Half-year Financial Report

("IP Group" or "the Group" or "the Company")

Half-yearly results 2026

IP Group plc (LSE: IPO), which invests in breakthrough science and technology companies with the potential to create a better future for all, today announces its financial results for the six months ended 30 June 2026 ("HY26").

Highlights

Continued NAV growth driven by strong progress on Pfizer's obesity programme & disciplined execution against strategic priorities

·      NAV/share increased 3.2% to 113.9p with closing NAV of £1bn, supported by £27m uplift in valuation of the Pfizer Obesity Royalty Income asset to £152m

·      Cash proceeds from exits of £68.7m in H1; surpasses total delivered in FY25; on track against £250m target for 2025-27 exits

·      Continued capital discipline with £30m invested across the balance sheet portfolio (HY25: £36m), including five new investments

·      Strong balance sheet and liquidity with gross cash and deposits of £239m (FY25: £211m)

·      Appointment of Michael Queen, former CEO of 3i Group, as Chair

Significant de-risking and value creation from Pfizer's obesity programme

·      Further positive clinical data released by Pfizer for berobenatide, demonstrating competitive weight-loss efficacy versus approved therapies alongside favourable tolerability and supporting monthly dosing

·      Berobenatide/amylin combination advanced into Phase 2b in May 2026, triggering a £27m valuation uplift

·      Pfizer progressing a ten-study Phase 3 programme, with berobenatide launch targeted in 2028

Portfolio continues to attract substantial third-party capital & deliver key operational milestones

·      Portfolio companies raised £543m (HY25: £372m; FY25: £914m), providing ongoing validation of portfolio quality; the Group contributed c. 5% of total funding

-       DeepTech: Quantum Motion ($160m) and Oxford Quantum Circuits (£260m, c.$350m) raised a combined c.$0.5bn, Oxa raised $103m

-       HealthTech: Centessa acquired by Eli Lilly generating £7.3m value uplift, Enterprise Therapeutics reported positive results from Phase 2 trial for cystic fibrosis, Microbiotica announced positive results in Phase 1b trial in ulcerative colitis, Istesso started Phase 2 trial in rheumatoid arthritis

-       CleanTech: First Light Fusion (£25m) and Mantle8 (€31m) completed funding rounds; Hysata secured first electrolyser order

·      Significant milestones through to end 2027 including exposure to AI-enabling technologies and therapeutics

Expanding third-party capital platform and funds under management

·      Strategic relationship with Aberdeen progressing to the closing of the managed-account mandate and first investment

·      Launch of A$50m IP Group Climate Catalyst Fund with A$20m from Australia's Clean Energy Finance Corp

·      Additional third-party capital raised through Parkwalk

·      Well positioned to benefit from growing institutional focus on UK innovation and growth assets

Post period-end update

·      NAV per share of approximately 117p at 11 September 2026

·      Cash proceeds of £17.1m received since 30 June 2026, giving a year to date total of £85.8m

·      Fair value of Oxford Nanopore increased by £26.4m since 30 June 2026

Summary financials

(i)       Note 6 details the Alternative Performance Measures ("APM")

Greg Smith, Chief Executive of IP Group, said: "The first half of 2026 has been another period of disciplined execution with the Group delivering further NAV growth, generating more cash proceeds in six months than in the whole of 2025 and continuing to broaden our third-party capital platform. With significant progress across our portfolio, IP Group enters the second half of the year with growing momentum. The continued advancement of Pfizer's obesity programme demonstrates the value that can be created from breakthrough science and innovation, while the £543m raised by portfolio companies during the period provides powerful external validation of the strength and quality of our portfolio. Looking ahead, we see a substantial pipeline of potential value-driving milestones across our HealthTech, DeepTech and CleanTech portfolios. Combined with our deep university relationships, sector expertise and strong financial position, we believe IP Group is uniquely placed to create, build and scale the next generation of innovation-led companies and deliver attractive long-term returns for shareholders."

Webinar

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Further information on IP Group is available on our website: www.ipgroupplc.com 

This half-yearly report may contain forward-looking statements. These statements reflect the Board's current view, are subject to a number of material risks and uncertainties and could change in the future. Factors that could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors relating to the financial or commercial prospects or performance of individual portfolio companies within the Group's portfolio of investments. Throughout this Half-Yearly Report, the Group's holdings in portfolio companies reflect the undiluted beneficial equity interest excluding debt, unless otherwise explicitly stated.

CEO's Interim Management Report

Summary

The first half of 2026 represented another period of disciplined execution against our strategic priorities, delivering growth in net asset value, further progress towards our realisation targets, continued expansion of our third-party capital platform and continued validation of portfolio quality from both operational milestones and third-party investors.

