As chief executive of Oxford Nanopore, Gordon Sanghera’s mission is reminiscent of a 1970s Martini ad: to enable the analysis of ‘everything, by anyone, everywhere’.
The genome sequencing company, which he co-founded in 2005 and spanned Oxford University, is one of those rare beasts, an independent British biotechnology company listed on the London stock market.
Sanghera, who floated in Oxford Nanopore last fall, is determined to keep it that way, rather than fall into the hands of a foreign buyer. So much so that he has “anti-takeover stocks” so he can fend off unwanted predators.
Warning: Gordon Sanghera says UK company buyouts have given US a leg up on gene sequencing
His commitment to supporting UK biotech is in stark contrast to some other chief executives, who are only too happy to be sold to the highest bidder.
The weak pound has made innovative British companies attractive targets, especially for US buyers. Sanghera, 61, and his fellow executives, he says, are “like-minded that we’re not for sale.”
Top shareholders include the IP Group, a UK-listed company that invests in innovation, Tencent of China and Abu Dhabi’s G42.
Neil Woodford, the disgraced fund manager, was an early financier of the company, and US investor Acacia, which bought some of its shares, still holds a stake.
Sanghera says, “Based on my contacts with investors, I think most recognize that there is value within the company that would not be realized in a short-term sale.”
Oxford Nanopore came to the fair last year, along with many other debutants, including takeout platform Deliveroo.
Lord Hill published a review in the spring of 2021 to make the city more attractive for IPOs. But the war in Ukraine and rising interest rates have had a chilling effect so far this year, and Oxford Nanopore stocks have fallen sharply.
“When we floated, the market was in a very different place than it is now,” says Sanghera.
‘Looking at the peer group on [US tech market] Nasdaq, some of them have dropped significantly more.”
The decision to list the company in London went against the prevailing trend for UK tech and biotech companies to list on the Nasdaq.
Semiconductor giant Arm is currently looking at an IPO in the US, while Cambridge biotech outfit Abcam leaves its UK listing on AIM and heads to the United States.
The stereotypical belief of tech company founders is that London is a second-rate location, with reluctant investors struggling to understand advanced science and technology.
Sanghera doesn’t like it and says: ‘I want to show that it is possible here. People say in the UK we don’t have the capital, we don’t have the ambition, we don’t have the expertise or the right people. I just don’t think that’s true.
“Somebody has to take a stand.”
He adds: ‘Too many British life science and technology companies are being sold.’ He cites the example of Solexa, a biotech company founded by former Cambridge University scientists, which was bought by Illumina from the US in 2007 for £600 million.
It was a high price, but the deal enabled the US company to become the world’s dominant DNA sequencing company. Illumina is now worth $35 billion (£29 billion) even after heavy recent price drops, so in retrospect Solexa seems like a bargain. And it shows how the UK missed the opportunity to develop a multi-billion pound British champion, allowing the US to reap the rewards.
Sanghera did his first degree in chemistry from Cardiff University, followed by a doctorate in bioelectronics technology, partly to escape an arranged marriage.
He started working at Medisense, a glucose monitoring company. The sale for $876 million to the American company Abbott Laboratories in the mid-1990s was a formative influence on his views.
“A good reason not to be acquired is that you can lose the urge to innovate,” he says. “It happened to Medisense. It can kill the goose that laid the golden egg.’
His 1.3 percent stake in Oxford Nanopore has made him a multimillionaire, but he comes from a humble background. The son of Indian immigrants, he grew up in Swindon with his father, grandparents, four aunts and three siblings in a four-bedroom house. His mother died when he was 11.
Starting his own business at 43, he said, was due to an early midlife crisis.
It has been a long and sometimes difficult journey, with issues such as patent litigation and the demise of Woodford, who was a major lender.
The company is still loss-making and, he says, it is focused more on growth than on profit — the plan is to break even by 2026.
As for the technology, the big selling point is that Oxford Nanopore can reduce the cost and time involved in gene analysis.
It is based on passing DNA fragments through tiny holes – nanopores – and measuring how they disrupt electrical currents, which can then be decoded to determine the DNA sequence. Its main advantage is that it can sequence and analyze much longer DNA strands in real time.
Devices the company has developed include the MinION, which is being used at Oslo University Hospital to demonstrate the potential to classify brain tumors through methylation – a biochemical process in the body – in just 91 minutes. That’s enough time to transfer the results back to the operating table during surgery.
The company helped identify and track the spread of Covid in 85 countries and sequence 18 percent of all coronavirus genomes.
It has a partnership with Genomics England that uses nanopore sequencing in cancer research and is involved in drug-resistant tuberculosis research, as well as pilot projects to protect endangered species and research virus-resistant crops. It recently signed a deal with G42, an Abu Dhabi group and one of its largest shareholders, to work on a large-scale population genomics program.
Skeptics question whether Oxford Nanopore can compete with major rivals in the US and whether relations between the company, Woodford and IP Group were too close for comfort.
Biotech is certainly not an industry for the faint-hearted investor, especially those not versed in science, who would struggle to distinguish a true genius from a charlatan.
The company is strengthening its board of directors with a new chairman, former Ocado Finance Chief Duncan Tatton-Brown.
‘The big challenge for us is growing pains. We’re at the foot of the hills and growing fast,” says Sanghera.
He believes that measures to give pension funds and other large investors more room to invest in start-ups and innovative companies that are unlisted could give the UK ‘some freedom to fund growth – there is a real opportunity’.
“In biotech, if you look at academic output in the UK, we’re far above our weight in terms of inventions,” he says, but argues that although we have a lot of start-ups, we’re missing the next stage, scaling it up.
‘It’s a desert there. Sometimes you feel like you’re on your own – the loneliness of the long-distance runner. You have to show that you can get through the desert and they will follow,” he says.
“Our ambition is to be a global biotech player. There’s no reason we couldn’t do that from here in the UK.”
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