By Debbie Strickland

Staff Writer

Gene Logic Inc., a young functional genomics company, has raised $20 million in a private placement less than a month after inking a collaboration with Cincinnati-based Proctor & Gamble Co. that provides up to $75 million plus royalties on any resulting products.

The new financing will fund the Columbia, Md.-based company's independent programs, including osteoporosis, central nervous system and cancer projects.

Hambrecht & Quist Inc., of New York, acted as advisor for the offering, which took the form of Series C convertible preferred stock. Per-share prices were undisclosed.

More than half the investment -- $12.75 million -- came from new investors, lead by Biotechvest L.P., of Chicago, which invested $3 million. Other new investors were WPG-Farber Weber Fund, Goldman Sachs, Niederhoffer Funds, GeneChem Technologies Venture Funds, Tisch Family Interests, Cresta Ltd. and PVJ Pension Fund.

"Our strategy in this financing was to build on our already strong investor base by bringing in a broader group of public market institutional investors, said Mark Gessler, senior vice president and chief financial officer of the privately held company.

Previous investors who anted up for more shares included Oxford Bioscience Partners, Hambro Health International, New York Life Insurance Co. and pension funds Altamira Management Ltd. and GIMV Investment Corp.

The added infusion of cash gives Gene Logic enough capital to continue operations "well in excess of two years," Gessler told BioWorld Today.

Since its inception in 1995, the company has raised a total of $30 million through three private placements. In June, Gene Logic snagged the Proctor & Gamble deal, which included a $3 million up-front fee as part of $12 million in research support for a program to discover genetic targets for heart failure drug development. (See BioWorld Today, June 16, 1997, p. 1.)

The heart failure program is worth up to $25 million, including milestones. Proctor & Gamble has the option to expand the deal to include gene target discovery in two additional, undisclosed diseases.

Gene Logic is negotiating for additional partners and likely will sign additional collaboration agreements in the next six months, Gessler said.

By the end of the year, Gene Logic plans to boost employment to about 60 from the current 45, Gessler said.

Gene Logic is a high-throughput, functional genomics company that analyzes gene expression and gene regulation to accelerate the discovery of drug targets and drug leads.

The core of the company's platform is a technology for monitoring the expression level of every gene in a given tissue or cell type. The company analyzes the data using its Molecular Topography tool, producing "a quantitative picture of all the genes used in a human cell."

In its target discovery process, the company generates what it calls "molecular movies," a series of molecular topographies that show the changes in gene expression patterns as a disease develops and progresses in a specific cell or tissue type, across different cell types, and in cells treated with various drugs. *