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Celcuity Becomes Third MN Company to Go Public This Year

The biotechnology company officially kicked off its IPO on Wednesday.

Celcuity Becomes Third MN Company to Go Public This Year
Colour-enhanced scanning electron micrograph image of a breast cancer cell. (Photo by Anne Weston/Cell Image Library)
EDITOR'S NOTE: Shares of Celcuity Inc. opened to trading on Wednesday, making the cellular analysis startup the third company out of Minnesota to perform an initial public offering (IPO) this year. Before going live on the stock market, Celcuity said it upped the number of shares available from two million to 2.4 million. An additional 300,000 shares being reserved for underwriters was also upsized to a total of 360,000 shares. The IPO is scheduled to run until closing time on Friday with each Celcuity share being priced at $9.50.
Cellular analysis startup Celcuity Inc. is expected to conduct its initial public offering this week; it’s the third Minnesota company to do so in 2017.
 
Plymouth-based Celcuity (Nasdaq ticker “CELC”) said it plans to sell two million shares of common stock and potentially offer up an additional 300,000 shares for underwriters. Individual shares are expected to go for $8 to $10 each, the company stated in regulatory filings.
 
Celcuity hopes to raise $23 million from its IPO if all goes as planned.
 
Assuming all 2.3 million of the company’s shares sell for $8 each—the low end of its price range—Celcuity would walk away with about $16.3 million. If shares instead sell at the high end of its range, or $10 each, Celcuity would receive more than $20 million in net proceeds.
 
“The net proceeds are intended to support our research and development and efforts, the development of our operational processes, and the launch of our business development activities to pharmaceutical companies,” Celcuity said in its Nasdaq profile.
 
Approximately $4 million will be set aside for “clinical trials to support clinical claims,” the company said, in addition to $2 million for the development of operational processes and capital expenditures and another $1.6 million for working capital and other general corporate purposes. Nearly half of its new capital, or approximately $8 million, is expected to fund research and development activities, particularly the discovery of new cancer sub-types and development and validation of any new CELx tests introduced by Celcuity.
 
Celcuity, which was founded in 2012, is chiefly known for CELx, its diagnostic test that analyzes live tissue, such as living tumor cells, to determine the best possible treatment plan for cancer patients. The company claims its test, which falls into the fast-growing field of “personalized medicine,” can give a more precise diagnosis than other genomic (DNA-based) or proteomic (protein-based) tests.
 
The promise of Celcuity’s technology was enough to draw in $5.75 million from nearly 40 investors during a funding round last May, as well as $5.2 million during a round a year ago and another $4 million in a 2014 round.
 
If the past is any indication, Celcuity CEO Brian Sullivan may be preparing the biotechnology company for a sizable acquisition, assuming CELx and any other products it develops gain a wider use.
 
Sullivan, who once ran as a GOP gubernatorial candidate in Minnesota, was successful in building and selling a local medtech company in 2011. After eight years as the CEO of Maple Grove-based Sterilmed, which reprocessed single-use medical devices, Sullivan agreed to sell the company to Johnson and Johnson for $330 million. Prior to that, he was CEO of Minneapolis-based filtration company Recovery Engineering until its $265 million sale to Proctor and Gamble in 1999.
 
The frequency of IPO offerings has been much higher in 2017 than last year, according to research firm Renaissance Capital. So far, over 90 have taken place, a nearly 60 percent rise year-over-year.
 
Two of those came from Minnesota—the first from construction equipment manufacturer ASV Holdings Inc. in May. The Grand Rapids-based company sold approximately 3.8 million shares at $7 each for a total raise of $26.6 million.
 
Minnesota’s other IPO this year came from Calyxt, a gene-editing company in Roseville. In July, the company priced 7 million of its shares at $8 a piece and finished with a $56 million raise.
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