Danny von Doesburg from SNS Securities said the sale did not necessarily mean that DSM had lost faith in Provexis.
“The shares have been on a good run and are about double the price DSM Ventures paid for them so they may be engaging in a little profit-making,” Doesburg told NutraIngredients.com this morning.
DSM Ventures remains the biggest investor in Provexis. The next biggest player being one of the original venture capital investors, Rising Stars Growth Fund, which holds 5.8 per cent.
Taking stock of stock
Provexis shares fell on the back of the news to about £0.05 (€0.0577) from £0.0535 at the beginning of the week – a drop of about six per cent. The shares peaked at almost £0.16 (€0.1847) in August last year, a level company spokesperson Nicholas Nelson admitted was unsustainable.
That spike was fed by Provexis becoming the first company to win an approval for a European Union article 13.5 emerging and proprietary science health claim for its Fruitflow, blood circulation-benefitting tomato extract.
“That spike was unsustainable,” Nelson said. “But the shares seem to have found a more sustainable level at about £0.05, and investors will now await the next developments in the deal with DSM.”
Provexis chief executive officer, Stephen Moon, said DSM Nutritional Products, with which it has been working for several years, was completely independent of DSM Ventures and so its reduced stake did not affect their joint activities.
DSM Nutritional Products and Provexis signed a letter of intent centered on developing Fruitflow in February that outlined profit-sharing and other measures, but details have not yet been revealed.
“We are in a full alliance agreement with DSM and in the process of setting up the supply chain, so it is full steam ahead,” said Moon. “They are a long-term strategic player.”
Doesburg said not too much could be read into a move that represented such a miniscule part of DSM Ventures annual €50-75m spend. The company has a portfolio of about 70 investments, many of which are not publicly traded.
“I don’t see any change in DSM Ventures strategic policy and see no real fear that it will retreat from being a strategic investor in Provexis.”
The current trading price of £0.05 (€0.0577) capitalizes Provexis at £56m (€64.59m).
Fruitflow, which is used in a juice called Sirco in the UK, works by inhibiting clumping of blood platelets, and is aimed at healthy adults between the ages of 35 and 70, who are disposed to cardiovascular disease.