Biotech IPO is landmark on route to innovative economy

The first IPO of a Russian Biotech company saw the debut of the Human Stem-Cells Institute and the debut of a new index for innovative companies on Thursday

These the first bids for shares in Russia’s first ever bio-tech IPO, and in another first they are being traded on Russia’s newly created index for innovative stocks – similar to the Nasdaq. The new trading floor is intended to contribute to investment in small and medium innovation business in Russia.

The organisers – the country's nanotechnology corporation Rusnano and Micex stock exchange expect about 10 more listings next year, according to Rusnano CEO, Anatoly Chubais.

“Innovative investments into the Russian economy have fantastic prospects. The scale of what we can build in Russia known as the innovative economy is unprecedented.”

The first IPO – the Human Stem-Cells Institute listing was oversubscribed. The company raised about 5 million dollars selling 20% of its shares to over 300 investor. The head of ALOR investment company, Anatoly Gavrilenko, bought 3 thousand dollars worth of shares himself.

"Analysts expect shares here to rise 200% in a year and 400% in 2 years. It’s a risk investment and the risk justifies the investment." 

But these could remain just expectations. So far the country has failed to diversify away from energy and metals in the real economy. But the long road must start somewhere – and where this bio-tech firm leads, others may be encouraged to follow.