Oxford Nanopore, whose DNA sequencing technology has been essential in tracking Covid-19 variants globally, has made a stellar stock market debut in London. A rise in its share price of as much as 47% has left the firm valued at almost £5bn.
The flotation of the Oxford University spin-out has given its chief executive and co-founder, Gordon Sanghera, a fortune on paper of £63m.
Sanghera has not sold any of his 10.3m shares, while the co-founder, Spike Willcocks, the firm’s chief business development officer, sold 368,000 shares for £1.56m as part of the initial public offering (IPO). He now holds 4.9m, worth nearly £30m after the jump in value. Clive Brown, the chief technology officer, sold 191,066 shares for £812,000 but still owns 1.7m, worth £10m.
The shares closed up 44% at 612.6p, giving the company a value of £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.
Nanopore sells a range of devices for DNA and RNA sequencing, ranging from handheld sequencers to desktop machines that can sequence a whole genome in two hours. Its technology has been used in tracking the spread of Ebola and Zika in recent years, and Covid-19 variants in the past year across 100 countries. Its vision, says Sanghera, is to enable the “analysis of any living thing, by anyone, anywhere”.
The business was established in 2005, with funding from IP Group, by three scientists who met at Oxford: Sanghera, Willcocks and Hagan Bayley, a professor of chemical biology at the university. It is unclear what Bayley’s holding is in the company and whether he sold any shares, as he is no longer on the board.
Sanghera said: “Today is a very proud day for the entire Oxford Nanopore team, but we believe we are only in the foothills of a long and exciting journey. We are living on the cusp of the genomic era.”
Neil Wilson, analyst at Markets.com, said: “The company has really hit a sweet spot since it makes devices to sequence Covid variants, and it’s in a sector that will only become more important, attract more attention and more investment over the coming years.”
Nanopore sold £524m of shares in the IPO and issued 82.4m new shares, raising £350m, while existing shareholders sold 41m shares.
Other technology stock market debuts in London have been mixed this year, with the cybersecurity group Darktrace seeing its shares more than triple in value since its April float, while the much-hyped IPO of the food app Deliveroo flopped.
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.
The company has given Sanghera a “limited anti-takeover” share, approved by shareholders, that would enable him to veto any hostile takeover.