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AutoGenomics to Withdraw Planned IPO; Eyes Launch of New MDx Platform in Q1 2016


NEW YORK (GenomeWeb) – AutoGenomics plans to pull its proposed initial public offering after being told that it would have to take a deep discount to its valuation, the firm's CEO told GenomeWeb today. 

The firm also announced a new molecular diagnostics platform that it anticipates launching in early 2016. 

AutoGenomics CEO Fareed Kureshy told GenomeWeb that the company will pull its planned IPO, possibly in the next week. In October, the company filed a preliminary prospectus with the US Securities and Exchange Commission, saying it anticipated raising up to $60 million in gross proceeds from the IPO. This past February, the firm said in a filing that it expected to price the offering at between $11 and $13 per share and that net proceeds were expected to be as much as $46.6 million.

More recently, AutoGenomics was told by the IPO's underwriters that if it were to go public it would have take a discount of about 30 to 40 percent to its valuation compared to other molecular diagnostics companies such as Cepheid, Luminex, and GenMark Diagnostics, according to Kureshy. 

"The value which we were getting in the IPO was not comparable to [our competitors], and instead of accepting a low value, we just decided to pull out," he said, adding that AutoGenomics may explore going public again either in the fourth quarter of this year or in the first quarter of 2016. 

The firm, he said, is in strong financial shape as it is profitable, has growing sales, and during the past 12 months it has added 30 new employees. Rather than a need for financing, the IPO was intended to increase AutoGenomics' profile, Kureshy said. 

He added that AutoGenomics is funded by high-net worth individuals, including himself and other company officials, and is not venture capital-backed, "so there is no external pressure, except to get a better valuation … for our shareholders. So, this is one reason we are not going to accept an undervaluation" of the company. 

Kureshy also said that the firm is not actively seeking to get acquired, even as mergers and acquisitions in the life science tools and molecular diagnostics spaces are in the midst of an uptick after years of dormancy. 

"We just have to find the right set of investors … when we pull out of the gate, and if we don't, the company's profitable enough to stay private," Kureshy said. 

The withdrawal of the most recent planned IPO would be the third one by AutoGenomics since 2011. In 2008, AutoGenomics filed to go public with intentions to raise as much as $86.3 million but withdrew those plans less than three years later. In 2012, it filed again for an IPO and targeted a raise of up to $65 million but pulled that offering in late 2013.

Adding to Infiniti 

Separately, the company this week announced a new addition to its Infiniti line of molecular testing platforms that eliminates the need to perform sample extraction and amplification. 

Called the Infiniti Smart, the platform augments AutoGenomics' Infiniti Plus and Infiniti High Throughput instruments and is slated for a commercial launch in the first quarter of 2016, AutoGenomics Senior Vice President Ramanath Vairavan told GenomeWeb. The company is showcasing the platform at next week's American Association for Clinical Chemistry meeting in Atlanta. 

The Infiniti Smart is designed so that a whole-blood sample or swab can be put into a vial and loaded onto the instrument, which will automatically do the extraction as well as amplification. After amplification, the Infiniti Smart automates the primer extension and hybridization, and generates results. 

A sample can be processed in about four hours, and the instrument can process 48 samples simultaneously, Vairavan said. Upon the Infiniti Smart's launch, AutoGenomics plans to launch 11 tests to run on the instrument, including pharmacogenomic tests for CYP2D6; CYP2C19; CYP2C9-VKORC1; CYP3A4; CYP3A5; Apolipoprotein E; Factor II; Factor V; methylene tetrahydrofolate reductase; flu, and HCV genotyping. AutoGenomics plans to file for 510(k) clearance from the US Food and Drug Administration for the tests to run on the Infiniti Smart instrument. 

The new instrument builds on the company's existing Infiniti technology, a multiplexing, continuous-flow, random-access microarray platform for measuring and sorting multiple signals from a clinical sample. The technology measures fluorescence signals of labeled DNA target hybridized to BioFilmChip microarrays using target signal amplification chemistry. 

Whereas the Infiniti Smart eliminates the need for sample extraction and amplification, both the Infiniti Plus and the Infiniti High Throughput systems require those steps before sample processing, primary extension, and hybridization. By bypassing the extraction and amplification steps, the Infiniti Smart reduces the the sample-to-result time by about one hour, and reduces costs by eliminating the need for supplementary equipment, including thermocyclers, Vairavan said. 

AutoGenomics has not yet decided on a price for the new instrument, Vairavan said. 

Because the underlying Infiniti technology is already 510(k)-cleared, AutoGenomics would need only to generate data to show equivalent performance on the Infiniti Smart in order to get clearance from the agency to run its tests on the new platform, Vairavan said. "So we don't need to go out and get a new 510(k)," Vairavan said, adding that AutoGenomics is in the process of generating the new data. He did not have a timeline for when the firm would submit the data to the FDA. 

AutoGenomics plans to target reference labs and 400- to 600-bed hospitals for the new platform, Vairavan said, adding the Infiniti Smart would address a new market for the firm. While the Infiniti Plus is for use in settings requiring lower throughputs, and the Infiniti High Throughput is being used by those who need a high-throughput platform, the sweet spot for the Infiniti Smart is the medium-throughput space. 

Along with the 11 tests that the firm plans to initially offer for the platform on its launch, the company has about 65 tests that run on the Infiniti Plus and High Throughput platforms. Eventually, AutoGenomics will validate all of the tests to run on the Infiniti Smart, Vairavan said.