Hope to see this on Freetrade when it arrives.
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Agree 
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Having a look at the IPO documents there seems to be a unusually large amount of information disclosed, including specific guidance which is always a good sign.
They disclose their business propositions as providing ābroader access to its technologyā, āunlike current competitorsā, by:
removing the dependency on capital-intensive devices and instead offers āstarter packsā for a supply of consumables (items such as kits and āflow cellsā that are used to perform sequencing) along with a device, at no additional cost to the user. The Company also seeks to broaden access by continuously striving to make its products easy-to-use for a range of applications, and convenient to order online and ship to their destination. Because starter packs require no upfront capital cost to the customer; their spend is focused only on the consumables for their experiments, thereby significantly reducing the financial barrier to adoption.
This lines up well with their eventual goal of moving beyond scientific and research markets. Their devices are well known for being portable, and while their main competitor in Pacific Biosciences may excel in various use cases, its easy to see how the company can carve out one, if not several, niches.
Financials-wise, they look very strong for a private growth biotech. They have achieved 51% revenue CAGR for 2018-20 and a historical gross margin of just under 50%, although that worsened to 41% in 2020. Management predicts revenue of around Ā£90m for 2021, 55% gross on that, and then Ā£164-75m in 2023 and 60% GP, with medium term targets of 30% for revenue growth and over 65% for gross margins beyond that. Operating losses increased from Ā£62m to Ā£73m between 2018 and 2020. Jefferies predicts the company will continue to rack up Ā£394m in operating losses by 2025 before posting an operating profit of Ā£41m the year after. The balance sheet is solid, with Ā£283m in cash and only Ā£9.5m in debt, and with estimated IPO proceeds of at least Ā£625m, the company will be capitalised-enough for its growth plans. Receivables have also not ballooned with sales which is always a good sign for cash generation. Revenue, aside from their massive UK COVID contracts, is quite geographically diversified, and their growth excluding testing was 109% up YoY in the first half.
Comparables are fairly few and far between, given the dominance of Illumina in the industry and the infancy of long-read sequencing. Roche acquired stratup Stratos Genomics for $250m in 2020, so its likely Oxford Nanopore would have a seven figure takeover floor (although Illumina would probably be ruled out given their offer for PacBio was disallowed for anti-trust). The main competitor is PACB, although it has seen essentially flat revenue growth for several years before COVID gave them a boost. It is expected to grow revenues at around 40% to 2023. Like ON, Pacific Biosciences is very well-capitalised, including raising almost Ā£900m in debt last year. They historically traded on a EV/Sales multiple of between 5-15x, however leadership changes, new products and COVID helped lift the stock dramatically, where it has now spent much of the year consolidating at a multiple of between 50-75x. Illumina is more established and trades at a 15-20x sales multiple, however I believe this is a weaker comparable as they serve different use-cases and Illumina is essentially a monopoly. Assigning a conservative multiple of 30 values Oxford Nanopore at Ā£3.4b, and this puts it nicely at 20x 2023 revenues which is where PacBio is sitting for that year now too. Depending on how much they raise that means the equity could easily be worth over Ā£4b. Its also worth noting Jefferies believe the stock will have scarcity value being the only large biotech listed in London.
Correction: I previously noted management expected revenue for this year to be c. Ā£158m. This was an error on my part - expectations have been upgraded and are now c. Ā£112m.
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Thank you for the excellent overview of this company.
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Looking forward to seeing this on Freetrade. 
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Anyone have an idea as to when they could float?
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All I can find is āis in coming weeksā which was posted on the first of September, so Iām thinking it will be before Christmas.
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Thanks, we are eerily light on details
Iāve decided to buy into IP Group, who have a 15% stake in Oxford Nanopore. Then maybe iāll sell before ON floats
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I know one of the people who works there. They showed me the gene sequencing device, itās about as big as a phone and sequences your DNA or a virus or whatever in like 20-40 minutes, passing the material through a mesh or something. No idea how it works.
The device is like Ā£1,000 and the single-use substrates are like Ā£750. I didnāt even know this technology existed, but it seems like it will be pretty useful in the medical and research industry.
No idea on the company fundamentals in terms of an investment. I tend to stay away from any wonder-technology as they can be a big gamble and massively over-hyped on speculation. Also, the customer market may not have worked out what they value the device at yet and what the demand is.
Also, anything medical related is highly dependent on regulations and approvals which adds another gamble aspect unless you understand the industry. Compare that to something like a new consumer electronic device which is way less dependent on regulations and much easier to get to market. Just my take on this sort of thing, but I am not well informed in this particular company.
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So, do we think it will make it on to Free trade today?
I hope so
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Conditional trading began on Thursday, and the shares were up 34% from the issue price at 570p each in early trading, growing the companyās market cap to GBP4.56 billion. The ticker is ONT I think and it is still going up - now at 615p. Here is the share page on LSE:
Unconditional dealings begin on October 5. So I doubt weāll see it before then. 
LSE did a little news story about it here:
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Crazy volume on IP Group today (they have a 15% stake in Oxford Nanopore), they were at their daily average volume of 2.5m at ~9:30 today. Approaching ~4.9m now
Oxford Nanoporeās volume is hitting 12m - woahh
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Bump, needs adding!
This has been moved to a stock discussion which means it should be in the app imminently.
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This is now live on your app 
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