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Oxford Nanopore Technologies plc’s initial public offering (IPO) has been coined one of the most successful and exciting on the London markets after its share price surged by 43% following its listing on the London Stock Exchange (LSE). The company made its on the standard listing segment of the Main Market of the LSE on 5 October 2021. Shares were trading at £6.12 per share at market close on the first day of conditional dealings, increasing the company’s market capitalisation by more than £1bn to £4.5bn, at a share price 43% higher than the £4.25 per share the company had priced its IPO, valuing the company at £3.4bn. The IPO is the fifth largest London listing in 2021 and comprised of 82.4m new shares, raising £350m, and 41m shares sold by existing investors, equating the total offer size to £524m. 

Commenting on the success of Oxford Nanopore’s IPO, Julia Hoggett, CEO of the London Stock Exchange plc said:

‘Oxford Nanopore’s listing highlights the key role the UK capital markets play in supporting globally leading life science and technology companies. At their most dynamic, capital markets connect those with capital to those seeking capital to drive growth and innovation. Whilst the numbers in an IPO matter, the purpose behind the numbers is perhaps most important, exemplified by Oxford Nanopore’s ambition to create technologies that “enable the analysis of anything, by anyone, anywhere”, making all of our lives healthier and better.’

Oxford Nanopore was founded as a spin out from the University of Oxford in 2005 and was valued at £2.4bn when it last raised funds in May 2021. According to the company’s , ‘the group is a pioneer in the field of nanopore sequencing and…[has] served customers across a wide range of scientific communities in over 100 countries.’ The company has developed the world’s only pocket-sized portable variant sequencing device called MinION which has been used globally, including by the UK government who contracted the company for £115m, to track the evolution of coronavirus (COVID-19) strains. The company stated in its that ‘the current DNA/RNA sequencing market is estimated to be worth [£4.2bn]… with a compound annual growth rate of 18% between 2020 and 2023’. 

Oxford Nanopore’s focus on cutting edge technology and life science research tools for DNA / RNA means that there is a fast-growing market to exploit. Dr Gordon Sanghera, Chief of Executive Officer of Oxford Nanopore said in a statement:

‘We believe Oxford Nanopore is ideally suited to both disrupt existing markets and create entirely new ones. An IPO [is] a step on the journey to make our vision a reality, supporting our ambitious growth plans and enhancing our ability to innovate and grow.’

The IPO has also been dubbed a significant test for the life sciences sector’s attraction to London as a listing venue. Many other British pharmaceutical, life-sciences and tech companies have opted to list on New York’s tech-focused Nasdaq exchange. London is seeking to become a more competitive listing venue and could be set to rival New York for life-sciences IPOs following the success of Oxford Nanopore’s listing. Following on from recommendations made by Lord Hill in the UK Listing Review report published in March 2021, aimed at encouraging more growth companies (such as in the life sciences and tech sector) to list in the UK, the UK government and the Financial Conduct Authority have conducted a series of public consultations on proposed changes to the Listing Rules. These proposals are being made to address the competitiveness of the UK and other factors which may be contributing to the long-term decline in UK IPO listings. London is seeking to overcome concerns about more onerous regulations for new listings and the view that British investors are more risk averse. For more information, see Practice Notes: and .

Oxford Nanopore has taken advantage of the UK’s review of listing rules around dual class share structures which previously contributed to deterring UK companies from listing at home. The company adopted a structure under which the CEO, Dr Gordon Sanghera, will receive a special class of shares. These ‘limited anti-takeover’ class of shares offer are designed to veto an unwanted takeover which is particularly significant given in the current climate in 2021 which has seen a high level of interest in UK-listed entities as takeover targets (see: CD&R set to check out with Morrisons whilst Fortress remains in the aisle). However, unlike the typical dual class share structures used by companies such as Wise plc and Deliveroo (see: Wise move to undertake dual class share structure in direct listing IPO and Deliveroo plans dual-class share structure IPO), these anti-takeover shares are limited in that they will not provide the CEO with additional voting rights.