ReNeuron has joined the long list of biotechs to leave London’s AIM stock market. The stem cell biotech is letting go of its listing after money troubles persuaded it to free itself from the costs and regulatory obligations of the exchange.
Trading of ReNeuron shares on London’s AIM growth market has been on hold since February, when the failure to secure a revenue-generating deal or additional equity funding drove the biotech to request a suspension. ReNeuron appointed administrators in March. If the company fails to find a path forward, the administrators will distribute whatever funds are left to creditors.
The hunt for money has identified a “limited quantum of funds” so far, ReNeuron said Friday. The lack of cash, plus the terms of people who are open to investing, led the biotech to reconsider its plans for emerging from the administration process as a viable, AIM-listed company.
ReNeuron said its board of directors has determined “it is not in the interests of existing shareholders to progress with a highly dilutive fundraise and continue to incur the additional costs and regulatory obligations of being listed on AIM.” Neither the administrators nor the board think there is a realistic possibility of ReNeuron raising enough cash to resume trading on AIM on acceptable terms.
The administrators are talking to ReNeuron’s creditors to determine the solvency of the business. Once those talks are complete, the administrators will work with the board to decide on the next steps. The range of current options includes ReNeuron continuing as a private company.
ReNeuron’s departure from AIM eliminates another biotech from the exchange. Access to public funding for biotechs is a long-standing problem in the U.K., driving companies to look to the U.S. for cash to scale up their operations or, increasingly, decide they are better off being taken private.
Destiny Pharma, e-therapeutics (ETX), Oxford Cannabinoid Technologies and Redx Pharma have all delisted this year. ETX CEO Ali Mortazavi aimed a shot at AIM on the way out, stating that the risk appetite of U.K. investors means “there is a limited available audience on the AIM market for companies such as ETX.”