Genetron Sets Price Range for Friday IPO
Genetron Holdings Ltd. prepares to lift off in an upsized IPO worth $175.5 million Friday on the Nasdaq Global Market.
The Beijing-based company, which first applied for a U.S. listing prior to the coronavirus outbreak, is to celebrate its debut as a public company on June 19. In its updated prospectus, filed Monday, Genetron has set the price range at $11.50 to $13.50 for its 13 million American depositary shares.
That's a significant increase from the earlier estimate of $100 million.
Genetron said a number of its existing shareholders have indicated interest in acquiring a cumulative $54 million worth of shares in the offering. Among them are Vivo Capital Fund IX, L.P., Easy Benefit Investment Ltd., and ETP BioHealth III Fund L.P. The latter is owned by Genetron's co-founder and chairman, Weiwu He.
Underwriters on the deal, Credit Suisse Securities (USA) LLC, China International Capital Corp. Hong Kong Securities Ltd., BTIG LLC, and Canaccord Genuity LLC, may acquire an additional 1.95 million ADSs upon the IPO.
Based in Beijing, Genetron provides precision oncology solutions including early screening, diagnosis, treatment recommendations, and monitoring. According to its prospectus, it operates a one-stop cancer care platform connecting patients with healthcare providers and uses AI and big data to manage health profiles of patients.
Genetron collaborates with hospitals, biopharma companies, medical examination centers, local governments, and key opinion leaders (KOL) to deliver and promote its services. Among its partners is formerly U.S.-listed iKang Healthcare Group Inc., which operates medical examination centers across the country.
For the four months ended April, Genetron posted sales of $15.3 million, a 20% increase from a year ago. For the full year 2019, Genetron reported revenues grew 44% to $45.7 million. Net loss mounted to $95.5 million. For the first trimester of 2020, the company posted revenues of $10.9 million on losses of $16.3 million. Genetron had cash and cash equivalents of $25.5 million as of March 31.
Among the risks Genetron listed in its prospectus, it noted that its audit report included in the prospectus was prepared by an auditor who has not been approved by the U.S. Public Company Accounting Oversight Board (PCAOB).
Currently, Washington is reviewing a bill that aims to increase the protection of U.S. investors and increase quality control of foreign companies' audits seeking a listing in New York. Ultimately, Genetron warned, the bill may "substantially reduce or effectively terminate the trading of our ADSs in the United States."