Biocartis flies the flag with unusual Brussels medtech listing

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So far this year there has only been one European medtech IPO, and that was the first for eight months. And since the start of 2014 all Eurozone IPOs have been in Paris (see table). So why does diagnostics group Biocartis believe it can raise around €100m ($107m) by listing on the Euronext Brussels?

“There is enough momentum and interest for a listing in Brussels,” Biocartis’s chief finance officer, Hilde Windels, tells EP Vantage. A Paris listing enables companies to expand their share of retail investors, she concedes, but for Biocartis “there is enough appetite in the current market without those buyers.”

It is no surprise that Biocartis is active in molecular diagnostics, one of the most appealing sectors to investors both retail and institutional. Its flagship technology, Idylla, is a PCR based system on which a number of tests can be run. So far the company only sells one test in Europe; Biocartis is not yet active in the US.

But it has plans to launch a vast number more, and very quickly. Ms Windels says the company has sold around 100 Idylla units so far and has agreements with distributors around the world to sell 130 more over the next three years, and the reason its customers are buying is not so much the launched test – a BRAF gene assay used to identify the correct treatments for melanoma patients – as the tests that will come in future.

Ms Windels would not discuss the price of the Idylla machine, but the company will employ the standard razor-razorblade pricing model.

Biocartis intends to launch “at least” four in-house assays per year, plus additional tests developed under its partnerships with J&J’s Janssen division and Abbott Molecular. This is its top priority, and whether it gets its maximum expected haul of €115m or the minimum of €87m this is where the money will go.

Life sciences

Biocartis is clearly in confident that Brussels is the place to be. But the fact is that European medtech listings have been in decline, and the phenomenon of European companies going to the Nasdaq is more pronounced. It is salutary that of the seven Eurozone medtech IPOs since the beginning of last year, only two have seen an increase in share price.

One of these, French group Safe Orthopaedics, has seen its share price nearly double, however, and it was the most recent IPO. Perhaps this really does signal an uptick in Euro investors’ enthusiasm in 2015, though this seems quite a hefty conclusion to hang on a sample size of one.

Eurozone medtech IPOs, 2014-1015
Company Area Date Amount raised Offering price Discount/premium Exchange Share price from float to April 14
Crossject  Drug Delivery February 20, 2014 €17m ($23.2m) €8.38 7% NYSE Alternext Paris -7%
Genomic Vision In Vitro Diagnostics April 3, 2014 €23m ($32m) €15 0% NYSE Euronext Paris 2%
Supersonic Imagine Diagnostic Imaging April 10, 2014 €50m ($69m) €11.70  (10%) NYSE Euronext Paris -43%
Theraclion General and Plastic Surgery April 25, 2014 €11m ($15m) €14.50  (0%) NYSE Euronext Paris -30%
Mainstay Medical  Neurology April 30, 2014 €18m ($25m) €21.15  (10%) NYSE Euronext Paris and Enterprise Securities Market of the Irish Stock Exchange -29%
Pixium Vision Ophthalmics June 18, 2014 €34.5m ($47m) €8.28  (10%) NYSE Euronext Paris -22%
Safe Orthopaedics Orthopaedics February 10, 2015 €10m ($11m) €2.55  (15%) NYSE Euronext Paris 94%

Be that as it may, Biocartis does have a few aces up its sleeve. As a maker of tests that can guide drug use, it is more closely wedded to the relatively buoyant biopharma sector than another medtech firm might be. Ms Windels dismisses the difference between medtech and biotech as “semantics”, saying Biocartis considers itself a “life sciences” company.

Secondly, it has certainly done well on the venture front. A series F round in September brought in $85m – the biggest round for a European group and the fourth largest worldwide – setting the company up for its IPO.

As well as its partnerships the company has attracted venture capital from J&J, Philips and Debiopharm as well as an enviable suite of dedicated VCs. It has raised $326m all told.

To please its venture backers and new shareholders Biocartis must deliver on its promise of more tests, and it must offer them beyond CE mark countries. CE mark for a second product, a KRAS assay for use in colorectal cancer, is expected in the next few weeks, but the company also appreciates the importance of cracking the US.

It will take the timeworn path for diagnostics – seeking quick, easy regulatory passes such as Clia certification for some of its tests and then obtaining full FDA approvals. Its first US product, however, will not be one of its CE marked assays but instead a rapid test for the Ebola virus, for which it will seek emergency use authorisation this year. 

A 510(k) submission for a combined flu and respiratory syncytial virus test developed with Janssen will come in 2016, Ms Windels says, and most of Biocartis’ cancer tests will go via the premarket approval route.

The IPO scene in medtech has been quiet this year compared with last. Seven companies have listed on European and US exchanges so far, compared with 11 this time last year. The signs are that the IPO frenzy of late 2013 and 2014 is over and Europe in particular is moribund. If Biocartis can succeed it will be a notable achievement.

To contact the writer of this story email Elizabeth Cairns in London at elizabethc@epvantage.com or follow @LizEPVantage on Twitter

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