Life science firms 'to float by winter'

Published on Wednesday 3 June 2009 21:43

SCOTTISH life science companies could be listing on the stock market again before the end of the year, an industry analyst has predicted.

Stefan Hamill, lead healthcare researcher at Edinburgh-based Noble Group, said "quality" firms which have bided their time during the market turmoil could float by the winter.

And Hamill maintained that he expected other biotechnology companies to follow next year, once other areas of the market began to open up again.

Hamill, who is speaking today at the BioDundee conference, said there may be a backlog of firms waiting to float but warned "the market would be the judge of valuation".

He told The Scotsman: "The initial public offering (IPO) market is closed at the moment, that's pretty clear, but we're seeing signs of activity in 2009.

"As a bank, I imagine we'll probably do one IPO this year but we're a bit more optimistic about 2010 and 2011.

"Come later in the year – presuming the market conditions stay where they are and sentiment continues to improve – I'd imagine we'd start to see the first of those that have been biding their time.

"I think we'll see the more traditional sectors go first and then the appetite for risk will continue to increase, so we should start to see some healthcare companies coming to market."

Hamill maintained there was more room in the market for Scottish healthcare firms. He explained: "Scotland's always had a pretty good group of companies in this area. The science base is good, the infrastructure for bringing young companies to market is in place and there's a lot of activity there, with some recent success stories."

He highlighted the recent share performance of Dundee-based testing-kit maker Axis-Shield and said he expected Galashiels-based drugs firm ProStrakan and Dunfermline-based eyecare machine maker Optos to bounce back.

While the IPO market may be closed to biotechnology firms at present, other forms of investment will be highlighted at today's conference in Dundee.

Richard Seabrook, head of business development in the technology transfer arm of the Wellcome Trust, the UK's largest non-government funding body, will highlight several funding routes to the 125 delegates.

Seabrook said: "In the life sciences sector, it's always been tough to raise funds, but it's particularly tough at the moment.

"The traditional sources – venture capital and private equity – are difficult to access, but there are organisations that are still providing early-stage funding.

"Scottish Enterprise and the Wellcome Trust have been doing this for some time but there are also some new sources – the UK government's Technology Strategy Board and the Medical Research Council's development pathways funding schemes."