Circassia’s triumph lifts European biotech sector

Andrew McConaghie

The hugely successful stock market flotation of Circassia, a firm developing new allergy products, has renewed optimism in the European biotech sector.

Small-scale biotech firms depend on outside investment to get their research projects to clinical trials, but funding for UK and European biotech has been very thin on the ground since the financial crisis of 2007/8.

Confidence in the European sector has been so low that no initial public offerings (IPOs) have been made in years, and other sources of cash, such as venture capital, have been scare.

But investors have returned to US biotech firms in droves in the last year or two, and now the trend looks to be spreading to the UK and Europe.

Last week saw the first biotech IPO on the London market since 2006, as Circassia completed a record-breaking £200m ($332m) public offering.

The IPO gives Circassia a market value of £590m, and overnight has turned the firm into one of the UK’s biggest biotech firms.

Oxford-based Circassia is focused on the development and commercialisation of a range of immunotherapy products for the treatment of allergy, based around its ToleroMune platform technology.

The firm has develop a new class of allergy therapies, Synthetic Peptide Immuno-Regulatory Epitopes (SPIREs), which it believes represents the next generation of allergy treatment.

Circassia’s chief executive Steven Harris says investors have been reassured by the firm’s investment in ToleroMune and the 16 clinical studies it has completed on its pipeline of allergy treatments.

However Circassia is still some way from the moment of truth – phase III data on its lead project Cat-SPIRE, a new treatment for people with a cat allergy, is not due until 2016.

The Company has a portfolio of early-stage molecules for seasonal and perennial allergies, with three further product candidates in addition to Cat-SPIRE having completed phase IIb development.

More IPOs on the horizon?

The success of Circassia means a number of other European biotech and life science firms are now considering an IPO.

UK-based Vectura, already listed, has just raised a further £52 million pounds ($86 million) in a new share placing. Meanwhile two Switzerland-based firm, AC Immune and Molecular Partners, are said to be considering IPOs.

But the gulf between US biotech funding and that in Europe has seen a number of companies migrating to the US to benefit from the more favourable environment. UK firms Oxford Immunotec, GW Pharmaceuticals are among numerous firms to have joined the exodus to join New York’s more prestigious Nasdaq in recent years.

This means the UK and European biotech environment will have to keep developing in terms of funding and incentives if it is to keep up with the US sector.


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