By Mary Welch

Staff Writer

Sangamo BioSciences Inc, which develops novel transcription factors for the regulation of gene expression, filed for an initial public offering to raise $100 million, with the proceeds going to increase the company's capitalization and financial flexibility.

Sangamo's filing Friday marked the tenth proposed biotech IPO since Feb. 3.

The Point Richmond, Calif., company did not indicate how many shares would be offered or at what price. The offering is being made through an underwriting group managed by Lehman Brothers Inc., Chase H&Q and ING Barings LLC, all of New York, and William Blair & Co. LLC, of Chicago.

The company also intends to use the proceeds to repay a loan, due in May 2003, which has a current balance of $250,000.

Last month, Sangamo signed a deal worth up to $40 million with Baxter Healthcare Corp., of Deerfield, Ill., to develop and commercialize novel therapeutics for ischemic cardiovascular and peripheral vascular diseases. Baxter will spin out a cardiovascular group that will have exclusive worldwide rights to develop and market Sangamo's proprietary zinc finger DNA binding proteins (ZFPs) for the activation of vascular endothelial growth factors (VEGFs) and VEGF receptors. This was Sangamo's first major deal. (See BioWorld Today, Jan. 12, 2000, p. 1.)

The ZFP platform is capable of rapidly and rationally producing drug candidates to regulate specific genes. ZFPs can be engineered to recognize a specific and unique DNA sequence within an entire genome, meaning they can be generated to discriminate between closely related genes. The company's ZFP transcription factors are being developed as drug candidates for cardiovascular disease, cancer and infectious diseases.

The company's Universal Gene Recognition technology enables the engineering of ZFP, a class of transcription factors. Transcription factors are proteins that turn genes on or off by recognizing specific DNA sequences. By engineering ZFPs so they can selectively bind to and regulate a target gene, Sangamo has created ZFP transcription factors that can control gene expression and, consequently, cell function, the company said.

The company intends to establish Universal Gene Recognition as a broadly used technology platform for commercial applications in pharmaceutical discovery, human therapeutics, DNA diagnostics and agricultural and industrial biotechnology.

So far, 17 pharmaceutical or biotechnology companies have signed Universal GeneTool agreements, including Pfizer Inc., of New York; Pharmacia & Upjohn, of Bridgewater, N.J.; Hoffmann-La Roche Ltd., of Basel, Switzerland; Merck KgaA, of Darmstadt, Germany; and Immunex Corp., of Seattle.

The company, as of Dec. 31 had cash of $7.3 million, and posted 1999 revenues of $2.2 million. Net loss for 1999 was $3.4 million.

In October, it raised $7.5 million in a private placement of Series C preferred stock. Investors included JAFCO Co. Ltd., of Tokyo; Lombard Odier Zurich Ltd., of Zurich, Switzerland; and the Palladin Group LP, of New York.

Sangamo's proposed NASDAQ ticker symbol is SGMO.