Net asset value increased to £1.0bn, equivalent to 114p per share, representing growth of 3% during the period, driven principally by continued value creation within our portfolio and a £27m uplift in the valuation of our Pfizer Obesity Royalty Income asset. The Group generated a profit of £31m and ended the period with gross cash and deposits of £239m, providing significant financial flexibility and a strong foundation from which to execute our strategy.

We continue to make good progress against our commitment to deliver more than £250m of exit realisations by the end of 2027. During the first half, we generated £69m of cash proceeds, taking total proceeds achieved since the start of 2025 to £137m. We have delivered a further £17m realisations since 30 June, taking this figure to £154m. At the same time, we maintained a disciplined approach to investment, deploying £30m across the portfolio while focusing capital on our highest-conviction opportunities.

The appointment of Michael Queen, former CEO of 3i Group, as Chair further strengthens the Board as we continue to focus on narrowing the gap between the underlying value of our portfolio and our market valuation. The Group continues to see a significant number of potential value-driving milestones across the portfolio through to the end of 2027.

Significant progress and value creation from Pfizer's obesity programme

The Pfizer Obesity Royalty Income asset remains one of the most significant drivers of value within the Group and continued to make important progress during the period. The asset valuation increased by £27m to £152m, reflecting both scientific advancement and reduced development risk as the programme progresses.

During the first half, Pfizer reported additional positive clinical data for berobenatide, demonstrating competitive weight-loss efficacy against approved therapies alongside a favourable tolerability profile that supports the potential for monthly maintenance dosing. Importantly, the berobenatide/amylin combination advanced into Phase 2b development in May 2026, triggering a valuation uplift for the asset.

Looking ahead, Pfizer is progressing an extensive Phase 3 programme comprising ten studies, with a targeted commercial launch in 2028. While significant development milestones remain ahead, continued progress across the programme reinforces our confidence in the long-term potential of the asset and illustrates the value that can be created through exposure to world-class innovation originating from our portfolio.

Delivery against strategy: portfolio performance and value creation

Across the broader portfolio, companies continued to attract substantial third-party capital while delivering significant commercial, technical and clinical milestones. Portfolio companies collectively raised £543m during the period, compared to £372m in the first half of 2025, with IP Group contributing around 5% of the total funding raised. This continued ability to attract external capital provides strong validation of the quality of our portfolio and demonstrates the value of our long-term investment approach.

Importantly, progress was broad-based across the portfolio, with companies delivering funding rounds, clinical milestones and commercial traction across our DeepTech, HealthTech and CleanTech themes demonstrating continued momentum beyond our Pfizer royalty asset. Alongside supporting existing companies, we completed five new balance sheet investments and added eight new companies through Parkwalk.

Over 60% of our portfolio value is concentrated in 10 holdings, and 91% in 40 holdings, across the Group's three main thematic areas. In the first half of the year, IP Group invested in 16 opportunities across HealthTech, DeepTech and CleanTech, with 55% of that capital invested into the existing portfolio and 45% invested into new opportunities. Our portfolio continues to be well-funded with over 75% by value of portfolio companies valued at >£4m currently funded into the second-half of 2027 or beyond.

The performance of the Group's thematic focus areas is summarised below with further detail in the Managing Partner's Portfolio Review.

Progress on realisations and cash generation

Delivering cash exits remains a core strategic priority. During the first half of 2026, the Group generated £69m of cash proceeds from exits and realisations, exceeding the total achieved during the whole of 2025. This takes cumulative proceeds since the beginning of 2025 to £137m, representing meaningful progress towards our target of delivering more than £250m of cash realisations by the end of 2027.

The principal contributors in the six month period were the receipt of proceeds from the 2025 sale of Monolith, which was settled in shares in the acquiring company CoreWeave, Inc. which were sold in the period (£23m), a full exit from Hinge Health which delivered £17m in HY26 and £46m of proceeds overall, equating to a 53x multiple of invested capital and a 46% IRR, and proceeds of £18m following the completion of Eli Lilly's acquisition of Centessa Pharmaceuticals in a transaction valued at $6.3bn upfront with up to a further $1.5bn in milestone payments. Together, these realisations demonstrate our ability to crystallise value across a diverse range of portfolio assets.

The current portfolio continues to offer a range of potential realisation opportunities across both private and listed holdings. Combined with our strong balance sheet and disciplined investment approach, these proceeds provide additional flexibility to support our highest-potential companies, pursue attractive new investment opportunities and continue returning value to shareholders through the active management of the portfolio. While the timing of realisations remains dependent on market conditions and company-specific developments, we remain confident in our ability to deliver against our medium-term exit objectives.

