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Molecular Food Testing Company Roka Bioscience to IPO

May 26. 2014. 2 mins read
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According to the Centers for Disease Control, every year 48 million people in the U.S.A get sick from foodborne illnesses. Of these, 128,000 are hospitalized, and 3,000 will ultimately die from it. In January 2011, President Obama signed the Food Safety Modernization Act into law. This piece of legislation was the most sweeping reform of food safety laws in more than 70 years and gave the FDA the authority to prevent outbreaks rather than just responding to them. The law requires food facilities to implement and monitor effective measures to prevent contamination, conduct regular hazard analyses, and assess potential safety risks. One company that is looking to address food testing with innovative molecular-based assays is Roka Bioscience which also recently filed for an IPO.

About Roka Bioscience

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New Jersey-based Roka Biosciences was established in 2009 through a spin-off of Gen-Probe’s (now Hologic NASDAQ:HOLX) industrial testing assets and technology and has taken in $109 million in funding so far from investors such as OrbiMed Advisors, Aisling Capital, and New Enterprise Associates. The Company recently filed for an IPO to raise $75 million. For the year ended December 31, 2013, Roka took in $2.2 million in revenues compared to just $100 thousand in 2012. For the first quarter of 2014, Roka brought in $828 thousand in revenues on losses of $8.4 million in the same period. According to their recent S1 filing, Roka had  $32.7 million cash on hand and an accumulated deficit of $109 million.

The Atlas System

There are 31 pathogens known to cause foodborne illness, however, 91% of all cases are attributed to just 5 pathogens. Current pathogen test methods involve up to approximately 40 process steps and up to approximately 30 manual touches per sample for a typical PCR-based method. The Atlas Solution provided by Roka can provide pathogen testing that is quicker and more accurate than currently used PCR food testing methods and can be performed in three simple steps as follows:

Roka_Bio_Process

The Atlas Solution offered by Roka can test for 5 pathogens including E. Coli, Listeria, and Salmonella, the latter two being among the top 5 pathogens contributing to foodborne deaths. Roka achieved their first commercial sales in late 2012 and experienced limited revenue and customer adoption during 2013. Through March 31, 2014, Roka had installed 32 Atlas instruments pursuant to commercial agreements.

Conclusion

Roka is moving into a niche application of pathogen testing in an industry that historically has not adopted new technologies at a very quick rate. It is likely that constituents in the foodservice industry will follow the lead of one another when it comes to adopting new pathogen tests so Roka will need to position their tests as an industry-standard in order to allow them to capture a majority of the market. Improving their test to include all of the top-5 pathogens, as opposed to just 2, while keeping the price economical will go a long way to increasing adoption in a cost-conscious industry that is becoming increasingly regulated over time. Roka Bioscience will trade on the NASDAQ under the symbol ROKA.

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