The German company Centogene has raised €50.6M ($56M) in an IPO on the Nasdaq Stock Exchange to fund the development of diagnostics technology that could improve the treatment of rare diseases.
The fundraise fell under Centogene’s target value of €54M ($60M). A part of the proceeds will fuel the development of biomarkers that Centogene will offer to potential pharmaceutical partners for use in clinical trials. Another part of the money will also be spent on developing artificial intelligence tools that can help tailor treatments to patients.
Centogene researches the biological underpinnings of rare diseases using genomics and epidemiology. The company uses the data to find genes and biomarkers linked to conditions that its partner companies are interested in. Centogene specializes in studying rare diseases such as the metabolic condition hereditary tyrosinemia type 1, which causes liver and kidney failure. The company also has programs in more common conditions such as cancer and Parkinson’s disease.
Centogen has attracted high investor interest in the past, raising a Series A round of €25M in 2017. However, according to an analyst on Seeking Alpha, a major challenge for Centogene will be maintaining its profit growth as operational costs climb.
The IPO’s lower-than-hoped value echoes disappointing IPOs seen across all industries in recent months. In European biotech, the German company BioNTech’s IPO raised €141M on the Nasdaq in October, which was less than its target of €227M. The Swiss company ADC Therapeutics canceled its IPO altogether in the same month. The IPO markets in the US and Europe have been doing poorly this season for a range of reasons, including manufacturing slowdowns and political uncertainty. Whether things start looking up in the new year remains to be seen.
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