Oxford Glyco looks to raise £150m on Nasdaq

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Oxford Glycosciences, the proteomics group, is to exploit the growing appetite for investments in genomics-related research by raising £150m when it lists on the US Nasdaq technology stock exchange next month.

Oxford Glycosciences, the proteomics group, is to exploit the growing appetite for investments in genomics-related research by raising £150m when it lists on the US Nasdaq technology stock exchange next month.

Disclosure of the planned fund-raising sent OGS shares tumbling 14 per cent to 1,995p yesterday, as traders braced themselves for up to 8 million new shares entering circulation.

The downward pressure was compounded by a weak opening on the Nasdaq and by the OGS announcement, which said it would offer the stock at a maximum 10 per cent discount to the market price on 7 December. Typically, share offerings are priced at about a 5 per cent discount.

Some analysts saw the fund-raising as an opportunistic attempt to shore up funds at a time when biotechnology continues to find favour, although the scale of the proposed fund-raising took many by surprise. OGS already has £45m in the bank and said in September it would seek a Nasdaq listing to obtain the standard paper currency required for purchasing US tech companies.

OGS said it needs £50m to develop drugs, in particular for breast, prostate and lung cancer, based on discoveries made using its proprietary proteomic technology.

Proteomics is the use of information technology to identify proteins responsible for disease. Like genomics, it generates potentially lucrative intellectual property, as most drugs work on proteins rather than the genes that produce proteins.

A further £25m was required for technology development, while £20m would be used to complete phase III trials of Vevesca, a treatment for Gaucher's disease and OGS's lead drug. Gaucher's, a metabolic disorder, affects about one thousand people and OGS intends to market the drug itself.

The remaining £55m in proceeds from the fund-raising would be used for acquisitions and working capital. Dr Michael Kranda, chief executive, said the group had a gap in its portfolio between late-stage products and the initial technology behind them. "From day one we've talked about doing drug discovery as well as developing a platform technology," he said. "This is about evolving from a services company to a pharmaceuticals company."

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