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Cancer Genetics Revises IPO Filing, Targets $29.3M in Proceeds

NEW YORK (GenomeWeb News) – Cancer Genetics plans to raise more than $29 million from its initial public offering, the company said in its amended Form S-1 yesterday.

In the document filed with the US Securities and Exchange Commission, the Rutherford, NJ-based cancer diagnostics firm said it anticipates net proceeds of $29.3 million from the offering. If the underwriters on the offering exercise their over-allotment options in full that figure would increase to $34.2 million.

Aegis Capital and Feltl and Co. are listed as the underwriters on the Form S-1/A.

Cancer Genetics said in the filing that it plans to offer 5 million shares of its common stock, at an anticipated share price of between $6 and $8. Its stock would list on Nasdaq under the ticker symbol "CGIX".

It added that it effected a 1-for-2 reverse stock split last week.

The $29.3 million figure — and $34.2 million overallotment amount — is based on an IPO price of $7 per share. About $5.0 million of net proceeds would go toward the repayment of "certain outstanding indebtedness," the company said. Another $5.0 million would be used for R&D work, regulatory submissions, and product launches, while $7.0 million would be used to hire sales and marketing personnel. Around $2.0 million would go toward funding the company's joint venture with the Mayo Foundation for Medical Education and Research to develop oncology diagnostic services and tests using next-generation sequencing.

Lastly, about $10.0 million would be used for ongoing operations and expansion of the business.

Cancer Genetics filed for its IPO in December 2011, saying at the time that it anticipated offering 4 million shares at an anticipated price of between $11 and $13 per share. At the $12 midpoint figure, the offering was expected to bring in net proceeds of $41.9 million, or $48.6 million if overallotment options were exercised in full by the underwriters.

Along with a lower take expected from the offering, the underwriters for Cancer Genetics' IPO have changed. William Blair & Co., R.W. Baird, Needham & Co., and First Analysis Securities were the original underwriters.

The company has a CLIA laboratory and in November 2010 it received CLIA approval for and commercially launched MatBA-CLL, a microarray-based test for chronic lymphocytic leukemia. A year ago it received CLIA approval for MatBA-SLL, a risk stratification test for small lymphocytic lymphoma.

The MatBA technology is based on comparative genomic hybridization, or CGH, for the detection of chromosomal gains and losses that are often observed in mature B-cell neoplasms.

During the summer, Cancer Genetics was selected by Roche Servicios to provide testing services to identify patients best suited for oncology drugs from Roche and its business unit Genentech.