Summarize this content to 2000 words in 6 paragraphs in Arabic The boss of the UK biotech seen as a beacon of hope for the London IPO market only four years ago has admitted the business has become a takeover target.Oxford Nanopore’s chief executive and co-founder Gordon Sanghera told the Financial Times that the gene sequencing company, whose shares have fallen 85 per cent from their 2021 peak, is “exposed” to acquisition. For three years after the listing, Sanghera’s Nanopore shares allowed him to veto an acquisition, but this has now expired. “Should [the veto right] have been a bit longer?” he said in an interview. “Right now, from where I’m sitting, we feel rather exposed.” He added that the business was not afraid of being bought by the “right person”. Bankers have said it could be attractive to one of the big diagnostics specialists, such as Thermo Fisher Scientific or Danaher. Neither company responded to a request for comment.Nanopore was spun out of Oxford university in 2005 with a pioneering technology for sequencing DNA on handheld devices. These are mainly bought by scientists and large public research projects like the UK Biobank, but sales shot up during the pandemic when they were used to track Covid variants spreading around the world. The company’s decision to list in London in 2021 was seen as a victory for the market: UK tech and biotech companies have generally chosen the Nasdaq. After the IPO, shares traded at more than £7 at their highest but as demand waned with the pandemic, investors started to worry about growth prospects.Charles Weston, an analyst at RBC Capital Markets, said the company had grown at a similar pace as it promised at the IPO, but the “market fell out of love” with it. Its shares now hover around £1 for a market capitalisation of just over £950mn.Despite the languishing price, the company still has big-name backers. Oracle billionaire Larry Ellison recently increased his stake, and Novo Holdings, the investment company behind drugmaker Novo Nordisk, invested £50mn last summer. It is also starting to have some success in the market for pharmaceutical quality assurance, selling its devices to drugmakers testing the complex new treatments that are coming to market.One large investor said shareholders should be able to defend the company from any unwanted offer, because together, the top 10 own 58 per cent. Another investor said many shareholders had invested before the IPO, at prices far above the current level, so were unlikely to accept a low ball offer.Sanghera, who has been CEO from the start, said Nanopore had been at a turning point for the past three or four years, but it has been “a bit like turning” a tanker. In its most recent results, it reported revenue growth of 8 per cent in 2024, or 23 per cent on an underlying and constant currency basis when Covid sales and a large one-off contract from the UAE were excluded. This year, it forecasts 20 to 23 per cent sales growth. It is cutting costs by 9 per cent, about half of this from staff, and is aiming to break even in 2027. To achieve this, Sanghera said Nanopore would have to maintain compound annual growth of 30 per cent in the next three years — the same pace it has managed in the past three — and accelerate its sales into other markets.Sanghera said he had thought that new clinical products, such as a drug resistant tuberculosis test it is developing with the French company BioMérieux, would be a more immediate source of revenue than supplying its sequencing devices to the pharma manufacturing market. But the opposite has happened, he said, with demand from manufacturing turning on like a “light switch”. DNA sequencing has become vital for testing new complex treatments such as cell and gene therapies, with regulators stipulating it as part of the quality control process. Sanghera added that in the clinical test sector, the “ultimate prize is huge” but it was hard to shift the incumbents. Nanopore noted that these companies could also be partners in developing tests.Miles Dixon, an analyst at Peel Hunt who has a “reduce” rating on the stock, said the company had often touted new potential markets for its technology, only for them to slip down the priority list. “It is an ever changing story with jam always coming tomorrow,” he said.Nanopore’s rivals have also come under pressure. The biotechs that buy gene sequencing devices have been struggling for funding since a pandemic boom started to fade in 2022 and government-funded research is being cut, most recently, at global behemoth the US National Institutes of Health. Growth has also slowed in China as the country tightens import controls, while the invasion of Ukraine caused general supply chain problems. Both Illumina, the largest DNA sequencing company, and PacBio, which has the closest technology to Nanopore, forecast lower revenue growth than Nanopore this year. “Just when you think it can’t get any worse, there’s just this onslaught,” Sanghera said.Some market veterans have suggested the company would have done better on the Nasdaq. One M&A lawyer said it was part of a class of companies that listed a few years ago that has had an “enormous erosion of value” because of a lack of liquidity and specialist investors in London. But on the Nasdaq, shares in Illumina are down 37 per cent in the past year, while PacBio has fallen 68 per cent. “I won’t shy away from accepting the sophistication of the Nasdaq investors to understand the complexity of our story differently,” Sanghera said. “It just doesn’t help in this market.”
