Our new blog series Panmure People introduces some of our sector specialists. First up is Freddy Crossley, sector lead for Healthcare.
Freddy has 15 years’ experience and joined Panmure Gordon in 2012. Freddy has led numerous M&A and equity market transactions on both AIM and the Official List, including Class 1 transactions and secondary fundraisings. This year, the Panmure Gordon team led by Freddy has raised c.40% of all Secondary Fundraising in Healthcare across the London market, including Faron, C4X, MaxCyte, Scancell and CareTech. He also managed the IPOs of Horizon Discovery and Midatech.
When did you join Panmure and what did that move entail?
I joined Panmure in August 2012. Before that, I was heading up healthcare at Seymour Pierce with Mike Mitchell. Having made Seymour Pierce into the largest healthcare NOMAD, Mike and I were asked to come over to Panmure as a team with the plan to do the same here. We recognised the value of working under the Panmure brand and platform. So we jumped at the opportunity.
What does your role as head of the healthcare team involve and what’s your team’s structure like?
I advise clients on broking and financing requirements, together with Tom Salvesen and Duncan Monteith. Analysts Dr Julie Simmonds and Dr Mike Mitchell work on the institutional side of the Chinese wall, where we also have David Cox on specialist sales. We are among the very few brokers in central London with specialist sales in healthcare and that’s definitely a point that differentiates us. We also work very well with the rest of our small to mid-cap sales team. They are very supportive of Healthcare and together it makes up a formidable fundraising capability.
What do you see as the biggest shift that the healthcare industry has seen, since you joined Panmure?
About 20 years ago, Bill Clinton and Tony Blair said that they were going to change the world with the Human Genome Project. And they did.
£3bn was invested to sequence the human genome for the first time; now it can be done for about the price of a train ticket from Oxford to Cambridge. This better – and cheaper – understanding of genetics has ignited a kind of industrial revolution in the pharma sector as a whole, especially over the last 6-7 years. Now we’ve got companies making great advances in cell therapy, gene editing and immuno-oncology. All of this is down to a better understanding of our genetic makeup, and it’s created the interest from investors for our deals with MaxCyte and Horizon Discovery.
What impact has working with Panmure had on these companies?
A lot of the companies that we deal with were embryonic three or four years ago.
Horizon Discovery for instance had a c.£4 million market cap in 2011. It's now closer to £200m. Faron was similar too. We've been part of their journeys in raising the capital to get to that size.
We’ve also helped MaxCyte leverage their work in CAR-T immuno-oncology, for example, to realise growth and to build relationships with cell therapy companies.
What new developments do you see coming for the healthcare industry?
I believe that cancer therapy is going to radically change. The typical, historical way of treating cancer would probably be to start with surgery, and then move on to chemotherapy and/or radiotherapy. But innovation is leading to different combinations of therapies: more targeted therapeutics; better surgery, and harnessing the power of the immune system (immune-oncology) which is, in particular, driving a great change in the world of cancer therapy. As our ability to fight cancer is improving dramatically; it’s becoming a “space race”, and Panmure works hard to be working with companies at the forefront of this innovation.
I believe that developments in cancer therapy over the next five to ten years will make us look back at treatment today and think “that’s archaic”.
As the head of Panmure’s healthcare team, what have been your most notable achievements so far?
The first one that springs to mind would be the IPO of MaxCyte during what was a particularly difficult time – the markets were completely dead in the water. So for that IPO to have gone up 400%, and then to raise double the IPO amount 12 months afterwards – I don't think any other firm in the City, perhaps in the world, could have raised money for MaxCyte like we did. We’re very proud of that success.
We also secured the largest life sciences IPO ever on AIM for Horizon Discovery. We had a heavily oversubscribed book for Horizon and raised well over £100m in 14 months as a result, so we're proud of that too.
A more recent success would be fundraising for Faron Pharmaceuticals, an AIM-listed Finnish company that was not very well-known at the time. We looked at the business and realised they had fantastic products; we’ve raised money for them both last year and again this year. I’m proud to say that we attracted a lot of investors, and brought them a great result too: the share price was originally at £2.50 during the fundraising, and we're now looking at a share price of around £8.00.
So as a team we're trying to produce stellar returns for investors while providing funding for the industry to keep innovating.
What can you tell us about transactions in the pipeline?
The pipeline is healthier than ever; we’ve never had as good a client base as the one we have at the moment – which is a hint of what to expect.
The fact is that healthcare companies, particularly biotechs and pharmaceuticals, require capital. Investment is essential to fund R&D around new diagnostics or pharmaceutical products, or to build out physical facilities – care homes, for example. So it’s a sector with significant financing needs.
Which would be the companies or stocks to keep an eye on for growth?
Looking at our client list I would expect them all to do well. It's hard to pick out any individual, but at the beginning of the year I said I'd expect Faron to be the best performing company of 2017, and it has been so far. Our analysts are also very supportive of Faron’s potential, and we are excited by what the future holds for the company.
What piece of advice would you give to a small or medium-sized company in the healthcare sector?
These are uncertain times. If you are a small or medium company, you will undoubtedly have a requirement for capital around the corner, but Brexit, Trump, elections and other uncertainties on a global scale are creating a macro-political outlook that is hard to predict.
So the best bit of advice I would give is to not wait around when it comes to fundraising: plan early to get ahead of the growing uncertainty.
Out of your career to date, what would you consider to be your proudest achievement?
I would say that every secured IPO has been a proud achievement in itself. Whilst the M&As and secondary fundraises are exciting, it's definitely the IPOs that tend to stick in my mind.
At the breakfast table or on the tube to work, what publication or feed would we find you reading?
The first thing I do every morning is to take a look at the Financial Times’ app; usually I navigate quickly to the healthcare section. I also listen to The Today Programme's business section at 6.15am: it's the best bit of news on the radio, and occasionally I might be lucky enough to hear the views of my colleagues Simon French and David Buik. And of course, I always read Cox on Stocks.
Lastly, business or otherwise, what would you say is the major topic people ask for your advice on?
It’s always about fundraising. When people ask me for advice about raising money, I’m very fortunate to be able to go back to them with a lot of certainty. This is the result of the wealth of experience within my team and Panmure as a whole. When you are raising c.40% of the funding on the market, it gives us a singularly good view on the appetite of investors for companies across the sector.
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