revenue.

45:18 So strategically, how do we do things and get the technology adopted quickly? We have picked things that only you can do with our technology and tried to look to jumps from research markets directly into applied testing. The form factors we have from the small handheld you see to the desktop devices, there's no upfront capital. You only pay for consumables. It's a razor razor blade model commercially. They're very attractive to applied market applications. So BioMarriott are a world leading infectious disease company. We have shown time and time again rapid insights in critical care. And I'll give the example here in London at Geyser St Thomas'.

46:06 Professor Jonathan Edgeworth has been looking at respiratory infections in the ICU and in that setting hours are critical. It takes four days to find out what infection somebody's got in the ICU. We've got that down to four hours using Minion, which is the power of a new technology in that real time streaming. We've done three fifty patients. We're doing a thousand patient proof of concept trial. Over half were on the wrong antibiotics. So there was a change in treatment and it's already groundbreaking in this proof of concept stage. There's still a long way to go to get that into routine clinical care, but our deal with BioMarieur as a potential channel partner is how we and I'll talk about lots of different things we can do how we will not become an infectious disease company, but a channel partner such as BioMarieux will sell market and distribute and be domain experts.

47:06 We will provide the underlying sequencing platform, which is ubiquitous for many, many application areas. Great. Thank you. Right. I've got a whole bunch of questions on the future and the opportunities, but there have obviously been some some some challenges that you've had to face. What are what are the key ones that you're grappling with at the minute? Where are you spending your time as CEO? Share price. From the club. Yeah. I I think that it's a double edged sword. We we were private for eighteen years, brilliant long term shareholders, but, you know, every party has to end at some point. And it was the right moment. October 21, there was, you know, I thought things were opening up. We were gonna see a nice, good boom.

47:53 And the first quarter while we were public was good, but then the markets collapsed. Money was sucked out of life sciences and high risk, high reward companies. And so that's been challenging. But we did raise £500,000,000 in capital, and and we always said we wouldn't need more capital to get to profitability. So we filled our boots, and I feel for companies out there trying to raise money in this, environment. We are well financed, well capitalized. It does put pressure on us because we did float in London. We I still think that was the right thing to do. And at the time of IPO, we did a very thorough analysis with our advisers, and it was pretty marginal.

48:43 You always get a higher return on Nasdaq, but only having to report every six months when you're going through an explosive growth phase and the focus has to be that path to profitability. We felt and we're all British. We're an Oxford based company. London's just down the road. It was the right place to start from being private for eighteen years to becoming public. Reflections now? I think notwithstanding the share price, But I'm I'm very happy with the way things have gone so far, and and I tell everybody at work, don't look at it on a daily basis.

49:29 You know, this recession will end. I mean, I always say the four horsemen of the apocalypse will disappear at some point. The war will end. The supply chains will ease. And, you know, this recession will shift and and our focus is to make good on the promises we made in October 21, which is greater than 30% year on year growth with that path to profitability, and we're capitalized to achieve that. So, I'm not comfortable with the share price, but other than that, you know, we're very comfortable with the progress we've made and and and the cash we have to really execute on some of these really big opportunities that are coming quickly towards us. Great. And and a similar sense when for IP GROUP really happy with the progress that their portfolio is making and share price is is deeply frustrating, so it's a it's a shared thing.

50:23 The other one which I know is sort of frustrating because I I've seen the progress, and we talk about it at every sort of technical event that you do, the old adage of accuracy. You mentioned earlier that you're now at least equivalent and you get color, readout rather than black and white. So do you want to just talk a little bit about that and the pathway, some of the stuff Clive was talking about for the existing chemistry, the new chips, etcetera? Sure. So I think, somewhat foolishly, we thought if you give somebody grainy black color, they'd watch a snooker on it. But it's just not that simple because they can't just it's not like a consumer product. A sequencing center is 10,000,000 plus. So they just want you to give them what they've already got to the accuracy that they get today. So they want high definition black and white, and then they look at the grainy color.

51:12 And it's taken us until last year to reach that point. But now that we've done that, we're really making inroads into particular areas that are hard to diagnose. And Pete talked about rare diseases. So there's something like 8% of the genome is unmapped, which doesn't seem like very much existing short read Illumina sequencing. But that codes for over one third of hard to diagnose diseases. And we're really seeing commercial traction in newborn screening for and doing whole genome for, hard to diagnose patients on a diagnostic odyssey. And the speed, the real time speed and pace at which we can do this, I'll just frame that for you.

52:05 So Professor Ewan Ashley at Stanford managed to sequence a newborn, three month old with severe epilepsy from heel stick to answer in seven hours. That's two hours prepping a sample, two and a half hours sequen two and a half hours sequencing, and two and a half hours, data analysis. It almost broke the servers at Stanford to do that. It's just a lot of data, but they did that in seven hours. In the middle there, the sequencing was done on our supercomputer. That's the handheld, desktop use, the MinION, which is a Promethion. And instead of putting 48 samples on and getting 48 genomes in three days, which is as good as any Illumina top end machine. He put that one sample of that infant across 48 channels.

52:58 He read that genome 60 times and Peter mentioned ten years twenty years ago the first genome was mapped, I think, Sam, actually. We were reading those genomes single copies every ninety seconds. So when people talk about machine learning AI and how the big data is going to come at you, having affordable, accessible, ubiquitous access to DNA RNA information will change from the brilliant superb centres of excellence we have today to hundreds and thousands of biologists elucidating these structures. And that will be just like the information age. It'll be the genomic information age and era that we're entering into now. And not only did you nearly break the servers, you also broke the Guinness World Record with that. They did indeed. Oh, and by the way, they diagnosed the type of epilepsy the newborn had. The PCR gold standard where you you look at regions where you think you know what you're looking at or you don't know what you're doing in football vernacular.

54:02 Came back two weeks later inconclusive. So looking at the whole genome is a good illustration of why looking at much more detail gives you so much more insight. And you and I have spoken a lot about, you know, what how do we build on this relationship that we've had for fifteen years between IP GROUP and and Oxford Nanopore, and it's been you know, the the journey financially so far has been great. You know, we've we've taken all of our costs off the table. We remain the largest shareholder in the business, but I also see a future, in in collaboration, and that could lead to spin out opportunities for us or new investment opportunities. There's not not one for today, but I was just sort of thinking in terms of where are you seeing the most, exciting, interesting, opportunities for the use cases for DNA sequencing or RNA or protein, you know, the the So I think two things before I articulate that. I'll talk about how we've set ourselves up strategically to be able to enable our goal, which is the analysis of any living thing by anyone anywhere.

55:04 And and we've set this platform up up to have an open source developer license. So we we we are not content creators. We merely and it's not trivial. We create fast, cheap, rapid, high content biology sequencing. Customers then can come up with applications and I'll pick something away from medical which is related to RNA. So all RNA vaccines have a piece of RNA inserted into the vaccine and they put certain chemical modifications on that RNA. We're the only company in the world and this speaks to this richness of content and the fact that we don't photocopy the biology, we read it native.

55:52 We read direct RNA. And what, RNA manufacturers like Moderna, BioNTech, AstraZeneca Pfizer want to do is to check that the thing they wanted to put in was properly made and then they inserted it correctly into their vaccine and they want to check that that's working correctly. Today that requires a multitude 10 to 12 different proxy based assays, and we can remove all of that and give them rapid real time insights in their biological manufacture. That has resulted in a year ago, it was a paper at London Calling, our customer conference. This year, a company has been set up, the University of Queensland spin out, and they're starting to work through the workflows to take that from an academically curious potential application to a workflow that biologics manufacturers will be interested in. And it really illustrates the power of real time DNA RNA information near the point of origin of the DNA, which you cannot do today.

