Small Talk: Fast progress of incubator IP2IPO raises eyebrows

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The Independent Online

The company is one of a network of quoted ventures discovered, funded and floated on AIM by IP2IPO, a "technology incubator" which was briefly owned by the broker Evolution Securities and is now quoted in its own right.

IP2IPO has agreements with several of the UK's best universities and university departments, giving them first dibs on investment opportunities in spin-out companies. The academic institutions get advice on how to commercialise their inventions, and IP2IPO gets a stake it hopes can be sold at a whopping profit a few years later.

This would seem a long-term game, but the speed of its progress to date - from company creation to flotation in a timeframe traditional venture capital outfits would never dream of - has raised eyebrows, particularly among veterans of the biotech industry. So far, six IP2IPO companies have listed on AIM, of which three are in the biotech sector.

The reason for these eyebrows is that IP2IPO has found investors willing to back a flotation of these biotech companies at an earlier stage in their development, or at higher valuations, than appear typical in the sector. IP2IPO would argue its detractors are just jealous. After all, the reputation of the scientists with whom it is doing business is second to none. To pick an example, Stephen Davies, a professor of organic chemistry at Oxford University and founder of the drug testing firm VastOx, has made a fortune creating and selling a previous company. The chances that IP2IPO is nurturing the superstar companies of the future are high, it says.

The detractors would argue that early-stage companies are bound to suffer scientific setbacks. They may even fail to develop the commercial blockbuster treatments for asthma, say, or Alzheimer's (in the case of the IP2IPO spin-out Proximagen Neuroscience) on which a good part of their valuation is based.

The concern is that if setbacks happen, and IP2IPO companies fall to valuations more typical of the biotech sector, there will be many disappointed investors and the companies will find it hard to attract funds for expansion. IP2IPO may find few people to back further spin-outs.

For reference, the six IP2IPO companies are Synairgen, Proximagen Neuroscience and VastOx in the biotech field, and GETech, Offshore Hydrocarbon Mapping and Nanscience. Their progress will be keenly monitored.

Felix agrees bank deal

Might we get word soon on a successful agreement between Felix, a little company developing pub games machines, and Alliance & Leicester, the banking giant, over plans to roll out a fee-charging cash machine with all sorts of bells and whistles on? The project is a little behind schedule, but Small Talk hears that an announcement could come very shortly.

Felix has developed a game called Everyone's a Winner in which - obviously - every player wins a prize of some value higher than the cost of playing. The prizes are provided by the marketing departments of partners such as retailers, who want to get players into their shops.

And now Felix has combined the Everyone's a Winner game into a cash machine, where the £1.50 withdrawal fee allows users a free go on the game. Prototypes have been put in a handful of pubs, and Alliance & Leicester, which is in charge of the cash machine side of the terminal, is understood to be close to committing to several hundred machines.

That all still seems a long way short of the 10,000-machine target that Felix remains publicly committed to, but it is a start and ought to justify the leap upwards that Felix shares enjoyed amid all the rumours of a deal last week.

Titanium ready to scoop peace dividend in Sierra Leone

More ticks in boxes for Titanium Resources, the company launched on AIM last year to start mineral production in Sierra Leone, now that country is no longer being ravaged by civil war.

The company has refurbished the giant dredger pictured opposite, which has lain unused for a decade. An announcement to the Stock Exchange today will confirm that it is back in service scooping up mineral-rich sand in the south-east of the country. It should be up to full speed, after some initial tests, by the end of March.

That is on time and on budget, as set out in the company's prospectus last August. Tick.

The mineral to be refined from the dredged sand is called rutile, which is used as a pigment in paints and plastics, and for the manufacture of welding rods.

There is also news on the company's second mining operation, a bauxite mine, also in the south-east of Sierra Leone. Bauxite is a raw material in aluminium, and Titanium Resources is reactivating long-term contracts to supply the global metals companies Alcoa and Glencore.

This mine, too, was abandoned because of the war and has had to be rehabilitated. The company will say today that it is back in service, also on time and on schedule.

Tick.

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