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Progenity Eyes $122.6M in Amended IPO

NEW YORK — Progenity on Monday amended its initial public offering filing and now aims to raise as much as $122.6 million through the sale of 7,666,667 shares of its common stock.

The molecular diagnostics testing lab, which initially filed in late May to go public, said it expects to float its shares on the Nasdaq at between $14 and $16 per share under the ticker symbol PROG. The underwriters of the planned offering — Piper Sandler, Wells Fargo Securities, Robert W. Baird, Raymond James, and BTIG — will also be granted a 30-day option to purchase an additional 1,000,000 shares at the IPO price.

Progenity's product line includes the noninvasive prenatal tests Resura, for monogenic disease, and Innatal, for chromosomal aneuploidies. The Ann Arbor, Michigan-based firm also offers the Preparent Carrier Test for genetic diseases that parents can pass to their children, Riscover for hereditary cancer risk, and a range of anatomic and molecular pathology tests and specialized genetic tests provided through affiliate Avero Diagnostics.

Progenity is also developing a next-generation version of Innatal, a proteomics-based preeclampsia rule-out test, and a platform for gastrointestinal (GI) disorders that uses a localizable, ingestible capsule to obtain a GI tract sample for diagnostic analysis or to deliver a therapeutic payload.

The molecular diagnostics testing lab said it expects to net approximately $103.0 million from the IPO, assuming a $15 per share offering price and full exercise of the underwriters' option. Progenity said it will use about $60 million to $65 million to support its operations, $9 million to $10 million to invest in its molecular testing R&D programs, and around $13 million to $15 million for its GI disorder platform.

The company also owes about $33 million to settle allegations of misconduct by three major insurance companies, it noted in the SEC filing.

Progenity recently agreed to pay millions to insurers Cigna, Aetna, United HealthCare under settlement agreements related to allegations over undisclosed past business practices. Specifically, Progenity would pay Cigna $12 million on behalf of Avero, of which $2.5 million remains outstanding; Aetna $15 million, of which $7.5 million remains unpaid; and United HealthCare $30 million, with $23 million remaining to be paid.

Progenity also recently agreed to pay $49 million over a five-year period to resolve criminal and civil charges filed by the US Department of Justice and the State of New York over discontinued billing practices for its NIPT and microdeletion tests, as well as alleged kickbacks or inducements made to physicians and patients. In the SEC filing, however, Progenity noted it had accrued $49 million as of March 31 to cover the potential settlement.

As of March 31, Progenity had $11.6 million in cash and cash equivalents.