Oxford Nanopore, whose Covid-19 technology was snapped up by the UK government and used to track variants of the virus globally, has unveiled its plans to float in one of the biggest London debuts this year.
The company, a startup spun out from Oxford University, hopes to exceed a £2.4bn valuation achieved at a fundraising round in May. It has laid out plans to tap into the growing genomic sequencing market, estimated to be worth $5.7bn globally. The firm’s revenues more than doubled to £114m last year, from £52m in 2019. It is aiming to reduce its losses to break even in the next five years.
In what it termed a “pivotal” year, Nanopore’s fortunes have been transformed by the coronavirus pandemic. Its DNA sequencing technology has been used in tracking the spread of Ebola and Zika in the past, and of Covid-19 variants around the world during the pandemic, and its devices are used in 100 countries.
The flotation is expected to turn two of its three founders into millionaires. The business was set up in 2005, with funding from IP Group, by three scientists who met at Oxford University: Sanghera; Spike Willcocks, chief business development officer; and Hagan Bayley, professor of chemical biology at the university.
Sanghera holds a 1.46% stake that would be worth £35m at a conservative £2.4bn stock market valuation while Willcocks’ holding would be valued at £18m. It is unclear what Bayley’s holding is, as he is no longer on the board.
The company has given Sanghera a “limited anti-takeover” share, approved by shareholders, that would enable him to veto any hostile takeover. If he left or was incapacitated, the share would go to Willcocks and after him to Clive Brown, the chief technology officer.
“Our vision is the analysis of any living thing,” said Gordon Sanghera, the chief executive. “This could include tracking the spread of viruses in people, animals and environments, which could potentially transform public health provision around the world. This is not the one and only pandemic that will hit us.”
Sanghera said the company had ambitious growth plans. “We want to be here to make sure we make good returns to our shareholders and not be sold cheaply in an unwanted takeover.”
Since the Covid-19 outbreak, Oxford Nanopore has also won contracts for tests worth £144m from the UK’s Department of Health and Social Care, all of which were awarded without competitive tender due to the emergency circumstances. However, Sanghera said the testing revenues will disappear as the UK’s vaccination campaign progresses.
At the moment, its sequencing technology is mainly used by universities and labs conducting scientific research, but it sees further great potential in the applied genomics market, in areas such as infectious disease, immune profiling and cancer, food safety and agriculture.
Sanghera said: “We are entering a biological era where genomics will be everywhere, in everything. For example, there is the opportunity to call out early indications of cancer.”
The firm’s devices cost from $1,000 (£722) for a palm-sized sequencer to $385,000 for a bigger desk top device that can sequence a whole genome in two hours.
Sanghera said it was unusual for a life sciences company of this size to list in London and not on Nasdaq in the US, but rejected suggestions that the UK government had intervened. “We went through a thorough and rigorous process before we chose London. No prime minister is going to tell me where this company is going to list.”
He added: “We are pretty confident that it’s going to work out. It’s an urban myth that you can do much better on Nasdaq.”