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Rules-Based Medicine Files for IPO

NEW YORK (GenomeWeb News) – Rules-Based Medicine, an Austin, Texas-based multiplex molecular diagnostics firm, has filed a registration statement with the US Securities and Exchange Commission for an initial public offering of common stock.

RBM did not disclose in the preliminary prospectus how many shares it intends to offer, an estimated price range for the offering, or an estimate for the proceeds it hopes to raise through the offering.

The firm is developing molecular diagnostic tests using its multi-analyte profiling (MAP) technology, which it acquired from Luminex in September 2002. The co-founding management team of RBM initially developed the technology while at Luminex.

RBM is focusing its efforts on first developing its Psychiatric Diagnostic Panel, a blood-based molecular diagnostic test that evaluates 51 biomarkers. The firm believes the panel could help psychiatrists diagnose schizophrenia, biopolar disorder, and major depressive disorder.

RBM noted in the SEC filing that there currently is no established market for blood-based psychiatric diagnostic tests. As a result, it said that it would "need to make significant investments to educate the psychiatric community" about the benefits of the panel, and how to properly use the test, interpret results, and incorporate those results into diagnosing mental illness.

It is developing the panel as a Laboratory Developed Test and will commercialize it through its own CLIA-certified lab in Texas. RBM also has plans to develop other tests for the psychiatric market and expand its pipeline of molecular diagnostics across indications by leveraging its pharmaceutical services business, which has provided the firm with its revenues thus far.

This past summer, RBM inked a global distribution deal with Satoris, which will sell RBM's DiscoveryMAP, a 189-biomarker panel that covers the most physiologically relevant pathways and includes biomarkers known to be important in the major disease processes for drug development.

In addition, two months ago, RBM took a majority stake in Psynova Neurotech, which holds the licenses to intellectual property from Cambridge University covering the Psychiatric Diagnostic Panel.

For the nine-month period ended Sep. 30, RBM brought in pharmaceutical services revenues of $15.9 million. For full-year 2008, its revenues were $21.7 million, up sharply from $13 million the prior year.

As of Sep. 30, RBM held around $3 million in cash and cash equivalents.

The firm said that it will use proceeds from the IPO to pay dividends associated with its outstanding Series A preferred stock, to repay borrowings under its revolving line of credit and subordinated debt, and for working capital and other general corporate purposes — including sales and marketing of the Psychiatric Diagnostic Panel, R&D efforts for the panel and other diagnostic tets, and expanding its facilities.