ACTG - Earnings call transcript Q2 2021 | Acacia Research Corporation

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Operator

Please standby. Good day, ladies and gentlemen. And welcome to your Acacia Research Second Quarter Financial Results Conference. All lines have been placed in a listen-only mode and the floor will be open for your questions-and-comments following the presentation. [Operator Instructions] As a reminder, today’s call is being recorded. is host, to IR. Jeff it over the time, your to Stanlis this my turn pleasure floor At with FNK the yours. floor Sir, is

Jeff Stanlis

Press, Tobia, Malinda. Executive Officer. Rich you, Hosting call Financial are Thank the Rosenstein, Chief Officer; Investment Chief Clifford Al Officer; and today Chief

result the during to future I beginning, in to statements current generally Act on uncertainties. as company’s forward-looking future forecasts expectations projected results These projections about provided of and and expectations, materially that Reform to a may are contain defined for estimates operation that the relate remind results certain estimates, based the Securities are Before risks differ call you forward-looking plans, Actual trends. events those may and of forward-looking and like objectives, information or would projections, Litigation this Private statements future from relating current as and XXXX.

and the Press, like company’s would Clifford to the financial This Al I Events review the under tab. described and Form results. Form see of this Mr. the release will discussion please press issued the to update said, website uncertainties, Clifford With SEC. turn yours. a quarterly I’d and the company’s that XX-K now provide on annual may quarterly call before be the opened. call Factors Risk XX-Q, market -- that the accessed will results on like financial Press. reports such the Rich and acaciaresearch.com filed For release a everyone morning Form was with all at annual Acacia’s report News risks and to a is remind in disclosing over on business

Clifford Press

to second capital partnership million. everyone. with and Value pursuant of end stood consisting cash, public LP Starboard availability investments, quarter, Jeff, good of At $XXX the you, and private at Thank our our and base morning, the

markets. Financial including We of Healthcare and team’s acquisitions Life technology in focus through private Sciences, pursue segments a our on leveraging and operating experience Services coordinated of public Insurance. research to process, and mature businesses continue Industrials, We tightly certain

companies in sub-$X billion primary set market with remains Our opportunity cap. that are equity

have when approach As this efficient and our view in segment primary the markets area the as permanent least favors the of we capital structure. public research we the and said past,

We opportune market. have in now Acacia of an the position part

Specifically, private public for we valuations, partner sellers us ideal a and at operate investors. variety the of interface and between market an making

We are to permanent deploy able to complex capital multi-factor navigate transactions.

This such acquirer and an investment Starboard, process private We rigorous ready to are approach leverages access counterparties, sheet packet balance equity attractive corporate are large with strong and a as committed be our enterprises. opposition funds capital. to and

to inherent relationships benefits committed may flexibility have to created, Al? turn active from with to us I we strategy, equity remain over Officer companies can transactions. network. to holdings. the to find where constructive Investment In a Al and will this now enabling underperforming summary, our private the our Chief we pursue have Tobia, existing potential range our speak of call will investors, continue who involvement build to We public which be our

Al Tobia

you, Clifford. Thank

our evaluate continue we return and we As maximize new of existing opportunities, value the to holdings.

to is goal Our our portfolio Life Sciences monetize expeditiously.

our $XXX we $XXX second have our now to-date Sensign of million and investment. the in we position quarter, portfolio original During Life [ph] exited recovered Science million

through from of portfolio, the public the this approximately a sale acquisition we reminder, portfolio. the recovered equities of following immediately million As certain $XXX

though and yet Induction XXth. did our shares this June Healthcare to Arix of Group, Bioscience of we portfolio, an monetize these public and have approximately class publicly June positions We recently continued $XX.X million XXth, completed as represented value. not positions two in in trade as held Immunocore companies, and IPO, of

earlier disclosed that including companies, in continue IPO on private meaningful other potential Oxford and an while hold process Oxford that would for is on we four additional Sciences Stock second Nanopore expects -- Life half started it and London of year the to occur Nanopore IPO timing this preparing Nanopore of state the positions Importantly, dependent the matters on market of its not the the that XXXX IPO conditions control, Exchange. the Technologies. fully Oxford within

including this settlements, Nanopore, enthusiastic than the balanced few Oxford up quarter respect to a past $XX and second business, addition in a In have our about $X our more from large licenses we and in year. made holdings. driven portfolio, litigation. for licensing both million the last prospects This soft settlement. revenue private year the over by IP to resulted With remain other million year, including We one was generated in growth investments

specifics not identifying is on the including considerations. confidentiality policy individual counterparties of agreements to comment and settlement, publicly any other given Our

team CFO a opportunities results. to I’d With the portfolios. that, actively to discuss our Rich number Our is turn monetize assets Rich? to existing call the IP of to over advancing additional acquire Rosenstein, our and to like

