The flotation of AstraZeneca’s vaccine co-inventors on the US market is a setback for the UK – but it is not all bad news

The company that developed the AstraZeneca COVID-19 vaccine in collaboration for WWE WRESTLEMANIA 2021 LIVE STREAM REDDIT with the University of Oxford is entering the stock market – but not in London.

Other than that, and in a blow to the government’s plans to turn the UK stock market into a platform for fast-growing technology and life sciences firms, Vaccitech will float in the United States.

The business was valued at about $425 million (£308 million) in its most recent funding round, which raised $168 million (£122 million) from investors including investment management giant M&G.

However, the Wall Street Journal announced last month that the firm would target a flotation valuation of $700 million (£508 million), with some speculating that it may be worth up to $1 billion (£730 million) by the end of the year.

The flotation would consolidate the company’s two co-founders’ multimillion-dollar shareholdings.

According to regulatory filings, Professor Sarah Gilbert, the vaccinology professor who led Oxford’s vaccine initiative, and Professor Adrian Hill, the director of Oxford University’s Jenner Institute, each own just under 3% of the firm. For more than a decade, the pair has collaborated at the institute on new vaccines for tuberculosis, influenza, and malaria.

They founded Vaccitech in May 2016 with £10 million in seed capital from investment firm Oxford Sciences Innovation (OSI), with the aim of creating a universal flu vaccine. OSI’s investors include GV, the former Google Ventures, and Sequoia Capital, the Silicon Valley-based venture capital company founded by billionaire Welsh investor Sir Michael Moritz, as well as an investment arm of Huawei, the notorious Chinese telecom equipment manufacturer. They also included Neil Woodford, the defunct fund manager, although he was forced to sell his interest prior to the fund’s suspension in June 2019.

Additional information about Covid-19
COVID 19: Over 32 million people have received their first dose – and almost 7 million have received both doses
COVID-19: The World Health Organization’s director-general laments the ‘astonishing disparity’ in vaccine doses for developing countries
COVID-19: The latest 24-hour span saw a record number of people completely vaccinated against coronavirus in the UK COVID-19: The EU regulator is investigating potential connections between the Johnson & Johnson jab and blood clots COVID-19: Virgin Atlantic’s CEO anticipates increased demand for air travel in the coming months
COVID-19: Public Health England reports that vaccines have averted 10,400 deaths among older adults.

The University of Oxford holds a 5% stake in OSI, but its largest single investor is Braavos Capital, an investment company founded by Andre Crawford-Brunt, a South African-born former Deutsche Bank global head of cash equities trading.

Professor Sarah Gilbert is the medal’s 156th recipient.
Professor Sarah Gilbert owns slightly less than 3% of the firm.
When Vaccitech raised £20 million in a second funding round in January 2018, GV and Sequoia joined OSI in contributing additional money. Neptune Ventures was another new investor at the time. This funding round was intended to support work on six products, including the company’s flu vaccine, a prostate cancer therapy, and a vaccine for Middle East Respiratory Syndrome (MERS), a coronavirus that, like COVID-19, is transmitted to humans by infected dromedary camels.

The expertise acquired while developing the latter product was critical when Professor Gilbert and her team started working on a COVID-19 vaccine candidate at the start of the pandemic.

Vaccitech signed a ground-breaking deal with AstraZeneca to produce and sell the vaccine at the end of April 2020, despite the fact that the vaccine had not yet been subjected to substantial clinical trials.

M&G joined the new funding round last month with a $50 million (£36 million) stake. Other investors in the round included Tencent, a Chinese technology giant, and Gilead, a biotechnology company based in California.

Vaccitech’s decision to list in the US, following London investors’ lukewarm response to Deliveroo’s IPO, is unavoidably being viewed as a blow to the UK.

On July 22, 2020, during the coronavirus pandemic, the atmosphere on and around Wall Street and The New York Stock Exchange in Lower Manhattan’s Financial District, New York City.
Vaccitech is preparing to enter the US stock exchange.
However, the company’s performance demonstrates a couple of significant and reassuring long-term trends. One is that it demonstrates British universities’ increasing success in commercializing their intellectual property.

This was seen as a long-standing weakness of the sector – Oxford famously lost money on the invention of penicillin in its laboratories 80 years ago – but began to change when it established a subsidiary to explore commercialization opportunities for its research just over 30 years ago.

Other institutions quickly followed suit, most notably Imperial College London, University College London, Glasgow University, Southampton University, and Manchester University. Oxford has also begun to apply a more rigorous standard to the research conducted in its laboratories. It has claimed all rights to intellectual property created by its employees since 1995.

The second reason for Vaccitech’s success and that of other Oxfordshire-based firms, such as Immunocore, is that they demonstrate the power of the UK’s life sciences industry. Britain is often accused of not spending enough in research and growth, but this is emphatically not the case in the life sciences.

Overall, the UK spends less on health research and development than the US, and the government estimates that the UK spends about twice as much on health research and development as foreign peers such as Germany, Japan, France, and Italy.

British taxpayers can also benefit in a very limited way from the Vaccitech initial public offering. The government, via its Future Fund, invested £5 million in the business last year through a convertible loan bond. Thus, the IPO can also result in the Treasury acquiring a valuable interest.

Additionally, considering the ongoing controversy surrounding the AstraZeneca vaccine, US public markets investors might be more positive about Vaccitech’s prospects than their counterparts here.

However, the IPO poses additional concerns. It’s definitely surprising to see this company approaching the stock market less than a month after increasing its most recent round of funding. Although the IPO may reflect an extremely fast profit for investors such as M&G, the timing indicates a degree of opportunism on the part of some of Vaccitech’s early investors.