Senomyx Inc. hit the public markets after pricing a $36 million initial public offering.
The La Jolla, Calif.-based company, which is developing flavor-enhancing products, sold 6 million shares at $6 apiece in its IPO. And like other biotech companies that have gone public in recent months, the offering came in below early expectations. Three months ago, Senomyx filed to raise $97.75 million, and soon after proposed a per-share price range of $13 to $15.
The company's shares gained some value over the course of their first day on the market. The stock (NASDAQ:SNMX) picked up 12.5 percent Tuesday, gaining 75 cents to close at $6.75. About 1.2 million shares traded hands during the day.
Officials at Senomyx could not comment due to SEC quiet-period rules, but the company's prospectus said that it plans to use the funds for its discovery and development operations, as well as for general corporate purposes or to fund acquisitions of technologies or businesses. (See BioWorld Today, March 31, 2004.)
All the shares are being offered by Senomyx, which also granted the underwriters a 30-day, 900,000-share overallotment option. Citigroup Global Markets Inc. is the offering's sole bookrunner, while Deutsche Bank Securities is a co-lead manager. Needham & Co. Inc. and First Albany Capital are co-managers. All are based in New York.
Senomyx uses taste receptor-based assays and screening technologies to discover and develop flavors and flavor enhancers for the packaged food and beverage industry.
Two compounds being developed are designed to enhance the savory taste of the amino acid glutamate. The products, labeled S336 and S807, might help eliminate the addition of monosodium glutamate (MSG) in a variety of packaged products.
Senomyx also is developing S395 to enhance the sweet taste of sugar and reduce the use of natural and artificial sweeteners, while S969 is being developed to enhance the activity of a taste receptor believed to be involved in the taste of salt.
The company licenses its flavor ingredients on an exclusive basis to food and beverage companies.
Before the public funding, Senomyx raised more than $70 million in private equity since its September 1998 inception. It eyed the public markets once before, filing for an IPO in February 2001 before withdrawing it that September due to market conditions. It then completed a Series E private placement in March 2002 that raised $36.8 million. (See BioWorld Today, March 13, 2002.)