Floating across the ocean
Article Date: Aug 10 2006
Entis takes huge satisfaction from the fact that Aqua Bounty has come up with a way of making its fast growing salmon sterile. That way there is no danger of them escaping into the wild and mating with “normal” salmon. Again that reduces the environmental footprint and takes care of one of the biggest fears of environmentalists. But paradoxically, the development has led to criticism that Aqua Bounty helps produce genetically modified fish. In fact, it doesn’t – but time and care are needed to understand the reasons why the criticism is not valid, and in the meantime potential investors can easily be lost.
Entis comments: ‘In the US our experience has been that if you are our size it is very difficult to attract substantial institutional funds from the main markets. We are too big for venture capital and a little too small for the NASDAQ or the NYSE. So if we wanted to stay in the US to raise money, we would have to go to some of the much less well-considered OTC exchanges here.
‘At our size, AIM represented a very nice opportunity indeed,’ Entis continues. ‘As an exchange it is innovative, it is prepared to look at companies our size, namely around $100 million and up, it takes companies of this size seriously. It is also willing to look at new areas of technology and consider them seriously.’
In addition, as Anthony Vickery points out, there is the compounding factor of corporate governance restrictions following the Sarbanes-Oxley Act in the US. ‘That was definitely a factor,’ Entis confirms. ‘Keeping the operating cost down for a company is important for our size; “Sarbox” adds a huge layer of bureaucracy, and the flight of capital from the US is now a reality as a result.’
Entis was also favourably impressed with the level of professional support and expertise available in the UK for an IPO. ‘We were extremely lucky to have been matched up with Code Securities (since purchased by Nomura) as our NOMAD (nominated advisor) specialising in new flotations for biotech companies. They put significant resources into ensuring that this would be as successful and smooth an IPO as possible.’
On 20 March 2006, the first day of trading, Aqua Bounty raised £20 million, ‘and our share price has held its own ever since,’ comments Entis. ‘It is much too early to know about the kind of analyst attention we are going to receive, but we are hopeful that it will be sustained. We are delighted with the positive response we have received from a base of highly regarded international investors. With the funds raised from the placing we will have sufficient resources to develop our marketing capabilities for existing products, accelerate the development of our products in the pipeline and achieve marketing approvals from the major regulatory agencies worldwide.’
This article was originally published in Masterclass magazine.
