Ian Oliver, is head of life sciences assurance for BDO in the UK, and is based out of the firm’s Reading office. In this article he looks at the public life sciences companies headquartered in the Thames Valley, which are listed on the London Stock Exchange or the US Nasdaq exchange, and provides a snapshot of their achievements during 2017.
In life sciences, Rome certainly wasn’t built in a day. Many companies incubate their drug research or medical device technologies and potential disease indications, for a number of years before reaching the public stage.
Of the 17 public companies in the region, only four – Midatech Pharma, Summit Therapeutics, Oxford Immunotec and Adaptimmune – are solely or dual-listed on Nasdaq. It is a relatively recent trend for UK life sciences companies to look beyond European exchanges to list; one which kick-started in 2013 on the back of rising investor sentiment towards the sector after years of financial crisis-driven risk-aversion. That these companies all happen to be located at Milton Park, Abingdon, is coincidental; however, the fact that 10 of the 17 companies reside within 10 miles of Oxford is testament to the maturing life sciences cluster that has developed in the area. It may be surprising though, that the Guildford environs is home to four of the peer group, no doubt attracted by high-quality research park facilities and proximity to London and Heathrow.
A small number of the companies are mature, commercial businesses – ConvaTec is the largest example: a global medical products and technologies conglomerate with 2016 annual sales of $1.7 billion, now headquartered in central Reading. ConvaTec joined the London main market in October 2016, raising £1.5b. The group re-financed debt and made acquisitions in 2017 of EuroTec (ostomy care) and Woodbury Holdings (continence and critical care).
Genus, the Basingstoke-headquartered leaders in animal genetic improvement, grew annual revenues by 18% to £459 million in FY16/17.
A number of companies are still in the research and development phase (pre-revenue) or early-stage commercial growth and require further funding to progress. Excluding ConvaTec, the total funding raised in 2017 was £149m, up 50% on 2016.
Although 2017 yielded no new IPOs for the sector in this region, notable follow-on fundraisings included Oxford Immunotec’s £31m round to continue to develop and grow its Tuberculosis testing services, assays for tick-borne diseases and blood screening; while Adaptimmune raised £83m to continue its novel cancer immunotherapy clinical trial programs.
On the London exchange, Angle plc raised a further £15m on AIM, in part to finance the acquisition of certain assets from Axela Inc, to enable the analysis from blood samples of up to 100 genes in circulating tumour cells harvested by Angle’s proprietary Parsortix system. Angle is continuing to position its liquid biopsy approach to early cancer detection, focusing initially on ovarian, breast and prostate.
Circassia focused on its respiratory disease treatment division during 2017, leveraging its US sales force across its NiOx point-of-care product for diagnosing and managing asthma and two new products for the treatment of Chronic Obstructive Pulmonary Disorder, via a collaboration with Astra Zeneca inked in April. The deal yielded an up-front cash receipt for Circassia of $50m. One product began immediate commercialisation while the other completed a phase 3 clinical study later in 2017, for which FDA marketing approval will be sought during 2018.
Other peers successful in their collaboration activities included gene and cell therapy specialist Oxford Biomedica, – making significant progress with its ongoing collaboration with Novartis on Kymriah, a CAR-T product encoded by the company’s LentiVector technology, to treat paediatric and young adult sufferers of relapsed and refractory B-Cell acute lymphoblastic leukaemia (B-cell ALL). The holy grail of receiving a US FDA marketing approval for Kymriah in B-cell ALL occurred in August, and the partners continued to expand marketing applications, to the European Medicines Agency for B-cell ALL, and to both US and European regulators for a secondary cancer indication, after the completion of related clinical trials. At the time of writing, Oxford Biomedica’s share price had grown 200% in the past 12 months.
The importance of successful product regulatory approvals for the health of the UK life sciences industry should not be underestimated. There were 46 US FDA novel drug approvals in 2017, the highest number in at least a decade, with each new product providing solutions to treat or cure disease and prolong or save lives.