Nanosphere IPO raises $98 million

Nanosphere Inc., the Northbrook-based developer of tests to diagnose diseases by using tiny gold particles, rose 14 percent in its first day of trading.

The stock gained $2, or 14 percent, to $16 on the Nasdaq Stock Market. Nanosphere raised $98 million by selling 7 million shares at $14 each, on the low end of the $14 t o $16 range it had been expecting, according to data compiled by Bloomberg.

The company said it uses gold nanoparticles to develop genetic tests that are faster and cheaper than competing products. Nanosphere plans to seek U.S. regulatory approval in the next three years for tests to diagnose cystic fibrosis, herpes, cervical cancer and heart disease. This year it began selling tests for gene disorders linked to blood clots and to detect a possible side effect from the blood thinner warfarin.

The company has said it will use about $50 million of the proceeds for research and to expand manufacturing capacity, and $40 million for sales and marketing.

Revenue increased 67 percent to $780,173 in the first six months of this year, and the company had a net loss of $15.1 million, according to a regulatory filing this week. The company, founded in 2000 and based on technology discovered at Northwestern University in Evanston, has a $124.8 million accumulated deficit.

The initial public offering was managed by Credit Suisse, Piper Jaffray, Leerink Swann, and Allen & Co.