Rich Rosenstein

Al. you, Thank

June at XXXX, share was March XXXX. value million book or to and at share, per $X.XX million XXst, million Our $XXX.X per XX, per December $X.XX $XXX.X or $X.XX basic share basic $XXX.X compared at XX, or basic

embedded value the book at $XXX.X June of derivatives at price XXth. liabilities, the increase share impact reflects in company’s over last year the our warrant million which on Our the and stood

we upon be extinguished derivatives or As all and warrants exploration impact these prefers, converted. these should their liabilities consider exercise would of be

full or forma the share same billion per Assuming XXXX. issued up of exercise $XXX.X $X.XX as rise share, book derivatives, basis from value $X.XX to XX, of per on or billion all $XXX.X pro December would Acacia

results senior for we $XXX.X of filed up include SEC $X.X unrealized Operating available income made For million year the press ago. to report in securities Realized secured at quarter. XX-Q, and June in a $X.X quarter, these reversing of equity Revenues More Debt a the in at this million million from which fair second have morning in was and Starboard million XXst. were gains million issued the release $X.X with Cash in million totaled XXXX been the loss year $XX.X notes quarter a to $XXX.X million, the $XX.X quarter the XXXX, quarterly ago. our our highlights $XXX.X Value. on total XX, the December value issued of morning. performance million financial compared detail this on and Form at was following.

me Let turn to closing the call back now Clifford for Clifford? comments.

Clifford Press

Acacia Thanks, its Rich. to investment execute In on conclusion, continues strategy.

in on which As our be Starboard. strategy, continues always, with on to our collaboration focus acquisition value and are book in executing improvement doing we focused our

stewards capital As to rest we and for the a fit factors factors will important an acquisition of expedience. as not other valuation and shareholder variety -- and important with of make

answer to happy now are questions. We

Operator

go Instructions] we of Anthony And Stoss [Operator to ahead. the first go line Craig-Hallum. with you. Please Thank

Anthony Stoss

Hi, equipment you monies questions for that forward gentlemen. litigation Can then you. patent a kind revenues couple A we after network I going Most that? couple June other your expect recently were confirm with could by have questions of you supplier. a a the impacted and of quick settlement sell

Clifford Press

Rich, why don’t you take one? that

Rich Rosenstein

Yeah. Yeah. I can.

we as were our million of Tony, $XX a the in over and number large settlements, include mentioned, just quarter license settlement. did revenues including and So, one agreements

so in would third receivable balance as the accounts beginning you’ll collected the sheet And see quarter. our of have that we that on

Anthony Stoss

it is settlement? expect Rich you or one Do to kind and a continue that of done

Rich Rosenstein

have often specifics on are and to settlements payment, individual we payments. upfront upfront, can’t some settlements, involved do revenue our of by had them, licensing recurring upfront agreements many but of typically look, our but the comment large, Al characteristics mentioned, are As and transactions

Anthony Stoss

Okay.

Clifford Press

I’ll on Tony, that Clifford. that got portfolios we’ve just it’s coming new are add that, some to realization.

a we settlement auspicious for expect that substantial follow and that portfolio start regard we that portfolio. an as on for Now,

Anthony Stoss

Meaning with or Clifford same existing… companies other with the

Clifford Press

With other licenses?

Anthony Stoss

you gears, shifting and than guys what the valuing you much you guess what JV, and versus they’re your then valuing are Viamet it maybe in Viamet conservatively? Can why and discuss you partner is at currently you valued differences their I aren’t? why more are ownership And Okay. guys higher your a maybe valuation at are. why

Clifford Press

two is There Yeah.

Rich Rosenstein

Yeah. I can…

Clifford Press

can -- Rich, and Rich describe it first the Well, I’ll the investment. GAAP aspect about of underlying talk will

Rich Rosenstein

Yeah. Clifford. Thank you,

initial hold, of our as cost. on Viamet what’s different and right, several we our of of to cost issue the you’re shares, same we that Tony, release, included we valuing positions valuing underlying amount shares, either -- size primary on at own, so -- securities consideration. that three might of value adjust we And Pharma and we they’d that of million. no take per were all be observed you that the that then called observed basis, we indicated involves transactions impairment ASC an different on as carry shares Pharmaceuticals, then value we’re And approach in adopted might private been a using at the for we transactions see has -- release of transactions environment basis There privates Viamet we carrying that at or that Pharmaceuticals class place. any at taken be combined XXX measurement private any alternative have our continue private under We press whether have into cost. in company for and will So, can we’ll our the secondary adjust the the a -- and se or also of at cost we’re AMO positions NovaBiotics carrying GAAP $XX.X to our

So adopt holdings. to private approach have value we’re of a fair not each we -- our adopted not

