NimbleGen last week filed for an initial public offering with the US Securities and Exchange Commission.
Though the number and prices of shares have not yet been determined, the proposed maximum aggregate price of the offering is $75 million, according to the firm's S-1 filing. The company used $75 million as a maximum offering price in order to calculate its filing fee with the SEC.
As stated in the SEC filing, the privately owned Wisconsin array firm has currently issued approximately 19 million shares of its private stock to several investors, including Skyventure Capital, a California venture capital firm that owns 14 percent of NimbleGen; Cargill, also based in California, which owns 13.4 percent; and Schott, a German life sciences company whose stake in NimbleGen is 12.7 percent.
A NimbleGen spokesperson declined to say how the company would spend the proceeds from the IPO. However, the S-1 filing states that the company will use the cash to fund its sales and marketing expansion, which has caused sales and general administrative costs to grow over the past year. Some of the cash will also go toward R&D costs, which are also growing.
According to the filing, NimbleGen said it could use the funds for "expanding our direct sales force in the United States and in select major countries around the world, and utilizing distribution partners elsewhere, to help promote our products and support customers."
The company noted in the filing that it began a "major expansion of our sales force and commercial infrastructure worldwide" in late 2006 and said it is "now well positioned to meet the needs of our customers, whether they prefer to take delivery of our microarrays and related products to analyze their own samples, or to outsource the entire process to our [Icelandic] service laboratory."
NimbleGen said in the filing that its annual revenue grew 42 percent to $13.5 million last year from $9.5 million in 2005. Meanwhile, R&D rose to $2.6 million from $1.9 million year over year, while SG&A costs jumped 66 percent to $9.3 million from $5.6 million in the prior year.
Despite the increase in R&D and SG&A costs, NimbleGen's net loss declined 18 percent to $6.8 million in 2006 from $8.3 million in 2005. In total, the firm said it has accrued a loss of $44.5 million since its inception in 1999.
In terms of its R&D expenditures, NimbleGen noted that new hires led to an increase of $726,000 in 2006 compared to 2005 and that the company spent an additional $500,000 in 2006 for materials used to build and test next-generation array prototypes.
In the S-1 filing, NimbleGen said that North American sales accounted for 63 percent of 2006 revenues, while European sales were 28 percent of total revenues and Asian sales 9 percent. The company said that it recently initiated direct sales in Europe.
"In late 2006, we began to develop a direct sales organization in Europe and discontinued exclusive distribution agreements covering certain countries. We intend to expand our European sales organization to directly cover more territories, in particular those regions that have not been effectively developed by distributors," NimbleGen states in the filing.
The company also said it relies on distributors in Japan, China, Taiwan, Korea, and Australia. In 2006, distributor sales accounted for approximately 20 percent of NimbleGen's revenue overall.
The firm added that selling and marketing expenses will increase as it commercializes its products, and general and administrative expenses will grow as it expands its operations and assume the obligations of a publicly traded company.
The IPO filing comes after NimbleGen closed a series of licensing agreements with Oxford Gene Technology and Affymetrix, both of which enabled the company — which has traditionally done most of its business through its service lab in Iceland — to pursue a catalog array business with direct sales to customers similar to rivals like Affymetrix, Agilent Technologies, and Illumina.
NimbleGen CEO Stan Rose told BioArray News in October that the company was laying the foundation for a sales and marketing initiative that reflected its decision to offer catalog arrays and to sell directly in markets outside of its North American base.
“We already [directly] sell some arrays in some circumstances. We are now putting in place the infrastructure to sell, distribute, and support arrays on a much broader basis," Rose wrote at the time (see BAN 10/10/2006).
J.P. Morgan will serve as bookrunner for the offering, Thomas Weisel Partners will be co-lead manager, and Leerink-Swan and Robert W. Baird are acting co-managers.
NimbleGen has applied to be listed in the Nasdaq Global Market under the ticker symbol 'NMBL.'