Oxford Nanopore raises £75m, including major contribution from Novo Holdings

Oxford Nanopore Technologies plc (LSE: ONT) has announced a major equity issue aimed at raising approximately £75 million. This move includes a significant investment from Novo Holdings A/S, a prominent global life sciences investor, and a new share placing. The funds raised will be directed towards advancing Oxford Nanopore’s cutting-edge molecular sensing technology and supporting its strategic initiatives in the biopharmaceutical sector.

Details of the Investment and Placing

The £75 million equity issue is divided into two main components. Novo Holdings will invest up to £60 million in Oxford Nanopore through a subscription of new ordinary shares priced at 120 pence each. This substantial investment reflects Novo Holdings’ confidence in Oxford Nanopore’s innovative technology and its potential within the biopharmaceutical field.

In addition to the strategic investment by Novo Holdings, Oxford Nanopore will conduct a placing of new ordinary shares to institutional investors, also priced at 120 pence per share. This placing will be managed through an accelerated bookbuilding process, which will begin immediately following the announcement. The issuance of these new shares will account for approximately 7% of Oxford Nanopore’s current issued share capital.

Expert Opinions on the Investment

Dr. Gordon Sanghera, Chief Executive Officer of Oxford Nanopore Technologies, expressed enthusiasm about the investment from Novo Holdings. He highlighted that Novo Holdings, as a leading life sciences investor, brings invaluable expertise in biomanufacturing—a key area for Oxford Nanopore’s growth. Sanghera noted that this investment aligns with the company’s focus on enhancing biopharmaceutical development through advanced molecular sensing technologies.

Dr. Daniel Mahony, Senior Partner at Novo Holdings, praised Oxford Nanopore’s progress and technological advancements. He emphasized that the investment underscores Novo Holdings’ belief in the company’s technology and its expanding opportunities in biopharmaceuticals. Mahony expressed confidence in Oxford Nanopore’s ability to support new drug discovery and delivery, bolstered by its robust intellectual property portfolio.

Purpose of the Equity Issue and Use of Funds

The primary goal of the equity issue is to strengthen Oxford Nanopore’s financial position and support its growth strategies. The proceeds will be used for general corporate purposes, including further development of its molecular sensing platform and expansion into the biopharmaceutical sector. The funds are expected to help Oxford Nanopore achieve adjusted EBITDA breakeven by 2027 and cash flow breakeven by 2028.

The investment by Novo Holdings validates Oxford Nanopore’s strategic direction and supports its growth plans across various markets, including life sciences research tools and clinical applications. The new funds will provide additional resources to implement the company’s business plan and advance its technological capabilities.

Details of the Placing

The placing will be conducted by Citigroup Global Markets Limited, J.P. Morgan Securities plc (operating as J.P. Morgan Cazenove), and Joh. Berenberg, Gossler & Co. KG, who will serve as Joint Bookrunners and Corporate Brokers. The new shares are anticipated to be admitted to the “transition” listing segment of the Official List of the Financial Conduct Authority and to be traded on the London Stock Exchange. Settlement and admission are expected to occur around 8.00 a.m. on 5 August 2024.

Outlook and Shareholder Support

The board of directors of Oxford Nanopore has consulted with shareholders prior to launching the placing and received supportive feedback. The company’s leadership believes that the placing and investment are in the best interests of shareholders and other stakeholders, promoting the long-term success of the company. The issuance of new shares is set to enhance Oxford Nanopore’s financial stability and support its strategic objectives in advancing molecular sensing technology.

What is the purpose of Oxford Nanopore’s new investment round?

The investment will enable Oxford Nanopore to further develop its innovative molecular sensing technology and expand its biopharmaceutical applications, reinforcing its financial position and supporting strategic growth initiatives.

How will the funds from the investment be used?

The funds are intended for general corporate purposes, which include the continued development and expansion of Oxford Nanopore’s technology in biopharmaceuticals and other sectors.

What does Novo Holdings’ investment signify for Oxford Nanopore?

Novo Holdings’ significant investment reflects confidence in Oxford Nanopore’s technology and potential, indicating strong investor belief in the company’s future growth and the effectiveness of its technology in the biopharmaceutical field.