Third-party capital under management

A key milestone during the period was the further development of our strategic relationship with Aberdeen and preparations for the proposed launch of the fund. The partnership brings together Aberdeen's distribution capabilities and IP Group's venture investing expertise, with the aim of increasing institutional access to innovative UK science and technology companies. We believe this represents an important step towards unlocking greater pools of long-term capital for the UK's innovation economy.

IP Group was also delighted to launch the IP Group Climate Catalyst Fund with Australia's Clean Energy Finance Corporation at the end of March. This new fund, targeting Seed and Series A investments, will help scale Australian technologies that can decarbonise hard‑to‑abate industries and has a target size of up to A$150m. First close of the fund was reached with IP Group contributing A$30m and CEFC A$20m as cornerstone investors.

Both of these initiatives demonstrate continued execution of IP Group's strategy to grow private capital under management and accelerate the commercialisation of breakthrough science and technology. As at 30 June 2026, IP Group managed or advised £553m (HY25: £663m, FY25: £557m), of which £363m is managed by Parkwalk, the Group's specialist Enterprise Investment Scheme ("EIS") fund management subsidiary, including funds managed in conjunction with the universities of Oxford, Cambridge, Bristol and Imperial College London. In 2025, we also launched a new EIS fund in collaboration with Northern Gritstone, covering the universities of Leeds, Liverpool, Manchester and Sheffield.

During the first half, Parkwalk invested £15.7m (HY25: £12.3m; FY25: £20.6m) across 18 companies, including eight new additions to the portfolio, continuing to support the commercialisation of world-class academic research.

The remainder of our third-party capital platform is primarily managed by our Australian team. In addition to the new CEFC mandate mentioned above, this includes the IP Group Hostplus Innovation Fund, which manages A$435m and has invested alongside IP Group in a number of portfolio companies including Oxford Nanopore, Genomics, First Light Fusion, Oxa and Hysata, providing additional growth capital as these businesses scale.  

The Group remains well positioned to benefit from growing institutional interest in innovation-led investment strategies.

Shareholder returns

Delivering returns for shareholders, including focusing on narrowing the share price discount to our NAV per share, continues to be a key focus. Under the Group's Capital Allocation Policy, a proportion of cash proceeds is re-invested and a proportion is used to deliver a cash return to the benefit of shareholders. While the share price discount to NAV exceeds 20%, such returns are typically delivered through share buybacks.

Since the completion of our 2025 buyback programme, approximately £50m of cash from realisations has been accumulated for future shareholder returns under the policy. The Group notes that the buyback authority proposed at the June Annual General Meeting did not achieve sufficient shareholder support to pass and is now engaging constructively with shareholders to understand the views expressed and consider all feedback received on both this resolution along with others that failed to pass. The Directors continue to believe that the ability to return capital through share buybacks remains an important part of the Group's ability to implement its capital allocation policy. In accordance with the UK Corporate Governance Code, the Group will publish an update on its shareholder engagement within six months  of the June AGM and will report the outcome of the same in its next annual report.

Since introducing this capital allocation framework in 2021, the Group has returned more than £150m of cash to shareholders through dividends and, more significantly, share buybacks, retiring 17.7% of the Group's share capital to date.

Outlook

IP Group enters the second half of 2026 with momentum across each of its strategic priorities. Since the start of 2025, we have delivered £137m of cash proceeds towards our target of more than £250m of exits by the end of 2027, expanded our third-party capital platform through new institutional partnerships and continued to demonstrate the quality of our portfolio through significant financing activity and operational milestones.

We remain encouraged by the continued progress of Pfizer's obesity programme, which represents a significant potential future value driver for the Group. More broadly, our portfolio is exposed to a substantial number of potentially value-accretive milestones over the next 18 months across therapeutics, artificial intelligence, quantum computing, robotics and climate technologies.

The environment for high-growth science and technology businesses remains supportive, with increasing institutional interest in innovation-led investment opportunities and growing recognition of the role that science and technology can play in addressing global challenges. We believe IP Group remains uniquely positioned through its deep university relationships, long-standing track record of company creation and development, specialist sector expertise and growing third-party capital platform.

Supported by a strong balance sheet, significant liquidity and a well-funded portfolio, the Board remains confident in the Group's strategy and focused on delivering long-term value for shareholders through disciplined capital allocation, portfolio execution and cash realisations.

