DNA-sequencing company Oxford Nanopore Technologies rose as much as 47% as it started trading in London, in one of the UK’s best-ever market debuts.

The initial public offering (IPO) valued Oxford Nanopore at £3.4bn. The debut ranks among the best on record for an IPO of its size on the London Stock Exchange (LSE), on track to beat clothing retailer Boohoo Group’s 40% jump by the end of its opening session in March 2014, data compiled by Bloomberg show.

“Oxford Nanopore is a British success story. It’s growing at an attractive 30%, and genome sequencing is a sexy and hot area to be in right now, there’s just a lot of demand for the company’s offering,” said Oliver Brown, a fund manager at RC Brown Investment Management, who participated in the IPO.

Oxford Nanopore raised £350m selling new stock, while its backers offloaded existing shares worth £174m, according to a statement on Thursday. The shares were priced in the top half of the range at which they were marketed. 

The stock climbed 42% to 604.50p from the IPO price of 425p. 

The University of Oxford spin-off’s holders sold more shares in the IPO than planned and moved its trading debut up by one day due to high demand. The Oracle-backed company provides Covid-19 test kits to Britain’s National Health Service, and its sequencing technology has been used by researchers to characterise the genome of the SARS-CoV-2 virus to identify and track variants. 

Vote of confidence 

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 start-ups. The IPO is an important win for London’s ambitions to boost its profile as a hub for innovative businesses.

“This will be seen as a vote of confidence for the LSE as a worthy launch pad for both tech and pharmaceutical companies, particularly given the Nasdaq’s dominance in this space,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.

The company has also given Gordon Sanghera, its founder and CEO, a special class of shares with extra power to block an unwanted takeover. Though panned by some investors for diluting voting rights, there are plans to allow multiple classes of shares on the LSE’s top-tier premium market.

For now, Oxford Nanopore is relegated to the bourse’s standard segment, which means it is ineligible for certain major benchmarks like the FTSE Russell indices. 

Bloomberg News. More stories like this are available on bloomberg.com


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