Usually, biopharma firms in Europe that are struggling to raise money turn to the US, either for a listing or re-location, or for both. So the decision by California-based Entelos Inc. to float not at home but on London's Alternative Investment Market (AIM), where it recently raised $20 million, highlights an interesting counter current. [See Deal] It also fueled the enthusiasm of some London-based bankers and analysts who increasingly see London's 10-year-old junior market for high-growth, small-to-mid-cap companies as, if not a Nasdaq-in-waiting, then certainly the most likely exchange to rival it. Some say AIM will eventually become the pan-European exchange that others such as Euronext (the combined Brussels, Paris, and Amsterdam markets), Nasdaq Europe, and Easdaq have tried but failed to achieve. (See "Easdaq: Fighting for a Lost Cause?" START-UP, January 2001 Also see "EASDAQ: Fighting for a Lost Cause?" - Scrip, 1 January, 2001..)
The statistics are indeed compelling. The total market capitalization of AIM-listed companies (which span all sectors) has increased by 80% in the last 12 months, with 23 IPOs in January alone. In terms of money raised and number of companies, it's the most successful market in the world for smaller, growing firms. And the average company size has increased. Importantly, institutional investors, who a few years ago shunned AIM as a poorly regulated backwater, have jumped on board
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