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Sophia Genetics Raises $234M in IPO, Eyes Additional Partnerships

CHICAGO – Sophia Genetics on Friday executed an initial public offering, from which it expects to raise approximately $234 million in gross proceeds before underwriting discounts, commissions, and other expenses. The Swiss-American bioinformatics company expects the IPO to close July 27.

Sophia, which has twin headquarters in Saint-Sulpice, Switzerland and Boston, is selling 13 million common shares at $18 each. The stock is trading on the Nasdaq Global Select Market under the ticker symbol SOPH.

J.P. Morgan, Morgan Stanley, Cowen, and Credit Suisse are serving as joint bookrunning managers for the IPO. 

As often happens with IPOs, Nasdaq initially held trading on the stock until Friday at noon Eastern time. Shares opened at $18.45 before falling to $16.76 at market close, a decline of nearly 7 percent from the IPO price.

The $234 million estimate does not include a private placement of $20 million from GE Healthcare, which earlier this month signed a letter of intent with Sophia to codevelop new artificial intelligence-driven analytics and workflow technologies to improve the matching of treatments based on genetic and tumor profiles of cancer patients.

The bookrunning managers also will have access to a 15 percent "greenshoe" over-allotment option placement after the IPO closes, according to Ross Muken, regulatory senior VP and CFO. Any funds raised that way would be on top of the IPO proceeds.

The pricing values the company at about $1.14 billion.

The firm said in several regulatory filings and press releases this month that it has "no intention" of offering its shares on the SIX Swiss Exchange or any other "regulated trading venue" in its home country.

Earlier this week, the firm increased its target for the offering. Sophia had said July 6 that it hoped to raise as much as $100 million, though it is common practice for companies to submit a placeholder number in their IPO registration statements.

Sophia Genetics cofounder and CEO Jurgi Camblong told GenomeWeb Friday that the IPO has not changed the company's growth and R&D strategy. "It just enabled us to continue doing what we are doing. The strategy remains the same."

That includes pushing beyond the firm's historical market of academic medical centers into community hospitals and, eventually, oncology clinics, as well as in expanding to new modalities, such as with the GE Healthcare deal. That plan calls for the partners to build on GE Healthcare's medical imaging and monitoring technologies and Edison data aggregation platform, as well as Sophia's flagship DDM platform. The firms said that they hope to break down data silos between imaging instruments and care sites that hinder the deployment of true precision cancer care.

Sophia offers a core genomic analytics platform called Data Driven Medicine, or DDM, to support all of its analytics pipelines and builds components including artificial intelligence technology for predicting variant pathogenicity.

"We expect that over time, the platform … will eventually define some standards" for data processing, management, and exchange, Camblong said.

Muken said that Sophia also will be looking to continue its strategy of forming partnerships, such as the ones it struck with the Spanish Lung Cancer Group and with Twist Bioscience since the beginning of 2020. The firm also is open to mergers and acquisitions to shore up its product offerings.

Sophia had raised at least $251 million in private equity, most recently in a $110 million Series F round that closed in October.

Sophia reported nearly $9 million in revenues during the first quarter of 2021. That is 20 percent higher than the $7.5 million booked in the same period a year earlier.

The company had a net loss of close to $12.7 million in Q1, compared to a loss of $10.5 million in the year-earlier quarter.

As of March 31, the firm had $57.1 million in cash and equivalents.

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