Tuesday, July 6, 2021

Very Brief Blog: Bioinformatics for Genomics: Sophia Genetics Files for $100M IPO

More than a few companies in the genomics space describe themselves as "data companies," from Sema4 to Syapse to Tempus - but that's the only way to describe Sophia Genetics.  After raising $100M just last fall, it has newly filed for a $100M IPO.  In 2020, Sophia Genetics had $28M revenue and $39M net loss.

  • See F-1 document here (340pp)
    • Foreign-based company equivalent of S-1
  • See article at Endpoints about IPO here
  • Inks deal with GE Healthcare; 360Dx, here
  • See article at Endpoints about $100M raised last fall here
  • See a panel presentation this spring including co-founder Lars Steinmetz, YouTube, here
  • See company home page here
From Sophia's "What We Do" - "We offer a cloud-based Software-as-a-Service platform — the SOPHiA DDM™ platform — that enables healthcare institutions to get quick, robust insights from their data. We apply our technology to diseases such as cancer and inherited disorders, where combining genomic and phenotypic information is vital to support discoveries, treatment decisions, and drug development efforts."

From 360 Dx, "Sophia also announced Tuesday that it has signed a letter of intent with GE Healthcare to codevelop new artificial intelligence-driven analytics and workflow technologies to improve the matching of treatments based on genetic and tumor profiles of cancer patients."

Sophia is based in Lausanne with offices in Boston and France.

The company had $28M in gross revenue in CY2020, with a gross profit (over COGS) of $18M.   That is, COGS was only $10M.

R&D and Selling/Marketing and Other Administration each cost about $18M, with a net loss of $39M.  The accumulated deficit to date is $150M.  Cash on hand is $57M.

click to enlarge

Material Weakness in Financial Reporting

Every IPO proposal catalogs a litany of woes and risks - "We may not be able to compete; We may lose key staff; Our patents may lose in court," etc.   The Sophia risks include one that caught my eye, "We have identified material weaknesses in our internal control over financial reporting...if we...fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition..."    

There's also a familiar remark about genomics reimbursement, "The insurance coverage and reimbursement status of newly developed products, such as data analytics platforms and related solutions, products and services, particularly in a new category of diagnostics and therapeutics, is uncertain. An inability to obtain or maintain adequate coverage and reimbursement could limit the commercial potential of our SOPHiA platform and related solutions, products and services."