Oxford Nanopore, the pioneer developer of DNA/RNA nanopore sensing tools that include its pocket-sized MinION DNA/RNA sequencer, has disclosed plans for an initial public offering that could value the company at a reported £4 billion ($5.5 billion).

Oxford Nanopore seeks to trade its shares on the London Stock Exchange.

“Ever since we founded Oxford Nanopore, we have been driven by making science more accessible, towards our goal of enabling the analysis of anything, by anyone, anywhere,” Oxford Nanopore CEO Gordon Sanghera, PhD, said in a statement. “We believe Oxford Nanopore is ideally suited to both disrupt existing markets and create entirely new ones. An IPO will be a step on the journey to make our vision a reality, supporting our ambitious growth plans and enhancing our ability to innovate and grow.”

Oxford Nanopore was founded in 2005 as Oxford Nanolabs by Hagan Bayley, PhD, professor of chemical biology at the University of Oxford. Gordon Sanghera, PhD, was hired as founding CEO. Also participating in the company’s founding was Spike Willcocks, PhD, who was with the IP Group at the time and is now ONT’s chief business development officer. Sanghera secured the company’s first major investment—£500,000 from the IP Group—over drinks in an Oxford pub a few blocks from Bayley’s laboratory.

An IPO could value the company as much as £4 billion ($5.5 billion), a figure estimated earlier this year by Jefferies—and nearly double the company’s £2.4 billion ($3.3 billion) valuation at its last financing in May, when it raised £195 million (about $270 million), according to the IP Group. That financing brought the total capital raised by Oxford Nanopore to £808 million ($1.1 billion).

Oxford Nanopore first entered DNA/RNA sequencing in 2014, with an early version of its technology offering the ability to sequence long fragments of DNA, portability, direct detection of DNA molecules, and real-time data streaming for rapid insights and dynamic workflows—features that according to the company offered a novel combination not present in other technologies. Early applications of the technology included on-site oceanic environmental analyses, rapidly understanding outbreaks of salmonella or Ebola, completing bacterial genomes and even DNA sequencing on the International Space Station.

The company initially launched the MinION Flow Cell, which can run up to 512 channels, and has subsequently launched the lower output 126 channel Flongle and the higher output 2,675 channel PromethION Flow Cells. Oxford Nanopore’s product range is intended to enable the whole analysis process, from sample preparation to sequence data acquisition and analysis. The company’s DNA/RNA sequencing flow cells are coupled to a range of sample preparation consumable kits and also software to run the devices (MinKNOW) and to perform sequence data analysis (EPI2ME).

“Substantial Portfolio”

“Since our foundation in 2005, we have created a substantial portfolio of patent-protected innovations, from our high-performance technology platform that is transforming access to DNA/RNA information, to our scalable manufacturing capabilities that will allow us to keep pace with the increasing demand for nanopore-based sequencing,” Oxford Nanopore stated in its registration filing. “This has required patience, a long term view, and a lot of determination from our innovative teams,” Sanghera stated. Our differentiated commercial model and technology platform, where devices range from low-cost plug-and-play sequencing in the palm of your hand to industrial-scale installations, significantly expands the potential customer communities who could benefit from the technology.”

Sanghera was among a trio of Oxford Nanopore executives who excitedly explained the company’s approach to sequencing in 2008 at a genomics conference in San Diego, GEN Editor-at-Large Kevin Davies, PhD, recounted last year.

“Sanghera impressed me with confident stories of how his fledgling company would one day transform the next-gen sequencing (NGS) space. Supporting data were scant but undeniably tantalizing: Willcocks opened his laptop and showed me the schematic models and preliminary results that fueled an almost magical vision for the future of DNA sequencing: a pocket-sized instrument—the MinION—that could read out a DNA sequence in real time by enzymatically chopping a single strand of DNA, like a master chef slicing a scallion, capturing the signature of each nucleotide as it was sucked into the belly of a bacterial nanopore protein.”

Four years later in 2012, the company’s chief technology officer, Clive Brown, unveiled the MinION at the Advances in Genome Biology & Technology conference in Marco Island, Florida, electrifying the audience with a two-hour lecture crammed into 17 minutes, delivered with dry British humor and even a Monty Python reference.

In its registration filing, Oxford Nanopore offered an example of its focus on continuous improvement, by noting that the volume of sequencing data that can be produced from a single MinION Flow Cell had increased approximately 100-fold since its first introduction seven years ago.

