Okyo Pharma has applied to delist from the London Stock Exchange, marking the latest blow to the UK capital’s reputation as an international financial centre.
The ophthalmology drugmaker told investors on Tuesday the decision was prompted by the costs connected with ‘negligible’ trading volumes of its shares on the main market.
It said the move would not affect its American Depositary Shares, which trade on the New York-based Nasdaq exchange, home to many technology giants like Apple, Amazon and Google’s parent company, Alphabet.
Difficult times: Okyo Pharma’s planned departure from the LSE comes amidst growing worries about London’s ability to attract initial public offerings and retain stock market listings
Okyo Pharma shares reached a ten-month low in the wake of the announcement, falling by 14.6 per cent to 1.75p and bringing 12-month losses to around 66 per cent.
Headquartered just off London’s Regent Street, Okyo focuses on developing novel treatments for inflammatory eye diseases, such as allergic conjunctivitis and uveitis, one of the world’s leading causes of blindness.
Last month, the group began Phase 2 trials on its dry eye disease treatment OK-101 after raising approximately $5.6million in an equity issue.
Its planned departure from the LSE, expected on 12 May, comes amid concerns about London’s ability to attract new businesses and retain stock market listings.
Analysts have blamed the trend on the risk-averse nature of British pension funds and insurers, Brexit-related uncertainty, an over-reliance on dividend payments, and worsening economic problems.
Many companies have moved or are considering switching their main listing to the US in the hopes of higher valuations and better liquidity.
In recent weeks, building materials supplier CRH Holdings announced it will transfer its primary listing to the US, where it earns the majority of its revenues.
Japanese conglomerate Softbank has also said it will float microchip maker ARM, widely considered a British tech success story, on Wall Street despite intense lobbying from the UK Government.
Other major companies thought to be considering a move over the Atlantic include Paddy Power owner Flutter, educational publisher Pearson and OakNorth Bank.
Nikhil Rathi, the former LSE boss and chief executive of the Financial Conduct Authority, has said more start-ups could be tempted to float in London if the stock market’s standard and premium listing segments were abolished.
Speaking to the Global Investment Management Summit last week, he also suggested removing the requirement for shareholder votes on large deals and loosening rules on financial track records.
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