Caris seeks as much as $423.5 million in IPO
Investment manager Neuberger may buy up to $75 million of shares
Caris was valued at $7.8 billion in 2021 funding round
Adds analyst comment in paragraphs 9-10, revenue in paragraph 6 and graphic at end
By Arasu Kannagi Basil
June 9 (Reuters) - Cancer diagnostic firm Caris Life Sciences said on Monday it is targeting a valuation of up to $5.3 billion in its U.S. initial public offering, as the market for new listings rebounds.
Irving, Texas-based Caris, backed by investment firm Sixth Street, is seeking up to $423.5 million by offering 23.5 million shares priced between $16 and $18 apiece.
The IPO market is heating up as high-profile companies move ahead with their stock market listings in a calmer period after tariff-related volatility stifled deal activity earlier this year.
Caris is an artificial intelligence-based precision medicine firm that helps diagnose cancer through its tumor profiling and blood-based cancer diagnostics.
Founded in 2008 by CEO David Halbert, Caris generates revenue mainly from its tissue-based molecular profiling, which helps select the appropriate cancer therapy.
The company, which competes with Guardant Health GH.O and Grail GRAL.O, saw its revenue jump 35% to $412.3 million in 2024.
It has run more than 6.5 million tests on 849,000 cases and works with over 100 biopharma partners, including Moderna MRNA.O and AbbVie ABBV.N.
Caris raised $830 million at a $7.83 billion valuation in a Sixth Street-led 2021 funding round. It is also backed by J.H. Whitney, one of the oldest U.S. private equity firms.
The valuation target places Caris' estimated price-to-sales ratio at about 13, positioning it at the high end of its peer group, said IPOX research analyst Lukas Muehlbauer.
"While the company's financials show positive momentum, Caris must ultimately prove that its AI translates into superior clinical outcomes in a highly competitive landscape," Muehlbauer said.
Investment manager Neuberger Berman may buy up to $75 million of shares in the offering. The flotation comes a year after SoftBank-backed precision medicine firm Tempus AI TEM.O went public. The stock has gained 67.8% as of Friday's close.
BofA Securities, J.P. Morgan, Goldman Sachs, and Citigroup are the lead underwriters. Caris will trade on the Nasdaq under the symbol "CAI."
IPOX 100 US Index rebounds from post-Liberation Day low https://reut.rs/4jGk6ve
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Leroy Leo and Maju Samuel)
((ArasuKannagi.Basil@thomsonreuters.com;))
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.