56:59 And that's just one of what is essentially a handful of start ups, some in infectious disease, some in cancer, some by pharma manufacturing. And that's not we're not creating incubators. This is just naturally happening, and and that will happen more. And, you know, I think there'll be some good opportunities for follow on investment in in in the next few years as as as we kind of get that message out there, and the first few demonstrate potential and opportunities in the applied markets. Very good. And to to paint a picture on a sort of a a five, ten year view and how you're thinking about the the scale of the market evolving and this sort of switch from the research markets to the applied markets, the difference in the potential scale of the applied markets. There's lots of research written about this by people in the room, over the years. What's what's your view on that sort of on a on a five, ten year basis, and what does it mean for Nanopore? I I well, I'll draw historical parallel. I think the applied market applications do run into tens of billions.

58:07 Alluvian have said that. JPMorgan have written reports. There's lots of applications in cancer, human health, ag bio, environmental, food safety, security, biologics manufacturing. But there's been very little penetration of those. And I'm quoting a 2014 JPMorgan report where they said Illumina by 2018 to 2020 would dominate and and be in all these markets. And it's the same reason why mainframes never really became ubiquitous. It's not affordable. It's not accessible. It's too complicated. It's a preserve of the brilliant genomic specialists in the world today. And that will only happen as you make it affordable, accessible and simpler.

58:54 And We expect in the two to three year time frame to demonstrate those value creating applied market use cases, whether that's rapid real time insights in ICU, in antimicrobial resistance for respiratory metagenomics or early detection of cancer in liquid biopsy or biopharma manufacturing. And one other we have is a collaboration with Asurion, which is a world leader in pre, genetic screening, carrier screening. And all of these demonstrate how this technology, affordable, accessible, real time, can cross the chasm into those applied markets.

59:40 And then we can start to think about and talk about how we would address those markets that run into something like fifty to a hundred billion, depending on how you add up that whole space. Very good. Right. I'm I'm I could talk to you all morning. I'm very conscious that that we've we've overrun the the the ten thirty. For for those in the room, hopefully, we can continue for sort of five, ten minutes of of questions. And those online, feel feel free to stay, and we'll obviously put this recording out so that you can see anything if you if you had to step off at at sort of around 10:30. So sort of, I guess, kind of one final question, and then we'll maybe ask them and see if there's any, Dave, questions from from from the platform, and then we can take some questions from the room, and I'll get Peter and Sam to come up in a sec. So I suppose the last one is we've spoken a little about the share price. We've spoken about the risk off and the lack of capital, etcetera. Are there any you know, there are one or two things that you think the market's particularly missed about the story that you'd like to have the opportunity to highlight here other than know, growing faster than peers, differentiated platform, color technology, you know, dot dot dot, and anything you you really want people to take home about the the value creation opportunity?

1:00:54 I I think, yeah, I can't talk about whether this is a good investment or not, but, you know, the share price is somewhat suppressed versus our peers. And yet in last year, for example, Illumina and Pacific Biosciences had zero growth. We still hit our 30% year on year growth, and that's probably something to do with the fact that you don't need millions of dollars. So budgets are suppressed. CapEx goes first. We're a CapEx free system. I I think there's huge potential here. And if you read up on it and particularly focus on the applied market use cases that we're starting to put partnerships together with, I'm sure you might come to an opinion I have which is biased.

1:01:42 It's a it's a good investment opportunity. Very good. We agree. Right. So to summarize that little bit, differentiated technology, £500,000 in cash, path to profitability with no need to raise money, massive market opportunity, inspiring leader that's done it before, with a with a medical diagnostics platform. So these are the sorts of businesses that we're trying to create with our shareholders' capital, both for the greater good and to generate investment returns. Excellent, really enjoyed that. Thanks a lot, Gordon. Maybe if I just ask Peter and Sam to come and join us up here, we can They'll be in the.

1:02:33 It's the goal, Mark. Yeah. So so, given this is the the morning and so we're not between anybody and drinks, that are that are maybe more attractive than a coffee, we'll spend sort of, five, ten minutes, up until quarter two, then we'll give fifteen minutes for people to mingle, have a coffee, and we'll come back at eleven, for the AGM. So, in the spirit of inclusion and diversity, we'll ask for some questions from outside the room. First, Dave, any Well, actually, to be fair, we've got oh, only father's sake. I think you've come by, actually. It was like the impact of AI in the industry was really the main one that came up, and what opportunities are, which I think you probably rather well. I don't want to hand it back to the room. No. Very good. And anything Mark's Mark's going sweet. Mark's got the mix.

1:03:19 Any questions? Can I ask you all? When are we gonna have a pour in our iPhones? We we found from our market and that's we we have one. We have an ASIC, an application specific circuit that we can now plug into an iPhone. It's called the SMIDGION. It's very small. But, actually, what customers want is fewer channels than the minion, so a lower cost device. So we're gonna do that first. It's code name pebble. We haven't come up with a name for it yet, but we we could do. But it's just, I think, a smaller handheld device is what the market's screaming for. So rather than the MinION starter pack is a thousand dollars, if that were 2 to $300 as a starter pack, it opens up a whole new range of customers who can do it. So we've kind of diverted our Smid Giant program, which for those who don't know was actually a little consumable that we plug into an iPhone and you could sequence on an iPhone, which we can do. We've diverted that and we're putting it on an iPad because we're now also generating even ever increasing amounts of data and the machine learning algorithms are quite complicated.

1:04:37 So an iPad version is coming next because that's it's actually what our customers want, and we will get there. And there will be a consumer based iPhone device at some point. Thanks. Thanks, Sam. Questions from the room? Think, one here in the front next to Chris. This is gonna keep you fit, Mark. Normally, when you're doing video, you don't have to run up and down the stairs. It's Hi. Sam, if you're moving from reactive to proactive, how big a challenge is the existing colossal pharmaceutical industry and business model? Well, it the pharmaceutical industry is is recognizing this challenge as well and is moving. And it's always been the case, you know, a huge amount of the pharma industry r and d budget is external in licensing, acquiring products from the biotech industry, which is probably slightly more rapidly moving towards that left hand side of the curve or addressing that left hand side of the curve than the than the pharma industry. So I don't think I don't think the pharma industry is a challenge, and I think what you're saying is, you know, is it a barrier to doing things in an unconventional revolutionary way? I mean, the pharma industry more than ever needs to get drugs and products on board that will get reimbursed, and you're more likely to get reimbursed now if you're revolutionary.

1:06:05 You're treating earlier, and you're saving a lot of health care dollars. Thank you. More from the floor. Odysseus, next to the post. Sorry. Marcus. I'll try and I'll pick them as far away as possible too. Everyone. I have one for Gordon, please. So I've heard a lot of instances of people wrongly comparing you to competition, which I'm sure you have as well. Many reasons for that, but simply in the end, think it's not an easy market to understand for the average investor, particularly given how differentiated your platform is, your native approach to reading DNA, but also different market focus at times. So to the risk of oversimplifying this, what's the single most significant driver that in your view will trigger a step change from either an R and D or applied market proof of concept perspective into people finally making this comparison in better terms?

