Oxford Nanopore, a VC-backed biotech startup that made its name during the pandemic by developing test kits for COVID-19, could reach a valuation of up to Â£ 3.8 billion (around 5.2 billion billion) when it goes public via a rare London IPO in October, according to reports.
The startup must set a range of 375 pence to 450 pence, in terms seen by Bloomberg, with a free float of at least 25%. Past filings show the company aims to raise Â£ 300million in gross proceeds with a secondary offering of existing shares.
The DNA / RNA sequencing company, which is backed by IP Group, Tencent and Temasek, will be the 11th UK-based startup in the biotech and pharmaceutical space to go public since early 2020, according to data from PitchBook. However, six of them chose to go public in the United States. Among them is drugmaker Immunocore, which raised $ 273 million in its February listing. In May, Vaccitech, co-inventor of the Oxford-AstraZeneca COVID-19 vaccine, secured $ 110.5 million for its Nasdaq debut.
The increased demand for biotechnology and pharmaceuticals in the United States has continuously pushed British companies to go public across the Atlantic. The Nasdaq has always been the exchange of choice where companies have access to a larger and more experienced investor base than in the UK, as well as higher valuations.
âWe think it’s an urban myth that our industry does better on the Nasdaq,â Gordon Sanghera, CEO of Oxford Nanopore, said on a conference call following the ITF’s announcement. âWe, as a company, are already a global technology player, we sell to 100 countries around the world, we have a great shareholder base, which is global. When we did the analysis, the investors we will get in London were of a similar standard of quality to what you would choose at the Nasdaq. That’s how we ended up choosing London. “
Stricter listing rules regarding share structures and liquidity requirements have also deterred UK companies from staying at home, but recent changes to relaxation could increase London’s attractiveness for biotech and pharmaceutical companies, and Oxford Nanopore is reaping the benefits.
The startup has decided to adopt a structure in which Sanghera will receive a special class of shares with increased power designed to veto an unwanted takeover. This is especially important in the current climate, as this year has seen a strong interest in UK listed entities as redemption targets. However, unlike the dual class share structures used by companies such as Deliveroo, Sanghera will not have additional voting rights.