On April 25, 2024, it was exactly one year since trading in shares of Genetico Center (CGRM, MOEX: GECO) started on the Moscow Exchange. This IPO marked the beginning of a whole series of initial public offerings on the capital market in Russia.
Just a year ago, the overwhelming majority of the investment community, professional participants and investment banks were skeptical about the possibility of raising capital on the stock market in Russia, and about the presence of interest from investors. However, Genetico's IPO and subsequent placements have significantly changed the attitude of investors and the professional community to opportunities in the capital market.
Genetico's placement became the first IPO on the Russian market in 2023. The company placed 10 million shares and raised, relative to subsequent placements, a small amount of RUB 178.8 mln. Despite the novelty of the genetic research and development sector in which the company operates for the Russian market, the market showed interest in the issuer and over the year Genetico shares increased in price by 180%.
During 3 years, from 2020 to 2022, there were only 5 initial offerings, and in the year after the Genetico's IPO, there were already 12 IPOs; the companies raised a total amount of RUB 66.57 bln on the capital market.
At a special event dedicated to the anniversary of the listing, Natalya Loginova, Director of the Issuer Relations Department of the Moscow Exchange, congratulated the company and its management and noted that "the dynamics of the Genetico share price pleased investors, the shares have grown significantly since the placement".
Artur Isaev, Founder of Genetico, Chairman of the Board of Directors of Artgen Biotech, noted that "in recent years, the Russian stock market has gone through a path that has led to fundamental changes. Favorable tax treatment for private investments has led to an increase in the number of private investor accounts. Subsidies and support for issuers that stimulate capital raising on the market, the efficient and developed infrastructure of the Moscow Exchange and other external factors have led to qualitative changes. A year ago, many professionals already saw this, but pessimism in the market against the backdrop of sanctions and other events was high, which stopped both investment banks and issuers on the path to an IPO. The reasons are obvious: an unsuccessful IPO is a problem for the image of all its participants. But in Artgen Biotech accelerator, we see what the capital market is really like. We have an experienced team in the ecosystem and good experience in conducting placements even against such a background. It was quite possible for the Genetico team, as pioneers in genetics, to reach another milestone - an IPO. Today we can safely say that we see an IPO boom in the market. Issuers can now effectively raise capital on the Russian stock market, and investors have the opportunity to invest in various sectors of the economy. Of course, the market develops non-linearly and periods of growth are invariably followed by periods of overheating and cooling. However, it is absolutely obvious that quantitative and other changes have brought a new quality to the market - the Russian stock market has become fundamentally different and this will last for a long time."
Arthur Isaev also noted the increase in the number of private investors in the stock market. In 2009, 317 investors participated in the Artgen Biotech IPO. In last year's placement of Genetico there were 3 thousand investors, and by the fall of 2023 the number of Genetico investors increased to 24.5 thousand.
Vladimir Kaymonov, Genetico Director, said that "at the end of 2023, Genetico showed good financial results. The company’s revenue increased by 10.7% to RUB 346.101 mln, EBITDA amounted to 8.4% of revenue."
The history of Genetico as an issuer on the Moscow Exchange began back in 2020. Then the company placed bonds on the platform that were included in the Moscow Exchange Growth Sector Bond Index.
Today, Genetico shares are traded on the Innovation and Investment Market, an exchange sector for high-tech companies with significant growth potential. The company's shares are also included in the calculation base of a new indicator - the Moscow Exchange IPO Index (MIPO).
Genetico has been successfully conducting and expanding its activities in the field of genetic research aimed at identifying, early diagnosis and prevention of genetic, oncological and other socially significant and orphan diseases and scientific research for more than 10 years. In 2023, the company launched a new biotechnological direction - the development of gene therapy drugs for the treatment of orphan diseases. Research is aimed at the initial stages of developing drug candidates for the treatment of eye diseases, hereditary cardiomyopathies and neurodegenerative diseases.
Genetico Center is part of the Artgen Biotech group (ex. HSCI, MOEX: ABIO), resident of Skolkovo, resident of Medtech Technopark. The company works in the field of medical genetics and genetic research, introducing innovative solutions into healthcare practice for the diagnosis, prevention and treatment of genetic and socially significant diseases.