Gems and pebbles

11 June 2015 By Robert Cyran Follow @rob_cyran

Six months after GlaxoSmithKline sold a compound for $5 mln to a hedge fund manager, he has taken it public and landed a $3 bln valuation. It shouldn’t prevent unloved lab discoveries from being licensed. The Axovant IPO just suggests the deal structures could be smarter.

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Axovant Sciences shares nearly doubled on their debut on June 11, giving the biotech firm a market value of $2.8 billion assuming underwriters exercise their option to purchase stock. The company has one asset, a potential drug for Alzheimer’s disease acquired from GlaxoSmithKline for $5 million in December 2014.

Axovant is led by Vivek Ramaswamy, a 29-year-old former hedge fund manager, who holds an 81 percent stake in the company.

GSK will also receive certain milestone payments and 12.5 percent royalty payments should the drug reach the market.

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