Ebb & Flow

A flurry of listings on AIM this month has been driven by a set of investors that differs significantly from investors in the types of biotech companies that would list on the main London market.

While some of the latter investors have been indulging in hallway chatter that the AIM stories will draw money away from main market companies, there is no reason to believe that this would be the case. But the AIM flurry does point out the extent that value degradation has chiseled away at long-time public names in the U.K. and the Continent.

The money behind the AIM companies is mostly from small cap non-specialist investors and venture capital trusts, which invest in early stage lower risk companies for private investors. The later stage main list IPO candidates are regarded as higher risk and therefore mostly attract specialist investors.

"Among most AIM investors there is little specialist knowledge of biotech," said Andy Smith of 3i. "The key is risk."

For these investors, even a hint of revenues makes the AIM stocks appear to be lower risk bets than many of the better known main list names.

Among this month's AIM entrants, allergy vaccine company Allergy Therapeutics(LSE:AGY) recorded sales of £18 million ($32.3 million) and an operating profit of £1.6 million ($2.9 million) for the year ended June 30.

VASTox (LSE:VOX) had revenues of £250,000 ($450,000) from its drug discovery and toxicology services in the six months to June 30. And structure-based discovery play Sareum (LSE:SAR) recorded revenues of £21,000 ($37,663) for the 14 months to June 30 through its fee-for-service business.

Another anticipated listing on AIM is

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