Okyo Pharma abandons UK listing in favour of Nasdaq

Okyo Pharma has decided to delist its shares from the London Stock Exchange and list them on the Nasdaq in New York, blaming “negligible” trading that doesn’t justify the associated costs.

The decision comes amid concerns that the LSE is losing its lustre for companies, with Okyo’s decision following higher-profile exits by the likes of chip designer Arm Holdings – which abandoned its IPO plans on the exchange earlier this year, along with building group CRH, SoftBank, gambling giant Flutter Entertainment and software developer WANdisco.

It’s certainly not unusual for the UK’s biotechs to plump directly for a Nasdaq listing when ready to go public given its domination of the category – recent examples include Vaccitech, Autolus, Centessa, and Zura Bio – given the size and strength of the US pharma market.

Okyo’s change of direction adds to the drip-feed of decisions undermining London’s position as a financial centre, and is disappointing given the UK government’s often-stated ambition to turn the country into a life sciences superpower. Overall, it adds to the impression that the exchange is having to work hard to keep its current listings, let alone entice new ones.

Last year, research tool supplier Abcam also delisted from the LSE’s junior AIM bourse – which sees more biotech activity than the LSE – opting to be solely listed in the Nasdaq. Meanwhile, the last UK biotech to opt for the flagship LSE board was Oxford Nanopore, which listed in 2021.

Shares in Okyo were down more than 15% this morning, after it said the delisting is due to take place on 12 May. The cancellation of its shares on the LSE Main Market will have no effect on its American Depository Shares (ADS) – each representing 65 ordinary shares - which already trade on the Nasdaq.

Its intention is to consolidate every 65 existing ordinary shares into one new share of no par value to match its ADS ratio, and upon delisting, it will “collapse” its ADS and directly list the new ordinary shares on Nasdaq in their place.

The UK Government – which lobbied unsuccessfully to get Arm and SoftBank to choose London – has looked at relaxing the LSE’s rules in an attempt to attract more start-ups, in order to reverse a decline in the bourse that saw it lose its position as the largest in Europe to Paris last year.

Okyo’s decision comes after UK biotech saw its worst funding downturn last year since 2012, with just £28 million coming from IPOs and the total raised just £1.8 billion, well down on the record £4.5 billion in funding the prior year.

The company develops medicines for ophthalmological conditions, led by OK-101 which is in phase 2 testing for dry eye disease.