DNA helix

One of the first things visitors may notice when they arrive at the headquarters of Oxford Nanopore are the murals that adorn the common spaces. On one wall, there is a picture of the group Nirvana. On another, The Ramones. Blondie features on a third. When I asked my host whether the founders were music fans, I was told, sure, but the important point was that each band depicted had not only challenged prior convention but also invented something new and enduring. It is this mindset that underpins the philosophy of Oxford Nanopore. For your author, it was a privilege to recently spend an hour with the company’s co-founder, Gordon Sanghera, a luminary in the world of life sciences and innovation. Our wide-ranging conversation invoked both Darwin and Copernicus among many other topics.

For those unaware, Oxford Nanopore was founded in 2005, with the broad ambition of “anyone being able to analyse anything anywhere.” The business listed in 2021 and is currently worth over £2bn. While many would consider what Nanopore has already achieved a marked success, the impression formed when talking with Gordon is that the business is still at a very early stage of its journey. For the team at Nanopore, there is “growing momentum” behind its approach to how DNA is sequenced (a topic we first discussed in 2012). Put simply, the business has developed a proprietary system that allows for greater levels of sequencing accuracy to be achieved at faster speeds than might be possible using more conventional systems such as those developed by industry leader, Illumina. Gordon likened the industry’s incumbents to “flat-earthers”, seeing the world only “in black and white.” By contrast, Nanopore is “bringing colour” to DNA sequencing; an approach it believes will eventually become the orthodoxy (in industry parlance, the Nanopore technique utilises ‘long reads’ on DNA versus the historic preference for ‘short reads’).

Oxford Nanopore may well have a chance at success simply because it has always taken a different approach. Gordon arrived at his epiphany through work originally done at the time of his PhD, bringing electronics (and data) to the world of biology. He is also acutely conscious of the importance of innovation. At Nanopore, those responsible for research and development are quite explicitly separated from those involved in the manufacturing of the products, allowing the business to focus on what matters most – namely, innovation. There is also a distinct focus on creating a platform rather than applications for its platform, a key lesson absorbed from how Apple ended up becoming one of the world’s most successful companies.

What lessons can be learned from a Future Trends perspective? We have consistently advocated the Darwinian principle that the most successful businesses will be those that are most responsive to change (as opposed either to the strongest or the most intelligent, in Darwin’s summation). Oxford Nanopore embodies this approach – “we have to keep innovating through disrupting our own business”, per Gordon. With fewer than 1% of all living things on the planet – not just humans, but animals and plants too – sequenced, the runway ahead for the business is significant. As costs continue to fall, the opportunity should only increase.

23 May 2023

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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Alex Gunz, Fund Manager

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