Molecular diagnostics company Veracyte ($VCYT) pulled the trigger and finally hit the public markets on Oct. 30, and the South San Francisco company's stock experienced some slight first-day gains. It closed at $13.25, up nearly 2%.
Veracyte's IPO generated $65 million, with 5 million shares of common stock priced at $13 each, the company disclosed. An earlier S-1 filing promised an offering of 4.7 million shares priced between $13 and $15 per share.
Still, while the end result is more modest than initial expectations, the IPO counts as a solid success for Veracyte. That's especially true in a fall season that has seen far more biotechs hit the public markets. And it's not the only diagnostics operation to succeed. Foundation Medicine ($FMI) went public in late September 2013 and raised $106 million--at the top of its range.
Veracyte, a 2013 Fierce 15 winner, granted the underwriters a 30-day option to snatch up an additional 750,000 shares of common stock at the initial public offering price to cover any overallotments.
The company's IPO prospectus counts Domain Partners, Versant Ventures, TPG Biotechnology Partners and KPCB Holdings as its largest investors.
Next comes Veracyte's accelerated commercial launch of its Afirma Thyroid FNA Analysis test, which combines a specialized cytopathology assessment and gene expression test to determine whether a thyroid nodule is benign or cancerous. The test launched in 2011 and Sanofi's ($SNY) Genzyme copromotes it. Veracyte said in its prospectus that it has won insurance coverage (at different rates) from Medicare, United Healthcare, Aetna and Humana, as well as "a number of other smaller payers."
But the test isn't cheap, with a list price of $4,275. Still, insurance reimbursement and now a successful IPO represent major accomplishments for the company and CEO Bonnie Anderson.
The next question, however, will be this: Which diagnostic company will hit the public markets next? Oxford Immunotec Global and Biocept Laboratories are among those that have filed IPO plans in recent weeks.
- here's the company's release
- check out the final IPO details
- read Xconomy's take
Special Report: FierceMedicalDevices' 2013 Fierce 15 - Veracyte