A company seeking to find a cure for cat and dust mite allergies is preparing to be the first biotech to float on the main market for several years. Circassia is looking to raise £175 million from its planned public debut next month, which could see it valued at more than £500 million.

That's good news for Imperial Innovations (IVO:AIM) which owns 19.7% of the business and is its largest investment in a portfolio of early-stage businesses. Imperial's shares nudge up 1.2% to 387.3p.

Web - Imperial Innovations - 6 Feb

Despite Circassia’s intention to join the main market and target a $12 billion global industry, it is a long way off generating the revenues that can bring the desired cash flows that shareholders demand. It is a clinical stage biotech, meaning that it does not have any products on the market yet.

The Oxford-based company intends to use the funds the initial public offering (IPO) will bring to take its products through the final stages of the safety and efficacy testing process, known as clinical trials. Once all three stages are successfully completed the regulator could approve its sale to the public.

Circassia has four products that have completed Phase II of the three-stage clinical trials process. It also has a cat allergy treatment that it is preparing for the third and final stage of the approval process. The first results could be published in the next two years with its first product ready for sale by 2017.

The company’s technology was developed by Imperial College London and also looks to tackle grass and ragweed allergies. Circassia has to date raised £105 million. Several existing shareholders want to invest in the IPO according to today's intention to float announcement, although no further details are provided.


Issue Date: 06 Feb 2014