1:07:00 Well, there's so many, but real I mean, there's like the technology is unbelievable. I could spend hours talking about how fabulous it is and how native DNA is going to be the future. But simple thing is rapid insights in real time in critical care is kind of emerging as something only we can do and whether that's in hard to diagnose newborns or in intensive care, or even and this is still the coolest thing I've seen apart from it's on the NASA space station real time tracking liquid biopsy so this is circular and tumour DNA during brain surgery. You really don't want to hack out more than the brain than you actually need to.

1:07:48 So I don't know if you guys are familiar with circular and tumour DNA that's before you see a lump so stage one stage two the cancer cells are in you proliferating and you should see fragments called tumour circulating tumour DNA and those fragments give you early indication. You can use that same liquid biopsy play to do live real time surgery brain surgery and see the circular and tumour DNA drop in real time. So you're actually getting real time feedback. So I mean, that's not going to be a huge market, but it's the real time feedback loop that you get in critical care with the richness of content that we provide, which is really emerging as sort of the thing that will really catapult this and kind of transform us from an interesting life science research tools business, which is very important and our revenues in the short term all come from that.

1:08:53 So it's a great market, 6,200,000,000, company only about 20% plus per year. But that will really catapult us into one or two of these applied markets, which really changes the needle quite dramatically in terms of value creation. Thanks Gordon. Charles up there. Hi, thanks. Charles Weston from RBC. A question for Gordon and Peter, please. Over the last few years, there's been sort of a race to create data, DNA data, specifically to understand biology better and get more insights that we can apply for drugs or diagnostics. And perhaps because of the risk of nature of the market, that seems to be considered less valuable now, where less dollars are going, fewer dollars are going into that. But given the different, the color aspect of the technology that Nanopore produces around epigenetics or RNA or long read or whatever, there's a whole different set of dimensions of data that can be generated at scale to create different biological insights. So do you think there'll be sort of another step, another race to create some of these additional data sets with this more colorful technology, colorful information.

1:10:07 And Peter, are companies like Genomics PLC set up to use that additional color to generate even better biological insights? I mean, I would just say we're ready and waiting, Peter. Oh, I'll give a slightly longer answer. I I think there's huge potential for the the kind of richer, set of information biologically to be used in our world in prediction. I think what I'd say is the prediction we do at the moment based on DNA is robust. It's been tested in hundreds of thousands of individuals. It's ready for prime time now in healthcare. The prediction problems using other omics are much harder.

1:10:54 First of all, are multiple omics. Secondly, if you take any one of them, that readout differs. It's one of the reasons it's particularly interesting, but it differs in different types of cells in our bodies. It differs in the same cell type over time in our bodies, and it differs in response to stimulus in our body. So instead of predicting from DNA, which is effectively the same in all of our cells, already a hard problem, but I think as I said, ready for primetime. The vastness of the data space with omics, cell types, age, external stimulus, makes that a much harder prediction problem. In time, that information will be incredibly useful. And Charles, absolutely, we wanna be at the forefront of using that for prediction for health care and for individuals.

1:11:39 But it's some way away from prime time yet. Technologies like Gordon's, will be a key driver in getting the data, which allows us to develop the prediction method. Yeah. I think the the biology needs to be rewritten from that discovery translational phase and that's some way behind, but the good news is that's revenue generating for us and people are beginning to go back to the beginning of looking at some of these things and really rebuilding that biology with the high definition that we offer. Very good. Thank you, Charles. Right. It is quarter two. I'm sure we could have plenty more questions, but I'd just like to take a second for us all to thank very much, Sam, Peter, and Gordon for a fascinating discussion. I hope it's given you, a flavor of what we're doing in life sciences, the way we're looking to create value, the types of companies that we're backing and trying to create, and why we are so confident in value creation for our shareholders and genuine impact along that pathway. So thank you. Thank you very much, and thanks very much for attending, everyone.

1:12:47 It's it's now 11:00, so I am happy to declare the twenty twenty three annual general meeting of IP GROUP PLC open. For those who don't know me, I'm Douglas Flint. I'm the nonexecutive chairman of of the group, and I want to welcome all of you to to this meeting. With me are are the rest of the board, so I'll introduce them one by one. Greg Smith, you've seen before, executive David Baines, the chief financial operating officer, and then along along the front row are our nonexecutive directors. So doctor Caroline Brown, who chairs the audit committee, EJ Chai, who chairs the remuneration committee, Admiral Hynes, who's our senior independent director, Anita Kajal, who joined the the board just in January. She's she's the new person on the board. And then finally, doctor Elaine Sullivan.

1:13:39 And our company secretary, I'm gonna introduce you to her as well, Angela. Angela Leach, you need a twirl. Great. Thank you. Okay. So the notice of the meeting together with the explanatory notes was posted to shareholders on the April 20, and, accordingly, the requisite notice of the meeting has been given. So if there are no objections, I propose taking the notice convening the meeting as read. No objections, and we certainly have a quorum. Good. There was a shareholder event that took place, as you know, immediately before this meeting, which focused on the company's life sciences portfolio, and and a copy of that event will be posted on the company's website following the close of this meeting. Following the formal proceedings of the AGM, the directors will respond to questions which have been submitted through the the investor meet platform.

1:14:27 And before we move on to voting on the AGM resolutions, I'd like to invite shareholders to ask any questions to the directors that they may have on any matters relevant to the business of the meeting. Now there's a a large number of resolutions, and by dealing with the questions on the business of the meeting at the outset of the meeting, hopefully, we can give shareholders sufficient time to ask all the questions that that you have. Before asking a question, if you could give your name and state whether you're a shareholder, proxy or corporate representative. And if you are a proxy or a corporate representative, could you please state your name and the name of the shareholder that you you represent? So are there any questions on the business of the meeting? We'll take the more general questions later. So are there any questions on the business of the meeting, the technical stuff?

1:15:16 Yes. Of course. I beg your pardon? Resolution report. Sorry. Janet, please. Sorry. Agenda item 14. Yeah. Authority to allot shares. I'm very disappointed up to a point that you are not gonna carry on dealing with giving out shares for dividends. I've always had a policy for the last forty odd years of taking where possible shares for dividends and also rights issues etc. So am I right in saying that since the membership of this company down there turned down that opportunity of taking shares for dividends, Is this was this around the company's policy not to follow through as far as ordinary shareholders, or is that basically a separate separate issue?

1:16:13 Well, let me have a go, and then and then I'll pass over to to to to got another one on that one as well, mister chairman. Well, give me that one as well and we'll do the two together. Okay. I like taking rights issues with if and as and when possible. I'm well aware that a lot of companies today do placements and they shut out ordinary shareholders. I'm hoping that if it hasn't went in the future and I'm still around, I'm 86 this Saturday. Happy birthday. Thank you. I'm hoping that you will also if you're doing a placement, that you do a split between doing a placement for, say, for the majority of the shares and leaving a quarter for it to be taken up by ordinary shareholders, whether they're staff members or not.

1:17:04 Look. Absolutely agree. I mean, there was a secondary capital market review done just a few months ago by somebody I know very well, Mark Austin, and one of the recommendations that he made in that review is that we had to find a way to facilitate the participation of ordinary retail shareholders, small shareholders, and placements in capital raisings that were otherwise going simply to institutional. Now the complexity of reaching shareholders and identifying them has made that difficult, but there's a number of other working parties, one of which I'm chairing, which is trying to make that simpler. So I hope that within not the very near distant future, first of all, the recommendations of Mark's report, which was to find ways to give you the ability to buy shares and placements, will have gone forward. And some of the technical changes that are required to make that happen will also have been, if not put in place, at least given a pathway to realization.

