IP Group (LON:IPO) reported full-year 2025 results showing an improvement in net asset value (NAV) per share, supported by a major uplift tied to a long-dated royalty and milestone interest in obesity drug compounds now being developed by Pfizer, alongside continued portfolio realizations and share buybacks.
NAV per share rises 13% as Pfizer-linked royalty interest drives valuation gains
Chief executive Greg Smith said delivering positive NAV per share growth was his “stated priority for 2025,” and the group reported NAV per share increased to £1.10, up 13% year-on-year and about 15% since the half-year update.
Smith also framed IP Group’s portfolio positioning in the context of investor debates around AI’s impact on software. He said the firm has limited exposure to application-layer SaaS and instead focuses on “deep tech, clean tech, and life sciences,” where companies are built around defensible intellectual property and, in many cases, are enabled by AI-driven demand for infrastructure, energy, advanced materials, and drug discovery capabilities.
How the obesity royalty interest was built over more than a decade
Smith walked investors through the history behind the Pfizer-linked asset, describing it as an example of “decades of foundational science” and long timelines before commercial relevance becomes visible. IP Group’s involvement began in the early 2010s through its Imperial Innovations subsidiary, which operated as the tech transfer office for Imperial College London at the time.
He said IP Group helped form Zihipp in 2012 around research from Professor Sir Stephen Bloom’s lab, secured exclusive rights to a family of GLP-1-related patents, and supported the academic team for years before the IP was licensed into the company in early 2019. Zihipp later operated with a small team, leaning on Imperial College for early work, and raised only a few million pounds in 2020, according to Smith.
In 2023, Zihipp was acquired by Metsera for what Smith described as a modest upfront payment, with much of the economics structured through milestone payments and royalty streams layered onto IP Group’s existing licensing economics. Metsera then floated on Nasdaq in January 2025, raising about $275 million at a valuation just under $2 billion. Pfizer subsequently agreed to acquire Metsera for up to $7 billion, and after a competitive bidding process (Smith referenced Novo as another bidder), the deal was finalized in November 2025 at a higher value of up to $10 billion.
Smith said the underlying patent life runs into the 2040s, with milestones extending into the 2030s, and that the lead program is in phase III with market approval targeted for 2028.
Portfolio highlights: Oxford Nanopore, Istesso, Hysata, and exits
Managing Partner Mark Reilly reviewed major holdings and developments across the portfolio. He said the Pfizer-related royalty interest is now the largest asset on the books. The second-largest holding remains Oxford Nanopore, which Reilly said reported over £220 million of revenue, up about 24% year-on-year, with its clinical market sector growing by nearly 60% in 2025. Reilly also noted a new CEO has joined Oxford Nanopore.
Reilly discussed Istesso, where the company did not hit the primary endpoint of a phase II trial previously disclosed by the group. He said further analysis of trial data in 2025 indicated bone protective effects and signs of muscle protection, supporting potential use of its drug (Leramistat) in conditions linked to aging and physical decline.
On clean tech, Reilly highlighted Hysata, described as a hydrogen electrolyzer company with a device said to be 95% efficient. He said the company is progressing toward commercial-scale manufacturing, building larger-scale versions in Australia, and starting customer-premises builds.
Reilly also summarized cash realization activity, including completion of IP Group’s exit from Hinge Health. He said IP Group, as the first institutional investor in the business that became Hinge Health, managed its exit over several months following a successful 2025 IPO, delivering £46 million of proceeds with a reported 50% IRR.
Another highlighted transaction was the sale of Monolith, an AI company spun out of Imperial College London that applied AI to engineering data, including battery optimization. Reilly said CoreWeave acquired Monolith, generating a reported 70% IRR for IP Group, with remaining exposure linked to an earn-out.
Additional portfolio updates included:
- Artios announced an oversubscribed $115 million funding round, which Reilly said followed early trial results showing tumor shrinkage in around 50% of patients in early cohorts.
- Oxa raised a $103 million Series D focused on off-road autonomy applications such as ports and airports; Reilly said the round was at a lower price than the prior round after a challenging capital-raising period.
- Microbiotica reported early clinical results in ulcerative colitis showing 63% of treated patients achieved remission versus 30% on placebo, according to Reilly.
Financials: profit, overhead reduction, cash, and buybacks
CFO David Baynes said NAV per share improved due to an overall profit of about £67 million and the impact of share repurchases. IP Group spent £45 million buying back 91 million shares, around 9% of total share capital, which Baynes said contributed about 4p to NAV per share.
Baynes said overheads declined, with the overhead ratio at 15.9%, down from about 22.1% two years earlier, helped by both cost reduction and higher income, including a “good year” at Parkwalk generating extra income.
On the balance sheet, Baynes said it remained around £950 million (just under £1 billion). Portfolio value increased from about £850 million to just over £900 million, reflecting £71 million of investment, £68 million of exits, and £64 million of fair value gains, which he said were largely related to Metsera.
Cash ended the year at £221 million, down from £285 million, after £70 million invested, £68 million realized, and buybacks and overhead outflows.
Valuation approach for the Pfizer-linked compounds and capital allocation priorities
Baynes detailed the process used to value the obesity royalty interest, describing three lead programs: a monotherapy GLP-1 agonist in phase III, a combination therapy program in phase IIb, and an oral program in preclinical development. He said IP Group used six analyst notes to estimate market size, dropped the most conservative and most optimistic, and used a weighted average of the remaining four.
He said the group applied historical probabilities of success by stage, citing about 53% for the phase III program, 25% for a phase I to II transition, and 10% for the earliest-stage program, then discounted projected cash flows at 11.5%. Baynes characterized the resulting £128 million as a “realistic estimate” of current fair value, noting the value could rise as clinical probabilities increase, but could also fall in the event of setbacks.
On capital allocation, Smith reiterated IP Group’s policy of using a portion of realizations to reinvest and a portion to return capital to shareholders, with buybacks favored when the discount to NAV exceeds 20%. In 2025, he said 50% of cash exits were allocated to buybacks, retiring almost 10% of shares at around a 50% discount to NAV. Looking ahead, management said around £30 million of cash from exits is available for the next program, and the board expects to update on the timing of a 2026 buyback in due course.
Smith also said the company is working with Aberdeen to build a portfolio of growth-stage investments for defined contribution savers, describing it as part of an effort to increase long-term institutional capital supporting UK innovation.
About IP Group (LON:IPO)
IP Group accelerates the impact of science for a better future. As the most active UK based, early-stage science investor, we develop and support some of the world’s most exciting businesses in deeptech, life sciences and cleantech (led by Kiko Ventures). Through Parkwalk, the UK’s largest growth EIS fund manager, we also back world-changing innovation emerging in leading universities and research institutions. Our specialist investment team combines sector expertise with an international approach.
