e-therapeutics is latest UK biotech to seek AIM de-listing

e-therapeutics has become the latest UK biotech to say it plans to delist from the Alternative Investment Market (AIM) in another blow to the reputation of the London Stock Exchange’s junior market.

According to chief executive Ali Mortazavi, the proposal – which will be put to shareholders at a meeting on 29th April – had been more than a year in the making and came after a disappointing capital raise drive that e-therapeutics took on the road in February and March of this year.

“Despite the firm commitments given by our two largest shareholders, the board was extremely disappointed by the lack of institutional UK interest,” said Mortazavi. e-therapeutics specialises in computational-powered drug discovery based around network biology and is building a pipeline of gene-silencing therapies based on RNA interference (RNAi).

The company “struggled to get sufficient engagement from the vast majority of the institutions who were approached, reflecting the risk appetite of the UK markets,” he added. That is in line with comments from the CEOs of Redx Pharma and C4X Discovery, which have also said they intend to de-list from the AIM, citing liquidity constraints.

Mortazavi said the lack of interest has been a trend in the last two to four years, leading him to conclude that there is a “limited available audience” on the AIM market for companies like e-therapeutics.

While the de-listing will have a short-term impact on liquidity, “it is the board’s view that there could be a far larger pool of capital available as an unlisted company as opposed to an AIM-listed one and that this situation is very unlikely to change in the near future.”

The decision adds to pressure on the AIM, which has seen a slump in new issues in recent months – hitting lows not seen in more than 20 years – as well as a downturn in secondary financings and low trading values.

Switch to Nasdaq on the cards

e-therapeutics hopes to exit the AIM and explore a listing on the Nasdaq exchange in the US, which is experiencing an upsurge in financing deals after a slow couple of years after something of a bonanza during the COVID-19 pandemic. Mortazavi said that listing on the Nasdaq would help the biotech narrow the valuation gap with its peers in the industry.

The announcement has coincided with a proposed £28.9 million (around $37 million) fundraising by way of a share subscription, backed by existing investors Richard Griffiths and M&G, which will be used to top up e-therapeutics’ current cash reserves of around £18 million.

The proceeds will help support a pipeline of preclinical RNAi candidates, headed by ETX-407, for the treatment of dry age-related macular degeneration (dAMD), a leading cause of blindness worldwide, which has shown efficacy in studies involving non-human primates.

It also has candidates in development for metabolic dysfunction-associated steatohepatitis (MASH), haemophilia, and cardiometabolic disease.