Hong Kong COVID tester Prenetics sets up $1.7B SPAC deal

Coronavirus Piggy Bank
Prenetics projects its revenue will grow 215% to $205 million by the end of this year and continue upward after securing an FDA emergency authorization for its portable COVID-19 testing system by the first quarter of 2022. (Getty Images)

Hong Kong diagnostics company Prenetics has snagged a special purpose acquisition company deal that promises to deliver a $1.7 billion valuation on the U.S. market plus enough cash to catapult its commercial and M&A efforts on the world stage.

Through a rapid, portable COVID-19 screener developed with technology from the University of Oxford, Prenetics has become a major provider in Hong Kong and the U.K. over the past year’s pandemic. With more than 5 million tests performed to date, the company has provided regular checks of English Premier League players and staff as well as for air travelers passing through London Heathrow and Hong Kong International airports.

By combining with Artisan Acquisition—a SPAC founded by Adrian Cheng, CEO of the multibillion-dollar Chinese conglomerate New World Development—Prenetics is slated to raise $459 million in cash, including $120 million from a private investment round backed by Aspex, PAG, Lippo, Dragonstone, Xen Capital and others.

After landing on the Nasdaq with the ticker "PRE," Prenetics will aim to tap into the testing opportunities across New World Development’s international real estate holdings, which span hotels, department stores, museums and other venues in addition to its healthcare clinics and branches.

Prenetics’ billion-dollar valuation makes it the first Hong Kong startup to achieve unicorn status anywhere, Cheng said in a statement, describing the company’s overarching goal as decentralizing healthcare services across a $1.3 trillion market.

RELATED: Oxford's rapid COVID-19 test acquired by Prenetics to screen airport passengers in London, Hong Kong

Its molecular COVID-19 test delivers lab-quality results nearly anywhere in about 20 minutes, using Oxford’s loop-mediated isothermal amplification, or LAMP method, with readings that can be picked up with a smartphone.

In recent months, Prenetics has outlined plans to take the technology to other infectious diseases beyond the coronavirus. Most recently it launched Circle HealthPod in Hong Kong, a CE marked, at-home testing service for COVID-19 that aims to expand to influenza and sexually transmitted diseases.

The company’s future roadmap also includes the launch of a stool DNA test for colon cancer in Southeast Asia—citing the success of Exact Sciences’ Cologuard as inspiration—in addition to other genomic diagnostics and at-home blood screening services in the coming years.

“With a strong existing business, an exciting product pipeline and a clear M&A acquisition strategy for USA geographical expansion, we have first-mover advantage and are well-positioned for our next chapter of growth," Prenetics co-founder and CEO Danny Yeung said in a statement.

RELATED: Oxford's COVID diagnostics partner Prenetics eyeing $1.3B SPAC deal: report

The company projects its revenue to grow 215% year on year, from $65 million last year to $205 million by the end of 2021 and continuing upward past $600 million by 2025. 

Currently, Prenetics aims to secure an emergency authorization from the FDA for Circle HealthPod by the first quarter of 2022 and is already increasing its manufacturing footprint to meet global demand following the surge of the coronavirus’s delta variant.

Meanwhile, portable COVID-19 testing provider Cue Health also aims to make its public debut through a Nasdaq IPO announced earlier this month that could raise more than $244 million.

According to the company’s prospectus filed with the Securities and Exchange Commission, Cue expects regular testing will remain necessary in the future as a mix of vaccinated and unvaccinated people return to the workforce, increasing the risks of spreading the disease and supporting a $24 billion market in 2022, before dropping to $12 billion in 2023 and 2024 and leveling out around $7 billion to $9 billion per year thereafter.