Nanosphere files for IPO to commercialize medical diagnostics system

August 15, 2007 — Nanosphere Inc. a nanotechnology-based molecular diagnostics company based in Northbrook, Ill., has filed for an initial public stock offering, intending to raise up to $100 million.

Nanosphere’s mission is to improve the diagnosis and treatment of disease by enabling earlier access to, and detection of, new and existing biomarkers. The company’s Verigene system, which is awaiting FDA approval, is a benchtop molecular diagnostics workstation that uses patented gold nanoparticle technology to for superior sensitivity to detect nucleic acid and protein targets. The system promises extremely early detection of such medical conditions as cancer and cardiovascular and neurodegenerative diseases.

Early detection is not the company’s only goal, however; the system is designed for easy use by technicians without specialized training and is inexpensive enough for purchase by hospitals. Currently such test analysis requires the use of highly trained personnel in labs outside of hospitals.

The company’s filing with the Securities and Exchange Commission notes that Nanosphere will use about half of the proceeds to develop product manufacturing, and the majority of the rest would go to marketing.

The Chicago Tribune reports that Nanosphere has raised more than $100 million in private money, including a $57 million venture capital investmentIin 2006 from a group led by Bain Capital. Lurie Investments, Nanosphere’s founding investor, is a major shareholder. Underwriters for the plannedIIPO are Credit Suisse,IPiper Jaffray, Leerink Swann & Co., and Allen & Co.

According to the Tribune report, Nanosphere’s revenues were just over $1 million in 2006, and came mainly from research contracts and government grants. “Minimal” sales derived from the genetic-testing system. But, future profit depends on getting regulatory approval for and commercialization of testing systems.


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