Shares of Personalis (NASDAQ:PSNL) fell nearly 14% today, after the company announced the pricing of a public offering of common stock. The genomics company will issue up to 7.56 million shares of common stock at $19 apiece. The offering could result in gross proceeds of up to $143.5 million.
Personalis ended June with $105 million in cash and reported an operating cash outflow of $24 million in the first six months of 2020. The offering wisely takes advantage of a soaring stock price and pads the balance sheet during the market launch of an important new liquid biopsy product.
As of 11:22 a.m. EDT, the small-cap stock had settled to a 11.8% loss.
Personalis has developed a genomics data-mining technology platform called NeXT. Made possible in large part thanks to a lucrative relationship with the U.S. Department of Veterans Affairs (VA), the platform is capable of scanning all 20,000 human genes for genomic patterns that can guide cancer diagnosis and treatment.
The company offers two products: ImmunoID NeXT (a tissue biopsy) and NeXT Liquid Biopsy (a liquid biopsy). The latter launched in the beginning of August. Personalis hopes the two products will be paired together by customers to provide unrivaled insights into a patient's cancer. Considering its liquid biopsy covers 20 times more genes than most similar tests available on the market, that vision might not be corporate marketing fluff. However, it's currently only intended for advanced solid tumor cancers and focused on biopharmaceutical companies, not clinicians.
Today's stock offering wisely takes advantage of a soaring stock price and provides a financial cushion to make the most of the NeXT Liquid Biopsy market launch. It will take at least a few quarters for investors to gauge the early success of the product, which makes changes to the company's customer count and signs that the tissue and liquid biopsy products are being paired together two of the more important metrics to watch in the next year.