Genetic Analysis Announces NOK 12.8M Directed Issue

Genetic Analysis (GA), a prominent player in the microbiome diagnostics sector, recently announced a Directed Issue, aiming to secure approximately NOK 12.8 million before transaction-related costs. This strategic financial maneuver is designed to bolster GA's capital base, thereby enabling the company to pursue growth opportunities and fortify its market presence.

The Directed Issue, priced at NOK 0.86 per share, aligns with the average volume-weighted trading price on the Spotlight Stock Market over the last 15 trading days up to April 24, 2025. This pricing strategy reflects the company's commitment to maintaining market parity and investor confidence.

In a decisive move, GA's board invited a select group of existing shareholders and proposed board members to participate in the issue. Notably, the board and management have subscribed for 23% of the proposed shares, underscoring their confidence in the company's strategic direction.

The decision to proceed with a Directed Issue, as opposed to a preferential rights issue, was carefully considered. The board concluded that the latter would entail a longer completion period and increased exposure to market volatility, potentially hindering timely investments. Furthermore, the current market sentiment and liquidity constraints for smaller growth companies supported the board's choice to opt for a Directed Issue.

To address potential dilution concerns among shareholders not included in the Directed Issue, GA intends to conduct a Subsequent Offering. This offering will allow these shareholders to subscribe to new shares at the same price, mitigating dilution effects and ensuring equitable treatment.

The funds raised will empower GA to enhance its collaboration with Ferring and explore additional partnerships within the microbiome field. The anticipated growth in demand for diagnostics like GA-map® positions the company to capture significant market opportunities.

Additionally, GA has secured an Innovation Norway Grant of NOK 1.125 million, contingent upon raising NOK 2.50 million through equity offerings. This grant will support the development of diagnostic products related to Clostridium difficile.

Despite the dilution effect of approximately 30% on existing shares, the Directed Issue is deemed essential for GA's strategic growth. The company acknowledges the financial risks associated with limited liquidity but views this capital raise as a pivotal step towards sustaining and expanding its business model.

For investors, the Directed Issue presents a strategic opportunity to hold, given GA's strong market positioning and growth potential in the microbiome diagnostics sector. While the dilution may concern some, the long-term benefits and strategic partnerships position GA favorably for future success.