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Genetron Health Targeting $175.5M in Amended US IPO

NEW YORK — Genetron Health on Monday amended it plans for an initial public offering in the US and said it expects to sell 13 million American Depositary Shares (ADS) on the Nasdaq in an initial public offering that could raise as much as $175.5 million.

According to a filing with the US Securities and Exchange Commission, Beijing-based Genetron plans to float 13 million ADS on the Nasdaq at an estimated price of $11 to $13.50 each under the ticker symbol GTH. The underwriters of the offering — Credit Suisse and China International Capital Corporation — are also expected to be granted a 30-day option to buy an additional 1.95 million ADS at the initial offering price.

Based on an assumed $12.50 per ADS offering price, Genetron said it expects to net approximately $146.1 million through the IPO. If the underwriters exercise their options in full, the net proceeds from the IPO would increase to $168.8 million, the company said.

About 40 percent of these funds will be used for technology and product development, 30 percent for sales and marketing, and 30 percent for working capital and general corporate purposes.

In the filing, Genetron reported revenues of $10.9 million for the first quarter of 2020, with a net loss of $16.3 million, or $.13 per share. R&D spending in the quarter was $3.9 milliom while selling and administrative costs totaled $10.7 million. For the full-year 2019, Genetron generated revenues of $45.7 million and had a net loss of $95.5 million, or $.76 per share. R&D spending in 2019 was $13.0 million and selling and administrative costs were roughly $52.4 million.

As of March 31, Genetron had $25.5 million in cash and cash equivalents.

Founded in 2013, Genetron offers genomics products and services, including PCR instruments and cancer sequencing, and maintains a research center in the Research Triangle area of North Carolina. In late 2019, the company received Chinese regulatory approval for its S5 next-generation sequencing system, which is based on Thermo Fisher Scientific's Ion GeneStudio S5 instrument for targeted NGS. And earlier this month, Genetron partnered with Thermo Fisher to commercialize diagnostics based on the S5 instrument in China.

Genetron also recently received Emergency Use Authorization from the US Food and Drug Administration for a PCR-based SARS-CoV-2 test. 

In its SEC filing, Genetron said that each ADS will represent five of its ordinary shares. It also noted that several of its existing shareholders and their affiliates — including an affiliate of the company's Cofounder and Chairman Weiwu He — have expressed interest in purchasing up to $54 million of the ADSs but are under no obligation to do so.