* Shares touch high of $34.19, valuing company at about $900
* Company raises about $106.2 mln from IPO
By Vrinda Manocha and Avik Das
Sept 25 Cancer diagnostic company Foundation
Medicine Inc's shares rose as much as 89 percent in
their market debut as investors bet on the potential of genomics
in the treatment of the disease.
The company, which counts Bill Gates and Russian billionaire
Yuri Milner as investors, develops FoundationOne test kits, used
by doctors to recommend treatment options for cancer patients
based on their genetic profile.
It also analyzes tissue samples from clinical trials
conducted by companies such as Novartis AG, Johnson &
Johnson and Celgene Corp. Novartis accounts for
more than 10 percent of Foundation Medicine's revenue.
Personalized medicine, the new buzzword in the field of
pharmaceuticals, is seen as the future of cancer treatment,
targeting the type of cancer instead of the organ in which the
Genetic tests are used to predict patients' vulnerability to
diseases and identify specific medicines for individual
"It seems like a fairly large market for what they're
(Foundation Medicine) targeting in terms of solid tumors and
rare and recurring cancers," Wedbush Securities analyst Zarak
Khurshid said. "The whole space for personalized medicine in
cancer diagnostics is several billion dollars," he said.
The Cambridge, Massachusetts-based company raised about
$106.2 million after its initial public offering was priced at
$18 per share, well above its expected price of $14-$16.
Foundation Medicine's shares touched a high of $34.19 on the
Nasdaq, valuing the company at about $900 million. About 6
million shares changed hands, making it one of the most heavily
traded stocks on the exchange.
The stock was at $33.80 in early afternoon trading.
Foundation Medicine is the third biotech company to be taken
public this year by its majority shareholder Third Rock
Third Rock's Bluebird Bio Inc made a successful
market debut in June and its shares have risen 69 percent since
then. Agios Pharmaceuticals Inc was taken public by the
venture fund in July. Agios shares have risen more than 40
percent since their listing.
Other investors in Foundation Medicine include Kleiner
Perkins Caufield & Byers, Google Ventures and Gates Ventures
Foundation Medicine, which expects to launch the test for
blood cancers by early next year, said net proceeds from the
offering would be used to expand its commercial and laboratory
operations and fund clinical studies.
The company's net loss widened to $22.7 million in 2012 from
$17.3 million a year earlier. Revenue rose four-fold to $10.6
Goldman Sachs and JP Morgan were the lead underwriters for
Shares of eye drug maker Ophthotech Corp, which
also went public on Wednesday, rose as much as 22 percent. The
company raised about $167.2 million after its offering was
priced at $22 per share, above its expected price of $16-$19.