HTG Molecular Diagnostics, a US-based molecular platform profiling provider backed by pharmaceutical companies Novo, GlaxoSmithKline (GSK) and Merck, has raised $50m in an initial public offering on Nasdaq.
The company offered 3.57 million shares priced at $14 each, in the middle of the IPO’s $13 to $15 range.
Founded in 2000, HTG’s profiling platform, HTG Edge, provides automated sequencing of tumours, requiring significantly smaller samples to do so than other technologies. The platform also combines several profiling techniques, eliminating the need for several samples.
HTG will use $18.5m of the proceeds for sales and marketing efforts, $7.7m for research and development and $4.8m to cover debt repayments owed to Silicon Valley Bank (SVB) and Oxford Finance, with the remaining money used for general administrative purposes.
SVB and Oxford Finance provided a $16m loan to HTG in October 2014. HTG had raised approximately $65m in debt and equity, according to regulatory filings and press reports.
Novo held a 25.7% stake ahead of the offering, which was diluted to 13.5% despite it buying about $3.1m of shares in the IPO. SR One, the corporate venturing arm of GSK, also invested about $3.1m but its stake dropped from 20.4% to 10.7%, while Merck invested $1.7m but now holds 9.1%, down from 20.1%.
Fletcher Spaght Ventures also bought stock but its share decreased from 12.8% to 6.5%. Solstice Capital’s stake was diluted from 6.1% to 2.1% and Valley Ventures’ from 5.6% to 2%.
Leerink Partners, Canaccord Genuity and JMP Securities acted as underwriters. If they exercise their 30-day option to purchase an additional 535,500 shares, the size of the offering could increase to $57.5m. HTG’s stock stands at $14.18 at time of publication.