Caltech + Stanford Startup Raises $75M in IPO

Fluidigm is a microfluidics company based upon technology licensed from Stanford University and Caltech.  Luke Timmerman from Xconomy does a great job of tracking the history of Fluidigm and the company’s long road to IPO.

The Invention

Fluidigm co-founder Stephen Quake invented a microscopic valve while he was teaching at Caltech in 1998. Much the way a transistor controls the flow of electrons in a computer chip, Fluidigm’s microfluidic valve performs the same function for the life sciences industry in a microfluidic chip made of rubber. Quake and Gajus Worthington founded Fluidigm in 1999. Worthington is the company’s president and chief executive officer, while Quake is head of Fluidigm’s Scientific Advisory Board, co-chair of the bioengineering department at Stanford University, and an investigator of the Howard Hughes Medical Institute.

In the late 1990s, most microfluidic experts came from the semiconductor industry and preferred substrates like silicon, glass or plastic, but not Fluidigm. Quake’s invention created the chip out of fusing multiple layers of rubber. That substrate is unique within the bio-chip industry and is illustrative of how Fluidigm has pioneered its path to creating a variety of PCR-based solutions.

A Decade of Successive Inventions

Today, Fluidigm’s technology enables the rapid, efficient, highly parallel, and reproducible analysis of tens-to-hundreds of genetic markers, across hundreds-or-thousands of DNA samples, in hours instead of days or weeks.  Fluidigm’s technology supports genomics-based applications such as single-cell gene expression, high sample throughput SNP genotyping and ground-breaking capabilities such as digital PCR and automated target enrichment for next-generation sequencing.

Xconomy - Feb 11, 2011

“You know what they say about how if you don’t at first succeed, try, try again.

South San Francisco-based Fluidigm said today it has completed its initial public offering, which comes more than two years after it had the misfortune to attempt an IPO at the height of the worst financial crisissince the Great Depression. This time, Fluidigm pulled in about $75 million, by selling about 5.6 million shares to investors at $13.50 a share. The price was on the low end of its forecasted range of $13.50 to $15.50 a share. The company is now ready to start trading on the Nasdaq exchange under the ticker symbol FLDM.

Fluidigm has traveled a long and risky road to its IPO day. Founded in 1999, it has piled up a deficit of more than $196 million since it was started by Stanford University biologist Steve Quake and CEO Gajus Worthington to create a high-powered, microfluidic instrument for researchers. It has sold about 200 of its machines, which sell for $200,000 each. As I wrote in a story in December, the Fluidigm machines can be used to do things like detect rare cancer stem cells that are hard to find, and which are thought to enable cancer to rebound following chemotherapy. Stem cell researchers use the Fluidigm machines to identify signatures of induced pluripotent stem cells—ordinary adult cells that scientists reprogram into a stem-cell like state.

Fluidigm hasn’t turned profitable yet, although its revenues have been climbing enough that it expects to start running in the black by mid-2011, Worthington has said.

Deutsche Bank Securities and Piper Jaffray led the offering, which was co-managed by Cowen and Co. and Leerink Swann.

Gevo Goes IPO

Gevo, an Osage portfolio company that manufactures iosbutanol from biomass, began trading today on the Nasdaq.  We are very proud of the Gevo team and congratulate them on their IPO.

From Dow Jones:

“Shares of biofuels developer Gevo Inc. (GEVO) rose in early trading Wednesday, its first day as a public company.

The company’s stock opened at $15.52 on the Nasdaq, up 3.5% from its initial public offering price of $15. It sold 7.2 million shares at the high of its expected $13 to $15 price range, and was changing hands recently at $16.49, up 10%.

Gevo is planning to make and sell isobutanol, an alcohol that can be made out of renewable materials such as grains and cellulose plant material. Isobutanol can be used as a replacement for petroleum-based products such as fuel or plastics. The company has developed the technology to produce isobutanol by retrofitting existing ethanol plants, and plans to begin commercial production in the first half of 2012.

Colorado-based Gevo has signed preliminary agreements and is negotiating several definitive agreements with potential customers and partners, including Total Petrochemicals USA and United Air Lines Inc. It acquired an ethanol production facility in Minnesota in September and has a preliminary agreement for a joint venture with another ethanol producer in the Midwest.

Gevo is at a very early stage of development and hasn’t retrofitted any ethanol plants yet. It also hasn’t generated any revenue from the sale of isobutanol, and has never turned a profit. No market currently exists for isobutanol as a fuel or fuel blendstock, and so it’s up to Gevo to gain acceptance and market it as a new product.

The company plans to use corn initially as the raw material in its isobutanol production and wants to sell the leftover protein fermentation meal after production as a feed product for livestock to help defray the expense of buying corn. But it first needs to gain Food and Drug Administration approval for its use as a feed product.

Gevo is currently defending itself against a lawsuit filed by Butamax Advanced Biofuels LLC, which is a joint venture between DuPont Co. (DD) and BP PLC (BP, BP.LN). Butamax alleges that Gevo has infringed on its patent for certain microbe host cells that produce isobutanol.

UBS AG (UBS), Piper Jaffray Cos. (PJC) and Citigroup Inc. (C) managed Gevo’s offering.”