Biotech company Redx Pharma Plc is set to pull its shares from the London Stock Exchange’s smallest market, citing liquidity constraints and saying it will attract investors more easily as a private company.

The decision is another blow to the LSE as innovative biotechs increasingly look to the US. Companies including Barinthus Biotherapeutics, Zura Bio and OKYO Pharma have opted to sell shares in New York or move their listings there.

London’s Alternative Investment Market, or AIM, is designed to help smaller companies access capital. But Redx’s board concluded that “our current market valuation is not reflective of our track record or future potential and is not conducive to raising the level of capital required for our growing clinical portfolio”.

Redx develops small-molecule medicines targeting cancer and diseases associated with fibrosis. Its lead product is in mid-stage clinical trials.

Britain has faced difficult questions in recent years regarding its attractiveness as a place for life-sciences companies to grow, with increasing concern that biotech companies may choose to list in the US rather than in London.

In February, Redx denied a report by The Times that it was considering switching its listing to New York.

Jane Griffiths, who chairs Redx’s board, attempted to allay concerns that the move to delist was a reflection on Britain. The company, she said, believes that the UK “is an excellent hub for scientific discovery and drug development”. Redx will retain its headquarters at Alderley Park in Cheshire.

The decision to re-register as a private company will be subject to shareholder approval at a meeting on April 19.

  - Bloomberg