Neil Woodford-backed tech innovation firm Allied Minds (ALM) continues to struggle on the stock market after it announces it will stop funding seven of its subsidiaries.
Nearly half the value of Allied Minds has been wiped off since January 2017, the shares falling 464p to 260p at the close of play on 4 April, which was largely due co-founder Chris Silva’s shocking departure in March.
Last month, we flagged Allied Minds as one to sell after Silva left by ‘mutual agreement’ with no explanation as we were concerned the departure would impact relationships with Allied’s subsidiaries.
Following the funding cut, the stock dropped a further 26% to 193.5p, marking a near all-time low since it floated in June 2014.
If someone invested in the company when it floated at 190p, they wouldn't be out of pocket, but others who bought into its early momentum probably are.
Allied Minds helps companies with innovative ideas to commercialise their technology.
Healthcare subsidiaries have been mainly affected as funding will be stopped to Biotectix, Cephalogics, CryoXtract, Novare Pharmaceuticals, Optio Labs, RF Biocidics and Tinnitus Treatment Solutions.
Cephalogics is developing a novel neuroimaging device to assess the effects of treatments on the brain. CryoXtract is designing a robotic system to automatically retrieve multiple frozen portions from a single frozen biological sample.
Management believes there are no commercial returns from these companies despite demonstrating progress against technical milestones.
Allied Mind says its portfolio will be marked down by a staggering $146.6m compared to an overall portfolio size of $535.8m when management reports full year results on 27 April.
The funding cut will free up approximately $14m of capital spend budgeted for 2017, which will be used for other companies in the portfolio ‘where there is greatest potential for value creation.’
A potentially valuable subsidiary to Allied Minds is Federated Wireless whose cloud-based platform offers co-ordinated shared spectrum resources to network operators and service providers.
