Chinese Cancer Genomics Firm Genetron Prices US IPO, Targets $175.5m

Genetron, a Beijing-based cancer genomics firm, plans to raise up to $175.5 million by offering 13 million American depositary shares (ADS) in an initial public offering on the Nasdaq, according to its amended filing.

The company plans to float 13 million ADSs at an estimated price range of $11.50 to $13.50. At the midpoint of the proposed range, Genetron stands to raise $146.1 million and would command a fully diluted market value of $1.1 billion.

The underwriters of the offering are also expected to be granted a 30-day option to buy an additional 1.95 million ADS at the initial offering price.

The amended target is higher than the $100-million placeholder amount it specified when it first filed its listing document in November last year, about a week after raising $71 million in a funding round.

Genetron, founded in 2013 and fully known as Genetron Health (Beijing) Co Ltd, specialises in the research and development of cancer precision medicine in China.

The company offers cancer researchers and healthcare providers with products and services, including risk assessment, early screening, molecular diagnosis, medication guidance, and prognosis monitoring. It maintains a research center in the Research Triangle area of North Carolina.

It booked revenues of $10.9 million for the first quarter of 2020, with a net loss of $16.3 million. For the entire 2019, the company’s revenue stood at $45.7 million, with a net loss of $95.5 million.

The loss-making firm is expected to become publicly traded Friday under the ticker symbol “GTH” on the Nasdaq.

In its filing with the US Securities and Exchange Commission, Genetron said it will use about 40 percent of IPO proceeds for technology and product development, 30 percent for sales and marketing, and 30 percent for working capital and general corporate purposes.

Genetron is among a slew of companies in China’s growing genetic testing market, estimated at 10.59 billion yuan ($1.51 billion) in 2018 with a consumer base of 1.4 million population, according to iMedia Research. The market is projected to hit 15.86 billion yuan ($2.26 billion) this year.

Prior to its filing in November, the company raised $71 million in a funding round led by global healthcare-focused investor Vivo Capital, CICC Healthcare Investment Fund, a healthcare investment vehicle of China’s CICC Capital, and Alexandria Venture Investments, the venture capital arm of US real estate investment trust Alexandria.