Managing Partner's Portfolio Review

IP Group invests in breakthrough technologies that address the world's most pressing societal and economic challenges. Our portfolio spans HealthTech, DeepTech and CleanTech, with a focus on companies that are shaping a healthier, tech-enriched and regenerative future. In addition, a small number of investments are categorised as platform investments, which are funds or portfolio companies that invest in other opportunities.

Performance of key holdings

The following table outlines the performance of the Top 10 constituents of our portfolio:

IP Group's biggest portfolio value movement came from reported progress from Pfizer's next-generation obesity drug candidates. Pfizer presented new data from its Phase 2b studies of berobenatide (PF'3944), a potential once-monthly GLP-1 receptor agonist, at the American Diabetes Association Scientific Sessions in June. The data demonstrated encouraging efficacy and a favourable tolerability profile, providing support for the asset's once-monthly dosing profile. Pfizer also confirmed the initiation of the SOLIS-1 Phase 2b study, which is evaluating an ultra-long-acting amylin analogue (PF'3945), both as a monotherapy and in combination with berobenatide.

Pfizer's pipeline includes four clinical-stage programmes and several next-generation assets, all targeting improved efficacy and tolerability with fewer injections, addressing a major unmet need in obesity treatment. IP Group is entitled to receive future returns from these compounds through a combination of milestone payments and tiered, low single digit percentage royalties on net sales of the licensed products. It is important to note that the above numbers are stated after allowing for the fact that 50% of all monies received by the Group will be payable to Imperial College London under revenue share arrangements.

Oxford Nanopore released its results for the six months to 30 June 2026 in August, reporting revenue of £116.7m, which grew by 12.3% on a constant currency basis, driven by strong adoption in EMEAI[1] and across Applied end-markets offset by headwinds as previously disclosed in its trading update. Adjusted EBITDA improved year-on-year and sequentially to £(22.1)m, compared with £(48.3)m in H1 2025 and £(38.4)m in H2 2025, reflecting continued progress towards profitability. The improvement was driven by gross profit growth and disciplined control of the cost base, with adjusted operating costs down 6.9% year-on-year and down 9.6% versus H2 2025. ONT ended the period with £234.5m of cash and liquid investments, compared to £302.8m as at 31 December 2025. Oxford Nanopore reiterated its guidance for the year, set a new target of achieving more than $700m of revenue in 2030 and announced a new cross-licensing deal with an unnamed global diagnostics company with a $20m licensing fee to be recognised during the second half of FY26 with an additional $15m in committed product purchases to be recognised over FY27 and FY28. During the period Francis Van Parys took up the role of Chief Executive, succeeding founder Gordon Sanghera.

In June, Istesso commenced dosing in IST-03, a Phase 2 clinical trial of its lead candidate, leramistat, in patients with rheumatoid arthritis. The randomised, double-blind, placebo-controlled study has been designed to generate data across a range of measures, including muscle quality, repair and function, bone density, and conventional rheumatoid arthritis endpoints. Muscle loss, or sarcopenia, is a significant and growing unmet need across ageing populations and multiple chronic diseases, for which no specific pharmacological therapies are available, and rheumatoid arthritis patients provide a population in which leramistat's effect on muscle can be assessed alongside its activity in the underlying disease.

The clinical study builds on prior rheumatoid arthritis data showing leramistat improved disability and fatigue alongside reductions in markers of muscle loss. This is supported by preclinical findings showing restoration of muscle quality in disease models and recovery of muscle mass, quality and function in aged animals to levels greater than those seen in baseline younger animals. A positive read-out would support leramistat's continued development in rheumatoid arthritis while also providing the first human evidence that it is possible to augment the capacity to repair, with implications for the treatment of chronic degenerative and age-related diseases more broadly, including sarcopenia.

Leramistat is the lead candidate from Istesso's novel class of Mitochondrial Complex I Modulators (MCMs), which have demonstrated the ability to induce adaptive tissue repair and regeneration across multiple tissues, including muscle, bone, gut and lung. Enrolment is currently underway at Newcastle University and Newcastle Hospitals, in conjunction with the National Institute for Health and Care Research whose specialist facilities and biopsy expertise include advanced imaging and analysis techniques that are ideally suited to delivering this innovative trial. Istesso's carrying value reduced by £4.4m, reflecting a small downward movement in the valuation range following an update for foreign exchange.

Australian electrolyser manufacturer Hysata reached a major milestone in the first half, securing its first commercial order for its record-efficiency electrolyser and marking its transition from technology validation to commercial supply. The Port Kembla-based company announced the signing of its first megawatt scale electrolyser commercial deployment, with the system set to be delivered to a significant global customer in the first half of 2027. While the customer has not yet been publicly identified, the project will operate in a hard-to-abate industrial sector with secured hydrogen offtake, representing a critical step towards large-scale commercial adoption of green hydrogen.

