Another listed company plans to quit London’s AIM market – this is why

Drug company C4X Discovery has announced plans to quit the London Stock Exchange’s AIM market, in the latest blow to the capital.

The Manchester-headquartered business said the “recent downturn in the financial markets has adversely impacted our share price, and with it, our future ability to raise funds in the public markets”.

C4X Discovery added that its current public market valuation “does not reflect the underlying potential of our business or our achievements to date and that this is unlikely to change in the short-to-medium term”.

If the decision is approved at a general meeting on April 15, the move will take effect on April 26.

No less than 75 per cent of the company’s shareholders need to approve the move at the meeting.

In a statement, C4X Discovery said it had already received irrevocable undertakings from Richard Griffiths, Polar Capital LLP and the directors, and a non-binding letter of intent from Lombard Odier, representing approximately 57 per cent. of the company’s issued share capital, to vote in favour.

C4X Discovery’s chief executive Clive Dix said: “We have not taken this decision lightly, however, following an extensive review and deliberation to ascertain the most effective way to maximise shareholder value in the longer term and increase the potential for the long-term success of the company, the board has unanimously concluded that it is in the best interests of the company and our shareholders to delist from AIM and re-register as a private limited company.

“Despite delivering on our strategy including three major deals with leading pharmaceutical companies demonstrating our scientific expertise and deal making capabilities, the recent downturn in the financial markets has adversely impacted our share price, and with it, our future ability to raise funds in the public markets.

“The board believes the current public market valuation does not reflect the underlying potential of our business or our achievements to date and that this is unlikely to change in the short-to-medium term. Clive Dix

“We believe that we can potentially access a larger quantum of future funding required to accelerate our strategy as a private company and therefore we believe that a cancellation of the company’s admission on AIM is in the best interest for shareholders and for the future of our business as a whole.”

The company’s ordinary shares started trading on AIM in 2014 and has raised around £63m.

The news comes as C4X Discovery announced its half-year results for the period to January 31, 2024.

The company’s revenue surged from £1.6m to £24.6m in the six months while it went from making a pre-tax loss of £5.1m to a profit of £17.7m.

During the period, the business received a $11m preclinical milestone payment from AstraZeneca. It also sold its Orexin-1 receptor antagonist programme for £15.9m.

On the results, Dr Dix added: “C4XD has demonstrated time and again our expertise to discover and develop high value, novel small molecule drugs.

“We have announced three major deal partnerships with world leading pharmaceutical companies, one of which has since acquired the programme outright demonstrating our scientific and deal-making capabilities.

“The company is in a strong financial position with the potential for further milestone payments over the next 18 months.

“As we progress our lead programme through the discovery phase towards the clinic and with a clear focus on immuno-inflammatory diseases, the board feel it necessary to address the perceived under-valuation of our business in the public market and the subsequent inability to access the future funding the board believes is required to allow C4XD to flourish.”