1:18:01 On the scrip dividend, we did it because there are people like you who like to take the dividend in shares, and a very small number did. And it was because it was a very small number, and in the current environment, we're being cautious with cost. The cost of reaching that small number of shareholders with scrip was actually pretty expensive, so we dropped it. But we hear what you say in terms of you found it interesting. It's not something we've given up for all time. We've got the technology now, having put in place the process of how to do it, but we were slightly disappointed in the first year that the take up was really, really very modest and the cost of getting to those shareholders was disproportionate to what we what we raised. Are there any other questions on the the the technical aspects of the meeting itself?

1:18:50 Thank you. Okay. So so the voting today will be conducted by a poll on each resolution. This is now pretty much seen as best practice as it gives all shareholders the opportunity to participate in the decision making of the company and have their votes recorded according to the number of shares they hold. As it will take a little bit of time to complete the poll procedure, the final results of the votes, including the proxy votes that have already come through on each of the resolutions will be announced through the regulatory information service and published on our website as soon as possible. Link Asset Services, who are our registrar, has been appointed to act as scrutineers, and a summary of each resolution will be shown in the screen behind me. For shareholders that are attending the AGM online, as was advised in the notice of the meeting, you're not able to vote online, and I hope you will, though, have already submitted your votes by proxy.

1:19:48 For those shareholders who are here physically, you have three options for each resolution. You can vote for, you can vote against, or you can withhold your vote. A vote withheld doesn't count in terms of the calculation of the proportion of the votes for or against a resolution and indeed does not regard it as a vote in law. If you previously voted by proxy and don't want and don't wash don't want to change your vote, don't need to do anything. If you do want to change your vote, you need to fill in the poll card. If you want to vote if you wish to vote now, if you could please complete the poll card given at registration and tick the appropriate box next to each of the resolutions depending on how you want to cast your vote, please please do so. And once you've recorded all your votes, please would you sign the card, put it in the completed poll card box at the back of the room, and if you need any further assistance, our registrars are ready and willing to assist.

1:20:45 We'll keep the poll open for as long as it takes to complete the poll cards. And if you could, those of you who are in the room, if you could now mark the poll cards and be ready to put them into the the box at the end of the the meeting. So that's sort of the formal bit. We now like to deal with the questions not on the formal part of the meeting, but the matters that have been raised by shareholders. They've been raised both by people ahead of time in writing on the on on the website, and we've had questions come in today. What we've tried to do, because there's quite a lot, is put them into themes and not surprising, quite a lot of them are on the same subject. So we're now going to do our best, Greg, DB, myself, and I may, of course, call on some of my nonexecutive colleagues if I'm feeling particular mischievous to answer any of the questions that you have.

1:21:41 So, again, in the room, we'll come we'll we'll we'll deal with we'll deal with the questions that have come in or some of the questions that have come in thematically now. And then if those in the room wish to ask questions, if you, again, put your hand up, identify yourself, and we will do our very best to answer questions. If we run out of time, which I hope we won't do, we'll take the question and we'll either write to you directly or we will put the answer if it's thematic onto the website. So, Greg, what's the themes of the questions that we've Thank you. Right. Thanks, Douglas. Thanks, everyone. And, particularly for those online, you know, one of the things that Dave and I have done over the last eighteen months is to try to open up access that we give to our institutional shareholders, to the retail community, to the wealth community, by using, the Investor Me Company platform. If you joined us for the investor update event that we did before the AGM, you'll know that that's the plan. And I also showed the amount of IR events we're doing both sort of at the group level and at the sector level, so please do look out for those, the vast majority are on the digital platforms as well as in person.

1:22:57 The the questions fall fall or fell into three main groups. The first was around sort of capital allocation, discounts and NAV, cash returns, our approach on that front. Doug is gonna say a few words, then I'll I'll talk a bit about what we're doing, sort of practically on that front. And the second was around portfolio and performance, what's happened in a few of the key companies, and we covered some of that on the life sciences side in the life sciences session, but I'll briefly recap that. And then the third was sort of a few general questions and a couple on our international business. And again, we'll cover those briefly, and I'll probably do them in one, three, two. But I'll let Douglas just say a few words on the discount first and then what we're doing about it as an executive management team.

1:23:43 So so so my report last year, we said that one of the one of the key agenda items for the board in the in in in the year that's just ended was addressing what more could be done to understand why there was a discount between the share price and NAV and what we could we could do about it. And that has actually been a subject that has occurred through virtually every board meeting we've had for the obvious reasons, because we're not happy with the fact that the share price is is significantly below the NAV because we believe the NAV is is a very good number. It's a very well constructed and audited number in terms of the valuation of the portfolio, and and our company can't be much more than the value of the portfolio plus or minus the discount as to whether you believe we can continue to create the kind of value represented by the two companies that that presented the the this morning. So we spent a lot of time thinking about discount to NAV and what we can do.

1:24:42 In a kind of a way, get frustrated with that question because people say, your shares are awfully cheap, and you say, well, why don't you buy some more and that would help create interest the company? And that actually leads to a more general comment that I think many, many companies, not just in our sector, but many smaller companies are finding problematic in in today's markets, in London in particular, is that smaller companies, and we are smaller, have limited liquidity on their stock, and that is being that is demonstrating itself as a bit of a constraint on company valuation because particularly institutional shareholders are nervous about owning companies where they can't buy in size and they can't sell in size because the market is relatively limited given the size of the company. And given the fact, as you've all read in the papers in in in in in in recent weeks, the amount of equity going into might have equity amount of money going into UK equities, and particularly smaller company UK equities get smaller and smaller each year. So the amount of available money is reducing, and there's a whole bunch of initiatives trying to to deal with that.

1:25:48 But if but put the sort of the the environmental stuff to side, the the valuation of of IP GROUP is really the valuation of our portfolio. Our commitment portfolio is to be there for the long term. You heard Gordon saying this morning that we were there at the beginning and we've been supporting it all the way through and many of the other companies in the portfolio. We are among the prime suppliers of capital that albeit that progressively we become a smaller part of the capital that they raise. So it's terribly important for us that we have the ability to follow our companies otherwise in an environment like today's when the money is not as available generally, the valuation would be under pressure if they can't find the money to progress their science scientific discoveries and and build their markets. And to that regard, one of the things we did last year led by David, we we put a little a modest amount of debt into the balance sheet so that we had the capability of following companies and markets were quite difficult. And I think one of the one of the things that we never anticipated, but but demonstrated the wisdom of that is that when Silicon Valley Bank went bust or was taken into conservatorship in America and and basically paused in The UK, a small number of our portfolio companies had a meaningful amount of their liquidity with SVB.

1:27:15 And we were able to stay on that Friday after a lot of running around crazy But then very disciplined very disciplined crazy that in the event those companies woke up on the Monday morning and that and there wasn't the deal that had been done with HSBC, we were there for them and could help them with their liquidity so that there wouldn't have been a problem. We would not have been able to do that if we didn't have liquidity. And Greg's gonna come on to capital allocation. You know, we are we've got a good balance sheet. We've got a good amount of liquidity on the balance sheet, but it's pretty much all bid for. I mean, our our businesses can spend that money over the next couple of years comfortably, and indeed, if we had more, they would spend more. And and if we if we did, as some shareholders suggest, why don't you buy back shares? Well, first of all, we bought them back at the share price. Well, sounds quite good.