Anthony Stoss

Okay. And gear… then, shifting

Clifford Press

a the think for while say valuation. on Melan about which disagree valuation, do we the not viable difference I product recording that their a your have we for and is in finish question health, women’s pretty Melan significant -- in that advance explained, And just to with evaluation, that [ph] will do drug basis

Anthony Stoss

continue to and don’t a Starboard we think have closer anything been get picture I of Any wondering, rush calls fact you shareholders And acquisition, out show year you or on don’t with applaud color because the getting from a Okay. a have have one into hard. very either acquisitions working or Clifford, with the know anything and I a you half, be yet. but bigger almost helpful, you yet? while -- guys a no and you lots you’re would you’ve any active just I partnership been bid year half know and to still to I want that going now in you’re I show to now,

Clifford Press

doing a we’re and acquisition, due It’s to. answer instrumental Starboard in some it portfolio transactions, which terms end, where and in not question the decided been we because -- public and so company in to of meet anyway a of we’ve significant is at But diligence extremely on legitimate spent recently Sure. a amount getting still were Woodford really is it which did close like we’ve far, criteria. substantial the of time our the size with

be some have end significant moment don’t if have transactions pipeline prospects surprised, the we we come day. as of robust I’ve by and I’d the late-stage of and a the However, at said before, completed very

Anthony Stoss

Thanks Okay. guys. for Thanks, that.

Clifford Press

you. Thank

Operator

with Reiss Brett Please of line the go to go ahead. Janney. we next And Instructions] [Operator

Brett Reiss

gentlemen. morning, Good

Clifford Press

Brett. Hello,

Brett Reiss

First question is to the it still aspiration $X net million $X of accumulated amortization? to on of revenue $XX.X generate the company’s patent

Clifford Press

generally from, will build terms that. Not time expect to that, got those to type and don’t terms book sure in it where we where to investment numbers Brett. over where that of to refer of in revenue. we We refer we value We emphasize of continue

Brett Reiss

Okay.

Rich Rosenstein

component just, someone end, and there’s think, the from. there’s if that of has $X criteria. referring one when $X -- to its But at be, these what I to profit look you larger own Brett, came revenue each we of that’s a deals you’re that, back you think, with may maybe share, decide when some and I a transactions, point, where of to a partner then maybe Clifford’s these kind there’s to

that to return in is ability $X terms acceptable. we’re look value. of prescriptive generate things $X we to We at their targeted not book that believe a per So on

Brett Reiss

on of the of There’s what of the all do be? IPO might think Oxford sorts the Nanopore going What Oxford value to estimates IPO value you is map all Okay. the Nanopore be? over

Clifford Press

you IPO. don’t that, if active it’ll think you I surprise tell I an Brett, it’s

top shareholder to be would and appropriate it for five whatsoever not make in just that any comment us We’re regard.

Brett Reiss

is one one the of being last a XX, prior in is metaphysical X scale probability One going the being on color, it’s an to a really for before calendar from again, on deal it’s XXXX enough. of company happen. What certainty operating just Fair and consummated to of not question, XX the terms year Okay. up? being and just asking

Clifford Press

be, Brett, certainty it it’s certainty, around a we’re hard. transaction been any time happened. think comfortable But would until and that tell with with feel it’s you we working know can would you deals? what I long for have -- predicting So, nobody you very is

a Starboard closely. are transactions number tremendous have that with research We and collaboration looking we’re at of there a very

Brett Reiss

questions. Thank you for taking my

Operator

with Sami ahead. we Kevin of Capital. Next to Please go line go Sami the

Kevin Sami

question. my Nanopore. Oxford ownership taking just morning. one in Good for I Thanks stake had on your

at they’ve you Your diluted it end stake capital, been has been that and by your X% XXXX stake disclosed has raise? raised yet year since last

Clifford Press

No. No.

Rich Rosenstein

No.

Clifford Press

been not diluted. We’ve

Kevin Sami

Okay.

So you’ve participated in the raise?

Clifford Press

Yeah.

Kevin Sami

disclosed add color what my Can Okay. to What some you hasn’t been knowledge? to that would be…

Clifford Press

their where such company so. -- maintain was shareholding their its a IPO. considering existing we where think the way in We and transaction done I could do did is shareholders in

Kevin Sami

Thank you. Understood.

Operator

This to We concludes for turn our question-and-answer Press remarks. Clifford session. closing

Clifford Press

for everyone, news much earnings look our and We very participation to to have today’s hopefully, you, next call. further report that Thank call, at time. your on we’ll forward

Operator

Thank you. your teleconference. today’s does for This conclude thank you We participation.

great your at day. You lines a may time. disconnect this Have

Acacia Research (ACTG) 16 Aug 212021 Q2 Earnings call transcript