NEW YORK — Chinese molecular diagnostics firm Burning Rock said on Monday that the underwriters of its recent US initial public offering have exercised their overallotment option, giving the transaction a value of roughly $256.2 million.
Burning Rock also said that investment group Lake Bleu Prime Healthcare Master Fund has purchased a $25 million equity stake in the company. Taken together, the two transactions have raised about $281.2 million for Burning Rock.
Earlier this month, Burning Rock announced that it had filed with the US Securities and Exchange Commission to float 13.5 million American Depositary Shares — each representing one of its Class A ordinary shares — on the Nasdaq at $16.50 apiece under the ticker symbol BNR.
The underwriters of the IPO — Morgan Stanley, BofA Securities, Cowen, CMB International Capital, and Tiger Brokers — were granted an overallotment option to buy another 2,025,000 shares at the offering price, which they exercised. Subject to the completion of the IPO, Lake Bleu Prime Healthcare Master Fund had also agreed to buy $25 million of Burning Rock's Class A ordinary shares at $16.50
Burning Rock sells a number of next-generation sequencing-based tissue and liquid biopsy tests for cancer therapy selection in China, and recently kicked off a 14,000-patient trial to further validate its cell-free DNA early detection technology.
In its SEC filing, Burning Rock said it intends to use about $68.5 million of the IPO proceeds to develop its early cancer detection technologies, approximately $45.7 million to obtain approvals from Chinese regulators for new cancer therapy selection products, and the rest for general and administrative purposes
The firm also reported $53.9 million in revenues in 2019 and a net loss of $23.9 million, or $2.01 per share. For the first quarter of 2020, Burning Rock had revenues of $9.5 million and a net loss of $7.4 million, or $.44 per share.
As of March 31, Burning Rock had cash and cash equivalents totaling $51.3 million.