A British medicine research firm has quit London’s AIM market citing a ‘lack of institutional UK interest’ and “risk appetite” as it launches a fundraise and switches to US markets.
In a statement to markets this morning, London-HQd e-therapeutics said it has “an intention to cancel its admission to AIM and subsequently explore the option of listing on NASDAQ in due course.”
The company, which says it has launched a ‘computational approach to drug discovery’, cited the weakness of London’s markets for the drastic move.
This comes as London has seen a flurry of firms leave public markets. Last week two companies quit AIM, with one saying it was “unnecessarily costly and regulatorily burdensome”.
Yesterday, London-listed software firm Gresham Technologies was bought out for just under £150m by an American private equity firm, with the “low level of liquidity” being a key factor.
This week there has also been murmurings of oil giant Shell threatening to quit.
We believe that there is a limited available audience on the AIM market for companies such as ETX.
e-therapeutics CEO Ali Mortazavi
In a punchy statement issued this morning, Ali Mortazavi, CEO of e-therapeutics, said: “For over a year, the Board has been contemplating delisting from the AIM market. However, given the dramatic rise in the US biotech indices in Q3 2023 which has seen record amounts of capital being raised, we decided to remain on the AIM market”.
“Despite the firm commitments given by our two largest shareholders, the Board was extremely disappointed by the lack of institutional UK interest in our innovative, technology-driven value propositions.
“Importantly, ETX struggled to get sufficient engagement from the vast majority of the institutions who were approached, reflecting the risk appetite of the UK markets.
“This trend has been a consistent theme over the last four years and the company has primarily raised funds through the current two key shareholders, who continue to support the company irrespective of its listing status.
“As such, we believe that there is a limited available audience on the AIM market for companies such as ETX.
He added that the company’s board thinks “the current valuation of ETX in no way reflects the company’s position”, but that “there could be a far larger pool of capital available as an unlisted company as opposed to an AIM listed one and that this situation is very unlikely to change in the near future.”
Mortazavi warned as a result there would be a “short-term reduction in liquidity as a result of this decision but we are of the firm belief that it is in the best interest of all shareholders to delist from the AIM market”.
He said the firm has a cash position of around £47m,