[Update: On June 19, Puretech successfully raised $171M – approximately €150M – during its IPO, setting its market cap at €509M]
Boston-based PureTech Health plans to raise €147M on the London stock market, following the path of Verseon, a San Diego-based bioinformatic company that raised €92M earlier this month. Is there a new American trend to earn cash in London?
PureTech is specialized in detecting early-stage technology from academia, and nurturing them into a portfolio of companies. PureTech claims to find these innovations by looking beyond traditional disciplines and approaching healthcare problems from different perspectives. The group currently involves 12 operating companies that are actively developing technologies in different stages.
PureTech strategy is also driven by its high-profile board including, amongst others, former Sanofi’s CEO, Chris Viehbacher and John LaMattina, former Head of Research at Pfizer. PureTech expects to make its initial public offering on the main market of the London Stock Exchange in June of this year to raise around €147M.
PureTech detains a high ownership in its operating companies – 76% shareholding on average – thanks to the €229M it already raised in the States. The new London fundraising will help PureTech to take its most advanced product candidates to the revenue-generating stage without loosing control over them.
Earlier this month, the Californian bioinformatic company Verseon opted for listing on London’s stock market rather than New York’s Nasdaq. A successful bet by looking at the €92M they raised, making this IPO one of the biggest European biotech listings of 2015, overtaking the €68.9M raised by Nordic Nanovector.
Theses decisions to be listed in the UK’s stock market are coming at a time when most European biotechs – Galapagos, DBV, Cellectis, Forward Pharma, Adaptimmune just to name them – are crossing the Atlantic to benefit from the Nasdaq’s inflamed biotech market. So why are these Americans doing this?
A simple answer lie in the legislative matter. Companies on AIM, London’s stock market, are required to report their financial results every 6 months, less often than Nasdaq companies, and therefore less expensive… In reality, the UK biotech stock market, and more generally the European stock market, is more competitive due to the number of actors fighting for a relatively limited amount of money. Moreover, the US, thanks to there strong history with public biotech companies, have more dedicated biotech investors who understand the difficulties of the drug development’s journey.
So what could the reason be? Neil Woodford is surely part of the answer. Woodford, former manager of Invesco (one of the UK’s largest investment fund), recently appointed one of the most influential people in biopharma, and created his own fund of €1.1Bn, named Patient Capital Trust. The fund aims to give a new lease of life to the European biotech market and is already making our latest news thanks to its key investments in PsiOxus, Kymab and, of course, the earlier mentioned Verseon.
Is the announcement made by PureTech no more than a mere call for Woodford’s funds? I’m betting that next June, we’ll write an article mentioning Woodford’s participation in PureTech’s IPO.