Allied Minds cuts funding to seven subsidiaries

Intellectual property group Allied Minds has cut funding for seven subsidiaries as part of a restructuring plan.

The company further plans to reallocate capital and management resources across the portfolio and pipeline in a bid to accelerate commercialisation.

The subsidiaries are Biotectix, Cephalogics, CryoXtract, Novare Pharmaceuticals, Optio Labs, RF Biocidics and Tinnitus Treatment Solutions.

In aggregate, they represented $146.6m of Allied Minds’ group subsidiary ownership adjusted value (GSOAV) as of 30 June last year.

Allied Minds interim CEO Jill Smith said: "While many of the discontinued subsidiaries have demonstrated progress against technical milestones, the path to commercialisation is unlikely to yield appropriate financial returns.

"The restructuring will result in a mark down to GSOAV. However, it places Allied Minds in a stronger position to capitalise on the exciting opportunities in front of us, and ultimately to deliver returns to shareholders over the medium term to longer term through accelerated commercialisation and monetisation, and portfolio growth." 

Allied Minds plans to undertake a process to seek strategic alternatives, which may include sales or transfers of legal entities or assets, or liquidations, for these businesses.

Capital and management resources that will be unlocked as part of this process would be diverted to other companies and opportunities in the portfolio.

With the discontinuation of funding, the company is expecting to free up approximately $14m of capital spend budgeted for this year or about $9m net of a restructuring charge that is estimated at $4.7m, to be taken in the second quarter of this year.