IPO watch: Oxford Nanopore soars to $6.8bn in London debut

·3-min read
A health worker removes Covid-19 test kits from a box at a NHS Test and Trace Covid-19 testing unit at the Civic Centre in Uxbridge, Hillingdon, west London on May 25, 2021, as
The DNA-sequencing company provides COVID-19 test kits to the NHS. (Photo: Getty)

Shares in Oxford Nanopore Technologies rocketed on its market debut on Thursday in what has become London's biggest biotech listing, valuing the firm at $6.84bn (£5.1bn).

The DNA-sequencing company, which provides COVID-19 test kits to the NHS, had priced its shares in its initial public offering (IPO) at 425p each. This was in the top half of an initial range after selling more shares than planned due to high demand.

However, the stock rocketed during its first day of trading, climbing 45% from its flotation price to as much as 619p within an hour.

This puts it on course to beat Boohoo’s (BOO.L) record 40% jump at its market debut in 2014.

“We are only in the foothills of a long and exciting journey,” founder and chief executive officer Gordon Sanghera said. “We are living on the cusp of the genomic era.

“Our focus remains on continuing to innovate, grow, and working towards our goal of enabling the analysis of anything, by anyone, anywhere."

He added that the group’s technology would open up many “possibilities for positive impact”.

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The IPO marked a significant move for the London Stock Exchange (LSE) as most British pharmaceutical and life science companies usually list on New York's Nasdaq.

According to Refinitiv data, the LSE has had a strong run of IPOs in the first half of this year, with new companies raising $12.77bn (£9.5bn) in the first seven months of 2021 alone, the highest in seven years.

The listing included the sale of 123.4 million shares, which will raise a total of £524m. Of that, there were 82.4 million new shares raising £350m and 41 million shares sold by existing investors. It has an additional 18.5 million new shares available as the overallotment option.

Oxford Nanopore is a spin-off of the University of Oxford, founded in 2005. It has around 600 employees in offices in Cambridge, New York, San Francisco, Singapore and Beijing.

The group develops products that are used to analyse DNA, RNA, proteins and small molecules, which can be applied in scientific research, crop science and more.

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The Oracle Corp-backed company's sequencing technology has also been used by researchers in 85 countries to identify and track the evolution of COVID-19 variants.

Oxford Nanopore has added about $1bn to its market value since its last funding round in May, placing it among the UK’s most valuable startups.

It has given Sanghera a special class of shares with extra power to block an unwanted takeover.

Susannah Streeter, at Hargreaves Lansdown, said: “This will be seen as a vote of confidence for the London Stock Exchange as a worthy launch pad for tech and pharmaceutical companies.”

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