Lynx Therapeutics Inc. raised $22.6 million and also cut its work force by 30 percent moves meant to increase the reach of its technologies.
Hayward, Calif.-based Lynx obtained commitments from investors to purchase 14.6 million newly issued shares at $1.55 apiece. Lynx also will issue warrants for the purchase of about 5.8 million common shares at $1.94 each. The transaction is expected to close by month’s end.
“[The financing] is really to focus on the commercial business development and some remaining R&D activity at Lynx,” said Edward Albini, chief financial officer and secretary at Lynx. “We believe that this is the last time that we will have to go to the markets.”
The stock price for the fund raising was determined by the average trading price over an undisclosed period of time, Albini told BioWorld Today. He would not discuss the terms of the warrants, but said they are priced at about a 25 percent premium to the $1.55 share price in the funding. Lynx’s stock (NASDAQ:LYNX) rose 2 cents Thursday to close at $1.72.
Before the offering, Lynx had about 13.8 million shares outstanding. Lynx’s first-quarter figures have not been released, but as of Dec. 31, the company had about $5.5 million in cash, Albini said. The company reported a loss of $16.7 million for 2001 in its annual report.
Lynx raised $11.1 million privately nearly a year ago, in May. At the time, the funds were earmarked for technology development. (See BioWorld Today, May 29, 2001.)
Aimed at the same goal as the $22.6 million funding expanding the commercial use of Lynx’s technologies the announced 30 percent staff reduction leaves the company with between 120 and 130 employees. The layoffs are unpleasant but needed, Lynx CEO Norrie Russell said.
“This is a necessary contraction of the work force and a focusing of our efforts,” he told BioWorld Today. “It offers us some control of our expenses. It lets us focus our financial and human resources on the MPSS commercialization and the final stages of the Protein ProFiler development.”
Using its Megaclone technology, Lynx’s Massively Parallel Signature Sequencing technology, or MPSS, is designed to identify nearly all the DNA molecules in a given sample. The Megaclone technology uses a library of approximately 16.7 million short synthetic DNA sequences and their complementary antitags to mark and process each DNA molecule. Lynx’s proteomics technology, Protein ProFiler, is designed to provide high-resolution analysis of complex mixtures of protein from cells or tissues.
Lynx now will set about the task of expanding the MPSS user base. It launched a “pretty intensive marketing plan” for MPSS in October, Russell said, and that will continue. Calling the technology a “comprehensive way to analyze the transcriptome,” Russell said a unique selling point behind MPSS is that it gets the user to “new biology.”
The technology is used on a service basis at this time the technology is in Hayward and customers and collaborators send Lynx samples. The next generation of instrumentation, however, will “open up the possibility of placing instrumentation in strategic locations with customers,” Russell said.
Through the financing and work force reduction, Russell said Lynx has positioned itself to climb ahead.
“This is a recipe for success,” he said. “It has its painful moments and its upsides.”