February 6, 2014 2:25 am

Circassia to raise £175m in biggest UK biotech float in years

An Oxford-based company, developing a cure for hay fever and cat allergies, is set to launch the biggest UK biotech float for years.

Circassia is planning to raise about £175m when it lists on the London Stock Exchange in March, echoing the biotech boom that has gripped US markets over the past year.


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The company hopes to tap the $12bn global market for treating the estimated 30 per cent of adults and 40 per cent of children who suffer from allergies.

It has received encouraging results from mid-stage trials but needs more funding to take the drugs through a final round of testing.

London has seen few biotech listings in recent years even as the sector has burst back to life in the US, where more than 50 life sciences companies went public in 2013 amid a surge in share price valuations.

If successful, Circassia’s decision to list in London could encourage other European biotech companies to look at raising money in the equity markets without crossing the Atlantic.

Some companies, such as Oxford Immunotec and GW Pharmaceuticals of the UK, have listed on Nasdaq over the past year to take advantage of US investor appetite.

On Wednesday, UniQure, a Dutch specialist in gene therapy, raised $81.9m in a Nasdaq stock offering that priced its shares above the expected range.

Many UK investors, in contrast, have shied away from biotech following a series of high-profile failures in the 1990s and early 2000s, but Steven Harris, Circassia co-founder and chief executive, said he sensed a change of attitude.

“There has been too much focus on the failures and not enough on some great success stories,” he said. “There is a willingness to invest in the right stories where trials are well advanced and the risk is less.”

Circassia has put four products through successful phase two trials and is preparing for a phase three study – the final stage before seeking regulatory approval – on its cat allergy drug.

Its other treatments target allergies caused by grass, dust mites and ragweed, using a process called immunotherapy to build people’s tolerance to the allergens.

The science was initially developed at Imperial College London and the company is 20 per cent owned by Aim-listed Imperial Innovations, which develops ventures spun out of the UK’s four top universities: Cambridge, Oxford, University College London and Imperial. Its shares have gained more than a fifth over the past year, in large part because of optimism over the prospects for Circassia.

Imperial and others, including Invesco Perpetual, have so far invested £105m in the company.

JPMorgan is global co-ordinator and joint bookrunner with Peel Hunt. Canaccord Genuity and Shore Capital are co-managers.

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