Chinese sequencing giant BGI Genomics raises $80M in IPO

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BGI plans to invest in better tests for diagnosing cancer and reproductive health conditions.

BGI Genomics has completed its long-gestating IPO. The listing injects about $80 million into BGI at a time when the Chinese company is trying to move beyond its traditional strength in basic science and establish itself as a major player in biomedical testing.

BGI built its reputation as a genome sequencing factory by investing heavily in capacity at a time when population-scale sequencing was yet to take off. That enabled BGI to play a starring role in headline-grabbing initiatives, such as the sequencing of the genomes of more than 1,000 types of gut bacteria. But BGI’s research business has contracted in recent years, forcing it to shift its focus on to its reproductive health screening unit. 

The IPO positions BGI to invest in the acceleration of this transition. Better tests for diagnosing cancer and reproductive health conditions sit toward the top of BGI’s spending plan. The company is also planning to invest in genetic consulting services and a cloud data processing platform to support its precision medicine ambitions. 

Investors picked up 40 million shares at about $2 a pop late last week when BGI began trading on the Nasdaq-style offshoot of the Shenzhen Stock Exchange. BGI’s share price soared rapidly on day one, forcing the exchange to halt trading to stop BGI from breaking a rule about how much a stock can appreciate just after an IPO. The stock is now up 58% on its IPO price.

BGI’s rapid rise in its first days as a public company follows an IPO that priced below the level talked up earlier this year. Those reports suggested BGI was looking to raise $250 million.

That fundraising target emerged when BGI filed to go public earlier this year. The filing followed an earlier attempt to IPO that was scuttled by the rejection of an application on the grounds it lacked the necessary documents. Both IPO filings were preceded by talk of a listing in the U.S. or reverse merger onto an exchange in Hong Kong. The upshot of these maneuverings is BGI has spent an unusually long time flirting with becoming a public company before sealing the deal.