Guardant Health continued the rapid drumbeat of life science IPOs this year by raising $237.5 million in its stock market debut, making it one of the biggest IPOs so far this year.
The cancer diagnostics company priced its offering of 12.5 million shares at $19 apiece late Wednesday, well above the $15 to $17 per share range it had targeted. Shares of the Redwood City, CA, company are expected to begin trading on the Nasdaq later today under the stock symbol “GH.”
According to IPO research firm Renaissance Capital, the third quarter saw 52 companies raise $11.2 billion in capital by going public. Those IPOs brought the tally of stock market debuts to 156 for the year. The IPO market has been particularly strong for healthcare. Renaissance Capital counted 58 IPOs in that sector this year through the end of the third quarter.
Guardant develops liquid biopsies, tests that detect genetic indicators of cancer from blood samples. These tests are less invasive than tissue biopsies, which require a surgeon to obtain a sample of the tumor. Liquid biopsies aim to detect cancer at a much earlier stage compared to tests of tissue. Longer term, Guardant wants to develop tests that can find even earlier signs of cancer by detecting the disease in people who have yet to show symptoms.
To date, Guardant has commercialized two liquid biopsy products. Guardant360 launched in 2014, and tests for 73 cancer-related genes from small amounts of tumor DNA circulating in the blood. Last year, Guardant launched GuardantOMNI, which tests for 500 cancer genes. This product is used in biopharmaceutical research, helping drug companies identify cancer patients for clinical trials.
According to Guardant’s prospectus, most of the company’s $49.8 million in 2017 revenue came from sales of Guardant360. In the first half of this year, Guardant tests generated $36.1 million in revenue. Guardant’s pipeline includes Lunar-1, which is being developed to identify the recurrence of cancer, and Lunar-2, a test intended to detect cancer in higher-risk patients. Guardant expects to launch Lunar-1 later this year for use in drug research and development.
Guardant’s liquid biopsy competitors include Roche’s subsidiary Foundation Medicine, Roche Molecular Systems, Thermo Fisher Scientific (NYSE: [[ticker:TMO]]), Illumina (NASDAQ: [[ticker:ILMN]]), and startup Grail. In genomics profiling, Guardant counts lab testing companies LabCorp (NYSE: [[ticker:LH]]) and Quest Diagnostics (NYSE: [[ticker:DGX]]) as its competitors.
Guardant plans to apply the IPO cash toward corporate purposes, including sales and marketing of its commercialized products.
The first week of the fourth quarter saw other life science companies also making IPO moves.
—-Kodiak Sciences raised $90 million in its IPO. Late Wednesday, the company priced its offering of 9 million shares at $10 each, which was below the $13 to $15 per share range it had projected. Palo Alto, CA-based Kodiak’s lead drug candidate, KSI-301, is a treatment for the “wet” form of age-related macular degeneration (AMD). Kodiak believes its experimental drug may have dosing advantages compared to AMD drugs that are already on the market. The company is planning to advance its lead drug into mid-stage studies in both AMD and diabetic retinopathy. Kodiak shares are expected to begin trading on the Nasdaq later today under the stock symbol “KOD.”
—Synthetic biology company Twist Bioscience filed its plans for an IPO on Wednesday. The San Francisco company has developed a proprietary method of manufacturing DNA by “writing” it on a silicon chip, which can be used in drug research. But to date, most of Twist’s sales have been to companies working in industrial chemicals or for academic research, according to its prospectus. Twist set a preliminary $86 million target for its IPO. The company plans to apply for a Nasdaq listing under the stock symbol “TWST.”
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