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SQI Diagnostics Files for US IPO

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Canadian life science firm SQI Diagnostics has filed a preliminary prospectus to raise up to $30 million in an initial public offering in the US.

In a Form F-10 filed with the US Securities and Exchange Commission on Wednesday, the firm, which trades on the Toronto Stock Exchange, said that is has been approved for listing on NYSE Amex under ticker symbol "SQD."

Leerink Swann, Rodman & Renshaw, and Kingsdale Capital Markets are listed as underwriters on the offering. As of July 4, SQI had 33,946,258 common shares outstanding, and 38,387,444 shares on a fully diluted basis.

The Toronto-based company did not set a share price for its stock. It also did not say how much in net proceeds are anticipated from the offering, but said that C$15 million ($15.7 million) would be used to pay the cash portion of its acquisition of microarray equipment and services firm Scienion, announced earlier this week.

Proceeds would also be used to support sales and marketing initiatives for the ongoing commercialization of its platforms; to support R&D and build out its test menu and diagnostic platforms; to support expansion of the firm's manufacturing operations; and for general corporate expenses.

SQI was officially founded in 2007 when Umedik and 670194 Canada merged and changed its name to SQI Diagnostics Systems. In the Form F-10, SQI said that its goal is to become "a leader in the development and commercialization of microarray and multiplexed diagnostics by offering … a comprehensive 'turnkey' solution that increases the efficiency and ease of diagnostic testing and test development."

Its target customers are clinical, academic, and diagnostic development laboratories. Its target market, the company said, is the immunoassay diagnostic test market, which it estimates at about $10.3 billion. The addressable market that SQI is eyeing is estimated at $4.5 billion, including immunological tests for autoimmune disease ($1.5 billion), infectious diseases ($2.4 billion), and allergenecity ($600 million).

The company said that it also intends to address "selected areas of the companion diagnostics" market, the research-use only and laboratory-developed test markets, and the market for microarray print and assay development tools.

Among the products in its portfolio are the microarray-based SQIDworks platform and IgXPlex celiac qualitative assay and the SQIgXPlex rheumatoid arthritis assay, all of which have received clearance from the US Food and Drug Administration.

The SQiDworks platform is a fully-automated microarray processing and analytical system capable of 888 results per hour, the company said. IgXPlex microarrays, it added, "have the ability to discriminate between individual isotypes of antibodies and antigens and proteins within a single well of a microarray, resulting in the measurement of multiple biomarkers in a single test."

SQI is also developing a 6-plex quantitative celiac panel for the US market, which will include quantitative determinations of IgA and IgG anti-gliadin antibodies, IgA and IgG anti-tissue transglutaminase antibodies, and IgA and IgG anti-deamidated gliadin peptide antibodies.

As of June 15, partners with which it has collaborations include the Cleveland Clinic on a project targeting rheumatoid arthritis; Beth Israel Deaconess Medical Center, targeting celiac disease; and three separate collaborations with Hospital Clinic de Barcelona, University Hospital Maastricht, and the University of North Carolina, Chapel Hill, all focused on vasculitis.

The partnerships are aimed at developing new candidate biomarkers for future tests.

For its fiscal year ended Sept. 30, 2010, the company posted C$35,000 ($36,500) in total revenues, including C$5,000 in product revenues. Its net loss for the year was C$8.1 million.

For the first half of fiscal 2011, ended March 31, 2011, it recorded C$22,000 in revenues, including C$13,000 in product revenues. Its net loss for the six months was C$4.1 million.

As of March 31, the company had C$4.7 million in cash and cash equivalents.

As of May 31, SQI had 54 employees. The management team includes President and CEO Claude Ricks; Chief Science Officer Peter Lea; and CFO Andrew Morris.

If SQI is successful in completing its US IPO, it would be one of the few companies in the life science tools and 'omics space to do so in 2011. While Fluidigm and BG Medicine went public in February, firms that have withdrawn their IPOs in the US or elsewhere this year include AutoGenomics, Agendia, and Atossa Genetics.

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