Vaccitech: Investors To Get A Shot At Investing As IPO Looms

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Vaccitech: Investors To Get A Shot At Investing As IPO Looms
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Vaccitech (NASDAQ:VACC) investors to get a shot at investing in Oxford based vaccine start-up as IPO looms

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  • Vaccitech is expected to list on the Nasdaq in New York on Friday 30th April under the ticker VACC.
  • The company co-invented the Oxford-AstraZeneca Covid vaccine.
  • 6.5m shares will be issued with 975k extra available as over-allotment for high investor interest.
  • The price range is between $16 and $18 a share, which could raise up to $135 million.
  • If the higher target is reached the IPO would value Vaccitech at around $613 million.
  • Retail investors can’t participate in the IPO but can trade in the secondary market once the shares have listed.
  • The listing represents a huge pay day for Oxford University and two vaccine professors

Vaccitech's IPO Due On Friday

"Investors are in with a shot of investing in Vaccitech, the Oxford university start-up which owns the technology used to create the AstraZeneca vaccine. Its IPO is due to launch on the Nasdaq in New York on Friday and if the higher target of $18 a share is revealed at the announcement after the close of trading today, it would put a value on the company of $613 million. The scale of rapid innovation in vaccine development has been breath-taking amid the pandemic and Vaccitech has been one of the companies leading the charge.

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There appears to be strong investor demand for companies in this space, with shares in Moderna, a company behind another Covid jab surging since trial results were announced in November. There has also been a rapid ascent in the share price of BioNTech, the German based company which partnered up with Pfizer to develop a vaccine.

The crisis has shown Vaccitech can effectively scale up a successful project at speed, which is quite unusual for a biotech start up, which often launch onto a stock market without such a proven track record. Its technologies are based on teaching the immune system to confront deadly illnesses, inducing potent T cell responses, and it’s also working on treatments for other diseases including MERS, Hepatitis B and forms of cancer.

But with IPOs, timing is everything and recent headlines about cases of rare blood clots in a relatively small number of people who have received AstraZeneca vaccine, and the restrictive use in some countries may spark concern among some potential investors.

Benefit From Future Sales

Although at present AstraZeneca is producing the vaccine at cost, once the pandemic has ended, the pharma giant and Vaccitech will benefit from future sales as batches are sold around the world. Vaccitech sounded a note of caution in its filing for the IPO, warning that any association with adverse effects or any findings showing it is less effective against other Covid variants may reduce sales. This could have a knock on effect on how many other potential products it will be able to afford to bring to market. Given that the company is still loss making, any disruption of its product pipeline could have an impact on its path to profitability and future valuation.

The IPO represents a massive pay day for Oxford University and its two world leading vaccine professors. The forces of nature behind Vaccitech are Professor Sarah Gilbert, who led the Oxford vaccine research team, and her co-founder Professor Adrian Hill. They will benefit from multi-million pound windfalls when the company lists, given their holdings in the company of 5.2% each. The University will also reap large rewards, given its 5.4% stake and additional holdings via its spin-off holding company Oxford Sciences Innovation, enabling the university to plough more money back into ground-breaking research. The University has created 200 spinout companies to commercialise research and raised a record $1 billion in external fundraising over the past year.

Like many other high profile listings in recent months, retail investors have been excluded from this IPO, with the offer limited to institutional investors only. They will be able to trade once the shares have listed, but should proceed with caution. There is a risk that the share price immediately spikes, so rushing to buy might mean retail investors will have to settle for a higher price, while institutions selling pocket immediate gains. Share prices can be extremely volatile immediately after an IPO, and fully researching a company’s prospects and potential risks ahead would be a wise move before making any investment."

Article by Susannah Streeter, Senior investment and markets analyst


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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