Abcam explores US IPO
Cambridge life science innovator Abcam plc is exploring the possibility of an IPO on NASDAQ, the US technology market.
It would supplement the company’s current listing in the UK and widen a trail from Cambridge to Wall Street blazed initially by GW Pharmaceuticals, then Bicycle Therapeutics.
Cambridge biopharma business Kymab has also been looking at a possible US float while cyber security specialist Darktrace, already valued at $2 billion, is widely expected to IPO next year, possibly in both London and New York.
Abcam CEO Alan Hirzel stressed that at present a US float was only a possibility and urged shareholders not to get over-excited before all the angles had been explored. But he said that the company’s long-term growth potential made a NASDAQ bow worth investigation.
He said: “With the attractive potential from the group's long term growth strategy, we have also begun exploring a potential secondary listing in the United States on NASDAQ.
“We have not made any decisions regarding the timing or the terms of the potential secondary listing and there is no certainty that the listing in the United States will take place.”
That caveat is commonplace when shareholders are being advised of potential developments and many respected market watchers believe Abcam would be a wow on Wall Street given its global market lead in the supply of life science research tools.
The possible IPO was raised in a trading update from the company for the year ended June 30 ahead of Abcam reporting its audited results on September 14.
Despite the upbeat IPO flirtation, Abcam’s UK share price took a significant hit as it revealed that due to the ongoing COVID-19 pandemic it had seen a reduction in demand as research laboratories globally shut down temporarily or reduced activity over the course of the second half of the year.
H2 revenue fell by around 10 per cent on both a reported and constant currency basis. Overall, the group expects to report revenues of £260 million for the full year (FY2019: £259.9m).
Abcam reports a steady claw back to recovery in China and Europe but said significant macro uncertainties and regional differences remain. “This uncertainty is acute in North America where case incidence of COVID-19 is currently rising in several US states with normally high research activity,” Abcam reported.
In September, Abcam set out plans to increase the rate of investment in areas including research and development, digital marketing and e-commerce, technology and global operations in order to achieve more and faster growth over the medium and long term.
It remains committed to this strategy, saying: “Despite the impact of COVID-19, we made progress across a broad range of these areas in the year, including the completion of several acquisitions that complement the existing portfolio and in which we intend to invest.
“The board and executive team have continued to support employees with full employment during the COVID-19 outbreak whilst investing in and implementing initiatives for our growth strategy.
“As a result, we expect that gross margin and adjusted operating margin for the full year will be approximately 69 per cent and 16-17 per cent, respectively.”
Hirzel said: “We are proud of the role Abcam has had in supporting researchers throughout this pandemic and we are proud of the dedication of our global team to help scientists perform their vital work.
“Abcam’s strong brand, distinctive customer focused culture and durable financial health has meant we have been able to lead with a longer term horizon and fulfil our ambition to be the most influential company for life scientists globally. We remain confident in our long term prospects and focused on delivering our strategy.”