Chinese Gene Testing Firm Genetron Files For US IPO

Right after raising $71 million in a new funding round, Beijing-based gene testing firm Genetron has filed for an initial public offering (IPO) in the United States.

Its SEC filing mentions the target amount as $100 million but this is likely to be a placeholder amount. It has not specified the number of shares it intends to list or the pricing but said that it seeks to list on the Nasdaq Global Market under the symbol GTH.

Genetron said proceeds from its listing will be used to further invest in technology and product development, expanding its sales and marketing efforts, and meeting working capital needs, among others.

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, according to iMedia Research. The market is projected to hit 15.86 billion yuan ($2.26 billion) by 2020.

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. It booked $42 million in sales for the 12 months ended 30 September 2019.

The company offers cancer researchers and healthcare providers with products and services, including risk assessment, early screening, molecular diagnosis, medication guidance, and prognosis monitoring.

Prior to its filing, 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.

If the listing pushes through, Genetron will add to the growing number of firms listed on the US exchanges. However, it is not all success stories for Chinese firms wanting to list in the US.

Last week, YX Asset Recovery, a Chinese firm that provides delinquent consumer debt collection services, postponed a planned $81-million IPO in the US.

The reason for the deferment was not disclosed. Most Chinese firms that have cancelled their listings have cited “unfavourable market conditions.”

In August, Samoyed Holdings, a fintech firm that focuses on China’s credit card repayment market, withdrew its planned IPO in the US for the said reason.

36Kr Holdings Inc., a Chinese news website that tracks the country’s startups, also fell 10 per cent in its Nasdaq debut early this month.