It’s not easy when long-time shareholders abandon you at the first opportunity.

Sienna Cancer Diagnostics (ASX:SDX) listed on August 4 and legacy investors began dumping the stock within minutes of the market open.

“There are a few seed investors who had about half a million dollars that started to pull out,” said Stuart McClure, CEO of Vested Equities, which bought into the company when it listed.

The market for IPOs in the last six to 12 months had not sparkled, Mr McClure told Stockhead.

“It seems like lately with IPOs there’s a race to get out, and no one cares about the carnage they leave behind.”

IPO expert Nathan Barabarich of RM Corporate Finance told Stockhead yesterday that 2017 has been tough for floats, with stock market investors suffering from “deal fatigue” — and a number of companies listing at or below their IPO price.

Sienna’s chief Matthew Hoskins was more optimistic about the sluggish early days on the market.

Sienna went from 160 shareholders to 642 on the day of listing, Hoskins told Stockhead.

About 7 per cent of shares changed hands, and he believed the price would stabilise now profit-takers had finished their work.

Show us the money

Sienna came to the market as a comparatively mature business compared to many other biotechs.

It listed only after having a commercialised product and a US distribution deal signed.

McClure says Sienna has to show a solid revenue stream from US distributor Statlab, which is selling into 200 labs –and they’ve got to show a quick move to becoming cashflow positive.

Hoskins says the company has a two-year runway from the $4.6 million raised from the IPO and about $500,000 cash in the bank.

While they hope to reach profitability in that time, the US revenues should extend that runway.

Already a separate lab, which ran a pilot in the US, had brought in $600,000.

“The company is concentrating on using the funds for four different areas: growing revenues in the US, expand geographically, expand cancer applications, and looking for the long term a new technologies to fill the product line.”

New tech, old failure

Sienna’s main product is a bladder cancer test, which dyes cancerous cells brown.

Regular tests rely on the human eye to detect abnormal cells under a microscope.

Cells have to be in the later stages of cancer for this kind of detection, and it opens up the possibility of human error.

The test Sienna developed makes is easier and faster to identify cancerous cells.

Hoskin says this came after a major shift in strategy: in 2008 they realise the tech they had been working on since launch in 2002 would never work.

“In 2009 there was a complete review of the technology. The R&D changed course and began pursuing what now has become the commercial technology.”

The company is working on methods to detect other kinds of cancers – a urine test is apparently not transferable to blood or other tissues – and no doubt hoping not to have a repeat of 2008.

Sienna Cancer Diagnostics listed at 20c and closed yesterday at 15.5c, valuing the company at about $25 million.