Diagnostics & Imaging Week
Genomic Health (GHI; Redwood City, California), a developer of diagnostic tests for cancer, has filed to raise as much as $75 million in an initial public offering (IPO), but did not specify the number of shares to be sold or the targeted share price.
Founded in 2000, GHI launched its first test, called Onco type DX for early stage breast cancer patients, early last year. The test predicts the likelihood of cancer recurrence, the likelihood of patient survival within 10 years of diagnosis and the likelihood of chemotherapy benefit.
Focused on patients with early stage, node negative (or N-), estrogen receptor positive (or ER+) breast cancer, the test is designed for patients who will be treated with tamoxifen. About half of the 230,000 patients to be diagnosed with breast cancer in the U.S. this year are expected to be early stage cancer patients that are N- and ER+.
As of March 31, the test had been ordered by more than 900 physicians in the U.S., and product revenues for the first quarter totaled $442,000, according to a prospectus related to the IPO. The company lost about $7.6 million during the period, compared with a loss of $5.8 million during the year-ago period.
GHI noted that it has contracts with commercial third-party payers covering more than nine million lives, or about 3.1% of the U.S. population. As of March 31, more than 70 payers have reimbursed at least one or more Onco type DX tests. As much as 20% of future revenues may be derived from tests billed to Medicare, the company said, but GHI does not expect to get the majority of revenues in this manner until 2007, at the earliest, it said.
Using the development platform created in connection with Onco type DX, GHI is building a product pipeline, with a second-generation product in N-, ER+ breast cancer in the works, as well as tests that can be used in N+ breast cancer patients and tests to predict responsiveness to other current therapies such as taxanes and aromatase inhibitors.
The firm also is doing research on colon, prostate, renal cell and lung cancers and melanoma. More than 550,000 treatment decisions are expected to be made in the U.S. this year for patients diagnosed with early stages of breast cancer and these cancers, GHI noted in its prospectus.
GHI said it will use the IPO proceeds for general corporate purposes, including working capital and capital expenditures. It will trade on the Nasdaq under the symbol GHDX.
JPMorgan and Lehman Brothers are leading the IPO's underwriters, which include Piper Jaffray; Thomas Weisel Partners; and JMP Securities.
Solexa (Hayward, California) reported completing a private placement of about $24 million following stockholder approval of the financing at its annual meeting of stockholders. The second closing included the sale of about 6 million shares of common stock at $4 a share and issuance of warrants to purchase up to around 3 million shares of common stock at $5 a share. The financing represents the second and final closing of a $32.5 million private equity placement announced in April.
The first closing of the placement, completed April 25, generated proceeds of about $8.5 million from the sale of roughly 2.1 million shares of stock and 1.1 million warrants.
Solexa's prior venture capital investors Abingworth Management, Amadeus Capital Partners, Oxford Bioscience Partners and SV Life Sciences invested a total of close to $10.8 million at the second closing. SG Cowen & Co. served as the exclusive placement agent for the transaction.
Solexa is developing a platform for genetic analysis, based on Sequencing-by-Synthesis and Cluster molecular arrays. This platform is expected to support many types of genetic analysis, including DNA sequencing, gene expression, genotyping and micro-RNA analysis, the company said, describing its goal as to reduce the cost of human re-sequencing to a few thousand dollars in applications ranging from basic research through clinical diagnostics. The company anticipates launch of its SBS-Cluster genetic analysis instrument system by the end of 2005.