By Marie Daghlian
DNA sequencing firm Complete Genomics (GNOM) went public after scaling back its deal price more than 30 percent to get it done. Shares began trading on the Nasdaq Global Market on Thursday under the symbol GNOM. The stock closed at $8.03, down more than 10 percent on the first day of trading with volume of nearly 2.5 million shares.
When the company filed to go public in late July, it said it hoped to raise as much as $86 million. As early as Monday, Complete Genomics said in a regulatory filing that it was planning to sell 6 million shares at a price of $12 to $14. But by Wednesday it dropped the offering price to $9 per share to sell 6 million shares, raising $54 million. Underwriters, led by UBS and Jefferies, have a 30-day option to buy an additional 900,000 shares.
The lukewarm reception came soon after investors welcomed an initial public offering by Complete Genomics’ competitor and neighbor Pacific Biosciences (PACB), which raised $200 million and priced in the middle of its expected range. The pricing came as many recent IPOs in the United States have delivered trading gains and priced solidly, according to Dow Jones, compared with deals as recently as the summer that were closing below prior expectations, if getting done at all.
With this offering Complete Genomics has about 26 million shares outstanding and a market capitalization close to $240 million. Venture investors continue to own 56 percent of the company, according to a filing. The Mountain View, California-based company has raised close to $130 million in total VC funding since its founding in 2005, including $39 million raised in a Series E round in August led by new investor Sands Capital that included existing investors Essex Woodlands, OVP Venture Partners, Prospect Venture Partners, OrbiMed Advisors, Highland Capital, and Enterprise Partners.
Founded in 2005, the Mountain View, California-based company is one of a handful of sequencing companies racing to be able to offer complete sequencing of the human genome for less than $1,000. Unlike its competitors, which include market leaders Illumina (ILMN), Life Technology (LIFE), Swiss biopharma Roche (RHHBY.PK), and recently public Pacific Biosciences, Complete Genomics offers sequencing services rather than selling its machines. Researchers ship samples to its lab, it performs the sequencing, and then provides the results over the Internet. The company says it achieves accuracy levels of nearly 100 percent at a cost that is significantly less than buying sequencers and operating an in-house lab.
Complete Genomics has already sequenced more than 400 complete human genomes since the beginning of the year—300 in the third quarter of 2010, according to a recent filing, and an order backlog of more than 800 genomes. However, the company is still at an early stage of development as it recently began ramping up to full-scale production, and despite beginning to see some revenue, reported that it had $10.5 million in cash and investments left at the end of September and an accumulated deficit of $108 million.