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OPINION

Chart: BioFrontera’s failed dual listing

Chart: BioFrontera’s failed dual listing
February 8, 2016
Chart: BioFrontera’s failed dual listing

As is just about visible from the chart below, trading volumes have certainly been thin, at an average of just 2,088 shares every 15 days. This has not helped the London share price, which has failed to track the loss-making company’s Frankfurt-listed stock (shown in the green line).

Consequently, holders of London-listed shares have two options: to transfer their underlying shares to a Frankfurt-authorised broker, or convert them into Crest Depository Interests. They could also sell. Given the recent progress its key drug has made in both US clinical trials and additional skin cancer applications in Europe, booking a loss is not necessarily something UK shareholders would have hoped for.

All of which begs the question as to why the company went to the hassle of coming to London in the first place. This was the rationale it gave at the time:

“The Directors believe that Admission will assist Biofrontera in its development by raising its international profile in the life sciences arena; providing investment for the expansion of the Company’s distribution and sales network; and increasing access to capital should further finance be required to expand the business in the future.”

The Aim listing and a move to the Prime Standard section of the Frankfurt Stock Exchange in 2014 meant financing costs ballooned from €182,134 to €869,733. Throw in listing and advisory fees, and it does not appear to have been a worthwhile marketing exercise. It failed in an attempt to raise €4m last year, and appears to have slipped beneath the radar of the wider market.

Yet compare it with other pharmaceutical plays on Aim, and it’s hard to see why Biofrontera has been so badly overlooked. The company is pulling in revenues, and could soon capitalise on the sale of its research, so there may not be significant read across for the sector. It is nonetheless a reminder of the importance of liquidity for early-stage companies on Aim.