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UPDATE: NetGenics Withdraws Application for IPO Citing Market Conditions

NEW YORK, Sept. 20 – Cleveland-based bioinformatics company NetGenics has withdrawn its proposed $60 to $70 million initial public offering in a filing with the Securities and Exchange Commission Thursday.

NetGenics Director of Operations and Controller Victor Peroni told GenomeWeb that the company was canceling the IPO due to market conditions, and because the pre-IPO quiet period had prevented the company from making positive public statements. 

“We have a lot of good news to share,” he said. “This is strategically the best choice we can make.”

In June, NetGenics, which develops software for integrating and annotating biological data using a web-based interface, won a contract to provide German pharmaceutical company Schering with a company-wide gene database. The deal gave NetGenics its first large customer and led to the release of DiscoveryCenter, a software product that the company released several weeks ago and is currently marketing to other customers.

However, the company has seen deals or potential relationships with pharmaceutical companies fall through, having eventually lost a multi-million dollar project with American Home Products, a license renewal from Abbott Labs, and a business lead with Pfizer.

In January, the company cut its staff by 30 percent, or 29 people, citing delays in carrying out its IPO. At that time, CEO Manuel Glynias said the company had enough money to continue operations for another year, and did not intend to raise money privately.

Peroni confirmed that NetGenics does not have immediate plans to raise more money, but did not rule out the possibility that the company would seek funds in the future. “We’ve been able to manage our funds very well,” he said. “We have a number of options that we’re going to evaluate, but right now we’re going to continue what we’ve been doing, that is, trying to float on our own bottom.

“The better off we are in terms of profitability, the better off we are in terms of an eventual IPO,” he added.