LONDON — Oxford Asymmetry Ltd. has become the second U.K. company this year to disclose plans to float on the London Stock Exchange (LSE), with the aim of raising £20 million in a listing in March.
UBS Ltd. is acting as sponsor and Cazenove and Co. is acting as broker to the flotation. The company also intends to change its name to Oxford Asymmetry International plc.
Oxford Asymmetry is at pains to stress that its flotation is not a test of the appetite for biotechnology shares. Quadrant Healthcare plc took a similar stance when it announced its plans to join the LSE two weeks ago, emphasizing that its core business is drug delivery, not biotechnology.
Edwin Moses, chief executive, told BioWorld International, "We are not a biotech company; we provide services to the industry. We have been trading for six years, and have been profitable for the last three. I believe investors are sophisticated enough to see the difference, even though at first sight we have some things in common.
"A very attractive part of the business model is that we are profitable on the basis of the fees we charge," he added, "but we also have agreements which include milestones and royalties, for which we carry none of the risk." The company has yet to receive any such payments. "It would be the icing on the cake to get royalties, but we don't rely on them," Moses said.
The timing of the flotation has not been influenced by the state of the market, Moses observed. "We have had these dates in mind for a considerable time," he said. "We took the decision based on our business and not on the markets. We have got to the point where we think we can handle, and benefit from, a flotation."
Oxford Asymmetry, based in Abingdon, U.K., has two divisions: Oxford Diversity, which supplies libraries of well-characterized compounds for biological screening, and Oxford Asymmetry, which develops and supplies chiral chemicals and organic compounds.
The company was founded in 1992 by Stephen Davies, a professor at Oxford University, with finance from private investors and investments amounting to £6 million from 3i plc. Staff numbers have grown from five in 1992 to 150 at the end of 1997.
In 1996, Oxford Asymmetry had pretax profits of £608,000 on sales of £5.6 million. Unaudited results for 1997 show a pretax profit of £2 million on sales of £10 million. Forty percent of business is in the U.S., and the rest is mainly in the U.K., with some in Europe.
Moses said, "The company is cash-flow positive except for major capital expenditures. We plan to spend the £20 million on new laboratory and scale-up facilities. We also wish to invest in new technology, including robotics and automation, and in chemical informatics."