23andMe Shares Pop On Nasdaq

Shares of consumer genetic testing and research company 23andMe jumped 21 percent on the Nasdaq Thursday as the company’s first day as public company.

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The Sunnyvale, California-based company announced plans to go public in February through a merger with VG Acquisition Corp., a special-purpose acquisition company, or SPAC, sponsored by Virgin Group.

Shares, now trading under the ticker symbol ME, opened at $11.13 and quickly rose throughout the day to close at $13.32 per share.

The business combination values at an enterprise value of approximately $3.5 billion, according to the company. The transaction was expected to deliver up to $759 million of gross proceeds through the contribution of up to $509 million of cash from VG Acquisition Corp. and a concurrent $250 million private placement of common stock.

In its regulatory filing, 23andMe reported revenue of $305.5 million during the fiscal year ended March 31, 2020, down from the $440.9 million for the same period in 2019. Net losses for fiscal year 2020 were $250.9 million, widening the gap of losses reported in 2019 of $183.5 million.

The company reported 10.7 million customers as of Dec. 31, 2020. As of Jan. 31, there were 83,400 subscribers to 23andMe+, a service launched in October 2020 to provide members with enhanced genetic testing reports.

In addition, the company said it “expects to continue to incur significant expenses and operating losses for the foreseeable future” as it continues to expand its R&D and develop drugs itself or with collaborators.

The company is the latest to ride the SPAC heatwave that became popular last year. Numbers for 2021 are already setting a new record so far this year with 344 deals raising $107.5 billion, according to SPAC Research data.

Illustration: Dom Guzman