Ready to Have Kids? This IPO Could Change That

by | Jun 16, 2020 | IPO Corner | 0 comments

Every good parent in this world wants what’s absolutely best for the health of their children. 

As a father, I can attest to it. My mission has been to raise my 3 boys to be the healthiest that they could possibly be. 

But every parent has a different way of going about ensuring the health of their children. 

With modern advances in technology, many parents these days are choosing to explore genetic testing options to learn about the potential health of their children— even before their children are born. 

It’s called prenatal genetic screening and it allows you to check for the likelihood of medical conditions— such as cancer, and a variety of other genetic disorders — while the baby is in the womb. 

Other forms of genetic testing can assess the likelihood of these conditions being present in a child by simply looking at the mother and father’s genes before pregnancy. 

Once the parents know about the likelihood of their child carrying or not carrying a potential medical condition, they can take certain steps ahead of time to prepare in the event that the baby will have special needs. 

These steps to prepare could be physical, emotional, and financial. 

Knowing about the potential genetic conditions of a baby ahead of time could also help guide medical management during the pregnancy.  

It could also inform decisions about whether to conceive a child in the first place or to pursue alternatives such as an egg donor. 

It’s an interesting approach to preparing for parenthood, and it just so happens that one company that conducts it’s IPO this week provides these genetic testing services. 

The company is called Progenity (PROG), and today I want to reveal what’s fascinating about the company’s product line and share it’s trading prospects. 

 

Progenity Offers An Impressive Suite of Genetic Testing Products

 

Progenity (PROG) offers a valuable suite of products designed to help parents prepare for the birth of their children in the case of a genetic disorder. 

These products include their Preparent Carrier test, their Innatal Prenatal screen, their Resura Prenatal test for monogenic disease, and their Riscover test for hereditary cancer. 

Preparent is their carrier test designed to assess whether parents carry genetic diseases that they could pass on to their children. 

It’s interesting because being a carrier is actually quite common as 1 in 3 people carry a genetic disease. 

Most people function normally because only one half of at least one of their 23 sets of chromosomes contain a gene with a “variant” — an error that can cause the gene to stop working and not fulfill an intended task in the body. 

The problem is not when a child inherits a single gene with a variant— people can function normally as long as the other gene in the pair works fine— but when both genes in the pair inherited from the mother and father contain a variant. 

If both parents are a carrier of a particular non-working gene, there is a 1 in 4 chance that the child could receive two non-working copies of a gene and experience severe health problems. 

These health problems could include cystic fibrosis, sickle cell, and spinal muscular atrophy, among many others. 

Progenity’s other products are based around the same idea of detecting the likelihood of a genetic disorder in a child, except that the Innatal and Resura products screen for these disorders during the actual pregnancy period. 

These prenatal screens use a noninvasive cell-free DNA technology to detect disorders and disorders.  

Progenity’s Riscover product specifically tests for hereditary cancer risk. 

Progenity accepts all types of insurance to cover the cost of testing and helping family’s preparations for life. 

 

The Progeny IPO Could Bridge Its Q1 Covid-19 Losses 

 

As far as the trading prospects of Progenity (PROG), one thing to note right off the bat is the purpose of the company’s IPO. 

PROG plans to use the funding as a bridge to offset the detrimental impact of COVID-19 on its business. 

While the company looks promising to me overall, I’m not convinced that the business that they are hoping for will return quickly. 

The company currently has an inhouse team of over 150 employees. 

The company has also been spending heavily on marketing in tandem with the moderate increases in revenue it has seen over the past couple of years (except Q1 of this year). 

The company has also increased its cash used in operations but decreased its net losses. The company has $11.6 million in cash and $195.7 million in total liabilities as of the very end of March. 

Fortunately, Progenity does address a growing global market. The market for molecular diagnostics is expected to grow to $11.5 billion by 2023, and 8.4% growth rate. 

PROG plans to sell 6.66 million shares at a midpoint price of $15 per share to acquire $100 million in proceeds. 

While I’m not determined to jump in long on PROG right off the bat, it’s an interesting IPO and one that I’m certainly going to keep my eye on. 

To find out whether I do trade PROG, long or short — and to find out what IPO’s I am currently trading right now — consider joining my premium IPO Payday service here.