1:28:07 Might be interpreted to some people we think the current share price is a good value, and therefore we don't believe in our NAV. If we bought back our NAV, which some people also suggest, the danger is that we wouldn't have as much money to support our companies, at which point the valuation of the company is under pressure because we can't support the companies that we are invested long term. So we are a long term investor, and that's why we go around the houses in this two or three times a year and come down to the conclusion that the best way we can create value for our shareholders is to continue to invest long term and support our portfolio long long term. That's a long answer. Greg will fill in the bits that I haven't covered and and and and and tie it into what we asked management to do, which was are there any pockets of shareholders out there that should be interested in the company and yet haven't heard enough about the story that they haven't invested? So how do we find them? And then how do we do the capital allocation within the company to give ourselves the best chance of demonstrating the value that's in the mouth? Greg?

1:29:08 Thanks, Douglas. So I very, very briefly summarized our capital allocation approach in the, AGM statement that we gave this morning. On a long term basis, we think that the the model is to deliver capital returns to shareholders through capital growth, but we have in the last couple of years only as, you know, relatively recently in our history in 2021, we also introduced a policy to supplement those capital returns with some cash returns. And to have a sustainable approach to that, the mechanism that we've come up with is to say, for all of the realizations that we make from the portfolio, the majority of that will be reinvested into existing companies and some new companies, and a smaller proportion will be used to supplement the capital growth with cash returns. We do that.

1:29:54 We've done that historically in two ways. The first is that we we've paid a dividend. We've recommended a dividend again this year, and that provides a small amount of regular capital and cash alongside the capital growth. And then where the proportion of realizations that we dedicate to to cash returns is in excess of the amount of the dividend. Last year, it wasn't. Did about 50% of our realizations went into the dividend, so that's higher than we would normally do, but we're committed to the dividend. Where it's higher, when this was the case in 2021, we also have tools like buybacks and potentially tenders, as as Douglas has mentioned, that we will employ, where that's the case. But the idea is to have a long term sustainable approach to capital allocation such that we're not required to come back to the market to raise capital because we think that's in the best interest of of generating value in the long term.

1:30:44 It's it's worth saying, since we introduced that policy, we've returned more than 50,000,000 in cash to shareholders. And with the current dividend, that will go to above 60,000,000. So we are making sort of, you know, meaningful amounts of cash alongside the capital growth. There was a question I mean, I've got there there were 26 questions. I I honestly, I won't do all of them, but I the the principle we've tried to stick to is is transparency and to try and answer every question where we can. And that means often we overrun, so I've tried to group them a bit. So so there was a specific question on what do your shareholders, what your major institutional shareholders think about this policy, and and we explicitly asked all of our holders that we saw as part of the full year results roadshow, and we obviously ask potential shareholders for their views on it. And I would say and there's there's always a range of views. You you always get a range of views from shareholders, but the vast majority of our large institutional shareholders support that realizations based approach. I mean, there are a smaller number who believe that we should do something more proactive with the capital that's on our balance sheet given the extremity of the discount, and we we obviously as Doug just said, we we debate that.

1:31:53 I would say in the last six months, the number of people who have moved from using your, balance sheet capital, not realizations, has shifted particularly when we had the SVB incident that Douglas mentioned. Two or three shareholders said, actually, we were encouraging you to use your cash for this extraneous events like this. We see why you have stated that cash is a strategic asset, and so we continue to believe that that's the way. But it is, it's deeply frustrating for me as a shareholder, for the for the board members who are shareholders, and and for the the wider shareholder base. So we do debate it, all the time. On the on the discount, there was a question around, you know, why is your discount different, greater than, others in the space? So I and we we follow the stats all the time. Numis here, one of our brokers, and they have a a a huge, analysis they do every single day, which groups together all of the various investment companies, and it it puts them into geography and into sector, etcetera.

1:32:49 And there was a specific question about us versus PE or PE fund of funds. And it is true. There was a bit of a difference between, the earlier stage growth that we're in and PE fund of funds. The average discount for PE type companies that are backing either fund of funds or PE direct is around the 30 to 40% mark. And when you go into growth mean, these aren't huge sample sets, you know, so so careful what we draw. But when you go into to look at growth, which is probably the nearest comparator to us, the range is everything from sort of 20% discount to 75% discount. We're the wrong side of the median. I'd prefer if we weren't below the sort of the 50% average, but we are. And and perhaps that's partly around the perception of valuation of our companies. We have those questions from shareholders frequently, so much so that we did a a special webinar on that front when we set it up. We thought it was gonna be not not very widely attended as it happened. A 158 people dialed into that webinar, and it's been watched since. 98.5% of the people that has a good point for, I suppose, numbers, said that it was useful and and helped to understand it. And we've also tried to work with some of our analyst colleagues at Berenberg in their latest note.

1:34:03 I know not everyone can have access to that, but in their latest note, they looked at the valuation approach we've taken across the portfolio and broadly concluded with our auditors that it's the sort of conservative side of balanced. And so in terms of sorry. I've got notes. I honestly, there were a lot a lot of questions here sort of thing. So the what are we doing about the discount? Douglas had mentioned we talk about it at at every board. We have done things like introducing the dividend where appropriate. We have done share buybacks. We are increasing the number of Citi events that we're doing, which I've I've talked about, and we're doing an ESG road show and an an ESG special deep dive event that will be later in the year as well as one on tech and one on clean techs. There's lots of that activity. And we're doing a lot of work with our brokers and a lot of, just shoe leather meeting with investors.

1:34:52 Earlier this week, we did a virtual roadshow to The Nordics, and we've got one in Switzerland coming up in, next week. And we also covered Scotland, and we spoke to Canadian investors. So there's there's a lot of, work going on to make sure that as risk appetite does return and as as flows go back into equities and particularly our end of the risk spectrum that we are front of mind and people understand the valuation and the investment case that we've got. So there's a lot of Citi engagement. And then Douglas also mentioned this sort of wider initiatives that are going on, particularly in The UK around getting the conditions right for long term capital to invest in scale up of science and technology companies. We've definitely got the product for that. We've got many of the the best and brightest science and technology companies in our portfolio that you're exposed to as shareholders.

1:35:43 And so, obviously, you as you would expect, we're engaged with many of those, be it the city of London or the government or the treasury, on those. Whether anything will come of it, I don't know, but I'm an optimist. I'm a I'm I'm CEO. You have to be optimistic in that these things will will lead to, more capital and greater liquidity, and therefore, hopefully, greater valuation for our companies. We I I should we we had about three or four questions on the various mechanisms. Douglas has touched on it. We don't rule out any of the the the buyback mechanisms. There was one also specifically on, the distribution in specie of our Oxford Nanopore shares, and we've looked at that many times. There is no way we know of to do that in a tax efficient manner. You either cause a dividend esque tax effect, which is income tax for many individuals, or you create a capital effect, which some of the trusts and some of the the institutions don't like.

1:36:35 So we we don't have that as an option that we think is value creating, and we will continue to hold that position. But over time, the intention is obviously to to realize capital as as we generate value for shareholders, but that could be over a a number of years. Then we had general questions. So, stuff on both international operations, and we've got two bits of the business that have got different branding to the group. So there's The US bit of the business is now called Longview Innovation, and we have our Cleantech platform, which is now called Kiko Ventures. And on long view, we had to the the way that we access The US market, we set up a wholly owned operation over there. It was very, very difficult to get US investors to invest into PLC to act to provide capital to The US portfolio. So what we did was we took money directly alongside us in The US platform.

