The London Stock Exchange takes another loss as Okyo Pharma prepares to delist in favor of the tech-focused New York Nasdaq
- Okyo focuses on developing new treatments for inflammatory eye diseases
- It said the move would not affect Nasdaq-listed American Depositary Shares
Okyo Pharma has applied to delist from the London Stock Exchange, marking the latest blow to the British capital’s reputation as an international financial centre.
The ophthalmic drugmaker told investors on Tuesday that the decision was motivated by costs related to “negligible” trading volumes of its shares in the main market.
It said the move would not affect its American Depositary Shares, which are traded on the New York-based Nasdaq exchange, home to many tech giants such as Apple, Amazon and Google’s parent company Alphabet.
Troubled times: Okyo Pharma’s planned exit from the LSE comes amid growing concerns over London’s ability to attract IPOs and maintain listings
Okyo Pharma shares hit a ten-month low in the wake of the announcement, dropping 14.6 percent to 1.75 pence and taking 12-month losses to about 66 percent.
Headquartered just off Regent Street in London, Okyo is focused on developing new treatments for inflammatory eye conditions such as allergic conjunctivitis and uveitis, one of the world’s leading causes of blindness.
Last month, the group began phase 2 trials for the OK-101 dry eye treatment after raising approximately $5.6 million through an equity offering.
The scheduled exit from the LSE, expected on May 12, stems from concerns about London’s ability to attract new businesses and maintain listings.
Analysts blame the trend on the risk-averse nature of UK pension funds and insurers, Brexit-related uncertainty, an overreliance on dividend payments and worsening economic problems.
Many companies have moved or are considering moving their main listing to the US in hopes of higher valuations and better liquidity.
In recent weeks, building materials supplier CRH Holdings has announced that it will move its primary listing to the US, where it generates most of its revenue.
Japanese conglomerate Softbank has also said it will bring microchip maker ARM, widely regarded as a British tech success story, to Wall Street despite intense lobbying from the British government.
Other big companies thought to be considering a move across 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 head to London if the standard and premium listing segments of the stock market were abolished.
Speaking at the Global Investment Management Summit last week, he also suggested removing the shareholder vote requirement on major deals and relaxing financial track record rules.