If there are any aspiring authors on the management team of Fluidigm, they certainly have the kind of material that best-sellers are made of.
Back in mid-September 2008 this South San Francisco-based company was out hustling on an IPO road show. It was the precise moment people were wondering if the global financial system would implode. Headlines were filled with horrors named Lehman, Fannie, Merrill, AIG. It was one of the scariest times in modern financial history. It certainly was the worst time ever to attempt to whip up investor enthusiasm for a high-risk, high-reward business trying to usher in a new era of biological research.
“We had front row seats to the financial meltdown,” says Fluidigm CEO Gajus Worthington. He noted that his communications guy, Howard High, wanted to bring an embedded reporter along during the road show to provide a fly-on-the-wall perspective of what it was like to go public, but the board didn’t like it.
“I wish, in retrospect, we had done that. It would have been an awesome story,” Worthington says.
Fluidigm now has a chance to write another chapter in its story, at least by getting a second chance to go public without so much drama. The South San Francisco-based company earlier this month submitted updated paperwork to the Securities and Exchange Commission so that it can make a second run at an IPO. That means Fluidigm management is now forbidden from talking to the press. But lucky for us, I did in-depth interview with Worthington at his office in September, when he was free to talk.
The company, founded in 1999, has grown up from its start in that heady era to produce a high-powered, high-cost instrument for biologists. It has sold about 200 of its machines, which sell for $200,000 a pop. They can be used to do things like fish out the rare cancer stem cells that are thought to lurk in the body and enable cancer to bounce back after it’s assaulted by chemotherapy. Stem cell researchers use the Fluidigm machines to identify signatures of induced pluripotent stem cells—ordinary adult cells that researchers reprogram into a flexible state from which they can become almost any other cell type in the body.
Fluidigm has been on a long and extraordinarily difficult journey to get where it is. The company has racked up a deficit of $196 million in its 11-year history to build up its independent capability to develop, manufacture, sell, and support its machines. Simple math says it’s hard to get much of a big venture-style return when you raise that much money. And the relatively modest size of this new proposed offering—$86 million—means that this financing by itself isn’t going to be anybody’s yellow brick road. Fluidigm has some prominent investors who have been waiting a good while for their returns. The list includes government of Singapore (13 percent); Fidelity Funds (9.1 percent); Versant Ventures (8.5 percent); and Euclid SR Funds (7.1 percent).
In 2007, when the company first introduced its commercial product—which uses complex microfluidic pumps to handle tiny biological samples—there was intense skepticism, Worthington says. “For a good solid year, people said, ‘this can’t really work how you describe it.'”
By the end of 2008, the financial nightmare year, Fluidigm had made some headway, recording $13 million in sales. It almost doubled that performance