1:37:28 So we own about 58% now of The US platform. We have a couple of long term institutions alongside us, big family office, big multifamily office, and a foundation. In order to do that, I won't bore you with the details, but there's some, some local investment restrictions and protectionist restrictions called CFIUS. And in order to to be able to get local and and international capital in, we had to restructure that vehicle. It got really, really confusing for the US team and for people interested in investing in The US. They say, well, your IP GROUP Inc, is that the same as IP GROUP PLC? Aren't you exposed to what's at Nannapur? A very cost effective, simple way. We changed it to long view innovation, to reflect that it's a a part owned bit of the group, and they report that that's helped them with, sort of, you know, brand clarity. But we don't we don't think that there's a need to create lots and lots of brands, but the one place where we have done it and it seems to be working so far is in the cleantech and the climate space.

1:38:24 Again, it's a modest investment, you know, completely immaterial in in the scale of the group. But the idea was to make sure that we had a dedicated brand because clean tech investing has become more competitive for talent, for capital, for, exit opportunities, and also interestingly for investment opportunities. And so if we are trying to build a business which is a an ecosystem relevant leader in those spaces, and brand has been particularly important in the cleantech space, time will tell over the course of the next one, two, three, four years whether that's a sensible, modest investment, we believe it is. And, you know, we'll report back as as we get operational progress. And then there's one on international operations on on Australia. Specific question, how much have you invested and what sort of projects? So this is, again, relatively small by weight of capital. We've invested about 25,000,000 in total into our Australian portfolio today. Actually, the returns are very good. They're, you know, sort of twenty, thirty, 40% IRR, but it's very early.

1:39:27 So it's I, you know, I don't wanna, draw too many conclusions. They align very well with our, deep tech, our clean tech, our life sciences. And the one that we're sort of most interested and most excited about is a business called Hydata, which is the world's most efficient hydrogen electrolyzer technology. Fascinating business, huge, huge commercial interest, and we hope to be able to report some good news on that company both in terms of technical progress and possibly funding in the second half of the year. So that's part that's the sort of the sourcing reason for being there. The second reason for Australia is in Australia, there are some very big long term pools of capital, the superannuation funds. We benefit from one of those Telstra Super who is a shareholder in the group, and we also have a a growing and and and valuable partnership with Hostplus who are one of the top 10 superannuation funds in Australia.

1:40:19 And so while we've invested about 25,000,000 of shareholders' money into spinouts in Australia, we've now invested about 90,000,000 and sterling of host plus capital alongside us into companies like Oxford Nanopore, into Oxboticle, now OXA on an international basis, and there's about another 70,000,000 to come. The economics for shareholders there is that we obviously get paid a fee, and we have some carrying upside in that portfolio. So it's partly about sourcing, but it's also about access to capital. If anyone's interested in the portfolio, Siro and a couple of other members of the Australia team are actually here, this week. Siro's on his way back from a couple of weeks in The US with two of our, most interesting therapeutic portfolio companies, Rage Biotech and Elemetry, and he's had, something like 60 face to face meetings. So part of the proof in the pudding will be those companies being able to attract capital, in the tens of millions of dollars and hopefully, from, US BC type investors alongside us. But if you if you are interested, we can catch zero, afterwards, over coffee. So that was the that was the general stuff.

1:41:27 Let let's take a couple of questions in the room or if there's any coming in from. At the moment, actually, there haven't. We had about two fifty people registered online this morning, so amazing attendance. But actually, we haven't had any AGM related questions yet. Are there any questions in the room, then we'll go back, Greg. I know you have questions that have come in in advance, but given that we're engaging. If there are any other questions in the room, let's yep. Of course. Oh, sorry. I see. Yeah. My first question of many, I'll split them over the morning, if I may. Try and put them into themes if you can into sort of Oh, have now.

1:42:12 I've marked them up in the book. They're hard to go from page to page to page. But the first one I've done is ArtificialInduction or is it AI? I'm not too sure. Artificial Intelligence. Artificial that's it. How is this company dealing with that situation? Because there's a lot going on about Danner. It's a bad thing, it's a good thing. There's talk about, shall we say, government legislation. I just want to know where this company stands one way or another because I haven't got it through where to put my cross at this moment in time. Well, I think you're not alone in that, but what I can tell you is I've talked to a number of people and it isn't going to end the world, which is I think reassuring.

1:42:57 But Mark Reilly, who heads our our deep tech business is in the room, and he's absolutely desperate to say something. So, Mark, do you wanna give a two minute how should we how do how should we think about AI, and how are we as IP group thinking about AI? Mark, you might wanna just come down, and we can the the people on the screen. Thank you. Good morning, guys. So, it's both a good thing and a bad thing is the is is my short answer, my personal view on it. It will have, lots of benefits. It will solve potentially lots of problems that face humanity today, it will also create some. And just like every technology that's come before it virtually, our approach to IPO, I mean, we've invested in artificial intelligence for a long time, actually. Over ten years now, we've had artificial intelligence businesses in the portfolio. They didn't really call themselves that before it became the buzzword, but someday they were using artificial intelligence technologies.

1:43:50 And so we have seven or eight companies in the portfolio today that are their product, their core kernel is innovation in artificial intelligence. What's created a lot of attention and fuss over the past six months is this new form of, well, it's not new, but a later form of artificial intelligence, which is generative AI. So most of our companies are analytical AI companies. They ingest data, they interpret that data and then they give you insight that you wouldn't otherwise have seen as a human observer of it. Generative AI companies create output being text or language or pictures or whatever. I think that technology has lots of applications. We're looking at new investments in that area. Do already have one or two investments in the generative AI area, But I think the things that you highlight are also opportunities for us as well. There is opportunity in ethical AI. There's opportunities for companies to apply AI to police itself. And we're looking at academics who are researching in those areas and there's potential for us to invest there as well.

1:44:52 Great. One more just and then I'll come back to Greg. So another one? There's a lot of theory about IE, one way or another, but it being monitored for good or for bad. We've all heard about various people that were very much involved in AI in the early stages are now very, very worried and have now always said taken a back seat because they are worried that we are running before we can walk. You know, I think the scenario is talking about AI actually taking over human beings one way or another. We will go on what you would call it on a busman's holiday, but it'll be a permanent one. I think I think I think that's best left to the movie industry, actually. I don't think that's that's likely. I mean, yes. I mean, there there are discussions between the EU and The United States around whether there should be some code of conduct.

1:45:56 The prime minister, when he was in Washington recently, suggested that The UK should be the host of a conference, and I think he was pitching should be the host of the global regulator. Well, I I think between The US, the EU, and China, who've all got significant businesses in AI, it would be it's a it's a it's a bold pitch, and we'll see where it goes. There there there will be some form of agreement just as there aren't some elements of, you know, gene editing and and so on for agriculture and for human beings. I'm sure there'll be some sort of agreement, but I think we're a long way from seeing an international framework agreed because it's early days. But I guess those people who say make some of the more dramatic illustrations of what it could do just beg the question, can you control it?

