Complete Genomics Gets Ho-Hum Reception, Cuts IPO Price More than 30%, to $9
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a beginning market capitalization of $800 million. The two companies have distinctly different business models—PacBio aims to sell instruments to researchers, while Complete Genomics is asking researchers to send samples to a central lab where it hopes to do efficient sequencing in-house. Both of the companies aspire to carve out niches in a field currently led by San Diego-based Illumina (NASDAQ: ILMN), Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), and Switzerland-based Roche.
As the price comes down in the future to possibly as little as $1,000 per genome, more scientists should be able to gain access to the technology, so all the companies are hoping the market for sequencing will grow. The DNA sequencing market is expected to grow from $1.2 billion in 2009 to more than $3.6 billion by 2014, according to figures from Scientia Advisors, which PacBio cited in its IPO filings.
Founded in June 2005, Complete Genomics is in the very earliest stage of commercialization. The company said it has sequenced more than 400 complete human genomes from January 1 through September 30, with more than 300 of them in the third quarter. The company said it has an order backlog of over 800 genomes.
All this activity takes money, which Complete Genomics is burning fast. The company said it generated $1.4 million in revenue, while tallying a net loss of $27 million, in the first six months of 2010. The company has accumulated a deficit of $108 million in the development stage, according to the filing. Complete Genomics said it had $10.5 million in cash and investments left at the end of September, and that its order backlog over the next 12 months ought to generate $9 million.