Reneuron, a biotechnology firm that received substantial funding from the Welsh government, has recently exited London’s junior stock market after entering administration. This marks another setback for the AIM exchange.
Once valued at over £500 million, Reneuron decided that pursuing a ‘highly dilutive’ fundraising was not in the best interest of its shareholders, particularly given its limited cash resources and unfavorable terms from potential investors. The company announced that it no longer sees a viable path to raise enough funds to exit administration and restore share trading on AIM.
Reneuron’s shares, which peaked at above 300p in 2019, have been suspended for over six months and are set for cancellation at the start of trading next week.
The administrators for Reneuron indicated that they will continue to engage with creditors to assess the company’s solvency. The firm noted it is exploring various options, including the possibility of functioning as a private entity.
Founded in the late 1990s and listed since 2005, Reneuron gained approval to commence clinical trials for its stem-cell therapy in 2009. However, progress was hindered by the COVID-19 pandemic, disrupting its path through the trial phases.
During the six months ending September of last year, Reneuron generated only £157,000 in revenue against operating expenses of £3.5 million, primarily for research and development, resulting in an overall loss of £2.8 million.
The company received a £5 million equity investment from the Welsh government’s Life Sciences Investment Fund in 2013 and was also awarded a £7.8 million grant to aid its relocation from Guildford, Surrey, to Pencoed in South Wales, where it aimed to set up a cell manufacturing and development facility.
Several British biotech firms have expressed concerns that raising capital on AIM has become increasingly challenging, prompting some to transition to private company status. This year alone, multiple companies, including Destiny Pharma, C4X Discovery, and Redx Pharma, have opted to delist from AIM.
Destiny Pharma, chaired by City veteran Sir Nigel Rudd, entered administration this month following its exit from the stock market. Others, such as SpectralMD, have relocated to the United States, moving their listings to the Nasdaq after a merger with Rosecliff last year.