Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

After AstraZeneca, Oxford Nanopore Might Be The Next UK COVID Winner

By Investing.com (Tezcan Gecgil/Investing.com )Stock MarketsApr 23, 2021 02:59AM ET
www.investing.com/analysis/after-astrazeneca-oxford-nanopore-might-be-the-next-uk-covid-winner-200574805
After AstraZeneca, Oxford Nanopore Might Be The Next UK COVID Winner
By Investing.com (Tezcan Gecgil/Investing.com )   |  Apr 23, 2021 02:59AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Vaccines manufactured by three groups have so far been approved in the UK. They include:

  • AstraZeneca (LON:AZN) (NASDAQ:AZN)/ Oxford University;
  • BioNTech (NASDAQ:BNTX) / Pfizer (NYSE:PFE); and
  • Moderna (NASDAQ:MRNA)

For many people around the globe, they have all become household names. The vaccine developed by Johnson & Johnson (NYSE:JNJ) is still awaiting approval in the UK.

In early 2020, before the pandemic started dominating almost all aspects of life, oil major Royal Dutch Shell (LON:RDSa) (NYSE:RDSa) had the largest market capitalization on the FTSE 100, the UK's leading stock index.

But last year, the leadership position quickly moved to AstraZeneca—clearly a sign of the times. The pharma group now has second place, behind the consumer goods giant Unilever (LON:ULVR) (NYSE:UL). Year-to-date AZN shares are up about 2.5%.

AstraZeneca Weekly Chart.
AstraZeneca Weekly Chart.

With that information, let’s look at Oxford Nanopore’s initial public offering (IPO), which has been making headlines.

Oxford Nanopore

Founded in 2005 as a spin-off from the University of Oxford, biotech firm Oxford Nanopore has recently announced a potential IPO in the second-half of 2021. To the delight of the UK's investment management community, the company picked London for the listing.

The biotech group has about 600 employees in the UK, US, Singapore and mainland China. As an DNA- and RNA- sequencing company, Oxford Nanopore has a single-molecule sensing system based on nanopore science that enables DNA/RNA sequencing. For instance, its DNA sequencing device, called MinION, offers a simpler, faster and cheaper alternative to the work done by big clinical laboratories.

In 2017, MinION was tested as part of the scientific research for a potential flight to Mars. Sarah L. Castro-Wallace of the Biomedical Research and Environmental Sciences Division, NASA Johnson Space Center, Houston, Texas and her colleagues highlight:

“Durations for Mars missions are likely to range from 1.5 to three years… There is also a clear need for in-flight clinical diagnostic capability to ensure that any infections can be managed appropriately, including the administration of targeted anti-microbials…. [MinION] sequences DNA and RNA… In order to evaluate the performance of the MinION in a space environment, we tested it aboard the International Space Station (ISS). [Results] demonstrated the feasibility of sequencing analysis and microbial identification aboard the ISS."

Put another way, the company’s work has been known to the scientific community prior to the pandemic.

But the emergence of new variants of the COVID-19 virus (i.e., those known as the Kent, Brazilian, South African or Indian variant), has put Oxford Nanopore in the spotlight. Scientists in these and other countries have been sequencing the coronavirus so that they can track the transmission and evolution.

Oxford Nanopore has so far raised funding from the IP Group (LON:IPO) as well as Tencent (OTC:TCEHY), the Singaporean sovereign wealth fund GIC and Abu Dhabi tech company G42. Institutional funds, including Schroders (LON:SDR) (OTC:SHNWF) and Odey Asset Management have also invested in the firm.

The amount raised has gone over £613 million (US$848 million). The founder and CEO, Dr. Gordon Sanghera said:

An IPO is the start of the next phase of our journey. Gaining access to deeper, international pools of capital would support our ambitious growth plans, enhancing our ability to innovate and scale our manufacturing and commercial functions.”

Potential investors are excited as Oxford Nanopore currently offers the only sequencing technology of real-time analysis. In recent months, it has also developed a rapid and scalable COVID-19 test, namely LamPORE, to support expanded high-accuracy testing in the UK. The firm also has more than 1,400 patents as well as numerous patent applications that could have implications for a broad range of industries.

IP Group currently holds a 15% stake in Oxford Nanopore, an amount currently valued at £340 million (US$470 million). Analysts expect the valuation to surpass £4 billion (US$5.53 billion) in the coming months.

Bottom Line

It will still be several weeks before Oxford Nanopore becomes a public entity. Therefore, it is still early to know how the share price will fare. When looking at new drugs and vaccines, three significant points are particularly important:

  • Clinical issues (effectiveness and safety);
  • Regulatory issues (will national regulators approve the drug/vaccine?);
  • Commercial issues (successful manufacturing and distribution capability).

In the coming months, the scientific community, as well as investors, will wait for exciting updates from Oxford Nanopores.

Those investors who are looking for other UK-headquartered pharma firms playing essential roles in the fight against the COVID-19 virus might be interested to research two other FTSE 100 members, namely GlaxoSmithKline (LON:GSK) (NYSE:GSK) and Hikma Pharmaceuticals (LON:HIK) (OTC:HKMPY).

With an enviable drug pipeline, GlaxoSmithKline has the sixth-largest market cap on the UK index. Management says, the group is:

"... collaborating with several organizations working on promising COVID-19 vaccines by providing access to our adjuvant technology. The use of an adjuvant is of importance in a pandemic situation where there is significant demand for a vaccine, since it may allow more doses to be produced from less ingredients and, therefore, enable manufacturing at scale. "

Generic drugs market firm Hikma Pharmaceuticals has been manufacturing Remdesivir—Gilead Sciences' (NASDAQ:GILD) antiviral drug—under contract in Portugal. In October 2020, the US Food and Drug Administration (FDA) approved Remdesivir for coronavirus treatment of hospitalized patients.

We have to point out that the work done by these pharmaceutical firms or any other newcomers in the future will not end with COVID-19. According to a report by MarketsAndMarkets:

"The global vaccines market is projected to reach US$58.4 billion by 2024 from US$41.7 billion in 2019, at a CAGR of 7.0% during the forecast period."

Finally, market participants who do not want to commit full capital to any single name could consider buying a thematic exchange-traded fund (ETF). Examples include:

  • ETFMG Treatments, Testing and Advancements ETF (NYSE:GERM)
  • SPDR® S&P Biotech ETF (NYSE:XBI)
  • VanEck Vectors Biotech ETF (NASDAQ:BBH)
  • Virtus LifeSci Biotech Clinical Trials ETF (NYSE:BBC)
After AstraZeneca, Oxford Nanopore Might Be The Next UK COVID Winner
 

Related Articles

After AstraZeneca, Oxford Nanopore Might Be The Next UK COVID Winner

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Sean Rivero Guy
Sean Rivero Guy Apr 23, 2021 3:55PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
take the vaccine and die, goodluck with that, youll be dead within three years
Artour Kassimov
art1997 Apr 23, 2021 10:35AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Based on structure of those vaccine only Sputnik and Astro most probably will not have any long term consequences. I am worring about Pfizer and Moderna LT effects.
Shahin Naseri
Shahin Naseri Apr 23, 2021 5:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
very nice
Parwez Alam
Parwez Alam Apr 23, 2021 5:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hello sir
OLORUNJU JOHNSON
OLORUNJU JOHNSON Apr 23, 2021 5:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good evening sir
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email