VC-backed Circassia valued at £581m for IPO

Ellie Pullen
14 March 2014

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UK allergy treatment developer Circassia, backed by several investors, plans on raising a total of ТЃ209m in its debut on the London Stock Exchange next week, giving it a market cap of ТЃ581m.

At a price of £3.1 apiece, Circassia is selling a total of 67.4 million shares in the offering, comprising 64.5 million issued by the company and a further 2.9 million from the selling shareholders. The company expects to net around £200m from the flotation, with its selling shareholders raising £9m.

Conditional dealings began on the morning of 13 March under the ticker "CIR". Admission to the main market is expected to take place on 18 March. The company announced its plans to float last month.

Invesco Perpetual, Lansdowne Partners and Imperial Innovations are all major shareholders of the company. Circassia has also been backed by Goldman Sachs and Tudor Capital.

According to unquote" data, the listing is the largest IPO of a venture capital- or private equity-backed UK healthcare company on the LSE in more than a decade. Second is former Blackstone portfolio company Southern Cross Healthcare, a UK company that floated on the LSE in August 2006 with a market cap of £423m.

Imperial holds 26.5 million shares in Circassia, meaning its stake in the company is worth £82.1m at the offer price. The value represents a 3.2x return and IRR of 37% on Imperial's investments in Circassia totalling £25.5m over four funding rounds, according to the firm.

JP Morgan Cazenove has been appointed global coordinator and sole sponsor, as well as joint bookrunner alongside Peel Hunt. Canaccord Genuity and Shore Capital are acting as co-managers.

An overallotment option of 10.1 million shares – representing 15% of the base offering – has been granted. Full exercise of the overallotment option would push the total amount raised by the company and its selling shareholders to approximately £240m.

Previous funding
Circassia has raised approximately £105m in funding to date from its investors. In January 2007, the company secured £6m from Imperial, Lansdowne and Tudor, with Imperial supplying £2m of the total.

This was followed in January of the following year by a further £11m from Imperial, Lansdowne and new investors Goldman Sachs and Invesco. Imperial, Invesco and Lansdowne then committed a further £15m to Circassia in December 2009.

Imperial then led a £60m funding round for the company in April 2011. Invesco and other existing shareholders took part in the round, which saw the funding supplied in two tranches.

The second tranche of £25m was supplied to the company in April 2012 alongside a fresh £12m investment from Imperial (which led the round), Invesco and other existing backers.

Company
Oxford-headquartered Circassia was founded in 2006, when Steven Harris and Charles Swingland acquired the ToleroMune technology initially developed at Imperial College in London.

Using its ToleroMune technology, Circassia is developing a range of immunotherapy treatments for grass, house dust mite, ragweed and cat allergies. Its lead product, Cat-Spire, is a treatment for cat allergy and is currently in phase-III testing.

Circassia intends to submit applications for market approval of Cat-Spire in the second half of 2016. Its Ragweed-Spire, Grass-Spire and HDM-Spire treatments are currently in phase-IIb testing.

People
Steve Harris is CEO of Circassia.