April 17, 2024

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Psomagen, a US company dedicated to genome sequencing technology and DNA testing, said on April 29 it looks to raise at least 57.5 billion won ($47.2 million) in an initial public offering on the Korean bourse.

Under the plan to be listed on Kosdaq, Psomagen seeks to issue 4.2 million new common shares, amounting to a 25 percent stake, and offer them to investors in an IPO set to take place in May. Shinhan Investment is an underwriter of the IPO deal.

The IPO proceeds will be used to boost its entry into a personal genomics business targeting the US market, repay its debt for an acquisition deal and ramp up its logistics infrastructure for its end-to-end genome sequencing solutions. 

Psomagen CEO Ryan Kim speaks at a briefing held in Seoul on April 29. (Psomagen)

Psomagen‘s foray into personal genomics business is crucial, as the practice of a precision medicine is increasingly tailored to an individual, Psomagen CEO Ryan Kim told reporters on April 29 in a briefing in Seoul.

“(Psomagen) is turning into a health care solution provider powered by big data, based on our genome sequencing capability,” he said.

“We are witnessing a paradigm shift in US health care system. As the genome sequencing technology gets more sophisticated, its price has been on the decline, so individual health care services are increasingly tailored to analysis and interpretation of the genome of an individual.”

Based in Rockville, Maryland, Psomagen has moved to produce genetic testing kits using saliva samples and sell them directly to consumers. It also tapped into microbiome genetic testing solutions using consumers’ stool samples.

This is a leap forward from its decadeslong effort to focus on research into genome sequencing using technologies such as sanger sequencing and next-generation sequencing.

Having both the College of American Pathologists accreditation and Clinical Laboratory Improvement Amendments certification, the company was the only for-profit entity to join former US President Barack Obama‘s Trans-Omics for Precision Medicine initiative, according to Psomagen. Kim said the research division is expected to generate a steady return of profits.

The efforts will also be buttressed by its latest acquisition of San Francisco-based biotech company uBiome in 2019, which allowed Psomagen to possess its 246 patent rights and some 300,000 data subjects.

In 2019, Psomagen logged a $4.17 million operating loss and 19.79 million net loss, according to its prospectus. The net loss rose over eightfold largely due to the cost of the uBiome acquisition deal.

Psomagen is expected to become the first company based out of Korea to go public by undergoing an abridged screening procedure by the Korea Exchange. The procedure, “special listing on promising business model,” allows a company’s listing eligibility to be evaluated by the potential of scalability instead of profitability.

Psomagen is a spinoff from Seoul-based genomics service provider Macrogen. If the new shares are issued, Macrogen and its affiliated shareholders will hold a combined 68.7 percent stake. It is part of the 71.53 percent of shares that will be placed under a lockup period for one to three years.

By Son Ji-hyoung (consnow@heraldcorp.com)