Genetics Testing Company Cancer Genetics Announces Pricing of Underwritten Public Offering
The genetics testing company saw its share price fall over 15 percent in response to the news.
Last Friday, DNA-based cancer diagnostics company Cancer Genetics (NASDAQ:CGIX) announced the pricing of an underwritten public offering. The company will sell 3 million shares of its common stock at $4 each, with five-year warrants to buy 3 million shares of common stock for an exercise price of $5 each.
Cancer Genetics tests for cancers that are difficult to diagnose and predicts treatment options. Its diagnostic tests search for hematological, urogenital and HPV-associated cancers, amongst others.
The company also offers a range of non-proprietary, oncology-focused tests and laboratory services intended to offer critical genomic information to healthcare professionals, biopharma and biotech companies. It has collaborated with a number of well-established cancer centers, including Memorial Sloan-Kettering, the Cleveland Clinic, the Mayo Clinic and the National Cancer Institute.
Gross proceeds of the company’s underwritten public offering are expected to be $12 million prior to deducting underwriting discounts and commissions. According to a press release, the underwriters have been granted a 45-day option to purchase additional shares of common stock, in addition to additional warrants. The offering is expected to close in mid-November.
Investor response and future outlook
The genetics testing company’s share price plummeted in response to its announcement. At close of day Friday, its share price was sitting at $3.90 after having seen a daily low of $3.86 and a high of $3.95. That’s a 15.29-percent fall since market close on Thursday, and unfortunately for the company it also hit a new 52-week low.
That said, the outlook for Cancer Genetics isn’t necessarily grim. It also announced Friday that it will be presenting the results of two studies during the 2015 Association for Molecular Pathology Meeting next week.
The first study is titled “A Multi-Platform Approach for the Detection of Mutations in 54 genes with Relevance to Myeloid Neoplasms in a Clinical Laboratory Setting,” and was led by the company’s vice president of research and development, Dr. Jane Houldsworth. According to a press release, “the aim of the study was to analyze mutations in 54 genes with relevance to MDS, AML, and MPN using a multi-platform approach, which combined NGS, Sanger sequencing, and PCR fragment analysis.” This is a particularly relevant study, as there are approximately 54,000 newly diagnosed cases of myeloid cancers in the US each year.
The aim of the second study, titled “Systematic Analysis of Recurrent Copy Number Variants in Diffuse Large B-cell Lymphomas,” was to identify novel, molecular prognostic biomarkers in diffuse large B-cell lymphoma patents. It also looked at integrating these with existing prognostic biomarkers that have been analyzed for 50 predetermined copy number variations.
Investors will no doubt be eager to see whether the results of those studies bring a turnaround for the genetics testing company’s share price.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.