Biotech’s IPO could mean good news for New Mexico taxpayers

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE, N.M. – A biotech company based in Albuquerque has filed paperwork for an initial public offering to raise $69 million. If all goes well that could mean good news for New Mexico taxpayers.

That’s because the taxpayer-funded New Mexico State Investment Council owns 37 percent of Exagen Diagnostics, which submitted documents to the Security and Exchange Commission for its IPO last Friday.

“Thirty-seven percent of this company is owned by the citizens of New Mexico,” SIC board member Peter Frank told New Mexico Watchdog after the SIC’s monthly meeting Tuesday. “So everybody in New Mexico should be enthusiastic about the fact that we have a success, it’s going to go public. It’s one of their investments — indirect — but it’s one of their investments that they will benefit from.”

The big question will be how much of a benefit will be realized through the IPO. It could be massive — last week, a spectacular $25 billion IPO greeted the e-commerce giant Ali Baba on Wall Street — or it could be minimal.

“Until that (IPO) price is set, we just don’t know,” said Brian Birk, who manages the SIC’s private equity fund and sits on Exagen’s board of directors.

What would a successful IPO potentially mean for the SIC?

“People tend to forget this, but the higher the fund is, the higher the benefit is for taxpayers,” said SIC spokesman Charles Wollmann. “At the end of the day, it means less taxes.”

The SIC invested in Exagen through its Private Equity Program that directs some of the SIC’s massive, nearly $20 billion portfolio into companies based in New Mexico.

“With any generic IPO, you’re going to have lock-up periods,” said Wollmann. “It depends on the covenants of various agreements so the timing is unclear, evaluations (are) unclear but it’s an exciting development for this program.”

Exagen makes blood tests that help diagnose autoimmune conditions such as lupus, fibromyalgia and rheumatoid arthritis and markets a brand called Avise to treat patients.

The company’s CEO, Ron Rocca, said the money raised in the IPO will help fund research.

“Chief among that is to plow that back into R&D and into a sales force, which would bring us to 40 (employees),” Rocca told Albuquerque Business First.

Exagen plans listing itself on the Nasdaq Global Market under the symbol of EXDX. No date has been set for the Exagen IPO, but financial experts say it typically takes at least one month from the time the SEC paperwork is filed before the public offering is listed.

Founded in 2002, Exagen’s headquarters are in Albuquerque and it also has a lab and an office in California.