ASX IPOs: NexSen debuts amid surging small caps, $8 million raise fully subscribed
NexSen raises $8 million at 20 cents to develop rapid diagnostics. Lead manager Alpine gets options at 30 cents. Clinical trials start Q4.
Source: iStock
Mentioned
KEY POINTS
- NexSen raised the maximum $8 million at 20 cents per share to develop rapid point-of-care diagnostics, with lead product GBS Rapid Sensor targeting pregnancy testing and clinical trials planned for December quarter 2025.
- Lead manager Alpine Capital receives 4.1-5.4 million broker options exercisable at 30 cents (50% premium to IPO price), with a solid track record including LTR Pharma which rallied from 20 cents to $2.15 within nine months.
- The IPO timing is favorable with the ASX Emerging Companies Index up 35% over the past quarter and 2.6% today to fresh highs, while smaller biotech stocks like ILA, AYA and RAC are running hot in the current market environment.
The IPO market is heating up, and I'm on a mission to take a closer look at all upcoming listings, providing key data and insights ahead of their ASX debut.
NexSen (ASX: NXN) is a biotech company developing rapid, lab-grade diagnostics, with the goal to deliver lab-quality diagnostics in minutes at point-of-care, without a central lab.
At a glance
NexSen's lead product is the GBS Rapid Sensor, designed to provide clinicians with a faster and more cost-effective way to diagnose Group B Streptococcus in pregnant women. This product seeks to deliver results in 15-20 minutes as opposed to 24 hours, allowing for real-time intervention during labor.
NexSen is also developing related diagnostics, including:
A rapid creatinine (kidney function) test for chronic kidney disease
An acute kidney injury ICU test
An at-home PSA cancer screen
A veterinary “VetStrep” test for bovine mastitis
The company is also investing in AI to accelerate the identification of novel molecules, which can be integrated with all of its rapid diagnostic technologies
The size of the broader Point of Care Testing (POCT) market was estimated at $17.7 billion and forecast to grow to $22.7 billion by 2028, according to Frost and Sullivan. The US is the largest market for POCT, accounting for 40% of the global total in 2024.
The criteria
Below, we'll assess whether NexSen checks off the common ingredients for a successful market debut. You can read my piece about it here.
Underwritten: The offer is not underwritten, which is unsurprising given the IPO's size.
Options: Lead manager Alpine Capital will be issued 4.1-5.4 million broker options exercisable at 30 cents. This is a positive sign as Alpine has skin in the game with options that only become valuable if the share price hits 30 cents, a 50% premium to the 20 cent IPO offer price.
Track record: Alpine has led multiple IPOs, particularly in biotech. Notable examples include ReNerve (ASX: RNV), which raised $7 million and closed at its 20 cent IPO offer price on debut, and LTR Pharma (ASX: LTP), which raised $7 million in a heavily oversubscribed IPO. LTR closed at 37.5 cents on debut (versus 20 cents offer price) and rallied as high as $2.15 within nine months of listing (currently 64 cents).
Near-term catalysts: The GBS Rapid Sensor is the company's most advanced product, currently in pre-commercialisation with development progressing toward clinical validation and regulatory submission. Manufacturing of devices for the clinical trial is underway, with studies planned for the December 2025 quarter. Data from this trial will support regulatory submissions across various jurisdictions, including the US. Other products are in early-stage R&D, with further investment planned over the next 24 months.
Substantial shareholders: Founder and Managing Director Mark Muzzin owns 37 million shares (28.6% pre-IPO), which will be diluted to 18-19% post-IPO. Interestingly, he comes from outside biotech, having served as CEO of Strategic Energy Resources between 2008 and 2016. Regal's Emerging Companies Opportunity Fund is also on the pre-IPO register with 10 million shares (7.75%).
Time and place: The backdrop is favorable. Solid Fed rate cut expectations (consensus anticipates two 25 bp cuts by year-end), rising M&A and IPO activity, and a small-cap breakout create strong conditions for NexSen's debut. The S&P/ASX Emerging Companies Index has rallied 17% over the past month and 35% over the past quarter. Smaller-cap biotech stocks are running hot, including ILA, AYA, RAC and others. NexSen has two direct ASX-listed competitors in the broader nanobiotechnology space: Proteomics (PIQ) is down around 55% year-to-date while Lumos Diagnostics is up 390%.
Investor demand: NexSen hit the maximum raise amount of $8 million, indicating solid demand (if not oversubscribed).
The bottom line
NexSen is listing at an opportune time. The S&P/ASX 200 Emerging Companies Index is up 2.6% today to a fresh all-time high, and the IPO is backed by solid characteristics including strong investor demand, an incentivised broker with a proven track record, and broader market appetite for small caps.
I won't pretend to be an expert on biotechs or its specific product offering, but with studies taking place in the current quarter, steady newsflow will be key to watch.