1:46:48 And I think most of the people I've talked to say you can't control something that that generates itself as easily as as you would like to. How do you do that? So watch this space. But I think we'll be long gone before it's a problem. So I think that's that's is there anyone else in the room? Then I'll come back to you. I have got a question online, again, Mark, probably. Excellent. I think it's good to come and participate. From Corecam Investment Group investment question. I have the following question from the tech side. How do you think the attention from the Apple Vision Pro, the ARVR goggles, the release of it will affect the overall ARVR market and especially companies like our own Ultra Leap? Do you consider this a threat or an opportunity for Ultra Leap? Do you really see additional traction in the market? What a fantastic question. If I had to write my own question, that's exactly what I would have written. I promise I didn't You might have done.

1:47:45 I promise I didn't plant it. Yeah, this is fantastic. So I've been saying, found an image the other day of a slide that I gave to the All Staff Christmas party about five years ago, which was an AR image. It was an image of a shark floating through a living room. I was explaining to the team that this is the future of computing, a spatial computing in three dimensions. And so it's quite an emotional moment for me when Apple came out with this device and announced it a week or so ago. And it will seed this whole concept. And of course, Apple have Apple ified it, and so they have done it well, and they've produced this piece of hardware that is streets ahead of anything that's come before it. And so that will sort of bring this into the mainstream, create the legitimacy of spatial computing as the next way that we'll interact with computing. It is a huge opportunity for a whole bunch of companies in our portfolio, Ultraleap being the standout one. So Apple have made it the defaults that you will use your hands in controlling these devices rather than having to hold cumbersome controllers, which means that everybody else who wants to build a spatial computing technology will be aspiring to that benchmark of using hand tracking.

1:48:49 Apple use relatively rudimentary hand tracking at the moment, which is just sort of specific gestures where you can scroll or pinch to click. Ultraleap have the best hand tracking in the world. They can do all of those things, pinching and clicking and scrolling, but they can also do tracking your hands when they're occluded by the other hand and all the different movements that you can make and build skeletal models. So it's already we're seeing the effect at Ultra Elite that a step change in the the level of traction and the level of speed of engagement that they're getting with their customers as people knew that this this Apple device was coming. So it is world to all good news. I'm very pleased and excited about the fact that that's that's happened. So now we know that we're to watch what you do at the Christmas party this year as to what will happen in five years' time. Greg, I'll come back to you. Yeah. Thanks, Douglas. So the last category was on progress in in the portfolio, particularly in in the top companies, and also a little bit around, like, how do we think about either retaining holdings in a company or or realizing them?

1:49:48 And there was also a question on the realizations this year. Somebody picked up very cleverly that in the balance sheet of the at the year end, we had some deferred proceeds to come and ask what's what's the time frame for those. So I can answer that one very quickly. So you'll see in the AGM update we gave this morning, we talked about having received 31,000,000 of realization proceeds year to date. The vast majority of that was from deferred consideration on our WaveOptix sale, which, to Mark's point, on the VRAR XR, and that was something that Snap Inc. Saw ahead of time and have been planning for, and we exited that business. So so the majority of that 48,000,000 was the 31,000,000 that we received in the first half. We don't expect a material amount of that remainder to happen this year, more likely next year and and the years after.

1:50:38 And so that's quite quite an easy one to cover. I mean, the how do you decide which companies retain a shareholding in or to sell? I mean, there is a plan for each company, which is our expected case, and then unusual things happen, preferably that they are ahead of time, but quite often, they take longer. In the case of WaveOptics, for example, we were doing a funding round for that business, and that catalyzed a a bid from Snap. And by the time we negotiated the position, and it ended up being, we think, the most valuable deep tech exit that that in Europe that was venture backed. And that was something that we thought if things went well for that business over the course of maybe two or three years, that would be the value we were aspiring to. And so we in that case, we we supported the exit.

1:51:25 And then there are others where we have taken our cost off the table. That's the case with Oxford Nallipur at the moment. You you heard the the opportunity that's there. We believe that the company is undervalued versus its peers. We believe it's under its intrinsic value. But fundamentally, we also believe that the core purpose of IP GROUP is to offer listed shareholders access to private businesses, but we have a long term capital model that means that we can hopefully get those returns to shareholders on a longer term basis and on a strong basis. There was one question came in. Is that sort of portfolio related? Or I'll just do a quick update then. Okay. Good. Quickly on the progress in companies, there was a question on Estheso, one on Nanopore, and you also heard from genomics.

1:52:11 And there's a specific one on Oxbotica, which is our it's now called OXA. That's the autonomous vehicles software company that we have from Oxford. Gavin Jackson, who is the CEO, gave an update as part of our full year results presentation, in line with all of our updates lately. That is on the website, so you can watch Gavin talk for sort of ten minutes or so on the commercial prospects. In terms of the the question was specifically what's happened this year in terms of commercial partnerships. I can't really go into the detail of non announced commercial partnerships. What I can say is they work with a number of multinationals. A number of multinationals invested in the current funding round that they did at the turn of the year, and they continue to make strong technology progress with those partners.

1:52:56 They did also announce that they, in sort of back end of March, a partnership with Google Cloud for all of the processing and storage and rapid transfer and analysis of their data that drives the autonomy. And Gavin said at the time of our results that Google were an investor in that round as well. So good progress there. I mean, job, as you remember, hopefully from the full year results presentation, the job for AXA to do with that capital is to make real traction and real commercial traction, real revenues over the course of the next couple of years. And that's certainly the mission that Gavin and team are on. On ESTESO, Sam mentioned very briefly that the Phase 2b trial for rheumatoid arthritis will read out in the first half of twenty twenty four. So in hopefully just under twelve months time, that is recruiting to plan. We're about halfway through the recruitment, it's about two twenty person trial.

1:53:53 And we've also, we announced in the last six months, a second indication, which is for fibrosis of the lung, and we plan to start a second phase two trial in the coming months or so. We'll announce when we start it. That will read out towards the back end of twenty twenty four. And we think it's a really, really valuable area if we can get through the clinical stages to prove efficacy. So questions before I wrap up? Or only ones. Yeah, I'm smiling. One is, is IP GROUP open to invest in university spinouts outside its regular jurisdiction? Probably from an academic, that question. I don't know if people want to and then the combined one will probably cover these quite quickly. Are there any of the top unlisted companies in either portfolio, the big portfolios groomed to get a listing before the next AGM? It'd be hard to comment out of thought but I don't know if Mark or Sam want to comment on either of those.

1:54:49 The second one was, are there any companies in the portfolio looking to IPO within the next year? I guess, hard to be specific. So the answer from the floor was depends on their level of madness. I mean, a lot of this is gonna be market driven. Many well, not many. There's there's there's a handful of companies who have talked about being IPO ready in the second half or possibly the first half of next year, But all of the bankers that we've spoken to, and I'm sure all the bankers of the companies have spoken to, is that the IPO market remains pretty subdued at the moment. So we're not baking into our forecast from a realization point of view realizations from IPOs. For example, in the therapeutic space, it's far more likely that we would partner with a pharma company and seek to generate cash that way. But there are a few, aren't there, that see that as an aspiration and as an exit? Sam might want to add on that.

1:55:48 We definitely have, several companies in the portfolio that were the markets there, where they had where they, were a couple of years ago would be able to IPO in the next year, but the markets aren't there at the moment. So all we're doing with those companies is getting them ready. So you've had a couple who have appointed CFOs who are particularly, market facing, market experienced, and that is one of the things that we have both companies preparing. If the market does open, they would be ready for that as one of the strategic options. You want to very quickly cover the other one off, which was I've gone to wrong. Yeah. So the university ones, over the last five years, we've looked at the data. We've done all the analysis. I mean, IP GROUP, including Park Walk, is the most active investor in university spinouts by a country mile.

