At first glance, 2015 looks like the year the London Stock Exchange turned its back on biotech once again. Acacia Pharma and Shield Therapeutics both tried and failed to be 2015's Circassia (LON:CIR), the big success story of 2014, leaving AIM listings and outliers such as PureTech (LON:PRTC) as the most notable London IPOs of the year. And yet, from another angle, 2015 looks like a landmark year.
|Immunocore CEO Eliot Forster|
The basis for positivity is to be found in the amount raised in follow-on offerings. Figures shared by the London Stock Exchange with The Telegraph show life science players listed in the city raised £1.1 billion ($1.6 billion) in follow-on capital last year. When added to a relatively meagre IPO haul, at least by the standards of 2014's Circassia-fuelled moneyfest, the follow-on capital drove the investment in life science stocks up to nearly £1.3 billion, the highest it has been in more than a decade. More than 60% of recently floated life science companies pulled off follow-on rounds.
In securing the follow-on cash, the companies have gone some way to denting the perception that a Nasdaq listing is needed to ensure an ongoing source of money. Eliot Forster, CEO of Immunocore and chairman of MedCity, thinks the haul is underpinned by several factors. "The strength of our academic community in the U.K., a supportive regulatory, legal and fiscal environment and a single healthcare system in the shape of the [National Health Service], which is becoming more integrated into research and development," he told The Telegraph.
Yet, while few would argue the U.K. is strong in several areas, the back end of 2015 raised questions about the ongoing willingness to bankroll biotechs among investors at the London Stock Exchange. Acacia Pharma and Shield Therapeutics both aborted IPOs intended to raise a total of £260 million. And, in the early weeks of 2016, Biofrontera revealed plans to drop its listing on London's AIM, citing low trading volumes and the cost as the reasons for its decision. Last year the German skin cancer player raised money on AIM but was "disappointed by the level of take-up."
The coming months will go some way to indicating which of the narratives that emerged in 2015 will shape the future of life sciences on the London Stock Exchange. A successful IPO or other indication of positive momentum could be seen as building off the decade-long highs of 2015, while further retrenchment would add to perceptions that the party is over.
- read the Telegraph article