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Roka Goes Public in $60M Stock Offering

NEW YORK (GenomeWeb) – Roka Bioscience today priced its initial public offering of 5 million shares at $12 per share, raising gross proceeds of $60 million.

The Warren, NJ-based firm, which makes molecular diagnostic tests for foodborne pathogens, will begin trading today on the Nasdaq Global Market under the ticker symbol "ROKA". The share price is below the previously anticipated range of $14 to $16 per share.

BofA Merrill Lynch and Leerink Partners are joint book-running managers on the offering, while Cowen and Co. and Wedbush PacGrow Life Sciences are co-managers. The firm noted that the underwriters have a 30-day option to acquire an additional 750,000 shares at the IPO price.

Net proceeds from the offering are expected to be $53.4 million, or around $61.8 million if the underwriters exercise their over-allotment option in full.

Roka, which filed to go public in May, is a spinout of Gen-Probe (now part of Hologic) and develops transcription mediated amplification-based molecular diagnostics for detecting foodborne pathogens. Its flagship platform is the Atlas instrument, an automated sample-in, result-out platform, and the company offers assays for detecting E. coli 0157:H7; Shiga toxin E. coli; Listeria; Listeria monocytogenes; and Salmonella.

Separately, investment bank Leerink Partners today initiated coverage of Roka with an Outperform rating and a $13 price target on the company's shares.

In a report, analyst Dan Leonard said that Roka's "differentiated technology for food pathogen testing and endorsement by leading contract testing labs and food processors augers well for future revenue growth … which is not appropriately captured in the current valuation."

He added that he sees "ample runway" for the firm to capture a greater share of the approximately $225 million North American molecular pathogen testing market due to the advantages offered by the Atlas platform, such as accuracy, automation, and speed, and he noted that in addition to being commercialized in food testing, the instrument is widely validated in the clinical diagnostics field "which we believe mitigates any technology risk commonly associated with early stage companies."

In morning trading on Monday, shares of Roka were flat at $10.49 on the Nasdaq.

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