The value of Oxford Nanopore shares experiences a significant increase following a £70m investment.

Shares of Oxford Nanopore Technologies experienced a significant increase on Thursday following the disclosure of information regarding a substantial investment worth millions of pounds.

The London-listed biotech group, which spun out of Oxford University in 2005, told investors it had secured a bioMérieux, a French in-vitro diagnostics group, has received a £70 million investment.

Due to the investment, bioMérieux currently possesses 3.5 percent of Oxford Nanopore’s shares and anticipates gradually raising this percentage as opportunities and prices allow.

Investment: Oxford Nanopore Technologies shares rose sharply after the firm revealed details of a multi-million pound investment

On Thursday afternoon, the shares of Oxford Nanopore increased by 13.88%, equivalent to 26.10p, reaching a value of 214.20p. However, over the past year, the shares had experienced a decline of approximately 13%. 

The cash will support Oxford Nanopore’s further development of its ‘groundbreaking’ nanopore-based IVD technology.

An IVD Advisory Board will be established as a component of the agreement to promote the utilization of nanopore technology in clinical applications.

“I cannot reword”

Oxford Nanopore added: ‘Together, the companies are driving to meet a significant unmet need in the clinical and diagnostic markets- an opportunity where nanopore sequencing is uniquely suited to deliver impact where information-rich, rapid, accessible, and affordable sequencing are critical.’ 

Pierre Boulud, bioMérieux’s boss, said: ‘This investment will reinforce our existing partnership with Oxford Nanopore and provide more resources for the development of innovative IVD solutions. 

Based on our extensive experience in the field of in vitro diagnostics, we believe that the advancements made by Oxford Nanopore in sequencing technology have the potential to address future diagnostic requirements and enhance patient care. This is especially crucial in combating the increasing threat of infectious diseases.

In addition to the £70 million investment, Oxford Nanopore announced a new collaboration with Mayo Clinic, a US healthcare group, to create innovative clinical tests for various diseases. These tests will include identifying genetic susceptibility to cancer and other diagnostics aimed at enhancing patient care.

The company restated its goal to achieve EBITDA breakeven by 2026.

Victoria Scholar, head of investment at Interactive Investor, said: ‘The recent updates have given a significant boost to its stocks, causing them to increase by nearly 20% during today’s trading session. This has helped to partially recover from the overall decline experienced so far this year.

“In September, it released a report indicating difficult results, as the revenue for the first half decreased by nearly 30 percent to £86 million, and the gross profit declined by 37 percent to £49.5 million.”

She added: ‘Born from a spin out of the University of Oxford in 2005, Oxford Nanopore floated on the stock market two years ago at the height of the pandemic in September 2021, making it the third biggest biotech listing of that year. 

Its technology played a crucial role in identifying and monitoring the transmission of Covid variants in numerous countries.

The company is currently figuring out how to provide results in a world after the pandemic, as their government contracts for covid testing have expired.

After experiencing a significant increase in the months following its initial public offering (IPO), the shares of Oxford Nanopore have faced difficulties since December 2021. Despite a recent recovery, they have dropped by approximately 60 percent over the past two years.