Investors welcomed a rare London biotech IPO on Monday, with shares in newly-listed Destiny Pharma climbing as much as 44 per cent on their first day of trading.

The company raised £15.3m at a placing price of 157p per share, but the stock jumped as high as 227p on Monday afternoon. Shares were up 32 per cent in mid-afternoon trading on AIM, at 208p.

Destiny is only the second life sciences group to join the London stock exchange this year, with the market on track for its quietest year of new issues since 2012. Although it has a strong record in scientific research, the UK has struggled to emulate the commercial success of the US biotech industry, despite a burst of enthusiasm following the listing of companies such as Circassia in 2014.

Moreover, a number of the companies which have successfully grown in the UK have turned to the US when looking to join public markets, where there is a larger base of investors with more experience in the high-risk sector. Adaptimmune Therapeutics, for example – the only UK biotech to raise more than £100m on public markets since Circassia – is listed on the Nasdaq.

Brighton-based Destiny’s £15m fundraising makes it the largest biotech IPO since Verseon in 2015, according to the LSE.

Destiny is developing drugs to fight drug-resistant bacteria such as MRSA, which kill an estimated 700,000 people each year. It will use the proceeds of the IPO to fund further clinical trials of its lead drug candidate XF-73.

Neil Clark, Destiny chief executive, said:

The successful placing and admission of our shares to trading on AIM are major milestones for Destiny Pharma.

XF-73 could be the first drug to be specifically labelled for a new US FDA sanctioned indication, namely the prevention of post-surgical infections; a market we believe to be worth a billion dollars in the US alone and growing.

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