(Bloomberg) -- London’s shrinking stock market suffered a fresh setback after British drugmaker Indivior Plc said it could move its primary listing to the US.

Indivior’s share price soared Thursday following its statement that it was starting talks with shareholders on the potential switch in the summer of this year. The move would attract more investors and analysts coverage as well as potentially leading to inclusion in major US indexes, it added.

The pharmaceutical manufacturer plans to keep a secondary listing in the UK.

The lure of New York’s deeper pools of investor cash have already prompted companies including CRH Plc and Ferguson Plc to move their primary listings to the US. Chip designer Arm Holdings Plc opted to list in New York last year, while Flutter Entertainment Plc shareholders will vote on May 1 on the gambling company’s plan to move its primary listing to the US.

Peel Hunt estimates that one in five companies listed in London has vanished in the past five years.

Indivior’s shares surged as much as 22% Thursday, the most since July 2020, and leading gains on the mid-cap FTSE 250 Index. Indivior also reported better-than-expected results for the fourth quarter and provided an upbeat outlook for 2024.

“It is nearly always worth going for a primary US listing, in particular if the company has significant assets or turnover in the US,” said Carsten Hesse, an index events specialist at Olivetree Financial. “US peers usually trade at a significant valuation premium and generally US listed stocks are followed by more passive money than those in Europe.”

Chancellor of the Exchequer Jeremy Hunt is under pressure to implement measures to help boost the London stock market after investors pulled a record $28.8 billion from UK equity funds last year, according to EPFR Global data. One option Hunt is considering is a so-called British ISA, a tax-free savings account for investing in British stocks, which could be announced at the next UK budget on March 6.

With a market capitalization of £2.2 billion ($2.8 billion), Indivior still has some way to go before it would be considered for inclusion in the benchmark FTSE 100 Index were it to keep its primary listing in the UK. The stock trades at about 10 times analysts’ estimated earnings for the next 12 months on a blended basis, according to data compiled by Bloomberg. 

Indivior generated more than 80% of its 2022 sales from the US. 

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