Oxford Nanopore (ONT): What to expect after stellar listing?

Highlights

• UK based biotech firm Oxford Nanopore Technologies made a stellar listing on the LSE main market on 30 September
• The company became one of the best IPO debuts on the LSE
• Oxford Nanopore’s H1 2021 revenues were up by 22 per cent to £59.0 million

UK based DNA sequencing biotechnology firm Oxford Nanopore Technologies PLC’s (LON: ONT) shares surged on listing on the LSE on Thursday, making it one of the best IPO debuts on the exchange.

The company’s shares rose by over 45 per cent upon listing. The stocks have extended the momentum on the second day, up by around 2 per cent on Friday’s morning session, trading at GBX 622.30.

Oxford Nanopore’s IPO details

The company’s IPO listing price was at 425 pence per share. This gave the company a market valuation of £3.4 billion. The firm’s IPO price range was between GBX 375 and GBX 450.

Oxford Nanopore raised about £330.1 million in net proceeds through the issue of 123.3 million shares in the IPO. IP Group PLC raised about £84 million from the partial sale of shares in Oxford Nanopore. Now IP group holds 10.3 per cent of shares of the company, following the sale.

Oxford Nanopore plans to use the proceeds to increase its investment in research and development in order to deliver its product pipeline as well to help boost its commercial team by twice its current size over the next 1.5 years.

The company also aims to use the funds to increase its investment in manufacturing automation, customer acquisition initiatives in the medium term, as well as other areas.

Oxford Nanopore Technologies PLC’s (LON: ONT) share price performance

Oxford Nanopore’s shares were trading at GBX 623.70, up by 1.81 per cent on its second day of trading on 1 October at 09:23 AM BST. Unconditional trading of shares is expected to start from 5 October.

Oxford Nanopore’s H1 2021 financial performance

The company’s H1 2021 revenues were up by 22 per cent to £59.0 million, compared to £48.3 million in H1 2020, which it disclosed in its IPO prospectus.

Also, the company reported a net loss of £44.8 million, compared to a loss of £35.5 million in the year before. Oxford’s research and development expenses were up by 29 per cent to £30.6 million, compared to £23.8 million in H1 2020.

Additionally, the company’s selling, general and administrative expenses (SG&A) rose by 28 per cent to £43.2 million, compared to £34.0 million in the year-ago period.

Conclusion

Oxford Nanopore has now become the only UK-based biotech company listed on LSE’s main market so far in 2021. This year, 4 other biotech firms were listed on LSE’s submarket, the Alternative Investment Market (AIM), while four got listed on US’ NASDAQ.

The company had helped in supplying covid-19 testing kits to the UK government and was involved in the gene sequencing of the virus, which helped boost the firm’s performance during the pandemic.

The company’s senior management now aims to expand into cancer diagnostics and eventually look at Oxford Nanopore offerings to have applications in other sectors such as agriculture and farming as well.