Quanterix Adds Twist To String Of Life Sciences Ipos
THE WALL STREET JOURNAL
By: Brian Gormley
Quanterix Corp. continued a string of health-care initial public offerings Thursday in a deal that defies the pattern of biotech companies making a Nasdaq debut.
Venture-backed drugmakers have streamed toward the public markets, with Apellis Pharmaceuticals Inc., InflaRx, Allena Pharmaceuticals Inc. and Spero Therapeutics Inc. staging IPOs last month.
And more is on tap: Denali Therapeutics Inc., a neurological drug developer, is poised to go public Thursday after raising a $130 million Series B round last year.
Investors back high-risk biotechnology companies in hopes of a massive payday if a drug pans out in clinical trials. The calculation is different for Quanterix, which sells a biomarker-analysis system that can detect low levels of proteins in blood or other fluids. Drug manufacturers use its technology in clinical trials to see if their therapies have the intended effect on protein markers. Quanterix went public at $15 and rose 16.5% to close at $17.47. The company, which raised $64.1 million on the sale of 4.3 million shares, has won over investors with its revenue growth—unlike most biotech startups going public. Revenue reached $16.3 million for the nine months ended Sept. 30, up from $10.9 million for the same period in 2016. Last year’s revenue was $17.6 million.
Lexington, Mass.-based Quanterix sells the Simoa HD-1 Analyzer that lists for $175,000. Next year it plans introduce a complementary instrument called SR-X that will list for $75,000. This lower-priced product could lead to more sales from academic researchers, and to more publications from research performed with its technology, according to Chief Executive Kevin Hrusovsky.
Research tools is a sizable industry. A 2016 BCC Research report put the market at $48.2 billion in 2015 and projected it would reach $58 billion by 2020. But Quanterix sees an even larger opportunity in diagnostics and screening, betting its technology will enable detection of diseases so they can be treated earlier.
Venture investors are betting on several startups aiming to detect cancer and other diseases sooner through blood tests. Last month cancer-detection startup Grail Inc. increased its Series B round to $1.21 billion, for example.
Quanterix also sees opportunity to enable new diagnostics and screening products. Because that market poses regulatory and reimbursement risks the company doesn’t face in the tools sector, it has been basing its projections to investors on sales in the research market for now.“We try to minimize the uncertainty for investors,” Mr. Hrusovsky said.
Quanterix’s venture backers included ARCH Venture Partners, Bain Capital Ventures and Flagship Pioneering. The company, formed in 2007, listed on Nasdaq under the symbol QTRX.
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