China-based genetic sequencing technology developer Burning Rock Biotech has gone public in a $223m initial public offering that provided exits for pharmaceutical firm Eli Lilly and conglomerate Legend Holdings.
The offering consisted of 13.5 million shares issued on the Nasdaq Global Market and priced at $16.50 each, above the $13.50 to $15.50 range the company had set. Lake Bleu Prime Healthcare Master Fund has agreed to buy another $25m of shares in a private placement.
Burning Rock is combining advanced sequencing technology with precision oncology in a diagnostics system that facilitates tissue and liquid biopsies in order to help physicians decide on the best treatment for each cancer patient.
The company has allocated $68.5m of the IPO proceeds to research as it seeks to expand its early cancer detection offering, while a further $45.7m will fund efforts to secure Chinese regulatory approval for more products.
The offering follows approximately $193m in funding, the most recent of which was a $126m series C round in February 2019 led by GIC and backed by Eli Lilly unit Lilly Asia Ventures, CMB International Capital, Lyfe Capital, Sequoia Capital China and T&Brothers Capital.
Legend Holdings’ Legend Star subsidiary joined Sequoia, CMB International Capital and Lyfe Capital in Burning Rock’s $43.9m series B round in 2017. The former two also took part in its $23m series A in 2015 alongside Northern Light Venture Capital and Jifeng Capital.
Northern Light Venture Capital is Burning Rock’s largest investor, with a 13.7% stake cut to 11.7% in the offering, followed by Lyfe Capital (9% post-IPO), Sequoia China (8%), CMB International (7.8%), Legend Holdings and GIC (5.2% each).
Morgan Stanley, BofA Securitiesand Cowen and Company are representatives for the underwriters, which include CMB International Capital and Tiger Brokers. They have a 30-day period to buy just over 2 million more shares which would lift the IPO to about $256m.
Burning Rock floated on Friday and its shares closed at $23.21 yesterday, giving it a market cap of approximately $2.37bn.
