Credit: Nigel Chapman Photography
A British biotech company that tracks Covid mutations has announced its intention to float on the London Stock Exchange, with its chief executive pledging to break the "urban myth" that technology businesses are better off listing in New York.
Oxford Nanopore, a former Neil Woodford investment, plans to debut in London before the end of the year, in what will be one of the biggest coups by the City in years. The flotation could earn its bosses more than £100m.
It follows a push by the UK to attract more technology and biotech firms to choose London, with former EU commissioner Lord Hill conducting a review of the listing regime. Late last year, Oxford Nanopore was among the companies invited to Downing Street to discuss what they would want to see in the UK to float in London.
Oxford Nanopore co-founder and boss Gordon Sanghera said the decision to choose London was not, however, taken after pressure from Boris Johnson.
He said: "No prime minister is going to tell me where this company will float, I can tell you that for free. But the mood music here is good."
However, he said the UK’s review into its listing regime was an "important" factor in the decision.
Oxford Nanopore is expected to achieve a valuation above the £2.4bn it landed earlier this year in a funding round, at around the £3bn mark, although some analysts have suggested the price could be higher. Jefferies’ Ken Rumph suggested Oxford Nanopore could be valued at around £4.5bn in a float, while another analyst put the price tag as high as £17bn based on similar companies in the US.
Mr Sanghera refused to be drawn on the valuation on Thursday. However, he said he expected that "the comps and valuations will be compared to Nasdaq-based companies because of the global investment opportunities that London brings".
"We had a very healthy debate [about where to float]. We looked globally, but it did come down to London versus Nasdaq."
Mr Sanghera said it was "somewhat unusual for a life sciences company of this size to not go directly to Nasdaq, but we’re a very unusual company".
"We don’t just do things because everyone else does, but we’re not contrarians. We use data… we’re pretty confident it’s going to work out.
"We think it’s an urban myth that you can do much better on Nasdaq and we’re about to test that, and our data and analysis tells us we’re going to be fine."
Oxford Nanopore has emerged as an important player during the pandemic, with its tools used for a fifth of all Covid sequencing globally, essentially tracking mutations of the virus.
In its filings on Thursday, the company said it was working to increase awareness of its sequencing tools. It had also worked on a Covid-19 test during the pandemic, which used saliva to tell whether someone had Covid and did not require swabs.
It said it did not expect any more revenues from this testing part of the business beyond the first half of this year, due to the global rollout of vaccines.