Oxford Nanopore fundraise plans offer possible exit for troubled fund

October 21, 2019
Biotech company Oxford Nanopore Technologies has approached investors in a bid to raise new funds at a valuation of £1.6 billion (around $2.1 billion), per The Sunday Times. The potential deal would reportedly offer hopes of an alternative exit route for investors in Equity Income Fund, the beleaguered vehicle of disgraced British fund manager Neil Woodford

Launched in 2005 as a spinout from the University of Oxford, the company develops a portable DNA/RNA sequencer that provides real-time biological data analysis. Oxford Nanopore was valued at a reported £1.5 billion in March 2018 with a £100 million investment from GIC, China Construction Bank International and Australian superannuation fund Hostplus, among others. Seven months later, US-based biopharmaceutical group Amgen bought £50 million worth of shares for a reported 3% stake. 

If successful, the fundraise halts any possible IPO plans. April reports suggested that the company may have been planning a dual stock market listing in Hong Kong and London. Analysts reportedly predicted that it could achieve a valuation of between £4.5 billion and £7 billion. 

If Oxford Nanopore does opt for a private fundraise, it will be one of several European companies to have decided against an IPO in recent times. Within the biotech space, ADC Therapeutics postponed going public in New York earlier this month due to adverse market conditions. Not long after, BioNTech did go ahead with its float only to see fewer shares sell and at a lower price than originally anticipated. The German startup sold 10 million American depositary shares at $15 apiece; it had targeted 13.2 million ADS for between $18 and $20 per share, according to reports. 

Whether it's an IPO or a capital raise, there is a group of investors eagerly awaiting the opportunity to exit the business: those who backed Neil Woodford's Equity Income Fund. Once referred to as "Britain's Warren Buffet," the star stock-picker closed down its flagship fund fourth months after its suspension. At its peak, the fund hit a reported £10 billion, but poor performance saw its value plummet. Critics blamed its downfall on the high proportion of illiquid, unquoted businesses in its portfolio.  

Oxford Nanopore entered Woodford's portfolio in 2014 and, according to The Sunday Times, the fundraise could allow Woodford's stake to be sold. The vehicle's administrator, Link Fund Solutions, has announced the first capital distribution from the fund is expected by the end of January 2020. Its less liquid assets, including Oxford Nanopore, will be sold over time. 

Featured image via Christoph Burgstedt/iStock/Getty Images Plus

Correction: The article has been modified to reflect that the company is seeking a fundraise at a valuation of £1.6 billion, rather than a fundraise of £1.6 billion.

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