International Biotech is part owner of an unquoted UK biotech stock, Convergence Pharmaceuticals, that is being acquired by Biogen Idec. At the purchase price of $675m, International Biotech’s stake is worth £6.8m. This compares to the £442,000 valuation of the company in International Biotech’s accounts.
For now though International Biotech is writing up the value of its investment to £4.4m. This reflects the fact that the payment for the acquisition will come in two parts – £2.1m within 15 days and the balance as Convergence’s drugs are developed. The latter point involves some risk and will take time and so International Biotech has discounted the value of the balance of the payment.
IBT : International Biotech making 15x its money on Convergence