As an industry, SIX Swiss Exchange listed biotech companies are on the ascendency, having raised around CHF 3.5 billion in 2020, a new record and a threefold increase compared to 2019 - an excellent track record. The exchange has facilitated access to capital for a number of companies during the peak of the pandemic’s volatility. Simultaneously, SIX Swiss Exchange is also looking to make it simpler for biotech SMEs to procure reliable funding through its Sparks segment, noted Gerber. By listing on Sparks, Gerber continued that biotech SMEs will be able to obtain funding more seamlessly - owing in part to their increased visibility among their peers.
Sparks also provides SMEs with a condensed continuous trading window, supporting optimised price discovery and execution. This will be vital in helping convince risk-averse investors to build up holdings in biotech SMEs, especially as many allocators have historically avoided companies with smaller market capitalisations owing to concerns about their lower trading liquidity.
Institutional investors will also be comforted by the fact that SMEs admitted to Sparks must adhere to strict reporting and regulatory requirements - similar to those of listed companies on the main segment. As such, companies traded on Sparks must be of very good quality to be onboarded onto the nascent equity segment.
Despite the robust oversight and strong investor protection, Sparks is designed to be incredibly flexible so as to encourage biotech SMEs to list. Gerber told the audiences that the minimum track record requirements for SMEs listing on Sparks were shorter, so as to enable younger scale-ups to list more easily. Elsewhere, SMEs looking to list on Sparks are subject to lower equity thresholds - in addition to more streamlined corporate governance reporting obligations. By reducing the listing requirements, it is likely that more SMEs – including those operating in the country’s burgeoning biotech sector - will list on Sparks before transitioning onto the main market.
“In a sector which has such high and recurring financing requirements, Sparks could prove to be incredibly attractive to biotech SMEs,” said Gerber. SMEs that list on Sparks naturally benefit from all the other well-known advantages of being a listed company at the Swiss stock exchange.
Further information can be found here: Sparks.