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Tuesday, Oct 3, 2023

Cancer Testing Firm Agendia Plots IPO

Breast cancer diagnostics firm Agendia Inc. is looking to join the ranks of Orange County’s publicly traded medical device makers, therapeutics firms and testing companies.

Mark Straley, chief executive of the Irvine-based firm, whose genomic profiling tests are used by oncologists and their patients to make better treatment decisions, said it will be ready to file an initial public offering after Thanksgiving this year. It recently hired a chief financial officer with extensive IPO experience to help with those efforts.

It’s the right time to go public, Straley told the Business Journal.

Over the last two years, Agendia has been growing at a clip of 25% to 30% and hit revenue of about $50 million in 2019. It expects similar growth this year, despite the headwinds of the pandemic, he said (see story, this page).

“We’ve hit a rhythm in terms of execution and [we’re] reaching a size and scale where [the business] becomes attractive to larger institutional investors and public markets,” Straley said.

“We have a closely held shareholder base, and we need access to broader capital,” he said. That access “will allow us to promote a new strategy and accelerate our growth.”

Agendia has raised over $190 million since its 2003 inception. Large shareholders include Norgine Ventures Management Ltd. in the United Kingdom, Athyrium Capital Management LP in New York and Halle, Belgium-based Korys.

IPO proceeds will be used to expand Agendia’s portfolio in the breast cancer treatment selection and monitoring space, the CEO said.

Shift in Strategy

“Since its founding, Agendia has been focused on helping women with breast cancer find the right treatment at the right time. We’ve always played a role in developing tools to sort that out,” said Straley, who lives in New Jersey and joined the company in mid-2015.

His résumé includes executive roles at Thermo Fisher Scientific and Ortho Clinical Diagnostics, a unit of Johnson & Johnson.

“Our new strategy is [still] focused on breast cancer, but looking more broadly across the entire treatment life cycle,” Straley said, noting the company will focus more on therapy monitoring and late-stage metastatic cancer.

The company has made two undisclosed investments in these categories, around artificial intelligence pathology and machine learning more broadly, he said.

These partnerships are expected to be announced in the next month.

“Those two categories [combined] are [five times] as large as the field in which we currently play,” Straley added.

“There is a rich environment in terms of unmet need and these investments are important for the treatment of patients, given our history and growing relationship with these patients.”

Agendia’s current total addressable market in the U.S. is between $700 million and $800 million, officials said.

Personnel Moves

In preparation for the initial public offering, Agendia named Brian Dow its chief financial officer on July 29. 

Dow’s “expertise in strategic financial management, Wall Street experience and vision to support long-term growth will be instrumental in creating value for both patients and investors,” Straley said at the time of the announcement.

Dow comes to Agendia from Hayward-based Pulse Biosciences Inc. (Nasdaq: PLSE), where he oversaw the company’s IPO in May 2016. 

He has plenty of experience taking companies public, including Pacific Biosciences of California Inc. (Nasdaq: PACB) in Menlo Park and the now-defunct Northstar Neuroscience Inc., which traded on the Nasdaq from 2006 to 2009. 

Meanwhile, Agendia’s Chief Operating Officer Kurt Becker, who previously served as head of finance, will take more of an active role in R&D and Agendia’s operations groups, the company said.

Over the next year, Straley said the company wants to add some 25 or 30 employees in the U.S. to bolster its sales and bioinformatics teams, as well as several mid- and senior-level leadership roles that will be based in OC.

The company’s currently looking to hire 10 people in Irvine, according to its website. It currently employs about 110 people in the area.

Amsterdam to Irvine

Agendia spun out of the Netherlands Cancer Institute of Amsterdam in 2003.

It maintains a Center of Innovation and R&D Excellence in Amsterdam, where its co-founders Laura van ’t Veer and René Bernards continue to lead research and innovation.

In 2004, it unveiled its flagship product: MammaPrint.

MammaPrint is the first FDA-cleared diagnostic test for personalized breast cancer treatment. The test uses the gene expression profile of breast cancer tissue samples to assess and predict a patient’s risk of breast cancer recurrence.

Its second product was introduced in 2010, the same year it relocated its U.S. headquarters and laboratory from Huntington Beach to the Irvine Spectrum area; the Irvine facility runs some 17,000 square feet.

BluePrint is an 80-gene complementary test provided with MammaPrint. It uses molecular subtyping to determine three subtypes of breast cancer, which details varying degrees of aggressiveness, long-term outcomes and responses to chemotherapy.

These insights help physicians determine the best treatment path for patients, Straley said.

In 2018, the MammaPrint and BluePrint kit received CE markings, allowing the product to be used in Europe.

Agendia entered China the same year via a platform-based arrangement—a market that Straley said continues to “grow by leaps and bounds.”

IPO Thaw

Two OC firms have gone public via a traditional IPO this year. Irvine-based Inari Medical Inc., a medical device maker of products to treat patients suffering from blood clots and other diseases affecting veins, has seen its shares (Nasdaq: NARI) pop since its May debut; it sports a $3.2 billion market cap.

Montrose Environmental Group Inc. (NYSE: MEG), a provider of a variety of environmental services, went public in July and sports a $550 market cap.

Turning the Corner: Agendia Signals Swift Recovery

Agendia Inc. was growing at a rapid clip between January and April, before the pandemic caused a disruption.

Its testing platform was used by between 1,500 to 2,500 women per month in the U.S.—its largest market that makes up about 80% of the entire business.

Patient volumes slowed in May and June and improved in July.

Ultimately, early indicators lead the company to believe normal volumes will return in the fall, according to Chief Executive Mark Straley.

“The message to women with breast cancer is: It is dangerous for your health not to go [to the doctor] and it is safe to go in for treatment and testing,” said Straley, noting he’s been encouraged to see community and patient advocacy groups promote the same message (see the Aug. 3 print edition of the Business Journal for more).

Pandemic Ops

Throughout the shutdown, Agendia’s “doors remained open,” Straley said.

The company’s OC facilities are cleaned twice a day. Social distancing and mask-wearing is enforced. Cleaning supplies and masks are fully stocked.

Agendia reduced travel and entertainment expenses immediately.

The company is healthy from a financial perspective, with “a sufficient cash balance that allowed us to weather this storm,” Straley added.

He declined to disclose its current cash balance.

“Most importantly, no U.S. or European colleague—not a single employee—was furloughed or took reduced pay. And now, we’re on the other side.”

—Jessie Yount

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