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Exiqon Completes $470M Nordic IPO; Will Use Proceeds for US Operations, Dx Development

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Exiqon, a Danish microRNA firm that has channelled its proprietary linked nucleic-acid technology into several product lines, including its miRcury miRNA arrays, has successfully completed an initial public offering worth DKK2.6 billion ($470 million) on the Nordic Stock Exchange, and will use its portion of the proceeds to beef up its US operations and invest in a diagnostics development program at its headquarters in Copenhagen, according to a company official.
 
Exiqon CEO Lars Kongsbak told BioArray News in an e-mail this week that Exiqon decided to go public to gain additional funding and strengthen its position in the miRNA field where it competes against larger, publicly funded firms like Agilent Technologies and Applied Biosystems. In terms of its arrays, Exiqon’s miRcury chips compete directly against offerings from Agilent, ABI, CombiMatrix, which also sell miRNA arrays, and Asuragen, which sells miRNA-based services.
 
”We are now able to pursue opportunities not possible prior to the IPO,” he explained. “Exiqon was one of the first players in the miRNA field and we intend to strengthen our position in this area, which can be done effectively due to our strong financial position and facilities on two continents, namely Copenhagen and Boston,” he added.   
 
According to Kongsbak, the net proceeds from the IPO, around $67 million, should benefit Exiqon across the board, from R&D to sales and market to capital investments in new facilities. However, two areas that will especially benefit from the cash will be Exiqon’s US operations and a budding diagnostics program that Exiqon believes will move its miRNA products beyond their current status as research tools.
 
Much of this investment will translate to a growth in headcount at the firm’s Copenhagen and Boston locations. “Exiqon has almost doubled its workforce over the past 12 months and the growth will continue,” Kongsbak wrote. “The investment will take place not only in Europe but also in the US as the North American market is of utmost importance.
 
“We just moved into a new and much bigger facility in Boston to accommodate the new staff and we plan on having our new Boston laboratories equipped and manned during the fall,” he added.
 
Michael Kallelis, who heads Exiqon’s Boston office, told BioArray News this week that he expects the company will double in size over the next six months.“Currently we are 12 people. We'll be about 24 to 25 people by the end of the year. The plan is to increase beyond that,” he said, referring to the US office.
 
“We will be a force to be reckoned with, but we need a much large presence in the US — sales people, chemists; the whole gambit,” Kallelis said. “So, by the end of this year we will have a vertically integrated structure in the US from the top down.”
 
To that end, Exiqon plams to expand its R&D group to Boston, including adding manufacturing capability, and establish an applications group that will be able to work closely with US customers to tailor applications to their needs.
 
“We like to get close to our customers and work with them on highly individualized projects,” Kallelis said, noting that all the company’s R&D to date has been in Denmark. “Our customers are growing in the US and we need to have to address their needs,” he said.
 
Kongsbak also wrote that Exiqon will be investing in a diagnostics-development group in Denmark in “order to exploit the commercial opportunities of miRNAs as a biomarker in diagnostic applications.”
 
The overall objective is to use miRNA as a biomarker in diagnostic or prognostic assays, with a strong focus on cancer. “The scientific literature has documented a strong link between miRNA expression profiling and the development of cancer, metabolic disorders, neural disorders as well as the differentiation of stem cells,” he wrote. “Exiqon has been focusing on cancer.” 
 
Kongsbak wrote that since Exiqon holds the IP to LNA technology, future miRNA assays, including in situ detection of miRNA expression in thin sections of tissue, could be developed for use in cancer diagnosis.
 
Furthermore, the firm is open to developing tests alone or with collaborators. According to Kongsbak, Exiqon has “done a fair bit of biomarker discovery” but is also “open for collaborations on third-party miRNA biomarkers and we might team up with larger players in the field if that makes sense, although we have no concrete plans for that.”
 

“We need a much larger presence in the US — sales people, chemists; the whole gambit. So, by the end of this year we will have a vertically integrated structure in the US from the top down.”

Big Leagues
 
Exiqon first announced the IPO on May 25, closed it four days later, and began trading under the ticker EXQ. The company is prohibited by US Securities Exchange Commission rules to distribute information related to the IPO in the US as it has not offered its shares there.
 
The lead manager and bookrunner was Danske Markets, a division of Danske Bank, and the co-lead manager was Handelsbanken Capital Markets, a division of Svenska Handelsbanken.
 
The company’s investors prior to the IPO were all Scandinavian venture-capital firms, including Teknoinvest of Norway, Scandinavian Life Sciences, a Danish/Swedish VC fund, the Danish Employee Fund, and BioFund of Finland.
 
Kongsbak wrote that the company had to close its books after three days because Exiqon received more than seven times over-subscription. “In the IPO, we offered 10 million new shares including the over-allotment in the price range of DKK 32 to DKK 42 per share,” Kongsbak wrote. “The new investors came in at DKK 40 per share, securing Exiqon a net proceed of approximately $67 million,” he wrote.
 
According to Kongsbak, the offering produced approximately 2,450 new shareholders, and around 40 percent of the new shares were sold to non-Danish investors. He wrote that the company decided to list on the Nordic Exchange — which operates in Denmark, Sweden, Norway, Iceland, Finland, Estonia, Latvia, and Lithuania — because most of Exiqon’s investors are in those countries.
 
“Exiqon is a Danish company, although a significant part of our activities are in the US,” Kongsbak wrote.

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