Oxford Nanopore IPO: Everything you need to know about Oxford Nanopore
Oliver Brett October 1, 2021 5:00 PM
Oxford Nanopore, whose DNA sequencing technology has been essential in tracking Covid-19 variants around the world, completed a highly successful IPO on September 30, 2021. Read on to find out how a company started by three Oxford University scientists in 2005 has become a key player in global biotech.
How much is Oxford Nanopore worth?
Oxford Nanopore made an extremely impressive market debut in London.
A rise in its share price of as much as 44% after the first day of shares exchanging hands left the firm valued at £4.9bn, in London’s biggest biotech listing since the allergy specialist Circassia floated in 2014.
Nanopore shares had been priced at 425p in the IPO, towards the upper end of its targeted range, which valued the firm at £3.4bn at the start of trading.
Such a successful IPO is a shot in the arm for the UK economy at a time when ministers are looking to reform listing rules in order to attract healthy interest from the tech sector.
The Oxford-based company is likely to be one of the largest floats this year in London, with analysts valuing it at between £4 billion and £7 billion.
What does Oxford Nanopore do?
Unless you have an extensive knowledge of biochemistry, the Wikipedia entry for Oxford Nanopore Technologies may as well be written in Sanskrit.
“Oxford Nanopore Technologies Limited is a UK-based company which is developing and selling nanopore sequencing products (including the portable DNA sequencer, MinION) for the direct, electronic analysis of single molecules,” we are informed.
The company’s own website has some slightly more digestible information. The technology it develops provides “on-demand biological information, to any person, in any environment.”
Further reading suggests much of its work is used in research, in fields as diverse as forensics, space exploration, crop efficiency and food security. Its core operations are in cancer and infectious diseases.
And while Covid-19 has hardly spelt good news for the vast majority of the world's population, it has proved beneficial to a group of Oxford-based scientists.
How does Oxford Nanopore make money?
Oxford Nanopore's revenue comes from the funds it receives by other companies in the biotech sector who are keen to use its products for their own research and development purporses.
To that end, its impressive IPO should give it bigger reach in a sector that is notoriously competitive when it comes to business-to-business marketing.
What is Oxford Nanopore's business strategy?
Nanopore has laid out plans to tap into the growing genomic sequencing market, estimated to be worth $5.7bn globally.
At present, the company’s sequencing technology is mainly used by universities and labs conducting scientific research, but it sees great potential in areas such as infectious disease, immune profiling and cancer diagnostics, food safety and agriculture.
It has also provided rapid Covid-19 tests to the UK government, under contracts worth £144m. Its revenues more than doubled to £114m last year, and it is aiming to reduce its losses and break even in the next five years.
Is Oxford Nanopore profitable?
Oxford Nanopore has never made a profit and is still some way off breaking even, after reporting an operating loss of £73m in its 2020 financial year. Costs are likely to continue growing, believes Julian Roberts, of the investment banking group Jefferies, forecasting the business will not turn a profit until 2026.
That has not deterred initial investors, however. And Roberts told the Daily Telegraph its "scarcity value" - as one of the few biotech companies listing on London's stock market, rather than in the US - was a key attraction.
He added investors would value shares in Oxford Nanopore based on the growth potential of the business, rather than its current financial performance.
Biotech and life sciences have been earmarked by the conservative government of Boris Johnson as a sector the UK can dominate. To that end, officials are keen to facilitate processes that would allow a nucleus of such companies to develop in the UK.
What is the UK doing to facilitate tech IPOs?The UK wants companies like Oxford Nanopore to remain with their feet firmly planted on home soil rather than be bought out by larger companies from overseas.
In February, ministers lent their support to a review into rules concerning London listings which can help keep tech companies in the UK. These measures include reforming the process to provide such greater scope for dual share classes, something that is in the interests of start-up founders.
How has the pandemic helped Oxford Nanopore grow?The COVID-19 pandemic has proved to be a substantial economic benefit to Oxford Nanopore. Few organisations can provide such a powerful solution when it comes to spotting and tracking coronavirus mutations.
It’s been reported that approximately 20% of the Sars-Cov-2 virus genomes were generated on an Oxford Nanopore device by scientists from more than 85 countries.
Board of Directors of Oxford NanoporeThe Oxford Nanopore executive team has experience in the development, manufacture and commercialisation DNA sequencing. It is also committed to supporting future fundraising activities.
- Chief executive officer: Dr Gordon Sanghera
- Chief business development officer: Dr Spike Willcocks
- Chief technology officer: Clive Brown
- Chief scientific officer: Dr John Milton
- SVP, Corporate development: John Schoellerman
- Chief financial officer: Tim Cowper
- VP, Marketing: Zoe McDougall
- VP, General Counsel: Jordan Herman
How to trade stocks at City Index
You can trade stocks with City Index using spread-bets or CFDs, with spreads from 0.1%. Follow these easy steps to start trading now.
- Open a City Index account or log-in if you’re already a customer.
- Search for the company you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.