Oxford Cannabinoid Technologies Holdings PLC (LON:OCTP) has begun trading in London after raising a gross £16.5mln in its initial public offer.

The UK-based pharmaceutical company specialises in cannabinoid drug development, with a focus on pain treatments.

OCT aims to become a global leader in developing prescription medicines that target the endocannabinoid system to address significant unmet medical needs in pain treatment.

WATCH: Oxford Cannabinoid Technologies chairman Neil Mahapatra talks about the company’s plans

The company owns a proprietary library of 93 cannabinoid derivatives and has in-licensed its lead drug candidate.

It plans to use the placing proceeds to primarily fund the pre-clinical development and Phase 1 clinical trial of this drug candidate, develop a second drug candidate, and advance potential third and fourth drug candidates from the cannabinoid library.

Chief executive John Lucas said: “As a British pharmaceutical business, we are pushing back the frontiers of cannabinoid-based drug development. Being a listed company will provide new investors with the opportunity to participate in the next chapter of our exciting story.

“This IPO will enable us to take our pipeline of drugs through the next stage of development, including taking two of our drug candidates into clinical trials.”

A total of 960.4mln shares were floated on the market, giving the group an initial valuation of just over £48mln at the issue price of 5p.

But the shares immediately soared 50% to 7.5p in early trading on Friday, though by mid afternoon the initial high wore off and they were back to 5.05p.