Other Notable Portfolio Developments

In the exciting area of quantum computing, we were pleased to see two of our quantum computing companies raise a combined $0.5bn. Oxford Quantum Circuits raised a £260m Series C round - Europe's largest ever private quantum computing funding round while Quantum Motion completed a $160m Series C to accelerate its silicon-based approach to utility-scale quantum computing.

In May, Enterprise Therapeutics announced that its Phase 2 trial for ETD001, its lead candidate for treatment of cystic fibrosis ("CF"), achieved its primary efficacy outcome. The trial aimed to investigate the efficacy, safety, tolerability and pharmacokinetics of inhaled ETD001 in the 10% of people with CF with the highest unmet medical need, who do not benefit from treatment with CFTR modulators. Data from the trial demonstrate improvement in lung function over a 28 day period compared to placebo.

Storm Therapeutics, a clinical stage company targeting RNA modifications to reprogram cells and develop novel cancer therapies, announced a successful $56m Series C financing. The proceeds will support the advancement of STC-15, a first‑in‑class, oral small-molecule inhibitor of METTL3, including a Phase 2 monotherapy study in selected sarcoma indications, in which the first patient has now been successfully dosed. Sarcoma is a form of cancer that arises in bone or soft tissues, including muscle, fat, cartilage, blood vessels, and other connective or supportive tissue. This study is designed to support a potential accelerated regulatory approval pathway for STC-15 and to establish a foundation for subsequent clinical development across additional oncology indications.

Microbiotica, which has a proprietary microbiome profiling platform that allows it to identify whether specific bacterial strains have clinical benefits, delivered two positive clinical readouts during the period. In February, its Phase 1b study of MB310 in ulcerative colitis met its primary and secondary objectives. After a three-month treatment period, clinical remission was observed in 63% of MB310 patients versus 30% on placebo, and, notably, 100% of those who responded to MB310 remained in remission at a three-month follow-up. The drug was well tolerated, highlighting MB310's potential to deliver disease-modifying, long-lasting remission in ulcerative colitis. In May, the Phase 1b MELODY-1 trial of MB097 in combination with MSD's KEYTRUDA® (pembrolizumab) also met all its objectives in advanced melanoma patients resistant to anti-PD-1 therapy. Together, the results validate Microbiotica's clinic-led discovery platform across two distinct disease areas and provide a foundation to progress to larger controlled studies.

Elsewhere in DeepTech, Audioscenic, a leader in 3D immersive sound projection from conventional speakers, achieved an important commercial milestone with its "Powered by Audioscenic" spatial audio technology in the new Lenovo Legion™ 7a laptop. Slamcore, a leader in spatial intelligence software, announced a $14m funding round from top investors, including ROKStar Ventures, a subsidiary of Rockwell Automation, a global leader in industrial automation and digital transformation.

In CleanTech, there were a number of funding rounds including a £25m first close for First Light Fusion. The round was led by UK venture firm East X Ventures and its fusion fund Starmaker One and included a significant strategic investment from the UK Atomic Energy Authority (UKAEA), marking a major milestone in the company's mission to deliver affordable, scalable, fusion energy. The new capital raised, which also included investment from IP Group and our Hostplus managed fund, will accelerate the commercial development of First Light Fusion's groundbreaking FLARE Fusion Energy concept.

Mantle8, a natural hydrogen exploration company, raised €31m in a Series A funding round to leverage its proprietary technology stack across a global exploration and drilling campaign targeting the first commercially exploitable reservoir of high-purity natural hydrogen. The company holds an exclusive five-year exploration permit in the French Pyrenees, covering 739 square kilometres across the Haute-Garonne and Hautes-Pyrénées departments. Through this permit area, Mantle8 is targeting multi-million-tonne resources of naturally occurring, pressurised hydrogen, with the potential to generate billions of revenues if successfully proven and developed.

Not all portfolio developments in the period were positive. The largest individual valuation reductions were at Diffblue, down £5.2m, and Aqdot, down £3.4m. Diffblue has been navigating the rapidly shifting AI landscape, which has affected a number of companies in the sector over the past two years, and has undertaken a strategic pivot and reset of the business in response. At Aqdot, customer adoption has been slower than anticipated and the company has faced challenges in establishing its manufacturing facility.