“The Group’s technology provides a unique combination of features in the market, such as, in particular: the ability to extremely rapidly stream sequence data in real time; to sequence the native DNA or RNA molecule; scalability (the ability to deploy sequencing in a range of formats from portable pocket-sized devices to ultra-high throughput bench-top machines), and the ability to sequence a range of fragment-lengths of DNA from shorter to ultra-long,” Oxford Nanopore explained.

“Richer Data, Faster Insights”

“These features can provide customers with richer data and faster insights, in multiple environments and scenarios, and can address user needs that are currently unmet by other technologies.”

Today, Oxford Nanopore added, it serves customers in more than 100 countries. Researchers are using the Group’s DNA/RNA sequencing technology for purposes that include analyzing human, cancer, plant, microbial/pathogen, food and/or environmental samples.

“Oxford Nanopore’s DNA/RNA sequencing technology currently enables the Group’s customers to perform scientific research in a range of high-impact areas, including human genetics, cancer research, viral outbreak surveillance, environmental analysis, pathogens/antimicrobial resistance, microbiome analysis and crop science,” Oxford Nanopore stated. “The technology is in the early stages of use beyond scientific research, in ‘applied market’ uses where biological insights can potentially enable rapid decision-making across areas including health, food, the environment and industry.

The company’s tools and technologies have been written up to date in more than 2,100 scientific publications including preprints. Oxford Nanopore said it owns or in-licenses more than 2,000 patents and applications including 800 generated internally across more than 260 patent families.

In its registration statement, Oxford Nanopore disclosed that it finished 2020 with a net loss of £61.244 million ($84.7 million) on revenue that more than doubled over 2019, to £113.86 million (about $157.5 million).

Impacting COVID-19 Testing

The revenue improvement came in the company’s core area of life science research tools (LSRT), and reflected a surge of interest in the company’s COVID-19 detection tools: Last year, Oxford Nanopore disclosed, the U.K. Department of Health and Social Care (DHSC) accounted for 42% of the company’s revenue through a one-time purchase of SARS-CoV-2 test kits.

Oxford Nanopore made its impact in COVID-19 diagnostics last year when it rolled out LamPORE, a COVID-19 test, in an agreement with the United Kingdom’s Department of Health and Social Care (DHSC). The agreement with DHSC accounted for 42% of the company’s revenue through a one-time purchase of SARS-CoV-2 test kits, Oxford Nanopore disclosed in its IPO filing.

LamPORE is designed to work on swabs and saliva samples. One MinION can hold up to 1,500 barcoded patient samples and complete a run in about 90 minutes. LamPORE combines loop-mediated isothermal amplification select LAMP) and nanopore sequencing, creating a relatively low-maintenance process designed in a single tube at a constant temperature. Developed two decades ago by a group of Japanese researchers, LAMP has enjoyed a recent resurgence due to its applicability in COVID-19 diagnostics.

COVID-19 testing revenue saw a £16.7 million ($23.1 million) decline in the first half of this year—which was more than offset by greater LSRT sales. However, while Oxford Nanopore’s gross profit for the first half of this year nearly doubled, to £30.2 million ($41.8 million) from £16.1 million ($22.3 million), the company continued to finish in the red, ending January–June 2021 with a net loss of £44.8 million ($62 million), compared with a £35.4 million (about $49 million) net loss in H1 2020.

Still, Oxford Nanopore’s results last year were an improvement over 2019, when it recorded a net loss of £72.216 ($99.9 million) on revenue of £52.061 million ($72 million). In 2018, the company lost £53.119 million (about $73.5 million) on revenue of £32.521 million (about $45 million).

Oxford Nanopore has attributed its net losses to “investing in innovation, intellectual property, operational and commercial infrastructure and growth.” The company’s full-time headcount has grown steadily, to 639 at the end of January–June 2021, up 21% from 527 at the end of 2020, 37% from 466 in 2019, and 58% from 405 in 2018.

That headcount includes R&D staff, which grew nearly 14% in the first half of this year, to 272 from 239, “to support the research phase into early product release across the platform.” Administrative headcount more than doubled during the period, to 107 from 47, with the new staffers focused on HR, finance, central administration, legal functions, and corporate executives hired to support business growth.

“Looking further ahead, we see the potential for a global Internet of Living Things—a future in which real-time networks of biological sensors can be used to help the broadest of communities,” Sanghera further stated. “This could include tracking the spread of viruses in people, animals and environments, which could potentially transform public health provision around the world. It could include networks of marine ecology sensors to help us understand the changes brought about by climate change.

“It could ultimately be a future in which embedded technology in wearable devices provides daily DNA/RNA information, and so critical, personalized health data to those users,” Sanghera added. “We believe Oxford Nanopore is ideally suited to both disrupt existing markets and create entirely new ones.”

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