Vaccitech slides in US stock market debut
Vaccitech, the company that owns the technology behind the Oxford/AstraZeneca coronavirus vaccine, slid in its public market debut on Friday, following recent concerns about rare side-effects from the jab and growing investor scepticism over high valuations in the biotech sector.
The company’s shares started trading at $13.62 on the Nasdaq, almost 20 per cent lower than the offer price Vaccitech set on Thursday. The biotech company raised $111m from the initial public offering.
In early trading, Vaccitech was valued at about $464m, still above the $425m set by its last private fundraising in March.
Vaccitech was co-founded by University of Oxford scientists Sarah Gilbert and Adrian Hill in 2016 and has been backed by private investors including Tencent, Google Ventures and Californian biotech Gilead Sciences.
The company owns the technology used to create the AstraZeneca vaccine and will receive 1.4 per cent of net revenues if the vaccine is sold on a for-profit basis after the pandemic. It is also working on another Covid-19 vaccine that could be used as a booster for those who received the AstraZeneca shot.
The rapid scale-up of the AstraZeneca vaccine has helped prove the company’s adenovirus-based platform and generated data from its use in millions of people. Vaccitech is developing the technology for other vaccines, for diseases including the coronavirus Mers and shingles.
Bill Enright, Vaccitech’s chief executive, said the company was going public now to take advantage of how Covid-19 had made its work visible.
“As they say in biotech, take money when it’s available,” he told the Financial Times.
But Vaccitech’s “real focus” was therapeutics, he said, with an early clinical trial of a lung cancer drug due to start in the middle of this year, as part of a collaboration with Cancer Research, and data expected from its programme to treat chronic human papillomavirus in the next year.
Shares in listed vaccine makers have soared during the pandemic. Novavax is up over 1,300 per cent, while Moderna and BioNTech are both up about 380 per cent over the past 12 months.
That has attracted several companies connected to Covid-19 vaccine development to tap public markets. CureVac shares rose 249 per cent on its first day of trading in August. Valneva, a French listed vaccine maker, also recently filed for a US IPO.
Some investors have grown cautious over lofty valuations in the biotech sector, however. The Nasdaq biotech index is down more than 10 per cent from its February peak after gaining more than 25 per cent in 2020. Short-sellers have poured into the sector, with Novavax and Moderna among the 10 most heavily shorted biotech companies, according to data from S3.
Vaccitech is going public after a period of intense scrutiny for the Oxford/AstraZeneca vaccine regarding concerns about a very rare blood clotting side-effect. The company warned in its IPO prospectus that the side-effect could hit royalties and affect the reputation of its products.
Susannah Streeter, a senior analyst at Hargreaves Lansdown, said the speed of innovation in vaccines had been “breathtaking”, and that Vaccitech was one of the companies leading the charge.
“The crisis has shown Vaccitech can effectively scale up a successful project at speed, which is quite unusual for a biotech start-up, which often launch on to a stock market without such a proven track record,” she said.
Morgan Stanley, Jefferies, Barclays and William Blair led the offering.
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