Upcoming milestones

As noted in March, many of the Group's "up and coming" portfolio companies have key developmental milestones approaching that could have a material impact on their value over the next twelve months. Iksuda Therapeutics, which is developing next-generation Antibody Drug Conjugates for difficult-to-treat cancers, is expected to complete several Phase 1 studies in H2 2026. In DeepTech and CleanTech, a number of our companies are targeting funding rounds and commercial milestones. We also expect to see further progress in Intrinsic's ReRAM and HBM memory technologies, and more progress towards the deployment of Accelercomm's technology in Low Earth Orbit satellite constellations.

Platform Investments

IP Group's Platform investments portfolio comprises holdings in funds and companies that operate in a similar way to IP Group, including our interest in our US platform, North America University Innovation L.P., Oxford Science Enterprises Limited, the UCL Technology Fund and Cambridge Innovation Capital Limited, and in all of which IP Group was a founding investor. This portfolio was valued at £59.6m at 30 June 2026 (HY25: £69.7m, FY25: £62.2m), reflecting a fair value decrease of £2.5m in the period driven by valuation reductions within North America University Innovation L.P.'s portfolio.

Other portfolio disclosures

Number of investments by sector

¹ Excludes de minimis holdings, which have a small value to the Group and are not actively managed to the same extent as core holdings, and are accordingly not included in the stated number of companies.

Portfolio funding position

The following table lists information on the expected cash-out dates (the date by which portfolio companies are projected to need to have raised further funding) of portfolio companies in which IP Group's investment holding value is greater than £4m. The values in the below table show the IP Group portfolio value which falls within each of the cash-out periods.

¹ Cash out dates based on portfolio company forecast as at publication date of half-yearly report.

Financial Review

The Group prepares its statutory financial statements in accordance with UK-adopted international accounting standards. With effect from December 2025, the Group transitioned to applying the investment entity basis under IFRS 10, under which its investment entity subsidiaries are measured at fair value rather than consolidated on a line-by-line basis. As a result, the assets, liabilities, income and cash flows held within those subsidiaries are presented in the IFRS financial statements as a single aggregated amount.

To preserve transparency, the Highlights, CEO's Interim Management Report, Managing Partner's Portfolio Review and Financial Review are presented on a disaggregated basis, which presents the income statement, balance sheet and cash flow components of that single amount separately. The disaggregated basis is unaudited, is an alternative performance measure, and is reconciled to the IFRS financial statements on in the Presentation of Unaudited Disaggregated Financial Information section at the end of this report. Net assets and profit for the period are the same under both bases.

Pfizer Obesity Royalty Interest

The Group's largest single asset arises as a result of its role in commercialising anti-obesity research undertaken at Imperial College London. Much of the resulting intellectual property sat within portfolio company Zihipp Limited, spun out of Imperial in 2019 and sold to Metsera, Inc. in 2023. Metsera was itself acquired by Pfizer in November 2025 for consideration of up to $10bn.

The Group's economic interest takes two forms, which are presented separately within the portfolio:

·      A licence interest. IP2IPO Innovations Limited owns and exclusively licences the underlying intellectual property patents relating to Pfizer's obesity drug programmes, including the lead product berobenatide  as well as an amylin analogue (PF'3945), a GIPR agonist (PF'4696) and a berobenatide prodrug (PF'6795). Under this licence agreement the Group holds the full entitlement to milestone payments and tiered, low single-digit percentage royalties on net sales of the licenced products. This interest is measured as the fair value of cash flows from intangible assets held within the Group's investment entity subsidiaries.

·      Deferred consideration on the sale of Zihipp. As a former 31% shareholder in Zihipp, the Group is entitled to 31% of all consideration paid or payable to selling shareholders under the Metsera Share Purchase Agreement, including contingent milestone payments linked to specified development, regulatory and commercial events, together with royalties on Net Sales and Net Receipts. This interest is measured within amounts receivable on the sale of debt and equity investments. These obligations were unaffected by Pfizer's acquisition of Metsera.

Both interests are valued using discounted cash flow models sharing the same underlying assumptions, and are stated net of the revenue share arrangements under which 50% of all monies received by the Group is payable to Imperial College London.

The composition of, and movements in the royalty interest by exposure type are as follows:

A breakdown of the total value by programme is as follows:

The asset increased in value by £27.3m during the period to £152.1m, largely reflecting the progression of the berobenatide & amylin analogue combination programme, which progressed from a Phase 1 trial at the end of December 2025 to a Phase 2b trial at 30 June 2026. Successful completion of Phase 1 removes the risk of failure at that stage from the assessment, and the estimated Probability of Success (the likelihood that the drug will ultimately be approved for sale) therefore increased from 25% to 39%.

