DNA sequencing biotech company Oxford Nanopore has raised £195 million of fresh growth funding ahead of its planned London listing later this year that could value the business at up to £4 billion.

The new funding comes as a surprise given that Oxford Nanopore had previously said it was ‘well-funded for the next phase of corporate development’, having raised £613 million in several funding rounds since 2005.

No further details were given other than to confirm that the company remained focused on its ‘previously announced strategic plans.’

ONE OF UK'S MOST EXCITING IPOS

Oxford Nanopore is one of the UK's most hotly awaited IPOs (initial public offerings) having generated huge excitement among investors since spinning out of the University of Oxford more than 15 years ago. The biotech start-up had previously been strongly backed by Neil Woodford, before his fund business collapsed.

Oxford Nanopore has developed next generation DNA and RNA sequencing technology that it believes could herald a new dawn for genetic applications, with the potential for  a ‘profound and positive impact on society.’

Oxford Nanopore has been praised over the past year for its work in helping to track coronavirus mutations.

M&G PLOUGHS IN £35 MILLION

New investors from its latest funding round include asset manager M&G (MNG), which ploughed in £35 million and is part of £125 million in total from new investors, which also include Singaporean investment firm Temasek and American investing giant Wellington Management.

Jack Daniels, chief investment officer at M&G, said: ‘The technology developed by Oxford Nanopore is being used in a broad range of scientific research applications, including to further biomedical science, to characterise pathogens in microbiology and public health.

‘This is an example of how institutional investors can play an important role in accelerating growth in companies that provide a wider benefit to society.’

Existing investors contributed the remaining £70 million, and one such investor is FTSE 250 intellectual property firm IP Group (IPO), which committed £18.7 million and now has a 14.5% stake in Oxford Nanopore, valued at £359 million.

IPO STILL ON TRACK

The firm’s fundraise hasn’t replaced its planned IPO (initial public offering), which is still set to go ahead in the second half of 2021 depending on market conditions, with brokers Berenberg and Jefferies valuing the IPO at £3.9 billion. The latest funding round gives the firm an implied valuation of just under £2.5 billion, however.

When it announced its plans to float at the end of March, Oxford Nanopore said it wants to access ‘deeper, international pools of capital’ to help finance its growth.

CEO Dr Gordon Sanghera explained: ‘We are still only in the foothills of what is possible; we believe that there is huge potential for near-sample, rapid, low cost, sequencing-based analyses across scientific research, healthcare and industrial settings.’

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Issue Date: 04 May 2021