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NetScientific plc (AIM: NSCI), an investor in life sciences and sustainability technology companies, has announced encouraging progress being made by its portfolio company, PDS Biotechnology Corporation (Nasdaq: PDSB), a clinical-stage immunotherapy company, in a Phase 2 trial that showed a 67% tumour reduction among all HPV16-positive cancer patients taking part in the trial.

The trial, led by the National Cancer Institute (NCI) in the US, uses the company’s proprietary Versamune T-cell activating technology (PDS0101), in combination with two immune-modulating agents, to treat HPV16-positive cancers by activating the immune system to produce in vivo CD8+ (killer) T-cells.

Dr. Lauren Wood, chief medical officer of PDS Biotechnology, believes the results reflect PDS0101’s ability to generate a robust, targeted T-cell response and so may have “the potential to significantly improve clinical outcomes for patients with advanced, refractory HPV16-associated cancers”. Once the concept has been proved, the product will be broadened to address cancers caused by other oncogenic HPV-types.


Netscientific got attention with its ProAxis stake

NetScientific holds 5.75% of PDS Biotechnology. The PDSB announcement came the day after (7 June) news that ProAxsis Ltd, a Belfast-based respiratory diagnostics company wholly owned by NetScientific, had entered into an exclusive licensing agreement with biopharmaceutical giant AstraZeneca, in what has proved to be a transformative year for ProAxsis.

The deal sees ProAxsis taking responsibility for completing the validation and global commercialisation of a SARS-CoV-2 (the virus associated with Covid-19) serology ELISA (a blood test) developed by an internal research team at AstraZeneca. In return for providing access to the required intellectual property and technical know-how, AstraZeneca will receive an undisclosed royalty fee on future global net sales of the test.

ProAxsis has registered a CE Mark for activity-based immunoassays targeting neutrophil elastase and proteinase 3, as biomarkers of lung infection and inflammation in chronic respiratory diseases such as COPD, cystic fibrosis and bronchiectasis.

Last year’s financial results for ProAxsis show a significant decline in sales and revenue, thanks to the pandemic, but five separate grants awarded in 2020, worth a total of £1m, have compensated. The company expects to commercialise five novel/improved products over the coming year, which the company forecasts will boost sales and revenue.

Listen: Podcast with Ailsa Craig of the International Biotechnology Trust

How NetScientific plans to deliver value to shareholders

NetScientific aims to deliver shareholder returns through a proactive development of its portfolio companies, seeking value through partial or full exits from trade sales, public listings or equity sales. In August last year, NetScientific bought out EMV Capital, which is now the corporate finance and venture capital division of the Group. The acquisition has more than doubled the Group’s portfolio, from eight to 17 companies.

NetScientific has a strong outlook. Last year’s fundamental change in strategy and management, moving to a model of ‘capital-light investment combined with pro-active management’ to unlock the underlying asset value in the portfolio companies, seems to be bearing fruit. The preliminary results for the year ended 31 December 2020 show the share price has increased from the low point of 12.5p in early 2020 to the year’s average of c. 55p. It is currently trading at 126p (as at 12 June), with a year-to-date return of 179%.

Netscientific fundamentals are looking strong

The company has strong fundamentals: the Board’s estimated ‘fair value’ of its holdings has increased by about 80%, from £11.8m to £21.2m; loss after tax has almost halved from £4.9m to £2.3m; and the cash position has been strengthened by two fundraisings, £2.3m raised in September 2020 and £7.7m last week, which should help the company deliver on what is clearly a successful strategy.

In addition, the doubling of its portfolio companies through the acquisition of EMV Capital holds out the prospect of more growth and more shareholder value to follow. We believe NetScientific’s current share price does not reflect its growth potential. Under the new CEO Ilian Iliev, a seasoned entrepreneur and venture capitalist appointed to lead the new strategy last May, NetScientific is going places.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

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