After scaling back its IPO price by about 85%, diagnostics outfit Cancer Genetics ($CGIX) has some good news to report, pulling in $6.9 million once its underwriters exercised their over-allotment option.
Cancer Genetics was seeking $6 million when it finally went public Friday, and its shares closed at $11.25, a 12% jump over the initial pricing. The company plans to put $2 million of the proceeds toward its diagnostics joint venture with the Mayo Clinic and use the rest to pay down debt and fund ongoing operations.
While $6.9 million is more than Cancer Genetics said it expected, it's just a fraction of the $41.9 million the company sought when it first announced its IPO plans back in May. Since then, Cancer Genetics has repeatedly slashed its proposed number of offered shares and expected price, down to $29.3 million in October, $20.1 million in February and $14.3 million last month before settling on $6 million last week.
Now that the IPO is completed, Cancer Genetics can afford to keep the doors open. Last month, the company said it had enough cash around to stay in business through March but would need to either go public or find alternative funding if it wanted to operate from there on out.
And while it now has enough money to stay afloat and support its JV, Cancer Genetics has scrapped plans to invest in R&D and scale up its marketing presence, goals that slowly disappeared from regulatory filings as the company again and again lowered its expected yield.
- read Cancer Genetics' announcement