1:56:36 So so much so that when when Bohirs do do the analysis do the analysis, they separate our IP GROUP balance sheet, Park Walk, and and one of the businesses we acquired because otherwise, the bar would be just so big compared to the others. So we are the market leader in this space. I think it's something like 45 or so companies that we have created or backed across Parkwalk and IP GROUP since the beginning of 2021. So the pipeline remains strong. We're doing more of the earliest new companies from from universities in The UK through the Part Walk platform, and that's part of our, you know, sort of efficient use of capital. But we do think there's about 15 or so that we've done across balance sheet in in Australia and in The UK, and that doesn't include the stuff in The US because we no longer consolidate The US business.

1:57:24 We don't see a big need to diversify geographically generally, but we do always look at opportunities. We've got one or two spinouts in Germany in the cleantech space, for example, or not even spinouts in some cases. So there is there will be a little bit of geographic diversification, but we're, you know, we don't want to go and operate in lots and lots of countries. We're trying to have critical mass either by sector or geography. We don't only invest in university spinouts, but we are very well positioned in them across The UK, America and Australia and we kind of pride ourselves that probably we've got some of the best access of anybody to early stage IP in the English speaking world, it's a really special position but already we are looking at stuff outside of universities, so to say do we consider that like we already do, we're sourcing our IP from a wide range of sources.

1:58:14 So I think that's all the questions. Mean, just by way of summary, we've tried to, as a management team, set out the clear strategy for value creation. We've tried to align the way that we think about shareholder value returns, aligned with that sort of time frame. We have these three clear sectors that we focus on, and I've tried to highlight at the beginning of each year a few of the exemplar important companies in each of those sectors. The way we will be moving is towards reporting IRR and performance for each of the sectors and realizations, etcetera. But in the meantime, we are do we're we're giving sort of milestone updates on the portfolio companies and doing it by by way of example. On the life sciences side, as Sam mentioned this morning, the big value driver there is these eight companies who are going through clinical trials that will read out in the next sort of twenty four months. On the deep tech side, companies such as Ultraleap and others, FeatureSpace, it's all about revenue growth. So they have though our top companies there all had double digit revenue growth last year and will have double digit revenue growth this year, which obviously drives valuation and eventual exit. And on the cleantech side, there are three main companies, OXXO, I've already mentioned, First Light Fusion, and Isata that I've already mentioned, as well as sort of judiciously, making a few new investments into that space.

1:59:30 So that's the that's the plan, and that's why we have confidence in our ability to deliver both financial returns and impact over the course of the the coming years, and and and we thank all shareholders for their support in in in that journey. Greg, thanks. We've we've kind of gone well beyond the time we'd allocated, which is great because we've had a lot of questions. But if there's a a final urgent question in the room, we'll take it. Otherwise, we'll we'll wrap up, and and we've got all the board sitting down in front of you and Greg and myself and and DB. If there's any questions as we walk out, we'll be very happy to talk to any individual shareholder. But there is a final question. So, sir, if you can, Andrew. Yes. Regarding mine. Yeah. Yeah. I do. Thank you.

2:00:21 I speak as a a long term private shareholder. I've been a shareholder for over ten years, added to my shareholding. I'd like to just return to this issue of the discount to NAV, which obviously was a main theme of the questions to the group. Can I also thank them for the presentations both earlier and today? Very helpful indeed. Clearly, it's very frustrating for you. You highlighted it's an area of discussion at every board meeting. I recognize that you've made efforts to communicate with the investment community and address your shareholders. And I recognize also that there's nothing you can do about changes in investment appetite for certain types of investment, and you can't affect interest rates and the impact on DCF valuations.

2:01:16 And totally supportive of you supporting your portfolio companies long term. That's where you're gonna create the value. But I would just like to challenge you into again, in terms of the authority you have to buy back up to 10% of your shares. The share price, I understand, is now 52 p, down a penny today, and the NAV is a 133 p. Very frustrating for us all. These are all external factors, but you could take action yourself with the NAV at a 133.

2:02:02 And I would just ask again, is it really is an investment in the in the shares around $50.50 to 60p not quite a good return for IP GROUP, relative to some of the other things one could be doing with the money? So we have that debate. We've had that debate many times. And and and kinda one of one of the simple one of the simple pieces of analysis is well, two things. If you invest at 52 p or 50 p or whatever you would have to do, are you signaling you believe that's what the shares are worth? Some people would say so. Some would say, no. You're being opportunistic in buying a you're buying a pound or £1.34 50 p. That's a good a good trade.

2:02:52 But you're also saying that you don't think there are better ways of putting your money to work where you're gonna get more than two and a half x for that investment. And we believe that that in portfolio for many of the companies that have been talked about, investment of those companies will pay back more than 2 or 3 x, whereas investment in our own shares would pay back two or three x on the on the numbers that you've talked about. So if we get the investments in the life sciences, the deep science and and and transition finance right, they should pay back many multiples of the amounts of money we're invested, which will be better than buying our own shares. We can't make those investments if we disperse the cash back into the stock market. So the analysis we've done and then and based on advice and and, you know, we've taken advice from the pros and the cons is that it's not certain that you would succeed in demonstrating to people you'd done yes.

2:03:43 You would have an immediate sort of technical boost, but you would unless you could replace that cash, so you'd be going out and asking people to invest a pound where they could buy you know, we'd like you to we'd like now some more capital to invest in the portfolio. The NAV is one. We've been more than one thirty because you'd have bought back shares. Shareholders say, why would I invest at at NAV when I can buy the shares in the marketplace at now 60 p or whatever it would be? So it's it's complicated. I think the best value we will get is is is successful investing, and and that's the decision we take it. We will be we've got a board meeting later on this afternoon. It will be on the agenda again. It's constantly on the agenda. I mean, I think that there's no silver bullet, but one of the things that would be very helpful, and that's why we're, thinking about going to The Middle East thinking well, not go we're going to Middle East, going to America. If we could, you know, if we could interest, and it's not very much money given our market capitalization, a meaningful investor that the rest of the world will look and say, hello.

2:04:46 These people see value in this company and are putting a, you know, 50 or 100,000,000, which would be quite a big part, into into play. What are we missing? It would be powerful because our share our our share register doesn't really move. And when we see our shareholders, they say, you're doing the right things. We just wish you were valued more. And you go, yeah. No. So it's frustrating, but, you know, you make it you make the point we make to ourself all the time. Any anything else? Okay. I'm gonna I'm gonna call the meeting to sort of a the formal and and and the informal part over. For those of you who haven't put your co op cards back in the box at the end so that we can count the votes, please do so. We'll put the the results of the the votes onto the onto the the website and and onto the regulation information service as soon as we have them. So just to close the meeting by saying thank you very much for your interest in the company, for your your challenges, your questions, and we'll be around for the next fifteen, twenty minutes or so before we start meeting. So if there's anything else that we haven't covered that you would like to ask any of us, we will be delighted to do so. But thank you very much indeed.

2:06:03 Thank you very much for updating attendees today. Could I please ask attendees not to close the session? I do now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few minutes to complete, but I'm sure it'll be greatly valued by the company. On behalf of the board of IP GROUP PLC, we'd like to thank you for attending today's annual general meeting, and good morning to you all.