The valuation is most sensitive to assumed clinical trial Probability of Success rates and the discount rate applied; the key inputs and sensitivities for each component are set out in notes 5A and 5D. Under the DCF methodology, where a compound fails to progress to market as a result of trial failure or failure to obtain regulatory approval, the model assumes a zero value outcome for that product. The eventual approval and commercial launch of drugs based on these compounds is not certain.

Consolidated statement of comprehensive income

A summary analysis of the Group's performance based on the Disaggregated Income Statement is provided below:

¹ Defined in note 6 Alternative Performance Measures.
² See net overheads table below and definition in note 6 Alternative Performance Measures.

Fair value movements

Net portfolio gains/(losses) consist primarily of realised and unrealised fair value gains and losses from the Group's equity and debt holdings in spin-out businesses and include changes in the fair value of licensing assets which have been recognised for the first time in 2025 as a result of the change in investment entity basis described earlier in this section. These movements are analysed in detail as follows:

A summary of the largest positive and negative net portfolio fair value movements is as follows:

¹ Formerly IPG Cayman L.P.

Net overheads

Other income comprises fund management fees on our third-party managed funds and licensing and patent income. In the current period other income totalled £3.0m (HY25: £3.6m, FY25: £7.4m) and was lower year-on-year largely due to a lower level of performance and exit-based annual management fees earned within Parkwalk in the current period compared with a very successful period for exits within their portfolio in the first half of 2025.

Other central administrative expenses, excluding performance-based staff incentives, share-based payments charges and the impact of FX translation movements are essentially unchanged on the prior period at £9.8m (HY25: £10.1m, FY25: £20.9m) reflecting a continued focus on control of operating costs.

The charge of £1.1m in respect of the Group's Annual Incentive Scheme reflects a provisional assessment of performance against 2026 AIS targets which include Group, Team, and Individual performance elements (HY25: charge £0.9m, FY25: charge £2.4m).

Carried interest plan charge

The carried interest plan charge of £1.1m (HY25: £5.8m credit, FY25: £7.0m credit) relates to the recalculation of liabilities under the Group's carry schemes, reflecting the unrealised portfolio gains in the period. The liabilities are calculated based upon any excess of current fair value above cost and the hurdle rate of return within each scheme or vintage. Any payments will only be made following the full achievement of cost and hurdle via cash proceeds and are only paid on the event of a cash realisation.

Consolidated statement of financial position

A summary analysis of the Group's assets and liabilities from the pro forma balance sheet is provided below:

The composition of, and movements in, the Group's portfolio are described in the portfolio review above.

Portfolio valuations

In terms of the funding round dynamics in the period, the proportion of down rounds (i.e. rounds raised at a lower valuation than the previous financing round) within the period increased slightly from the previous year at 43% (HY25: 38%). For all three down rounds, impairments had been recognised already in the Group's previous full year results in anticipation of the funding round outcomes.

The first half of 2026 saw a marked increase in capital raised by the portfolio compared to the same period in 2025, with £543m raised (HY25: £372m, FY25: £914m), of which the majority (92%) was raised as equity with only 8% raised as debt. Of this amount, £345m related to the Series C rounds for Oxford Quantum Circuits and Quantum Motion. IP Group contributed around 5% (HY25: 10%, FY25: 7%) of the total capital raised by our portfolio in the period.

In the period we commissioned third-party valuation reports for one investment, specifically Hysata (HY25: Microbiotica, Pulmocide, FY25: Pfizer Obesity Royalty Interest, Hysata).

The above table reflects priced funding rounds in the private portfolio (excluding organic and de minimis companies) and excludes debt funding and funding transactions where a subsequent tranche is drawn based on pre-agreed pricing.

The table below summarises the valuation basis for the Group's portfolio. Further details on the Group's valuation policy and approach can be found in note 5B.

 ¹ Total portfolio represented to reflect the updated APM definition made in the Group's 2025 Annual Report and Accounts

Other assets and liabilities

Other long-term liabilities relate to carried interest (described above), and loans from LPs of consolidated funds; IP Venture Fund II LP is a fund in which the Group has a significant interest. Loans from third parties of consolidated funds represent third-party loans into this partnership. These loans are repayable only upon these funds generating sufficient realisations to repay the Limited Partners.

Borrowings

Following the repayment in January 2026 of the remaining £3.1m outstanding under the Group's historic debt facility with the European Investment Bank (held in a non-consolidated subsidiary), the Group's outstanding debt now relates solely to a £120m private placement issued in 2022 and 2023. This loan has a fixed interest rate of 5.25% and is due to be repaid with three equal maturities in December in 2027, 2028 and 2029.

