Cancer Genetics will ramp up clinical trials plus expand its sales and marketing staff with an initial public offering the company envisions will haul in close to $49 million. Considering that the IPO markets remain uneven, this is yet another sign that investors see molecular diagnostics as a sure thing that are coming into their own as a vital part of the healthcare system.
The New Jersey molecular diagnostics company disclosed the amount in an amended S-1 regulatory filing submitted with the SEC on May 7. Plans call for offering 4 million shares at about $12 per share. Initially, the company believes it will raise $41.9 million. But if underwriters William Blair & Co., R.W. Baird, Needham & Co. and First Analysis Securities exercise their 600,000-share, over-allotment option in full, the company could raise $48.6 million, the filing states.
Cancer Genetics even divvies up how it will spend the cash, once the IPO takes place. Plans call for applying about $7 million of the proceeds for research and development, hoped-for regulatory submissions and commercial launches. Another $10 million goes toward hiring more sales and marketing employees, $14 million covers ongoing operations and expansion, $2 million funds an ongoing "joint venture" with the Mayo Clinic and $9 million helps to reduce debt.
The company also says it will trade on Nasdaq using the symbol "CGIX." And Cancer Genetics acknowledges in its filing that it is plowing ahead in what is becoming a hotly competitive space, with likely rivals including Johnson & Johnson ($JNJ), Roche ($RHHBY), bioMerieux, Genomic Health, Myriad Genetics, Qiagen ($QGEN), Pathwork Diagnostics and Foundation Medicine, among others.
Cancer Genetics has two components: a clinical reference laboratory focused on state-of-the-art cancer testing and an arm that is developing molecular diagnostics for blood, urogenital and HPV virus-related cancers, according to its website. The company also has offices in Milan and has raised at least $15 million in at least two rounds previous venture financing rounds.
- here's the SEC filing
- read GenomeWeb's take