Under the terms of the £120m private placement, the Group is required to maintain a minimum balance of cash and cash equivalents which includes deposits maturing within 30 days held by any subsidiary of £25m at any time, equity must exceed £500m and gross debt less restricted cash must not exceed 25% of total equity as at the Group's 30 June and 31 December reporting dates. See the Group's 2025 Annual Report and Accounts for further details.

The private placement also includes 'Cash Trap' provisions which stipulate that the Group is required to maintain cash and cash equivalents of no less than £50m at any time, equity must be at least £750m, and gross debt less restricted cash must not exceed 20% of total equity as at the Group's 30 June and 31 December reporting dates. In the event of the Cash Trap being triggered, the Group is not permitted to pay or declare a dividend or purchase any of its shares. In addition, investments are restricted to £2.5m per calendar quarter other than those legally committed to. The Group is also required to place the net proceeds of all cash proceeds (over a threshold of £1m) into a blocked bank account. Entering a Cash Trap does not constitute a default.

Cash and deposits

At 30 June 2026, the Group's cash and deposits totalled £238.9m, an increase of £27.9m from a total of £211.0m at 31 December 2025. The key movements in the period were cash proceeds of £68.7m less portfolio investment of £29.9m, with remaining outflow of £10.9m mainly relating to the group's net overheads base. Of the £238.9m, £98.5m was held within consolidated subsidiaries (FY25: £16.5m) and £140.4m was held within investment entity subsidiaries (FY25: £194.5m)

Investments and realisations

The Group invested a total of £29.9m across 16 portfolio companies during the period (HY25: £35.7m, 22 portfolio companies) (FY25: £70.5m; 31 portfolio companies) and realised cash proceeds of £68.7m (HY25: £30.3m, FY25: £68.1m).

Largest investments and realisations by portfolio company:

¹ Receipt of cash related to deferred consideration

Deferred consideration from both expected royalty and milestone achievement was estimated at £56.4m at 30 June 2026 (2025: £54.4m), relating to the Group's realisation of Zihipp (£41.6m, exited in 2023), Featurespace (£7.2m, exited in 2024), Enterprise Therapeutics (£3.9m, programme exited in 2020), Oxular (£2.1m, exited in 2024), Kynos Therapeutics (£0.5m exited in 2024), and Centessa (£1.1m, Contingent Value Right from acquisition in 2026).

Taxation

The Group typically holds at least a 10% equity holding in its portfolio companies and as a result most of the portfolio will qualify for the Substantial Shareholdings Exemption ("SSE") on disposal. On these companies, capital gains are exempt from UK corporation tax and hence no deferred tax is recognised on capital gains at the balance sheet date for SSE-qualifying companies.

Capital gains from companies not qualifying for SSE will be at least partially offset by a deduction for the Group's current year net overheads and further reduced by using brought-forward tax losses relating largely to the Group's historic net overheads (restricted to 50% above a £5m annual threshold). As a result, the tax rate payable on any non-SSE disposals will be significantly less than the headline UK corporation tax rate of 25%. Deferred tax is calculated on non-SSE disposals and recognised through the income statement.

The Group complies with relevant global initiatives including the US Foreign Account Tax Compliance Act ("FATCA") and the OECD Common Reporting Standard.

Alternative Performance Measures ("APMs")

The Group discloses alternative performance measures, such as NAV per share and Return on NAV, in this half-yearly report. The Directors believe that these APMs assist in providing additional useful information on the underlying trends, performance, and position of the Group. Further information on APMs utilised by the Group is set out in note 6.

Principal risks and uncertainties 

A detailed explanation of the principal risks and uncertainties faced by the Group, and the steps taken to manage them, is set out in the Strategic Report section of the Group's 2025 Annual Report and Accounts. The principal risks and uncertainties are summarised as follows: 

·      it may be difficult for the Group to maintain the required level of capital to continue to operate at optimum levels of investment, activity and overheads, 

·      it may be difficult for the Group's portfolio companies to attract sufficient capital, 

·      the returns and cash proceeds from the Group's early-stage companies may be insufficient, 

·      the Group may lose key personnel or fail to attract and integrate new personnel, 

·      macroeconomic conditions may negatively impact the Group's ability to achieve its strategic objectives, 

·      there may be changes to, impacts from, or failure to comply with, legislation, government policy and regulation, 

·      the Group and its portfolio companies may be subjected to phishing and ransomware attacks, data leakage and hacking, 

·      the Group may be negatively impacted by operational issues both from a UK central and international operations perspective. 

The Group reviewed its operational, strategic and principal risk registers in the period and has concluded that it is not aware of any significant changes in the nature of the principal risks that would result in a change to the Group's principal risks as set out above in the forthcoming six months.